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Wednesday, November 18, 2009
Turnover declines
RIL November 2009 futures at premium
Nifty November 2009 futures were at 5,057, at a premium of 2.30 points as compared to spot closing of 5,054.70. Turnover in NSE's futures & options (F&O) segment was Rs 67,322.64 crore, lower than Rs 71,301.23 crore on Tuesday, 17 November 2009.
Reliance Industries (RIL) November 2009 futures were at premium at 2104.50 compared to the spot closing of 2101.
Tata Steel November 2009 futures were near spot price at 547 compared to the spot closing of 546.
Jindal Steel & Power November 2009 futures were near spot price at 729 compared to the spot closing of 728.40.
In the cash market, the S&P CNX Nifty fell 7.55 points or 0.15% at 5,054.70.
Wednesday woes continues to whack Asian Markets
Nikkei, NZX 50, Sensex, Hang Seng finish lower while Sydney, Seoul, Shanghai ended higher
Stock markets in Asian region witnessed a mixed trend on Wednesday, 18 November 2009, as investors took some profits at higher levels amid some doubts about the pace of economic recovery. Investors awaited a raft of U.S economic data such as CPI and housing starts for more clues about the health of the world's largest economy.
On Wall Street, stocks closed higher Tuesday, again touching year highs, after having the flat line most of the day. The market digested a mix of builder confidence figures, wholesale price data, factory numbers and retail earnings. The Dow Jones Industrial Average gained 30 points, or 0.3%, to 10,437. The S&P 500 advanced 1 point, or 0.1%, to 1110, as the Nasdaq added 6 points to 2204.
In the commodity market, crude oil advanced for a third day in New York after an industry report showed a decline in crude stockpiles in the U.S., the largest energy consumer.
Crude oil for December delivery rose as much as 71 cents, or 0.9 percent, to $79.85 a barrel in electronic trading on the New York Mercantile Exchange. It was at $79.71 at 4:24 p.m. in Singapore. Yesterday, the contract rose 24 cents to settle at $79.14.
Brent crude oil for January settlement rose as much as 73 cents, or 0.9%, to $79.70 a barrel on the London-based ICE Futures Europe exchange. It was at $79.53 a barrel at 4:25 p.m. Singapore time. The contract climbed 21 cents, or 0.3%, to $78.97 a barrel yesterday.
Gold climbed to a record in London and New York as investors bought the precious metal as an alternative to a weaker dollar. Silver and platinum rose to the highest prices in at least 14 months. Immediate-delivery bullion gained as much as $6.42, or 0.6 percent, to $1,147.72 an ounce in London and was at $1,146.72 by 9:41 a.m. local time. December gold futures climbed as much as 0.8 percent to $1,148.10 an ounce on the New York Mercantile Exchange’s Comex division and were last at $1,146.80.
In the currency market, the U.S. dollar edged lower against other major currencies on Wednesday, as European shares posted gains for the fifth time in six sessions.
The Japanese yen was quoted at 89.18 per US dollar on Wednesday.
The Hong Kong dollar was trading at HK$ 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. The Hong Kong Monetary Authority (HKMA), on Wednesday afternoon injected HK$5.425 billion ($700 million) into the money market to stem an appreciating Hong Kong dollar and keep it within its fixed trading band.
In Sydney trade, the Australian dollar fell further from 15-month highs on Wednesday as investors seized on recent weakness to take profits, but few doubted it was still poised to head higher aided by rising local interest rates. At the local close, the dollar was trading at $US0.9292, down from $US0.9336 seen here yesterday. It had hit a 15-month high of $US0.9470 on 16 November 2009.
In Wellington trade, the New Zealand dollar settled into a fairly narrow range in quiet trading today. By 5pm it was at US74.34c from US74.49c at 8am and US74.69c at 5pm yesterday. It has retreated from US75.20c, a three week high, yesterday due to strength in the US dollar.
The South Korean won closed at 1,153 won to the greenback, up 1.1 won from Tuesday's close and the highest finish since 23 September 2008, as global equity rallies stoked investor appetite for risky assets.
The Taiwan dollar was little changed against the greenback. The Taiwan dollar was trading slightly higher against the US dollar at NT$ 32.1190, 0.0010 up from Tuesday’s close of NT$32.1200.
In the Asian equity markets, most of the regional markets finish lower as capital and share-sale concerns dragged banks and property companies’ lower, overshadowing advances among telecommunications companies.
In Japan, shares market dragged down on rekindled worries about nation’s deflation, corporate equity finance plans, and growing uncertainty about government economic policy. Investors remained circumspect as domestic issues such as the rise in corporate share issuance, a stronger yen and growing concern about deflation, kept market activity apprehensive. Investors opted to lock in early gains made as profit taking became pervasive.
At closing bell, the Nikkei 225 Stock Average index was at 9,676.8, lost 53.13 points or 0.55% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange fell 6.94 points, or 0.81%, to 850.06.
In Mainland China, share market endured gains for fourth day in row, boosted by a positive lead from overseas markets and continued strength in resource and energy shares, although most of morning gains trimmed on worries recent rally turned stocks overvalued as compared earning.
The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, surged 20.34 points, or 0.62%, to 3,303.23, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, earned 0.05%, to 3,630.23. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange edged down 0.21% or 28.73 points and stood at 13,642.35 points.
In Hong Kong, the stock market reversed early morning gains sparked by positive Wall Street overnight on profit taking in major heavyweights on concerns that the recent rally not be sustainable. Most of market participant banked profit after the benchmark hitting the 23,000 level for a second day.
The Hang Seng Index stumbled 73.82 points, or 0.32%, to 22,840.33, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, retracted 44.04 points, or 0.32%, to 13,688.01.
In Australia, the share market trimmed most of morning gains before finishing up on the back of support from properties and banks and financials stocks. Materials and resources lost a lot of steam in afternoon, while gold miners benefited as precious metal increased its value to record high. At closing bell, the benchmark S&P/ASX200 index swelled 9.60 points, or 0.2%, to 4,739 after touching a high of 4780.4, meanwhile the broader All Ordinaries jumped 9.40 points or 0.2%, to 4,759.60.
On the economic front, the Australian Bureau of Statistics said that merchandise imports value increased in original terms in October, rising A$329 million or 2% to A$17.96 billion compared to a revised A$17.63 billion in the previous month. On a balance of payments basis, preliminary data showed goods imports dropped by a seasonally adjusted 2% to A$16.89 billion in October from A$17.17 billion in September.
The Australian Bureau of Statistics wage price index increased by 0.7% in the quarter ended September 2009. The annual wage growth rate ease to 3.6 % in the year to September from 3.8 %, the slowest pace in at least two years.
The Leading Economic Index, which measure published by Westpac Bank and the Melbourne Institute, economic activity in the coming three to nine months, rose 0.9% in September to 255.1, On an annualized basis, leading index grew 5.8% in September, compared to 3.8% in August. The Coincident Index, which measures current activity, rose 0.2% in September to reach 239.2 points. On an annualized basis, it expanded at rate of 0.4% compared to an August reading of minus 0.1%.
In New Zealand, stock market ended up by a slim margin. The share market slipped just a little today as buyers were happy to wait for new listings, further news of which is seen as imminent. The NZX50 dipped down 0.10% or 3.11 points to 3128.40. The NZX 15 inched forward 0.06% or 3.21 points to close at 5687.53.
In South Korea, shares closed higher as foreign investors snapped up tech and memory chipmakers on a brisk sales outlook. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 17.99 points to 1,603.97, the highest close since 29 October 2009.
In Singapore, stocks market dragged down by profit booking in banks, properties and major blue chips stocks on tracking weak Asian and European bourses. Banks and financials finished in diverse terrain on profit booking following recent strong rally. Manufacturing and multi industries dropped on concern recent rally were overdone and as metal and oil prices fell in today. The blue chip Straits Times Index was ended session at 2,745.04, slid 19.91 points or 0.72%.
On the economic front, the International Enterprise Singapore said Singapore's non-oil domestic exports or NODX dropped 6.1% year-on-year in October, slower than the downwardly revised 7.3% decrease in the previous month. On a monthly basis, NODX plummeted a seasonally adjusted 13%, in contrast to the 2.9% increase in the previous month.
In Taiwan, stock market flip-flop yesterday’s losses with gains as Chinatrust Financial gained following its decision to buy a stake of AIG’s Taiwan unit from China Strategic. The benchmark Taiex share index once again witness a flip-flop on Wednesday by inching higher towards its near 17-month high, finishing higher by 33.48 points or 0.43% in a day, closing at 7766.69.
In Philippines, the stock market closed marginally higher on strong leads from Wall Street, with mining & oil index coming back into play, recording awesome gains driven by Philex Mining Corporation, which jumped almost 9%. At the concluding bell, the benchmark index PSEi ascended 0.67% or 20.52 points to 3,052.61, while the All Shares index mounted 0.37% or 7.21 points to 1,906.28.
In India, the key benchmark indices hit fresh day's low in late trade despite higher European stocks. Investors took home cash after recent spurt in indices. The market recovered soon after an initial slide. The Sensex and the 50-unit S&P CNX Nifty pared gains after hitting one-month highs in mid-morning trade.
The market once again slipped into the red later. The market cut losses in early afternoon trade after Finance Minster Pranab Mukherjee said the current higher capital inflows are not a matter of concern. The market moved between positive and negative zone later. Market hit fresh day's low in late trade.
The BSE 30-share Sensex was down 51.87 points or 0.30% to 16998.78. At the day's high of 17,098.79, the Sensex rose 48.14 points in mid-morning trade, its highest since 21 October 2009. The Sensex fell 92.24 points at the day's low of 16958.41 in late trade. The S&P CNX Nifty was down 7.55 points or 0.15% to 5054.70. It hit a high of 5079.30; it’s highest since 21 October 2009.
Elsewhere, Malaysia's Kula Lumpur Composite index finished lower at 1275.10 while stock markets in Indonesia’s Jakarta Composite index added 5.11 points ending the day higher at 2484.23.
In the other hand, European shares gained on Wednesday, rising for the fifth time in six sessions, with companies leveraged to an improving economy performing well. On a regional level, the U.K. FTSE 100 index up 0.2% at 5,357, the German DAX 30 index rose 0.5% to 5,808 and the French CAC-40 index advanced 0.5% to 3,848.95.
BSE Bulk Deals to Watch - Nov 18 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
18/11/2009 533083 Rishabhdev Technocbl ARIHANT SEC & INVESTMENT B 145206 19.70
18/11/2009 533083 Rishabhdev Technocbl TOUCHSTONE FINVEST SERVICES PVT LTD B 88903 19.69
18/11/2009 533083 Rishabhdev Technocbl TOUCHSTONE FINVEST SERVICES PVT LTD S 88903 19.81
18/11/2009 533083 Rishabhdev Technocbl ARIHANT SEC & INVESTMENT S 98206 19.15
18/11/2009 570001 TataMotors DVRA Ordy JM FINANCIAL SERVICES PVT LTD B 650000 500.00
18/11/2009 570001 TataMotors DVRA Ordy TATA SONS LTD S 1200000 500.00
18/11/2009 531881 ARVIND CHEM NEHA GYANESHWAR SHARMA S 102637 55.88
18/11/2009 531682 CAT TECH VINOD AMRATLAL NAAI B 405100 12.40
18/11/2009 531682 CAT TECH VINOD AMRATLAL NAAI S 289216 12.33
18/11/2009 532022 FILATEX FASH CHANDRESH CHANDRAKANT SHAH B 32923 18.46
18/11/2009 532022 FILATEX FASH CHANDRESH CHANDRAKANT SHAH S 32923 18.19
18/11/2009 532521 FOUR SOFT SETU SECURITIES PVT LTD B 208048 24.70
18/11/2009 532521 FOUR SOFT SETU SECURITIES PVT LTD S 208044 24.68
18/11/2009 531439 GOLDSTONE TECH PREM MOHANLAL PARIKH B 150000 27.38
18/11/2009 508918 GREYCELLS ENTER SAFE ENTERPRISES B 100000 57.30
18/11/2009 508918 GREYCELLS ENTER I G E INDIA LTD S 136425 55.11
18/11/2009 511543 GSB FINANCE NEELAM RAMAKANT BIYANI B 50000 8.75
18/11/2009 511543 GSB FINANCE GSB SECURITIES PVT LTD S 50000 8.75
18/11/2009 532139 GTECH INFO CHANDRAKANT B SHAH S 897200 2.02
18/11/2009 532139 GTECH INFO KAUSHIK GANGARAM RATHOD S 781200 2.03
18/11/2009 517271 HBL POWER UTI INVEST ADVISORY SERV LTD A/C ASCENT INDIA FUND S 131410 410.00
18/11/2009 532679 INDIABULLS RETL JM FINANCIAL SERVICES PVT LTD S 113191 33.59
18/11/2009 504336 INDTRADECO ARYAMAN BROKING LIMITED B 5000000 0.40
18/11/2009 504336 INDTRADECO VARSHA INDL TOWNSHIP ORGANISERS PVT LTD. S 961150 0.40
18/11/2009 504336 INDTRADECO KRUNAL INDUSTRIAL ESTATE DEVELOPERS PRIVATE LIMITED S 4038850 0.40
18/11/2009 516078 JUMBO BAG RUSHAB RAVJI PATEL S 40646 36.37
18/11/2009 522259 KALINDI RAIL AMIF I LTD S 160000 158.26
18/11/2009 530255 KAY POWER KAUSHALYA GARG B 350000 7.84
18/11/2009 530255 KAY POWER BAMPSL SECURITIES LTD. B 175550 7.70
18/11/2009 530255 KAY POWER VISHAL PIPES LTD B 100000 7.63
18/11/2009 530255 KAY POWER SATISH KUMAR GUPTA B 97956 7.80
18/11/2009 530255 KAY POWER SUNDER DASS AGARWAL B 136226 7.86
18/11/2009 530255 KAY POWER GIRRAJ PRASAD GUPTA B 134182 7.80
18/11/2009 530255 KAY POWER KAUSHALYA GARG S 352000 7.69
18/11/2009 530255 KAY POWER BAMPSL SECURITIES LTD. S 175550 7.82
18/11/2009 530255 KAY POWER SATISH KUMAR GUPTA S 97956 7.80
18/11/2009 530255 KAY POWER SUNDER DASS AGARWAL S 136226 7.84
18/11/2009 530255 KAY POWER GIRRAJ PRASAD GUPTA S 134182 7.89
18/11/2009 531366 KOHINOOR BROAD VINOD AMRATLAL NAAI B 707731 6.20
18/11/2009 531366 KOHINOOR BROAD VINOD AMRATLAL NAAI S 721738 6.22
18/11/2009 531261 KUSHAGRA SOFT ALKEN MANAGEMENT & FINANCIAL S S 100000 11.08
18/11/2009 526596 LIBERTY SHOES OPG SECURITIES P LTD B 170345 108.96
18/11/2009 526596 LIBERTY SHOES OPG SECURITIES P LTD S 170345 108.95
18/11/2009 500265 MAHARASHTRA SEAM CONCORD TREXIM PRIVATE LIMITED B 350000 364.50
18/11/2009 500265 MAHARASHTRA SEAM STABLE TRADING CO.LTD. B 350000 364.00
18/11/2009 500265 MAHARASHTRA SEAM JHANJHARI HOLDINGS PVTLTD S 350000 364.00
18/11/2009 500265 MAHARASHTRA SEAM G V N FUELS LIMITED S 350000 364.50
18/11/2009 531769 PFL INFOTECH VEDANSH BHAGERIA B 25000 12.36
18/11/2009 531769 PFL INFOTECH SHEFALI BHAGERIA B 21679 12.36
18/11/2009 531769 PFL INFOTECH MANSI BHAGERIA B 25000 12.36
18/11/2009 531769 PFL INFOTECH ANU BHAGERIA B 25000 12.36
18/11/2009 531769 PFL INFOTECH ISHITA MOHATTA B 50000 12.36
18/11/2009 531769 PFL INFOTECH SARITA PASARI B 50000 12.36
18/11/2009 531769 PFL INFOTECH RITU PASARI B 47538 12.36
18/11/2009 531769 PFL INFOTECH PRIME INVEST INFO INVEST LTD. S 100000 12.36
18/11/2009 531769 PFL INFOTECH GB TRADING & INVESTMENTS (P) LTD. S 278000 12.36
18/11/2009 531746 PRAJAY ENGR ANGEL INFIN PRIVATE LIMITED B 298109 32.48
18/11/2009 590077 RANKLIN SOL SATYA NARAIN TULSIAN B 28579 44.99
18/11/2009 590077 RANKLIN SOL JAYA VEER V. DURGA PRAKASH M. S 33500 45.00
18/11/2009 532805 REDINGTON INDIA INDIA CAPITAL FUND LTD. B 1391598 310.00
18/11/2009 532805 REDINGTON INDIA INDIA MAN FUND MAURITIUS LIMITED S 1700000 310.01
18/11/2009 511585 REGENCY TRUST OMPRAKASH JINDAL (HUF) B 20000 11.25
18/11/2009 511585 REGENCY TRUST NIRMALADEVI JINDAL B 20000 11.25
18/11/2009 511585 REGENCY TRUST OMPRAKASH JINDAL B 20000 11.25
18/11/2009 511585 REGENCY TRUST PRAVEEN JINDAL B 20000 11.25
18/11/2009 511585 REGENCY TRUST SUNIL KAJARIA S 110000 11.25
18/11/2009 531952 RIBA TEXTILES NITA BANKESH BHAVSAR S 126000 19.05
18/11/2009 531781 SAPAN CHEM PUSHPABEN SURESHKUMAR B 60000 3.00
18/11/2009 531781 SAPAN CHEM J GEETHALAKSHMI S 61000 3.00
18/11/2009 532344 SOFTSOL INDIA SOFTSOL INDIA LTD B 170056 55.00
18/11/2009 532344 SOFTSOL INDIA KRISHNA CHANDAKKINENI S 169699 55.00
18/11/2009 522229 TANEJA AERO RAJ KUMAR LOHIA HUF B 130000 37.14
18/11/2009 526650 TOURISM FIN CORP SUNIL ROSHANLAL BEHKI B 589041 26.68
18/11/2009 526650 TOURISM FIN CORP SUNIL ROSHANLAL BEHKI S 518537 26.40
18/11/2009 532619 UTV SOFTWARE RELIANCE MUTUAL FUND S 150000 450.00
18/11/2009 530109 VANTAGE CORP NARESH CHAND JAIN B 24345 16.77
18/11/2009 530109 VANTAGE CORP PUNYAYATRIK JHAVERI S 22420 17.17
18/11/2009 530109 VANTAGE CORP NARESH CHAND JAIN S 24345 17.16
18/11/2009 532867 VISHAL RETL Naman Securities & Finance Pvt. Ltd. B 120911 66.02
18/11/2009 531249 WELL PACK PAPERS PANDYA YAMINIBEN M B 29751 293.12
18/11/2009 531249 WELL PACK PAPERS LAXMAN DHIRUBHAI PARMAR B 25190 294.42
18/11/2009 531249 WELL PACK PAPERS PANDYA YAMINIBEN M S 23759 294.31
NSE Bulk Deals to Watch - Nov 18 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
18-NOV-2009,LIBERTSHOE,Liberty Shoes Ltd,OM INVESTMENTS,BUY,146071,109.39,-
18-NOV-2009,LOKESHMACH,LOKESH MACHINES LIMITED,KETAN BHUPENDRAKUMAR SHAH,BUY,60490,45.97,-
18-NOV-2009,PRAENG,Prajay Engineers Syndicat,ANGEL INFIN PRIVATE LIMITED,BUY,618213,32.75,-
18-NOV-2009,PRAENG,Prajay Engineers Syndicat,SETU SECURITIES LTD,BUY,219140,32.75,-
18-NOV-2009,RAMSARUP,Ramsarup Industries Limit,SILVER STALLION LIMITED,BUY,125000,87.00,-
18-NOV-2009,TFCILTD,Tourism Finance Corp ,BEHKI SUNIL ROSHANLAL,BUY,429229,26.01,-
18-NOV-2009,KALINDEE,Kalindee Rail Nirman (Eng,AMIF I LTD,SELL,440000,158.55,-
18-NOV-2009,LIBERTSHOE,Liberty Shoes Ltd,OM INVESTMENTS,SELL,146071,109.47,-
18-NOV-2009,LOKESHMACH,LOKESH MACHINES LIMITED,KETAN BHUPENDRAKUMAR SHAH,SELL,49239,46.22,-
18-NOV-2009,LOKESHMACH,LOKESH MACHINES LIMITED,LOKESHWAR RAO MULAPUDI,SELL,150000,45.91,-
18-NOV-2009,MIRZAINT,Mirza International Ltd.,CALEDONIA INVESTMENTS PLC,SELL,505621,15.12,-
18-NOV-2009,MURUDCERA,Murudeshwar Ceram Ltd,MANJULA JAYANTILAL JAIN,SELL,92154,44.45,-
18-NOV-2009,PRAENG,Prajay Engineers Syndicat,ANGEL INFIN PRIVATE LIMITED,SELL,468631,32.54,-
18-NOV-2009,PRAENG,Prajay Engineers Syndicat,SETU SECURITIES LTD,SELL,95962,32.95,-
18-NOV-2009,RAMSARUP,Ramsarup Industries Limit,ASHISH JHUNJHUNWALA,SELL,125000,87.00,-
18-NOV-2009,TATAMTRDVR,Tata Motors DVR 'A' Ord,TATA STEEL LIMITED,SELL,676122,490.01,-
18-NOV-2009,TFCILTD,Tourism Finance Corp ,BEHKI SUNIL ROSHANLAL,SELL,429229,26.38,-
Sensex closes below 17K
Today's major news
Pratibha Industries secures contract from UP Jal Nigam; the stock closed 16.94% higher.
Legal notice to Mahindra Satyam for refund of Rs1,230.4 crore; the stock ends 1.38% lower.
Mahindra Lifespace in race to build new city in Mauritius; the stock closed 0.30% lower.
Valecha Engineering bags projects worth Rs110.00 crore; the stock closed 3.55% lower.
Tata Motors raises Rs264 crore in new FD scheme; the stock ends 3.14% higher.
Click here for more stories
Global signals
After yesterday’s fall European stocks opened marginally higher today. All the major European indices are trading in green at the time of writing this report with FTSE 100 trading at 5357, 11 points higher than its previous close.
Major Asian indices that opened weak didn’t manage to recover the losses, except for Shanghai Composite, Jakarta Composite and KOSPI Index that rose marginally. SGX Nifty that opened strong ended the highly volatile day with a marginal loss of 1.50 points.
Indian indices
Sensex ended the day with the loss of 52 points or 0.30% down. On the back of weak performance by Asian indices, Sensex stayed in red zone for most part of the day and failed to come out of red column.
The bellwether slipped below the psychologically important 17K level. The Sensex that opened 19 points lower at 17032 soon slumped from the level to see the low of 16958. However it went to make the high of 17099 before closing at 16999 that is marginally lower by 0.30% or 52 points. Today, Nifty managed to stay above 5000-level all through the day and ended the day at 5055, down by 8 points.
Sensex sentiment
Market breadth, the number of advancing shares to declining ones, was almost positive as out of 2,846 stocks traded on the BSE, 1,598 stocks advanced, whereas 1,166 stocks declined. Eighty two stocks closed unchanged.
Sectoral & stock screening
Of the 13 sectoral indices on BSE, except BSE Metal that was up by 1.20% the rest of the 12 sectoral indices were either up or down by less than 1%. BSE FMCG, BSE IT, BSE Realty, BSE CD, BSE HC, BSE TECk and BSE Auto were up by less than 1% each, whereas BSE Bankex, BSE CG, BSE PSU and BSE Power BSE Oil & Gas posted losses of less than 1% each.
On stocks’ front, Pantaloon Retail topped the chart surging by 5.76% for the day to be followed by GE Shipping (up 4.88%) and GTL Infrastructure that rose by 4.62%. Sintex Industries, Adani Enterprises, Ispat Industries, Oriental Bank of Commerce, JSW Steel and IDFC were up by 4% each. Among losers, Mphasis slid the most by 4.94%, followed by Exide Enterprises that fell by 4.86% and Reliance Infrastructure that was down by 3.20%.
Viewing volumes
On turnover front, Over 1.22 crore shares of Suzlon Energy changed hands on BSE followed by Ispat Industries (1.15 crore shares), Unitech (0.84 crore shares), GTL Infrastructure (0.74 crore shares) and IFCI (0.64 crore shares).
Sensex falls below 17,000
Volatility ruled the roost as the key benchmark indices edged lower with investors cashing in on gains after a sharp rally in the past few days. The BSE 30-share Sensex fell 51.87 points or 0.3% off close to 100 points from the day's high. The Sensex settled below 17,000 mark after alternatively moving above and below that level during the day.
Metal stocks rose. But capital goods and banking stocks fell. Index heavyweight Reliance Industries dropped after setting record date for a liberal 1:1 bonus issue. Another index heavyweight L&T also fell.
Intraday volatility was high. The market recovered soon after an initial slide. The Sensex and the 50-unit S&P CNX Nifty pared gains after hitting one-month highs in mid-morning trade. The market once again slipped into the red later. The market cut losses in early afternoon trade after Finance Minster Pranab Mukherjee said the current higher capital inflows are not a matter of concern. The market moved between positive and negative zone later. The market hit a fresh intraday low in late trade. Volatility was high at the fag end of the trading session
Profit taking weighed on the domestic bourses today. From a recent low of 15,404.94 on 3 November 2009, the Sensex had jumped 1,645.71 points or 10.68% in a short period of time to 17,050.65 on 17 November 2009.
Mukherjee said on Wednesday the country is monitoring foreign capital inflows and the current higher inflows are not a matter of concern. Indian stocks have risen sharply this year on robust inflow from foreign funds. Indian officials had said on recent occasions that they welcomed fund inflows, but Mukherjee on Wednesday also noted that India is ready to deal with the flows if they become a problem. We have a system of monitoring inflows, he said.
The industry body Assocham on Tuesday, 17 November 2009, suggested that foreign institutional investors (FIIs) should be charged a tax of 2% of their money pumped into the stock market to prevent further rise of the rupee and also an asset-bubble. At a quarterly policy review late last month, the RBI said there were signs excess liquidity is seeping into asset prices.
Imposing the tax would help the RBI to manage rupee at reasonable levels to safeguard and support Indian exporters, hit hard by rising input cost and appreciating rupee, Assocham said. The rupee has appreciated over 5% against the US dollar in the last six months.
The parliament will debate closely watched reform bills in the banking and insurance sectors in the winter session which starts on Thursday, 19 November 2009, the minister of state for Parliamentary Affairs Prithviraj Chavan said on Wednesday. The insurance bill, which is pending before the parliamentary standing committee, proposes to raise foreign investment limit in insurance companies from 26% to 49%, Chavan said
Meanwhile, Federal Reserve Chairman Ben Bernanke surprised investors on Monday 16 November 2009 when he said the central bank was attentive to implications of changes in the value of the dollar, although he reiterated that interest rates would remain exceptionally low for an extended period.
On Tuesday, 17 November 2009, other top Federal Reserve officials struck differing notes on the likely pace of the US economic recovery. Jeffrey Lacker, the president of the Richmond Federal Reserve Bank said economic recovery in the US is solidly under way. He expects the economy to grow at a reasonable pace in 2010 as the housing sector recovers and consumers and businesses resume spending. Lacker, an outspoken anti-inflation hawk, said that if officials want to keep inflation in check, they cannot be "paralyzed by patches of lingering weakness, which could persist well into the recovery."
Two other senior Fed officials, Cleveland Fed President Sandra Pianalto and San Francisco Fed chief Janet Yellen, stressed that the economic recovery will be sluggish. Yellen, however, told a panel in Hong Kong that the Fed knows it cannot maintain its easy money policy for too long once the economy has healed.
Lacker warned that the risk consumers and businesses lose confidence in inflation stability is greatest in the early years of an economic recovery. The Fed's actions to pump money into the system to spur recovery heightens this danger, he said.
The Fed took another small step on Tuesday to wind down its emergency support as financial markets improve. It shortened the maturity of the emergency loans it makes to banks at its discount window, which it had lengthened during the crisis.
Closer home, inflation based on the wholesale price index accelerated in October 2009 from a month earlier on costlier minerals and fuels. On Saturday 14 November 2009, the government switched to using monthly inflation data for all commodities with 1993/94 as the base year, from the earlier practice of announcing weekly price movement. The wholesale price index was up 1.34% in October 2009 from a year earlier, compared with 0.5% rise in September 2009 and 11.06% jump a year ago. Food prices, however, declined by 1% from the previous month's level, while minerals and industrial fuels were each costlier by 3%.
Mukherjee today said the government may import rice if there is a shortfall in the summer-sown crop output.
Industrial output grew 9.1% in September 2009 from a year earlier, helped by stimulus and festival demand, and adding to the debate on the timing of exit policy. However, Finance minister Pranab Mukherjee said on Monday stimulus packages to perk up the economy during the slowdown are unlikely to be withdrawn in the current financial year and the exit when it happens will be a gradual one.
Economists and analysts surveyed by the Reserve Bank of India (RBI) revised downwards India's gross domestic product projection to 6% for 2009/10 from 6.5% in the previous round of survey, the RBI released the results of the ninth round of survey on Monday 16 November 2009.
The RBI in its mid-term monetary policy review last month kept its GDP projection for the current fiscal unchanged at 6% but had increased inflation target to 6.5% by end-March 2010 from 5%. The government is scheduled to announce the July-September GDP growth number on 30 November 2009.
Meanwhile, the initial public offer of Cox and Kings, a global tour operator, was subscribed 60% at 16:00 IST on the first day of bidding today. The price band has fixed at Rs 316-330 per share and the issue will close for subscription on 20 November 2009. Face value per share is Rs 10.
European shares bounced back on Wednesday to trade near their highest level in more than 13 months, with investors waiting for macro-economic numbers from the United States and minutes from the Bank of England. The key benchmark indices in France, Germany and UK were up by between 0.44% to 0.67%.
Asian stocks were trading mixed on Wednesday. The key benchmark indices in China, South Korea and Taiwan rose by between 0.43% to 1.13%. The key benchmark indices in Hong Kong, Japan and Singapore fell by between 0.32% to 0.72%.
China needs to be alert to the danger of asset bubbles, but headline inflation is unlikely to be a risk for some time, Fan Gang, a member of the People's Bank of China's monetary policy committee, said. Speaking at a forum in Hong Kong on Wednesday, Fan said Chinese gross domestic product could expand between 8% and 9% in 2010. Growth this year would be above the government's target of 8%, he added.
Chinese Premier Wen Jiabao told US President Barack Obama in a meeting on Wednesday that China wants to balance its trade relationship with the United States and does not seek a surplus. The comments published on China's foreign ministry website made no reference to Wen mentioning China's yuan policy to Obama, but did indicate that Obama had brought up currency reform as one step that China should take to mitigate trade imbalances.
Trading in US index futures indicated a steady opening of US stocks on Wednesday, 18 November 2009.
US stocks rose to fresh 13-month highs on Tuesday as upbeat broker views on improving prospects for two Dow components offset disappointing holiday spending outlooks from Target and Home Depot. The Dow Jones industrial average was up 30.46 points, or 0.29%, to end at 10,437.42. The Standard & Poor's 500 Index gained 1.02 points, or 0.09% to finish at 1,110.32. The Nasdaq Composite Index rose 5.93 points, or 0.27% to close at 2,203.78.
In economic data from the US, producer prices rose 0.3% in October, with the core rate dropping 0.6%. And industrial production climbed 0.1% in October 2009. This was less than the 0.4% gain expected.
The BSE 30-share Sensex fell 51.87 points or 0.3% to 16998.78. At the day's high of 17,098.79, the Sensex rose 48.14 points in mid-morning trade, its highest since 21 October 2009. The Sensex fell 92.24 points at the day's low of 16,958.41 in late trade.
The S&P CNX Nifty fell 7.55 points or 0.15% to 5054.70. It hit a high of 5079.30 in intraday trade, its highest since 21 October 2009. Nifty November 2009 futures were at 5,057, at a premium of 2.30 points as compared to spot closing of 5,054.70. Turnover in NSE's futures & options (F&O) segment was Rs 67,322.64 crore, lower than Rs 71,301.23 crore on Tuesday, 17 November 2009.
The market breadth, indicating the overall health of the market was strong. On BSE, 1591 shares advanced as compared with 1163 that declined. A total of 81 shares remained unchanged.
From the 30 share Sensex pack, 18 fell and rest rose.
BSE clocked a turnover of Rs 5234 crore, higher than Rs 4835.65 crore on Tuesday,17 November 2009.
The Sensex is up 7351.47 points or 76.2% in calendar year 2009, as on 18 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8838.38 points or 108.3% as on 18 November 2009.
Coming back to today's trade, the BSE Mid-Cap index rose 0.29% and the BSE Small-cap index rose 0.8%. Both these indices outperformed the Sensex.
The BSE Metal index (up 1.2%), the BSE FMCG index (up 0.73%), the BSE IT index (up 0.7%), the BSE Realty index (up 0.67%), the BSE Consumer Durables index (up 0.61%), the BSE Healthcare index (up 0.47%), the BSE Teck index (up 0.47%), the BSE Auto index (up 0.03%), the BSE Power index (down 0.1%), the BSE PSU index (down 0.2%), outperformed the Sensex.
The BSE Oil & Gas index (down 0.84%), the BSE Bankex (down 0.78%), the BSE Capital Goods index (down 0.66%), underperformed the Sensex.
Energy major Reliance Industries (RIL) fell 1.47%. The company plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions as India's top company by market capitalisation prepares itself for the next phase of growth. The company will work towards attaining global scale for its conventional energy platform petrochemicals, refining and oil and gas exploration and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said at the company's annual meeting of shareholders on Tuesday.
Meanwhile, RIL has set 27 November 2009 as the record date for a liberal 1:1 bonus share issue.
The government on Monday 16 November 2009 announced additional allocation of 51.6 million metric standard cubic metres per day (mmscmd) of natural gas from RIL's Krishna Godavari D6 field. Nearly 70% of this has been to the power sector. The move, finalised at the meeting of the ministry of petroleum and natural gas on 27 October 2009, takes the total allocation to 91.6 mmscmd from the current 40 mmscmd.
RIL on Tuesday 10 November 2009 announced its first oil discovery in its exploration block in the Cambay Basin off Gujarat. Reliance holds 100% participating interest in the block. This block was awarded to Reliance under the fifth round of the New Exploration Licensing Policy.
Oil exploration stocks rose as crude oil gained for a third day on Wednesday after an industry report showed US stockpiles declined after a hurricane in the Gulf of Mexico. Oil rose as much as 0.9% to $79.85 a barrel on Asian electronic trading. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
Cairn India rose 1.58%. The company on 5 November 2009 signed a pact with Reliance Industries for supply of crude oil.
India's second biggest state-run oil exploration firm by revenue Oil India rose 0.43%. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 0.37%. Steel magnate Lakshmi Mittal has reportedly pulled out of a project to develop an oil block in Kazakhstan with Indian joint venture partner Oil and Natural Gas Corp. ONGC Mittal Energy was to have acquired a 25% stake in Satpaev block from state-owned KazMunaiGaz and invested a total of $400 million in the project.
Meanwhile, the petroleum ministry has reportedly proposed a 33% hike in the price of natural gas produced by ONGC and Oil India and gradually increase it to $4.20 per mmBtu set for gas from Reliance Industries' KG-D6 fields.
PSU OMCs fell as higher crude oil prices will increase under-recoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. HPCL, Indian Oil Corporation (IOC) and BPCL fell by between 0.45% to 2.35%.
Metal stocks rose on strong domestic demand. National Aluminium Company rose 0.3%. The company recently hiked the prices of aluminium products by Rs 1000 a tonne reflecting the recent uptrend in prices on the London Metal Exchange. Sterlite Industries rose 0.49%.
Steel Authority of India (Sail) rose 0.51% on reports the company has won a battle with ArcelorMittal for Chiria mines in Jharkhand. The steel minister on 16 November 2009 said the cabinet will soon consider selling part of government's stake in Steel Authority of Steel. Meanwhile, Sail chairman on Monday said the company has cut flat product prices by Rs 500 per tonne
JSW Steel rose 4.03%. Japan's Nippon Steel Corp on Wednesday denied a report that it was in talks for a stake in JSW Steel. Earlier, a television report said JSW Steel aims to raise $300 million to $500 million via the stake sale of about 7 to 11% to Nippon.
Tata Steel, the world's eighth largest steelmaker by output, rose 1.68%. Tata conglomerate is looking around the world for a successor to Ratan Tata, the 71-year old chairman of the sprawling salt-to-steel group said on Wednesday. Local and foreign candidates were being looked at to head the group, which includes Tata Motors, Tata Steel, Tata Consultancy Services and Tata Power among its 27 listed companies Tata Steel is reportedly raising its annual iron ore production by 55% to 17 million tonnes in India over the next two years. The expansion is expected to cost about Rs 1100 crore.
Tata Steel, recently approved a new convertible bonds offer in exchange for an existing $875 million securities to reduce costs and ease repayment obligations. The company said on 6 November 2009 steel sales at its Indian operations rose 38% to 462,000 tonnes in October 2009 over October 2008.
Demand for steel remains strong from auto, rural construction and infrastructure sectors. Also demand for construction grade steel has improved post monsoon season, and has resulted into higher sales.
India's largest engineering and construction firm by sales Larsen & Toubro fell 1.72%. The company after market hours on Tuesday said Gilbarco Inc. has bought its petroleum dispensing pump business.
India's largest power equipment maker by sales Bharat Heavy Electricals fell 0.19%. The company said on Wednesday it has signed a joint-venture to build a 1,600 megawatt (MW) thermal power plant in the central state of Madhya Pradesh. The power plant at Khandwa will be equipped with supercritical technology, which helps lower coal consumption and leads to lower emissions.
Banking shares fell on profit taking. India's largest bank by net profit State Bank of India (SBI) fell 0.88%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.
SBI announced after market hours on Friday 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.
India's largest private sector bank by net profit ICICI Bank fell 1.47% as its ADR fell 0.23% on Tuesday. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.
India's second largest private sector bank by net profit HDFC Bank fell 0.22%.
India's largest dedicated home loan lender Housing Development Finance Corporation (HDFC) fell 0.66%. The lender announced after market hours on Friday 13 November 2009 it has agreed to acquire approximately 41% in the fully diluted equity share capital of Credila Financial Services from DSP Merrill Lynch Capital.
Prime Minister Manmohan Singh said on 8 November 2009, financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.
Meanwhile, the Reserve Bank of India Deputy Governor Usha Thorat said on Monday 16 November 2009 the central bank will soon issue guidelines on provisioning for bad loans by banks
IT stocks rose on gains in American depositor receipt overnight in US. India's third largest software company by sales Wipro rose 0.4% as its ADR rose 0.99% on Tuesday. Wipro, sees robust deal pipeline on the back of improving IT demand worldwide, Suresh Vaswani, joint chief executive said on Tuesday 10 November 2009. The company said on 5 November 2009 it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business. Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.
India's second largest software company by sales Infosys rose 1.54% as its ADR rose 1.27% on Tuesday. Infosys BPO, the business processing outsourcing subsidiary of Infosys Technologies, last week, announced the signing of a definitive agreement to acquire all of the outstanding interests of McCamish Systems LLC, a premier business process solutions provider, based in Atlanta, Georgia in the United States.
The acquisition is expected to be completed later this year subject to the satisfaction of certain closing conditions. The upfront consideration for the deal is $38 million with up to an additional $20 million payable to the sellers if McCamish Systems achieves certain financial targets in the future. The announcement was made before market hours on Thursday 12 November 2009.
But, India's largest software company by sales Tata Consultancy Services (TCS) fell 0.54%. The company recently secured a 150 million pounds software implementation contract for 15 years from Cardiff city council, UK.
UltraTech Cement, a unit of conglomerate Aditya Birla Group rose 1.08% extending gains for the third day. The company absorbed sister unit Samruddhi Cement, to form the country's biggest cement firm. The move, flagged in October 2009, was approved by the boards of both companies on Sunday. In October, the group said it will hive off the cement business of flagship firm Grasim Industries into unit Samruddhi in a cashless transaction and later merge it with group firm UltraTech. Samruddhi shareholders will receive four shares of UltraTech for every seven held in Samruddhi. UltraTech will also issue 14.95 crore new shares, boosting its capital to Rs 274 crore.
India's largest mobile telecom services provider by sales Bharti Airtel fell 0.25%. The company's chief Executive Manoj Kohli recently said that the company is confident that the country will proceed on schedule with 3G spectrum auctions in January 2010 with high hopes for the technology in the competitive market. The government held a pre-bidding conference on Monday in the run-up to third-generation (3G) spectrum auctions that have been twice delayed but are now scheduled to take place on 14 January 2009.
Bharti expects the current state of stiff competition to continue into 2010, as the government worked on new rules that may allow faster consolidation, Kohli said.
Among other telecom stocks, Reliance Communications and Idea Cellular rose by between 0.4% to 0.69%.
Shares of state-run firms rose after Prime Minister Manmohan Singh on 5 November 2009, approved divestment in public sector companies to raise funds for social welfare. Hindustan Copper, Central Bank of India, State Trading Corporation, MTNL rose by between 0.07% to 2.54%.
Shares of shipping firms rose after the Baltic dry index, which tracks rates to ship dry commodities, surged to its highest since September 2008. On Tuesday, 17 November 2009 the Baltic Dry Index (BDI) jumped 3.8% to 4,381 in London, extending its rally for the fourteenth straight session, as bids rose for the Capesize vessels that transport iron ore and coal to China. Mercator Lines, Shipping Corporation of India , Essar Shipping Ports & Logistics , Shreyas Shipping & Logistics , Varun Shipping Company and Great Eastern Shipping Company rose by between 2.56% to 11.56%.
FMCG stocks rose on bargain hunting. ITC, Tata Tea, United Spirits, Nestle India, rose by between 0.28% to 1.61%.
India's largest thermal power producer by sales NTPC fell 0.26%. A 5% stake sale in state-run power producer could fetch the government Rs 8100 crore ($1.7 billion), Sunil Mitra, a senior finance ministry official, said on Friday 13 November 2009.
Last month, the cabinet approved share sales for NTPC, Satluj Jal Vidyut Nigam and Rural Electrification Corp.
Among other power stocks, Torrent Power, Reliance Infrastructure, CESC fell by between 0.02% to 3.2%.
Rate sensitive auto stocks fell on profit taking. Low interest rates and attractive benefits offered by companies pushes up sales
India's largest tractor maker by sales Mahindra & Mahindra fell 0.52%. The company's overall sales climbed 32% in October this year to 18,410 units against 13,935 units in the same month last year.
India's second largest bike marker by sales Bajaj Auto fell 1.11%. Carlos Ghosn, chief executive of French car maker Renault and Japan's Nissan Motor Co, said, last week, that an agreement had been signed with Bajaj Auto for a low-cost car which would come to India in 2012.
India's largest bike marker by sales Hero Honda Motors fell 0.75%. The company reported a marginal increase in October sales at 354,156 units as against 352,449 units in the same month last year
But, India's largest small car marker by sales Maruti Suzuki India rose 0.52%. The company's total sales grew 32.4% to 85415 units in October 2009, compared with 64490 units posted in the same month a year ago.
India's largest commercial vehicle maker by sales Tata Motors rose 3.14%. Tata Motors has reportedly raised Rs 264 crore so far through the revised fixed deposit scheme which it launched in August this year. The company is authorised to raise Rs 1,300 crore from the revised scheme. Meanwhile, Jaguar Land Rover received as much as 170 million pounds ($286 million) as a five-year working capital facility from General Electric Co.'s GE Capital division, the lender said on 16 November 2009. Tata Motors the owner of Jaguar Land Rover, is hopeful of turning around the unprofitable luxury unit as it cuts costs to battle a slump in sales during the global recession.
Car sales in India rose an annual 34% to 132,615 units in October 2009, boosted by festival demand and easier availability of loans, an industry body said on Wednesday 11 November 2009. Sales of trucks and buses, a gauge of economic activity, rose 52% to 42,562 units in October 2009, the data showed.
Rate sensitive realty shares rose on bargain hunting. Omaxe, Unitech, DLF, Lok Housing, rose by between 0.2% to 5.66%.
The RBI, late last month, raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% at a regular monetary policy review. The latest RBI move will result in increase in borrowing costs for realty firms which depend heavily on borrowing. In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs), the central bank said in its quarterly policy review.
Cals Refineries clocked the highest volume of 3.33 crore shares on BSE. Suzlon Energy (1.21 crore shares), Ispat Industries (1.15 crore shares), Karuturi Global (0.98 crore shares) and Mahindra Satyam (0.87 crore shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 275.67 crore on BSE. JSW Steel (Rs 194.89 crore), Reliance Industries (Rs 178.04 crore), Tata Steel (Rs 141.86 crore) and DLF (Rs 109.29 crore) were the other turnover toppers in that order.
Cox & Kings (India) IPO Analysis
Cox & Kings is one of the recognized holiday brands with over 250 years of history. Over the years, it has increased its reach with global presence in 19 countries besides India through subsidiaries, branch offices and representative offices. In India, the company has 255 points of presence covering 164 locations through a mix of branch sales offices, franchised sales shops, general sales agents and preferred sales agents.
Cox & Kings has been promoted by A B M Good and Ajay Ajit Peter Kerker and his associates. Ajit Kerker was a very well known name in the Indian hotel industry and was earlier associated with Indian Hotels group, from where he had a controversial exit some years back.
The business of Cox & Kings can be broadly categorized as leisure travel (which includes outbound travel, inbound travel and domestic travel); corporate travel; and visa processing. The company has products like "Duniya Dekho", "Bharat Dekho" and "FlexiHol". It has increased its geographical presence through acquisitions as well as expanding its own business.
Acquisitions
In March 2006, Cox & Kings acquired the entire shareholding of Clearmine, a company incorporated in the UK. ETN Servicesis a wholly owned subsidiary of Clearmine and carries out destination management services for tours to Europe and also inbound tours in Europe for other tour operators. In September 2007, the company acquired the entire shareholding of Cox & Kings based in the UK and took over 41.17% of the share capital of Cox & Kings (Japan). Cox & Kings Travel, a wholly owned subsidiary of Cox & Kings, is an outbound specialist tour operator and caters to leisure travel market of Europe. Cox & Kings Travel and Cox & Kings Tours LLC holds 33.33% and 25.50%, respectively, of Cox & Kings (Japan). Cox & Kings (Japan) is a dedicated wholesaler of products and services to other tour operators.
The company acquired Quoprro Global Services Pvt. Ltd. and forayed into the business of visa processing. In September 2008, it got approval from the High Commission of India at Singapore for outsourcing their visa processing activities. Recently, it got in-principle approvals from the diplomatic missions of India at Athens, Greece and at Hong Kong for outsourcing their visa processing activities.
In December 2008 the company formed a joint venture with IRCTC, "Royale Indian Rail Tours Limited", to operate a luxury train to be called "Maharajas' Express". This train is currently under manufacturing and is scheduled to commence operations in January 2010. The train will carry nearly 100 passengers in 23 passenger coaches and will have two bars and two restaurants. It will have an ultra modern kitchen and a boutique. The train is expected to operate from September to April, making it a total of 16 journeys per annum.
During FY 2010, the company acquired Tempo Holidays Pty Ltd, based in Australia, with its wholly owned subsidiary Tempo Holidays NZ Ltd. in New Zealand. This would further consolidate its position in Europe as major business of the acquired company is in European countries. It has entered US with its recent acquisition of East India Travel Company Inc., which is in the business of selling up-market tour and travel packages in the US.
Domestic & International mix
The share of domestic revenues to the total operating revenues of the company has come down from 92% in FY2007 to 60% for Q1FY2010. The main reason is acquisition in the overseas markets.
The India business, i.e., the standalone business has reported CAGR over the last 4 years of 38.6% in revenues and 37.6% in profitability.
Public Issue
The public offer includes fresh issue and offer for sale by selling shareholders. The selling shareholders mainly Lehman Brothers Opportunity Limited, Deutsche Securities Mauritius and Merrill Lynch Capital Markets Espana S.A., S.V. are selling off part of their stake bringing it down from 8.23% to 3.39% on post issue equity. The selling shareholders had acquired the stake through purchase from promoters of the company in 2006 and increased its stake through bonus issue in 2007 and through rights issue at Rs 10 in July 2009. The cost for the selling shareholders is about Rs 91.91 per share.
The net proceeds of fresh issue would be utilized towards repayment of debt, acquisitions and strategic initiatives, investment in subsidiaries, in facilities and finally for corporate purposes. Part of the IPO proceeds is towards repayment of debt and for corporate purposes, which includes working capital needs of the Company. This would lead to lower interest costs and lower working capital needs going forward.
Strengths
* Cox & Kings has a good blend of domestic and international business so as to diversify its risk of dependence on one specific country. With presence across 19 countries other than India, e.g. UK, US, Australia, New Zealand and Japan, it has diversified its business. The share of international revenues has increased to 40% for the quarter ended June 30, 2009.
* The company has seen good growth in the domestic business. The revenue for the domestic business has reported CAGR of 38% for the last 4 years with earnings CAGR of 38%. Even in the downturn of 2008-2009, the company was able to grow revenues by 31% and maintain operating margins at 44% in the domestic business.
* The travel & tourism industry has seen a downturn due to the global economic slowdown. However, going forward, World Travel & Tourism Organization predicts the overall travel & tourism economy to grow by 4% per annum in real terms over the next 10 years. For India, the expected growth in travel & tourism demand from 2010 – 2019 would be 8.2%.
Weaknesses
* The company operates in a highly competitive market. It faces stiff competition from other organized players operating in this sector and also from the un-organized sectors. Many Indian and foreign players have entered the market both in the online and offline space.
* The travel and tours industry is cyclical and sensitive to changes in the economy in general. The sector may be affected by such factors as changes in the global and domestic economies. Any occurrence of an epidemic/terrorist acts in the countries may also have an adverse effect on the operations.
Outlook
At the issue price of Rs 316 – 330, on the consolidated EPS of Rs 10 for FY2009, the PE works out to 31.6 – 33 times. Thomas Cook (India) is trading at TTM PE of 47.5 times. However, Cox & Kings is much bigger in terms of global presence, with the listed Thomas Cook (India) being mainly India centric, whereas Cox & Kings is a global player.
Market recovers after a weak start; RIL declines
The key benchmark indices recovered and were trading flat after a negative start. The gains in some Asian stocks helped recovery. The BSE 30-share Sensex was flat at 17051.90 up close to 60 points from the day's low. The Sensex regained 17000 mark after falling that level in early trade. Banking stocks fell but IT stocks rose. Oil exploration stocks rose but PSU OMCs fell on gains in crude oil prices. Index heavyweight Reliance Industries fell despite setting record date for the bonus issue. Another index heavyweight Larsen & Toubro also fell.
Federal Reserve Chairman Ben Bernanke surprised investors on Monday 16 November 2009 when he said the central bank was attentive to implications of changes in the value of the dollar, although he reiterated that interest rates would remain exceptionally low for an extended period.
Closer home, inflation based on the wholesale price index accelerated in October 2009 from a month earlier on costlier minerals and fuels. On Saturday 14 November 2009, the government switched to using monthly inflation data for all commodities with 1993/94 as the base year, from the earlier practice of announcing weekly price movement. The wholesale price index was up 1.34% in October 2009 from a year earlier, compared with 0.5% rise in September 2009 and 11.06% jump a year ago. Food prices, however, declined by 1% from the previous month's level, while minerals and industrial fuels were each costlier by 3%.
Industrial output grew 9.1% in September 2009 from a year earlier, helped by stimulus and festival demand, and adding to the debate on the timing of exit policy. However, Finance minister Pranab Mukherjee said on Monday stimulus packages to perk up the economy during the slowdown are unlikely to be withdrawn in the current financial year and the exit when it happens will be a gradual one.
Economists and analysts surveyed by the Reserve Bank of India (RBI) revised downwards India's gross domestic product projection to 6% for 2009/10 from 6.5% in the previous round of survey, the RBI released the results of the ninth round of survey on Monday 16 November 2009.
The RBI in its mid-term monetary policy review last month kept its GDP projection for the current fiscal unchanged at 6% but had increased inflation target to 6.5% by end-March 2010 from 5%. The government is scheduled to announce the July-September GDP growth number on 30 November 2009.
Asian stocks were trading mixed on Wednesday as the generally bearish dollar kept riskier assets in demand. The key benchmark indices in China, South Korea and Taiwan rose by between 0.265% to 0.72%. The key benchmark indices in Hong Kong, Japan and Singapore fell by between 0.49% to 0.88%.
Trading in US index futures indicated Dow could fall 12 points at the opening bell on Wednesday, 18 November 2009.
US stocks rose to fresh 13-month highs on Tuesday as upbeat broker views on improving prospects for two Dow components offset disappointing holiday spending outlooks from Target and Home Depot. The Dow Jones industrial average was up 30.46 points, or 0.29%, to end at 10,437.42. The Standard & Poor's 500 Index gained 1.02 points, or 0.09% to finish at 1,110.32. The Nasdaq Composite Index rose 5.93 points, or 0.27% to close at 2,203.78.
In economic data from the US, producer prices rose 0.3% in October, with the core rate dropping 0.6%. And industrial production climbed 0.1% in October 2009. This was less than the 0.4% gain expected.
At 10:20 IST, the BSE 30-share Sensex was flat at 17051.90. At the day's high of 17,055.99, the Sensex rose 5.30 points in early trade. The Sensex fell 59.85 points at the day's low of 16990.80 in early trade.
The S&P CNX Nifty was flat at 5062.95.
The market breadth, indicating the overall health of the market was strong. On BSE, 703 shares advanced as compared with 439 that declined. A total of 40 shares remained unchanged.
From the 30 share Sensex pack, 22 fell and rest rose.
The BSE Mid-Cap index rose 0.4% and the BSE Small-cap index rose 0.46%.
Energy major Reliance Industries (RIL) fell 0.68%. The company plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions as India's top company by market capitalisation prepares itself for the next phase of growth. The company will work towards attaining global scale for its conventional energy platform petrochemicals, refining and oil and gas exploration and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said at the company's annual meeting of shareholders on Tuesday. RIL has set 27 November 2009 as the record date for a liberal 1:1 bonus share issue.
The government on Monday 16 November 2009 announced additional allocation of 51.6 million metric standard cubic metres per day (mmscmd) of natural gas from RIL's Krishna Godavari D6 field. Nearly 70% of this has been to the power sector. The move, finalised at the meeting of the ministry of petroleum and natural gas on 27 October 2009, takes the total allocation to 91.6 mmscmd from the current 40 mmscmd.
RIL on Tuesday 10 November 2009 announced its first oil discovery in its exploration block in the Cambay Basin off Gujarat. Reliance holds 100% participating interest in the block. This block was awarded to Reliance under the fifth round of the New Exploration Licensing Policy.
Oil exploration stocks rose as crude oil gained for a third day on Wednesday after an industry report showed U.S. stockpiles declined after a hurricane in the Gulf of Mexico. Oil rose as much as 0.9 % to $79.85 a barrel on Asian electronic trading. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
Cairn India rose 0.41%. The company on 5 November 2009 signed a pact with Reliance Industries for supply of crude oil.
India's second biggest state-run oil exploration firm by revenue Oil India rose 0.25%. But, India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 0.35%. Steel magnate Lakshmi Mittal has reportedly pulled out of a project to develop an oil block in Kazakhstan with Indian joint venture partner Oil and Natural Gas Corp. ONGC Mittal Energy was to have acquired a 25 % stake in Satpaev block from state-owned KazMunaiGaz and invested a total of $400 million in the project.
The petroleum ministry has reportedly proposed a 33% hike in the price of natural gas produced by ONGC and Oil India and gradually increase it to $4.20 per mmBtu set for gas from Reliance Industries' KG-D6 fields.
PSU OMCs fell as higher crude oil prices will increase under-recoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. HPCL and BPCL fell by between 0.14% to 0.22%. But Indian Oil Corporation (IOC) rose 0.5%.
Banking shares fell on profit taking. India's largest bank by net profit State Bank of India (SBI) fell 0.95%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.
SBI announced after market hours on Friday 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.
India's largest private sector bank by net profit ICICI Bank fell 0.73% as its ADR fell 0.23% on Tuesday. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.
But, India's second largest private sector bank by net profit HDFC Bank rose 0.15% even as its ADR ended flat on Tuesday.
India's largest dedicated home loan lender Housing Development Finance Corporation (HDFC) fell 0.93%. The lender announced after market hours on Friday 13 November 2009 it has agreed to acquire approximately 41% in the fully diluted equity share capital of Credila Financial Services from DSP Merrill Lynch Capital.
Prime Minister Manmohan Singh said on 8 November 2009, financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.
As per reports, the government plans to introduce two key bills in parliament by December 2009. It plans to introduce bills proposing the raising of foreign stake limits in insurers to 49% from the present 26% and opening up the pension sector to private and foreign firms.
Meanwhile, the Reserve Bank of India Deputy Governor Usha Thorat said on Monday 16 November 2009 the central bank will soon issue guidelines on provisioning for bad loans by banks
India's largest engineering and construction firm by sales Larsen & Toubro fell 0.92%. The company after market hours on Tuesday said Gilbarco Inc. has bought its petroleum dispensing pump business.
Meanwhile, the company made a profit of Rs 86.14 crore by paring a third of its stake in software firm Mahindra Satyam last week. Larsen and Toubro (L&T) on Friday, 13 November 2009 sold 2.72 crore shares in Mahindra Satyam in two bulk deals at an average price of Rs 113.65 on BSE in opening trade.
IT stocks rose on gains in American depository receipts overnight in US. India's second largest software company by sales Infosys rose 1.22% as its ADR rose 1.27% on Tuesday. Infosys BPO, the business processing outsourcing subsidiary of Infosys Technologies, last week, announced the signing of a definitive agreement to acquire all of the outstanding interests of McCamish Systems LLC, a premier business process solutions provider, based in Atlanta, Georgia in the United States.
The acquisition is expected to be completed later this year subject to the satisfaction of certain closing conditions. The upfront consideration for the deal is $38 million with up to an additional $20 million payable to the sellers if McCamish Systems achieves certain financial targets in the future. The announcement was made before market hours on Thursday 12 November 2009.
India's largest software company by sales Tata Consultancy Services (TCS) rose 1.09%. The company recently secured a 150 million pounds software implementation contract for 15 years from Cardiff city council, UK.
India's third largest software company by sales Wipro rose 1.31% as its ADR rose 0.99% on Tuesday. Wipro, sees robust deal pipeline on the back of improving IT demand worldwide, Suresh Vaswani, joint chief executive said on Tuesday 10 November 2009. The company said on 5 November 2009 it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business. Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.
Mahindra Satyam fell 1.76% on Tuesday rejected claims worth Rs 1,230 crore made by 37 companies linked to the company's former promoter B Ramalinga Raju in a filing to the stock exchange terming them legally untenable. Satyam received letters from these 37 companies reclaiming the money a day after Raju confessed to the Rs 7,000-crore fraud.
Valecha Engineering gained 1.43% after the company bagged two new road projects aggregating Rs 110 crore at Himachal Pradesh.
Sensex to open flat
Headlines for the day
* SAIL to set up 12mt steel plant in Chiria - DNA Money
* Reliance Industries plans big push for gas, oil exploration - Business Line
* Hindalco EGM clears plan to raise Rs2900 crore - Business Line
* L&T sells fuel dispenser biz to US firm for Rs 150 crore - Business Standard
* Tata Torrent Power cuts fuel surcharge by 1 paise - Business Standard
Events for the day
Major corporate action:
Ex-date for the interim dividend of Jetking Infotrain Ltd & Ex-date for the dividend of Banco Products India Ltd.
Pre-market report
Global signals
The European stocks opened the Tuesday in red and remain red throughout the day. At the end, FTSE 100 closed 0.68% lower at 5346.
While the US markets continue its northward journey to closed with in green. Nasdaq 100 crossed the 2200 mark and closed the day at 2204.
In today's trade, the major Asian indices showing the mixed trend in the early trading hours. Indices like Straits Times, Nikkei 225 & Hang Seng all trading in red territory. While Kospi & Shanghai Composite trading with marginally gain. And at the time of writing this report, SGX Nifty that opened strong, had lost its mornings gains and was trading lower by 5 points.
Indian markets
The domestic indices are expected to open slightly higher, remain range bound and volatile owing to the Mixed Asian cues. However with the positive signal coming from the US, domestic markets may get strength.
Among the local indices, the Nifty could test the 5100-5150 range on the up side, while on the down side it could find support at 5000 and 4920. While the Sensex is likely to get support at 16600 and may face resistance at 17300.
Indian ADR's
Among the Indian ADRs trading on the US bourses, only Infosys, Wipro & HDBC Bank managed to closed in green. While rest all of the Indian ADR closed in the Red wherein Tata Communications slides the most.
Commodity cues
It was a day of gains in the in the commodity space, wherein the Crude oil prices recorded gains, with the Nymex light crude oil for December series rising by $0.30 to settle at $79.14 a barrel.
In the metals space, Comex Silver for December series slide marginally $0.03 to settle at $18.49 to a troy ounce.
Daily trend of FII/MF investment in equities
On November 17, 2009, FIIs were the net buyers of the Indian Stocks in the tune of Rs679.30 crore (with the gross purchase of Rs2505.90 crore and gross sales of Rs1826.60 crore).
While the Domestic mutual funds, on November 16, 2009, were the net Seller of the stocks in the tune of Rs49.50 crore (with gross purchase of Rs502.90 crore and gross sales of Rs552.10 crore).
Daily News Roundup - Nov 18 2009
Reliance Industries has lined up aggressive plans for its oil and gas exploration work over the next three years to further strengthen its position in the energy business. (BS)
LN Mittal has pulled out of a project to develop an oil block in Kazakhstan with joint venture partner ONGC Videsh. (ET)
Jharkhand government has agreed to renew SAIL’s lease for the Buddhaburu mine, having reserves of 810mn tons. (BS)
NMDC and SAIL will jointly develop a limestone project at Arki in Himachal Pradesh with a 3MTPA capacity. (BS)
SAIL to spend Rs600bn for expansion in 3 years. (ET)
Bharti Airtel said it has commenced operations of its Far-East Connect Network, enabling it to serve the requirements of wholesale customers in the high growth markets across Asia and the Pacific. (ET)
TCS has recovered all its dues from American carmakers - General Motors and Chrysler. (BL)
Indian Oil is losing Rs920mn/day on sale of petrol, diesel, domestic LPG and kerosene. (ET)
Tata Motors has so far raised Rs2.6bn through the revised fixed deposit scheme which it launched in August this year. (BS)
Tata Motors, the Indian owner of Jaguar Land Rover, is hopeful of turning around the unprofitable luxury unit as it cuts costs to battle a slump in sales during the global recession. (BS)
Fiat India Automobiles Ltd, a 50:50 JV between Fiat Group and Tata Motors, plans to launch CNG driven vehicles in India by the Q1 FY11. (BL)
L&T plans to sell its petroleum dispensing pump business to US company Gilbarco Veeder-Root for ~Rs1.5bn. (BS)
L&T plans to consolidate its integrated engineering services business into one separate entity. (BL)
Hindalco Industries plans to raise Rs29bn through issue of QIP, GDR or any other securities in the near future to fund its expansion plans. (BL)
The FIPB referred to the CCEA a proposal by private carrier Jet Airways to raise about Rs20bn from foreign investors. (ET)
JSW steel is likely to spend US$500mn buying coal mines overseas to secure supplies for local expansion. (FE)
JP Associates plans to raise Rs15bn from the primary market by an initial share sale of its arm Jaypee Infratech. (FE)
Power Grid has initiated talks with BSNL to lease space from its towers. (BS)
Satyam has received legal notices from 37 companies claiming a refund of US$265mn, allegedly given as temporary advance. (BS)
Mahindra Satyam announced a strategic partnership with Gen-i one of Australia’s leading ICT service providers. (FE)
Japanese conglomerate NTT Group has entered the race to acquire a majority stake in Patni Computer. (ET)
The government has approved ArcelorMittal’s over Rs5bn FDI for acquisition of a 35% stake in steel products maker Uttam Galva. (ET)
Godrej Consumer Products plans to strengthen its roots in the rural areas through regional advertising component. (BS)
Shree Cement has lined up am major expansion plan in both its key business – cement and power with a total investment of Rs13bn. (FE)
Land acquisition is proving to be a problem for Shree Cement to carry out its expansion plans. (BS)
JK Lakshmi Cement said it will invest Rs12bn for setting up a greenfield plant at Durg (Chhattisgarh). (ET)
Mahindra Lifespace Developers has been shortlisted by the Mauritius government to build a new city on the island. (ET)
Torrent Power has reduced fuel surcharge by one paise per unit. (BS)
Nestle India launched a new range of instant pasta products, ‘Maggi Nutri-Licious Pazzta’, in two flavours and priced at Rs12 and Rs15. (BL)
Brigade plans to invest Rs20bn over the next four years to build compact residential properties, ‘Brigade Value Homes’, in Bangalore. (BS)
Godrej Properties plans to invest Rs2bn for its maiden a commercial and office space project ‘Godrej Eternia’ in Chandigarh. (BS)
Nitesh Estates is learnt to have planned to raise nearly Rs10bn through sale of shares of a special purpose vehicle (SPV). (ET)
Jayashree Chemicals, a caustic soda producing company, has agreed to procure the salt from the farmers at Rs1,050/ton. (BS)
The government plans to allow railways and power projects to borrow from IIFCL. (BS)
State-owned UCO Bank expects to receive Rs7.5bn from the government this month to shore up capital. (BS)
Hyundai Motor India will continue to be aggressive with its product launches in the compact car segment to protect and grow its market share. (BL)
BSNL is likely to exit the consortium comprising Delhi-based Vavasi Group and Malaysia's Al-Bukhary to acquire 46% in Kuwait’s Zain Telecom. (BS)
Himachal Pradesh government has urged the Centre to extend the industrial package from 2010 to 2013. (BS)
The North West Region of the Income Tax Department comprising Jammu and Kashmir, Himachal Perdesh, Punjab, Haryana and the Union Territory of Chandigarh registered 13.7% growth in collection of direct taxes to Rs59.8bn till 16 November 2009 as compared to the corresponding period last year. (BS)
The Direct tax collections have grown sharply in many smaller cities in the April-October period, in contrast to the big ones where they have either fallen or grown at low single-digit rates. (ET)
The proposal for a single regulator for organized trading of all financial market instruments is gaining momentum with the Union finance ministry starting internal discussions on the issue. (BS)
Life insurance renewal premium jumped 18.6% to Rs624bn during first half of the current financial year, while ULIPs registered 34% growth to Rs254bn. (BS)
A panel set up by RBI has recommended setting up of an emergency fund to help urban co-operative banks tide over liquidity problems. (BS)
The RBI has asked leading finance companies, bond houses and securities firms to disclose details on all structured debentures floated by them to raise money. (ET)
The Finance and Investment Committee of EPFO is scheduled to meet on December 1 to take a final call on investing ~Rs130bn a portion of its corpus in the capital markets. (BS)
The Andhra Pradesh government has agreed to pass on the purchase tax incentive of Rs60/ton to sugarcane growers during the 2009-10 season. (BL)
The Designated Authority in the Commerce Ministry has recommended imposition of preliminary anti-dumping duty on the import of Digital Versatile Discs-Recordable (DVD-R and DVD-RW) from Malaysia, Thailand and Vietnam. (BL)
Apprehending the misuse of the concept ‘class action suit’, the government is considering a proposal to change the norms on such a suit specified in the Companies Bill, 2009. (BL)
The Communications Minister will meet the Finance Minister and the Defence Minister to end the stalemate on 3G spectrum vacation by the armed forces. (BL)
The Corporate Affairs Minister said the government could come up with norms on CSR credits on the lines of carbon credits and companies can trade in such credits. (BL)
State run National Aviation Company of India, which runs Air India and Indian Airlines, would receive the first installment of equity infusion by the government worth Rs4bn by January. (ET)
The Centre has suggested to the state governments that they should create industrial land banks from available waste and fallow lands, to avoid confrontation with farmers over acquisition of agricultural plots for industrial purposes. (ET)
The government will take help of the department of posts in providing unique identity number to people in the less-accessible parts of the country. (ET)
In a bid to accelerate the infrastructure projects through public private partnership initiatives in India, the Asian Development Bank (ADB) has decided to provide close to US$700mn in loans. (FE)
Longing for shorting?
Although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.
The bears failed to make a big dash last month, but could yet again be licking their lips as the market struggles for direction. The fascinating thing is that every time the bears have attempted a comeback; the bulls have managed to make them run for cover. As a result, stocks are seeing dips and spikes without any significant change in the overall scenario.
Today we see another anemic start and a lackluster day. The key indices could continue to rise steadily and make new highs for the year. But, beyond a point they are likely to meet with some resistance. That level may turn out to be around 5200-5300 on the Nifty.
After a Marvelous Monday things have turned a bit quiet. Traded volume has cooled off from last week. Sensex and Nifty appear to be struggling above 17000 and 5000, respectively yet again. Technical and derivatives indicators are indecisive as well. Stick to stock specific action and keep a close track of relevant developments, both local and global, and you should do fine.
Inflows from local funds have turned negative though the overseas investors remain bullish. In short, the market is facing some resistance though there are no signs of a big selloff, not at least in the near term. We expect the market to trade sideways with a positive bias, depending on the trend in global markets.
FIIs were net buyers in the cash segment on Tuesday at Rs4.63bn on a provisional basis. The local funds were net sellers of Rs2.35bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs3.25bn. The foreign funds were net buyers of Rs6.79bn on Monday. Mutual funds were net sellers of Rs492mn in the cash segment on the same day. FIIs' net investments in Indian stocks this year has crossed $15bn, as per SEBI's web site.
US market rose for the nine time in the last 11 sessions, with the housing market returning to the spotlight as Home Depot reported signs of stabilization. European shares, however halted their recent advances, pressured by weakness in the banking sector. Most Asian stock markets ended slightly lower on Tuesday and are mixed this morning.
Gold extended its record-breaking run, helped by news of fresh central bank buying, while oil prices dipped after a strong rise in the previous session. Pound sterling rose to a two-month high against the euro on Tuesday after higher-than-expected UK inflation in October. Waning risk appetite took momentum from the FTSE 100, which fell back from year-highs as traders booked profits.
US stocks recovered from early losses to end a tad higher on Tuesday, closing at 13-month highs for the second day in a row, as strength in the commodity space offset weakness in the retail sector.
The Dow Jones Industrial Average rose about 30 points, or 0.3%, to close at 10,437.42. The S&P 500 index finished nearly unchanged above the key 1,100 level. The Nasdaq Composite advanced 0.3% to end at 2,203.78. All three indexes are at their highest levels since October 2008.
Stocks opened lower and struggled for most of the day as the dollar regained ground against rival currencies, reflecting a decreased appetite for risky assets. The tone improved in the last few hours of trading as oil and gold prices reversed direction.
The rebound in commodity prices boosted shares of energy and materials companies. But gains were limited by weakness in the retail sector after Home Depot and Target offered cautious earnings outlooks.
Tuesday's economic news was mixed. Government data showed inflation at the wholesale level remains subdued, while industrial production was weaker than expected in October.
Globally, the stock markets continue to look to the dollar for direction. When the US currency is weak, investors pile up on risky assets. If it is strong, they shed the risk a little bit. The dollar has hovered near a 15-month low against rival currencies in recent weeks.
However, after lifting the major indexes from lows of early March, investors have become a touch wary of going too aggressive on equity as the economic outlook remains cloudy.
The government reported that the Producer Price Index (PPI), the key measure of inflation for manufacturers, edged up 0.3% in October. Core PPI, which excludes volatile food and energy prices, fell 0.6%. The PPI was expected to have risen 0.5% for the month, according to a consensus of economists. The core was expected to have edged up 0.1% in October.
Before the start of market trading, the government also reported that industrial production rose 0.1% last month versus a forecasted 0.4% increase. In September, production rose 0.7%. Capacity utilization rose by 0.2% to 70.7%, a rate slightly below economists' expectations for 70.8%.
Home Depot reported a decline in third-quarter earnings to 41 cents per share from 45 cents in the year-ago quarter. While the results were better than 36 cent per share profit that analysts had expected, the company said it expects earnings for the full year to be down 13%.
Discount retailer Target reported an 18% increase in third-quarter profit, helped by gains in the company's credit card portfolio. But Target, which had suffered declining profits for the last eight quarters, remained cautious about the outlook for holiday spending.
TJX, which owns the TJ Maxx and Marshalls chains, reported a larger-than-expected quarterly profit on increased consumer demand for discount products. The company said it expects profit from continuing operations of 65 cents to 71 cents per share in the fourth quarter. Analysts surveyed by Thomson Reuters are forecasting a profit of 71 cents per share in the fourth-quarter.
On the higher end, Saks reported a quarterly profit, surprising analysts who were expecting the company to report a loss. However, the results were driven mostly by cost-cutting, and the company offered a cautious outlook.
Treasury prices rose, with the yield on the 10-year note falling to 3.33%.
The weak dollar recovered a little Tuesday. The dollar index, which measures the US currency against a basket of rivals, was up 0.7% to 75.38 from 74.92.
Oil prices rose 24 cents to settle at $79.14 barrel in New York.
The price of gold closed at an all-time high of $1,139.40 an ounce, up 20 cents from Monday's record close of $1,139.80.
Investors will digest reports on consumer prices and initial construction of new homes Wednesday morning. Later in the week, the government will report on the number of Americans filing first-time claims for unemployment benefits.
Meanwhile, European shares ended a four-session streak of gains, closing lower as automakers pared recent gains and banks came under pressure on concerns about capital levels.
After touching a 13-month high on Monday, the pan-European Dow Jones Stoxx 600 index fell 0.4% to close at 250.36.
The UK's FTSE 100 index declined 0.7% to end at 5,345.93, while Germany's DAX index lost 0.5% to settle at 5,778.43 and the French CAC-40 index shed 0.9% to finish at 3,829.06.
It was an absolute Tuesday twister for the Indian markets. After starting off with a negative bias and staying in the red till the last trading hour, a sudden bout of buying in the IT, Banking, Capital Goods and the Metals stocks aided the benchmark indices to end with mild gains.
NSE Nifty recovered nearly 50 points to close above 5,050 and the BSE Sensex recouped 170 points to shut above the 17,000 mark.
The IT stocks were in the limelight throughout the day, stocks like Infosys, TCS and Wipro were among the star performers, even the mid-cap IT stocks like Polaris, Mphasis and MindTree were in demand.
The index heavyweight Reliance Industries which held its Annual General Meeting today put on a disappointing show, the stock ended in the red, down by 0.7% at Rs2133.
Finally, the BSE Sensex rose 18 points to end at 17,050 after touching a high of 17,080 and a low of 16,882. The index opened at 16,052 against the previous close of 17,032. The NSE Nifty ended flat at 5,062.
In Asia, the Nikkei in Japan was down 0.6%, while Australia's S&P/ASX ended lower by 0.5% at 4,729. Shanghai SE Composite was up 0.5% and Hang Seng index in Hong Kong fell 0.5%.
In Europe, stocks were trading in the red. The DAX in Germany was down 0.2% and the CAC 40 index in France was down 0.2%. The FTSE in the UK was down 0.4%.
Coming back to India, among the BSE sectoral indices, the IT index was the top gainer, adding 2%, followed by the Teck index that was up 1% and the BSE Consumer Durables index was up 0.6%.
Major losers were BSE Realty index down 1.2% and BSE Oil & Gas index down 0.8%.
The BSE Mid-Cap index ended flat while the BSE Small-Cap index was marginally up by 0.2%.
Among the 30-components of Sensex, 15 stocks ended in the green and 15 ended in the negative terrain. TCS, Hero Honda, Infosys and Reliance Infra were among the top gainers.
On the other hand, among the major losers were ONGC, ACC, DLF, Bharti Airtel and RCom.
Outside the frontline indices, the big gainers in the broader market were Spice Tele, Glenmark Pharma, GMDC, Sintex Industries and Aban Offshore. On the other hand, losers included Hindustan Copper, United Phos, Mundra Port and RCF.
Shares of the Aviation firms’ crash landed after media reports flashed that the ministry said that it sees no reason to raise the existing FDI limit.
Shares of Kingfisher Airlines fell over 5% to Rs52.9, Jet Airways slipped by 2.3% to Rs445 and SpiceJet fell 3.5% to Rs46.2.
Shares of HDFC ended flat at Rs2754. The company along with Standard Life, UK plans to infuse Rs3bn in its life insurance venture HDFC Standard Life in H2FY10.
In the previous week, HDFC also diversified into education loans. It acquired a 41% stake in Credila Financial Services, a company that specialises in education loans, for Rs100mn. HDFC has acquired the stake from Merrill Lynch, which was an initial investor in the company.
Shares of Bharat Forge advanced by 2% to Rs274 after reports stated that the company is planning to foray into the power sector with an investment of up to Rs500bn with a targeted generation capacity of up to 10,000MW, over the next 10 years.
Reports stated that the company plans to set up power plants in Gujarat, Maharashtra, coastal Andhra Pradesh and Tamil Nadu.
Shares of Glenmark gained by 5.5% to Rs242 after reports stated that the company has settled patent litigation with Medicis Pharmaceutical Corporation and has entered into a co-development arrangement on its specialty drug to treat acne.
The stock opened at Rs229 and made an intra-day high of Rs244 and a low of Rs229. Total traded volumes stood at 0.7mn shares.
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