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Friday, November 27, 2009
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Market ends weak on Dubai World debt concerns
The markets were shattered due to Dubai debt crisis fears today. Aggressive selling was seen in funds as well as sectors namely, realty, banking and metals stocks were hammered badly during the after noon trade.
The index tumbled over 500 points in the opening trade in reaction to Dubai`s debt rescheduling which hurt investor sentiment worldwide and witnessed a steep fall later touching a low of 16,210.44. However, the index shed most of its losses and recovered from day`s low to finally close on weak note.
Dubai had accumulated USD 80 billion of debt by expanding in banking, real estate and transportation. S&P had placed the ratings of four Dubai-based banks on negative outlook due to their exposure to Dubai World.
BSE Midcap and Smallcap index declined 1.35% and 2.14% respectively.
Asian stocks slumped, dragging the MSCI Asia Pacific Index down the most in eight months, on concern over losses stemming from Dubai`s attempt to reschedule its debt and as the yen strengthened against the dollar. HSBC Holdings and Standard Chartered sank more than 7% in Hong Kong as CLSA Asia-Pacific Markets said Dubai World`s potential default has `negative implications` for the banks.
Japanese benchmark index Nikkei 225 fell 301.72 points, or 3.22%, to end at 9,081.52. Hong Kong`s Hang Seng is declined 1,075.91 points, or 4.84%, to end at 21,134.50. China`s Shanghai Composite decreased 74.72 points, or 2.36 to end at 3,096.26.
The Sensex ended the day with a loss of 222.92 points, or 1.32% at 16,632.01 after touching a high of 16,718.80 and a low of 16,210.44. The broad-based NSE Nifty fell 63.80 points, or 1.27% at 4,941.75 after hitting a high of 5,005.05 and a low of 4,806.70.
Major gainers in the 30-share index were Bharti Airtel (0.94%), Reliance Capital (0.59%), Hero Honda Motors (0.53%), Reliance Infrastructure (0.43%), Grasim Industries (0.30%), and Tata Steel (0.27%).
On the other hand, Jaiprakash Associates 3.05%), Larsen & Toubro (2.71%), Infosys Technologies (2.45%), Tata Consultancy (Services (2.40%), Sterlite Industries (India) (2.13%), and ITC (1.88%) were the major losers in the Sensex.
Overall market breadth was sharply negative. Out of the total 2,802 stocks traded at BSE, 734 advanced, 2,023 declined while 45 remained unchanged.
Among the sectoral indices, BSE IT fell 2.2%, Capital Goods fell 1.82%, TECk went down 1.63%, Bankex dropped 1.41% and Metal lost 1.30%, while BSE HC which went up 0.08%, Consumer Durables rose 0.35%.
In an exclusive talk with Myiris.com, Ashok Jainani, vice president Head Research, Khandwala Securities commenting on the Dubai debacle said, ``The stock market reaction to debt rescheduling sought by Dubai World does not seem warranted. Global market capitalization loss is many times over the total debt that is being sought to be rescheduled. We do not believe there is any default cascading to other sectors of the Indian economy as is being made out by mainline media.``.
``Market was looking for a reason to pause and rest. This incidence has just provided that. We suggest adding long positions in growth stocks in this panic situation,`` he added.
Sensex slides for second session
Today's major news
Suzlon Energy’s arm bags order for up to 954MW; the stock ends 6.24% higher.
Sun Pharmaceutical Industries receives tentative approval from the US Food and Drug Administration; the stock slid 0.29%.
Bajaj Auto to launch sub-150cc Pulsar in December; the stock rises 1.43%.
For more news, click here
Post-market summary
Global signals
European markets that opened 0.5% lower are trading flat to marginally lower, erasing early losses, at the time of writing this report.
Major Asian indices remained in red all through the day and ended with heavy losses in the range of 1.10-4.84% each. SGX Nifty lost 50 points.
US stock futures signaled a sharp slide, losing close to 2%, owing to the Dubai debt jitters. Oil prices dropped to $74 as dollar rose.
Indian indices
The Sensex opened 136 points lower at 16718.80 and never saw this level in today's trade. The Dubai debt jitters dragged the Sensex to the low of 16210, 645 points lower than its yesterday’s closing. However, marginally negative European opening coupled with buying in healthcare scrips helped the market to recover to a great extent. The Sensex closed at 16632, losing 1.32% or 223 points. Nifty closed at 4941, down 64 points.
Sensex sentiment
The market breadth was heavily negative, as out of 2,802 stocks traded on the BSE, 735 stocks advanced, whereas 2023 stocks declined.Forty-four stocks closed unchanged.
Sectoral & stock screening
Of the 13 sector indices on the BSE, only BSE HC managed to stay in positive with marginal gains of 0.08%. The remaining 12 sector indices declined in the range of 0.35%-2.20%.
On stocks’ front, Suzlon Energy surged the most by 6.24% followed by Tata Communications that rose by 5.63%. Bharat Electronics, Ranbaxy Laboratories and Jain Irrigation were up by over 3% each. Among losers, Financial Technologies slid the most by 6.06%, followed by Aban Offshore that fell by 6.01%, while IVRCL Infra, Siemens and IRB Infra fell by over 5% each.
Viewing volumes
On stock turnover front, over 2.74 crore shares of Suzlon Energy changed hands on BSE followed by Unitech (1.53 crore shares), IFCI (1.08 crore shares), HDIL (0.69 crore shares) and Ispat Industries (0.63 crore shares).
Sensex slids by 2.29%
It was a choppy week for the Sensex that started on a positive note, however with the global cues getting weaker, Sensex ends 390 points lower over the last weeks close. The markets at the start of the week remained range-bound and volatile, however the bears grabbed the 30-stock index- BSE Sensex as the week ended in the red.
During the week, Sensex made the high of 17290, close to its yearly high of 17394, however today it hit the weekly low of 16210, swinging wildly by 1080 points.
Among the sectoral indices, BSE IT and Teck indices declined by over 3% each. While indices like BSE CG, Metals and Power losses over 2% each. Among the gainers, the BSE Auto, Bankex, HC and realty ends in the green with gains in the range of 0.30%-6.34%.
As dollar seems to be getting stronger, liquidity might be the cause of concern in the coming period for the domestic markets. Thus one should watch closely the FII movements in the coming period.
BSE Bulk Deals to Watch - Nov 27 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/11/2009 524412 Aarey Drugs UTSAV NITINBHAI SHAH B 25000 44.04
27/11/2009 531881 Arvind Chem NILESH EKNATH BHOIR B 104539 45.03
27/11/2009 533138 ASTEC LIFE MERCURY FUND MANAGEMENT CO.LTD. B 156067 82.54
27/11/2009 533138 ASTEC LIFE MERCURY FUND MANAGEMENT CO.LTD. S 153067 82.60
27/11/2009 522005 Austin Engr VASANTABEN JAYANTILAL SHAH B 21396 101.85
27/11/2009 522005 Austin Engr SHILABEN SUNILKUMAR CHOKSHI B 22000 106.19
27/11/2009 522005 Austin Engr RAJESH KAPOOR B 20000 109.99
27/11/2009 522005 Austin Engr HITESH SHASHIKANT JHAVERI B 70040 110.06
27/11/2009 522005 Austin Engr NARESHCHAND JAIN B 49089 107.81
27/11/2009 522005 Austin Engr ANIL ARORA B 25550 104.22
27/11/2009 522005 Austin Engr BHAVIN K PATEL B 18000 105.76
27/11/2009 522005 Austin Engr DYNAMIC STOCK BROKING INDIA PVT LTD B 21788 107.57
27/11/2009 522005 Austin Engr VASANTABEN JAYANTILAL SHAH S 21396 107.04
27/11/2009 522005 Austin Engr SHILABEN SUNILKUMAR CHOKSHI S 20000 108.69
27/11/2009 522005 Austin Engr RAJESH KAPOOR S 20000 108.41
27/11/2009 522005 Austin Engr ASHISH KUMAR . S 20000 107.53
27/11/2009 522005 Austin Engr HITESH SHASHIKANT JHAVERI S 58795 110.05
27/11/2009 522005 Austin Engr NARESHCHAND JAIN S 49089 107.56
27/11/2009 522005 Austin Engr SUNIL BAKSHI S 20000 105.78
27/11/2009 522005 Austin Engr DYNAMIC STOCK BROKING INDIA PVT LTD S 20288 107.40
27/11/2009 505036 Automobile Corp Prabodh Artha Sanchay Pvt Ltd B 39414 203.98
27/11/2009 505036 Automobile Corp PARESH PRITAMLAL MEHTA S 40000 203.88
27/11/2009 508136 B&A PRAVINCHANDRA DAMJIBHAI GHAGHDA B 20000 201.99
27/11/2009 508664 Best Eastern Hot DISHA DHARMENDRA MADHANI S 9091 101.01
27/11/2009 532363 Compulearn CHODANKARNAND KUMAR B 80000 26.47
27/11/2009 507910 Fiberweb India VASUMATI BENGULABDA SMITHAWALA B 167000 7.41
27/11/2009 507910 Fiberweb India JIMMY DALIBHAI SINGAPORIA B 98000 6.46
27/11/2009 507910 Fiberweb India FARNAZ JIMMY SINGANPORIYA B 58000 6.98
27/11/2009 507910 Fiberweb India VASUMATI BENGULABDA SMITHAWALA S 166000 6.52
27/11/2009 507910 Fiberweb India JIMMY DALIBHAI SINGAPORIA S 98000 7.40
27/11/2009 507910 Fiberweb India FARNAZ JIMMY SINGANPORIYA S 58000 7.40
27/11/2009 511543 GSB Finance NEELAM RAMAKANT BIYANI B 50000 9.20
27/11/2009 511543 GSB Finance GSB SECURITIES PVT LTD S 50000 9.20
27/11/2009 524342 Indo Borax SAINATH HERBAL CARE MARKETING P.LTD B 27001 69.08
27/11/2009 524342 Indo Borax NANDA PRAMOD DESAI S 20000 69.04
27/11/2009 530255 KAY Power B.S.KHANDELWAL S 80351 8.74
27/11/2009 531602 Koffee Break ANJAN KUMANIL ROY B 500000 2.16
27/11/2009 531602 Koffee Break ANKIT RAJENDRA SANCHANIYA S 574526 2.16
27/11/2009 531515 Mahan Inds JASMIN S BAJORIYA B 45150 11.72
27/11/2009 516007 Mangalam Timb GOLD MOUHAR VYAPAAR PVT LTD B 200000 27.97
27/11/2009 516007 Mangalam Timb KHANDWALA INTEGRATED FIN SERVICES PVT LTD S 103331 28.00
27/11/2009 519287 Modern Dairies ANGEL INFIN PRIVATE LIMITED B 90111 58.38
27/11/2009 519287 Modern Dairies HITESH SHASHIKANT JHAVERI B 100068 63.25
27/11/2009 519287 Modern Dairies ANGEL INFIN PRIVATE LIMITED S 90111 58.41
27/11/2009 519287 Modern Dairies HITESH SHASHIKANT JHAVERI S 91847 63.07
27/11/2009 512626 Orbit Exports MEDIAMAN MULTIRADE PVT LTD B 250000 13.97
27/11/2009 512626 Orbit Exports SUBHKAM VENTURES (I) PRIVATE LIMITED S 250000 13.97
27/11/2009 511702 Parsharti Inv JAYESHKUMAR CHIMANLAL SONI B 25000 37.00
27/11/2009 506605 Polychem KULDIP KUMAR SHARMA B 3000 188.45
27/11/2009 506605 Polychem KULDIP KUMAR SHARMA S 3000 178.03
27/11/2009 532387 Pritish Nandy PATEL BROKOING PVT LTD S 150000 30.33
27/11/2009 502587 Rama Pulp MAHIPATIWDARMAL MEHTA B 61748 22.68
27/11/2009 590077 Ranklin Sol JYOTHI G B 50500 49.42
27/11/2009 531646 RFL Intl MITTAL SECURITIES FINANCE LTD B 93118 1.46
27/11/2009 531646 RFL Intl ATULKUMAR MANSUKHLAL SHAH S 30000 1.44
27/11/2009 531646 RFL Intl NIRAJ B SHAH S 35000 1.44
27/11/2009 512618 RLF GIRISH GULATI B 50000 6.48
27/11/2009 512618 RLF BHAVIN Y MEHTA S 87166 6.42
27/11/2009 531099 Rubra Med JITESH PRAKASHCHANDRA JADAV B 38700 22.00
27/11/2009 514304 S Kumar Nation NIRSHILP SECURITES PVT. LTD B 1103651 41.50
27/11/2009 514304 S Kumar Nation IL&FS S 1100000 41.50
27/11/2009 506172 Sampada Chem SUNIL BHAGWATLAL DALAL B 131000 43.20
27/11/2009 506172 Sampada Chem HIMALAYA BUILDERS PVT LTD S 132050 43.20
27/11/2009 531781 Sapan Chem NILESH KRUSHNA PALANDE S 110200 3.60
27/11/2009 513097 Shivalik Bimet CHANDRAKANT J VALLAKATI B 135892 23.43
27/11/2009 513097 Shivalik Bimet CHANDRAKANT J VALLAKATI S 137536 23.17
27/11/2009 513097 Shivalik Bimet SAINATH HERBAL CARE MARKETING P.LTD S 130268 23.50
27/11/2009 533121 THINKSOFT GLOB TRANSGLOBAL SECURITIES LTD. B 105880 310.69
27/11/2009 533121 THINKSOFT GLOB RAMINDERKAUR DHIR B 66435 309.48
27/11/2009 533121 THINKSOFT GLOB EUREKA STOCK & SHARE BROKING SERVICES LTD B 54719 313.53
27/11/2009 533121 THINKSOFT GLOB OPG SECURITIES P LTD B 212172 312.30
27/11/2009 533121 THINKSOFT GLOB HEMANSHU SHAH B 55941 310.43
27/11/2009 533121 THINKSOFT GLOB TRANSGLOBAL SECURITIES LTD. S 105380 310.67
27/11/2009 533121 THINKSOFT GLOB RAMINDERKAUR DHIR S 66435 308.17
27/11/2009 533121 THINKSOFT GLOB EUREKA STOCK & SHARE BROKING SERVICES LTD S 54719 313.75
27/11/2009 533121 THINKSOFT GLOB OPG SECURITIES P LTD S 212172 312.40
27/11/2009 533121 THINKSOFT GLOB HEMANSHU SHAH S 55941 312.33
NSE Bulk Deals to Watch - Nov 27 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-NOV-2009,ASTEC,Astec LifeSciences Ltd,HEMANSHU RAMNIKLAL SHAH.,BUY,110117,82.79,-
27-NOV-2009,ATLANTA,Atlanta Limited,GKN SECURITIES,BUY,94659,157.74,-
27-NOV-2009,CREWBOS,Crew B.O.S. Products Limi,ADELIA THERESA RODRIGUES,BUY,27778,40.55,-
27-NOV-2009,GLOBUSSPR,Globus Spirits Limited,CHITRA BHOJWANI,BUY,118554,85.15,-
27-NOV-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,NIRSHILP SECURITIES PVT. LTD.,BUY,1103911,41.50,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,HEMANSHU RAMNIKLAL SHAH.,BUY,90968,308.13,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,MANSUKH SECURITIES & FINANCE LIMITED,BUY,54413,309.67,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,OM INVESTMENTS,BUY,54359,310.52,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,RAMINDER KAUR DHIR,BUY,71765,308.36,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,TRANSGLOBAL SECURITIES LTD.,BUY,102011,311.18,-
27-NOV-2009,ABAN,Aban Offshore Ltd.,DSP MERRILL LYNCH EQUITY FUND,SELL,260000,1235.81,-
27-NOV-2009,ASTEC,Astec LifeSciences Ltd,HEMANSHU RAMNIKLAL SHAH.,SELL,110117,82.65,-
27-NOV-2009,ATLANTA,Atlanta Limited,GKN SECURITIES,SELL,94659,157.59,-
27-NOV-2009,BAJAJHIND,Bajaj Hindusthan Ltd,CLSA (MAURITIUS) LIMITED,SELL,1156580,208.69,-
27-NOV-2009,CREWBOS,Crew B.O.S. Products Limi,ADELIA THERESA RODRIGUES,SELL,72778,39.58,-
27-NOV-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,IL&FS FINANCIAL SERVICES LIMITED,SELL,1100000,41.50,-
27-NOV-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,NIRSHILP SECURITIES PVT. LTD.,SELL,3911,41.54,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,HEMANSHU RAMNIKLAL SHAH.,SELL,90968,314.07,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,MANSUKH SECURITIES & FINANCE LIMITED,SELL,54413,310.40,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,OM INVESTMENTS,SELL,54359,310.61,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,RAMINDER KAUR DHIR,SELL,71765,309.96,-
27-NOV-2009,THINKSOFT,Thinksoft Global Ser Ltd,TRANSGLOBAL SECURITIES LTD.,SELL,102011,311.54,-
Market may extend losses; Q2 GDP data eyed Q2
The market may extend recent losses as Dubai's debt problems could trigger investor risk aversion which in turn may slow down the flow of capital into emerging markets including India. Dubai said on Wednesday, 25 November 2009, it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate's breakneck growth. Dubai World had $59 billion in liabilities as of August.
Debt worries in Dubai sparked fears that the global financial markets have not healed properly since last year's crisis and that the Dubai problem could expose these weaknesses.
India and the United Arab Emirates (UAE), of which Dubai is a member, are separated by the Arabian Sea and closely linked by the millions of Indians who work in the region. Indians make up about 40% of the UAE's population, accounting for 10% to 12% of India's inward remittances, according to report by a foreign brokerage. But Finance Secretary Ashok Chawla said on Friday Dubai debt worries are unlikely to impact remittances from the region.
The UAE was the second-biggest export destination for India during the nine months through December 2008, accounting for $14.6 billion, or 11.15% of India's total - a share that has been rising and closing in on the United States. But Trade Minister Anand Sharma said India's economy is unlikely to be hard-hit by the situation in Dubai as India is a very large economy.
The Reserve Bank of India (RBI) governor Duvvri Subbarao on Friday 27 November 2009 said an assessment of the impact of Dubai's debt problems was needed before deciding on a response. India's financial integration with the global economy is deeper than its trade integration, the central bank governor said.
Many Indian companies were also quick to play down their exposure to Dubai on Friday, 27 November 2009. Engineering conglomerate Larsen & Toubro said it had exposure to Dubai of $20 million to $25 million. India's largest listed realty firm, DLF, and second ranked Unitech said they had no exposure to Dubai, and leading private bank ICICI Bank said it had no material exposure. While Indian banks are heavily focused on the domestic market, they are active in handling remittances from overseas workers. State-run Bank of Baroda has exposure of 7-8% of its loan book in the United Arab Emirates. Bank of Baroda said the assets are good performing assets
The government will announce Q2 September 2009 gross domestic product (GDP) data on Monday, 30 November 2009. The economy grew at 6.1% annual rate in the June 2009 quarter
Another data to watch out is Purchasing Managers' Index (PMI) for the month of November 2009. India's manufacturing activity expanded for the seventh consecutive month in October 2009, but at a slightly slower pace as growth in new orders and output slowed. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 companies, fell to 54.5 in October 2009 from 55 in September 2009. A reading above 50 means activity expanded during the month
Auto, cement and steel stocks will be in focus as they announce November 2009 sales figures.
Dubai woes pull market off one-month high
A setback towards the end of the week pulled the market in the red in for the week ended Friday, 27 November 2009, as Dubai's debt problems sparked concerns about corporate exposure and the risk of foreign investors repatriating funds. The BSE Sensex fell below the psychological 17,000 mark and 50-unit S&P CNX Nifty fell below the key 5000 mark.
Dubai's financial health came under scrutiny after a major government-owned investment company on Wednesday, 25 November 2009, asked for a six-month delay on repaying its debts. Dubai World, which has total debts of $59 billion, is asking creditors if it can postpone its forthcoming payments until May next year. Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5 billion of its debts next month.
The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies. Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008. The Dubai government said the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.
Volatility was high as traders rolled over positions in the derivative segment from November 2009 series to December 2009 series ahead of the expiry of the near month November 2009 contracts on Thursday, 26 November 2009.
Earlier, the market hit one month high on Wednesday 24 November 2009 supported by sustained buying by the foreign funds. FII inflow in November 2009 totaled Rs 5491.60 crore (till 26 November 2009). FII had bought equities worth Rs 8303.80 crore in October 2009. FII inflow in the calendar year 2009 totaled Rs 73,939.30 crore (till 26 November 2009). A weak dollar boosted world stocks recently as traders borrow against the low-yielding greenback to reinvest elsewhere in what's known as the carry trade. The dollar has tumbled this year on speculation the US Federal Reserve will keep interest rates low for a prolonged period of time to aid recovery in the US economy.
Dovish comments from a US Federal Reserve official on Sunday, 22 November 2009, added weight to expectations that US monetary policy would stay ultra-loose for a prolonged period. St. Louis Federal Reserve President James Bullard said on Sunday that the central bank should keep alive its mortgage-related asset purchase programme beyond a planned end date to help stimulate the economy.
Higher capital inflows have resulted in currency appreciation mainly in Asia and Latin America, prompting central banks contemplate a range of measures to hold back the tide. An unwinding of the European Central Bank's extraordinary stimulus measures is still premature as the financial crisis has not completely subsided, European Central Bank (ECB) President Jean-Claude Trichet said on Monday.
C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said in an interview to a news agency on Tuesday 24 November 2009 that India can absorb nearly $100 billion of dollars in capital inflows, nearly double for what is on track this year, before it needs to take strong restrictive measures. He said the total capital flows during the current year would be $57-$60 billion, which is manageable. Any initial curbs would be on speculative funds in sectors such as real estate and borrowing abroad to spend at home, he said.
Rangarajan's statement came after Brazil and Taiwan have taken steps to curb hot money inflows, and other governments are keeping a watchful eye on inflows, wary that they could fuel asset price bubbles.
Meanwhile, there are also concerns that a glut in share sales may suck liquidity from the secondary market. A foreign brokerage firm expects Indian firms to raise roughly $70 billion through share sales over the next three years. The brokerage expects stake sales in state-run firms will account for $10-$15 billion of the total funds to be raised. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets.
Indian companies have raised about $18 billion in equity thus far this year to repay high cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.
The food price index rose 15.58% and primary article index rose 11.04% in 12 months to 14 November 2009, data released by the government showed on Thursday, 26 November 2009. The fuel price index declined 1.51%.
The worst dry spell in nearly four decades and floods in parts of the country have hurt farm output and pushed up food prices. C. Rangarajan, Chairman of Prime Minister Manmohan Singh's Economic Advisory Council, recently said food price inflation is the biggest worry for the economy in near term and a strong rise in food prices could prompt monetary action. Inflation based on the wholesale price index rose 1.34% in October 2009 from a year earlier
The government has set reform of the insurance sector as a priority for the winter parliament session that began on 19 November 2009. The bill, which was stalled in the last parliament, proposes raising the foreign investment limit in insurance companies from 26% to 49%. The government also wants to open up the pension sector to private and foreign firms and give equal voting rights to foreigners in private-sector banks, which are currently limited to 10% irrespective of their actual holding.
The Index of six core industries having a combined weight of 26.7% in the Index of Industrial Production (IIP) registered a growth of 3.5% in October 2009 compared to 2% growth registered in October 2008, data showed on Friday 27 November 2009.
The BSE 30-share Sensex fell 389.84 points or 2.29% to 16,632.01 in the week ended Friday, 27 November 2009. The S&P CNX Nifty fell 110.70 points or 2.19% to 4,941.75.
The BSE Mid-Cap index fell 2.36% and underperformed the Sensex. The BSE Small-cap index fell 2.1% and outperformed the Sensex.
The Sensex is up 6984.70 points or 72.4% in calendar year 2009, as on 27 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8471.61 points or 103.81% as on 27 November 2009.
Volatility ruled the roost as the key benchmark indices pared gains after striking one-month highs in mid-afternoon trade on Monday 23 November 2009. Firm global stocks and weak US index aided the rally on the domestic bourses. The BSE 30-share Sensex rose 158.33 points or 0.93% to 17180.18 on that day. Index heavyweight Reliance Industries (RIL) led the rally. The stock surged after the company said it has put a bid to acquire bankrupt chemicals maker LyondellBasell Industries.
Volatility was the order of the day as market swung between positive and negative zone on Tuesday, 24 November 2009. Market snapped last two days' gains as a sharp slide in Chinese stocks and weak European markets weighed on investor sentiment. The BSE 30-share Sensex fell 49.10 points or 0.29% to 17131.08 on that day.
The key benchmark indices pared gains after hitting their highest level in more than a month on Wednesday, 25 November 2009 on concerns a glut in share sales may soak available liquidity in the secondary market. The BSE 30-share Sensex rose 67.87 points or 0.4% to 17198.95 on that day.
The market witnessed sharp losses in a highly volatile trading session on Thursday as world stocks fell. The BSE 30-share Sensex lost 344.02 points or 2% to 16,854.93 on that day.
Key benchmark indices cut steep intraday losses on Friday 27 November 2009 as European stocks recovered from an initial slide. News that China has pledged to stick with a pro-growth stance in 2010 also helped. The market recovered after a heavy sell-off in early afternoon trade triggered by worries about Dubai's debt problems. the BSE 30-share Sensex fell 222.92 points or 1.32% to 16,632.01 on that day.
Telecom stocks fell. India's second largest mobile telecom services provider by sales Reliance Communications fell 4%. Reliance Communication on Friday 27 November 2009 slashed SMS charges, further heating up an ongoing price war in the telecom market
India's largest mobile telecom services provider by sales Bharti Airtel fell 1.77%. The company reduced roaming rates by up to 60% on 20 November 2009. Bharti Airtel has slipped to third position in terms of monthly additions, data from an industry body showed. Bharti Airtel in October 2009 added about 27 lakh new users, lower than 29 lakh added by Vodafone Essar and over 38 lakh added by Tata Teleservices.
Bharti expects the current state of stiff competition to continue into 2010, as the government worked on new rules that may allow faster consolidation.
India's largest commercial vehicle maker by sales Tata Motors fell 2.01%. The company reported a consolidated net profit of Rs 21.78 crore in Q2 September 2009 compared with a consolidated net loss of Rs 941.75 in Q2 September 2008. Consolidated total income declined 8.20% to Rs 21506.94 crore in Q2 September 2009 over Q2 September 2008. The result hit market at the fag end of trading session on Friday.
The world's sixth largest steel maker by capacity Tata Steel fell 1.21% The company reported a consolidated net loss of Rs 2707.25 crore in Q2 September 2009 compared with a net profit of Rs 4771.65 crore in Q2 September 2008. The result was announced during trading hours on Thursday, 26 November 2009
India's largest engineering company by revenue Larsen & Toubro fell 2.85%. Executive vice president, Shankar Raman told the media on Friday 27 November 2009 that the company's exposure to Dubai is in the range of $20 million to $25 million.
India's largest drug maker by sales Ranbaxy Laboratories rose 5.11%. The company launched a generic version of GlaxoSmithKline's Valtrex in the United States with a 180-day marketing exclusivity.
Sensex slides 3.4% in two days on Dubai debt problems
Key benchmark indices staged a strong comeback in second half of the day's trading session after suffering a severe setback in the first half. A recovery in European stocks from an initial slide and news that China has pledged to stick with a pro-growth stance in 2010, aided the recovery. The BSE 30-share Sensex lost 222.92 points or 1.32%, up 421.57 points from the day's low and off 86.97 points from the day's high.
The barometer index has lost 566.94 points or 3.41% in the past two trading sessions on worries about Dubai's debt problems. Debt worries in Dubai sparked fears that the global financial markets have not healed properly since last year's crisis and that the Dubai problem could expose these weaknesses.
Trading in US index futures showed the Dow could fall 203 points the opening bell today, 27 November 2009. At one point of time, the Dow futures were down more than 300 points. US financial markets were closed on Thursday, 26 November 2009, for the Thanksgiving holiday.
Index heavyweights Reliance Industries, ICICI Bank and Bharati Airtel played lead role in the strong intraday recovery on the domestic bourses today. Auto, banking and infrastructure shares rebounded from early lows. But the market breadth was weak.
Intraday volatility was high. The market cut losses after a sharp setback in early trade. However, the intraday rebound proved short-lived. The market weakened again later. Fresh selling pulled the market to fresh intraday low later. The market staged a solid intraday rebound in mid-afternoon trade.
Dubai said on Wednesday, 25 November 2009, it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate's breakneck growth. Dubai World had $59 billion in liabilities as of August 2009.
India and the United Arab Emirates (UAE), of which Dubai is a member, are separated by the Arabian Sea and closely linked by the millions of Indians who work in the region. Indians make up about 40% of the UAE's population, accounting for 10% to 12% of India's inward remittances, according to report by a foreign brokerage. But Finance Secretary Ashok Chawla said on Friday Dubai debt worries are unlikely to impact remittances from the region.
The UAE was the second-biggest export destination for India during the nine months through December 2008, accounting for $14.6 billion, or 11.15% of India's total - a share that has been rising and closing in on the United States. But Trade Minister Anand Sharma said India's economy is unlikely to be hard-hit by the situation in Dubai as India is a very large economy. Meanwhile, total exports from India fell 6.6% in October 2009 over the previous year, Sharma said today.
The Reserve Bank of India (RBI) governor D Subbarao on Friday 27 November 2009 said an assessment of the impact of Dubai's debt problems was needed before deciding on a response. India's financial integration with the global economy is deeper than its trade integration, the central bank governor said.
Many Indian companies were also quick to play down their exposure to Dubai on Friday, 27 November 2009. Engineering conglomerate Larsen & Toubro said it had exposure to Dubai of $20 million to $25 million. India's largest listed realty firm, DLF, and second ranked Unitech said they had no exposure to Dubai, and leading private bank ICICI Bank said it had no material exposure. While Indian banks are heavily focused on the domestic market, they are active in handling remittances from overseas workers. State-run Bank of Baroda (BoB) has exposure of 7-8% of its loan book in the United Arab Emirates. BoB said the assets are good performing assets
Subbarao today said that there was no benign policy option and that inflationary pressures were building up. The government on Thursday said it was concerned about rising prices, especially of food articles, and would take appropriate fiscal and monetary measures to contain them. "We are deeply concerned when prices go high," Finance Minister Pranab Mukherjee said on Thursday. "It will have to be done by us: control of monetary policy, control of credit policy, control of fiscal policy."
The food price index rose 15.58% and primary article index rose 11.04% in 12 months to 14 November 2009, data released by the government on Thursday showed. The fuel price index declined 1.51%.
The worst dry spell in nearly four decades and floods in parts of the country have hurt farm output and pushed up food prices. C. Rangarajan, Chairman of Prime Minister Manmohan Singh's Economic Advisory Council, recently said food price inflation is the biggest worry for the economy in near term and a strong rise in food prices could prompt monetary action. Inflation based on the wholesale price index rose 1.34% in October 2009 from a year earlier
Meanwhile, China gave no sign on Friday that it was planning an early exit from its stimulus policies, pledging to stick with a pro-growth stance in 2010 to cushion the fallout of the global financial crisis. A meeting of the ruling Communist Party reaffirmed the relatively loose monetary setting and active fiscal policy that China adopted a year ago as the crisis reached its peak, but said there was a need to implement policy flexibly.
The party's decision-making Politburo pledged to make growth more stable, more sustainable and more balanced, the official Xinhua news agency reported. To that end, China would promote sustainable domestic demand, especially consumption and private investment, increase imports and encourage companies to invest abroad
Closer home, the six core industries grew 3.5% in October 2009 from a year earlier, slower than upwardly revised annual growth of 4.1% in September 2009, government data showed on Friday. During April-October, the first half of the 2009/10 fiscal year, output rose 4.7% from 3.3% in the same period in 2008/09. The infrastructure sector accounts for 26.7 percent of India's industrial output.
European shares moved off early lows on Friday, with banks paring losses and autos gaining ground. Key benchmark indices in UK and Germany were down 0.23% to 0.13% respectively. France CAC 40 index rose 0.12%
Asian stocks extended Thursday's slide as Dubai's debt concerns triggered worries about the global financial system. Key benchmark indices in China, Hong Kong, Singapore, Japan, South Korea and Taiwan fell by between 1.10% to 4.84%.
Japan's unemployment rate in October 2009 unexpectedly fell for a third month, a sign that the worst may be over for the labor market. The jobless rate declined to 5.1%, the statistics bureau said today in Tokyo. The rate has been declining since reaching a postwar high of 5.7 percent in July 2009. Household spending rose 1.6% in October 2009 from a year ago, a separate report showed.
Taiwan's gross domestic product (GDP) decreased 1.29% year-on-year in the third quarter, the Directorate General of Budget, Accounting and Statistics said on Thursday. The GDP was down 6.85% annually in the second quarter, revised from a 7.54% decrease estimated initially. The first quarter GDP was revised up to 9.06% from a decline of 10.13%. Taiwan's GDP has been falling since the third quarter of 2008 and the economy fell into a recession in the fourth quarter
Back home, signaling a sustained recovery in consumer sentiments, the domestic personal computer (PC) shipments touched 21.9 lakh units during July-September 2009 quarter, a 24% growth over the previous quarter. But seen on a year-on-year basis, the overall PC shipment was almost 3% lower than that in the same period the previous year.
Meanwhile, as per reports, the government plans to move a bill early next year to amend a banking law for allowing foreign investors in private banks to have voting rights in proportion to their shareholdings. Currently, voting rights of foreign investors are capped at 10%.
There are concerns that a glut in share sales may suck liquidity from the secondary market. A foreign brokerage firm expects Indian firms to raise roughly $70 billion through share sales over the next three years. The brokerage expects stake sales in state-run firms will account for $10-$15 billion of the total funds to be raised. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets.
Indian companies have raised about $18 billion in equity thus far this year to repay high cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.
The BSE 30-share Sensex was down 222.92 points or 1.32% to 16,632.01. The Sensex opened 136.13 points lower at 16,718.80, also its day's high. It lost 644.49 points at the day's low of 16,210.44 in afternoon trade. The Sensex oscillated 508.36 points during the day.
The S&P CNX Nifty was down 63.80 points or 1.27% to 4941.75. Nifty December 2009 futures were at 4953, at a premium of 11.25 points compared with the spot closing.
Turnover in NSE's futures & options (F&O) segment declined to Rs 96075.18 crore from a record turnover of Rs 137130.38 crore on Thursday, 26 November 2009.
Derivative contracts for November 2009 series expired on Thursday, 26 November 2009. As per reports, rollover of Nifty positions was about 70% while market wide rollover stood at 75%.
A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 6984.70 points or 72.40% in calendar year 2009, as on 27 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8471.61 points or 103.81% as on 27 November 2009.
The BSE Mid-Cap index fell 1.35% and the BSE Small-cap index fell 2.14%. Both the indices underperformed the Sensex.
All sectoral indices on BSE ended lower except the BSE Healthcare index. The BSE Bankex (down 1.41%), the BSE IT index (down 2.20%), the BSE Capital Goods index (down 1.82%), underperformed the Sensex.
The BSE Consumer Durables index (down 0.35%), the BSE Realty index (down 0.55%), the BSE Oil & Gas index (down 1.06%), the BSE PSU index (down 1.22%), the BSE FMCG index (down 1.20%), the BSE Healthcare index (up 0.08%), the BSE Teck index (down 1.63%), the BSE Metal index (down 1.30%), the BSE Power index (down 0.73%), the BSE Auto index (down 0.41%), outperformed the Sensex.
The market breadth, indicating the overall health of the market was weak. On BSE, 2029 shares declined as compared with 796 that rose. A total of 53 shares remained unchanged.
The total turnover on BSE amounted to Rs 5334 crore, higher than Rs 4508 crore on Thursday
Among the 30-member Sensex pack, 25 declined while only 5 of them managed gains.
Infrastructure shares were the worst hit in today's market meltdown. India's largest dam builder Jaiprakash Associates lost 3.05% to Rs 214.50 and was the top loser from the Sensex pack. Nevertheless the stock recovered from day's low of Rs 205.55 after company said it does not have any project or borrowing in Dubai.
India's largest engineering and construction firm by sales Larsen & Toubro slumped 2.80% to Rs 1585 after declining to a low of Rs 1530. The company's exposure to Dubai is in the range of $20 million to $25 million, a senior company official told a television channel on Friday.
Real estate shares staged a sharp recovery from early lows. India's largest real estate firm by sales DLF fell 1.06% after the company said it has no exposure to Dubai.
India's second largest listed real estate firm Unitech's rose 2.52 % after the company said it has no exposure to Dubai.
Cement shares declined despite reports of hike in prices by Rs 8-10 in Maharashtra and Gujarat. Sanjay Ladiwala, the president of Cement Stockists and Dealers Association of Mumbai was quoted as saying that the price rise was due navailability of railway wagons.
ACC (down 0.89%), Ambuja Cements (down 3.37%), UltraTech Cement (down 0.60%), and India Cement (down 2.05%), declined.
Siemens tanked 5.84% after net profit fell 32.7% to Rs 151.54 crore on 2.5% rise in sales to Rs 2482.05 crore in Q4 September 2009 over Q4 September 2008. The result was announced after trading hours on Thursday, 26 November 2009.
Suzlon Energy jumped 7.39% after the company said its unit REpower Systems AG has signed a set of wind farm project contracts with EDF Energies Nouvelles and RES Canada for delivery of up to 954 megawatt. The announcement was made before trading hours today, 27 November 2009.
Voltas rose 0.15% after the firm's chief financial officer told the media that the company is executing a Rs 900-crore project in Dubai through a joint venture in which Voltas has 37% stake.
Punj Lloyd fell 1.89% after a company official told the media that United Arab Emirates and Libya account for 40% of the company's order book.
India's second largest private sector power generation firm by sales Tata Power fell 0.31% after consolidated net profit fell 30% to Rs 367.7 crore in Q2 September 2009 over Q2 September 2008.
India's largest private sector firm by market capitialisation Reliance Industries (RIL) lost 0.67% to Rs 1057.50, recovering from day's low of Rs 1011.25. RIL has reportedly offered between US$10 billion and US$12 billion for acquiring LyondellBasell Industries.
India's largest power generation firm NTPC fell 0.97%. The Bombay High Court, on Wednesday, held that it will frame additional issues for the trial in a dispute for gas supply between state-run NTPC and Reliance Industries (RIL) on 4 December 2009. Justice Anoop Mohta has asked the parties to decide which documents submitted by either of them will be admitted or denied by the other
Shares of state-run oil marketing companies rose after crude oil futures tumbled in Asia Friday, as concerns about the global economic recovery and oil demand were re-ignited by the debt crisis in Dubai.
Hindustan Petroleum Corporation (HPCL) (up 0.31%), Indian Oil Corporation (IOC) (up 0.19%) and Bharat Petroleum Corporation (BPCL) (up 1.84%), edged higher.
Fall in crude oil prices will reduce under-recoveries of state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Software pivotals slipped on selling pressure despite weak rupee. A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
India's second largest software exporter Infosys fell 2.47%. As per recent reports the company is reportedly considering acquiring companies in the consulting and health-care industries for as much as $500 million.
Other IT pivotals also edged lower on selling pressure. India's third largest software exporter Wipro declined 1.76%. India's largest software exporter TCS fell 2.49%.
The rupee was trading at 46.64/65 as compared with previous close of 46.45.
Auto stocks recovered from day's low on bargain hunting. India's top two wheeler maker by sales Hero Honda Motors rose 0.95% to Rs 1753 and was the top gainer from the Sensex pack. The stock recovered from low of Rs 1677.
India's largest small car marker by sales Maruti Suzuki India dipped 1.68% to Rs 1553.10, off day's low of Rs 1510. India's top tractor market by sales Mahindra & Mahindra shed 1.27% to Rs 1013.80 after sliding day's low of Rs 990.70
India's top truck maker by sales Tata Motors pared early losses and ended 0.69% lower at Rs 630.50 after the company reported a consolidated net profit of Rs 21.78 crore in Q2 September 2009 compared with a consolidated net loss of Rs 941.75 in Q2 September 2008. Consolidated total income declined 8.20% to Rs 21506.94 crore in Q2 September 2009 over Q2 September 2008. The results were announced during trading hours today, 27 November 2009.
Private sector banking pivotals extended fall for the second day despite reports indicating that the government plans to move a bill early next year to amend a banking law for allowing foreign investors in private banks to have voting rights in proportion to their shareholdings. Currently, voting rights of foreign investors are capped at 10%.
India's largest private sector bank by net profit ICICI Bank slipped 1.84% to Rs 849.60. Nevertheless, the stock rebounded sharply from day's low of Rs 810 after a bank spokesman said that it had no material exposure to Dubai corporates. ICICI Bank said the bank has no material non-India linked exposure to Dubai corporates.
India's second largest private sector bank by net profit HDFC Bank shed 0.44%. India's largest bank by net profit State Bank of India declined 0.36%.
Metal stocks declined after a gauge of six metals traded on the London Metal Exchange, fell 2.18% on Thursday, 26 November 2009. Sterlite Industries (down 1.89%), Hindustan Zinc (down 4.88%), Sesa Goa (down 4.62%), slipped.
India's largest private sector steel marker by sales Tata Steel slipped 0.08%. The company reported consolidated net loss of Rs 2707 crore in Q2 September 2009 as compared with a net profit of Rs 4772 crore in Q2 September 2008. Net sales dropped 42.82% to Rs 25270 crore in Q2 September 2009 over in Q2 September 2008. The results were announced during market hours on 26 November 2009.
India's largest private sector aluminium maker by sales Hindalco Industries rose 0.60% after the Reserve Bank of India allowed the company to enhance foreign institutional investors (FII) limit to 40%.
India's largest cellular services provider by sales Bharti Airtel rose 0.89% to Rs 283.50. The stock oscillated in a wide band of Rs 229.50-Rs 284.45 during the day. The company's chairman Sunil Mittal in a television interview said the company has no plans to cut SMS charges as of now and also ruled out any global acquisitions at present.
India's second largest cellular services provider by sales Reliance Communication (RCom) fell 1.18% after the company slashed SMS charges, further heating up an ongoing price war in the telecom market.
RCom said it would charge customers just 1 paisa per SMS in a new bill plan. The company also launched another plan where customers can send unlimited text messages by paying Re 1 per day. Currently mobile operators charge Re 1 for local SMSes.
Select pharma shares gained on defensive buying. India's largest pharma company by sales Ranbaxy Laboratories rose 2.92% after the company launched a generic version of GlaxoSmithKline's Valtrex in the United States with a 180-day marketing exclusivity.
Wockhardt (up 0.94%), and Cipla (up 0.79%), edged higher from the pharma pack.
Sun Pharmaceutical Industries fell 0.29% to Rs 1459.05 on profit booking. The stock rose to day's high of Rs 1490 after the company received tentative approval from US Food and Drug Administration for generic Strattera capsules. The announcement was made after trading hours on Thursday, 26 November 2009.
Rajesh Exports fell 1.99% after the company's chief told the media that the Dubai crisis will affect the business as a whole but further informed that the company is not in any direct threat of payment defaults.
Tata Communications spurted 5.63% to Rs 382.05. The company recently signed a pact with five Middle East telecommunications companies to build a new cable system that will connect the region to the rest of the world. The five companies are Bahrain Internet Exchange, Oman's Nawras, Qatar Telecom Q.S.C., Saudi Arabia's Mobily and United Arab Emirates' Etisalat. It did not provide financial terms of the pact.
Tata Steel was the top traded counter on the BSE with a turnover of Rs 249.11 crore followed by HDIL (Rs 207.67 crore), Suzlon Energy (Rs 194.63 crore), State Bank of India (Rs 187.93 crore) and Reliance Industries (Rs 176.36 crore).
Suzlon Energy led the volumes charts on BSE clocking volume of 2.74 crore shares followed by Cals Refineries (2.60 crore shares), Unitech (1.52 crore), Mahindra Satyam (1.18 crore shares) and IFCI (1.08 crore shares).
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