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Tuesday, December 23, 2008
Post Session Commentary - Dec 23 2008
The Indian market ended lower as investors booked profits over the counters due to lack of positive cues on subdued global markets. Bears tightened their grip as Asian stock markets retreated for a third straight session. European markets opened positive but overlooked by the domestic traders. December 2008 derivatives contracts due to be expire on Wednesday, 24 December 2008, also contributed to the uneasiness.
The Indian market extended its yesterday’s losses and opened lower tracking negative cues from the markets all over the world. Further benchmark indices continued to trade in negative as strong selling pressure prolonged across the board on the back of deepening worries about the global economic outlook. Stocks slipped sharply lower during final trading and posted its biggest drop in more than two weeks to conclude the day in red led by banks and engineering companies on concern that corporate earnings may be hurt by slowing economic growth. BSE Sensex ended below 9,700 mark and NSE Nifty below 3,000 level. From the sectoral front, Investors off-loaded positions across the sectors and most of the selling was observed in Consumer Durables, Reality, Bank, Capital Goods, Metal, Auto and IT stocks. Midcap and Smallcap stocks also remained out of favor.
Among the Sensex pack 29 stocks ended in red territory and 1 in green. The market breadth was negative as 1752 stocks closed in red while 725 stocks closed in green and 82 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 241.60 points at 9,686.75 and NSE Nifty ended down by 70.65 points at 2,968.65. The BSE Mid Caps and Small Caps ended with losses of 83.98 points and 95.77 points at 3,175.81 and 3,639.18 respectively. The BSE Sensex touched intraday high of 9,838.38 and intraday low of 9,643.56.
Losers from the BSE Sensex pack are Satyam Computer (13.55%), JP Associates (10.18%), Tata Motos (7.04%), Sterlite In (6.00%), Mahindra & Mahindra Ltd (5.33%), L&T Ltd (4.89%), DLF Ltd (4.40%), ICICI Bank (4.32%), Hindalco (4.10%) and HDFC Bank (3.92%).
Only gainer from the BSE Sensex pack is Reliance Com Ltd (1.24%).
The BSE Consumer Durable index tumbled (5.81%) or 119.58 points to close at 1,137.87 as Titan Ind (7.68%), Videocon Ind (5.53%), Rajesh Export (4.41%), Blue Star L (3.29%) and Gitabjale GE (2.32%) ended in negative territory.
The BSE Reality index ended lower by (4.84%) or 122.26 points at 2,406.38. Main losers are Unitech Ltd (7.54%), Ansal Infra (7.16%), Housing Dev (6.82%), Orbit Co (5.68%), Parsvnath (4.80%) and DLF Ltd (4.40%).
The BSE Bank index ended down by (3.76%) or 206.69 points at 5,285.09. Major losers are Yes Bank (8.11%), Axis Bank (7.07%), Indian Overseas Bank (6.70%), Kotak Bank (6.70%) and Bank of Baroda (5.78%).
The BSE Capital Goods index ended lower by (3.61%) or 257 points at 6,868.03. Major losers are Usha Martin (7.86%), Alstom Proje (6.57%), Suzlon Energy (5.79%), Jyoti Struct (4.96%), L&T Ltd (4.89%) and Punj Lloyd (4.54%).
The BSE Metal index lost (3.07%) or 164.06 points to close at 5,188.42 as Jai Corp Ltd (8.62%), Sterlite In (6.00%), Steel Authority (5.76%), Hindalco (4.10%), Guajrat NRE C (4.29%) and Hindalco (4.10%) ended in red.
Turnover surges ahead of expiry
Nifty December 2008 futures at slight premium
Nifty December 2008 futures were at 2970.50, at a premium of 1.85 points as compared to the spot closing of 2968.65. Turnover in NSE's futures & options (F&O) segment surged to Rs 51,132.48 crore from Rs 47,321.10 crore on Monday, 22 December 2008.
The December 2008 derivatives contracts will expire on Wednesday, 24 December 2008, as the markets are closed on Thursday, 25 December 2008, for Christmas.
NTPC December 2008 futures were near spot price at 180 compared to the spot closing of 179.70.
State Bank of India December 2008 futures were near spot price at 1264.50 compared to the spot closing of 1264.20.
DLF December 2008 futures were near spot price at 301.75 compared to the spot closing of 301.80.
In the cash market, the S&P CNX Nifty lost 70.65 points or 2.32% at 2968.65.
Weak Asian stocks weigh on the domestic bourses
Bears were in command as market declined for the second straight day on setback in Asian stocks and caution ahead of the expiry of the near month derivatives contracts. Banking, realty and capital goods led the decline. The BSE Sensex provisionally lost 251.08 points, or 2.53%. India's fourth largest software firm by revenue, Satyam Computer Services, plunged 14.25% on rumours its founder and chairman Ramalinga Raju had resigned from the board.
All the sectoral indices on the BSE were in the red. The market breadth, indicating the overall health of the market, was weak.
Volatility was high. An intraday recovery was witnessed on a number of occasions on expectations of a further rate cut by the central bank and on a likely second government stimulus package for the economy. In its mid-year review of the economy, the finance ministry today, 23 December 2008, said there is a considerable scope for monetary easing over the next six to 12 months and an aggressive monetary policy may be necessary if the global economic turmoil continues to adversely affect manufacturing.
Lower interest rates and the government's fiscal stimulus package for the economy may revive the economy. The Indian economy has slowed down after a strong growth in the past three years. As per the market buzz, the government is likely to come out with a second stimulus for the economy. The first stimulus package announced early this month mainly involved additional government spending and an across-the-board cut in excise duties.
The near month December 2008 derivatives contracts will expire on Wednesday, 24 December 2008, as the markets are closed on Thursday, 25 December 2008, for Christmas.
Asia stock markets retreated for a third straight day on Tuesday, 23 December 2008 on deepening worries about the global economic outlook. The Shanghai Composite fell 4.55% after China's central bank trimmed interest rates by 27 basis points after trading hours on Monday, 22 December 2008, disappointing some investors in a move that was smaller than expected given the aggressive actions by other central banks. Key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan were down by between 1.21% to 2.75%. The Japanese financial markets were closed for a national holiday.
European stocks were mostly higher in early trade on Tuesday, as investors bought banks, which have endured a battering this year, and energy shares. The key benchmark indices in France, Germany and UK were up by between 0.27% to 0.77%.
Trading in US index futures indicated the Dow could rise 21 points at the opening bell. US stocks slid on Monday, 22 December 2008, on more evidence the year-long recession will keep eating into corporate profits, while retailers tumbled on worry the holiday shopping season could be the worst in nearly 40 years. The Dow fell 59.34 points, or 0.69%, to 8,519.77. The S&P 500 index slipped 16.25 points, or 1.83%, to 871.63, and the Nasdaq composite index declined 31.97 points, or 2.04%, to 1,532.35.
Economic and corporate data around the world remains weak. New Zealand's economy contracted by the biggest amount in eight years in the third quarter, reinforcing the case for more central bank rate cuts, data on Tuesday showed. On Monday, figures showed Japanese exports plunging at the fastest annual pace on record in November 2008, while Toyota Motor Corp said it would post its first-ever annual operating loss.
Top US staffing company Manpower on Monday scrapped its profit outlook and No. 1 drug store chain Walgreen Co posted a weaker-than-expected profit and slowed its expansion plans.
As per the provisional figures, the BSE 30-share Sensex was down 251.08 points, or 2.53%, to 9,677.27. At the day's low of 9,643.56, the Sensex fell 284.79 points in mid-afternoon trade. The Sensex fell 89.97 points at the day's high of 9,838.38 hit in early trade.
The S&P CNX Nifty was down 72.15 points, or 2.37%, to 2,967.15 as per the provisional figures.
The BSE clocked a turnover of Rs 3,364 crore, lower than Rs 3,861.10 on 22 December 2008.
The market breadth, indicating the overall health of the market, was weak. On BSE, 735 shares rose as compared with 1,770 that declined. 66 shares remained unchanged.
The BSE Mid-Cap index fell 2.51% while the BSE Small-Cap index dipped 2.51%. Both the indices outperformed Sensex.
Ranbaxy Laboratories, Reliance Infrastructure, Hindustan Unilever, ITC, Grasim Industries fell by between 1.36% to 4.4%.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 1.92% to Rs 1,260 on recent reports it may face pressure from the US to stop selling gasoline to Iran. As per reports, eight American lawmakers have asked the Export-Import Bank of United States (Ex-Im US) to immediately suspend all financial assistance to Reliance Industries (RIL) till it agrees to stop selling gasoline to Iran.
In a letter written to Ex-Im Bank president James Lambright, the American lawmakers stated that RIL is a major supplier of gasoline to Iran which is detrimental to the national security interests of the US and the loan is in direct collision with its foreign policy on Iran.
Oil exploration firms ONGC and Cairn India fell between 1% to 2.68% as crude dropped below $40 a barrel on signs the global economic downturn is further drying up fuel demand. Crude oil for February 2009 delivery fell as much as 61 cents, or 1.5%, to $39.30 a barrel.
Banking stocks fell as the recent rate cuts raised concerns about a fall in net interest margin (NIM). India's largest commercial bank State Bank of India (SBI) fell 0.87%. On Saturday, 20 December 2008, SBI slashed its lending rate by 75 basis points, to be effective from 1 January 2009. The bank also cut its deposit rates by 25 to 100 basis points across maturities. SBI's rate cut raised expectations other banks would follow suit.
India's second largest private sector bank by net profit HDFC Bank slipped 4.39% as its American depository receipt (ADR) fell 4.02% on Monday, 22 December 2008.
India's largest private sector bank by net profit ICICI Bank slashed 4.27% as its American depository receipts (ADR) dipped 3.8% on Monday, 22 December 2008. Its advance tax payment declined 6% to Rs 470 crore in Q3 December 2008 over Q3 December 2007. ICICI Bank said on Friday, 19 December 2008, joint managing director Chanda Kochhar would succeed Chief Executive K.V. Kamath who retires in April 2009. Kamath, chief executive since 1996, will become non-executive chairman from May 2009 replacing N. Vaghul who retires.
India's largest home loan lender by operating income Housing Development Finance Corporation (HDFC) fell 1.32% after it cut its retail lending rates by 50 basis points, effective 22 December 2008. HDFC announced the rate cut after trading hours on Friday, 19 December 2008.
PSU banks Indian Overseas Bank, Union Bank of India, Punjab National Bank, Bank of Baroda fell by between 2.76% to 6%.
Capital goods stocks slipped on worries a slowing economy will crimp orders. Larsen & Toubro , Bharat Heavy Electricals and ABB fell by between 1.74% to 5.73%.
Real estate shares dipped on reports property rates are expected to fall by 20-25% as demand has dropped off sharply over the past 9-10 months due to high interest rates. Indiabulls Real Estate, DLF and Unitech fell by between 4.35% to 7.82%. Fall in property prices is expected to hit the margins of developers already hit by the demand slowdown. Additionally, developers are facing a sever cash crunch that is hindering the execution of ongoing projects and grounding new launches.
Outsourcing firms declined as fears a weak global economy would cut the amount firms spent on technology offset a weaker rupee.
Satyam Computer fell 14.25% on rumours its founder and chairman Ramalinga Raju had resigned from the board. As per unconfirmed reports, Raju has put in his papers and he awaiting the company board's decision on the issue. The company had said on Thursday, 18 December 2008 its board will meet on 29 December 2008 to consider buyback of shares, a move aimed at boosting investor confidence. The stock had slumped 30.22% to Rs 158.05 on Wednesday 17 December 2008 after it called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju, bowing to investor pressure.
India's second largest IT exporter by sales Infosys fell 0.47% even as its ADR rose 2.03% on Monday. Infosys sees the Indian IT industry going through a slow phase of growth for some time, its chief executive said last week. India's largest IT exporter by sales Tata Consultancy Services slipped 2.13%. India's fourth largest IT exporter by sales Wipro fell 0.81% as its ADR slipped 3.58% on Monday.
The Indian rupee eased to its lowest in nearly two weeks on Tuesday, as a wobbly stock market raised concerns about foreign fund withdrawals. The partially convertible rupee was at 48.48/49 per dollar, off a trough of 48.535, its lowest since 12 December 2008 and about 1 % lower than Monday's close of 48.01/03.A weaker rupee augurs well for IT firms which derive a lion's shares of revenue from exports.
India's largest commercial vehicle maker by sales Tata Motors fell 7.5% on reports the company may have to pump in at least $1 billion to revive premium British brands Jaguar and Land Rover that it bought earlier this year.
Hatsun Agro Product rose 1.78% on reports it would double its previously planned ice cream production capacity at its new facility coming up in Salem, Tamil Nadu.
Pyramid Saimira Theatre was locked at lower circuit limit of 10% at Rs 61.15 on reports the market regulator did not issue any advisory to the company's chairman regarding an open offer.
SEBI letter forged - PSTL
Chennai-based entertainment and theater company Pyramid Saimira Theatre today said the letter which it had received from the regulator Securities Exchange Board of India (Sebi), with regard to the company's open offer, has been forged.
The company had requested the Bombay Stock Exchange and National Stock Exchange not to issue the pay out and to conduct a thorough enquiry into the company's share transaction on Monday. The company is also planning to launch a formal complaint with Central Bureau of Investigation (CBI) in this regard.
Speaking to reporters in Chennai today P S Saminathan, chairman, Pyramid Saimira Theatres said that the regulator had clarified to the company that it did not issue any letter and would issue a detailed press release later today.
Saminathan also denied all the points which has been stated in the so called letter sent by Sebi. "If the letter itself fraud, there is no point commenting on it," said Saminathan.
The letter dated December 19, 2008, which is in the circulation printed at the regulator's letterhead carrying Corporate Finance Department's Assistant General Manager signature. The letter subjected, "Violations of Sebi (SAST) Regulations by P S Saminathan & Pyramid Saimira Theatre", stated that Sebi had directed Pyramid Saimira to make an open offer to buy 20 per cent in the company at Rs 250 a share.
Meanwhile, the concerned courier company which delivered the letter to Samintahan, in written has confirmed that they received instruction from Sebi to deliver the letter on December 22. Saminathan noted, the regulator normally faxes such letters and does not courier them. He feels this is a deliberate attempt to defame the company.
He added, his current holding is 24 per cent in the company and planning to consolidated it by buying another 22 per cent from Nirmal Kotecha on Monday, which would haven taken to the total share holding of Saminathan to 46 per cent.
But on Monday company's stock surged as much as 10 per cent on the domestic bourses on reports that the promoters would make an open offer to the shareholders for acquiring a further 20 per cent stake. Shares of Pyramid Saimira surged 9.95 per cent in the opening trade to hit its upper circuit of Rs 82.90 on the BSE, which had put Saminathan's plan on hold.
Saminathan said there has been massive 75 lakh share trade and 25 lakh shares delivery marking which is completely abnormal.
The current share holding pattern of the company Saminathan – 24 per cent, Nirmal Kotecha – 22 per cent, Narayanan, 4 per cent, Other promoters – 4 per cent and Public – 46 per cent.
via Business Standard
Daily Call - Dec 23 2008
Markets are likely to lack luster as they start the day's proceedings on a rather tepid note. The US markets continued with their losing ways for the 4th session on the trot. Japan is observing Emperor's birthday. Hong Kong is mildly weak. Our markets have largely ploughed their own furrow for the past two weeks and therefore Asian markets are unlikely to guide Dalal Street behaviour.
The profit booking mode, which began yesterday is likely to manifest itself today as well but it won't halt the uptrend unless you see a close below 9600 mark. But Reliance is a worry, where shorts appeared again in the derivative segment. As important data in the US is on tap in the coming days, the US markets could play the pied piper once again. One solace is that punters may like to extend their gains and may put up a fight in this settlement that ends tomorrow
Pre Session Commentary - Dec 23 2008
Today the markets are expected to open up in red due to negative trading of Asian markets. And the investors will closely keep a close eye on the rollover in the derivatives market. However, for the day the market will trade in negative zone and track the behavior in the Asian and European market.
On Monday, the markets opened on a flat note and continued to trade volatile with a negative bias and ended the day in deep red. The hopes for a possible stimulus package and rate cut are getting extended day by day, which resorted in profit booking in index heavyweight. As there was not much to talk about domestic cues, the benchmark indices reacted to the behavior of the Asian Markets. In line with the Asian Markets the downtrend was followed by the European markets, which ended the session in red. The Sensex breached the sensitive mark of 10,000 and closed in a four-digit mark. Sensex and Nifty lost 1.69% and 1.24%. Oil & Gas, Bankex, Metal, Capital Goods and Auto conceded lose of 3.02%, 2.48%, 1.52%, 0.99% and 1.36% respectively. The market is likely to turn volatility with negative bias. Also, as Thursday being holiday on the occasion of Christmas most data like Derivatives expiry and Inflation are expected to come out a day early
The BSE Sensex closed lower by 171.56 points at 9,928.35 and NSE Nifty ended low by 39 points at 3,077.50. The BSE Mid Caps and Small Caps ended with loss of 4.20 points and 9.07 points at 3,259.79 and 3,734.95 respectively. The BSE Sensex touched intraday high of 10,173.34 and intraday low of 9,894.01.
On Monday, the US markets closed in weak note. The investors are worried over the impact of recession on the corporate profits on more evidence the year-long recession will keep eating into corporate profits, while retailers tumbled on worry the holiday shopping season could be the worst in nearly 40 years. Crude oil for February delivery fell 1.5 percent to $39.31 barrel in New York after plunging 5.8 percent yesterday
The Dow Jones Industrial Average (DJIA) closed low with 59.42 points at 8,519.69, whereas NASDAQ index dropped by 31.97 points at 1532.35 and the S&P 500 (SPX) also closed lower by 16.25 points to close at 871.63 points.
Indian ADRs ended mixed. In technology sector, Infosys gained by 2.03% and Satyam that gained by 5.49% whereas Wipro lost by 3.58% and Patni Computers closing low by 2.11%. In banking sector ICICI Bank plunged by 3.80%, HDFC Bank fell by 4.02%. In telecommunication sector, Tata Communication plunged by 3.40%, while MTNL inclined by 8.91%.
Today the major stock markets in Asia opened weak. The Shanghai Composite is trading low by 67.77 points at 1,919.98 Hang Seng is low by 374.60 points at 14,247.79. Further Japan''s Nikkei is closed on the occasion of Emperor’s Birthday. Tiwan weighted low by 163.69 points at 4,371.85 and Singapore’s Strait Times is down by 8.55 points at 1,737.08. The Asian Markets are trading low as there are no positive cues flowing in the market and even if there are any then they are not enough to curtail the downtrend. Today China came out with a rate cut, but the reaction in the Chinese market is negative and the same could shadow on the rest of the market.
The FIIs on Monday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 2,243.30 Crore and gross debt purchased stood at Rs 174.30 Crore, while the gross equity sold stood at Rs 1,780.40 Crore and gross debt sold stood at Rs 61.50 Crore. Therefore, the net investment of equity and debt reported were Rs 462.90 Crore and Rs 112.70 Crore respectively.
On Monday Indian Rupee closed at 48.01/03 a dollar, about 1.6% weaker than Friday''s close of 47.26/27. Negative stocks and positive offshore dollar/rupee and some corporate (dollar) buying between 47.30-47.50 have pulled the rupee lower.
On BSE, total number of shares traded were 34.63 Crore and total turnover stood at Rs 3,861.10 Crore. On NSE, total number of shares traded were 72.15 Crore and total turnover was Rs 10,149.04 Crore.
Top traded volumes on NSE Nifty – Unitech with 102398902 shares, Suzlon Energy with total volume traded 5253028867 shares, Reliance Petro with 21061405 shares, DLF with 18832155 shares, followed by SAIL with 10024713 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1038615 with a total turnover of Rs 15088.39 Crore. Along with this total number of contracts traded in stock futures were 1436665 with a total turnover of Rs 15905.39 Crore. Total numbers of contracts for index options were 1013251 with a total turnover of Rs 15661.70 Crore and total numbers of contracts for stock options were 61334 and notional turnover was Rs 665.61 Crore.
Today, Nifty would have a support at 2,900 and resistance at 3,170 and BSE Sensex has support at 9,725 and resistance at 10,200.
Market seen lower on negative global cues
Key benchmark indices are likely to edge lower in volatile trade mirroring negative global cues.
Asia stock markets retreated for a third straight day today, 23 December 2008. China's Shanghai Composite plunged 1.24% or 24.71 points at 1,963.05, Hong Kong's Hang Seng tumbled 1.26% or 184.45 points at 14,437.94, Singapore's Straits Times declined 0.76% or 13.27 points at 1,732.36, South Korea's Seoul Composite slipped 2.23% or 26.35 points at 1,153.26 and Taiwan's Taiwan Weighted fell 2.28% or 103.31 points at 4,432.23.
US stocks closed lower on Monday, 22 December 2008 amidst gloomy outlooks from companies like Toyota Motors. Caterpillar reportedly predicts a slump in global economy and lower energy demand. The Dow fell 59.34 points, or 0.69%, to 8,519.77. The S&P 500 index slipped 16.25 points, or 1.83%, to 871.63, and the Nasdaq composite index declined 31.97 points, or 2.04%, to 1,532.35.
Back home, volatility may rise ahead of the December series F&O contracts expiry on Wednesday, 24 December 2008. As per reports, rollover of Nifty and marketwide positions from December 2008 series to January 2009 series stood at 40% as of Monday, 22 December 2008.
There is a possibility of dip in trading volumes due to a likely decline in foreign institutional participation on account of the Christmas and New Year celebrations. In that case, domestic institutions are expected to play a key role in determining the market direction. Market remains closed on Thursday, 25 December 2008 on account of Christmas.
Investors resorted to profit booking on weakness in global stocks pulling the barometer indices lower on Monday, 22 December 2008. The BSE 30-share Sensex lost 171.56 points, or 1.7%, to 9,928.35 and the S&P CNX Nifty was down 38.20 points, or 1.24%, to 3,039.30, on that day.
Foreign institutional investors (FIIs) were net sellers worth Rs 191.49 crore while mutual funds bought shares worth Rs 207.55 crore on Monday, 20 December 2008, according to provisional data on NSE.
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