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Tuesday, July 07, 2009
Asian markets ends mixed
Hang Seng, Shanghai retreat while Sensex gave up yesterday's losses
Stock market in Asian region showed mixed trend on Tuesday, 7 July 2009 amid choppy movements following a mixed close on Wall Street. With concerns over the state of global economy continuing to weigh in to a marked extent, participants are rather wary of holding positions at higher levels even as a section of them appear to be evincing keen interest in going in for some bargain hunting at declines.
On Wall Street, consumer staples stocks and an upgraded American Express helped to pull two of three major indices into the green Monday after a drop in oil and economic worries discouraged investors early on. The Dow Jones Industrial Average was higher by 44.13 points, or 0.5%, at 8324.87, while the S&P 500 gained 2.3 points, or 0.3%, to 898.72. The Nasdaq Composite declined 9.12 points, or 0.5%, to 1787.40.
In the commodity market, crude oil traded near a five-week low on a stronger dollar and concerns that slow fuel consumption will lead to an increase in stockpiles.
Crude oil for August delivery was at $64.23 a barrel, up 17 cents, or 0.3%, at 1:42 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, the contract fell $2.68, or 4%, to $64.05, the lowest settlement since 27 May 2009.
Brent crude oil for August settlement traded at $64.36 a barrel on London’s ICE Futures Europe exchange, up 31 cents, or 0.5%, at 1:37 p.m. in Singapore.
Gold, little changed in Asia, may gain from a two-week low as crude oil stemmed a decline and the dollar rally halted. Gold for immediate delivery traded at $925.98 an ounce at 8:43 a.m. in Singapore. Gold for August delivery on the Comex division of the New York Mercantile Exchange was at $925.90.
Bullion fell to $920.75 an ounce yesterday, the lowest since June 23, as oil led a drop in commodities on concern the global economic recovery will falter, damping demand for the precious metal as an inflation hedge.
In the currency market, major currencies recover against dollar and yen as markets stabilize following yesterday's late recovery in US stocks.
The Japanese yen strengthened against major currencies on Tuesday in Asia after European finance ministers said risks to the recovery remain, spurring demand for the relative safety of Japan’s currency. The Japanese currencies were quoted at 95.1 against the US dollar, 132.47 against euro, and 154.02 against British pound.
The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar firmed on Tuesday after the Reserve Bank sounded slightly more upbeat in its latest policy statement, where it kept interest rates unchanged at a record low of 3 per cent as expected.
At the local close, the dollar was trading at $US0.7960, up from Monday's close of $US0.7912. During the domestic session, the unit moved between $US0.7944 and $US0.7993.
In Wellington trades, the New Zealand dollar fell to a three-week low against the greenback overnight, but then charged ahead. By 8am the kiwi was buying US63.67c, having fallen to around the US62.40c area from US62.80c at 5pm yesterday. The NZ dollar also fell to its lowest level in nearly six weeks against the Japanese currency, dropping as low as 59.30 yen early today before racing up to 60.70 yen at the local open from 59.95 at yesterday's local close.
The South Korean won finished at 1,273.1 won to the U.S. dollar, down 4.6 won from Monday's close, as an absence of major news led it to trade in a tight range
The Taiwan dollar weakened further against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.9890, down by NT$ 0.0010 from Monday’s close of NT$32.9880.
Coming back in equities, Asian equity markets ended mostly lower as weaker metal and oil prices dragged on commodity and shipping related stocks.
In Japan, the stock market tumbled extending losses for fifth consecutive day, as investor’s remains on doubts over a potential rebound in the global economy. Marine transportation, automakers, and other export oriented shares plummeted as shipping rates slumped and the rising yen dimmed earnings prospects for the exporters. At the closing bell, the Nikkei 225 Stock Average index erased 33.08 points, or 0.3%, to 9,647.5, while the broader Topix index fell 3.29 points, or 0.4%, to 909.
On the economic front, Japan’s Ministry of Finance said the official reserve assets totaled $1.019 trillion at the end of June, representing a decline of $4.84 billion from May. In June, the foreign currency reserves amounted to $988.5 billion, while the reserves with the IMF totaled $ 4.3 billion. The gold reserves stood at $22.9 billion, while the SDRs amounted to $2.97 billion.
In Mainland China, stock index plummeted snapping five days of winning streak, on the back of losses from properties amid worries recent gains had outpaced profit expectations, while resource related shares plunged as pullback in commodities prices and on news copper imports into China might fall 64% in the second half. The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, tumbled 1.13%, or 35.21 points, to 3,089.45, while the Shenzhen Component Index melted 1.02%, or 127.48 points, to 12,362.44.
On the economic front, China's central bank plan to drain 170 billion Yuan ($24.9 billion) from the money market on Tuesday through short-term bond repurchase agreements. The operation comprises 90 billion Yuan via 28-day repos and 80 billion Yuan via 91-day repos. A total of 260 billion Yuan in central bank bills and repos is due to mature this week. Last week, the central bank injected a net 31.5 billion yuan into the market.
In Hong Kong, the stock indices tumbled on tracking negative cues from Shanghai bourses. Shares of property developers dragged down the market amid worries recent gains had outpaced profit expectations and on concern regulators will crack down on mortgage lending to cool growth in home prices.
Banks stumbled after the nation’s banking regulator said rapid credit growth poses a risk to lenders. Falling commodities and oil prices weighed down resources related shares. The Hang Seng Index melted 117.14 points, or 0.65%, to 17,862.27, while the Hang Seng China Enterprise Index retracted 152.95 points, or 1.41%, to 10,674.67.
In Australia, the stock market drifted lower extending losses for third consecutive days on tracking negative lead from Wall Street and pullback in commodities prices. Materials and resources and energy shares hardest hit on a morning on the back of drop in base metal and crude oil prices. Shares of properties and other economically sensitive stocks were also below the line fell as investors turned cautious ahead of the upcoming company earnings reporting season.
At the closing bell, the benchmark S&P/ASX200 index stumbled 16.8 points, or 0.44%, to 3,766.9, meanwhile the broader All Ordinaries tumbled 16.4 points, or 0.43%, to 3,767.8.
On the economic front, the Australian Industry Group-Housing Industry Association performance of construction index dropped for the 16th consecutive month in June. The PCI shed 4.3 points to 42.6. The Reserve Bank of Australia retained its cash rate at 3% as expected for third straight month. The official cash rate now stands at its lowest level in 49 years.
In New Zealand, equities edged forward ending its four-day losing streak. The New Zealand share market edged slightly higher in early trading today, after Wall Street ended its session on a firm note. the NZX50 edged up 0.12% or 3.26 points to 2746.24. The NZX 15 added 0.28% or 14.07 points to close at 5068.63
On the economic front, New Zealand business activity is rebounding slightly according to NZIER. New Zealand businesses are less pessimistic than they have been in the past six months, said Jean-Pierre de Raad, chief executive of NZIER, as reported in the latest NZIER Quarterly Survey of Business Opinion (QSBO). According to the survey, fewer businesses expect a reduction in their own trading activity in the next three months. The recession is not over yet. These latest data do not alter the view of a continued contraction until the December quarter.
Meanwhile, the Reserve Bank of Australia board has kept interest rates unchanged at 3 percent. The decision was widely expected. It means that rates across the Tasman - unusually - remain higher than those in New Zealand. Here the Official Cash Rate is 2.5 percent. RBA Governor Glenn Stevens reiterated his view that the global economy is stabilising, after a sharp contraction in demand during the December and March quarters.
In South Korea, stocks finished higher as investors snapped up electronics shares amid rising expectations for second-quarter earnings. The benchmark Korea Composite Stocks Price Index (KOSPI) added 5.26 points to end at 1,434.20.
On the economic front, the International Monetary Fund (IMF) Tuesday revised up its 2009 growth outlook for South Korea, forecasting that its economy will contract 3 percent as the government's rapid and comprehensive" stimulus measures helped limit its downturn. In April, the IMF forecast that the economy would undergo a 4 percent contraction. The latest outlook is still worse than the government's projection of minus 1.5 percent growth for this year.
In Taiwan, stock market trespassed one month high, as technology shares on better-than-expected second-quarter earnings. The main Taiex share index gave up yesterday’s losses as the Taiex index stepped up 65.31 points or 0.98%, closing the day at 6715.22, strongest closing since last 6 June 2009 when market closed at 6856.74.
In Philippines, the stock market continued to take an uphill for a second consecutive day, closing almost 1% higher, as investors became optimistic following the benign inflation data on the local inflation front, which seemingly augured well from the point of view of the domestic markets. Philippines CPI rose at their slowest pace in more than 22 years in June, prompting the central bank to reiterate its monetary easing thrust. At the final bell, the benchmark index PSEi mounted 0.92% or 22.66 points to 2,471.76, while the All Shares index rose 0.89% or 13.98 points to 1,582.80.
In India, the key benchmark indices snapped yesterday’s nearly 6% post-budget losses on a view that the Union Budget 2009-2010 will aid a recovery in the economy The BSE 30-share Sensex was up 127.05 points or 0.90% to 14,170.45. The S&P CNX Nifty was up 36.45 points or 0.88% to 4,202.15.
Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.05% or 0.53 points to 1066.36 while Indonesia’s Jakarta composite index ended the day higher at 2083.25.
In other regional market, shares in Europe shook off some early uncertainty on Tuesday to trade higher for the first time in four sessions, helped by gains for metal stocks and banks. Of regional equity markets, the commodity-heavy U.K. FTSE 100 index advanced 0.8% to 4,227.25, the German DAX index rose 0.6% to 4,680.29 and the French CAC-40 index traded up 0.5% at 3,098.38.
Turnover dips
Nifty July 2009 futures at discount
Nifty July 2009 futures were at 4193, at a discount of 9.15 points as compared to the spot closing of 4202.15. Turnover in NSE's futures & options (F&O) segment was Rs 60,222.63 crore, sharply lower than Rs 96,656.53 crore on Monday, 6 July 2009.
Reliance Industries July 2009 futures were at premium at 1866.15 compared to the spot closing of 1855.45.
Reliance Infrastructure July 2009 futures were at premium at 1164 compared to the spot closing of 1157.50.
ICICI Bank July 2009 futures were near spot price at 694.50 compared to the spot closing of 694.85.
In the cash market, the S&P CNX Nifty gained 36.45 points or 0.88% at 4202.15.
Sensex ends volatile session higher
The Sensex ends the volatile session higher on the back of buying interest seen in select stocks. FMCG and auto stocks also led the upmove. It opened with a gain of 60.25 points, at 14,103.65 on Tuesday despite negative global cues. The index gained ground on the back of sustained buying seen in heavyweights in noon trades, touching a high of 14,251.88. Finally it closed on a firm note.
BSE Midcap index rose 0.92%, while Smallcap index declined 0.33%.
Among the sectoral indices, BSE Auto and FMCG surged over 3% each, Capital goods rose 1.67%, while PSU and Oil & gas dipped over 1% each.
European stocks opened flat after three days of losses for the Dow Jones Stoxx 600 Index. The MSCI Asia Pacific Index slid for a fifth day, the longest stretch of declines since October. UK`s benchmark index FTSE 100 rose 35.67 points, or 0.86%, to trade at 4,231.04.French benchmark index CAC 40 gained 20.72 points, or 0.67%, to trade at 3,102.50 and Germany`s benchmark index DAX advanced 45.30 points, or 0.97% to trade at 4,696.46. (4.24 p.m., IST)
Asian stocks end mixed as commodity shares fell on lower oil and metal prices. Japanese benchmark index Nikkei fell 33.08 points, or 0.34%, to end at 9,647.79. Hong Kong`s Hang Seng index lost 117.14 points, or 0.65%, to close at 17,862.27 and China`s Shanghai Composite declined 35.22 points, or 1.13%, to settle at 3,089.45.
The Sensex ended the day with a gain of 127.05 points, or 0.90% at 14,170.45 after touching a high of 14,251.88 and a low of 14,000.68. The broad-based NSE Nifty gained 36.45 points, or 0.88% at 4,202.15 after hitting a high of 4,231.80 and a low of 4,155.50.
Major gainers in the 30-share index were ITC (6.77%), Jaiprakash Associates (6.65%), Hero Honda Motors (5.80%), Mahindra & Mahindra (5.64%), ACC (5.34%), and Grasim Industries (5.19%).
On the other hand, Reliance Industries (2.02%), Oil & Natural Gas Corporation (1.91%), Reliance Communications (1.73%), Tata Motors (1.24%), Infosys Technologies (1.18%), and State Bank Of India(1.13%) were the major losers in the Sensex.
Overall market breadth was negative. Out of the total 2,630 stocks traded at BSE, 1,071 advanced, 1,461 declined while 98 remained unchanged.
BSE Bulk Deals to Watch - July 7 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/7/2009 524412 AAREY DRUGS KUMKUM STOCK BROKER PVT LTD B 35503 39.36
7/7/2009 524412 AAREY DRUGS PATEL NITABEN SHAILESHBHAI B 86000 40.57
7/7/2009 524412 AAREY DRUGS KUMKUM STOCK BROKER PVT LTD S 38398 39.54
7/7/2009 524412 AAREY DRUGS NIKHILBHAI VINAKANTBHAI SHAH S 35000 39.36
7/7/2009 524412 AAREY DRUGS RONAK ASHWIN CHOKSI S 45000 41.39
7/7/2009 530721 ANG AUTO RAJASTHAN GLOBAL SEC LTD B 221511 32.30
7/7/2009 530721 ANG AUTO FIDELITY INDIA FUND S 255111 32.31
7/7/2009 531223 ANJANI SYNTH MANGILAL B. BURAD B 69487 37.19
7/7/2009 531223 ANJANI SYNTH MANGILAL B. BURAD S 62167 37.01
7/7/2009 531682 CAT TECHNOL OUDH FINANCE & INVESTMENT PVT LTD B 225000 7.20
7/7/2009 531682 CAT TECHNOL S V ENTERPRISES B 257834 7.11
7/7/2009 531682 CAT TECHNOL NEWGEN INTERNATIONAL PRIVATE LTD S 211500 7.05
7/7/2009 531682 CAT TECHNOL S V ENTERPRISES S 299307 7.15
7/7/2009 526821 DAI ICH KARK* DAI ICHI KARKARIA LIMITED B 122561 35.89
7/7/2009 526821 DAI ICH KARK* KAUSHIK SHEKHAR S 90000 35.90
7/7/2009 532876 EVERONN SYS FRONTPOINT FINANCIAL HORIZONS FUND L.P S 76444 346.26
7/7/2009 532022 FILAT FASH ANKIT NARENDRA BHAUVA B 35000 96.48
7/7/2009 532022 FILAT FASH SUNIL MERATWAL S 35000 96.49
7/7/2009 531439 GOLDSTON TEC BHAVESH PRAKASH PABARI S 228000 32.00
7/7/2009 526797 GREENPL INDU PARAG VIJAY GANDHI B 100000 100.05
7/7/2009 526797 GREENPL INDU ASHISH DHAWAN B 383681 100.10
7/7/2009 526797 GREENPL INDU GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 400000 100.02
7/7/2009 526797 GREENPL INDU PARAG VIJAY GANDHI S 100000 100.45
7/7/2009 508918 GREYCELLS EN INDIA MAX INVESTMENT FUND LTD B 50000 153.75
7/7/2009 508918 GREYCELLS EN ALKA MAHENDRA JAIN S 50000 153.75
7/7/2009 531025 INCA FINLEAS R R P MANAGEMENT SERVICES P.LTD. S 28000 86.50
7/7/2009 522059 INDAGE VIN REKHA RAKESH JHUNJHUNWALA S 91012 75.66
7/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 38862 56.61
7/7/2009 516078 JUMBO BAG LT CHIMANLAL MANEKLAL SECURITIES PVT.LTD B 79908 56.68
7/7/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 51182 57.16
7/7/2009 516078 JUMBO BAG LT CHIMANLAL MANEKLAL SECURITIES PVT.LTD S 74908 57.09
7/7/2009 502933 KATARE SPG. HIMAT .P. JATANIA B 29000 15.07
7/7/2009 502933 KATARE SPG. RAMESH G GOKANI B 25500 15.13
7/7/2009 502933 KATARE SPG. AMI STOCK & SHARE BROKERS PVTLTD S 48500 15.10
7/7/2009 531731 KUVAM INTL DEEPAK MULCHAND GOSAR B 20000 10.09
7/7/2009 531731 KUVAM INTL SHILPA DHIREN DESAI B 20000 10.09
7/7/2009 531731 KUVAM INTL ANIL KUMAR SINGHAL S 34300 10.09
7/7/2009 531731 KUVAM INTL SANJEEV KUMAR GUTPA S 39900 10.09
7/7/2009 512449 PACE TEXTILES SPA STOCK AND SECURITIES PVT LTD B 182442 31.95
7/7/2009 531802 PRERNA INFR Mukesh Narpatlal Shah S 50000 18.90
7/7/2009 531952 RIBA TEXTILE KUMKUM STOCK BROKER PVT LTD B 39322 54.61
7/7/2009 531952 RIBA TEXTILE PATEL NITABEN SHAILESHBHAI B 54700 55.16
7/7/2009 531952 RIBA TEXTILE KUMKUM STOCK BROKER PVT LTD S 39322 55.08
7/7/2009 533083 RISHABHDEV Naman Securities & Finance Pvt. Ltd. B 90808 19.75
7/7/2009 533083 RISHABHDEV Naman Securities & Finance Pvt. Ltd. S 90808 19.82
7/7/2009 531626 SILVER SMITH B K NARULA B 48249 13.34
7/7/2009 531626 SILVER SMITH DYTOP COMMODEAL LTD S 50400 13.33
7/7/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD B 56728 56.94
7/7/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD S 67728 56.91
7/7/2009 526133 SUPERTEX IND SHAISHIL T JHAVERI S 50000 56.95
7/7/2009 531917 TWINSTA SO E MAYUR NARAYANDAS DARJI S 115041 1.78
NSE Bulk Deals to Watch - July 7 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-JUL-2009,ANGAUTO,ANG Auto Limited,RAJASTHAN GLOBAL SECURITIES LTD,BUY,210000,32.10,-
07-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,166142,3803.55,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,BUY,78162,351.18,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,92446,363.94,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,BUY,117925,356.64,-
07-JUL-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,BUY,2965207,22.34,-
07-JUL-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1684015,215.74,-
07-JUL-2009,ANGAUTO,ANG Auto Limited,FIDELITY INDIA FUND,SELL,242508,32.14,-
07-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,166142,3805.85,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,FRONTPOINT FINANCIAL SERVICES,SELL,207961,346.26,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,SELL,78162,351.51,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,92446,363.84,-
07-JUL-2009,EVERONN,Everonn Systems India Lim,MULTIPLEX CAPITAL LTD.,SELL,117925,356.96,-
07-JUL-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,SELL,2786624,22.24,-
07-JUL-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1684015,215.81,-
07-JUL-2009,INDUSFILA,Indus Fila Limited,INDIA INFOLINE INVESTMENT SERVICES PVT LTD,SELL,147572,20.36,-
Post Session Commentary - July 7 2009
Indian market ended on positive zone after showing high instability during the trading session. Stocks managed to maintain gains after Finance Minister Pranab Mukherjee said government spending has to fill a gap left by lower private investment. Firm cues from the European markets also contributed to the upward journey. However, market pared some of its gains during early trading on concerns for huge budget deficit. Meanwhile, stocks witnessed heavy losses yesterday caused by lack of any aggressive economic reforms in the Union Budget 2009-2010. BSE Sensex ended above 14,100 level and NSE Nifty closed around 4,200 mark.
The domestic market started the day on green territory on rebound after previous session’s huge losses led by disappointment over Union Budget. However, the US stocks markets closed in mixed on Monday after a late session rally pushed the Dow into positive territory. Further, benchmark indices soon turned volatile and slipped lower backed by selling pressure at higher level. Despite firm start, investors were careful after yesterday’s fall. Market regained strength during afternoon trade after falling into red but was unable to hold the impetus and again lost ground. Finally, market managed to regain and uphold strength to close the day with gains. From the sectoral front, most of the buying was witnessed in Metal, Auto, FMCG, Capital Goods, Power and Pharma. However, PSU and Oil & Gas stocks remained out of favor as witnessed most of selling from these baskets.
Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth indicating the overall health of the market remained negative as 1461 stocks closed in red while 1071 stocks closed in green and 98 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 127.05 points or (0.90%) at 14,170.45 and NSE Nifty ended up by 36.45 points or (0.88%) at 4,202.15. BSE Mid Caps closed with gains of 45.46 points at 4,964.34 and Small Caps closed losses of 18.60 points at 5,544.27. The BSE Sensex touched intraday high of 14,251.88 and intraday low of 14,000.68.
Gainers from the BSE Sensex pack are ITC Ltd (6.77%), JP Associates (6.65%), Herohonda Motors (5.80%), M&M Ltd (5.64%), ACC Ltd (5.34%), Grasim Industries (5.19%), Maruti Suzuki (4.34%), Bharti Airtel (3.48%), L&T Ltd (2.52%), ICICI Bank (2.51%), Reliance Infra (2.22%) and TCS Ltd (1.94%).
Losers from the BSE Sensex pack are Reliance (2.02%), ONGC Ltd (1.91%), RCom (1.93%), Tata Motors (1.24%), Infosys Tech (1.18%), SBI (1.13%), Tata Power (0.96%) and HUL (0.80%).
On the global markets front the Asian markets that opened before the Indian market, ended mostly lower as weaker metal and oil prices pulled commodity and shipping related stocks. Shanghai Composite, Hang Seng and Nikkei 225 ended lower by 35.22, 117.14 and 33.08 points at 3,089.45, 17,862.27 and 9,647.49 respectively. However, Straits Times index and Seoul Composite gained 6.17 and 5.26 points at 2,272.26 and 1,434.20 respectively. The Japanese equity market was lower for fifth consecutive session on worries about prospect of global economy.
European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading up by 43.29 points at 4,695.11 and in London FTSE 100 is trading higher by 45.22 points at 4,240.13.
The BSE Auto stocks advanced by (3.92%) or 174.93 points to close at 4,634.89. Major gainers are Escorts Ltd (8.80%), Exide Industries (7.96%), Herohonda Motors (5.80%), M&M Ltd (5.64%) and Apollo Tyre (5.64%).
The BSE FMCG index increased by (3.83%) or 88.67 points to close at 2,401.16 the finance minister repeated the government''s drive on the agriculture sector. Main gainers are Marico Ltd (12.68%), ITC Ltd (6.77%), United Spr (4.79%), Britania Industries (4.41%) and Godrej Cons (4.05%).
The BSE Capital Goods index gained (1.67%) or 202.09 points to close at 12,301.85. Gainers are Crompton Greaves (3.82%), Alstom Proje (3.25%), L&T Ltd (2.52%), Usha Martin (2.15%) and Bharat Elec (1.79%).
The BSE Power index increased by (0.97%) or 26.67 points at 2,770.50. Torrent Power (7.76%), Lanco Infra (4.90%), Crompton Greaves (3.82%), Reliance Infra (2.22%) and GVK Power (2.09%) ended in positive territory.
The BSE PSU ended lower by (1.75%) or 136.30 points at 7,636.94. Losers are St Trad Corp (6.91%), Rashtriya Chem & Fert (5.95%), MMTC Ltd (5.90%), Hind copper (2.89%) and Dena Bank (2.53%).
The BSE Oil & Gas index lost (1.32%) or 119.28 points at 8,919.94. Scrips that lost are Essar Oil Ltd (2.78%), Aban Offshore (2.27%), Reliance (2.02%), ONGC Ltd (1.91%) and Reliance Pet (1.88%).
Ambuja Cements Ltd gained 4.64% after a block deal of five lakh shares was executed on NSE at Rs 88.50 per share.
Reddy''s Laboratories Limited advanced by 2.46%. The company announced that its Annual Report on Form 20-F, containing its annual consolidated financial statements forth fiscal year ended 31 March 2009 was filed with the United States Securities and Exchange Commission on 6th July 2009.
ITC Ltd zoomed 6.77% to Rs. 210.50 after the government left taxes on cigarettes untouched in the Union Budget 2009-2010.
Maytas Infra Ltd fell 1.14% despite the Karnataka state government awarded two Greenfield airport projects to the company.
Auto, cement, FMCG stocks lead recovery
The key benchmark indices snapped Monday's (6 July 2009) near 6% post-budget losses on a view that a sharply higher government spending in the Union Budget 2009-2010 will aid a recovery in the economy. Higher European stocks and US index futures also supported the domestic bourses.
The BSE 30-share Sensex advanced 127.05 points or 0.9%, off close to 85 points from the day's high and up close to 175 points from the day's low. Index heavyweight Reliance Industries extended Monday's (6 July 2009)'s losses following an increase in the Minimum Alternate Tax (MAT) in the Budget. The market breadth, indicating the overall health of the market, was weak.
As per the provisional data, foreign funds today, 7 July 2009, dumped shares worth a net Rs 921.39 crore. On the other hand, domestic institutions mopped up stocks worth a net Rs 790.16 crore
The market was volatile. The market pared gains after a firm start triggered by higher Asian equities. It regained strength later after falling in the red for a brief period in mid-morning trade. The market once again pared gains in early afternoon trade. Volatility was immense in afternoon trade. Volatility continued in mid-afternoon trade.
Transport minister Kamal Nath said today the government aims to attract $10 billion a year in overseas funding for roads and targets investment of $ 20 billion a year for road building.
Finance Minister Pranab Mukherjee said government spending has to fill a gap left by lower private investment, a day after he sharply raised government spending in the Union Budget 2009-2010 on Monday, 6 July 2009. Higher government spending on infrastructure sector and rural economy will help facilitate recovery in the economy.
Reduction in personal income tax
will leave more money in consumers hand which may boost consumer spending. The basic exemption limit on personal income tax was raised by Rs 15,000 for senior citizens and by Rs 10,000 for others. The 10% surcharge on personal income tax was also abolished in the Budget.
Analysts said continuance of previously provided indirect tax breaks will also help help facilitate a recovery in the economy. There was no across-the-board increase in excise duties after a sharp reduction in duties in two stages since December 2008 which was announced as a part of the government's stimulus package for the economy.
The Finance Minister said today that manufacturing is showing better performance but the economic slowdown is not over yet. He further said tax receipts are on a downward path and there is a need to boost spending. He said India must come back to higher growth path at the earliest.
Absence of any big bang economic reforms in the Union Budget 2009-2010 had triggered a nearly 6% slide on the bourses amid heavy volumes on Monday. The Union Budget 2009-2010 did not contain any major reforms such as a roadmap to increase foreign direct investment in insurance sector and decontrol fuel prices. Lack of financial sector reforms and a clear roadmap on divestment were other sources of disappointment. The government set an very small target of Rs 1120 crore from divestment for the financial year ending March 2010. A surge in fiscal deficit target added to the market's woes. Finance Minister (FM) Pranab Mukherjee set a sharply higher fiscal deficit target to 6.8% for the financial year ending March 2010 after he increased spending on roads, power and aid to the poor.
The market had expected some announcement on decontrol on fuel prices but the FM only said that a panel will be set up to look into the pricing of petrol and diesel. The market was also surprised by the FM keeping a mum on Foreign Direct Investment (FDI) policy at a time when expectations were running high that the government will announce a roadmap for hike in foreign direct investment in insurance sector to 49% from 24%.
The next major trigger for the market is earnings of India Inc. for the quarter ended June 2009. India's second largest IT major by sales Infosys kickstarts the result season on 10 July 2009.
European shares turned positive after a subdued start. Key benchmark indices in France, Germany and UK rose by between 0.46% to 0.8%.
Asian markets were mixed. Key benchmark indices in Singapore, South Korea, Taiwan were up by between 0.27% to 0.98%. The key benchmark indices in Hong Kong, China and Japan fell by between 0.34% to 1.13%.
US index futures reversed early losses. Trading in the US index futures indicated Dow could rise 17 points at the opening bell today, 7 July 2009.
Wall Street ended Monday's session mixed. Gloomy earnings expectations weighed on sentiment. The Dow Jones gained 44.13 points, or 0.5%, to 8,324.87. S&P 500 index rose 2.30 points, or 0.3%, to 898.72. The Nasdaq Composite Index fell 9.12 points, or 0.5%, to 1,787.40.
Back home, the projected FY 2010 fiscal deficit is much higher than the 5.5% deficit forecast by Mukherjee in an interim budget in February 2009, and also higher than the 6.2% deficit recorded by the government in the previous year ended 31 March 2009.
While Standard & Poor's said the fiscal deficit was within the boundary of their expectation, Fitch Ratings said the budget doesn't alleviate pressure on India's ratings. Moody's Investors Service said on Tuesday that India's budget for 2009/10 is consistent with a stable outlook on its sovereign ratings, although it said the commitment to cut a debt overhang was weak.
S&P ranks India's long-term local-currency rating at BBB-, their lowest investment grade. Fitch has a BBB- long-term rating on India, also their lowest investment-grade level. Moody's has a Baa3 foreign currency rating and Ba2 local currency sovereign rating, which is non-investment grade, on India.
The BSE 30-share Sensex was up 127.05 points or 0.9% to 14,170.45. The Sensex rose 208.48 points at the day's high of 14,251.88 in early trade. At the day's low of 14,000.68, Sensex fell 42.72 points in mid-morning trade.
The S&P CNX Nifty was up 36.45 points or 0.88% to 4,202.15. Nifty July 2009 futures were at 4193, at a discount of 9.15 points as compared to the spot closing of 4202.15. Turnover in NSE's futures & options (F&O) segment was Rs 60,222.63 crore, sharply lower than Rs 96,656.53 crore on Monday, 6 July 2009.
BSE clocked a turnover of Rs 5,285 crore, lower than Rs 7,330.76 crore on Monday, 6 July 2009.
The market breadth, indicating the overall health of the market, turned weak from positive breadth in early trade. On BSE, 1,061 shares rose as compared with 1,464 that fell. A total of 97 shares remained unchanged.
From the 30 shares Sensex pack, 18 rose and rest fell.
The BSE Sensex is up 4,523.14 points or 46.88% in calendar year 2009 as on 7 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,010.05 points or 73.64% as on 7 July 2009.
Coming back to today's trade, the BSE Mid-Cap index was up 0.92% and outperformed the Sensex. The BSE Small-Cap index was down 0.33% and underperformed the Sensex.
The BSE Auto index (up 3.92%), the BSE FMCG index (up 3.83%), the BSE Capital Goods index (up 1.67%), outperformed the Sensex.
The BSE PSU index (down 1.75%), the BSE Oil & Gas index (down 1.32%), the BSE IT index (down 0.38%), the BSE Metal index (down 0.14%), the BSE Realty index (down 0.1%), the BSE Bankex (up 0.46%), the BSE Consumer Durables index (up 0.49%), the BSE TECk index (up 0.5%), the BSE Healthcare index (up 0.57%), the BSE Power index (up 0.97%), underperformed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 2.02% to Rs 1,855.35. The Supreme Court today declined to stay the Bombay High Court's verdict in a dispute over the sale of natural gas by Reliance Industries (RIL to Reliance Natural Resources (RNRL).
The Supreme Court didn't grant Reliance Industries' plea to stay the order of the Bombay High Court until the resolution of the case and issued notices to the companies and the Centre. Both companies have to reply to appeals filed by each other by 20 July 2009, when the matter is scheduled to be heard, a bench headed by Chief Justice K.G. Balakrishnan said in New Delhi today. The government must also respond by then, the court said.
RIL, late last week, moved the Supreme court, challenging the Bombay High Court judgment asking it to supply gas to the former at a price that is 44% lower than fixed by the government. In its appeal filed in the Supreme Court on Saturday 4 July 2009, Reliance Industries contended that the high court had erred in deciding the three terms - quantity, tenure and price of gas supply to power plants of Reliance Natural Resources (RNRL) affiliates.
Meanwhile, RIL's tax liability would rise after Finance Minister Pranab Mukherjee increased the rate of minimum alternate tax (MAT) to 15% from 10% of book profit. RIL pays taxes under MAT. RIL's total tax liability stood at Rs 3028 crore in the year ended March 2009 (FY 2009), which included deferred taxes of Rs 900 crore and fringe benefit tax of Rs 54 crore. While higher MAT may result in increase in tax outgo, the scrapping of the fringe benefit tax (FBT) may help mitigate the impact to some extent. The government has scrapped FBT in the Union Budget 2009-2010.
Meanwhile, the government has restored tax holiday to natural gas producers which will benefit RIL. In the last financial year's budget, the government had removed seven-year tax holiday on natural gas production while continuing the same for oil production. However, the tax benefit on natural gas will be available only for future gas discoveries i.e from the forthcoming New Exploration Licensing Policy (NELP) round VIII onwards.
Oil stocks were mixed as crude oil fell for a fifth day in New York today on a stronger dollar and concerns that slow fuel consumption will lead to an increase in US stockpiles. India's largest oil exploration firm by revenue ONGC fell 1.91%. But Cairn India rose 0.3%. The fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms. Oil for August 2009 delivery fell as much as 50 cents, or 0.8%, to $63.58 a barrel in electronic trading on the New York Mercantile Exchange.
Shares of three state-run oil marketing firms BPCL and Indian Oil Corporation rose by between 0.14% to 0.42% on fall in crude oil prices. But HPCL fell 0.19%. Lower crude oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. The government had recently hiked petrol prices by Rs 4 per liter and diesel prices by Rs 2 per liter.
But contrary to market expectations, the Union Budget 2009-2010 did not include a roadmap for decontrol of fuel prices in the country but only said it will set up a expert panel to look into the matter of fuel pricing.
Capital goods and construction stocks rose after the budget laid major emphasis on infrastructure development. Siemens, Praj Industries, Siemens, ABB, Larsen & Toubro, Bharat Heavy Electricals rose by between 0.21% to 2.52%.
Among construction stocks, Hindustan Construction Company, IVRCL Infrstructure &Projects and Nagarjuna Construction Company rose by between 3.11% to 9.04%.
Finance Minister Pranab Mukherjee on 6 July 2009, provided a thrust on various infrastructure projects in the budget which will benefit construction firms in the form of increased orders. The government announced more spending for urban, water and road projects. The allocation to National Highway development program allocation was increased 23% to Rs 15948 crore.
To ensure that infrastructure projects do not face financing difficulties arising from the current downturn, the government has decided that India Infrastructure Finance Company (IIFCL) will refinance 60% of commercial bank loans for Public Private Partnership (PPP) projects in critical sectors over the next fifteen to eighteen months.
Cement stocks rose on thrust on the infrastructure sector in the Budget which may boost cement demand. ACC, Ambuja Cements, Ultratech Cement and Grasim Industries rose by between 3.87% to 5.34%.
Meanwhile, the differential excise duty structure for the cement industry was kept unchanged. Besides there was no change in the import duty of basic inputs like coal, petroleum coke, gypsum etc.
Steel stocks fell as the Finance Minister did not announce measures to safeguard the domestic industry against cheap imports in the budget. Bhushan Steel, JSW Steel, Steel Authority of India, Jindal Steel fell by between 0.04% to 4.3%.
But, India's largest steel maker by sales Tata Steel rose 0.42% after the company said on Tuesday that steel sales from its Indian operations rose 19 % to 497,000 tonnes in June 2009 over June 2008. The Indian operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes its Anglo-Dutch unit Corus.
Auto stocks rose on retention of lower excise duties in the Budget. Mahindra & Mahindra, Maruti Suzuki India, Hero Honda Motors rose by between 4.34% to 5.8%.
There was no across-the-board increase in excise duties after a sharp reduction in excise duties in two stages since December 2008 which was announced as a part of the government's stimulus package for the economy. A section of the market was fearing rollback of excise duties due to signs of a recovery in the Indian economy.
The specific excise duty applicable to big cars and utility vehicles of engine capacity 2,000 cc and above was reduced to Rs 15000 per per vehicle from Rs 20000 per vehicle.
FMCG stocks rose as the finance minister reiterated the government's thrust on the agriculture sector. FMCG firms derives a substantial revenue from rural sector. Aries Agro, Advanta India, Jain Irrigation, Tata Tea, Marico, United Spirits, Dabur india rose by between 1.13 % to 12.68%.
Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2009-10, said the government will ensure that agriculture grows by at least 4% per year.
The government has announced additional interest rate subvention of 1% to farmers who pay short-term farm loans on schedule. The government has also decided to extend agriculture debt waiver by six months and to provide additional Rs 1000 crore over interim budget for irrigation.
India's largest cigarette maker by sales ITC rose 6.77%, extending Monday's 3.13% gains after the Finance Minister left excise duty on cigarettes unchanged in the Union Budget 2009-2010.
Shares of drug makers rose after the Finance Minister Pranab Mukherjee reduced customs duty on life saving drugs in the Budget. Dr Reddy's Laboratories, Lupin, Piramal Healthcare, Biocon, Sun Pharmaceutical Industries rose by between 1.16% to 4.45%.
Finance minister on 6 July 2009, reduced basic customs duty on influenza vaccine and nine other specified life-saving drugs used for treating breast cancer, hepatitis-B, rheumatic arthritis, etc.
The government has also reduced basic customs duty for two bulk drugs used in manufacturing these medicines from 10% to 5%. Bulk drugs are processed raw materials used in manufacturing the final doses of medicines.
Bank stocks fell as government did not announce financial sector reforms in the Budget. Market expectations on financial sector reforms were high. The government's annual economic survey released ahead of the Budget had called for a phased increase in the foreign direct investment limit in banks. Voting rights in banks should be aligned with equity holdings, the Survey had said
India's biggest bank in terms of branch network State Bank of India (SBI) fell 1.13%. India's second largest private sector bank by net profit HDFC Bank fell 0.1% as its ADR fell 2.2% overnight. But, India's largest private sector bank by net profit ICICI Bank rose 2.51% even as its American depository receipt (ADR) fell 0.9% on Monday, 6 July 2009.
India's biggest dedicated housing finance firm by operating income Housing Development Finance Corporation rose 0.24%. The finance minister did not announce a hike in tax sops for housing loans contrary to market expectations.
Some realty stocks extended Monday's steep losses as finance minister made no major announcement to boost the debt ridden sector reeling under slump in demand for new homes. DLF, Omaxe, Housing Development & Infrastructure, Akruti City fell by between 0.37% to 5.34%.
India's largest cellular services provider in terms of market share Bharti Airtel rose 3.48% after the stock market regulator Securities & Exchange Board of India (Sebi) said Bharti is considering issuing global depositary receipts (GDRs) to South Africa's MTN and its shareholders. Sebi said MTN would need to make an open offer under Indian takeover rules only when the GDRs are converted by the South African firm and its shareholders to local shares with voting rights.
Bharti and MTN have been in exclusive talks that could lead to a merger creating the world's No. 3 wireless group with more than 200 million subscribers and combined revenue of $20 billion.
IT stocks rose as the Finance Minister extended deduction in respect of export profits under the Software Technologies Parks of India (STPI) scheme available under sections 10A and 10B of the Income-tax Act till the financial year 2010-11. IT majors, TCS and Wipro rose by between 1.34% to 1.94%. But, India's second largest IT major by sales Infosys fell 1.18%. In order to tide over the slowdown in exports, the Finance Minister proposed to extend the sun-set clauses for these tax holidays by one more year i.e. for the financial year 2010-11. Last year, the benefit under this section was extended to one year till 2009-2010.
Shares of fertiliser makers fell after the Finance Minister proposed a change in the method of subsidising fertiliser prices. Rashtriya Chemicals and Fertilizers, Nagarjuna Fertilizers & Chemicals, Zuari Industries, Chambal Fertilizers & Chemicals, National fertilizers, Gujarat State Fertilizers Company, Deepak Fertilisers and Petrochemicals Corporation, Tata Chemicals fell by between 0.03% to 8.8%.
Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2009-10, proposed a change in the method of subsidising fertiliser prices by shifting to a 'nutrient based subsidy regime' from a 'product pricing regime'.
Cals Refineries clocked the highest volume of 4.53 crore shares on BSE. Reliance Natural Resources (1.89 crore shares), Unitech (1.72 crore shares), Suzlon Energy (1.51 crore shares) and IFCI (1.14 crore shares) were the other major volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 278.27 crore on BSE. Educomp Solutions (Rs 245.96 crore), ICICI Bank (Rs 207.19 crore), Reliance Infrastructure (Rs 194.17 crore) and Reliance Capital (Rs 189.48 crore) were the other turnover toppers in that order.
Pre Session Commentary - July 7 2009
Today domestic markets are likely to open positive as little rebound on the early trading hours may happen. Yesterday’s huge losses due to disappointing budget devastated the market sentiments and therefore one could see some cautiousness prevailing across the broader level for a couple of days. The domestic traders may now track the global sentiments as there would hardly be any domestic news to drive the markets.
On Monday, domestic markets shattered with huge losses. After a subdued opening the markets awaited the final countdown of the UPA budget session. However as the Finance Minister Pranab Mukherjee started with budget session heavyweight stocks succumbed to slaughtering that continued till the end. Stocks at broader level were ruthlessly hammered by the disgust and despair of traders. Key sectors like Bankex, Realty, CG, Metal and Power plummeted by 8.17%, 7.28%, 7.02%, 6.57% and 6.36% respectively. BSE Midcap and Smallcap were also slaughtered as they lost 5.17% and 4.50% respectively. Today domestic markets are likely to trade range bound.
The BSE Sensex closed low by 869.65 points at 14,043.40 and NSE Nifty ended with a huge loss of 258.55 points at 4,165.70. BSE Mid Caps closed with losses of 268.34 points and 262.08 points at 4,918.88 and 5,562.87 respectively. The BSE Sensex touched intraday high of 15,097.87 and intraday low of 13,959.44.
Indian ADRs ended mostly down on Monday. In the banking space, HDFC Bank was down 2.2% and ICICI Bank was down 0.9%. In the telecom space, MTNL was down 0.1% and Tata Communication was down 0.6%. In the IT space, Infosys was down 1.1%, Patni Computers was down 0.3%, while Satyam Computers was up 0.1% and Wipro was up 0.1%. In other sectors, Tata Motors was down 0.3%, Dr Reddy''s Labs was down 0.1% while Sterlite Industries was up 0.1%.
Today major stock markets in Asia are trading mixed. Hang Seng is up at 18,117.41. Shanghai Composite is up by 1.869 points at 3,126.536. Japan''s Nikkei is trading down by 27.62 points at 9,653.25. Strait Times is up by 17.67 points at 2,283.76. Seoul Composite is up by 2.06 points at 1,431 and KLSE Composite is low by 6.86 points at 1,065.83.
On Friday, the partially convertible rupee ended at Rs 47.89/91, 5 paise stronger than its previous close at 47.94/95. The rupee gained strength on the back of phenomenal gain in local stock markets.
The FIIs on Monday stood as net buyers in equity and in debt. Gross equity purchased stood at Rs 2,149.60 Crore and gross debt purchased stood at Rs 2,404.80 Crore while the gross equity sold stood at Rs 1,581.30 Crore and gross debt sold stood at Rs 400.30 Crore. Therefore, the net investment of equity reported was Rs 568.40 Crore and net debt was Rs 2,004.50 Crore.
On BSE, total number of shares traded were 54.57 Crore and total turnover stood at Rs 7,330.76 Crore. On NSE, total number of shares traded was 108.03 Crore and total turnover was Rs 21,546.46 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 87241340 shares, followed by Suzlon Energy with 59467327, DLF with 22471754, ITC with 16917635 and ICICI Bank with 14367600 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1203596 with a total turnover of Rs 24,941.52 Crore. Along with this total number of contracts traded in stock futures were 752603 with a total turnover of Rs 21,192.05 crore. Total numbers of contracts for index options were 2172630 with a total turnover of Rs 48,611.82 Crore and total numbers of contracts for stock options were 60300 and notional turnover was Rs 1,911.14 Crore.
Today, Nifty would have a support at 4,056 and resistance at 4,199 and BSE Sensex has support at 13,740 and resistance at 14,195.
Market may extend Monday's losses
The key benchmark indices may extend Monday's (6 July 2009) losses on lack of any big bang economic reforms in the Union Budget 2009-2010. The disappointment over the budget resulted in sell-off on the bourses on Monday, 6 July 2009 that was accompanied by heavy volumes The BSE 30-share Sensex tanked 869.65 points or 5.83% to 14,043.40 on the budget day. As per provisional data released by the stock exchanges, foreign funds on 6 July 2009, dumped shares worth a net Rs 1483.03 crore. On the other hand, domestic funds bought stocks worth a net Rs 815.71 crore.
Investors were disappointed after the Union Budget 2009-2010 did not contain any major reforms such as a roadmap to increase foreign direct investment in insurance sector and decontrol fuel prices. Lack of financial sector reforms and a clear roadmap on divestment were other sources of disappointment. The government set an very small target of Rs 1120 crore from divestment for the financial year ending March 2010. A surge in fiscal deficit target added to the market's woes. Finance Minister (FM) Pranab Mukherjee set a sharply higher fiscal deficit target to 6.8% for the financial year ending March 2010 after he increased spending on roads, power and aid to the poor.
The market was expecting some announcement on decontrol on fuel prices but the FM only said that a panel will be set up to look into the pricing of petrol and diesel. The market was also surprised by the FM keeping a mum on Foreign Direct Investment (FDI) policy at a time when expectations were running high that the government will announce a roadmap for hike in foreign direct investment in insurance sector to 49% from 24%
The next major trigger for the market is corporate earnings of India Inc. for the quarter ended June 2009. India's second largest IT major by sales Infosys kickstarts result season on 10 July 2009.
However, positive Asia may support the market today. Most Asian stocks rose today in a volatile trade as utilities advanced on optimism energy costs will drop. The key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan rose by between 0.25% to 1.19%. The key benchmark indices in China and Japan fell by between 0.22% to 0.68%.
The Wall Street ended Monday, 6 July 2009 session mixed. The gloomy earnings expectations weighed on sentiment. The Dow Jones managed to end positive on some bargain hunting. The Dow Jones gained 44.13 points, or 0.5%, to 8,324.87. S&P 500 index rose 2.30 points, or 0.3%, to 898.72. The Nasdaq Composite Index fell 9.12 points, or 0.5%, to 1,787.40.
Back home, the projected FY 2010 fiscal deficit is much higher than the 5.5% deficit forecast by Mukherjee in an interim budget in February 2009, and also higher than the 6.2% deficit recorded by the government in the previous year ended 31 March 2009.
The finance minister has forecast an increase in plan expenditure by 34% and non-plan expenditure by 37%. The total projected budgetary spending in 2009-10 stands at Rs 10.23 lakh crore. The government has proposed an increase in the allocation for government welfare schemes by 45%. Expenditure on Bharat Nirman has been hiked by 45%. The government has allocated Rs 3,91,000 crore under the National Rural Employment Guarantee Scheme this year. The allocation for rural roads scheme has been raised by 59% in 2009-10.
The 10% surcharge on personal income tax has been scrapped. The FM has scrapped the Fringe Benefit Tax and also suggested removal of the Commodities Transaction Tax (CTT). The Minimum Alternate Tax (MAT) has been hiked to 15% of book profit from 10% of boom profit. The FM has kept the corporate tax rate unchanged. Mukherjee said the government will pursue structural changes in direct and indirect taxes. He said states have agreed on basic structure of goods and services tax which will be introduced from 1 April 2010.
FM has increased personal income tax exemption by Rs 15,000 for senior citizens and by Rs 10000 for others.
The Finance Minister (FM) said the plan is to a return to a path of 9% at the earliest and to deepen and broaden the agenda for inclusive development. The FM forecast a 6.7% GDP growth for FY 2010.
The government has extended agriculture debt waiver by 6 months and provided additional Rs 1000 crore over interim budget for irrigation. Budget will provide additional subvention of 1% to farmers who pay short term farm loans on schedule. He said government will develop long distance gas pipelines to develop national grid and LNG infrastructure in the country.
The finance minister has allocated Rs 4000 crore to incentivise lending to small firms. Budget extended interest subvention to exporters in seven sectors till March 2010 and will provide relief to exporters hit by global financial crisis. FM has extended agriculture debt waiver by 6 months and provided additional Rs 1000 crore over interim budget for irrigation.
The budget has allocated Rs 5000 crore for Mumbai flood project. The government will raise allocation for urban poor schemes to Rs 3,973 crore in 2009-10.
The finance minister proposed to raise the threshold for non-promoter holding in all listed companies. The FM said the government will encourage people participation in divestment of state owned firms. He said a plan will be set up to review domestic fuel prices. He said the government plans to return to fiscal reform targets at the earliest and that institutional reforms are required to control fiscal deficit. The government plans to move towards nutrient based subsidy regime for fertilizers and to offer direct subsidy to farmers.
The FM said significant flow of foreign capital is important and that there are signs of revival in domestic industry and foreign investors have returned. He said the government will continue to provide fiscal stimulus and to provide more flexibility to Infrastructure Finance Company (IIFCL). IIFCL will facilitate 'take out' financing for infrastructure projects. He said allocation for national highways development will rise 23% and has asked states to remove bottlenecks on infrastructure projects.
The government has restored 8% excise duty on manmade fibres. It has meanwhile, scrapped the excise duty on branded jewellery. With regards to the customs duty, the duty on LCD panels has been cut to 5% from 10%. The government has imposed a 5% customs duty on set top boxes. The customs duty on wind power equipment has been cut to 5% from 7.5%.
The finance minister said fiscal deficit target will be closer to 3% of GDP by FY 2011-12 assuming a global economic recovery. He has assumed GDP growth of 8% in FY 2011 and 9% in FY 2012.
Meanwhile, credit rating agency Standard & Poor's (S&P) said India's proposed budget deficit of 6.8% of gross domestic product is within the boundary of the rating agency' expectation. The prospect of a wider fiscal gap had already prompted S&P to change the outlook on India to negative after the government said in its February interim budget that additional stimulus of 0.5% to 1% of GDP may be required, Takahira Ogawa, a Singapore-based director of sovereign ratings at S&P said.
India's meteorological department said on 6 July 2009 good monsoon activity is likely over central India during next 4-5 days with extension into Gujarat and interior Maharashtra from 8th July onwards.
Grey Market Premium - NHPC, Adani Power, Mahindra Holidays
Mahindra Holidays 300 30 to 32
Adani Power 110 to 130 (Approximate) 27 to 30
NHPC 15 to 20 (Approximate) 5 to 7
US stocks manage a turnaround
Defensive oriented stocks help stocks pare losses
US stocks managed to make a late comeback and end in a mixed mode on Monday, 06 July, 2009. Stocks started the day in the red since early morning as economic uncertainty pushed oil prices and market considerably lower on Monday. The consumer staples and utility sectors tried to hold back stocks as much as possible.
The Institute of Supply Management Services index report checked in line with expectations but it showed that all is not that good in the US economy till now. Leadership from defensive-oriented stocks helped the stock market gradually pare its losses. Dow and S&P 500 managed to end in the green. Nasdaq was the only index to end in the red.
The Dow Jones Industrial Average ended higher by 44 points at 8,324. The Nasdaq Composite Index, ended lower by 9 points at 1,787. S&P 500 ended higher by 2.6 points at 898.
Alcoa, Boeing, Bank of America, Chevron and Exxon Mobil were the main Dow laggards today. Merck, American Express, P&G and Johnson & Johnson were the main Dow winners.
Nine of the ten sectors ended in the green today. Technology sector was the only laggard. Google, Apple and Microsoft were the main losers in the technology sector.
Telecom sector gained today despite reports that the Department of Justice has begun a review to determine whether telecom giants like AT&T and Verizon abused their market power in recent years
The Institute for Supply Management reported on Monday, 06 July, 2009 that the the service sectors of the U.S. economy contracted again during June but at a slower pace. The ISM nonmanufacturing index rose to 47% from 44% in May. This is the highest level since last September.
Readings below 50% in the diffusion index indicate more firms are contracting than expanding. The index has been below 50% for the past nine months, but it has been improving since hitting a record low in November. In June, six industries reported growth, while eleven reported contraction.
The new-orders index rose to 48.6% from 44.4% in May, while the employment index also increased, climbing to 43.4% for June from 39.0% the prior month. The prices-paid index rose to 53.7% in June from 46.9% in the previous month.
Crude prices fell substantially lower at Nymex on Monday, 06 July, 2009. Prices fell on worries about the timing of global recovery from the current recession and strong dollar. Crude prices dropped to six week lows today. On Monday, crude-oil futures for light sweet crude for August delivery closed at $63.05/barrel (lower by $2.68 or 4%). Last week, crude ended lower by 3.5%.
In the currency market on Monday, the dollar index, a six-currency measure of the greenback's value rose considerably. The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback. The dollar index dropped by 6.4% in the second quarter and is higher by almost 0.5% on a y-t-d basis.
There are no major announcements scheduled in the US market for tomorrow. Alcoa is scheduled to report its latest quarterly results after Wednesday's closing bell. The announcement marks the unofficial beginning of the second quarter earnings reporting season.
Asian stocks open on negative note
Asian stocks declined, led by commodity companies, on lower oil and metal prices.
Inpex Corp dropped 1.5%.
Japanese benchmark index Nikkei fell 38.25 points, or 0.40%, to trade at 9,642.62.
Hong Kong`s Hang Seng index lost 35.92 points, or 0.20%, to trade at 17,943.49.
China`s Shanghai Composite slid 28.30 points, or 0.91% to trade at 3,096.37.
Taiwan`s Taiex index gained 42.31 points, or 0.64%, to trade at 6,692.22.
South Korea`s Kospi index shrank 0.80 points, or 0.06%, to trade at 1,428.14.
Singapore`s Straits Times rose 11.19 points, or 0.49%, to trade at 2,277.28. (7.40 a.m., IST)
Daily News Roundup - July 7 2009
South African telecom major MTN has said that it is still in talks with Bharti Airtel for a potential transaction. (ET)
Total budget expenditure for 2009-10 will be Rs10,280bn, 36% jump over what was budgeted last fiscal. (BS)
The projected market borrowings of Rs4,510bn are about Rs890bn more than what was provided for in the Interim Budget for 2009-10 on February 16. (BS)
Fiscal deficit in 2009-10 is proposed at 6.8 per cent of GDP. (BS)
The total fiscal stimulus for 2008-09 amounts to Rs1,860bn, 3.55 of GDP. (BS)
Fringe Benefit Tax (FBT) and the Commodity Transaction Tax (CTT), besides the 10% surcharge on taxable personal incomes above Rs1mn. (BS)
The FM has abolished the fringe benefit tax (FBT), though some of what the FBT covered (including employee stock option programmes) will now be taxed as perquisites. (BS)
Goods and Services Tax (GST) will be implemented by April 2010. (BS)
Minimum alternative tax (MAT) has been increased to 15% of book profit from 10% earlier and the period allowed to carry forward the tax credit under MAT has been extended from seven years to ten years. (BS)
The government plans to mop up Rs350bn from the auction of 3G spectrum, likely before December end. (ET)
India Infrastructure Finance Company (IIFCL) will pick up infrastructure loans from banks’ books. (ET)
Airports Authority of India (AAI) has been allocated ~Rs992mn for development of airports. (ET)
The government has proposed to move towards a nutrient based subsidy regime (direct subsidy) for fertilisers from the current product pricing regime. (FE)
The government has proposed a disinvestment target of Rs11.2bn for FY10. (ET)
Leading auto manufacturers are set to reduce the prices for passing on the benefit of the excise duty cut on big cars with engine capacities of 2,000 cc and above by Rs5,000 per unit to consumers. (ET)
Government has exempted packaged software from 8% excise and countervailing duty. (ET)
Allocation to the Accelerated Power Development and Reform Programme (APDRP) was Rs20bn, 160% over the budget estimates of 2008-09. (BS)
The National Highways Authority of India (NHAI) received a higher allocation of Rs85.8bn in 2009-10, up from Rs69.7bn spent in 2008-09 in the revised estimates. (BS)
The Railways received Rs50bn over Rs108bn made in the interim Budget for 2009-10 to Rs158bn. (BS)
Allocation for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the flagship program for urban infrastructure, has been stepped up by 87% to Rs.128.8bn. (BS)
The FM has extended the tax holiday available for oil production and refining to gas production (under section 80-IB (9) of the Income Tax Act) from oil and gas blocks, which will be awarded under the eighth round of New Exploration and Licensing Policy (Nelp-VIII). (BS)
IIFCL will refinance 60% of commercial bank loans in PPP in critical sectors over the next 15 to 18 months. (BS)
Allocation under Accelerated Irrigation Benefit Programme (AIBP) increased 75% yoy. (BS)
Target for agriculture credit raised to Rs3,250bn in 2009-10. (BS)
Export Credit Guarantee scheme extended till March 2010. (BS)
Customs duty on gold import has been doubled from Rs100/10 grams to Rs200/10 grams. (BS)
Scope for hope!
Hope is tomorrow's veneer over today's disappointment.
The market thumbs down need not disappoint you much. We had warned that having too high expectations from the budget was foolhardy. That’s exactly what has happened. Stocks, bonds and the rupee made evident their displeasure.
Markets are rarely in agreement with the political class, especially when short term steroids are not articulated. Reforms for markets may mean something different than what they mean for the Government. The bottomline is this: don’t despair as the huge dollops of stimulus unleashed could actually stand India in good stead (in the longer term).
Authors of the budget defend the lack of announcements saying it is not necessary to include the same in the budget. So, there is still hope that disinvestment, PSU IPOs and other reforms may be announced in the coming quarters.
It remains to be seen whether the markets regain their composure after the Monday mayhem? Some sort of a comeback is a given after such a big selloff. The global picture is not too encouraging. One will also have to contend with corporate earnings. Be stock specific and stick to quality stuff. The FIIs’ stance, whether you like it or not, will play a major role too.
FIIs were net sellers in the cash segment on Monday at Rs14.83bn while the local institutions poured in Rs8.16bn. In the F&O segment, the foreign funds were net buyers at Rs17.45bn. On Friday, the foreign funds were net buyers at Rs5.68bn in the cash segment. Mutual Funds also pumped in Rs3.04bn on the same day.
US blue chip stocks erased some of the early losses to end marginally higher on Monday, though the technology space did see some selloff.
Stocks slipped through the early afternoon, in line with falling oil prices. A better-than-expected report on the services sector of the US economy did have a bearing on improving the sentiment. But a late pick-up in biotechnology and consumer stocks helped the Dow turn positive.
The Dow Jones Industrial Average gained 44 points, or 0.5%, to 8,324.87. The S&P 500 index rose 2 points, or 0.3% to close at 898.72 and the Nasdaq Composite index fell 9 points, or 0.5%, to finish at 1,787.40.
US market had slipped on Thursday after a weaker-than-expected jobs report fueled worries about the health of the world's largest economy. All financial markets were shut on Friday for the Independence Day weekend. Monday's trading was partly a continued response to the job report.
People want hard evidence that the global recession will end later this year or early next year. The jobs report was an indication that the recovery will take longer than previously anticipated.
US stocks rallied for three months, with the S&P 500 gaining 40%, on optimism that the worst of the recession is over. But stocks have been struggling in the past few weeks on concerns that the stock rally went too far, too fast.
General Motors' (GM) restructuring plan has been approved by a federal judge, clearing the way for the troubled automaker to emerge from bankruptcy. The automaker will be allowed to sell most of its assets to a new company, which should clear the way for it to exit bankruptcy. The judge's ruling came after a three-day hearing ended on Thursday. The company has received $50 billion in taxpayer funds. In exchange, the US government will get a majority stake in the new GM. Other owners include the Canadian government and the United Auto Workers union. GM shares fell 14.4%.
Pepsi and Pepsi Bottling Group will invest an additional $1 billion in Russia over the next three years in an effort to counter weak domestic sales by boosting profits in emerging markets. The two companies have now invested more than $4 billion in Russia.
Rio Tinto sold a division of its Alcan unit for $1.2 billion as it seeks to cut debt after the 2007 purchase of the Canadian aluminum company. The sale of Alcan's packaged food division to US-based Bemis is a cash-and-stock deal.
The Institute for Supply Management's (ISM) services index rose to 47 in June from 44 in May, which still indicated a contracting sector. Economists had forecast a rise to 46.
Energy prices tumbled, with US light crude oil for August delivery falling $2.68 to settle at $64.05 a barrel on the New York Mercantile Exchange.
Treasury prices rose, lowering the benchmark 10-year note yield to 3.51% from 3.49% late on Thursday. Bond markets were closed on Friday.
In currency trading, the dollar gained versus the euro and the yen.
COMEX gold for August delivery settled down $6.70 at $924.30 an ounce.
European stocks extended last week's downward trend with miners and automakers bearing the brunt of the selling. After closing lower for three consecutive weeks, the pan-European Dow Jones Stoxx 600 index finished in the red again, down 1.1% to 201.92.
The UK's FTSE 100 index fell 1% to 4,194.91, while Germany's DAX index was down 1.2% at 4,651.82 and the French CAC 40 index shed 1.2% to 3,082.16.
Indian markets ended with a deeper dent on Monday as the Union Budget failed to meet market expectations. The Sensex posted its worst performance on a Budget day in over a decade as benchmark government bond yield crossed 7% after the finance minister announced much higher fiscal deficit target for the year.
Budget which was expected to be a dream budget turned into a nightmare for traders and investors on Dalal Street. It was unabated selling as the key indices plummeted post the presentation of the Union Budget in the parliament on the back of huge volumes. Total market turnover crossed Rs1 lakh crore.
Commenting on the stock market’s negative reaction to the Union Budget, Finance Minister Pranab Mukherjee has said the market may have expected too much from the country’s annual financial document. The stock markets slipped sharply just as the finance minister progressed into his budget speech in Parliament on Monday and was at one point 5% down, mainly due to the lack of any major announcements.
"I had at the start of my speech said ‘One budget speech won’t address all the problems [that the economy faces]," Mukherjee said in an interview to Lok Sabha TV, adding that the budget was not the only instrument to address the economy’s issues.
The finance minister added that it was not possible to set a divestment target.
On the fiscal deficit (raised to 6.8% from 6.2% earlier), the FM said it was possible to improve the fiscal deficit target in the next budget.
"I had at the start of my speech said ‘One budget speech won’t address all the problems [that the economy faces]," Mukherjee said
The BSE Sensex plunged 870 points or 5.8% at 14,043 after touching a high of 15,098 and a low of 13,959. The index had opened at 14,962 against the previous close of 14,913.
The NSE Nifty plummeted 258 points or 5.8% to shut shop at 4,166.
Asian markets ended in the red; the Nikkei index in Japan slipped 1.4% at 9,680, Australia's S&P/ASX ended down 1.1% at 3,783. Hang Seng index fell 1.2% at 17,979.
Elsewhere in the Europe, stocks were trading in the red. The FTSE index was down 1.3% at 4,183. The DAX index was down 1.6% at 4,629. CAC 40 index was down 1.6% at 3,068.
Coming back to India, among the BSE Sectoral indices BSE Bankex index was the top loser losing 8.1%, followed by the BSE Realty index down 7.2%, BSE Capital Goods index fell 7% and BSE Metal index declined 6.5%.
The BSE Mid-Cap index ended in the red down 5.10.8% and BSE Small-Cap index fell 4.5%.
In the Sensex, the major losers were Reliance Infra, ICICI Bank, JP Associates, Tata Steel, HDFC, L&T, SBI and DLF.
On the other hand, ITC and Hindustan Unilever were among the top gainers.
Among the big losers in the broader market were Educomp, Areva, Central Bank, IFCI, MTNL, RCF, APIL and IDBI Bank.
Outside the frontline indices, the top gainers included Titan and Asian Paints.
Shares of ITC advanced by 3% to Rs199 after the after the government left taxes on cigarettes unchanged for the year ending March 31. The scrip touched an intra-day high of Rs202 and a low of Rs187 and recorded volumes of over 2.2mn shares on BSE.
Shares of Reliance Industries slipped by over 6.5% to Rs1893. The scrip touched an intra-day high of Rs2051 and a low of Rs1865 and recorded volumes of over 2.01mn shares on BSE.
The stock came under pressure after the Finance Minister Pranab Mukherjee said that the Government proposes to raise the minimum alternate tax (MAT) to 15% of book profit. He also said that the tax credit on MAT will be carried forward to 10 years.
The announcements on MAT were made by Mukherjee while presenting the Union Budget for the fiscal year 2009-10.
Shares of Titan Industries surged by over 4% to Rs1237 after the Finance Minister announced that branded jewellery would be fully exempted from excise duty. The scrip touched an intra-day high of Rs1297 and a low of Rs1195 and has recorded volumes of over 35,000 shares on BSE.
Looking at the heavy selling on Dalal Street post Budget presentation, the Nifty seems to be in an oversold position. Markets might stage a comeback on Tuesday provided firm cues from the global markets. However, one cannot rule out further selling.
Daily Technical Analysis - July 7 2009
There was a sea of red splashed across trading screens on Monday as the Sensex and Nifty nose-dived 5.8 per cent. Market participants went on a selling spree, irked at the continuation of STT, increase in MAT and lack of policy direction in the Budget document.
Sensex (14,043.4)
Short term
The giant engulfing candle in the daily candlestick chart has made the short-term trend in Sensex turn downwards. The daily momentum indicators too corroborate this view. The short-term support that Sensex is clinging to is 14,016 that was the trough formed on June 23. A close below this level will take the index to the 50-day moving average at 13470 and the floor of the gap formed after the election result at 13479. In other words, despite the sell-off on Monday, the index is approaching key support zone from where a short-term rebound is possible. Strong close below 13500 is needed to make the medium-term view negative in the index.
Medium term
As indicated in the index outlook column published on July 5, the medium-term trend is under pressure. As the index is reversing from the key intermediate resistance zone between 15200 and 16200, a medium-term peak could have been formed at the June 11 peak of 15600. Failure to move beyond 15000 over the next two weeks will confirm this view.
Nifty (4,165.7)
Nifty too recorded a bearish engulfing candle in the daily chart and it closed below the recent trough at 4143 that is negative from a near-term perspective. But the index has strong support at 4100. Close below this level is needed to pull Nifty to 3884 or 3544 over the medium term. Close above 4500 is needed to make the short-term view positive in Nifty.
via BL
Turnover gallops
RIL July 2009 futures at premium
Nifty July 2009 futures were at 4154, at a discount of 11.70 points as compared to the spot closing of 4165.70. Turnover in NSE's futures & options (F&O) segment galloped to Rs 96,656.53 crore from Rs 54,841.47 crore on Friday, 3 July 2009.
Reliance Industries July 2009 futures were at a slight premium at 1,896.65 compared to the spot closing of 1893.15.
State Bank of India July 2009 futures were at discount at 1638.85 compared to the spot closing of 1653.50.
Bharat Heavy Electricals July 2009 futures were at discount at 2097.70 compared to the spot closing of 2100.50.
In the cash market, the S&P CNX Nifty lost 258.55 points or 5.84% at 4165.70 following a disappointment from Union Budget 2009-2010 which lacked big bang economic reforms.
Precious metals continue to drop
Yellow metal drops to lowest level in two weeks
Precious metal prices fell substantially at USA on Monday, 06 July, 2009. Slipping crude price and strong dollar snatched away quite some shine from precious metals by decreasing their appeal as a hedge against inflation. Gold fell to its lowest levels in two weeks.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Monday, gold for August delivery ended at $924.3, lower by $6.7 (0.7%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 4.6%.
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 (11%) since then.
On Monday, Comex silver futures for September delivery lost 17 cents (1.3%) at $13.238 an ounce.
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 17.3% this year. For 2008, silver had lost 24%.
In the currency market on Monday, the dollar index, a six-currency measure of the greenback's value rose considerably. The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback. The dollar index dropped by 6.4% in the second quarter and is higher by almost 0.5% on a y-t-d basis.
Crude prices traded substantially lower today due to the strong dollar. Crude oil prices traded lower by 4% around $64/barrel.
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 55 (0.44%) at Rs 14,519 per 10 grams. Prices rose to a high of Rs 14,560 per 10 grams and fell to a low of Rs 14,408 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 156 (0.72%) higher at Rs 21,820/Kg. Prices opened at Rs 21,505/kg and rose to a high of Rs 21,899/Kg during the day's trading.
Crude at six week lows
Price drops as traders mull over global recovery timing
Crude prices fell substantially lower at Nymex on Monday, 06 July, 2009. Prices fell on worries about the timing of global recovery from the current recession and strong dollar. Crude prices dropped to six week lows today.
On Monday, crude-oil futures for light sweet crude for August delivery closed at $63.05/barrel (lower by $2.68 or 4%). Last week, crude ended lower by 3.5%.
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%. 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 61% since then. Year to date, in 2009, crude prices are higher by 43%.
In the currency market on Monday, the dollar index, a six-currency measure of the greenback's value rose considerably. The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback. The dollar index dropped by 6.4% in the second quarter and is higher by almost 0.5% on a y-t-d basis.
The Institute for Supply Management reported on Monday, 06 July, 2009 that the the service sectors of the U.S. economy contracted again during June but at a slower pace. The ISM nonmanufacturing index rose to 47% from 44% in May. This is the highest level since last September.
Also at the Nymex on Monday, August reformulated gasoline fell 5.04 cents, or 2.8%, to $1.7404 a gallon and August heating oil dropped 7.5 cents, or 4.4%, to $1.6266 a gallon.
August natural gas futures dropped 12.8 cents, or 3.5%, to $3.487 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 3,117/barrel, lower by Rs 46 (1.4%) against previous day's close. Natural gas for July delivery closed at Rs 169.9/mmbtu, lower by Rs 5/mmbtu (2.8%).
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