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Wednesday, August 12, 2009
Aban Offshore August 2009 futures at premium
Aban Offshore August 2009 futures at premium
Nifty August 2009 futures were at 4472.10 at a premium of 14.60 points as compared to the spot closing of 4457.50. Turnover in NSE's futures & options (F&O) segment surged to Rs 73,347.15 crore from Rs 63,519.37 crore on Tuesday, 11 August 2009.
Aban Offshore August 2009 futures were 1169, at a premium compared to the spot closing of 1150.15.
Reliance Industries August 2009 futures were at a premium at 1996.90 compared to the spot closing of 1990.70.
Sesa Goa August 2009 futures were at slight premium at 228.60 compared to the spot closing of 228.
In the cash market, the S&P CNX Nifty fell 13.85 points or 0.31% at 4457.50.
Asian markets sagged in pre-Fed caution
Shanghai slumped on tightening worries while Sensex, Hang Seng, Nikkei follows
Stock market in Asian region sagged on Wednesday, 12 August 2009, tracking the losses on Wall Street and as investors locked in profits as they waited to hear what the US Federal Reserve would say about prospects for recovery in the world's largest economy.
On Wall Street, stocks lost ground as investors fretted over discouraging bank headlines and the Fed's policy-making meeting. The Dow Jones Industrial Average closed down 96.5 points, or 1.03%, to 9241.45, while the S&P 500 gave up 12.75 points, or 1.3%, to 994.35. The Nasdaq Composite edged down 22.51 points, or 1.1% to 1969.73.
On the economic front, the Labor Department said preliminary data showed a 6.4% increase in productivity in the non-farm business sector in the second quarter, the largest since 2003, as hours worked declined faster than output. At the same time, unit labor costs decreased at an annual rate of 5.8%. In other data, the Commerce Department said wholesale inventories fell 1.7% in June, from a 1.2% decline the month before and vs. expectations for a 0.9% drop.
In the commodity market, crude oil fell below $69 a barrel in New York after equities declined and on speculation supplies increased in the U.S., the largest energy-consuming nation.
Crude oil for September delivery dropped as much as 61 cents, or 0.9 percent, to $68.84 a barrel on the New York Mercantile Exchange. The contract was at $69 at 3:22 p.m. in Singapore. Yesterday, it fell $1.15, or 1.6%, to settle at $69.45 a barrel. It was the fourth daily decline and the first time oil settled below $70 this month.
Brent crude oil for September settlement on London’s ICE Futures Europe Exchange dropped to as low as $71.68 a barrel, down 78 cents, or 1.1%, and traded at $71.92 at 3:23 p.m. in Singapore. Yesterday, the contract fell $1.04, or 1.4 percent, to settle at $72.46.
Gold advanced after U.S. stocks fell and the dollar depreciated on concern that bank earnings won’t improve in the second half. Gold for immediate delivery rose as much as 0.3% to $948.45 an ounce before trading at $946.70 at 12:58 p.m. in Singapore.
In the currency market, US dollar extended recent rally against most major currencies, helped by sharp falls in yen crosses, as investors awaits FOMC announcement today.
The Japanese yen strengthened against major currencies. The Japanese yen was quoted at 95.90 per greenback, down from Tuesday’s quote of 96.86-87 yen.
The Hong Kong dollar was trading at HK$ 7.7508 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 lost almost two US cents, after domestic wages data sparked doubts that the central bank will raise the overnight cash rate any time soon. At the local close, the local currency was trading at $US 0.8187, down from Tuesday's close of $US 0.8373.
In Wellington trade, the New Zealand dollar was weaker as investor’s trimmed positions ahead of a Federal Open Market Committee meeting in the US. A decline in US equities on Tuesday US time on profit taking and heightened rising risk aversion after disappointing economic data from China was also a factor.
The US dollar rallied against commodity based currencies like the NZ dollar on the suggestion of weakness in China's economy. By 5pm the NZ dollar was at US 66.48 cents, down from US 67.35 cents at the same time yesterday.
The South Korean won ended at 1,246.5 won against the dollar, down 7.4 won from Tuesday's close, as offshore investors snapped up the greenback.
The Taiwan dollar weakened further against the greenback. The Taiwan dollar gave up against the US dollar as it was trading lower at NT$ 32.9250, down by NT$ 0.0700 from Tuesday’s close of NT$32.8550.
Coming back in equities, the drop in Chinese markets led a generally down day for Asian stocks as most of the other markets ended lower taking a lead from Wall Street's drop Tuesday and on caution ahead of the outcome of a U.S. Federal Open Market Committee meeting.
In Japan, the shares market tumbled, easing from 10-month high as profit takers took money after weak finish of Wall Street overnight and ahead of the US Federal Reserve’s policy statement, while losses in other Asian markets put a further drag on sentiment. Exporters and automakers tumbled after yen strengthened against greenback. Banks and financials plummeted on negative rating for US banks. At the closing bell, the Nikkei 225 Stock Average index tumbled 150.46 points, or 1.42%, to 10,435, while the broader Topix index stumbled 13.64 points, 1.4%, to 959.87.
In Mainland China, share market stumbled on broad based sell off across the board as worries deepened about a possible tightening of market liquidity following a sharp drop in bank lending in July. Shares of exporters and banks and financials and properties dropped after the government data showed that exports and new loans tumbled in July 2009. Materials, industrials, and energy stocks dropped on pullback in commodities and crude oil prices. Falling shipping freight rates weighed down shipping companies.
At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, plunged 4.66% or 152.01 points to 3,112.72, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, plummeted 4.47% or 158.98 points to 3,397.40.
On the economic front, China's fiscal revenue rose 10.2% year on year to 669.59 billion Yuan (97.96 billion U.S. dollars) in July, Ministry of Finance announced today. The July figure brought the total fiscal revenue in the first seven months to 4.067 trillion Yuan, down 0.5% year on year, according to a statement from the ministry.
In Hong Kong, the benchmark Hang Seng index tumbled after opening lower, on tracking a weak finish on Wall Street and also weighed by profit-taking pressure after the benchmark indices ended at near 12-month high Tuesday. The Hang Seng Index retracted 638.97 points, or 3.03%, to 20,435.24, while the Hang Seng China Enterprise has retreated 332.47 points, or 2.77%, to 11,656.32.
In Australia, the stock market surged after opening lower, shrugged off a negative lead from Wall Street as surge in consumer confidence and a better than expected profit result from the Commonwealth Bank outweighing falls from the energy and properties. Investors favored individual stocks over the broader sectors. At the closing bell, the benchmark S&P/ASX200 index added 11.1 points, or 0.26%, to 4,343.1, meanwhile the broader All Ordinaries raised 11.5 points, or 0.27%, to 4,345.9.
On the economic front, the Westpac-Melbourne Institute consumer sentiment index rose 4 points in August to 113.4 points. The Australian Bureau of Statistics said that the wage price index grew at 0.8% for the second straight quarter ended June2009. The index saw the annual growth rate ease to 3.8% in the year to June from 4.2% as of the previous quarter, its slowest pace in at least two years.
In New Zealand, the share market eased after a pull back in major stock indices in the United States and ahead of the Fletcher Building result tomorrow morning. The benchmark NZX-50 index closed down 24.22 points, or 0.79%t, at 3079.69.
In South Korea, stocks closed lower as foreign and institutional investors unloaded financial and auto firms to lock in profits. The benchmark Korea Composite Stock Price
Index (KOSPI) fell 13.86 points to 1,565.35, the first drop in five sessions.
On the economic front, South Korea's unemployment rate fell to the lowest level in six months in July amid growing signs a protracted economic slump might be nearing an end. According to the report by the National Statistical Office, the jobless rate stood at 3.7% last month, down from 3.9% the previous month. The economy, however, shed 76,000 jobs last month compared with a year earlier, turning around from a year-on-year job growth in June, the first gain in six months, by adding 4,000 positions, the report showed.
In Singapore, the stock market tumbled as investors prompted for profit booking following a weak finish of Wall Street overnight and other Asian bourses. Banks dragged down the market on tracking negative cues from US peers. Meanwhile selling pressure was evident in manufacturing, multi industries, and construction shares. At the closing bell, the blue chip Straits Times Index eased 25.99 points, or 1%, to 2,571.31.
In Taiwan, stock market carried on its swing between gains and losses, as the rising death toll from Typhoon Morakot weighed on market sentiment and as financial shares tracked losses among their U.S. peers. The benchmark Taiex share index continued to swing between gains and losses ending the little lower by 10.12 points or 0.15%, closing the day at 6898.90.
In Philippines, despite the positive economic prospects, the stock market closed more than 1% lower, as investors took cues from the losses on Wall Street overnight, which in turn brought the key heavy weight stocks under selling pressure. At the concluding bell, the benchmark index PSEi lost 1.11% or 32.02 points to 2,828.52, while the All Shares index fell 1.01% or 18.36 points to 1,794.92.
In India, stocks were hurt by persistent concerns that deficient rainfall in several parts of the country would affect rural incomes and delay economic recovery. But the key benchmark indices closed with small losses, recovering sharply from a steep intra-day slide as stronger-than-expected domestic industrial data and recovery in European stocks aided the rebound. The BSE 30-share Sensex was down 54.43 points or 0.36% at 15,020.16. The S&P CNX Nifty was down 13.85 points or 0.31% to 4,457.50.
Elsewhere, Malaysia's Kula Lumpur Composite index went down 0.48% or 5.74 points to 1180.54 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2347.36.
In other regional market, European shares moved off early lows on Wednesday to trade flat amid contrasting reactions to earnings from companies such as utility E. Regional markets were mixed with the U.K. FTSE 100 index flat at 4,670.35, the German DAX index up 0.4% at 5,306.51 and the French CAC-40 index up 0.2% at 3,462.4
Post Session Commentary - Aug 12 2009
Indian market closed in negative on sustained selling in keys stocks, though minimized losses during final trading on strong industrial production data. Market sentiment was bearish during the trading due to weak global markets along with concerns over the below normal monsoon and the spread of swine flu. However, market recovered from day’s low during last trading hours in line with rise in European stocks. Moreover, the Index of Industrial Production (IIP) bounced back sharply in the month of June 2009 reporting a growth of 7.8%, higher than 2.7% reported in May. The BSE Sensex ended below 15,050 level and NSE Nifty closed below 4,500 mark.
Market opened on downbeat note tracking weak cues from the global markets. The Asian markets were down and US stocks markets closed lower on Tuesday, due to broad based selling led by banking stocks. Stocks skidded for the second consecutive day as investors awaited the Federal Reserve''s latest decision on monetary policy and guidance on the outlook for recovery from the recession. Further, the investors were closely watching the industrial output that was data due later in the day. The IIP improved sharply in the month of June 2009 reporting a growth of 7.8%. Stocks continued to extend losses till afternoon mainly on concern that lesser than normal rain may weigh down economic recovery. However, market started recovering during final trading hours and minimized losses at the end on positive European markets. From the sectoral front, IT, Metal, PSU, Oil & Gas, Bank and Capital Goods witnessed most of the selling pressure. However, Realty, Pharma and Auto stocks were able to gain favour from the market. The BSE Midcap and Smallcap indices also remained on buyers’ radar.
Among the Sensex pack 18 stocks ended in red territory and 12 in green. The market breadth indicating the overall health of the market remained negative as 1368 stocks closed in red while 1214 stocks closed in green and 99 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 54.43 points at 15,020.16 and NSE Nifty ended down by 13.85 points at 4,457.50. BSE Mid Caps and Small Caps closed with gains of 15.11 and 28.71 points at 5,414.53 and 6,134.93 respectively. The BSE Sensex touched intraday high of 15,043.62 and intraday low of 14,071.05.
Losers from the BSE Sensex pack are Tata Steel (4.20%), TCS Ltd (4.11%), HUL (2.32%), Infosys Tech (1.87%), Hindalco (1.85%), ONGC Ltd (1.82%), Sterlite Industries (1.76%), SBI (1.58%), L&T Ltd (1.57%), Tata Power (1.56%), Reliance Infra (1.10%), ICICI Bank (0.84%), M&M Ltd (0.82%) and Wipro Ltd (0.68%).
Gainers from the BSE Sensex pack are Bharti Airtel (5.84%), Tata Motors (4.41%), DLF Ltd (2.91%), Sun Pharma (2.73%), JP Associates (2.73%), HDFC Bank (1.64%), Herohonda Motors (1.30%), RCom (1.14%), ACC Ltd (1.03%) and ITC Ltd (0.80%).
Beating the forecasts, the Index of Industrial Production (IIP) bounced back sharply in the month of June 2009 reporting a growth of 7.8%, higher than 2.7% reported in May. Cumulative growth for April-June period stands at 3.7% over the corresponding period of the previous year. Moreover, the Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors stand at 183.3, 311.5, and 234.4 respectively as against the corresponding growth rates of 15.4%, 7.3% and 8.0% in June 2008. The cumulative growth during April-June, 2009-10 over the corresponding period of 2008-09 in the three sectors have been 7.3%, 3.2% and 6.0% respectively, which moved the overall growth in the General Index to 3.7%.
On the global markets front the Asian markets that opened before the Indian market, in red. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits Times Index and Seoul Composite ended lower by 152.00, 638.97, 150.46, 25.99 and 13.86 points at 3,122.72, 20,435.24, 10,435, 2,571.31 and 1,565.35 respectively.
European markets, which opened after the Indian market, are trading in green. In Frankfurt the DAX index is trading higher by 38.19 points at 5,324 and in London FTSE 100 is trading up by 25.42 points at 4,696.76.
The BSE IT index closed lower by (1.78%) or 71.55 points at 3,959.09 on profit taking. Losers are TCS Ltd (4.11%), Infosys Tech (1.87%), Moser Bayer (1.81%), Finance Tech (0.70%) and Wipro Ltd (0.68%).
The BSE Metal index dropped by (1.63%) or 200.57 points at 12,105.09 after LMEX, a gauge of six metals traded on the London Metal Exchange, dropped 1.96% on Tuesday. Scrips that lost are Sesa Goa Ltd (8.73%), Tata Steel (4.20%), Hindustan Zinc (3.23%), JSW Steel (2.17%) and Hindalco (1.85%).
The BSE PSU index lost (0.70%) or 56.75 points at 8,048.33. Main losers are Union Bank (3.47%), Dena Bank (2.63%), Allahabad Bank (2.42%), Indian Overseas Bank (2.41%) and Bank of India (2.23%).
The BSE Oil & Gas index dropped by (063%) or 60.05 points at 9,522.29 oil prices declined overnight on declines in US stock markets. Losers are Cairn Ind (2.91%), ONGC Ltd (1.82%), Essar Oil Ltd (1.30%), Gail India (1.11%) and RNRL (0.45%).
The BSE Realty index gained (2.15%) or 79.57 points at 3,772.59. Gainers are Ansal Infra (6.43%), Housing Dev (5.73%), Pheonix Mill (5.61%), Orbit Co (4.99%) and Sobha Dev (3.54%).
The BSE Pharma index ended up by (1.31%) or 49.99 points at 3,856.25. As Sunpha Adv (5.54%), Ranbaxy Lab (4.49%), Glaxosmith (3.91%), IPCA Lab (3.65%) and Wockhardt Ltd (3.22%) ended in green.
Tata Steel Ltd plunged 4.20% on reports the company has reduced prices of long steel products by up to Rs. 1,500 a tons, with immediate effect.
Tata Communications Ltd fell 2.63% after its American depository receipt slumped 5.48% to $18.99 overnight.
Gujarat NRE Coke Limited dropped by 1.49%. Gujarat NRE Minerals Limited (GNM), an Australian Subsidiary of the company plans of an off market takeover to acquire entire shares of Rey Resources Limited (REY) has received a big boost on its receiving no-objection from the Australian Government under the Foreign Acquisition and Takeovers Act, 1975.
Mphasis Ltd increased slightly by 0.03%. The company announced that it has reached a definitive agreement to acquire AIG Systems Solutions Pvt. Ltd. (AIGSS), part of American International Group Inc.
Sun Pharmaceuticals Industries Ltd gained 2.73%. The company (collectively with its subsidcries/''Sun Phcrma") announced that USFDA has granted approvals for two Abbreviated New Drug Applications (ANDAs), generic version of Eloxatin, oxdidatin for injection and generic version of Imtrex, sumatriptcn sumatriptan tablets.
NHPC IPO subscribed over 23 times
Receives bids for more than 3900 crore shares
State-run NHPC's initial public offer (IPO) was subscribed by a 23.44 times by 16:00 IST on Wednesday, 12 August 2009. The IPO got bids for 3932.57 crore shares as against 168 crore shares offered by the company. More than 133.11 crore shares were bid at cut off price.
NHPC is selling 168 crore shares comprising of 5% divestment of stake by the government and infusion of 10% fresh equity. The price band for the IPO is Rs 30 to Rs 36 per equity share.
The issue will constitute 13.64% of the post-issue capital of NHPC. The IPO closes on 12 August 2009.
NHPC is the largest hydroelectric power generating company in the country. It has 13 operating hydro electric power (HEP) plants with an installed capacity of 5,175 megawatts (MW) including two power stations of total 1,520-MW capacity set up through its joint venture subsidiary Narmada Hydroelectric Development Corporation (NHDC). Current total generating capacity is 5,134.2 MW, taking into account the downgrade of the capacity ratings of Loktak and Tanakpur power stations by the Central Electricity Authority.
NHPC is constructing 11 additional hydroelectric projects, which are expected to increase the installed capacity by 4,622 MW. These plants, barring Teesta Low Dam IV, are mostly in the north and northeastern states and scheduled to be commissioned between December 2009 and March 2013. The Teesta Low Dam IV project is coming up in the Darjeeling district of West Bengal.
NHPC is also awaiting government sanction to build another five projects with an anticipated capacity of 4,565 MW on its own and another 2,166-MW capacity projects through certain JV projects. In addition, the company is surveying and investigating proposals for nine additional projects totaling 7,255 MW of anticipated capacity.
Apart from development and operation of HEP projects, NHPC also develops, designs, and delivers HEP station to clients. The company has executed two HEP projects, i.e. Kurichhu HEP in Bhutan and Devighat HEP in Nepal, on contract. Further, it also provides technical, management advisory and consultancy services to domestic and international clients.
NHPC's consolidated net profit rose 3% to Rs 1244.15 crore on 19.2% growth in sales to Rs 3493.71 crore in the year ended March 2009 (FY 2009) over the year ended March 2008.
On post-IPO equity of Rs 12300.74 crore, the EPS for FY 2009 works out to Rs 1 and the PE is 30-36 times at the offer price band of Rs 30-Rs 36.
Sensex up 320 points from the day's low
The key benchmark indices registered small losses, recovering sharply from a steep intraday slide triggered by a sharp setback in Chinese stocks
. Stronger-than-expected domestic industrial production data and recovery in European stocks
aided the rebound in the second half of the trading session. The BSE 30-share Sensex lost 54.43 points or 0.36%, up 320 points from the day's low.
The barometer index regained psychological 15,000 mark in late trade after falling below that level in earlier in the day. Healthcare, telecom and readlty stocks gained. Index heavyweight Reliance Industries recovered from intraday low. IT and metal stocks fell. The market breadth, indicating the overall health of the market, was negative.
Intraday volatility was high. Equities cut losses after an early slide triggered by weak global stocks. However, the recovery proved short-lived. The market weakened in mid-morning trade. The market witnessed an intraday recovery once again in early afternoon trade soon after a stronger-than-expected industrial data hit the market. The Sensex slumped later as Chinese stocks declined sharply. The market cut losses after hitting a fresh intraday low in afternoon trade. The recovery gathered steam later as Eur7opean stocks rose.
Industrial output expanded at its fastest pace in 16 months in June 2009, beating forecasts by a wide margin, as higher salaries of government employees and stimulus spending boosted consumer demand. Industrial production jumped 7.8% in June 2009, data released by the government at about 11:55 IST today, 12 August 2009, showed. The growth was much higher than a revised 2.2% growth in May 2009. The growth in industrial production for May 2009 was revised downwards to 2.2% from 2.7%. Planning commission deputy chairman Montek Singh Ahluwalia said positive trend in industrial output will continue.
But, fears of slower economic growth ahead and lower yields of key crops rose on reports India's monsoon rainfall deficit since the beginning of the season on 1 June 2009 rose to 29% as on 10 August 2009. The seasonal rains were 28% deficient until 9 August 2009. The June-September rains were 42% short until 10 August 2009 over the cane-growing region of northwest India, same as the rainfall quantum until the previous day. The shortfall in rains over the soybean-growing region of central India widened by 1% point to 20%.
Finance Minister Pranab Mukherjee said on Tuesday 161 districts were drought prone and sowing of crops was down 20% from last year. The June-September rains are the main source of irrigation for farms and are crucial for Asia's third-largest economy as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
The India Meteorological Department (IMD) on Monday, 10 August 2009, pared its forecast for the June-September South West monsoon for a second time in three months and said state governments were free to announce drought. Rain in the June-September season will be 87% of the long-period average, compared with a previous forecast of 93% in June 2009.
Mukherjee said the government is prepared to manage a drought and a contingency plan was also in place. The Finance Minister said the government is sticking to a gross domestic product (GDP) growth target of more than 6% for the year ending March 2010 (FY 2010). He was confident that direct tax receipts target for FY 2010 would be surpassed.
The initial estimates showed that India's exports declined 26.2% in July 2009 to $13.6 billion due to a slump in global demand.
Concerns about the spread of swine flu remain. A Maharashtra schoolboy succumbed to swine flu just hours after three others in the state died of the same disease on Wednesday morning. With these deaths, the toll due to the viral infection has risen to 11 in the state and 15 in the country. A worried health minister Ghulam Nabi Azad has urged the chief ministers to take urgent steps to tackle the H1N1 disease that was unknown to India till the first case was reported 16 May 2009.
European shares reversed initial losses in volatile trade as investors awaited the outcome of a two-day meeting of the US Federal Reserve. Key benchmark indices in France, UK and Germany were up by between 0.3% to 0.65%.
The US Federal Reserve started its two-day meeting on Tuesday, with expectations that it will leave benchmark interest rates near zero and let a $300 billion programme to buy Treasury securities expire on schedule in September 2009 as economic gloom lifts.
In Asia, the Shanghai Composite index plunged 4.66% as investors took flight amid mounting concerns government-led investment and lending growth are beginning to moderate. The sharp decline comes a day after the People's Bank of China said lending by Chinese banks totaled 355.9 billion yuan ($52.1 billion) in July 2009, a decline of 77% from the prior month, and fixed-asset investment growth eased to 30% in July 2009 from a rise of 35% in June 2009.
In other Asian markets, key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 0.15% to 3.03%.
US index futures rose in volatile trade. Trading in US index futures indicated the Dow could rise 21 points at the opening bell on Wednesday, 12 August 2009.
There was broad-based selling in US markets on Tuesday, 11 August 2009. Financial stocks led the decline. The Dow Jones Industrial Average fell 96.50 points, or 1%, to 9,241.45. The broader S&P 500 index fell 12.75 points, or 1.3%, to 994.35. The Nasdaq Composite Index fell 22.51 points, or 1.1%, to 1,969.73.
In US economic news, the second quarter productivity increased at a better-than-expected 6.4%, the strongest increase since the third quarter of 2003. Unit labour costs fell 5.8% during the second quarter. The fall was sharper than expected and the steepest drop in eight years.
In other economic news, wholesale inventories fell for the 10th straight month by dropping a sharper-than-expected 1.7% in June 2009.
Closer home, the government after trading hours today, 12 August 2009, released a brand new Direct Taxes Code that will replace the 1961 Income Tax and other direct tax laws, providing a simple tax structure for better compliance. The new code will provide for a simple structure for capital gains tax, savings instruments and non-profit organisations, Mukherjee said, while releasing the Direct Taxes Code adding that there will be less scope for litigation.
The BSE 30-share Sensex was down 54.43 points or 0.36% at 15,020.16. At the day's low of 14,701.05, the Sensex fell 373.54 points in afternoon trade. The Sensex fell 30.97 points or 0.21% to 15,043.62 at the fag end of the trading session.
The S&P CNX Nifty was down 13.85 points or 0.31% to 4,457.50. Nifty August 2009 futures were at 4472.10 at a premium of 14.60 points as compared to the spot closing of 4457.50. Turnover in NSE's futures & options (F&O) segment surged to Rs 73,347.15 crore from Rs 63,519.37 crore on Tuesday, 11 August 2009.
BSE clocked a turnover of Rs 5,668 crore higher than Rs 5,072.56 crore on Tuesday, 11 August 2009.
The market breadth, indicating the overall health of the market, was negative. Nevertheless, the breadth improved when compared to a weak breadth earlier in the day. On BSE, 1208 shares advanced as compared with 1367 that declined. 99 shares remained unchanged.
Among the 30-member Sensex pack, 18 fell while the rest gained.
Foreign funds are selling equities this month after heavy purchases last month. FII outflow in August 2009 totaled Rs 412 crore (till 11 August 2009). Foreign funds had bought equities worth Rs 11,625.20 crore in July 2009. FII inflow in calendar year 2009 totaled Rs 35,745.10 crore (till 11 August 2009).
Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex was up 5372.85 points or 55.74% in calendar year 2009 as on 12 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex was up 6,859.76 points or 84.06% as on 12 August 2009.
Coming back to today's trade, the BSE Mid-Cap index was up 0.28% and the BSE Small-Cap index was up 0.47%. Both these indices outperformed the Sensex.
The BSE Realty index (up 2.15%), the BSE Healthcare index (up 1.31%), the BSE Auto index (up 0.36%), the BSE Consumer Durables index (up 0.35%), the BSE Teck index (up 0.15%), the BSE FMCG index (down 0.17%), the BSE Power index (down 0.2%), outperformed the Sensex.
The BSE IT index (down 1.78%), the BSE Metal index (down 1.63%), the BSE PSU index (down 0.7%), the BSE Oil & Gas index (down 0.63%), the BSE Bankex (down 0.5%), the BSE Capital Goods index (down 0.42%), underperformed the Sensex.
India's largest mobile services provider by sales Bharti Airtel gained for the second straight day, rising 5.84%. The Securities Appellate Tribunal (SAT) on Tuesday adjourned till 28 August 2009 the hearing on an appeal seeking greater clarity on a Securities & Exchange Board of India (Sebi) order, which exempts South Africa's MTN from making an open offer to shareholders of Bharti, if a merger deal between two telecom companies materialises.
On seeking guidelines on the proposed merger with MTN, Sebi in an order dated 22 June 2009 had said that telecom giant MTN need not make an open offer to Bharti shareholders in India as its stake in the domestic mobile company would be through the Global Depository Receipts (GDRs). The appeal was filed by a shareholder Deepak Mehra, who holds around 200 shares, arguing that MTN has to make an open offer to Bharti shareholders.
India's second largest mobile services provider by sales Reliance Communications rose 1.14% on reports the company has tied-up with US-based Kodiak Networks for a nationwide roll-out of mobile conferencing service
Sun Pharmaceutical Industries rose 2.73% after the company got USFDA approvals for generic versions of Eloxatin and Imtrex.
India's largest drugmaker by sales Ranbaxy Laboratories rose 4.49% after company entered the protein foods market with the launch of the 'Revitalite' brand.
Other healthcare stocks, Wockhardt, Cipla, Glaxosmithkline Pharma, Pfizer, Sterling Biotech rose by between 0.03% to 3.22%.
Auo stocks fell on concerns arising from scanty rains. Auto firms derive substantial revenue from rural India. Mahindra & Mahindra, Maruti Suzuki India, TVS Motor Company fell by between 0.07% to 4.69%.
But, India's largest commercial vehicle maker by sales Tata Motors rose 4.41% on reports the automaker has almost finalized short term funding for its two British luxury brands without the loan guarantee from the UK government.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) was down 0.39% to Rs 1991.75. The stock came off the day's low of Rs 1943.05. Reliance Industries (RIL) has reportedly filed a caveat in the Supreme Court, seeking to be heard before it considers any petition by National Thermal Power Corporation (NTPC). NTPC is expected to file a petition challenging last month's order of the Bombay High Court that allowed RIL to amend its plea in its dispute with NTPC.
RIL had bid to supply gas to NTPC's projects for 17 years at $2.34 per mmbtu. But RIL did not sign the contract and the matter is pending in Bombay High Court for resolution.
A dispute between Reliance Industries and Reliance Natural Resources on gas sales is before the Supreme Court. Cross-appeals between RIL and RNRL, will come up for hearing before the Supreme Court on 1 September 2009.
Oil exploration stocks fell as oil prices declined on Tuesday on fall in US stock markets and speculation supplies increased in the United States, the largest energy-consuming nation. Cairn India fell 2.91%. India's largest state-run oil exploration firm by sales ONGC fell 1.82%. US light crude ended down $1.15 a barrel to $69.45 on the New York Mercantile Exchange. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.
Shares of three public sector oil marketing companies rose on expectations that a hike in retail fuel prices in early July 2009 may boost Q2 September 2009 results. BPCL, HPCL and Indian Oil Corporation (IOC) rose by between 0.44% to 3.04%. 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 realty shares reversed early losses as the government's thrust on housing sector in the Union Budget 2009-2010 may help extend recovery in housing demand witnessed in the past few months. Unitech, Phoenix Mills, Indiabulls Real Estate, Ansal Properties, DLF rose by between 0.91% to 5.61%.
IT stocks fell on profit taking after recent strong gains triggered by hopes of recovery in the US economy. Indians IT companies derive a lion's share of revenues from exports to the US.
India's second largest IT exporter by sales Infosys fell 1.87% as its American depository receipt (ADR) fell 1.16% on Tuesday. India's third largest IT exporter by sales Wipro fell 0.68% as its ADR fell 2.68% on Tuesday. India's largest IT exporter by sales TCS fell 4.11%.
Metal shares fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.96% on Tuesday, 11 August 2009. Hindalco Industries, National Aluminum Company, Hindustan Zinc, JSW Steel, Sterlite Industries fell by between 0.68% to 3.23%.
India's largest steel maker by sales Tata Steel fell 4.2% on reports the company has reduced prices of long products, used primarily in the construction sector, by Rs 1,000-1,500 a tonne with immediate effect.
Some construction and cement shares rose as the government's thrust on the infrastructure sector in the Union Budget 2009-2010, may result in increase order flow for construction firms and may help boost cement demand. IVRCL Infrastructure & Projects, Era Infra Engineering, Hindustan Construction Company, Nagarjuna Construction Company rose by between 0.01% to 2.63%.
India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 1.57% even a joint venture of the company a Rs 4000-crore equipment order
From cement pack, UltraTech Cement, Grasim Industries, ACC, Ambuja Cements, rose by between 0.25% to 1.66%.
Power stocks fell even as the NHPC IPO received robust investor response. The IPO was subscribed 23.53 times by 17:00 IST on the last day of issue today. Reliance Infrastructure, NTPC, Reliance Power, PowerGrid Corporation of India, Tata Power Company, CESC, GVK Power & Infrastructure, fell by between 0.09% to 1.56%.
Bank stocks fell on weak American depository receipts (ADR) on Tuesday. India's largest private sector bank by net profit ICICI Bank fell 0.84% as its ADR fell 1.41% on Tuesday, 11 August 2009.
India's biggest commercial bank in terms of branch network State Bank of India (SBI) fell 1.58%.
But, India's second largest private sector bank by net profit HDFC Bank rose 1.64% even as its ADR fell 2.74% on Tuesday.
Among PSU banks, Punjab National Bank, Bank of India and Union Bank of India, fell by between 0.32% to 2.23%.
Raj Oil Mills settled at Rs 119.30 a discount of 0.58% over its offer price of Rs 120 on its debut today.
Raj Oil Mills clocked highest volume of 1.73 crore shares on BSE. Unitech (1.73 crore shares), Suzlon Energy (1.43 crore shares), Cals Refineries (1.2 crore shares) and GVK Power & Infrastructure (1.05 crore shares) were the other volume toppers in that order.
Reliance Industries clocked highest turnover of Rs 223.78 crore on BSE. Sesa Goa (Rs 219.60 crore), Tata Steel (Rs 213.01 crore), Raj Oil Mills (Rs 207.47 crore) and Aban Offshore (Rs 167.98 crore) were the other turnover toppers in that order.
US stocks drown further in losses
Financial sector acts as the main culprit
US stocks continued to stay deep in the red on Tuesday, 11 August, 2009. It was mainly the financial sector followed by the energy sector that led the pack of laggards today. Market did not show any excitement a day ahead of Federal Reserve's important decision on interest rates in its tomorrow's Federal Open Market Committee meeting. All ten sectors ended in the red today.
The Dow Jones Industrial Average ended lower by 96.5 points at 9,241.45. The Nasdaq Composite Index, ended lower by 22.51 points at 1,969.73. S&P 500 ended lower by 12.75 points at 994.35.
Weakness was broad-based for the entire session as participants moved to take profits, but defensive-oriented consumer staples stocks managed to limit losses.
In the financial sector, MBIA was a primary laggard after being hit with a downgrade at JPMorgan.
The Labor Department reported on Tuesday, 11 July, 2009 that U.S. companies slashed their workers' hours in the second quarter, boosting the productivity of the workplace to an annualized rate of 6.4%. It was the fastest increase in productivity in the nonfarm business sector in nearly six years. Unit labor costs, a key indicator of inflationary pressures, plunged at a 5.8% rate, the largest decline in nine years.
The report detailed that hourly compensation rose just 0.2% in the second quarter. After inflation, real hourly compensation sank 1.1%. Productivity in the first quarter was revised much lower, reflecting the revision to growth released in late July. As revised, productivity increased 0.3% in the first quarter, compared with the earlier estimate of 1.6%. Unit labor costs fell 2.7%.
A separate report showed that wholesale inventories for June decreased 1.7%, which is a sharper decrease than the 0.9% decrease that had been widely expected. The previous figure was revised downward to reflect a 1.2% decrease. Inventories have fallen in each of the past 10 months.
Crude prices ended lower on Tuesday, 11 August, 2009. Prices fell in synchronization with falling US stocks and also as traders mulled that last week crude supplies registered an increase. On Tuesday, crude-oil futures for light sweet crude for September delivery closed at $69.45/barrel (lower by $1.15 or 1.6%). During intra day trading, it hit a low of $68.71. Last week, crude ended higher by 2.1%.
In the currency market on Tuesday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 0.2%.
All the Indian ADRs ended in the red today. Rediff and Sify were the major losers shedding 7.3% and 8.4% respectively.
Latest Grey Market Premium - NHPC, Adani Power
NHPC 30 to 36
9 to 10
Adani Power 100
10 to 12
Raj Oil Mills 120
7 to 10
Pre Session Commentary - Aug 12 2009
Today domestic markets are likely to open with negative gap as all the Asian markets are also trading in southward direction on the back of negative cues from US markets. The financial sector in the US markets was the worst hit as JPMorgan Chase & Co. degraded MBIA Inc, which is the biggest bond insurer. In the domestic arena the bearish sentiments are likely to percolate stocks at broader level. One could witness an early selling pressure across frontline stocks. Today domestic markets are likely to trade negative.
On Tuesday, Domestic markets closed positive after late buying. Firm Asian stocks along with recovery in US index futures led sharp rebound from initial lows in the domestic bourses. On 10th August 2009, the India Meteorological Department (IMD) slashed its forecast for the June-September South West monsoon for a second time in three months and said state governments were free to announce drought. Further, Indian benchmark indices rebounded sharply and continued to trade with gains as most of the Asian stocks witnessed rise. Investors were hopeful that economic reforms would advance economic growth and corporate earnings over the medium term. However, market skidded from the day’s high during final trading but managed to recover again to end on positive terrain. From the sectoral front, all indices ended in green barring PSU stocks. Auto, Realty, Metal, Pharma, Power, Oil & Gas and Teck stocks supported the market. BSE Midcap and Smallcap indices also witnessed buying during the trading.
The BSE Sensex closed higher by 64.82 points at 15,074.59 and NSE Nifty ended up by 33.70 points at 4,471.35. BSE Mid Caps and Small Caps closed with gains of 58.94 and 33.19 points at 5,399.42 and 6,106.22 respectively. The BSE Sensex touched intraday high of 15,218.65 and intraday low of 14,864.23.
On Tuesday, US stock markets closed lower. The markets tumbled due to weakness in financial sector after JPMorgan Chase & Co. said that credit losses may overwhelm capital at MBIA Inc. MBIA, the biggest bond insurer, tumbled 13 percent after JPMorgan cut the company to “underweight.” A group of S&P 500 financial shares lost 3.5%, the steepest decline since July 2 and the biggest yesterday among 10 industries. American International Group Inc., the insurer rescued by the government, slumped by 13% to $24.92. Bank of America Corp fell the most on the Dow, dropping 5% to $15.85. A separate government report showed inventories at U.S. wholesalers fell in June for a tenth straight month as a gain in sales helped distributors move out more of their excess supply. US light crude oil futures for September delivery closed at $69.45 per barrel lower by 1.6% on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 96.54 points at 9,241.45, NASDAQ index declined by 22.51 points to 1,969.73 and the S&P 500 (SPX) closed lower by 12.75 points at 994.35.
Today major stock markets in Asia are trading in negative territory. Shanghai Composite is low by 78.60 points at 3,186.13. Japan''s Nikkei is trading low by 121.32 points at 10,464.14 followed by Strait Times and Seoul Composite, which are also trading lower by 13.15, and 24.03 points at 2,584.15 and 1,555.18 respectively. However, Hang Seng is down by 512.24 points at 20,561.97 and Taiwan Weighted is low by 7.60 points at 6,901.42.
The FIIs on Tuesday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 2,972.80 Crore, while the gross equity sold stood at Rs 3,200 Crore and gross debt purchased stood at Rs 676.00 Crore, while gross debt sold stood at Rs 381.80 Crore. The net investment of equity reported was Rs (227.30) Crore and net debt was Rs 294.20 Crore.
On Tuesday, the partially convertible rupee ended at 47.96/97, 0.31% weaker than its previous close at 47.81/82. Lackluster movement of domestic markets during the last trading hour pulled the sentiments of traders and therefore local currency succumbed to green back’s strength.
On BSE, total number of shares traded were 34.10 Crore and total turnover stood at Rs 5,072.56 Crore. On NSE, total number of shares traded were 77.08 Crore and total turnover was Rs 15,992.79 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 49866863 shares, followed by Suzlon Energy with 43490782, Bharti Airtel with 11346060, Tata Motors with 11327981 and DLF with 11230552 shares.
On NSE Future and Options, total number of contracts traded in index futures was 847356 with a total turnover of Rs 18,006.14 Crore. Along with this total number of contracts traded in stock futures were 516285 with a total turnover of Rs 15,877.74 crore. Total numbers of contracts for index options were 1234591 with a total turnover of Rs 28,200.10 Crore and total numbers of contracts for stock options were 45336 and notional turnover was Rs 1,435.39 Crore.
Today, Nifty would have a support at 4,365 and resistance at 4,411 and BSE Sensex has support at 14,742 and resistance at 14,923
Raj Oil Mills to list today
Shares of Mumbai-based Raj Oil Mills will debut on the bourses today, 12 August 2009. The company had priced its initial public offer at the top end of the Rs 100-Rs 120 price band. The IPO had closed for on 23 July 2009, with a total subscription of 1.24 times.
Market may fall tracking weak global cues
The key benchmark indices may fall tracking weak global stocks Scanty rains and swine flu scare may further weigh on investor sentiment. Investors will keenly watch industrial production data for June 2009 due today. Industrial output had risen by a faster-than-expected 2.7% in May 2009.
Asian shares sagged on Wednesday after losses on Wall Street and as investors locked in profits as they waited to hear what the U.S. Federal Reserve would say about prospects for recovery in the world's largest economy. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 0.39% to 2.4%.
The Fed started its two-day meeting on Tuesday, with expectations that it will leave benchmark interest rates near zero and let a $300 billion programme to buy Treasury securities expire on schedule in September as economic gloom lifts.
It was a broad based selling in the US markets on Tuesday, 11 August 2009. Financial stocks led the decline.The Dow Jones fell 96.50 points, or 1%, to 9,241.45. The broader S&P 500 index fell 12.75 points, or 1.3%, to 994.35. The Nasdaq Composite Index fell 22.51 points, or 1.1%, to 1,969.73.
In economic news, the second quarter productivity increased at a better-than-expected 6.4%, the strongest increase since the third quarter of 2003. Unit labour costs fell 5.8% during the second quarter. The fall was sharper than expected and the steepest drop in eight years.
In other economic news, wholesale inventories fell for the 10th straight month by dropping a sharper-than-expected 1.7% in June.
Back home, the key benchmark indices snapped last three days' losses, posting small gains on Tuesday 11 August 2009 in a highly volatile trading session. The BSE 30-share Sensex rose 64.82 points or 0.43% at 15,074.59 on Tuesday after falling 5.62% in the preceding three trading sessions.
Fears of slower economic growth and lower yields of key crops rose in India on Tuesday as the weather office cut its monsoon forecast and the government said more than a quarter of districts were prone to drought. While many of these districts are not major crop producers, most sugarcane and soybean areas remain parched and total rainfall since 1 June , the start of the four-month monsoon season, has been 28 percent short of normal till 8 August 2009. The weather office, which initially predicted normal monsoon rains, has forecast widespread rains in central India, the main soybean-producing region that has seen virtually no rain in the past three weeks. Finance Minister Pranab Mukherjee said on Tuesday 161 districts were drought prone and sowing of crops was down 20 percent from last year.
The June-September rains are the main source of irrigation for farms and are crucial for Asia's third-largest economy as more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
A doctor in Nasik on Wednesday 12 August 2009 became the 14th swine flu victim in India. This is the first swine flu death recorded in Nasik in Maharashtra. Swine flu claimed its seventh victim in Pune with the death of a 29-year-old woman in Sassoon hospital early on Wednesday. A worried health minister Ghulam Nabi Azad urged the chief ministers to take urgent steps to tackle the H1N1 disease that was unknown to India till the first case was reported 16 May. Of the 1,079 positive cases in India, 589 have been discharged report said.
Daily News Roundup - Aug 12 2009
Tata Motors is close to securing the £340mn loan from the European Investment Bank (EIB). (BL)
Tata Steel cuts long product prices. (BS)
ONGC Videsh Ltd. (OVL) is in talks with three Russian companies Rosneft, Lukoil and Gazprom for acquiring a substantial stake in YPF, the Argentinean arm of Spanish oil major Repsol YPF SA. (ET)
HUL is offering VRS to about 200 people as it moves to optimise resources in an increasingly competitive scenario. (ET)
Sterlite Industries and Grupo Mexico have both revised their bid for the assets of bankrupt US copper mining firm Asarco. (ET)
DLF to raise Rs7bn for metro project. (BS)
BHEL will set up a JV with Maharashtra State Power Generation Company (Mahagenco) to set up a supercritical thermal power plant with a maximum capacity of 1,500 MW at Latur in Maharashtra. (ET)
Maruti gets 700 acres for R&D unit at Rohtak. (BL)
GMR consortium to build first phase of outer ring road in Chennai. (BL)
Aurobindo Pharma gets USFDA nod for migraine drug, Sumatriptan Succinate. (BL)
Strides Arcolab ready to supply swine flu drug, can deliver 1mn capsules within 3-5 days.(BL)
Ranbaxy’s anti-migraine drug gets USFDA nod. (BL)
Oil Minister says RIL-RNRL gas pact flouts government authority. (BS)
Apollo Tyres plans a capex of Rs9bn to more then double its capacity at the Chennai plant. (BS)
Manappuram General Finance and Leasing Ltd (MAGFIL), is planning to raise around Rs2.5bn from the capital market and a loan of Rs30bn from banks. (BS)
PTC Financial Services, a subsidiary of Power Trading Corporation, is mulling to raise Rs15bn by divesting 26 per cent of the promoters’ stake by FY11. (BS)
Gujarat NRE Coke to commission its NSW mine soon. (BS)
Belgium-based Wabco, a global technology leader, has entered into a supply agreement with commercial vehicles manufacturer Ashok Leyland. (BS)
The Government has allowed Maytas Ventures to give up its bio-tech SEZ in Hyderabad. (ET)
Era Infra Engineering is looking to raise Rs5-6bn by issuing fresh shares through a qualified institutional placement. (ET)
Government’s policy on public-private partnership in the education sector will be finalized in four weeks, Rs100bn investment likely. (BL)
Sugar prices in the wholesale markets crossed the Rs30/kg mark, since the beginning of this month, prices have increased over 25%. (BL)
GSM mobile phone operators in India added 9.48mn users in July. (BS)
FM ups direct tax target to 8% for the current fiscal. (BS)
Retail food prices are up by 32% yoy in June-July period. (BS)
The Indian economy will grow by more than 6% and there is no need to press the panic button despite a fear of drought, says Finance Minister Pranab Mukherjee. (ET)
Government is rolling out a massive plan to build 5mn dwelling units in five years across 400 towns and cities. (ET)
Maharashtra's sugar commissionerate estimates that 41mn tons of sugarcane will be available for crushing in the forthcoming season. (ET)
Disinvestment proceeds, pegged at Rs100-150bn for FY10, will be used for infrastructure development and not towards bridging fiscal deficit. (ET)
Thirst on the Street!
When the well is dry, they know the worth of water.
After a flood of liquidity and news, there seems to be a drought of positive news flow. With most global markets flashing red signs, we expect a lower opening. The IIP data might bring some cheer though. On the whole, things will remain volatile and uncertain. The Fed is set to leave rates steady at near zero levels. What the Fed policymakers say will be keenly followed.
After having enjoyed the green shoots-led rally since early March, we may witness some drought in the form of slight softening in the market. Agri output is set to take a beating with the rain Gods not showering its blessings in several districts. The Centre has put the number at 161 districts. This will only aggravate the problems facing the UPA. Food prices are already hitting the roof. Given that festivals are round the corner and the low base effect too will start waning soon, tackling inflation will assume top priority.
Don’t be surprised if the Centre unleashes few more measures to reign in inflation. At the same time, it has the uphill task of bolstering growth. The global economic recovery is still fragile and with the monsoon shortfall it will take some doing to attain 6.5-7% GDP growth.
FIIs were net sellers of Rs1.77bn in the cash segment on Tuesday on a provisional basis while the local funds pumped in Rs6.28bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs6.89bn.
On Monday, the foreign funds were net sellers at Rs2.27bn in the cash segment. Their net purchases of Indian stocks have crossed $7.2bn year-to-date. Mutual Funds were also net sellers at Rs2.18bn.
US stocks fell on Tuesday, led by weakness in bank shares and some jitters ahead of the Federal Reserve announcement. JPMorgan Chase said credit losses may overwhelm capital at MBIA Inc. and analyst Dick Bove said bank earnings won’t improve in the second half of the year.
The Dow Jones Industrial Average lost 97 points, or 1%. The S&P 500 index fell 13 points, or 1.3%. The Nasdaq Composite index dipped 23 points, or 1.1%. Stock declines were broad based, with 26 of 30 Dow issues falling.
US stocks slipped modestly in the first 30 minutes of the session, but lost more steam as new banking sector woes surfaced and after the government said wholesale inventories fell 1.7% in June versus forecasts for a drop of 0.9%.
The benchmark index for US stock options jumped the most in two weeks. The VIX, as the Chicago Board Options Exchange Volatility Index is known, climbed 4% to 25.99. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November yet above its 20.22 average over its 19-year history.
Investors were focusing on the Fed's two-day meeting, which concludes Wednesday afternoon with the release of a decision on interest rates and a statement on the economy.
The Fed is expected to hold rates steady at historic lows near zero percent. In its closely scrutinized statement, the bankers are expected to say that economic activity is picking up, but that they remain cautious about the outlook. The FOMC is not expected to say anything too specific about what its exit strategy may be after putting so much stimulus into the financial system.
US stocks rallied through the end of last week as part of a broader advance that lifted the S&P 500 over 50% off the March lows. But investors have turned cautious as they look for fresh signs that the economy is stabilizing.
The banking sector retreated after CIT Group delayed its quarterly filing, reviving bankruptcy fears, and several analysts sounded an alarm on the sector.
Influential analyst Richard X. Bove of Rochdale Securities said that bank stocks are trading on "fumes" and that investors should take some short-term profits.
JPMorgan Chase downgraded bond insurer MBIA.
Applied Materials is likely to be active on Wednesday. After the close on Tuesday, the chipmaker reported a quarterly loss versus a profit a year ago on weaker revenue. However, the results were better than what analysts were expecting and shares gained 3% in extended-hours trading.
Dow financial shares American Express, Bank of America, JPMorgan Chase and Travelers Companies all declined. The KBW Bank index lost 4.4%.
Among other financial sector movers, CIT Group slumped after saying it will delay filing its quarterly report as it continues to try to restructure its debt and avoid filing for bankruptcy protection.
IBM, Cisco Systems, Chevron, Caterpillar, Walt Disney and General Electric (GE) were the Dow's other big decliners.
US productivity in the second quarter jumped at the fastest pace in six years, the government said. Productivity - which measures how much workers produce per hour worked - rose 6.4% versus forecasts for a rise of 5.5%. Productivity rose 0.3% in the first quarter.
US light crude oil for September delivery fell $1.15 to settle at $69.45 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose 70 cents to settle at $947.60 an ounce.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.67% from 3.77% late on Monday.
The US government is offering $75 billion this week as part of its ongoing efforts to reduce the deficit and fuel its recovery efforts. Investors reacted mildly to the conclusion of the first auction on Tuesday. Treasury sold $37 billion in three-year notes and saw stronger demand than in other recent auctions. On Wednesday, the government auction $23 billion in 10-year notes and on Friday it auctions $15 billion in 30-year bonds.
In currency trading, the dollar fell versus the euro and the Japanese yen.
Ahead of the FOMC meeting, the Commerce Department releases the June trade gap. The trade gap is expected to have widened to $28.5 billion from $26 billion in May, a 10-year low.
The weekly oil inventories report from the Energy Information Administration is also due in the morning. The July Treasury budget is due on Wednesday afternoon.
European shares declined, with financials and miners under pressure. The pan-European Dow Jones Stoxx 600 index dropped 1.4% to 226.37 in the second day of losses in four. However, the index is still trading near its 2009 high and rallied hard in July.
Germany's DAX index fell 2.4% to 5,285.81, the UK's FTSE 100 index lost 1.1% to 4,671.34 and the French CAC-40 index shed 1.4% to 3,456.18.
Indian markets staged a slight rebound on Tuesday, snapping a three day losing streak. The NSE Nifty index managed to take support at the 4,398 levels which is close to the 50 Day Moving Average.
Bulls overlooked the fears of declining monsoon and the outburst of pandemic H1N1 Flu as markets traded in a narrow range throughout the day. But, offloading in the index heavyweights dragged the Nifty below the 4400 levels in intra-day trades. However, markets staged smart recovery from there on taking support at crucial technical levels.
The BSE Sensex gained 65 points or 0.4% at 15,074 after touching a high of 15,218 and a low of 14,864. The index opened at 15,000 against the previous close of 15,009. The NSE Nifty ended higher by 34 points to shut shop at 4,471.
In Asia, the Nikkei in Japan ended higher by 0.6% at 10,585 while Australia's S&P/ASX ended higher by 0.6% at 4,332. The Hang Seng index in Hong Kong ended higher by 0.7% at 21,074. Shanghai index in China gained 0.5% at 3,264.
In Europe, stocks were trading mixed. The FTSE in the UK was flat. The DAX was flat and the CAC 40 index in France was up 0.3%.
Coming back to India, among the BSE sectoral indices, the Auto index was the top gainer, gaining 3.2%, followed by the Realty index that was up 2.7%. The BSE Metal index up 2.4% and the BSE Pharma index was up 1%.
On the other hand, BSE PSU index ended lower 0.02%.
The BSE Mid-Cap index ended higher by 1.2% and the BSE Small-Cap index edged higher by 0.6%.
Within the Sensex, the major gainers were Tata Motors, M&M, Hindalco, Maruti, Bharti, Sun Pharma and Tata Power. Among the major losers were JP Associates, HDFC, NTPC, ONGC, Wipro and ICICI Bank.
Outside the frontline indices, the big gainers in the broader market were Cummins India, Tech Mahindra, Bharat Forge, GVK Power, Torrent Power and HCL Tech. On the other hand, losers included REI Agro, Glenmark, P&G, Indian Hotels and Glaxo.
Strides Arcolab announced that it is also one of the approved and qualified manufacturer of ‘Oseltamivir Capsules’ – the generic equivalent of Tamiflu – Roche’s innovator product.
Mr. V.S. Iyer, CEO – India Operational stated that "Strides is fully geared up to meet significant supply need of the product for domestic and international markety"
Shares of Strides shot up by over 5% to Rs158. The stock opened at Rs154 and made an intra-day high of Rs166 and a low of Rs151. Total traded volumes stood at 1.3mn shares.
Ranbaxy Laboratories received final approval from the U.S. Food and Drug Administration to manufacture and market Sumatiptan Succinate Tablets, 25mg (base), and 50mg (base).
The office of Generic Drugs, U.S.Food and Drug Administration, has determined the Ranbaxy formulation to be bioequivalent and have the same therapeutic effect as that of the reference listed drug Imitrex by GlaxoSmithKline.
Shares of Ranbaxy shot up by over 6% to Rs277. The stock opened at Rs262 and made an intra-day high of Rs280 and a low of Rs262. Total traded volumes stood at 0.9mn shares.
Shares of Lupin advanced by 2% to Rs994 after ~1.39% equity shares of the company changed hands in two blocks deals on the BSE. The stock opened at Rs980 and made an intra-day high of Rs1002 and a low of Rs976. Total traded volumes stood at 1.2mn shares on the BSE.
IIFL in its recent reports said that "With a revenue CAGR of over 50% over FY06-09, Lupin has grown faster than most of its peers in the US market. Newly in-licensed products and accelerated ANDA filings will maintain its growth momentum in the branded and generics businesses respectively. In the domestic market, the company’s revenues have consistently risen at over 20% annually, as against the industry’s growth rate of 10-12%. Its business in other emerging markets and Japan too is growing well. As the Japanese market warms up to generics, we see significant synergies that can boost growth rates".
Shares of Tata Steel were in demand and are trading with smart gains after reports stated that the company is looking for several mineral projects in Brazil and Australia. Tata Steel Europe, which controls Corus's operations, had imported around 22mt of iron ore and 11mt of coal in FY09.
The stock was up by 1.5% to Rs463, it opened at Rs454 and made an intra-day high of Rs466 and a low of Rs450. Total traded volumes stood at 2.9mn shares.
The Board of Directors of Gammon Infrastructure approved the sub-division of the issued and un-issued equity shares of the Company of the face value of Rs 10/- (Ten) each into 5 (Five) equity shares of Rs 2/- (Two) each, subject to the approval of the shareholders.
Shares of Gammon Infra were locked by 5% upper circuit to Rs103.5. The stock opened at Rs95 and made an intra-day high of Rs103.5 and a low of Rs94. Total traded volumes stood at 27,000 shares.
Asian stocks open in red
Asian stocks fell as commodity prices declined and a weaker dollar reduced Japanese automakers` overseas earnings prospects.
Mitsubishi lost 2%. Honda Motor dropped more than 2% in Tokyo.
Japanese benchmark index Nikkei dropped 82.50 points, or 0.78%, to trade at 10,502.96.
Hong Kong`s Hang Seng index fell 430.92 points, or 2.04%, to trade at 20,643.29.
China`s Shanghai Composite decreased 67.67 points, or 2.07% to trade at 3,197.06.
Taiwan`s Taiex index gained shrank 22.45 points, or 0.32%, to trade at 6,886.57.
South Korea`s Kospi index lost 16.54 points, or 1.05%, to trade at 1,562.67.
Singapore`s Straits Times advanced 15.16 points, or 0.58%, to trade at 2,582.14. (8.02 a.m., IST)
FII selling vigour slows down
Outflow of Rs 227.20 crore on 10 August 2009
Foreign institutional investors (FIIs) sold shares worth a net Rs 227.20 crore on Monday, 10 August 2009, much lower than Rs 846.10 crore on Friday, 7 August 2009.
FII outflow of Rs 227.20 crore on 10 August 2009 was a results of gross purchases Rs 2972.80 crore and gross sales Rs 3200 crore. The BSE Sensex lost 150.47 points or 0.99% at 15,009.77 on that day.
FII outflow in August 2009 totaled Rs 1,116.50 crore (till 10 August 2009). Foreign funds had bought equities worth Rs 11,625.20 crore in July 2009. FII inflow in calendar year 2009 totaled Rs 35,053.20 crore (till 10 August 2009).
There are a total of 1682 foreign funds registered with the Securities & Exchange Board of India (Sebi)
Crude ends lower again
Anticipation about increase in supplies pushes crude lower
Crude prices ended lower on Tuesday, 11 August, 2009. Prices fell in synchronization with falling US stocks and also as traders mulled that last week crude supplies registered an increase.
On Tuesday, crude-oil futures for light sweet crude for September delivery closed at $69.45/barrel (lower by $1.15 or 1.6%). During intra day trading, it hit a low of $68.71. 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 45.1% since then. Year to date, in 2009, crude prices are higher by 47%.
As per latest report, market expects a build in commercial crude stocks of 1.2 million barrels for the week ended 7 August, 2009. They also project a decline in gasoline stocks of 1.7 million barrels as well as a rise in distillate stocks of 900,000 barrels.
In the currency market on Tuesday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 0.2%.
Also at the Nymex on Tuesday, September reformulated gasoline gained 1.48 cents to end at $2.0422 a gallon, while September heating oil declined fell 1.59 cents to finish at $1.9117 a gallon.
September natural gas futures fell 10 cents to end at $3.541 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 lower by33 (0.97%) at Rs 3,351/barrel. Natural gas for August delivery closed lower by Rs 2.8(1.6%) at Rs 173.1/mmbtu.
Yellow metal rises after long time
Precious metals end mixed as silver ends marginally lower
Yellow metal prices rose for the first time in five sessions on Tuesday, 11 August, 2009. Prices fell as the dollar weakened ahead of Federal Reserve's latest decision on interest rate in its tomorrow's Federal Open Market Committee meeting.
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 Tuesday, gold for December delivery ended at $947.6, higher by $0.70 (0.1%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by almost 0.4%. Year to date, gold prices are higher by 6.6%.
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 (11.7%) since then.
On Tuesday, Comex silver futures for September delivery lost a marginal 1 cent to $14.345 an ounce. Last week, silver ended higher by 5.2%.
Silver ended 2.7% higher for July, 2009. For second quarter, silver rose 4.5%. Year to date, silver has climbed 29.6% this year. For 2008, silver had lost 24%.
In the currency market on Tuesday, the dollar index, a six-currency gauge of the greenback's value, fell by almost 0.2%.
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 66 (0.45%) at Rs 14,807 per 10 grams. Prices rose to a high of Rs 14,819 per 10 grams and fell to a low of Rs 14,739 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 86 (0.37%) higher at Rs 23,117/Kg. Prices opened at Rs 23,076/kg and rose to a high of Rs 23,193/Kg during the day's trading.
NHPC IPO subscribed over 6 times on day 3
Receives bids for more than 1000 crore shares
State-run NHPC's initial public offer (IPO) was subscribed by a 6.16 times on the third day. The IPO got bids for 1032.82 crore shares as against 168 crore shares offered by the company. More than 57.23 crore shares were bid at cut off price.
The qualified institutional buyers (QIBs) category was subscribed 9.48 times. Investors in this category put in bids for 930.73 crore shares as against 98.12 crore shares reserved for this category.
The non institutional investor category, made up of high net worth individuals and corporate investors, was subscribed 2.43 times. The category mopped up bids for 39.79 crore shares as against 16.35 crore shares set aside by the company.
The retail investor category was subscribed 1.25 times. Total bids in this category were for 61.36 crore shares as against 49.06 crore shares assigned by the company.
NHPC is selling 168 crore shares comprising of 5% divestment of stake by the government and infusion of 10% fresh equity. The price band for the IPO is Rs 30 to Rs 36 per equity share.
The issue will constitute 13.64% of the post-issue capital of NHPC. The IPO closes on 12 August 2009.
NHPC is the largest hydroelectric power generating company in the country. It has 13 operating hydro electric power (HEP) plants with an installed capacity of 5,175 megawatts (MW) including two power stations of total 1,520-MW capacity set up through its joint venture subsidiary Narmada Hydroelectric Development Corporation (NHDC). Current total generating capacity is 5,134.2 MW, taking into account the downgrade of the capacity ratings of Loktak and Tanakpur power stations by the Central Electricity Authority.
NHPC is constructing 11 additional hydroelectric projects, which are expected to increase the installed capacity by 4,622 MW. These plants, barring Teesta Low Dam IV, are mostly in the north and northeastern states and scheduled to be commissioned between December 2009 and March 2013. The Teesta Low Dam IV project is coming up in the Darjeeling district of West Bengal.
NHPC is also awaiting government sanction to build another five projects with an anticipated capacity of 4,565 MW on its own and another 2,166-MW capacity projects through certain JV projects. In addition, the company is surveying and investigating proposals for nine additional projects totaling 7,255 MW of anticipated capacity.
Apart from development and operation of HEP projects, NHPC also develops, designs, and delivers HEP station to clients. The company has executed two HEP projects, i.e. Kurichhu HEP in Bhutan and Devighat HEP in Nepal, on contract. Further, it also provides technical, management advisory and consultancy services to domestic and international clients.
NHPC's consolidated net profit rose 3% to Rs 1244.15 crore on 19.2% growth in sales to Rs 3493.71 crore in the year ended March 2009 (FY 2009) over the year ended March 2008.
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