"It would be useless for any player to attempt to explain successful batting."
The fact that master blaster Sachin Ton-dulkar has overshadowed Mamata Banerjee is proof enough of how disappointing Railway Budget is. Populism took precedence over pragmatism. One only hopes the Finance Minister doesn’t fall prey to the temptation.
Those batting around conventional wisdom of making some quick gain on railway-related stocks had to make a hasty retreat less their capital evaporates further.
Meanwhile, the Economic Survey will be unveiled today. Here again, we have seen that the Survey always talks of a spate of reforms urgently needed to accelerate India’s growth. But, the Budget hardly incorporates any recommendations made in the Survey. The key is to keep expectations low and one will not be disheartened.
As for the markets, they are set for another colorless show. The opening is likely to be sedate to say the least. There might be some more volatility today due to the F&O expiry. Global cues are inconclusive. US market ended higher on reassurances from Federal Reserve chairman Ben Bernanke that he will keep rates at record low for some time to come. Asian markets are mixed. European shares managed modest gains.
The market is in a predicament and a bit nervous ahead of Budget. The NSE Nifty has been stuck in a range of 4800-4930 of late and is unlikely to make a big move anytime soon- at least not today. A long overdue breakout in either direction could take place only post the Budget. At the same time, one has to take into account the emerging global situation before jumping the gun.
Shares of Hathway Cable Ltd. will list today.
Results Today: Advanta India, Goodricke Group, Oswal Spinning, Pfizer, Ranbaxy and Tata Power.
FIIs were net buyers in the cash segment on Wednesday at Rs4.85bn on a provisional basis while the local funds were net sellers of Rs1.54bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers of Rs7.47bn. On Tuesday, FIIs were net buyers of Rs7.44bn in the cash segment.
US stocks rose on Wednesday after Fed chairman Bernanke reiterated his pledge to keep interest rates low for the foreseeable future, reassuring investors worried about the outlook for the economy.
The Dow Jones Industrial Average gained 91 points, or 0.9%, to end at 10,374.16 while the S&P 500 index rose 11 points, or 1%, to 1,105.24. The Nasdaq Composite added 22 points, or 1%, to 2,235.90.
The dollar got hit and people started buying stocks. The weaker dollar lifted dollar-traded commodities and big corporations that do a lot of business overseas. Financial and technology shares were also on the rise.
US stocks managed to advance in the previous two weeks as investors focused on the positives in company and economic news, after a four-week drubbing.
The dollar tumbled versus the euro and the yen. The dollar's weakness gave a boost to dollar-traded commodities.
US light crude oil for April delivery rose $1.14 to settle at $80 a barrel on the New York Mercantile Exchange.
COMEX gold for April delivery fell $6 to settle at $1,097.20 per ounce.
Treasury prices fell, raising the yield on the 10-year note to 3.69% from 3.68% late on Tuesday.
US stocks posted slim gains in the early trades, lost some momentum after a worse-than-expected new home sales report and then turned higher again after the Fed chief began speaking. The gains continued throughout the session.
In his first day on Capitol Hill, Bernanke told the House Financial Services Committee that while the economic recovery is moving along, the job market remains weak. Against this backdrop, the Fed is unlikely to lift the fed funds rate, the key overnight bank lending rate, anytime soon.
In his statements yesterday, Bernanke implied that the Fed will at some point need to raise the fed funds rate.
Bernanke was testifying before the House and was scheduled to appear before the Senate on Thursday.
Investors are looking for more on how and when the Fed plans to unwind emergency programs that were put in place at the height of the financial crisis.
The Fed boosted the discount rate - the emergency bank lending rate - by a quarter-percentage point to 0.75%. It was a largely symbolic move in a rate that is rarely used by banks, but it was also the first rise in rates in over a year and the first move in any direction for rates in over two years.
Printing services firm R.R. Donnelley said it is buying Bowne & Co., a printer of corporate regulatory filings, in a deal worth $481 million. The $11.50 per share all-cash deal values the stock at more than 60% over Friday's closing prices.
Shares of Bowne & Co. rallied 60% in unusually-active New York Stock Exchange trading, while RR Donnelley shares gained 1%.
Shares of STEC plunged almost 24% in unusually active Nasdaq trading after the company issued a 2010 profit forecast late on Tuesday that disappointed investors. The computer data storage firm forecast revenue in a range that is more than 50% below analysts' forecasts and said it would report a quarterly loss, versus current forecasts for a profit. JPMorgan Chase led the list of analysts downgrading or cutting forecasts on the company.
Toyota faced Congressional scrutiny for the second-straight day, with company president Akio Toyoda speaking before the House Oversight Committee regarding the recall of millions of vehicles over safety issues. Toyoda apologized for the safety problems that led to deaths, injuries and the eventual recall of more than 8 million vehicles with brake problems.
The Japanese car giant said it is creating a system that will make it easier for customer complaints to be addressed and that it is forming a quality advisory group to seek input on safety and quality measures. On Tuesday, witnesses argued that the problems with the brakes could be tied to the vehicles' electronic throttle system, but Toyoda disputed that.
Transportation Secretary Ray LaHood testified earlier, refuting claims that the National Highway Traffic Safety Administration was a "lap dog" for the auto industry in dealing with safety claims. The NHTSA is part of the Transportation Department.
In the day's economic news, sales of new homes tumbled to the lowest level on record in January, surprising economists who expected a rise in sales. Sales fell 11% to a 309,000 annual unit rate from 348,000 in the previous month. Economists expected sales to rise to a 354,000 annual unit rate.
The Senate approved a $15 billion jobs creation bill that gives businesses tax breaks for hiring the unemployed and extends tax breaks that encourage companies to buy equipment.
European shares finished slightly higher, with an advance for HSBC Holdings offsetting weakness for Spain's Santander and BBVA, against a backdrop of uncertainty about the economy and labor unrest.
The pan-European Dow Jones Stoxx 600 index finished the day up 0.2% to 247.28. The index is nonetheless down 2.6% year-to-date, including losses on Tuesday.
Standard & Poor's meanwhile warned that a rating downgrade of one or possibly two notches is possible in a month for Greece. The Greek government is currently implementing spending cuts in order to reduce its budget deficit, a move that drew protesters to the streets of Athens on Wednesday. The Greek ASE Composite Index, down roughly 21% over three months, rose 0.2% to 1,926.81.
In Turkey, however, the ISE National-100 index declined 3.4% to 49,659.56, as investors worried about tensions between the Islamist government and the secular military after over 40 current and former military officers were arrested on Monday.
The German DAX index edged up 0.2% at 5,615.51 and the French CAC-40 index added 0.2% to 3,715.68. The UK FTSE 100 index gained 0.5% at 5,342.92.
The eagerly awaited Railway Budget turned out to be more populist one, with no change in passenger fares. More emphasis was laid on containing inflation and helping the common man on the street fight off spiraling prices. For corporates too, the Railway Budget was favourable as Railway Minister Mamata Banerjee left freight rates unchanged. But, the market hardly moved and the key indices were pretty much stagnant in an extremely insipid session. Weak global cues and jitters ahead of the Union Budget kept investors on tenterhooks. Railway stocks, which tend to rally in the run up to Railway Budget cooled off while new listings also failed to sparkle.
Railway stocks skid
Finally, the BSE Sensex marginally slipped 30 points to end at 16,256 it hit an intra-day high of 16,328 and intra-day low of 16,187. While the NSE Nifty slipped 11 points to end at 4,858.
Among the 30-components of Sensex, 19 ended in the negative terrain and 11 ended in the green. Sun Pharma, M&M, RCom, Tata Motors and Tata steel were among the top losers. On the other, major gainers were Maruti, NTPC, Tata Power, SBI and L&T.
Outside the frontline indices, the big losers in the broader market were Central Bank, KSK Energy, Gujarat NRE Coke and RCF. On the other hand, gainers included PFC, Divi’s Lab, REC, REI Agro and Balrampur Chini.
DB Realty, real estate major in Mumbai, started trading at Rs430 rupees on the BSE on Wednesday, against the issue price of Rs468 rupees a share. Although, towards the end the stock managed to stage a smart pull back, however was unable to end above its issue. Db realty ended at Rs456 against its issue price of Rs468 translating into a discount of 2.5%.
The company entered the capital market with Rs15bn IPO which was subscribed 2.95 times. The issue price band was Rs468- Rs486. The majority of reserved portion was subscribed at lower end of the price band by FIIs. Janus Capital picked up close to 43% of the allocated portion and India Capital Fund bought 5.14%.
The IPO garnered 5,52,19,024 bids in response to total issue size of 2,64,95,984 shares with 1,63,114 bids at cutoff price. The QIB portion was subscribed 3.29 times while non-institutional investors bid for 3.15 times the portion reserved for them.
The majority of the IPO proceeds i.e Rs13.88bn would be used to meet construction- and development-related expenses. The company focuses on residential, commercial, retail and other projects, such as mass housing and cluster re-development, and has 25 existing projects covering 60mn square feet.
SBI plans to raise up to US$4.3bn through a rights equity issue in 2010-11. The bank needs about half the amount to sustain growth over the next 5 years, the chairman was quoted as saying.
O.P. Bhatt said, the bank would need to raise US$8.6bn to feed demand for loans over 5 years in the fast-growing economy. "If we can raise half of it anytime during the next 12-18 months, it will be great," he added. The Rs100bn to Rs200bn rights offering will need the support of the government, which owns about 60% of the bank.
Shares of SBI edged higher by 0.2% to end at Rs1921. The scrip opened at Rs1906 it touched an intra-day high of Rs1930 and a low of Rs1900 and recorded volumes of over 0.81mn shares on NSE.
REpower, in which Suzlon Energy holds 90.71% won 51 MW order from Akuo Energy, France. The stock ended flat at Rs69. The scrip opened at Rs69 it touched an intra-day high of Rs70 and a low of Rs68.7 and recorded volumes of over 10.4mn shares on NSE.
Shares of KRBL shot up by over 9% to end at Rs25.80 after Mamata Banerjee in her Railway Budget announced a cut in freight on Food Grain by Rs100/ wagon. The scrip opened at Rs23 it touched an intra-day high of Rs26.80 and a low of Rs23 and recorded volumes of over 5.4mn shares on NSE.
Thermax announced that it has amicably resolved pending dispute and has settled trade secret litigation regarding its Ion Exchange Resin business in the US. Shares of Thermax slipped by 1.5% to end at Rs565. The scrip opened at Rs583 it touched an intra-day high of Rs589 and a low of Rs560 and recorded volumes of over 0.15mn shares on NSE.