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Thursday, August 06, 2009
Post Session Commentary - Aug 6 2009
After the yesterday’s gains, the domestic market today plunged sharply to close in red terrain on intense profit booking. Depressing cues from the US markets weighed on the sentiments. Unsatisfactory readings on the US service sector along with employment situation and a cautious outlook from P&G contributed to the downward journey. Benchmark indices were under pressure also on concern of weak monsoon that is below normal. Meanwhile, India’s inflation remained in negative for the eighth straight week, with falling 1.58% for the week ended 25th July compared with 1.54% decline in the previous week. The BSE Sensex ended below 15,550 level and NSE Nifty closed below 4,500 mark.
Market opened on downbeat note tracking weak cues from global markets. The US stocks markets closed lower on Wednesday following some weaker-than-expected economic reports. The ISM services index for July unexpectedly slipped to 46.4 from 47 in June. Besides, the latest ADP employment report in US indicated that 3.71 lakh jobs were slashed in July. Further, benchmark indices continued to trade weak amid volatility on sustained selling over the counters. However, market managed to gain some ground during afternoon trade tracking gains in European stocks, before slipping again. Going ahead, stocks extended losses and nosedived during final trading backed by strong selling pressure. From the sectoral front, investors off-loaded positions across the sectors. Besides, most of the selling was witnessed in Auto, Realty, Metal, FMCG, Power, Consumer Durables, Capital Goods and IT stocks. BSE Midcap and Smallcap indices also remained under pressure.
Among the Sensex pack 28 stocks ended in red territory and 2 in green. The market breadth indicating the overall health of the market remained negative as 1614 stocks closed in red while 1080 stocks closed in green and 73 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 389.80 points or (2.45%) at 15,514.03 and NSE Nifty ended down by 108.65 points or (2.31%) at 4,585.50. BSE Mid Caps and Small Caps closed with losses of 136.07 and 82.59 points at 5,559.26 and 6,314.79 respectively. The BSE Sensex touched intraday high of 15,969.81 and intraday low of 15,443.22.
Losers from the BSE Sensex pack are Tata Motors (6.93%), Hindalco (6.50%), JP Associates (5.53%), Maruti Suzuki (5.34%), Herohonda Motors (5.25%), ACC Ltd (4.94%), Sterlite Industries (4.79%), M&M Ltd (4.14%), ITC Ltd (4.02%), Tata Steel (3.87%), HUL (3.81%), Grasim Industries (3.55%), ONGC Ltd (3.32%), RCom (3.31%), Reliance Infra (3.01%), DLF Ltd (2.90%), SBI (2.57%), TCS Ltd (2.39%), HDFC (2.35%) and HDFC Bank (2.33%).
Gainers from the BSE Sensex pack are Sun Pharma (1.53%) and Wipro Ltd (0.04%).
India’s inflation remained in negative for the eighth straight week, with falling 1.58% for the week ended 25th July compared with 1.54% decline in the previous week. The annual inflation rate was 12.53% during the corresponding week of previous year. Wholesale price index for all commodities, used to measure the inflation, was up 0.04% on a week-on-week basis, at 236.9. The primary articles index was 0.4% high and the prices of manufacturing products dropped 0.1%. Meanwhile, inflation rate for the week ended 30 May 2009 was revised to a rise of 0.9% from a provisional 0.13% reported previously.
On the global markets front the Asian markets that opened before the Indian market, ended mostly up. Hang Seng, Nikkei 225 and Seoul Composite ended up by 404.47, 135.56 and 5.57 points at 20,899.24, 10,388.09 and 1,565.04 respectively. However, Shanghai Composite and Straits Times lost 72.17 and 5.33 points at 3,356.33 and 2,601.50 respectively.
European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading up by 29.28 points at 5,382.29 and in London FTSE 100 is trading up by 47.30 points at 4,694.43.
The BSE Auto index underperformed the benchmark indices as dropped by (4.43%) or 263.16 points at 5,676.95 on profit booking. Scrips that lost are Escorts Ltd (7.80%), Tata Motors (6.93%), Ashok Leyland (6.25%), Maruti Suzuki (5.34%) and Herohonda Motors (5.25%).
The BSE Realty index plunged (3.65%) or 144.08 points at 3,802.20. Losers are Indiabull Real (8.04%), Anant Raj (7.61%), Sobha Dev (3.61%), Housing Dev (3.48%) and Omaxe Ltd (3.43%).
The BSE FMCG index ended down by (3.29%) or 88.84 points at 2,613.45 on worries over progress of India''s annual monsoon. As United Brew (5.59%), ITC Ltd (4.02%), HUL (3.81%), Dabur India Ltd (3.65%) and Colgate Palm (3.39%) ended in red.
The BSE Metal index dropped by (3.05%) or 390.43 points at 12,405.06. Losers are Hindalco (6.50%), Ispat Industries (4.96%), Sterlite Industries (4.79%), Jindal Saw (3.93%) and Tata Steel (3.87%).
The BSE Power index lost (2.30%) or 68.73 points at 2,925.67. Main losers are Suzlon Energy (4.39%), Torrent Power (3.91%), Crompton Greaves (3.42%), Siemens Ltd (3.37%) and GMR Infra (3.17%).
The BSE Consumer Durables index closed lower by (2.13%) or 68.09 points at 3,136.08. Losers are Rajesh Export (5.09%), Blue Star L (3.71%), Titan Ind (1.17%), Gitanjali GE (1.08%) and Videocon Ind (0.93%).
Thermax Limited lost 0.48%. The company announced that it has received an order for a turnkey contract from a major cement producer in Egypt The order value is USD 20 million.
Tata Teleservices (Maharashtra) Limited dropped by 0.70%. The company announced the launch of TATA DOCOMO, the most awaited GSM brand, in Mumbai arid across Maharashtra.
Canara Bank lost 0.05%. Rate of interest on vehicle loans sanctioned on or after August 1 have been revised by the Bank starting at 8.50% for the first 12 months, 9.50% during the next 24 months and 10% for periods above 36 months to 60 months.
Sterlite Industries (India) Ltd slipped 4.79% as copper prices declined on renewed concerns of global economic health as well as profit-taking.
Tata Consultancy Services (TCS) decreased by 2.39%. The company announced that it has simultaneously implemented an automated trading system for Dalwa Securities SMBC (Dalwa) across multiple markets in the Asia Pacific (APAC) region Including Tokyo, Hong Kong and Singapore.
Tata Communications increased by 0.92%. The company has bagged a licence for offering international long distance services in Russia and intends to offer full range of services including voice and data. The company already has an office established in Moscow. Tata Communications now has direct presence in about 40 countries.
Allied Digital Services Ltd rose 0.09% on reports it is evaluating acquisition deals in Europe and Australia worth $100 million by the next quarter.
BSE Bulk Deals to Watch - Aug 6 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
6/8/2009 519532 ASIAN TEA EX RAKESH MANGILAL SURYA S 50000 25.40
6/8/2009 532995 AVON CORP BASMATI SECURITIES PVT LTD B 1679266 12.97
6/8/2009 532995 AVON CORP PRABHUDAS LILLADHER P LTD. B 605278 12.49
6/8/2009 532995 AVON CORP JMP SECURITIES PVT LTD B 571017 12.88
6/8/2009 532995 AVON CORP S V ENTERPRISES B 1520400 12.36
6/8/2009 532995 AVON CORP BASMATI SECURITIES PVT LTD S 1104070 12.30
6/8/2009 532995 AVON CORP PRABHUDAS LILLADHER P LTD. S 590277 12.67
6/8/2009 532995 AVON CORP JMP SECURITIES PVT LTD S 641017 12.79
6/8/2009 532995 AVON CORP S V ENTERPRISES S 1520400 12.42
6/8/2009 509475 BOMBAY PAINT DANNY JOSEPH S 10595 49.32
6/8/2009 590076 CAMSON BIO JITS SHARE TRADING PVT LTD B 50000 51.25
6/8/2009 590076 CAMSON BIO FAIR DEAL EQUIRES & REALTO PVT B 50000 51.25
6/8/2009 532969 CHI INVEST INDIA BROKING LTD B 100000 56.92
6/8/2009 532969 CHI INVEST MAVJI NARSHI CHHEDA HUF S 65000 54.92
6/8/2009 523200 CLASS DIAM I ARCADIA SHARE & STOCK BROKERS PVT. LTD B 348399 18.97
6/8/2009 523200 CLASS DIAM I ARCADIA SHARE & STOCK BROKERS PVT. LTD S 224954 18.84
6/8/2009 532022 FILAT FASH TRUPTI L NAIK B 51000 95.60
6/8/2009 532909 GRABAL ALOK ALOK FINANCE PVT. LTD. B 150000 59.73
6/8/2009 532909 GRABAL ALOK VECTOR FINANCIAL & MANAGEMENT CONSULTANT S 150000 59.73
6/8/2009 532786 GREAT OFFSH AAP INVESTMENTS B 247304 554.00
6/8/2009 532786 GREAT OFFSH ASHAV SHETH S 247304 554.00
6/8/2009 531025 INCA FINLEAS RAKESH MANGILAL SURYA B 24000 52.17
6/8/2009 531025 INCA FINLEAS GLOBAL FILM & BORD CASTING LTD S 28520 52.28
6/8/2009 511131 KAMAN HSG MANSI JANMEJAY VYAS S 78100 32.41
6/8/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 112916 7.02
6/8/2009 530255 KAY POW PAP GOPINATH SHARMA B 56012 7.01
6/8/2009 530255 KAY POW PAP SATISH KUMAR GUPTA B 57120 6.95
6/8/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 112916 7.08
6/8/2009 530255 KAY POW PAP GOPINATH SHARMA S 56012 7.03
6/8/2009 530255 KAY POW PAP SATISH KUMAR GUPTA S 57120 7.00
6/8/2009 531731 KUVAM INTL KAMLESH GUPTA S 21500 16.12
6/8/2009 532376 MRO-TEK LTD* BP FINTRADE PRIVATE LIMITED B 105666 31.46
6/8/2009 532376 MRO-TEK LTD* BP FINTRADE PRIVATE LIMITED S 105779 31.54
6/8/2009 524372 ORCHID CHEM MANGALAM INVESTMENT B 369593 111.03
6/8/2009 524372 ORCHID CHEM MANGALAM INVESTMENT S 369503 104.96
6/8/2009 509839 PUNJAB WOOLC SUSHMA RANIPUNNI S 78341 5.71
6/8/2009 517534 S.V.ELECTRIC KIRAN SUTTAMCHAND B 249000 5.17
6/8/2009 517534 S.V.ELECTRIC VASUDEO SECURITIES PVT LTD S 125000 5.17
6/8/2009 517534 S.V.ELECTRIC GENESIS SECURITIES PVT LTD S 125000 5.17
6/8/2009 524540 SECUN HEALTH SIVARANJIT PALEMPATI S 50000 28.85
6/8/2009 505729 SINGER INDI MOHAN RAO P G B 10000 30.50
6/8/2009 505729 SINGER INDI SINGER (INDIA) B.V S 15616 30.35
6/8/2009 530611 STURDY INDS KINOFOLK INDUSTRIES LTD. S 35000 26.20
6/8/2009 519228 TEMPT.FOODS MARYADA BARTER PRIVATE LIMITED S 150000 35.10
6/8/2009 503657 VEER ENERGY RITESH SHARES ADVISORS PRIVATE B 29187 180.89
6/8/2009 503657 VEER ENERGY MANISH KIRIT SHAH(HUF) B 10000 181.23
6/8/2009 503657 VEER ENERGY VIRESH P SHAH S 7500 180.72
6/8/2009 503657 VEER ENERGY JIGNA NIRESH SHAH S 7500 180.72
6/8/2009 531249 WELL PACK PA PANDYA HARDIK M B 25055 160.41
6/8/2009 531249 WELL PACK PA BENKO TRADING PRIVATE LTD B 50000 158.56
NSE Bulk Deals to Watch - Aug 6 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
06-AUG-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,202121,1164.85,-
06-AUG-2009,ALOKTEXT,Alok Industries Limited,HI-GROWTH CORPORATE SERVICES PVT. LTD.,BUY,2593000,21.99,-
06-AUG-2009,CHI,CHI Investments Limited,INDIA BROKING LTD.,BUY,100000,56.96,-
06-AUG-2009,DCB,Development Credit Bank L,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,1428213,39.54,-
06-AUG-2009,FSL,Firstsource Solutions Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1893152,29.79,-
06-AUG-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,BUY,2067381,29.82,-
06-AUG-2009,GRABALALK,Grabal Alok Impex Limited,NIRVAN HOLDINGS PVT. LTD.,BUY,149000,59.67,-
06-AUG-2009,GSSAMERICA,GSS America Infotech Limi,NAGARJUN VALLURIPALLI,BUY,1500,177.32,-
06-AUG-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,5608783,23.96,-
06-AUG-2009,IVC,IL&FS Investment Managers,INDIA DISCOVERY FUND LIMITED,BUY,789194,171.00,-
06-AUG-2009,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD.,BUY,2333552,36.47,-
06-AUG-2009,SASKEN,Sasken Commu Techno Ltd,ASIT C MEHTA FOREX PRIVATE LTD,BUY,204435,130.81,-
06-AUG-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1535858,21.35,-
06-AUG-2009,WWIL,Wire and Wireless (India),MAHALAXMI BROKRAGE INDIA PRIVATE LIMITED,BUY,1223864,21.42,-
06-AUG-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,202121,1165.62,-
06-AUG-2009,ALOKTEXT,Alok Industries Limited,HI-GROWTH CORPORATE SERVICES PVT. LTD.,SELL,2593000,21.98,-
06-AUG-2009,DCB,Development Credit Bank L,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,1396558,39.57,-
06-AUG-2009,FSL,Firstsource Solutions Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2225652,29.77,-
06-AUG-2009,FSL,Firstsource Solutions Lim,JAYPEE CAPITAL SERVICES LTD.,SELL,2300502,29.85,-
06-AUG-2009,GEODESIC,Geodesic Limited,MORGAN STANLEY INVESTMENT MANAGEMENT INC.A/C MORGAN STANLEY,SELL,550000,105.00,-
06-AUG-2009,GSSAMERICA,GSS America Infotech Limi,NAGARJUN VALLURIPALLI,SELL,145648,178.18,-
06-AUG-2009,IBREALEST,Indiabulls Real Estate Li,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,2228123,238.72,-
06-AUG-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,6412629,23.93,-
06-AUG-2009,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD.,SELL,2333552,36.48,-
06-AUG-2009,SASKEN,Sasken Commu Techno Ltd,ASIT C MEHTA FOREX PRIVATE LTD,SELL,204435,129.56,-
06-AUG-2009,WEBELSOLAR,Webel-SL Energy Systems L,KAYPEE INFOCOM PRIVATE LIMITED,SELL,70000,251.55,-
06-AUG-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1538144,21.40,-
06-AUG-2009,WWIL,Wire and Wireless (India),MAHALAXMI BROKRAGE INDIA PRIVATE LIMITED,SELL,1273864,21.42,-
Asian markets turned timid on Thursday
Shanghai, Sensex fell while Nikkei, Hang Seng turned higher
Stock market in Asian region turned timid on Thursday, 6 August 2009, with a weak set of economic reports from the U.S. hurting sentiment to an extent. While some of the markets in the region given up most of their gains, most markets recorded some impressive gains on rising optimism about a global economic revival.
On Wall Street, the weak economic data dragged on indices most of the day as traders eyed a profit-taking opportunity, but stocks were off their worst levels of the session at the close. The Dow Jones Industrial Average fell 39.22 points, or 0.4%, to 9280.97, while the S&P 500 was off 2.93 points, or 0.3%, at 1002.72. The Nasdaq Composite edged down 18.26 points, or 0.9%, to 1993.05.
In the commodity market, crude oil was little changed in New York amid rising equity indexes and concerns about excess availability of crude.
Crude oil in New York advanced earlier today to its highest since June 30, and Brent crude in London increased to its highest this year as stock markets in Europe and Asia rose on better-than- expected earnings. The U.S. Energy Department reported that crude stockpiles grew more than expected last week as refinery utilization fell to its lowest in more than two months.
Crude oil for September delivery rose as much as 45 cents, or 0.6 percent, to $72.42 a barrel on the New York Mercantile Exchange, and traded at $72.08 at 9:37 a.m. London time. Prices have gained 61 percent this year.
Brent crude oil for September settlement rose as much as 49 cents, or 0.7 percent, to $76 a barrel on London’s ICE Futures Europe Exchange. That’s the highest since Oct. 14, 2008. The contract traded for $75.61 at 9:37 a.m. local time.
Gold advanced as a falling dollar and weak U.S. economic data bolstered the precious metal’s appeal as a haven investment. Gold for immediate delivery gained 0.1 percent to $964.40 an ounce at 9:41 a.m. in Singapore. It reached $970.47 on Aug. 4, the highest since June 5.
In the currency market, the US dollar gained against the major currencies as weaker economic data from the US lowered risk appetite amid expectations from the European Central Bank and Bank of England rate decisions due today.
The Japanese yen weakened against the euro and the dollar on Thursday, 6 August 2009 as stocks advanced after Japanese companies reported improved earnings, reviving demand for higher-yielding assets. The Japanese yen was quoted at 95.14 against the US dollar, down from Wednesday’s quote of 94.97 yen.
The Hong Kong dollar was trading at HK$ 7.7500 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 held fast above 84 US cents after the jobs report for July showed a surprise jump in employment, fuelling speculation local interest rates may rise even before December. The dollar bounced to a high of $US0.8462 after data showed employment rose by 32,200 in July, confounding expectations for a drop of 20,000. Unemployment was steady at 5.8 per cent.
The Aussie pulled back by early evening to close at $US0.8429, but was still up from $US0.8404 seen here at yesterday's close. It was up on the yen at 80.20, from Wednesday's 79.86.
In Wellington trade, the New Zealand dollar held around 10-month highs against the greenback, reached on the back of strong rises in milk powder prices at Fonterra's monthly internet auction yesterday morning. The kiwi stayed above US 67 centsbb after the surge, getting to a high around US 67.60 cents shortly before midnight. After a bumpy session early today, the NZ dollar was buying US 67.39 cents by 8am.
The South Korean won ended at 1,222.5 won against the greenback, up 1.8 won from Wednesday's close, as foreign investors increased their holdings in local stocks.
The Taiwan dollar strengthened strongly against the greenback. The Taiwan dollar added against the US dollar as it was trading higher at NT$ 32.7920, up by NT$ 0.0720 from Wednesday’s close of NT$32.720.
Coming back in equities, Asian shares ended mostly higher, though Chinese stocks tumbled on persistent worries Beijing may tighten monetary policy to prevent asset bubbles.
In Japan, the shares market bounced as bargain hunters stepped in following yesterday’s slump. Shares of commodities companies gained on higher metal prices. Automakers bounced on bottom fishing on hopes a car manufacturers will expand market share. Gains were also driven by positive earnings reports. Soften yen against the euro and the dollar boosted up exporter shares. At the closing bell, the Nikkei 225 Stock Average index surged 1.32%, or 135.56 points, to 10,388.09, while the broader Topix index added 7.93 points, 0.8%, to 957.51.
On the economic front, Japan's leading index increased to 79.8 in June from 76.9 in the preceding month, a preliminary report by the Cabinet Office said Thursday. The leading index has now increased for the fourth consecutive month in June. The coincident index climbed to 87.8 from 87.1 in May. This is the third consecutive month the index has risen.
In Mainland China, share market tumbled dragged down by major heavyweights on concern that the central bank comment about fine-tuning its policy heralds a curbing of liquidity into the market, but property shares rebounded to lift the index off the lows.
Financials tumbled amid fears that central banks might be introduced tightening measures to cool the market. Properties plunged on report the southern city may start trials for a property tax. Materials stocks dived amid worries about companies’ valuation. Shares of coal, steel, and oil sectors dived after major index closes at fresh 14-month high Tuesday. Investors were cautious about companies valuations after the market surged fourteen month high. Shanghai shares have moved ahead of fundamentals and the whole market is facing increasing risks, as valuations are getting more expensive.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 2.11%, or 72.17 points, to 3,356.33, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dived 2.08% to 3,663.12.
In Hong Kong, the benchmark index surged after opening lower, ignoring a weak finish on Wall Street and a sharp decline in Shanghai. Shares of market heavyweight HSBC Holdings led the rally on an improved outlook after its first-half results earlier in the week. Gains were further extended in the afternoon, helped by rotational buying in new energy stocks and bargain hunting in properties. The Hang Seng Index surged 404.47 points, or 1.97%, to 20,899.24, while the Hang Seng China Enterprise has climbed up 84.12 points, or 0.70%, to 12,052.60.
In Australia, the stock market surged as better than expected corporate earning and strong jobs report boosting confidence the global economy is recovering. Banking stocks continuing climbs that started last week after analyst upgrades. Materials and resources benefited from a rise in metal prices. The property trusts enjoyed a stronger day too as money continued to flow into the sector that was previously held in cash by many institutions. At the closing bell, the benchmark S&P/ASX200 index surged 61.8 points, or 1.45%, to 4,326.3, meanwhile the broader All Ordinaries rose 58.8 points, or 1.38%, to 4,331.
On the economic front, the Australian Bureau of Statistics data showed that Australia’s unemployment rate held steady at 5.8% in July, seasonally adjusted.
In New Zealand, equities ended lower for the second day in a row. The NZX50 decreased by 0.91% or 27.92 points to 3056.14. The NZX 15 declined 1.17% or 66.08 points to close at 5627.78.
On the economic front, NZ unemployment hit 6% in the June quarter, up from 5% in March and much worse than most expected, as the recession knocked out thousands more jobs. During the June 2009 quarter, the number of people unemployed went up by 20.6% to reach 138,000.
In South Korea, stocks closed higher as investors scooped up financial shares on better-than-expected second-quarter earnings. The benchmark Korea Composite Stock Price Index (KOSPI) climbed 5.57 points to 1,565.04, recovering from the previous session's fall.
In Singapore, the stock market finished the volatile session lower amid bout of short covering and profit booking. Shares of major blue chip above the line as bargain hunters steeped in following yesterday selloff. Banks extended yesterday losses amid renewed jitters about credit tightening on the China. Properties, Manufacturing, transportation, and multi-industries shares bounced on bottom fishing. The blue chip Straits Times Index slid 5.33 points, or 0.2%, to 2,601.50.
In Taiwan, stock market posted its first advance in the month of August by closing higher, as financial stocks supported the gains with advance. The main Taiex share index rose 20.41 points or 0.30%, closing the day at 6868.65.
In Philippines, the stock market overturned yesterday's gains, closing more than 1% lower following weak global cues and lack of support from the easing inflationary pressures on the domestic front. At the final bell, the benchmark index PSEi lost 1.58% or 45.75 points to 2,841.21, while the All Shares index fell 20.98 points or 1.15% to 1,799.29.
In India, the key benchmark indices nose-dived in last one hour or so of trade led by fall in auto, metal, realty and FMCG stocks. The BSE 30-share Sensex went down 389.80 points or 2.45% to 15514.03 off close to 460 points from the day's high. The S&P CNX Nifty was down 108.65 points or 2.31% to 4,585.50.
Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.38% or 4.48 points to 1183.97 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2359.98.
In other regional market, Europe stocks returned to winning ways after a one-day hiatus as investors continued to return to financials reporting results. The U.K. FTSE 100 rose 0.9% to 4,688.10 and the German DAX added 1% to 5,406.33
Looking ahead for the day, the important news to note would be the much awaited rate decision by the European Central Bank and the Bank of England which are expected to keep rates unchanged at 1% and 0.5% respectively although the conference following the decision would hold the key as the central bank governors would make statements on the economic outlook and any further stimulus packages if any. From the US, the initial jobless claims would be the most important as higher job loss reading could lead to dollar strengthening as investors resort to risk aversion.
Sensex sheds 2.45% on profit taking
The Key benchmark indices nosedived in last one hour or so of trade led by fall in auto, metal, realty and FMCG stocks. The BSE 30-share Sensex lost 389.80 points or 2.45%, off close to 450 points from the day's high. The market breadth was weak.
The sharp slide materialised ahead of television reports at the fag end of the trading session that the monsoon rains were 66% below normal the week to 5 August 2009. Separate media reports suggested that monsoon rains during the period from 1 June 2009 to 4 August 2009 were 25% below normal. A weak monsoon may hamper economic growth as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
There are signs that the Indian economy is recovering from a slowdown last year. Growth in India's manufacturing activity held steady in July 2009 amid robust local demand and a slight rebound in exports. However, intense competition curbed companies' pricing power even as raw material costs jumped, a survey released during trading hours on Monday, 3 August 2009, showed. The Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, was at 55.30 in July 2009, little changed from 55.34 in June 2009. It has been above the threshold of 50 -- which separates expansion from contraction -- for four straight months. The new orders index rose to 59.75, its highest in nine months, from 58.56 in June 2009.
The stock market was volatile today, 6 August 2009. The market drifted lower in early trade as weak Asian stocks and lower US index futures triggered profit taking after a recent strong rally. The market cut losses later as Asian stocks recovered. The recovery gathered steam with the Sensex moving to positive zone from negative territory as European stocks rose in early trade. The market pared gains in mid-afternoon trade. A sell-off gripped the bourses in the last one hour or so of trade.
Heavy purchases by foreign funds has triggered a solid rally on the bourses this year. The Sensex was up 5866.72 points or 60.81% in calendar year 2009 as on 6 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex was up 7353.60 points or 90.11% as on 6 August 2009.
Foreign institutional investors' (FIIs) inflow in calendar year 2009 totaled Rs 36,360.70 crore (till 5 August 2009). However, foreign funds sold shares worth Rs 480.40 crore on Wednesday, 5 August 2009.
Investors continue to bet that the government will undertake economic reforms which may boost economic growth and corporate earnings. The government kickstarts the divestment process with the initial public offer of state run hydro power generation firm NHPC opening for bidding on Friday, 7 August 2009. The company is selling 168 crore shares comprising of 5% divestment of stake by the government and infusion of 10% fresh equity.
Inflation based on the wholesale price index (WPI) declined 1.58% for the 12 months to 25 July 2009 compared to previous week's fall of 1.54% government data showed at 12:00 IST today. Inflation for the week ended 30 May 2009 was revised upwards to a rise of 0.9% from 0.13%. Finance Minister Pranab Mukherjee said on Thursday said the government will take appropriate action if needed to tame prices.
The Q1 June 2009 results of India Inc were encouraging, with lower costs helping bottomline growth. The combined net profit of 3,028 companies rose 17% to Rs 73716 crore on 5% fall in sales to Rs 722149 crore in Q1 June 2009 over Q1 June 2008.
European shares rose on Thursday, after the Bank of England (BoE) surprised the financial markets by raising the size of its quantitative easing programme. Key benchmark indices in France, Germany and UK were up by between 0.76% to 1.26%.
The BoE extended its quantitative easing programme, raising the size of its bond purchase scheme to an unexpectedly large 175 billion pounds from 125 billion, and held interest rates at unchanged at 0.5%. The European Central Bank (ECB) is scheduled to announce its decision on interest rates shortly.
Asian stocks rose as Alumina posted a smaller-than-estimated underlying loss and Australian employers unexpectedly added jobs, boosting confidence the global economy is recovering. Key benchmark indices in Hong Kong, South Korea, Taiwan and Japan rose by between 0.3% to 1.97%. But China's Shanghai Composite index was down 2.11% led by financial companies and commodities producers, on speculation the central bank will rein in lending to avert bubbles in equities and property.
China's central bank late on Wednesday repeated that monetary policy will remain growth friendly, sticking with its view that the recovery was not solid, though it said it would use market tools to fine tune policy after unprecedented loan growth in the first six months of the year.
US index futures reversed losses. Trading in US index futures indicated Dow could rise 11 points at the opening bell today, 6 August 2009.
Disappointing readings on the service sector and employment situation dragged US stocks lower on Wednesday, 5 August 2009. The Dow fell 39.22 points, or 0.4%, to 9,280.97. The S&P 500 Index fell 2.93 points, or 0.3%, to 1,002.72, while the Nasdaq Composite Index fell 18.26 points, or 0.9, to 1,993.05.
The ISM services index for July 2009 unexpectedly slipped to 46.4 from 47 in June 2009. The latest ADP employment report indicated that 3.71 lakh jobs were slashed in July.
The BSE 30-share Sensex was down 389.80 points or 2.45% to 15,514.03. The Sensex rose 65.98 points at the day's high of 15,969.81 in afternoon trade. The Sensex fell 460.61 points at the day's low of 15,443.22 in late trade.
The S&P CNX Nifty was down 108.65 points or 2.31% to 4,585.50. Nifty August 2009 futures were near spot price at 4585.10. Turnover in NSE's futures & options (F&O) surged to Rs 73,819.40 crore from Rs 63,729.03 crore on Wednesday, 5 August 2009.
BSE clocked a turnover of Rs 7139 crore, higher than 6009.87 crore on Wednesday, 5 August 2009.
The market breadth, indicating the overall health of the market, turned weak. On BSE, 1072 shares advanced as compared with 1617 that declined. A total of 71 shares remained unchanged. The breadth had turned strong in early afternoon trade from negative breadth in early trade.
Among the 30-member Sensex pack, 28 fell while the rest gained.
The BSE Mid-Cap index was down 2.39% and the BSE Small-Cap index was down 1.29%. Both the indices outperformed Sensex.
The BSE Auto index (down 4.43%), the BSE Realty index (down 3.65%), the BSE FMCG index (down 3.29%), the BSE Metal index (down 3.05%), underperformed the Sensex.
The BSE Healthcare index (down 0.69%), the BSE Oil & Gas index (down 1.58%), the BSE Bankex (down 1.67%), the BSE PSU index (down 1.87%), the BSE Teck index (down 1.88%), the BSE IT index (down 2.09%), the BSE Capital Goods index (down 2.12%), the BSE Consumer Durables index (down 2.13%), the BSE Power index (down 2.3%), outperformed the Sensex.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.38% to Rs 2,046.55. It hit a high of Rs 2123.80 and a low of Rs 2020. Anil Dhirubhai Ambani Group (ADAG) company Reliance Power on Wednesday cast doubt on the government-appointed experts that approved the capital expenditure plan for the production of natural gas by rival Reliance Industries (RIL), drawing a sharp response from the Directorate General of Hydrocarbons (DGH).
Reliance Power chief executive officer J P Chalashani alleged that the London-based company Mustang Engineering and an academic P Gopalakrishnan who vetted RIL's higher capital spending plan were not independent because they could be linked to RIL and Mukesh Ambani.
The Ambani brothers have been at loggerheads since the death of their father in 2002, and a 2005 settlement saw the Reliance group split into two.
The Supreme Court on 30 July 2009 said, it will give a date on 1 September 2009 to expedite the decision pertaining to the Krishna-Godavari basin gas dispute between Mukesh Ambani's Reliance Industries (RIL) and Anil's Ambani's Reliance Natural Resources (RNRL). RNRL counsels Mukul Rohatgi and Mahesh Agrawal sought an early decision in the case.
Shares of three public sector oil marketing companies advanced as a revision in retail fuel prices in early July 2009 may boost Q2 September 2009 results. Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) rose by between 0.05% to 1.63%. On 1 July 2009 the government had hiked petrol price by Rs 4 per litre and diesel by Rs 2 per litre.
The three public sector oil marketing firms reported strong Q1 June 2009 results as they incurred negligible underrecoveries on domestic sale of fuel at controlled prices. The strong performance was despite lack of any oil bonds from the government.
Rate sensitive auto stocks fell on profit taking after recent surge triggered by healthy monthly sales figures for July 2009 and good Q1 June 2009 results. Mahindra & Mahindra, Bajaj Auto, Hero Honda Motors, and Maruti Suzuki India, TVS Motor Company fell by between 4.14% to 5.34%.
India's largest truck market by sales Tata Motors fell 6.93%. Early this week, the global ratings agency Standard & Poor's downgraded long term corporate credit rating of the auto major to 'B' from 'B+'. The outlook is negative. At the same time, Standard & Poor's lowered the issue rating on the company's senior unsecured notes to 'B' from 'B+'.
IT stocks fell as weak US data on the services sector and private payrolls cooled recent optimism the recession was retreating. US is the biggest market for Indian IT firms. India's second largest IT exporter by sales Infosys fell 1.91% as its American depository receipt (ADR) fell 1.06% on Wednesday. The company's chief executive S Gopalakrishnan on Wednesday said company is looking at acquisitions of companies with $450-$500 million revenue. He further said the company is pursuing outsourcing deals worth $1 billion and that 2-15 deals are in pipeline.
India's largest IT exporter by sales TCS fell 2.39%. The company has bagged an order from multi-brand discount chain The Loot. TCS will manage the back-end and software support system for the retail chain.
India's third largest IT exporter by sales Wipro was flat at Rs 498.25. The company announced on Wednesday, 5 July 2009, that it has entered a five-year contract with US apparel retailer Charming Shoppes Inc. to provide information technology services. Its ADR rose 0.39% on Wednesday
FMCG stocks fell on concerns over annual monsoon. FMCG firms derive substantial revenue from rural sector. Hindustan Unilever, Tata Tea, ITC, United Spirtis, Marico, Dabur India, fell by between 0.72% to 4.02%.
Rate sensitive realty shares declined on profit booking after recent strong gains triggered by of the government's thrust on housing sector in the Union Budget 2009-2010. Unitech, Indiabulls Real Estate, Phoenix Mills, Omaxe, Anant Raj Industries, Ackruti City, fell by between 2.09% to 8.02%.
India's largest realty player by market capitalization DLF fell 2.9% after reports the company is looking to exit its life insurance joint venture with the US-based Prudential Financial as it continues to sell non-core businesses that demand fund infusion. The company is reportedly scouting for a potential buyer for its 74% stake in DLF Pramerica Life Insurance.
Metal shares fell as metal prices fell on the London Metal Exchange amid concerns that China's central bank will rein in lending. Tata Steel, Steel Authority of India, Sterlite Industries, National Aluminum Company, Hindalco Industries fell by between 1.48% to 4.79%.
Copper for three-month delivery on the London Metal Exchange fell as much as 3.1% to $6,010 a tonne. Among other London-traded metals, aluminum slid 2.2% to $2,025 a tonne, zinc dropped 2.2% to $1,883 a tonne and lead declined 1.5% to $1,920 a tonne. Nickel was 3.9% lower at $19,650 a tonne and tin declined 2 to $15,000 a tonne.
Rate sensitive bank stocks fell on profit taking after recent surge. India's biggest bank in terms of branch network State Bank of India (SBI) fell 2.57%
India's largest private sector bank by net profit ICICI Bank fell 0.98%. Its ADR was flat on Wednesday. India's second largest private sector bank by net profit HDFC Bank fell 2.33% as its ADR fell 0.51% on Wednesday.
India's largest electric equipment maker by sales Bharat Heavy Electricals (Bhel) fell 1.58%. The company has bagged a Rs 2,600-crore order from Hindal India Thermal Power for its 1,200 megawatt greenfield power project located at Derang in the Angul district of Orissa.
India's largest engineering and construction firm by sales Larsen & Toubro fell 1.89%. As per reports, the company has sought permission from market regulators to sell its stake in outsourcer Mahindra Satyam.
Other capital goods stocks, Crompton Greaves, Praj Indutries, , ABB, BEML, Thermax, Siemens fell by between 0.48% to 3.42%.
Cement stocks fell on profit taking after a recent surge triggered by healthy July 2009 monthly sales. UltraTech Cement, Ambuja Cements, ACC fell by between 0.14% to 1.94%.
Construction shares fell on profit booking after recent strong gains triggered by of the government's thrust on the infrastructure sector in the Union Budget 2009-2010. Gayatri Projects, IVRCL Infrastructure & Projects, Era Infra Engineering, Hindustan Construction Company fell by between 1.57% to 5.69%.
Some power stocks fell on profit taking after recent surge on strong response to Adani Power's initial public offer. The IPO of Adani Power was subscribed over 21 times on 31 July 2009. CESC, Reliance Power, PowerGrid Corporation of India, Reliance Infrastructure, Torrent Power, GVK Power & Infrastructure, NTPC fell by between 1.37% to 3.91%.
Cals Refineries clocked highest volume of 2.97 crore shares on BSE. Ispat Industries (2.53 crore shares), Firstsource Solutions (2.02 crore shares), Unitech (1.83 crore shares) and Mahindra Satyam (1.67 crore shares) were the other volume toppers in that order.
ICICI Bank clocked highest turnover of Rs 343.18 crore on BSE. Reliance Industries (Rs 272.97 crore), Reliance Capital (Rs 229.44 crore), Tata Steel (Rs 185.36 crore) and Mahindra Satyam (Rs 180.29 crore) were the other turnover toppers in that order.
US stocks register humble losses
Indices manage to curtail their losses as financial sector rebounds
US stocks witnessed modest losses on Wednesday, 05 August, 2009. All the ten sectors started the day in the red but it was the financial sector that ended relatively stronger with gains. Economic reports dominated the day. Crude prices slipped on energy department's weekly inventory report. But at the end, indices managed to curtail their losses.
The Dow Jones Industrial Average ended lower by 39.2 points at 9,280. The Nasdaq Composite Index, ended lower by 18.2 points at 1,993. S&P 500 ended lower by 2.9 points at 1,002.75.
Before market opened today, the latest ADP Employment Report indicated that 371,000 jobs were slashed in July, but that was greater than the 350,000 job losses that had been forecast. Meanwhile, job losses for June were revised lower to reflect 463,000 job cuts.
Better-than-expected earnings from Marsh & McLennan gave insurers, and hence the financial sector a good lift. Steel stocks also provided support to the materials sector after AK Steel said it would raise prices.
The Commerce Department reported on Wednesday, 05 August, 2009 that orders for U.S made factory goods rose 0.4% in June, 2009 beating market expectations. Excluding transportation equipment, new factory orders rose 2.3%.
The report detailed that overall shipments rose 1.4% in June, following 10 consecutive months of declines. Shipments of durable goods fell 0.1% in June, and were down for 11 consecutive months.
A separate report showed that the ISM Services Index for July unexpectedly slipped to 46.4 from 47 in June. It was expected to come in at 48.
Crude prices gave up earlier losses and finally ended higher on Wednesday, 05 August, 2009. Prices fell earlier during the day as energy department's weekly inventory report showed more than expected build up in crude inventories for last week. But then crude pared its losses and ended higher as dollar gave up its early morning gains. On Wednesday, crude-oil futures for light sweet crude for September delivery closed at $71.97/barrel (higher by $0.55 or 0.7%). During intra day trading, it fell to a low of $69.71.
In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose in the early trading hours. It however slipped while the session was nearing its end.
Indian ADRs ended mixed today. WNS and Rediff were the main gainer today gaining almost 6% each. Tata Motors and Infy were the main losers shedding 1.6% and 1.2% respectively.
Tomorrow will be another busy day of for earnings and economic reports. Among economic data, new jobless claims is due at 8:30ET.
Daily Call - Aug 6 2009
The guiding force of this rally has been the Chinese economy. And if any questions are ever raised on the sustainability of the Chinese economic affluence, the world markets, including US and India will get jitters. Today is one such day, when Chinese markets are down 3% on concerns that monetary tightening could be in store after 7 months of easy money policy that has seen banks lending 160% of what they lent in whole of the last year.
Commodity stocks may take a beating and so would banking. So close your longs and take protective measures. Will this be a one day weakness, like the one we saw last week or some thing more enduring? The chances of the markets getting bearish from here are more. So even Hindustan Oil, some thing, which we have recommended in the past may only be a buy at dips story and not a outright trading buy if the 153 level is broken. In order to go short on the Nifty, one will have to first ensure that we trade below the 4600 mark for some 15 minutes. Keep a tight stop loss or simply buy lower puts if the 4600 level does cave in. Till the time this level breaks, there could be long trading opportunities if the Nifty does open sharply lower (more than 60 points) with the three minute low or 4600 as stop loss.
Pre Session Commentary - Aug 6 2009
Today domestic markets are likely to have gap down opening as US markets ended lower on Wednesday and Asian markets are trading mixed. Unsatisfactory readings in US on the service sector along with employment situation and a cautious outlook from P&G contributed to the downward journey. The ISM services index for July unexpectedly slipped to 46.4 from 47 in June. Market is expected to witness volatility during the trading session.
On Wednesday, Market opened on pleasant note tracking some positive cues from the US markets. The US stocks markets closed higher on Tuesday after strong increase in pending home sales and considerable strength in the financial sector has led the markets to gained momentum in the late trade. However, Indian stocks turned weak in line with weak Asian markets as Japanese automakers fell on Toyota''''s big loss. Further, market continued to trade with negative bias amid instability. During last trading hours, benchmark indices managed to move into green on upward movement in key stocks. Finally, market closed with good gains in line with positive European markets that contributed to the bounce back in the market movement. From the sectoral front, most of the buying was seen in Consumer Durables, Oil & Gas, IT, Teck and PSU stocks. BSE Midcap and Smallcap indices also remained in buyer’s radar. However, Realty, Auto and FMCG stocks witnessed most of the selling from these baskets.
The BSE Sensex closed higher by 72.85 points or (0.46%) at 15,903.83 and NSE Nifty ended up by 13.65 points or (0.29%) at 4,694.15. BSE Mid Caps and Small Caps closed with gains of 6.60 and 63.43 points at 5,695.33 and 6,397.38 respectively. The BSE Sensex touched intraday high of 15,973.10 and intraday low of 15,695.11.
On Wednesday, the US stock markets ended down regardless of a late effort to revert losses. Unsatisfactory readings on the service sector along with employment situation and a cautious outlook from P&G contributed to the downward journey. The ISM services index for July unexpectedly slipped to 46.4 from 47 in June. Besides, the latest ADP employment report indicated that 3.71 lakh jobs were slashed in July. US light crude oil futures for September delivery closed at $71.97 per barrel up by 0.8 % on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 39.22 points at 9,280.97, NASDAQ index declined by 18.26 points to 1,993.05 and the S&P 500 (SPX) closed lower by 2.93 points at 1,002.72.
Today major stock markets in Asia are trading mixed. Hang Seng is up by 86.19 points at 20,580.96 followed by Japan''s Nikkei is trading up by 98.22 points at 10,350.75. However, Shanghai Composite is down by 83.53 points at 3,344.97 and Taiwan Weighted is low by 29.42 points at 6,818.82.
Indian ADRs ended mixed on Wednesday. In the telecom space, MTNL was down 3.63% and Tata Communication was down 1.59%. In the banking space, HDFC Bank was down 0.51% while ICICI Bank was up 0.09%. In the IT space, Infosys was down 1.06% while Wipro was up 0.39%, Satyam Computers was up 2.59% and Patni Computers was up 1.09%. In other sectors, Tata Motors was down 1.61%, Dr Reddy''s Labs was down 1.16% while Sterlite Industries was up 1.51%.
The FIIs on Wednesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,781.40 Crore, while the gross equity sold stood at Rs 2,573.70 Crore and gross debt purchased stood at Rs 3,110.60 Crore, while gross debt sold stood at Rs 429.60 Crore. The net investment of equity reported was Rs 207.80 Crore and net debt was Rs 2,681.00 Crore.
On Wednesday, the partially convertible rupee ended at Rs 47.52/53, 0.44% stronger than its previous close at 47.73/74. The rupee gained on the back of positive trading in the local stock markets.
On BSE, total number of shares traded were 46.84 Crore and total turnover stood at Rs 6,009.87 Crore. On NSE, total number of shares traded were 95.51 Crore and total turnover was Rs 18,062.01 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 56039277 shares, followed by Suzlon Energy with 32578581, Hindalco with 19760095, Tata Steel with 109852.06 and DLF with 9671208 shares.
On NSE Future and Options, total number of contracts traded in index futures was 812264 with a total turnover of Rs 17,902.73 Crore. Along with this total number of contracts traded in stock futures were 567699 with a total turnover of Rs 18,212.03 crore. Total numbers of contracts for index options were 1102603 with a total turnover of Rs 26,133.71 Crore and total numbers of contracts for stock options were 45640 and notional turnover was Rs 1,480.55 Crore.
Today, Nifty would have a support at 4,616 and resistance at 4,748 and BSE Sensex has support at 15,653 and resistance at 16,099.
Volatility continues
The market is likely to witness sideways movement on the back of a strong intra-day volatile move. Stocks across the sectors along with heavyweights may gyrate sharply. Overnight weakness in the US indices and mixed Asian markets in morning’s trades may further dampen the investors' sentiment. On the technical side, the Nifty has a stiff resistance at 4755-4810 levels and the downside strong support at 4641-4579, while the Sensex could test higher levels of 16063 and has a likely support at 15697.
US indices lost ground on Wednesday as investors became cautious in the wake of some weaker-than-expected economic reports. The Dow Jones industrial average (INDU) gave up 39 points, at 9281 and the tech-heavy Nasdaq composite (COMP) eased 18 points, at 1993.
Most of the Indian ADR's fell on the US bourses. MTNL was the biggest loser and dropped over 3.50% while Infosys, Dr Reddy, Tata Motors and VSNL were down around 1% each. However, Rediff soared over 6% while Satyam, Patni Computers and Wipro gained around 1% each.
Crude oil prices in the US market edged higher, with the Nymex light crude oil for September delivery up by 55 cents to close at $71.97 per barrel. In the commodity segment, the Comex gold for December series dropped by $3.40 to settle at $966.30 an ounce.
Daily trend of FII/MF investment in equities
On August 04, 2009, FIIs were net buyers of stocks to the tune of Rs207 crore (purchases worth Rs 2781 crore and sales of Rs 2574 crore). while domestic mutual funds were net buyers of stocks to the tune of Rs25 crore (purchases worth Rs879 crore and sales of Rs854 crore).
Grey Market Premium - NHPC, Adani, Raj Oil Mills
NHPC 30 to 36
Premium : 9 to 10
Adani Power 100
Premium : 7.50 to 8
Raj Oil Mills 120
Premium : 3 to 5
Market may slip tracking weak global cues
The key benchmark indices may slip tracking weak Asia and fall in US stocks on Wednesday. Profit taking may not be ruled out after the recent surge in indices. The government will announce India's wholesale price index (WPI) in the 12 months to 25 July 2009 today. Inflation had declined 1.54% in the 12 months to 18 July 2009, as compared with previous week's annual decline of 1.17%. With no near term domestic triggers investors will closely follow global developments for further cues.
Heavy purchases by foreign funds triggered a solid rally on the bourses this year. The Sensex was up 6256.52 points or 64.85% in calendar year 2009 as on 5 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex was up 7743.43 points or 94.89% as on 5 August 2009.
Foreign institutional investors (FIIs) inflow in calendar year 2009 totaled Rs 36,841.10 crore (till 4 August 2009). As per provisional figures on NSE, foreign funds sold shares worth Rs 690.53 crore and domestic funds sold shares worth Rs 23.90 crore on Wednesday, 5 August 2009.
There are signs that the Indian economy is recovering from a slowdown last year. Growth in India's manufacturing activity held steady in July 2009 amid robust local demand and a slight rebound in exports. However, intense competition curbed companies' pricing power even as raw material costs jumped, a survey released during trading hours on Monday, 3 August 2009, showed. The Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, was at 55.30 in July 2009, little changed from 55.34 in June 2009. It has been above the threshold of 50 -- which separates expansion from contraction -- for four straight months. The new orders index rose to 59.75, its highest in nine months, from 58.56 in June 2009.
The Q1 June 2009 results of India Inc were encouraging, with lower costs helping bottomline growth. The combined net profit of 3,004 companies rose 17% to Rs 73677 crore on 5% fall in sales to Rs 721948 crore in Q1 June 2009 over Q1 June 2008.
A weak monsoon remains a cause of concern though. India's monsoon rains were 18% below normal in the week to 29 July 2009, having been above normal in the preceding two weeks. Total rainfall since the beginning of June was 19% below average, the India Meteorological Department said on 30 July 2009. On the flip side, water levels in India's 81 main reservoirs rose to 35% of capacity in the week to 30 July 2009, up from 23% a week earlier and 31% a year ago, government data showed. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
Most Asian stocks fell today as Nikon Corp. forecast a record loss and some investors speculated China's central bank may rein in lending. The key benchmark indices in China, Hong Kong, South Korea, Singapore and Taiwan fell by between 0.44% to 3.11%. Japan's Nikkei rose 0.92%.
The US markets ended lower on Wednesday, 5 August 2009. Disappointing readings on the service sector and employment situation dragged the markets down.
The Dow fell 39.22 points, or 0.4%, to 9,280.97. The S&P 500 Index fell 2.93 points, or 0.3%, to 1,002.72, while the Nasdaq Composite Index fell 18.26 points, or 0.9, to 1,993.05.
In economic data. The ISM services index for July 2009 unexpectedly slipped to 46.4 from 47 in June 2009. The latest ADP employment report indicated that 3.71 lakh jobs were slashed in July. This came after the challenger report stated that planned job cuts jumped 31% last month. Meanwhile job loss estimates for June were revised lower to reflect 4.63 lakh job cuts. Only positive indicator being that the factory orders unexpectedly rose 0.4% in June 2009.
Precious metals end mixed
Gold drops but silver gains as dollar pares early gains
Yellow metal prices fell from their two month high levels on Wednesday, 05 August, 2009. Prices fell as the dollar strengthened following the private sector job report. But silver managed to rise.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Wednesday, gold for August delivery ended at $964.2, lower by $3.3 (0.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended almost unchanged. Year to date, gold prices are higher by 8.6%.
Gold ended July, 2009 higher by 2.8%. Before this, 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 (9.5%) since then.
On Wednesday, Comex silver futures for September delivery gained 6.5 cents (0.4%) at $14.76 an ounce. Last week, silver ended higher by 0.5%.
Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 30.7% this year. For 2008, silver had lost 24%.
In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose in the early trading hours. It however slipped while the session was nearing its end.
Before market opened today, the latest ADP Employment Report indicated that 371,000 jobs were slashed in July, but that was greater than the 350,000 job losses that had been forecast. Meanwhile, job losses for June were revised lower to reflect 463,000 job cuts.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for October delivery closed higher by Rs 19 (0.13%) at Rs 14,912 per 10 grams. Prices rose to a high of Rs 14,950 per 10 grams and fell to a low of Rs 14,851 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 140 (0.6%) higher at Rs 23,387/Kg. Prices opened at Rs 23,252/kg and rose to a high of Rs 23,498/Kg during the day's trading.
Crude pares early losses
Prices rise as dollar pares early gains
Crude prices gave up earlier losses and finally ended higher on Wednesday, 05 August, 2009. Prices fell earlier during the day as energy department's weekly inventory report showed more than expected build up in crude inventories for last week. But then crude pared its losses and ended higher as dollar gave up its early morning gains.
On Wednesday, crude-oil futures for light sweet crude for September delivery closed at $71.97/barrel (higher by $0.55 or 0.7%). During intra day trading, it fell to a low of $69.71. Last week, crude ended higher by 2.1%.
For the month of July, 2009, crude ended lower by a marginal 0.6%. 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 44% since then. Year to date, in 2009, crude prices are higher by 49%.
In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose in the early trading hours. It however slipped while the session was nearing its end.
EIA reported today that crude supplies increased 1.7 million barrels to 349.5 million barrels in the week ended 31 July, 2009. Market was expecting a rise of 1.5 million barrels. The Energy Department also said that gasoline stocks fell by 200,000 barrels and distillate inventories dropped by 1.1 million barrels last week.
Also at the Nymex on Wednesday, September reformulated gasoline fell 1 cent to $2.05 a gallon, while September heating oil rose 6 cents to $1.96 a gallon.
September natural gas futures rose 4 cents to $4.04 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 August delivery closed higher by 27 (0.8%) at Rs 3,404/barrel. Natural gas for August delivery closed at Rs 193.3/mmbtu, higher by Rs 4.3/mmbtu (2.3%).
Daily News Roundup - Aug 6 2009
L&T seeks SEBI nod to exit Mahindra Satyam. (BL)
L&T has bagged two projects worth Rs8.5bn. (BS)
BHEL has secured an order of Rs26bn from Jindal India Thermal Power. (BL)
Infosys and Wipro don’t have any immediate plan to create new facilities in Kolkatta. (BL)
GMR plans to grab opportunities in Rs1trn road project to be offered by NHAI. (FE)
MTNL to rent out vacant building space in seven of its properties in and around Mumbai. (BL)
Tata Communication get Russian license for long distance services. (BL)
Lanco Infra to raise Rs7.3bn through a QIP issue on a private placement basis. (BL)
Madras Fertilizers hopes to get government guarantee for feed stock supply. (BL)
Essar Group plans to sell stake in Essar Telecom Infrastructure. (ET)
DLF is looking to exit its life insurance JV with Prudential Financial. (ET)
Tata Group is planning to buyout AIG stake from the life insurance JV Tata AIG Life. (ET)
Wipro may bag big ticket deals each valued over US$100mn in Q2 FY10. (ET)
RPower has kick started the process of inviting bids for EPC contract for Dadri project. (ET)
Dish TV to shut sales in Uttar Pradesh from October. (ET)
Jet Airways to cut 2,000 jobs in phases. (ET)
Retailers in Maharashtra have threatened to boycott whisky brands of United Spirits. (ET)
Canara Bank to cut auto loan rates. (BS)
IOC has received major financial incentive from Orissa Government for its Paradip refinery. (FE)
Tea production up by 12% yoy in June. (BL)
Textiles export to US slip 12% yoy in H1 CY09. (BL)
Power deficit in the country has risen to a 5yr high in June. (BS)
Weightage of food product in the new WPI (2004-05 base year) is expected to reduce as weightage of primary goods is likely to fall from 22.02% to around 10%. (BS)
July truck sales see first rise after year of decline. (FE)
Strength seems missing!
Real strength is not just a condition of one's muscle, but a tenderness in one's spirit.
The muscle of liquidity seems so far so good. However, the key indices look to be struggling after having surpassed key levels recently. The market on the whole seems to be in a consolidation mode after a strong rally. Ditto goes for global markets, where key indices are exhibiting some signs of fatigue after touching new highs for the year. We expect another cautious start today. Given the circumspect mood across the globe, the market may not make much headway. A rangebound and choppy kind of trend is what we expect in the near term.
Friday’s monthly jobs data in the US could prove to be a catalyst. However, any advance could soon fizzle out after a strong run. Investors are looking to the third quarter with raised expectations that could be difficult to meet. In the absence of major positive triggers, liquidity will be a crucial factor that might drive the indices a little further up. But, don’t expect a runaway rally. There is bound to be some resistance though the fall should not be a big one. Any correction should be bought into as the medium to long term outlook is upbeat.
FIIs were net sellers of Rs6.9bn in the cash segment on Wednesday on a provisional basis while the local funds too pulled out Rs239mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs2.24bn. On Tuesday, the foreign funds were net buyers of Rs2.08bn in the cash segment. With this, their net purchases of Indian stocks have crossed $7.6bn year-to-date. Mutual Funds were also net buyers of Rs254mn on Tuesday.
Hong Kong shares were flat after opening lower. Shares in Shanghai are down sharply. There are concerns that Chinese regulators might fine-tune moderately loose monetary policy. Most banks declined. Except for the Nikkei, most Asian markets are trading in the red.
Nobel Prize-winning economist Joseph Stiglitz expects a “very slow recovery” in the US economy and that a replacement for Federal Reserve Chairman Ben S. Bernanke should be considered. US reports yesterday added to doubts that the recession in the world’s largest economy is easing, boosting demand for Japan’s currency as a refuge.
On the positive side, the yen fell for the first time in three days versus the euro and the dollar as Asian stocks advanced on speculation that Japanese companies will report stronger earnings, reviving demand for higher-yielding assets. The pound traded near a nine-month high against the dollar before the Bank of England’s policy-setting meeting. Economists say the UK central bank will leave its benchmark interest rate at 0.5%. Australia’s dollar approached the strongest level since October against the yen after the nation unexpectedly added workers in July.
The VIX Index, a measure of stock-market volatility known as Wall Street’s fear gauge, fell to as low as 24.86 yesterday, the least since July 28.
US stocks retreated on Wednesday as investors turned wary in the wake of some weaker-than-expected economic reports. The Standard & Poor’s 500 Index came off a nine-month high after reports on job losses and service industries were worse than economists estimated.
The Dow Jones Industrial Average shed 39 points, or 0.4%, the S&P 500 index lost 3 points, or 0.3%, and the tech-heavy Nasdaq Composite index eased 18 points, or 0.9%.
The fall reverses Wall Street's recent run, which has been spurred by better-than-expected second-quarter corporate results and signs of economic stabilization. Last month was the strongest July for the Dow and S&P 500 in two decades.
Paycheck processor Automatic Data Processing (ADP) said that private-sector employers cut 371,000 jobs in July, the smallest monthly total since October. Although the pace of job cuts is slowing, the number was higher than expected.
In addition, outplacement firm Challenger said that companies' planned job cuts rose 31% in July, indicating problems in the employment sector are far from over.
The reports come ahead of the US Labor Department's closely watched monthly jobs report, which will be released on Friday. That report is expected to show that the economy shed 328,000 jobs in July, less than the 467,000 reported for June.
A separate report showed that the US services sector contracted more than expected in July. The Institute for Supply Management's services index fell to 46.4 from 47 in June, shy of economists' forecast of 48. Any reading under 50 indicates the sector is contracting.
Meanwhile, a report from the Commerce Department showed a surprise uptick in demand for US-made manufactured goods. Factory orders increased 0.4% in June, while economists were bracing for a decline of 0.8%.
Consumer goods firm Procter & Gamble reported profits slightly higher than expected, although revenue declined as consumers moved away from its high-end product lines. Shares of Procter & Gamble lost 3%.
Kraft Foods reported an 11% jump in profit after U.S. markets closed Tuesday. Shares of Kraft ended nearly unchanged on Wednesday.
Shares of Whole Foods surged 16% after the gourmet food retailer turned a better-than-expected profit and a 2% rise in sales during its fiscal third quarter.
Shares of bailed out insurance giant American International Group (AIG) surged more 63% as the company brought on a new CEO, former MetLife chief Bob Benmosche. AIG is set to report its quarterly results Friday before the opening bell.
US light crude oil for September delivery settled up 55 cents at $71.97 a barrel. In its weekly supply report, the government said crude supplies rose by 1.7 million barrels last week, surpassing analysts' expectations of a 1.5 million barrel build.
COMEX gold for December delivery fell $3.40 to $966.30 an ounce.
Treasury prices fell, with the yield on the benchmark 10-year note jumping to 3.77%. On Wednesday, the government announced plans to auction $75 billion in US debt next week.
In currency trading, the dollar fell against the Japanese yen and the British pound and held nearly even with the euro.
On Thursday, the Labor Department reports on weekly jobless claims. The number of people who filed for first time benefits is expected to be 580,000, according to a consensus estimate, a slight decrease from the 584,000 who filed in the previous week.
Furthermore, sales figures for July from the nation's retailers are due throughout the morning.
European stocks finished lower. The pan-European Dow Jones Stoxx 600 index declined 0.4% to 226.93. The oil sector was the biggest contributor to its negative performance. The UK's FTSE 100 index fell 0.6% to 4,644.69, while Germany's DAX was down 1.2% to 5,353.01 and the French CAC 40 index slipped 0.5% to 3,458.53.
After losing ground in the previous trading session, Indian markets staged a come back on Wednesday led by gains in the Oil & Gas and IT stock. The heavyweights like Wipro, Infosys and Reliance Industries were the major gainers. Even the Small-Cap stocks were in demand unlike the Mid-Cap stocks which witnessed another day of offloading.
The media and entertainment stocks were back in action. Stocks like NDTV gained by 12% to Rs159, HT Media gained 11% to Rs115, Raj Tv was locked at 10% upper circuit to Rs55.40, ENIL surged 7% to Rs191 and Sun TV gained 3.6% to Rs274.
While, the Realty, Auto and the FMCG stocks were among the other major laggards.
The BSE Sensex gained 73 points or 0.4% at 15,903 after touching a high of 15,973 and a low of 15,695. The index opened at 15,882 against the previous close of 15,831. The NSE Nifty ended flat to shut shop at 4,685.
In Asia, the Nikkei in Japan ended down by 1.2% at 10,252 while Australia's S&P/ASX ended lower by 1% at 4,264. The Hang Seng index in Hong Kong ended lower by 1.4% at 20,494. Shanghai index in China slipped by 1.1% at 3,428.
In Europe, stocks were trading marginally higher. The FTSE in the UK was up 0.3%. The DAX was flat and the CAC 40 was up 0.7%.
Coming back to India, among the BSE sectoral indices, the IT index was the top gainer, gaining 2%, followed by the Consumer Durables index that was up 2%. The BSE Oil & Gas index up 1.8% and the BSE Teck index was up 1.1%.
The BSE Mid-Cap index ended flat and the BSE Small-Cap index ended higher by 0.9%.
Within the Sensex, the major gainers were ONGC, Wipro, ACC, Infosys, Sun Pharma, Reliance Infra and Reliance Industries. Among the major losers were Maruti, Hindalco, DLF, HDFC Bank, HUL, HDFC and RCom.
Outside the frontline indices, the top gainers included Godrej Industries, Glenmark, Aditya Birla, Moser Baer, Kotak Bank and Cadila.
Among the big losers in the broader market were Indiabulls Real Estate, Piramal Healthcare and United Phosphorous.
Shares of Infosys gained 2.5% to Rs2094 after the company’s arm won 5-year contract with T-Mobile. The stock opened at Rs2050 and made an intra-day high of Rs2105 and a low of Rs2050. Total traded volumes stood at 0.16mn shares.
Shares of Great Offshore shot up by over 10% to Rs559 as high stakes battle for the control of the company escalated further after ABG Shipyard raised the open offer price to acquire a 32.12% stake in the offshore service provider to Rs520 a share, according to a filing on the National Stock Exchange (NSE) today. On Monday, ABG bought 150,000 shares, or 0.4%, of Great Offshore from the open market at an average Rs498.39 a share and a maximum price of Rs519.94.
Last week, ABG had raised the open offer for Great Offshore to Rs450 a share. The open offer price prior to that was Rs375 a share. On July 29, ABG bought 5.3% stake in Great Offshore through a series of block deals taking its stake to 7.3%. It bought a further 212,348 shares of Great Offshore (0.6% stake) at Rs450 a share on the NSE, taking its total shareholding above 8%.
Bharati Shipyard owns 19.5% of Great Offshore and has announced an open offer at Rs405 a share. The two companies have time till August 24 to change their offer price.
Bharati Shipyard acquired a 14.89% stake in Great Offshore in May, at a price of Rs315 per share, from its vice chairman and managing director, Vijay Sheth, following an invocation of shares which he had pledged. This left Sheth with less than one per cent stake in the company and he lost control of the company. Bharati Shipyard needs just 6% to become a 26% shareholder and that will give it the power to block special resolutions.
Shares of NMDC ended at 5% upper circuit to Rs384.5 after the steel ministry approved a plan to sell 8.38% of the company.
"We have approved 8.38% disinvestment of government's stake in NMDC. We will be sending the proposal to the Disinvestment Department in a day or two (for initiating the process of equity sale)," Steel Secretary P.K. Rastogi said.
Government has already offloaded 1.62% stake in the listed entity. Post-disinvestment, government's stake in the iron ore mining company will be reduced by 10%--the minimum that is required to list shares of a company on the exchanges as per SEBI regulations.
Shares of Wipro gained by 3.2% to Rs498 after the company announced that it has entered into a 5-year strategic agreement with US-based multi-brand specialty retailer, Charming Shoppers, stated reports. The stock opened at Rs480 and made an intra-day high of Rs504 and a low of Rs478. Total traded volumes stood at 0.18mn shares.
Shares of Reliance Infrastructure gained by 2% to Rs1212 after the company in consortium with SNC Lavolin Inc. Canada and Reliance Communication were awarded Mumbai Metro-II Project on BOT basis for a concession period of 35 years with an extension clause of another 10 years.
The project has been awarded by Mumbai Metropolitan Region Development Authority through an international competitive bidding process. The estimated project cost is about Rs.110bn and is scheduled to be operational by 2015.
Shares of PVR shot up by over 10% to Rs122 after Reliance Cap Trustee’s Reliance Media and Entertainment Fund acquired ~0.5mn equity shares of the company at an average price of Rs103 per share.
The fund bought the shares from the open market on August 4, 2009. The stock has surged by over 15% from the funds purchase price.
On Wednesday the stock opened at Rs115 and made an intra-day high of Rs121.4 and a low of Rs115. Total traded volumes stood at 0.3mn shares.
The Promoters hold 41.2% stake in the company, while, institutional investors have 33.3% holding. Non-promoters have 4.2% while, public and others hold the remaining 21.23% in PVR.
Shares of Shriram Transport Finance surged by over 2% to Rs309 after ICICI Prudential Life Insurance acquired 2mn shares of the company from the open market. The shares were bought at an average price of Rs300 per share on the NSE on August 4, 2009.
Asian stocks open mixed
Asian stocks opened mixed on Thursday. The MSCI Asia Pacific Index was up for the first time in three days, as metal prices advanced and Nippon Telegraph & Telephone Corp. said first-quarter earnings grew.
Japanese benchmark index Nikkei gained 86.60 points, or 0.84%, to trade at 10,339.13.
Hong Kong`s Hang Seng index fell 10.43 points, or 0.05%, to trade at 20,484.34.
China`s Shanghai Composite decreased 61.97 points, or 1.81% to trade at 3,366.53.
Taiwan`s Taiex index declined 2.05 points, or 0.03%, to trade at 6,846.19.
South Korea`s Kospi index advanced 0.94 points, or 0.06%, to trade at 1,560.41.
Singapore`s Straits Times lost 0.71 points, or 0.03%, to trade at 2,606.12. (7.47 a.m., IST)
FIIs net sellers Rs 224cr in F&O on Wednesday
According to the data released by the NSE, FIIs were net sellers of index futures to the tune of Rs 53.94 crore and sold index options worth Rs 201.82 crore. They were net sellers of stock futures to the tune of Rs 51.23 crore while bought stock options worth Rs 82.4 crore.
Dishman Pharma
We recommend a buy on the stock of Dishman Pharmaceuticals and Chemicals from a short-term horizon. It is apparent from the charts that since its March low of Rs 87 (52-week-low), the stock has been on an intermediate-term upturn. After encountering resistance around Rs 200 in late May, it has been in a medium-term sideways consolidation. The stock, which had formed a symmetric triangle pattern since late June, broke out of the pattern conclusively on August 5. We have noticed above average volumes over the past six trading sessions. Moreover, the stock breached resistance at Rs 200 and is trading well above its 21- and 50-day moving averages. Both the daily and weekly relative strength index (RSI) have entered the bullish zone from the neutral region. The daily moving average convergence and divergence indicator signals a buy. Our short-term outlook on the stock is bullish. We expect it to move up until it hits our price target of Rs 225. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 193.
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