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Thursday, December 10, 2009

Daily News Roundup - Dec 10 2009

Lyondellbasell has said that it has not yet received a final bid from RIL. (ET)

Hardy Oil and Gas and RIL may drill 7 wells at two gas fields in India. (BS)

ONGC along with OIL India and Turkish Petroleum is likely to bid for Iraq’s giant Halfaya oil field. (ET)

ONGC Videsh has entered into a MoU with Sistema to jointly acquire and develop oil and gas fields in Russia and other CIS countries. (BS)

Infosys says it will make 13,000 campus offers for 2010-11. (BS)

Tata Motors looks to enter Swaraz Mazda by acquiring a 53% stake of Sumitomo. (ET)

American Tower Corporation to buy Essar Telecom Tower arm for US$400mn. (ET)

Hindalco to raise Rs45bn as debt to achieve financial closure for Utkal Alumina Refinery. (BS)

Suzlon Energy has received a Rs1.9bn order from Rajasthan State Mines and Minerals Ltd. (BL)

BHEL has developed a high temperature super conducting transformer of 1MVA, three phases, 33/6.6KV capacity. (BL)

M&M’s US arm to open a new assembly and distribution centre by end of this months. (ET)

Bajaj Auto has launched a 135-cc Pulsar, which will be manufactured from Chakan plant having a manufacturing capacity of 35,000 bikes. (ET)

Bajaj Auto to exit scooters business. (BS)

Fortis Healthcare is in talks to buy Lanka Hospitals chain. (BS)

Pfizer sues Dr Reddy’s over the sale of generic version of its best anti-cholesterol medicine Lipitor. (ET)

SEBI restricts Barclays to issue fresh P-Notes. (ET)

Mahindra Satyam has agreed to pay US$70mn to Upaid for out of court settlement. (ET)

PNB offloads 26% in its housing finance arm. (ET)

Government may sell Rs140bn worth of shares in NMDC. (BS)

TCS has entered into a 15-year agreement with Cardiff Council on a project aimed at making it easier for resident of the Welsh Town to access council services. (BS)

Elecon Engineering has bagged an order worth Rs290mn from Tecpro Systems. (BL)

SEBI restricts Barclays to issue fresh P-Notes. (ET)

RBI brings back price ceiling on overseas borrowing or the maximum rate at which Indian corporates can raise foreign funds. (ET)

Centre to sell 3mn tons of wheat and rice in the open market. (ET)

Government to rethink of excise duty SOPs for manufacturing unit in Himmachal Pradesh and Uttarakhand. (ET)

Exports to grow 15%, says Commerce and Industry Minister. (ET)

RBI tells banks to cover all villages by 2011. (ET)

Property tax to be raised by 5% in Delhi. (BL)

Government to consider uniform power tariff in Mumbai. (BL)

Slightly positive at start!

If you wanna make the world a better place, take a look at yourself, then make that change.

The world and its problems will continue. While you need to keep a close watch on the developments, you need to look even more closely at your portfolio. Today, we expect a positive start, but overall trading will be choppy. The Nifty will continue to face resistance at 5180-5200. Stock-specific movements will hog the limelight. Mahindra Satyam could spurt after it has agreed to pay US$70mn to Upaid for an out of court settlement.

The bulls will hope that all the talk of a double dip recession remains just a talk though not all is hunky dory. There are a few dark clouds gathering over the horizon; like the credit problems in Dubai and Greece. If that was not enough, S&P has cut its outlook on Spain to negative. UK and Japan are not doing particularly well. There are some concerns on asset bubbles in China. Inflation of course will remain a big bother for India. High unemployment and subdued consumers are hindering growth in the US. Given this backdrop, one should remain guarded. Avoid impulsive buying.

The US markets managed to claw their way back despite worse than forecast Japanese data and continued fears over Greece and Dubai. An analyst upgrade of 3M and surprisingly strong wholesale-inventory data boosted the mood on Wall Street.

Gold futures have bounced back today in Asia after four-session drop. The dollar resumed its southward journey.

Across the Atlantic, shares in Spain tumbled after S&P revised down its outlook on the country to negative from stable. The rating agency has already warned Greece and Portugal over their fiscal woes. Dubai market slid for a third session on persistent worries over the uncertainty around Dubai World's debt issues.

FIIs were net sellers in the cash segment on Wednesday at Rs3.77bn on a provisional basis. The local funds were net buyers of Rs188.7mn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs8.58bn. FIIs were net buyers of Rs9.94bn in the cash segment on Tuesday. FIIs' net investments in Indian stocks this year have crossed $16bn.

US stocks ended higher on Wednesday at the end of a choppy session after the falling dollar boosted commodity stocks. A rise in wholesale inventories and an upgrade of 3M also provided some optimism.

The Dow Jones Industrial Average rose 51 points, or 0.5%, to 10,337.05. The S&P 500 index added 4 points, or 0.4%, to 1,095.95. The Nasdaq Composite advanced 11 points, or 0.5%, to 2,183.73.

Wall Street had retreated on Tuesday as global debt woes weighed and as a stronger dollar hurt commodity prices. The debt woes remained in place, while the dollar fluctuated throughout the session, turning higher near the close and giving stocks some support.

The market may not see a big push to the new highs. Neither will there be a big selloff. At the same time, plenty of investors who have missed the bulk of the nine-month bull run would be tempted to get in on every dip.

The S&P 500 is up 62% as of Wednesday's close from early March.

The federal bailout plan will be extended until Oct. 3, 2010, Treasury Secretary Timothy Geithner said in a letter to Congress. However, the Troubled Asset Relief Program (TARP) will be scaled back and refocused on newer programs designed to stop foreclosures and make loans to small businesses.

Separately, the Congressional Oversight Panel said that while TARP did help stabilize the banking system, it failed to boost spending or help stop foreclosures.

On Tuesday, President Obama proposed reallocating money not used for TARP to help create jobs and provide other help to consumers. The president is reportedly meeting with the CEOs of a number of big banks next week to try to finesse more lending to consumers.

In the day's key economic news, wholesale inventories in October rose 0.3% after falling 0.8% in September. Economists thought they would decline 0.5%.

3M rallied 3% and helped keep the Dow afloat after Citigroup upgraded it to "buy" from "hold," saying it is likely to outperform its peers over the next year and deliver superior financial returns.

Pfizer rose on a bullish note out of Credit Suisse. Fellow Dow pharmaceutical stock Merck gained as well.

Hewlett Packard (HP) and IBM were the Dow's other big gainers.

Bank of America said that it has paid back the government in full the $45 billion it accepted in bailout money. A week ago, BofA announced that it planned to pay the government back. Shares were little changed.

COMEX gold for February delivery fell $22.50 to settle at $1,120.90 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last week.

US light crude oil for January delivery fell $1.95 to settle at $70.67 a barrel on the New York Mercantile Exchange.

Treasury prices fell, raising the yield on the 10-year note to 3.42% from 3.38% late on Tuesday.

A drop for financials pressured European shares, as renewed worries about debt levels hit Greek and Spanish banks hard. The pan-European Dow Jones Stoxx 600 index fell 1% to 241.70. The index, which has pared year-to-date gains to 21.9%, closed down for the third straight session.

The Spanish IBEX 35 index dropped 2.3% to 11,532.2 after the country's outlook was downgraded to negative by Standard & Poor's, although ratings were affirmed for the country.

Greece's rating was cut on Tuesday by Fitch. Greek stocks fell again, with the ASE Composite index down 3.4% to 2,105.48.

The French CAC-40 index declined 0.7% to 3,757.39, while Germany's DAX index shed 0.7% to 5,647.84. The UK's FTSE 100 index lost 0.4% to 5,203.89 after the UK government outlined its plan to tackle the country's debt pile.

Bulls were unable to continue yesterday’s brilliant run on Wednesday as weak global cues coupled with selling witnessed in the Metals, Banking and the Power stocks.

Sentiment further got dampened on Dalal Street as the Mayhem in Dubai extended to the third straight trading session. Investors and traders continued to offload heavily on the Dubai bourses on worries over the uncertainty around Dubai World's debt woes.

Technically, The Nifty has managed to close above its medium term trend line which indicates that the index has strong support at 5,080 levels. However, another factor to watch out is the Nifty has ended below its 5DMA. Whereas, on the upside yet again the 5182 levels (52-week high) would remain as major hurdle.

The BSE Sensex fell 102 points to end at 17,125 after touching a high of 17,227 and a low of 17,057. The index opened at 17,179 against the previous close of 17,228. The NSE Nifty was down 36 points to shut shop at 5,112.

In Asia, the Nikkei in Japan was down 1.3%, while Australia's S&P/ASX ended lower by 0.7%. Shanghai SE Composite in China slipped 1.7% and Hang Seng index in Hong Kong was down 1.4%.

In Europe, stocks were in the red. The FTSE in the UK was down 0.3%, The DAX in Germany was down 0.4% and the CAC 40 index in France was down 0.3%.

Coming back to India, among the BSE sectoral indices BSE Metals index was the top loser, shedding 2%, followed by the Banking index that was down 1.6% and the BSE Power index was down 0.6%. The BSE Mid-Cap index was down 0.6% and the BSE Small-Cap index was up 0.4%.

Among the 30-components of Sensex, 17 stocks ended in the negative terrain and 13 ended in the red. ICICI Bank, HDFC, Tata Steel, Reliance Industries and Sterlite ended in the negative terrain. Among the major gainers were Infosys, Maruti, TCS and Hero Honda.

Outside the frontline indices, the big losers in the broader market were BOB, Godrej Ind, Jai Corp, Allahabad Bank and LIC Housing. On the other hand, gainers included TTML, Idea, NMDC and REI Agro.

Reliance Industries announced that it has no plans to acquire any debt of LyondellBasell Industries. Reports had earlier stated that Reliance was expected to buy out some of the bankrupt petrochemical company's debt.

LyondellBasell is under Chapter 11 reorganization that would require positive approval from all lenders, in the pecking order of secured to unsecured. Any disapproval if they deem the terms to be unfair could add to delays, adding to the complexity of the transaction.

The scrip opened at Rs1070 it touched an intra-day high of Rs1077 and a low of Rs1063 and recorded volumes of over 0.56mn shares on BSE.

Suzlon won 31.5MW order with Rajasthan State Mines & Minerals Limited. Shares of Suzlon erased early gains and ended lower by 1% to end at Rs84.10. The scrip opened at Rs84.45 it touched an intra-day high of Rs86.40 and a low of Rs83.70 and recorded volumes of over 10.4mn shares on BSE.

Shares of Maruti Suzuki surged by over 2.5% to end at Rs1608 after Volkswagen AG agreed to buy a 20% stake in the company’s parent, Suzuki Motor Corp. Volkswagen will pay 222.5bn yen (US$2.5bn) for a 19.9% stake in Suzuki.

Shares of Kiri Dyes & Chemicals furtherextended gains and added 4% to end at Rs686 after reports stated thatthe company plans to acquire German textile- dye company DyStarTextilfarben GmbH from private equity firm Platinum Equity LLC.

Recently listed, Reliance Media World shares surged by 5% to end atRs122 after the company announced that BIG 92.7 FM and BBC WorldService have entered in to an alliance. BIG 92.7 FM will take BBC’sEntertainment’s updates across 33 network’s stations.

Shares of Mahindra Forgings hit new 52-week high surging 2.5% to end at Rs134 after its parent announced plans to combine its auto component businesses into a single entity to pare costs.

While, Mahindra Ugine was locked at 5% upper circuit at Rs57.3, its highest in almost 16 months.

Mahindra Forgings, Mahindra Composites and other partmakers could be folded into the new group over the next two years, Hemant Luthra, president in charge of Mahindra & Mahindra Ltd.’s component business, said yesterday.

Shares of NMDC surged by over 4% to end at Rs422 after reports stated that the company plans to sell as much as Rs140bn of stock as part of a sell-off in the company. A committee of ministers will start selecting arrangers for the sale this week after cabinet approved plans to divest an 8.38% stake.