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Friday, July 17, 2009
Sensex reverses post Budget sell-off
The key stock indices recorded its biggest weekly gain since May 24. The FM’s clarifications in parliament on disinvestment and the borrowing programme, coupled with reports of encouraging progress in monsoon led the recovery after last week’s sharp decline. Strong global cues also helped. Finally, the BSE Sensex surged 9.5% and the NSE Nifty added 9.3%.
The BSE Sensex hit an intra-week high of 14,801 and low of 13,220. While, the NSE Nifty hit an intra-week high of 4,390 and low of 3,918.
The Foreign Institutional Investors bought stocks worth Rs7.59bn during the week and the Domestic Institutional Investors also purchased stocks worth Rs9.61bn during the week.
The top gainers: The top gainers in the Sensex were DLF (up 19.4%), ICICI Bank (up 18.1%), Reliance Capital (up 16.9%), Tata Motors (up 16.7%) and Hindalco (up 15.8%).
The Top Losers: HUL was the only loser among the 30-components of the BSE Sensex. The stock was down 0.22%.
The BSE IT Index (up 9.7%):The top gainers in IT sector were Sasken Communication (up 36.2%), Mahindra Satyam (up 19.9%), Wipro (up 11.6%), Patni Computer (up 10.9%), TCS (up 9.9%) and Infosys (up 8.4%),
Financial Technologies (FT) rallied by over 24% during the week. National Multi-Commodity Exchange signed up for ODIN - brokerage solution of FT.
HCL Tech surged 20% during the week. HCL Axon, a division of HCL Technologies announced a strategic partnership with UCS Group and a takeover of the UCS Group's Enterprise Solutions SAP practice.
The BSE Consumer Index: The top gainers in the consumer durables space were Videocon Industries (up 13.5%), Samtel Color (up 9.7%), Su-Raj Diamonds (up 6.6%), Mirc Electronics (up 5.2%) and Titan (up 3.8%).
The BSE Healthcare Index (up 5.3%): Strides Arcolab was the top gainer in the Pharma space. The stock was up 14% during the week. Reports stated that the company is exploring merger and acquisitions for its specialty Pharma and R&D units.
Sun Pharma gained 11.6% during the week. Reports stated that the company along with its subsidiary, Caraco reached a settlement agreement with Forest Laboratories and licensing partner H Lundbeck AS, over a pending patent infringement dispute.
Lupin advanced by 14% during the week. Lupin Holdings B.V. Netherlands, a wholly-owned subsidiary of Lupin increased its holdings in Generic Health Pty from 38.45% to 48.11%.
Among the other major gainers were Aurobindo Pharma (up 12.4%), Morepen Labs (up 11.8%) and
The top losers were Dr Reddy's (down 3.8%), Piramal Healthcare (down 2.1%), Ipca Labs (down 1%) and Panacea Biotec (down 1%).
The BSE Banking Index (up 11%): The top gainers in the banking space were ICICI Bank (up 18.1%), Kotak Mahindra Bank (up 15.6%), Axis Bank (up 15.3%), Yes Bank (up 12.3%) and PNB (up 12.2%).
HDFC Bank advanced 4.2% during the week. The bank earned total income of Rs51.36bn for the quarter ended June 30, 2009, an increase of Rs9.21bn over the corresponding quarter ended June 30, 2008. Net revenues (net interest income plus other income) were Rs28.99bn for the quarter ended June 30, 2009, an increase of 25.1% over the corresponding quarter of the previous year.
Meanwhile, the annual rate of inflation stood at -1.21% for the week ended July 4, 2009 as compared to -1.55% for the previous week June 27, 2009 and 12.19% during the corresponding week July 5, 2008 of the previous year.
The BSE Auto Index (up 11%): The top gainer in the auto sector was Tata Motors. The stock was up by 16.7% during the week. Ratan Tata, Chairman of Tata Group, handed over the first owner of Tata Nano on Friday at Tata Motors showroom in Mumbai. Tata Motors completed the selection process of selecting the first 1 lakh lucky owners of Tata Nano via lottery system.
Bajaj Auto surged over 13% during the week. The company’s Q1 net profit was at Rs2.93bn as against Rs1.75bn a jump of 67.4% YoY. While, net sales rose 1.8% to Rs22.6bn as against Rs22.2bn in the same period last year. The company has gains of Rs218mn on derivative hedging and has retirement scheme cost of Rs458.2mn.
Among the other major gainers were Hindustan Motors (up 15.5%), Hero Honda (up 12.9%), M&M (up 12.1%), Ashok Leyland (up 9.3%) and Maruti Suzuki (up 7.1%).
The BSE Oil & Gas Index (up 7.8%): The top gainers in oil & gas space were GSPL (up 20.4%), Shiv-Vani Oil (up 13.7%) and Hindustan Oil (up 13.1%).
Gujarat NRE Coke soared over 19% during the week. Reports stated that the company plans to complete the hostile takeover of Australian coal exploration company Rey Resources by year end.
Essar Oil surged over 13% during the week. Reports stated that the company plans to expand its retail fuel outlet network to 1,500 by the end of this year.
Meanwhile, Great Offshore was down 0.2% during the week.
The BSE Capital Goods Index (up 7.5%):The top gainers in the capital goods space were Aban Offshore (up 26.8%), HEG (up 11.9%), Dredging Corp (up 10.5%), Thermax (up 10.4%),
BHEL rallied over 12% in the week. The manufacturing capacity of the company is being further enhanced to 15000 MW per annum by end December 2009. This will further go up to 20000 MW per annum by December 2011. The estimated cost for the above capacity expansion programme of BHEL is approximately Rs58.03bn.
On the other hand, the top loser was Gammon India, the stock was down 7.3% during the week after a part of an under construction Delhi Metro line collapsed on Sunday morning, which was being constructed by Gammon India. This was the second accident involving Gammon India. The first incident was when Gammon was held responsible for the collapse incident in Panjagutta Hyderabad which claimed two lives in September 2007. Eight pre-fabricated segments of the flyover collapsed after scaffolding caved in on Sept. 9, 2007.
The Cement Sector: The top gainers in the cement sector were Dalmia Cement (up 13.2%), Birla Corp (up 13.1%), Grasim (up 12.4%), Shree Cement (up 10.7%) and India Cements (up 9.7%).
The Telecom Sector: The top gainers in the telecom space were RCom (up 12.5%), Shyam Telecom (up 10.7%), Gemini Comm (up 10.7%), Himachal Futuristic (up 9.9%), Idea Cellular (up 9.4%), WWIL (up 8.7%) and MTNL (up 8.2%).
Bharti Airtel surged over 6.2% during the week. According to reports, Bharti Airtel and MTN Group are expected to confirm the details of the deal in the coming weeks, media reports stated.
The Realty Sector (up 17.6%): The top gainers in real estate space were Ackruti City (up 20.6%), DLF (up 19.4%), HDIL (up 18.5%), Ansal Properties (up 14%) and Mahindra Lifespace (up 13.2%).
Sobha Developers was the only loser, down 2.3% during the week
The Metals sector (up 10%): The top gainers in the metal space were Bhushan Steel (up 29%), Ispat Industries (up 18.2%), Lloyds Metals (up 17.2%), JSW Steel (up 16.2%) and Bhuwalka Steel (up 15.5%).
Post Market Commentary - July 17 2009
Indian market rebounded sharply from yesterday’s tedious trading to end the day with handsome gains on strong buying emerged across the board. Gains in European markets added to positive sentiments. The sentiments also boosted on comments from Finance Secretary Ashok Chawla that the government''s record market borrowing programme would not pressure bond yields as well as interest rates. Meanwhile, the Indian government raged up its borrowing plan by nearly a quarter for the fiscal first half to September 2009 to bridge its growing budget deficit. Further, market extended gains on revival on monsoon this month after weak start. Besides, increased capital inflows from funds on the back of encouraging quarterly results by the domestic companies also contributed to the rally. For the quarter ended June 30, the first set of 59 non-banking companies to announce results have reported a 21% year-on-year growth in net profit, the highest in four quarters. BSE Sensex ended above 14,700 level and NSE Nifty closed below 4,300 mark.
Market opened the today’s session on pleasant note tracking firm cues from the global markets. The US markets closed higher on Thursday on the back of better than expected results from JP Morhan Chase, IBM and Google. Moreover, on a macro economic front the Initial jobless claims for the week ending July 11 came in at 522,000, which is the lowest since January. Further, Indian benchmark indices continued to extend gains and ruled higher through out of trading session. During last trading hours market witnessed sharp rally to close near day’s high on the back some positive signals from the government for reforms and strong rally in the stocks all over the world. From the sectoral front, investors on-loaded positions across the sectors. Besides, Auto, Bank, IT, Tech, Realty, PSU, FMCG, Metal and Power stocks observed most of the buying from these baskets. BSE Mid Caps and Small Caps stocks also remained on buyers’ radar.
Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth indicating the overall health of the market remained positive as 1832 stocks closed in green while 825 stocks closed in red and 82 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 494.67 points or (3.47%) at 14,744.92 and NSE Nifty ended up by 143.55 points or (3.39%) at 4,374.95. BSE Mid Caps and Small Caps closed with gains of 115.17 and 135.34 points at 5,105.59 and 5,680.90 respectively. The BSE Sensex touched intraday high of 14,800.70 and intraday low of 14,325.58.
Gainers from the BSE Sensex pack are Reliance Infra (8.44%), M&M Ltd (8.07%), JP Associates (7.20%), ICICI Bank (6.82%), Tata Motors (6.68%), Herohonda Motors (6.49%), Hindalco (6.31%), ITC Ltd (5.99%), HDFC (5.85%), Bharti Airtel (5.33%), Tata Power (5.03%), DFL Ltd (5.02%), SBI (4.19%), Infosys Tech (4.01%), HDFC Bank (3.64%) and Grasim Industries (3.62%).
Losers from the BSE Sensex pack are Sterlite Industries (0.42%), NTPC Ltd (0.15%) and Reliance (0.05%).
On the global markets front the Asian markets that opened before the Indian market, ended higher on better than expected earning from the US companies. Shanghai Composite, Hang Seng, Nikkei 225 index, Straits Times and Seoul Composite ended up by 6, 443.79, 51.16, 29.94 and 7.88 points at 3,189.74, 18,805.66, 9,395.32, 2,430.96 and 1,440.10 respectively.
European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading up by 37.94 points at 4,995.13 and in London FTSE 100 is trading higher by 35.85 points at 4,397.69.
The BSE Auto stocks surged (5.16%) or 248.86 points to close at 5,069.86. Major gainers are Exide Indus (11.19%), M&M Ltd (8.07%), Apollo tyre (7.14%), Ashok Leyland (7.09%) and Herohonda Motors (6.49%).
The BSE Bank index advanced by (4.76%) or 369.47 points at 8,132.16 after the Finance Minister said early this week that the government is committed to financial sector reforms. Scrips that gained are Canara Bank (7.75%), ICICI Bank (6.82%), Axis Bank (6.60%), Karnataka Bank (4.41%) and SBI (4.19%).
The BSE IT closed higher by (4.11%) or 138.27 points at 3,505.28 on hopes of a revival in US economy. Gainers are HCL Teck (11.21 %), Aptech Ltd (9.69%), Rolta India (9.42%), NIIT Ltd (7.01%) and Financ Tech (5.88%).
The BSE Teck ended up by (4.09%) or 106.57 points at 2,711.71. HCL Teck (11.21 %), Aptech Ltd (9.69%), Rolta India (9.42%), Zee Ent (7.44%) and Deccan Chr (7.25%) ended in green territory.
The BSE Realty index increased by (3.55%) or 114.73 points to close at 3,347.10. Main gainers are DLF Ltd (5.02%), Orbit Co (5.00%), Mahindra Life (4.95%), Housing Dev (4.17%) and Ansal Infra (4.02%).
The BSE PSU index gained (3.31%) or 260.52 points at 8,125.29. NMDC Ltd (9.61%), Hindustan Copper (7.86%), Canara Bank (7.75%), MMTC Ltd (7.17%) and Steel Authority (5.43%) ended in positive territory.
The BSE FMCG index went up by (3.02%) or 73.19 points at 2,499.86. Gainers are United Brew (6.89%), ITC Ltd (5.99%), Colgate Palm (2.01%), Ruchi Soya (1.44%) and Godrej Cons (0.98%).
PBA infrastructure closed higher by 18.59% after it bagged orders worth Rs 70.80 crore from Mumbai Metropolitan Region Development Authority.
HCL Tech gained 11.21%. HCL AXON, a division of the company, which provides Business Transformation consultancy and services through the innovative implementation and support of SAP technologies, announced a strategic partnership with UCS Group and a take over of the UCS Group''s Enterprise Solutions SAP practice. The acquired practice is a division of UCS Solutions and offers Tier 1 Retail and wholesale SAP project implementations.
Exide Industries Ltd zoomed 11.19% after net profit increased phenomenally 48.9% to Rs 122.40 crore in Q1 June 2009 as against Q1 June 2008.
Maytas Infra Ltd advanced by 4.95%. The company has bagged Jajpur and Midnapore projects in 2008 from Power Grid Corporation of India Limited (PGCIL), through competitive bid process and in its own right as a competent infrastructure company. Maytas has quickly mobilized the teams at most of the packages to execute the projects and currently the execution is progressing well.
Colgate Palmolive India Ltd ended up by 2.01%. The company has posted a net profit after tax of Rs 1027.80 million for the quarter ended June 30, 2009 as compared to Rs 719.20 million for the quarter ended June 30, 2008. Total Revenue has increased from Rs 4359.90 million for the quarter ended June 30, 2008 to Rs 4939.80 million for the quarter ended June 30, 2009.
BSE Bulk Deals to Watch - July 17 2009
Date Scrip Code Company Client Name Deal Type * Quantity Price **
17/7/2009 532057 ABHINAV CAP LALAITAM MALPANI B 45250 92.50
17/7/2009 532057 ABHINAV CAP BHARATH BIYANI S 54536 92.50
17/7/2009 531761 AMULYA LEAS VINOD KUMAR GOYAL B 76400 8.11
17/7/2009 531761 AMULYA LEAS VIKASH KUMAR SINGH S 45400 8.11
17/7/2009 531223 ANJANI SYNTH NARENDRA VALLABHAJI BAHUVA B 65379 51.39
17/7/2009 531223 ANJANI SYNTH NARENDRA VALLABHAJI BAHUVA S 68257 51.25
17/7/2009 532981 ANU LABS KIRIT KUMAR MOHANLAL PATEL B 666861 30.06
17/7/2009 532981 ANU LABS KIRIT KUMAR MOHANLAL PATEL S 666861 30.10
17/7/2009 532995 AVON CORP S V ENTERPRISES S 150203 8.54
17/7/2009 511664 BGIL FL TEC EDEN FINANCIAL SERVICES B 50000 16.05
17/7/2009 511664 BGIL FL TEC BP FINTRADE PRIVATE LIMITED B 50525 15.76
17/7/2009 511664 BGIL FL TEC RAJULATUL SHAH S 39359 15.75
17/7/2009 511664 BGIL FL TEC JINESH BHATT S 89211 16.53
17/7/2009 511664 BGIL FL TEC BP FINTRADE PRIVATE LIMITED S 50522 16.70
17/7/2009 531127 ENRICH INDUT ASHUTOSH YASWANTRAI PANDYA B 50000 3.30
17/7/2009 531127 ENRICH INDUT DHARMENDRA MALDEV BHAIAHIR B 55000 3.30
17/7/2009 531127 ENRICH INDUT REKHABEN DHARMENDRABHAIA HIR B 55000 3.30
17/7/2009 531127 ENRICH INDUT DINESH MADHUKAR BHANARKAR HUF B 40000 3.30
17/7/2009 531127 ENRICH INDUT DINESH MADHUKAR BHANARKAR B 40000 3.30
17/7/2009 531127 ENRICH INDUT KAVITA DINESH BHANARKAR B 35000 3.30
17/7/2009 531127 ENRICH INDUT ROCK BUILDERS & DEV P. LTD S 300000 3.30
17/7/2009 503699 GEOD LTD WARD FERRY MNGT LTD A/C WF ASIAN SMALLER CO. FUND LTD. B 1112000 95.00
17/7/2009 503699 GEOD LTD MORGAN STANLEY INVESTMENT MNGT A/C MORGAN STANLEY INDIA INVSTFUND S 806000 95.09
17/7/2009 503699 GEOD LTD MORGAN STANLEY INVST MGT INC A/C MORGAN STANLEY GEOWTH FUND S 726000 95.09
17/7/2009 531025 INCA FINLEAS R R P MANAGEMENT SERVICES P.LTD. S 17000 65.50
17/7/2009 500233 KAJARIA CERA RARE INVESTMENTS B 1000000 34.00
17/7/2009 500233 KAJARIA CERA NEERAJ SINGAL S 1072264 34.07
17/7/2009 530255 KAY POW PAP SUNIL KUMAR GUPTA B 75000 6.55
17/7/2009 530255 KAY POW PAP JOLLY GUPTA S 57201 6.43
17/7/2009 530255 KAY POW PAP SUNIL KUMAR GUPTA S 75000 6.00
17/7/2009 531602 KOFF BR PICT GAGAN O ARORA B 500000 3.87
17/7/2009 511728 KZLEASING RAMESH GGOKANI B 15606 10.87
17/7/2009 511728 KZLEASING AMI STOCK & SHARE BROKERS PVTLTD S 15606 10.87
17/7/2009 530273 LIBERTY PHOS TIRATH PRADYUMAN PARIKH B 49551 24.29
17/7/2009 533088 MAH HOLIDAY OPG SECURITIES P LTD B 774463 331.81
17/7/2009 533088 MAH HOLIDAY OPG SECURITIES P LTD S 774463 331.97
17/7/2009 500271 MAX INDIA L. WARBURG PINCUS INT. LLC A/C MELANY HOLDINGS LTD. S 3125000 197.01
17/7/2009 500271 MAX INDIA L. WARBURG PINCUS INT. LLC A/C MADISON HOLDINGS LTD. S 3125000 197.01
17/7/2009 531832 NAGAR AGRITE CARWIN MERCANTILES PVT LTD S 52100 5.04
17/7/2009 531996 ODYSSEY CORP BHROSEMAND COMMODITIES PVT. LTD. B 30025 23.75
17/7/2009 531952 RIBA TEXTILE BELA TUSHAR ZAVERI B 34800 50.52
17/7/2009 531952 RIBA TEXTILE PATEL NITABEN SHAILESHBHAI B 55350 49.56
17/7/2009 531952 RIBA TEXTILE SHAILESH SOMABHAI PATEL S 37000 49.67
17/7/2009 512413 SPECTACLE HEMANT MADHUSUDAN SHETH S 393000 47.00
17/7/2009 526133 SUPERTEX IND ARCHI STEEL WIRES PVT.LTD. B 50000 57.20
17/7/2009 507747 TTK HEALTHCA* TTK HEALTHCARE LIMITED BUY BACK OF EQUITY SHARES ACCOUNT B 79874 119.93
17/7/2009 507747 TTK HEALTHCA* JAGDISH AMRITLAL SHAH S 42875 120.00
NSE Bulk Deals to Watch -July 17 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
17-JUL-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,241471,861.67,-
17-JUL-2009,ABAN,Aban Offshore Ltd.,SMC GLOBAL SECURITIES LTD.,BUY,177973,862.63,-
17-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,118776,4007.75,-
17-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,9811605,20.05,-
17-JUL-2009,SASKEN,Sasken Commu Techno Ltd,KOTAK MAHINDRA MUTUAL FUND/MAHINDRA K BALACE,BUY,154000,138.38,-
17-JUL-2009,SASKEN,Sasken Commu Techno Ltd,STANDARD CHARTERED CLASSIC EQUITY FUND,BUY,142000,135.26,-
17-JUL-2009,SUNDARMFIN,Sundaram Finance Ltd.,PRUDENTIAL ICICI TRUST LTD-TAX PLAN,BUY,500000,275.00,-
17-JUL-2009,ZICOM,Zicom Electronic Security,S K SONTHALIA SECURITIES PVT. LTD.,BUY,120000,75.00,-
17-JUL-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,241471,862.08,-
17-JUL-2009,ABAN,Aban Offshore Ltd.,SMC GLOBAL SECURITIES LTD.,SELL,191168,861.84,-
17-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,118776,4009.31,-
17-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,9238669,20.03,-
17-JUL-2009,MAX,Max India Ltd,WARBURG PINCUS INTL LLC A/C-MADISON HOLDING LTD,SELL,3125000,197.02,-
17-JUL-2009,MAX,Max India Ltd,WARBURG PINCUS INTL LLC A/C-MELANY HOLDINGS LTD,SELL,3125000,197.02,-
17-JUL-2009,SUNDARMFIN,Sundaram Finance Ltd.,HAMBLIN WATSA INVT COUNSEL LTD A/C HWIC ASIA FUND CLASS A SH,SELL,1010288,275.04,-
17-JUL-2009,ZICOM,Zicom Electronic Security,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,122572,75.00,-
17-JUL-2009,ZICOM,Zicom Electronic Security,S K SONTHALIA SECURITIES PVT. LTD.,SELL,10000,76.15,-
Market may extend gains
The market may extend gains after a more than 9% surge in the week ended 17 July 2009. The undertone remains bullish as analysts expect a turnaround in the economy the near future as government stimulus packages take effect. Revival of the monsoon rains and initiatives on divestment may support stocks. With earnings season in progress, companies unveiling their June 2009 quarterly results will be in the spotlight.
Finance Secretary Ashok Chawla on 17 July 2009 said the finance ministry will introduce seven bills in parliament, including proposals for pension and banking reforms and efforts to raise the foreign investment limit in insurance companies. Chawla added that the government's record market borrowing of Rs 4, 51,000 crore in 2009-10 would not pressure bond yields and interest rates. Chawla also said that he sees economic growth of around 7% for 2009/10 and expects inflation to be between 2-3% by end March 2010.
A progress on disinvestment will lift sentiment. On 14 July 2009, the Union Finance Minister, Pranab Mukherjee, told Lok Sabha that the Finance Ministry has initiated discussions with other ministries and departments for identifying the state run firms where a portion of Government shareholding can be sold.
Earlier in his budget speech on 6 July 2009, the Finance Minister had pegged the revenue estimates from disinvestment at Rs 1,120 crore for 2009-10, lower than the Rs 1,165 crore garnered in 2008-09.
The government is reportedly considering to divest stake in four PSUs -- National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) -- administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.
Meanwhile, analysts expect a turnaround in the economy the near future as government stimulus packages take effect. As per government data released on 11 July 2009, India's industrial output rose by a higher-than-expected 2.7% in May 2009, indicating interest-rate cuts and stimulus measures are helping revive demand. This is significantly more than the downwardly revised 1.2% growth in April 2009.
At the global level, sentiment has been improving with the US Federal Reserve on 15 July 2009 lifting its forecast for the recession-hit American economy. It now forecasts that the economy will shrink between 1% to 1.5% in 2009 from its earlier forecast of a 1.3% to 2% contraction.
Renowned economist Nouriel Roubini said on 16 July 2009 said the worst of the financial crisis is over and the US economy was no longer in a free fall.
US retail sales grew for the second consecutive month, rising 0.6% in June 2009 as compared with 0.5% gain in May 2009. Eurozone industrial production rose for the first time in nine months in May 2009. Production in the 16 countries that use the euro recorded a monthly growth of 0.5% in May 2009, compared to a revised 1.4% fall in April 2009.
Closer home, the Supreme Court hearing on the Reliance Industries (RIL)-Reliance Natural Resources (RNRL) due on 20 July 2009 will be closely watched. RIL said on 17 July 2009 it has no unfettered rights to Krishna Godavari (KG) Gas. The company told the Supreme Court that it is bound by government policies on the pricing and sale of gas produced at the KG-D6 field, following a petition filed by Reliance Natural Resources (RNRL) seeking enforcement of a lower court order on supplying gas for less than the price set by the government.
The SC is scheduled to hear the dispute on 20 July 2009 in what could be the final stage of a wrangle sparked by the breakup of the Ambani family empire in 2005. The Bombay High Court ruled that RIL must honor a 2005 agreement to sell gas from the Bay of Bengal field to estranged brother Anil's company.
Earnings unveiled by Indian companies so far have been encouraging. The combined net profit of 122 firms rose 60% on 18% rise in sales in Q1 June 2009 over Q1 June 2008.
Wipro, Housing Development Finance Corporation, Bharat Heavy Electricals, ACC, Oil & Natural Gas Corporation, Maruti Suzuki India and Ranbaxy Laboratories will declare their June 2009 quarterly results in the forthcoming week.
Others companies that will unveil their June 2009 quarterly results next week include Petronet LNG, JSW Steel, Infrastructure Development Finance Company, Chambal Fertilizers & Chemicals, Dr Reddy's Laboratories, Thermax, Ultratech Cement, Mastek, Canara Bank, Siemens, Ambuja Cements, Biocon and Hindustan Construction Company.
Investors will also monitor the progress of India's annual monsoon. India's monsoon has revived this month after a dismal start last month. Rainfall in the week to 10 July was 6% more than the long-term average. For the 1 June-15 July period it was 27% below normal, improving from a deficit of 36% up to 8 July.
The weather office has also forecast widespread rainfall in the next five days in most regions of India where more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
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.
Banking, auto stocks lead 3.5% Sensex surge
The key benchmark indices staged a stellar performance today buoyed by Finance Secretary Ashok Chawla's comments that the Finance Ministry will introduce bills in parliament to reform the financial industry. The BSE 30-share Sensex rose 494.67 points or 3.47%. Auto, IT, and banking stocks led the rally. Firm global markets and revival of monsoon rains also underpinned sentiment. Chawla's comments that the government's record market borrowing programme would not pressure bond yields and interest rates further bolstered bulls.
India's largest IT firm by sales TCS rose ahead of Q1 June 2009 result. The market breadth, indicating the overall health of the market, was strong. All the sectoral indices on BSE rose
India's monsoon has revived this month after a dismal start last month. Rainfall in the week to 10 July was 6% more than the long-term average. For the 1 June-15 July period it was 27% below normal, improving from a deficit of 36% up to 8 July.
The weather office has also forecast widespread rainfall in the next five days in most regions of India where more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains. The weak start to the vital June-September monsoon rains had stoked fears of crop failure, encouraging the government to ban wheat exports and prepare contingency plans. While the monsoon rains have picked up, progress has been uneven, causing floods in some areas and drought in some districts which are not major crop producers.
However, a cause for concern is that water levels in India's 81 main reservoirs more than halved from a year earlier in the week to 16 July 2009 after the lowest June monsoon rains in more than 80 years, government data showed. Shrinking water level in reservoirs has already hit hydropower supply and will limit the water available to irrigate winter-sown rapeseed and wheat crops which will be harvested next year.
The Finance Secretary today said the government will introduce seven bills in parliament, including proposals for pension and banking reforms and efforts to raise the foreign investment limit in insurance companies. Chawla said on Friday the government's record market borrowing of Rs 4, 51,000 crore in 2009/10 would not pressure bond yields and interest rates. Chawla also said that he sees economic growth of around 7% for 2009/10 and expects inflation to be between 2-3% by end March 2010.
Reserve Bank of India deputy governor K.C. Chakrabarty said on Friday the stance on interest rates should be stable and benign. He further said credit in system is improving and trend is likely to continue.
The Indian government ramped up its borrowing plan by nearly a quarter for the fiscal first half to September 2009 to bridge its growing budget deficit. After a meeting with finance ministry officials, Reserve Bank of India (RBI) Deputy Governor Shyamala Gopinath said on Thursday, 16 July 2009 the government would borrow an additional Rs 1,10,000 crore ($22.6 billion) from next week up to 30 September 2009.
The new figure means the government would have completed about 66% of its full-year record borrowing target of a record Rs 4,51,000 crore in the first half. In its first budget last week after being re-elected with a stronger mandate, the Congress-party led government boosted spending on rural and infrastructure programmes, and projected the fiscal deficit to widen to 6.8% of gross domestic product, its highest in 16 years.
Meanwhile, the government is considering to divest stake in four PSUs -- National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) -- administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.
The stock market has entered a crucial period of earnings. L&T yesterday reported results which were more or less in line with market expectations. Early this week, HDFC Bank, India's second biggest private sector bank, reported good Q1 results. India's largest IT firm by sales TCS will announce Q1 June 2009 result today.
European shares rose for the fifth straight day on Friday led by banks and commodity stocks ahead of earnings from Citibank, Bank of America and General Electric. Key benchmark indices in France, Germany and UK were up by between 0.49% to 0.79%.
Asian stocks rose today as key US earnings reports beat expectations, fueling hopes that the global recession is receding. Key benchmark indices in Singapore, Hong Kong, Japan, South Korea, China, Singapore and Taiwan rose by between 0.19% to 2.42%.
But trading in the US index futures indicated the Dow could slide 8 points at the opening bell on Friday, 17 July 2009.
US stocks rallied for a fourth day in a row on Thursday, 16 July 2009 on optimism about the earnings season. Comments by well-known economist Nouriel Roubini that US economy was no longer in a free fall, also aided the rally. The Dow added 95.61 points, or 1.1%, to 8,711.82. The S&P 500 index rose 8.06 points, or 0.9%, to 940.74. The Nasdaq rose 22.13 points, or 1.2%, to 1,885.03.
In economic news, the initial jobless claims came in at 5,22,000 the lowest since January 2009. On the earnings front, Google Inc's quarterly profit beat Wall Street expectations, but the weak economy and slump in advertising spending took a toll on revenue growth and the price of its search ads. JPMorgan's robust results added to growing optimism about the quarterly earnings season.
The BSE 30-share Sensex rose 494.67 points or 3.47% at 14,744.92. At the day's high of 14,800.70, the Sensex rose 550.45 points in late trade. At the day's low of 14,325.58, the Sensex rose 75.33 points in early trade.
The S&P CNX Nifty was up 143.55 points or 3.39% to 4,374.95. Nifty July 2009 futures were at 4398, at a substantial premium of 23.05 points as compared to the spot closing of 4374.95. Turnover in NSE's futures & options (F&O) segment surged to Rs 74,254.90 crore from Rs 68,847.29 crore on Thursday, 16 July 2009.
BSE clocked a turnover of Rs 6623 crore, higher than Rs 6573.37 crore on Thursday, 16 July 2009.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,824 shares rose as compared with 828 that fell. A total of 82 shares remained unchanged.
From the 30 shares Sensex pack, 27 rose and rest fell.
The Sensex is up 5,097.61 points or 52.83% in calendar year 2009, as on 17 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 6,584.52 points or 80.68% as on 16 July 2009.
Coming back to today's trade, the BSE Mid-Cap index was up 2.54% and the BSE Small-Cap index was up 2.61 %. Both the indices, however, underperformed the Sensex.
The BSE Auto index (up 5.16%), the BSE Bankex (up 4.76%), the BSE IT index (up 4.11%), the BSE TECk index (up 4.09%), outperformed the Sensex.
The BSE Oil & Gas index (up 0.48%), the BSE Healthcare index (up 0.96%), the BSE Consumer Durables index (up 1.34%), the BSE Capital Goods index (up 2.72%), the BSE Power index (up 2.82%), the BSE Metal index (up 3.01%), the BSE FMCG index (up 3.02%), the BSE PSU index (up 3.31%), the BSE Realty index (up 3.55%), underperformed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) was flat at Rs 1,919.10. The stock came off the day's high of Rs 1,964. RIL today said it has no unfettered rights to Krishna Godavari Gas. The company today told the Supreme Court it is bound by government policies on the pricing and sale of gas produced at the KG-D6 field, Reliance Industries said in the Supreme Court (SC) today, 17 July 2009. The company made its stand clear following a petition filed by Reliance Natural Resources (RNRL) seeking enforcement of a lower court order on supplying gas for less than the price set by the government.
The SC is scheduled to hear the dispute on 20 July 2009 in what could be the final stage of a wrangle sparked by the breakup of the Ambani family empire in 2005. The Bombay High Court ruled that RIL must honor a 2005 agreement to sell gas from the Bay of Bengal field to estranged brother Anil's company.
The accord required Reliance Industries to sell 28 million cubic meters of gas a day at $2.34 per million British thermal units for 17 years to Reliance Natural, a price that is 44% lower than fixed by the government.
Shares of oil exploration firms rose even as crude oil fell in New York, reversing two days of gains, as the US dollar rose against the euro, limiting the appeal of commodities as an investment. India's largest state-run oil exploration firm by revenue ONGC rose 1.79%. Cairn India rose 1.86%. Crude oil for August delivery fell as much as 51 cents, or 0.81% to $61.52 a barrel on the New York Mercantile Exchange.
India's largest copper maker by sales Sterlite Industries fell 0.42%, extending Thursday's 6.12% slide, on equity dilution concerns after the company said it has raised $1.5 billion from an issue of American Depositary Receipts in which parent Vedanta has subscribed $500 million.
IT stocks rose on hopes of a revival in US economy. US is the largest market for IT firms. India's third largest IT exporter by sales Wipro rose 3.11% as its American depository receipt (ADR) rose 3.77% on Thursday.
India's largest IT firm by sales Infosys rose 4.01% after the company raised the lower end of its annual forecast in dollar terms at the time of announcing Q1 June 2009 results late last week. Its ADR rose 0.78% overnight. India's largest IT exporter by sales TCS rose 3.13% ahead of its Q1 June 2009 result today.
Two-wheeler makers rose for the second straight day boosted by good Q1 June 2009 results from Bajaj Auto during market hours on Thursday, 16 July 2009. Bajaj Auto gained 0.59% after surging 5.12% yesterday. Bajaj Auto's net profit jumped 67.60% to Rs 293.49 crore in Q1 June 2009 over Q1 June 2008.
Hero Honda Motors and TVS Motor Company rose by between 0.4% to 6.49%.
India's largest commercial vehicle maker by sales Tata Motor rose 6.68% on recent reports the company will deliver the first batch of Nano, the world's cheapest car, in the last week of July 2009.
India's largest small car maker by sales Maruti Suzuki India rose 3.58% and India's largest tractor maker by sales Mahindra & Mahindra rose 8.07%.
Bank stocks rose after the Finance Minster said early this week that the government is committed to financial sector reforms. The minister's articulation of commitment to financial sector reforms suggests that greater foreign direct investment in insurance and pension reforms, issue that had been put in cold storage because of Left opposition during the UPA's last term, would now be expedited.
India's largest private sector bank by net profit ICICI Bank rose 6.82% even after its American depository receipt (ADR) fell 1.51% on Thursday, 16 July 2009.
India's biggest bank in terms of branch network State Bank of India (SBI) rose 4.19% after Chairman O P Bhatt said early this week that the bank's net interest margin may be over 2.5% in the year ending March 2010.
Axis Bank rose 6.6% extending recent gains after net profit rose 70.24% to Rs 562.04 crore on 33.64% rise in total income to Rs 3864.13 crore in Q1 June 2009 over Q1 June 2008. The bank announced the result during market hours on Monday 13 July 2009.
India's second largest private sector bank bank in terms of operating income HDFC Bank rose 3.64%. HDFC Bank's net profit rose 30.52% to Rs 606.11 crore on 21.86% rise in total income to Rs 5136.75 crore in Q1 June 2009 over Q1 June 2008. Other income jumped 75.9% to Rs 1043.70 crore in Q1 June 2009 over Q1 June 2008, due to spurt in fees and commissions. The bank announced the result on Tuesday, 14 July 2009.
Some FMCG stocks rose following revival in India's annual monsoon. FMCG firms derive substantial revenue from the rural sector. Britannia Industries, ITC, Hindustan Unilever, and United Spirits rose by between 0.15% to 5.99%.
Some drug makers rose after the Finance Minister Pranab Mukherjee reduced customs duty on life saving drugs in the Budget. Ranbaxy Laboratories, Sun Pharmaceutical Industries, Cipla, Lupin, rose by between 1.08% to 2.31%.
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.
Power stocks rose on bargain hunting after a recent fall triggered by disappointment from the Budget. There was lack of any major sops in the Budget for the power sector. Reliance Power, Reliance Infrastructure, Power Grid Corporation of India, Tata Power Company rose by between 0.77% to 8.44%.
India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 3.03% recovering from Thursday's fall of 3.65% after the company stood by its stated outlook of 25% growth in order inflows for the current year even as the first quarter ended with a negative note. At the time of announcing Q1 June 2009 results, L&T had during trading hours on Thursday said its order inflow was down 22 % in Q1 June 2009 over Q1 June 2008. The company's order backlog at the end of the June quarter was Rs 71, 650 crore ($14.7 billion).
Other capital goods stocks, Praj Industries, BEML, ABB, Siemens, rose by between 1.29% to 7.11%.
Some cement stocks rose after a thrust on infrastructure development in the Union Budget 2009-2010. Birla Corporation of India, Grasim Industries, ACC, Ultratech Cements, rose by between 0.41% to 3.62%.
Construction stocks, too, were in demand. Era Infra Engineering, Hindustan Construction Company, IVRCL Infrstructure &Projects and Nagarjuna Construction Company rose by between 1.69% to 5.69%.
Finance Minister Pranab Mukherjee on 6 July 2009, provided a thrust on various infrastructure projects in the Budget which may result in increase in orders for construction firms and help boost cement demand. 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.
Realty stocks rose on the government strong thrust to the housing sector in the Union Budget 2009-2010. Unitech, Housing Development & Infrastructure, Indiabulls Real Estate, DLF, Omaxe, Ackruti City rose by between 1.67% to 5.02%.
Fertiliser shares rose on of the annual monsoon rains. 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 rose by between 0.76% to 3.67%. The fortunes of the fertiliser sector are linked to monsoon.
Shares of tyre companies rose after JK Tyre & Industries posted a robust Q1 numbers. CEAT, MRF, Apollo Tyres and Goodyear India rose by between 0.84% to 7.14%.
JK Tyre & Industries surged 10.84% after net profit jumped 101.3% to Rs 40.75 crore on 5.7% rise in net sales to Rs 897.67 crore in Q1 June 2009 over Q1 June 2008. The company announced its results after market hours on Thursday, 16 July 2009.
Shipping stocks rose as the Baltic Dry Index, a measure of shipping costs for commodities, surged 5.3% in London on Thursday, for a three- day advance of 18%. Essar Shipping, GE Shipping Company and Mercator Lines rose by between 1.01% to 3.21%.
Mahindra Satyam clocked the highest volume of 3.76 crore shares on BSE. Reliance Natural Resources (1.72 crore shares), Cals Refineries (1.61 crore shares),Ispat Industries (1.61 crore shares) and Suzlon Energy (1.38 crore shares) were the other volume toppers in that order.
Mahindra Satyam clocked the highest turnover of Rs 335.61 crore on BSE. Reliance Industries (Rs 243.55 crore), Reliance Capital (Rs 201.17 crore), Mahindra Holiday & Resorts (Rs 194.34 crore) and ICICI Bank (Rs 192.90 crore) were the other turnover toppers in that order.
Markets may resume its northward journey
A positive opening in most of the Asian indices in ongoing trades and prevailing strong bullish sentiment may help the local market advance further. However, bouts of strong intra-day volatile moves may weigh on the sentiment. Among the key indices, the Nifty has a resistance at 4250 and has a key support at 4200 in the near-term. The Sensex has a likely support at 14100 and may face resistance at 14400.
Us indices ended a volatile session higher Thursday, finding momentum in a choppy session, as investors welcomed JPMorgan Chase's better-than-expected profit report and geared up reports from tech leaders after the close. While the Dow Jones gained over 96 points at 8712, the Nasdaq moved up by 22 points at 1885.
Indian floats trading on the US bourses fared better on Thursday, the gainers were, Satyam registering the highest gains over 5.40% while Wipro, Patni Computers, Infosys, MTNL, Tata Motors and Rediff gained around 1% each. VSNL, ICICI Bank, Dr Reddy and HDFC Bank however, dropped around 1%.
Crude oil prices moved up, while the Nymex light crude oil for August delivery rose by 48 cents to close at $62.02 a barrel. In the commodity segment, the Comex gold for August series moved down $4 to settle at $935.40 an ounce.
Daily trend of FII/MF investment in equities
On July 15 2009, FIIs were net buyers of stocks to the tune of Rs1031 crore (purchases worth Rs2888 crore and sales of Rs1857 crore) while domestic mutual funds were net buyers of stocks to the tune of Rs249 crore (purchases worth Rs932 crore and sales of Rs683 crore).
Stocks with +ve bias: Reliance Energy, United Spirits, India Cements
Stocks for investments: Balrampur chini, Emco ltd, Ultratech cement & Bajaj Holdings
Infaltion for the week ended Jul 4th came in at –1.21% v/s expectaton of –1.36 %.
Pre Session Commentary - July 17 2009
Today domestic markets are likely to open positive. The US markets extended their gains in the last night session as JP Morgan Chase reported better than expected earnings and also on a macro economic front the Initial claims for the week ending July 11 came in at 522,000, which is the lowest since January. There are sings of some resurgence in the US markets and therefore one could witness some firmness across Asian markets. The northward movement in domestic arena would be grappled by some profit booking pressures.
On Thursday Domestic markets closed flat note as investors booked profits following steep rise in previous two sessions. However, market exhibited positive attitude during early trading on overnight rise in US stocks. Further, concerns regarding the inflation data and the negative opening of European markets hit the sentiments. Meanwhile, inflation stood at (-) 1.21% for the week ended July 4 against (-) 1.55% during the previous week mainly due to higher prices of fuel items. BSE Sensex ended around 14,250 level and NSE Nifty closed below 4,250 mark. From the sectoral front, Capital Goods, Metal and Power stocks witnessed most of the selling from these baskets. However, Auto, Oil & Gas, Consumer Durables, Pharma and Teck stocks were able to gain favour from the market. BSE Mid Caps and Small Caps stocks also observed buying. Today markets are likely to trade range bound.
The BSE Sensex closed slightly lower by 2.99 points at 14,250.25 and NSE Nifty ended marginally down by 2.10 points at 4,231.40. BSE Mid Caps and Small Caps closed with gains of 11.78 and 21.76 points at 4,990.42 and 5,545.56 respectively. The BSE Sensex touched intraday high of 14,493.10 and intraday low of 14,169.58.
Thursday, the US stocks markets closed higher on the back of some better than expected results from JP Morhan Chase, IBM and Google. This marks a fourth day rally for the markets. However the stocks were trading in sideways for most of the session but a follow through buying latter in the session helped offset weakness among financials. JPMorgan Chase posted a better-than-expected second quarter earnings due to strength in its core consumer and investment banking businesses offset a jump in credit losses. Second-quarter net income rose to $2.72 billion from $2 billion a year earlier, while net revenue jumped 41 per cent to $27.71 billion. The bank said it set aside $9.7 billion for credit losses, up from $4.29 billion a year earlier but down from the first quarter''s $10.07 billion. US light crude oil futures for August delivery closed at $62.02 per barrel up by 0.8% on the New York Mercantile Exchange. The crude prices finished modestly higher after trading in negative territory during the most of the session.
The Dow Jones Industrial Average (DJIA) advanced by 95.61 points at 8,711.82, NASDAQ index gained 22.13 points to 1,885.03 and the S&P 500 (SPX) grew by 8.06 points to close at 940.74 points.
Today major stock markets in Asia are trading mixed. Hang Seng is up by 213.90 points at 18,575.77. Shanghai Composite is low by 3.716 points at 3,180.026. Japan''s Nikkei is trading up by 63.41 points at 9,407.57. Strait Times is up by 1.56 points at 2,402.58. Seoul Composite is up by 3.84 points at 1,436.06 and KLSE Composite is up by 11.64 points at 1,108.88.
Indian ADRs ended mixed on Thursday. In the IT space, Satyam Computers was up 5.4%, Infosys was up 0.78%, Wipro was up 3.77% and Patni Computers was up 2.46%. In the telecom space, MTNL was up 1.03% while Tata Communication was down 1.21%. In the banking space, ICICI Bank was down 1.51% and HDFC Bank was down 0.52%. In other sectors, Tata Motors was up 0.47% while Sterlite Industries was down 13.45% and Dr Reddy''s Labs was down 0.69%
The FIIs on Thursday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,887.50 Crore and gross debt purchased stood at Rs 61.60 Crore while the gross equity sold stood at Rs 1,856.50 Crore and gross debt sold stood at Rs 112.40 Crore. Therefore, the net investment of equity reported was Rs 1,031.00 Crore and net debt was Rs (50.80) Crore.
On BSE, total number of shares traded were 43.11 Crore and total turnover stood at Rs 6,573.37 Crore. On NSE, total number of shares traded were 102.70 Crore and total turnover was Rs 19,783.87 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 61825224 shares, followed by Suzlon Energy with 55406274, Tata steel with 17033930, DLF Bank with 13339823 and SAIL with 12661027 shares.
On NSE Future and Options, total number of contracts traded in index futures was 832358 with a total turnover of Rs 17,011.57 Crore. Along with this total number of contracts traded in stock futures were 643731 with a total turnover of Rs 18,437.82 crore. Total numbers of contracts for index options were 1467779 with a total turnover of Rs 31,533.32 Crore and total numbers of contracts for stock options were 62634 and notional turnover was Rs 1,864.58 Crore.
Today, Nifty would have a support at 4,218 and resistance at 4,298 and BSE Sensex has support at 14,269 and resistance at 14,410.
Grey Market - Raj Oil Mills, NHPC, Adani Power, Excel Infoways
Excel Infoways Ltd. 80 to 85
4 to 6
Raj Oil Mills Ltd. 100 to 120
6 to 8
Adani Power 110 to 130 (Approximate)
11 to 13
NHPC 15 to 20 (Approximate)
3 to 4
Market set to open in green on positive global cues
The key benchmark indices may open in green on positive global cues. Revival in India's annual monsoon may also boost investor sentiment.
Most Asian stocks rose today and set for its first weekly gain in three weeks as key U.S. earnings reports beat expectations, fueling hopes that the global recession is receding. The key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.17% to 0.94%. But, China's Shanghai Composite fell 0.28%.
The US markets rallied for a fourth day on Thursday, 16 July 2009 on optimism about the earnings season. Nouriel Roubini said that the recession may end by year end also sparked off buying interest. The Dow added 95.61 points, or 1.1%, to 8,711.82. The S&P 500 index rose 8.06 points, or 0.9%, to 940.74. The Nasdaq rose 22.13 points, or 1.2%, to 1,885.03.
In economic news, initial jobless claims data showed a bigger-than-expected decrease. For the week ending 11 July they came in at 5.22 lakh, which is the lowest since January 2009.
In earnings front, Google Inc's quarterly profit beat Wall Street expectations, but the weak economy and slump in advertising spending took a toll on revenue growth and the price of its search ads. While, JPMorgan's robust results added to growing optimism about the quarterly earnings season.
Back home, the government ramped up its borrowing plan by nearly a quarter for the fiscal first half to September to bridge its growing budget deficit. After a meeting with finance ministry officials, Reserve Bank of India (RBI) Deputy Governor Shyamala Gopinath said on Thursday, 16 July 2009 the government would borrow an additional Rs 1,10,000 croe ($22.6 billion) from next week up to 30 September 2009.
The new figure means the government would have completed about 66 % of its full-year record borrowing target of a record Rs 4,51,000 crore in the first half. In its first budget last week after being re-elected with a stronger mandate, the Congress-party led government boosted spending on rural and infrastructure programmes, and projected the fiscal deficit to widen to 6.8 percent of gross domestic product, its highest in 16 years.
Meanwhile, the government is reportedly considering to divest stake in four PSUs -- National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) -- administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.
India's monsoon delivered above-average rainfall last week for the first time since it hit the southern coast on 23 May, limiting damage to rice, sugarcane and cotton crops and cheering farmers and policy makers. Rainfall in the week to 15 July was 6 % more than the long-term average. For the 1 June – 15 July period it was 27% below normal, improving from a deficit of 36 % up to 8 July.
The weather office also forecast widespread rainfall in the next five days in most regions of India where more than two-thirds of the people live in villages and 60 % of the farm land depends on the annual rains. The weak start to the vital June-September monsoon rains had stoked fears of crop failure, encouraging the government to ban wheat exports and prepare contingency plans. While the monsoon rains have picked up, progress has been uneven, causing floods in some areas and drought in some districts which are not major crop producers.
The key benchmark indices closed little changed in a volatile trade on Thursday after two day of strong gains. The BSE 30-share Sensex fell 2.99 points or 0.02% to 14,250.25. As per the provisional figures on NSE, foreign funds bought shares worth Rs 32.37 crore and the domestic funds sold shares worth Rs 35.02 on Thursday, 16 July 2009.
The stock market has entered a crucial period of earnings. Early this week, HDFC Bank, India's second biggest private sector bank, reported good Q1 results. Last week, IT bellwether Infosys reported better than expected Q1 results. TCS, Colgate, Crompton, India Infoline, Container Corporation, Goa Carbon, Kirloskar Brothers, Prime Securities, Sasken, Sonata Software, Wyeth, Radico Khaitan will announce their quarter ended March 2009 result today.
Crude pares earlier losses
Prices rise on back of positive economic data
Crude prices gave up earlier losses and managed to end higher on Thursday, 16 July, 2009. Prices rose today on the back of positive economic data.
On Thursday, crude-oil futures for light sweet crude for August delivery closed at $62.05/barrel (higher by $0.51 or 0.8%). Earlier, it fell to a low of $60.29. Last week, crude ended lower by 10.3%.
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 62% since then. In July, 2009, it has dropped by 11% till date. Year to date, in 2009, crude prices are higher by 40%.
The Labor Department reported on Thursday, 16 July, 2009 that the number of initial claims in the week ending 11 July, 2009 fell 47,000 to 522,000 - the lowest level since early January, 2009.
Also today, China reported that its gross domestic product grew by 7.9% in the April-June quarter from the year-earlier period, as government-led stimulus measures and strong bank lending spurred domestic consumption and industrial activity.
EIA reported yesterday that U.S. crude inventories fell 2.8 million barrels in the week ended Friday, 10 July, 2009. The drawdown in crude inventories came as crude-oil inputs in U.S. refineries rose to 15.105 million barrels a day last week, the highest level since late August. Refiners' utilization rate rose to 87.9%.
EIA also reported that gasoline inventories rose 1.5 million barrels, while distillate stockpiles, which include diesel and heating oil, rose 600,000 barrels. Demand for petroleum products, however, remained weak, pushing total petroleum product inventories to 771.6 million barrels last week, up 4.6 million barrels from a week ago. That's the highest level since September 1998.
Earlier during the week, in its latest monthly report, OPEC reported that global oil demand will fall by 1.6 million barrels a day this year from a year ago. It also said the cartel increased its production in June for a third straight month. As per OPEC, oil demand will fall this year as the global economy is expected to contract 1.4%. The cartel, which accounts for about one third of the world's oil production, also said its oil production in June rose to 28.441 million barrels a day.
Also at the Nymex on Thursday, August reformulated gasoline rose slightly to $1.7135 a gallon and August heating oil slid 1.73 cents, or 1.1%, to $1.5994 a gallon.
August natural gas futures jumped 38.5 cents, or 12%, to $3.668 per million British thermal units. EIA reported today that U.S. supplies of natural gas in storage rose 90 billion cubic feet last week, smaller than expected.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for August delivery closed at Rs 3,031/barrel, lower by Rs 28 (0.91%) against previous day's close. Natural gas for July delivery closed at Rs 177.2/mmbtu, higher by Rs 17.3/mmbtu (10.8%).
Precious metals end mixed
Silver rises but gold witnesses marginal drop
Precious metal prices ended mixed on Thursday, 16 July, 2009. Gold prices ended their three day winning streak and ended moderately lower. However, silver managed to gain for the day.
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 $935.4, lower by $4 (0.4%) an ounce on the New York Mercantile Exchange. Before today, gold had risen by 3% in the past three sessions. Last week, gold ended lower by 1.6%. Year to date, gold prices are higher by 5.9%.
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 Thursday, Comex silver futures for September delivery rose 4.1 cents (0.2%) at $13.235 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%.
The Philadelphia Fed's manufacturing index in US slipped to negative 7.5 in July from negative 2.2 in June. Though market was expecting a slide, the drop was more than expected. Readings below zero in the Philly Fed diffusion index indicate contraction in activity. The index measures the breadth of economic activity across firms.
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 53 (0.35%) at Rs 14,717 per 10 grams. Prices rose to a high of Rs 14,816 per 10 grams and fell to a low of Rs 14,694 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 37 (0.17%) lower at Rs 21,821/Kg. Prices opened at Rs 21,830/kg and fell to a low of Rs 21,727/Kg during the day's trading.
US stocks climbs led by tech shares, earnings optimism
US stocks gained on Thursday after JPMorgan`s strong results fed growing optimism about the quarterly earnings season and technology shares rose in anticipation of more good news.
The Dow Jones Industrial average gained 95.61 points, or 1.11%, to settle at 8,711.82.
The Standard & Poor`s 500 index climbed 8.06 points, or 0.86%, to end at 940.74.
The NASDAQ composite index rose 22.13 points, or 1.19%, to close at 1,885.03.
Asian stocks open on a positive note
Asian stocks rose as commodity prices rose and International Business Machines Corp. earnings beat analyst estimates.
Toshiba Corp, climbed 2% as IBM became the second technology bellwether this week after Intel Corp. to post forecasts that exceeded analyst targets. Nomura Holdings gained more than 2.2% after the Nikkei English News said the nation`s investment banking revenue rose.
Japanese benchmark index Nikkei rose 32.84 points, or 0.35%, to trade at 9,377.
Hong Kong`s Hang Seng index climbed 190.04 points, or 1.03%, to trade at 18,551.91.
China`s Shanghai Composite fell 5.25 points, or 0.16% to trade at 3,178.49.
Taiwan`s Taiex index advanced 30.20 points, or 0.45%, to trade at 6,810.50.
South Korea`s Kospi index rose 2.05 points, or 0.14%, to trade at 1,434.27.
Singapore`s Straits Times lost 4.71 points, or 0.20%, to trade at 2,396.31. (7.40 a.m., IST)
Ranbaxy Labs
We recommend a buy in Ranbaxy Laboratories from a short-term trading perspective. The stock was on a medium-term correction from its June high of Rs 311 to Rs 240. This correction halted at the twin support at Rs 240 (a long-term key support level and intermediate-term up trendline). After taking support from this level, the stock resumed its intermediate up trend which has been intact since March low of Rs 133 (a 52-week low). The stock is trading way above its 50-day moving average. Moreover, the stock has breached its moving average congestion (21, 50 and 200 day) around Rs 250. The price rate of change (ROC) indicator has entered into the positive territory from the negative territory signalling buying interest. Both daily and weekly relative strength index (RSI) are heading to the bullish zone. We are bullish on the stock from a short-term trading perspective. We anticipate the stock to move up further until it hits our price target of Rs 284 in the upcoming trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 247.
via BL
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