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Recommendations
Wednesday, January 21, 2009
Trading Calls - Jan 21 2009
Nifty (2797) Sup 2720 Res 2835
Sell ACC (485) SL 490
Target 477, 473
Sell Sterlite Ind (258) SL 263
Target 250, 248
Sell ABB (443) SL 448
Target 435, 432
Sell Tata Steel (195) SL 199
Target 188, 186
Sell Bank of India (251) SL 256
Target 243, 240
Daily News Roundup - Jan 21 2009
TCS has won a multi-year contract from Ducati to deploy ERP solutions for the Italian super bike maker in Europe (BL)
L&T is emerging as a strong contender for acquiring Satyam. (ET)
Tata Motors cash flow may fall by Rs5bn in FY09 (BS)
M&M has forayed into the retail sector with launch Mom & Me stores. (ET)
ITC plans to introduce organic spices in the overseas market and to garner Rs3bn revenues in the next two years from the division. (FE)
RPL to start exports of petroleum products by January-end (BS)
DLF plans to restructure its business verticals through a major human resource redeployment to boost efficiency and productivity (BS)
SBI crosses priority sector lending target (BS)
M&M plans to launch fuel-efficient hybrid and electric vehicles in the near future. (ET)
Satyam’s ERP consultants are learnt to be exploring options of breaking away with the company and servicing existing clients. (ET)
Videocon expects growth to slow down (BS)
Vedanta Resources Plc is planning to buyback the remaining 20% stake held by the public in Madras Aluminium Ltd. (FE)SBI is likely to witness fall in credit off-take by 15-20% in Q3 FY09. (FE)
HCC in JV with John Laing Investment and Sadbhav Engineering has bagged NHAI project to construct the 96.5km highway from Maharashtra-Madhya Pradesh border to Dhule on NH-3 BOT basis. (FE)
Kirloskar Brothers to spin off its investments operations into a new company (BS)
LIC increases stake in IOB to more than 5% (BS)
Sasken Communications to continue to do business with Nortel Networks in the near-term (BL)
Dish TV is in talks with the Indian Railways to launch the live television services in trains. (FE)
UCO Bank to disburse Rs70-80bn during January-March 2009. (ET)
Catholic Syrian Bank’s employees oppose merger with Federal Bank. (ET)
The Central Electricity Regulatory Commission has issued new tariff regulations for next five years under which the base rate for return on equity has been raised from 14% to 15.5%. (ET)
The third stimulus package to not include tax cuts to boost demand, says Mr.Montek Singh (BS)
RBI has directed banks not to ask for collateral security for new loans up to Rs0.5mn from micro and small enterprises. (ET)
The Government has told public sector banks to extend credit to fund starved Indian industry, especially exporters and small and medium sector enterprises. (ET)
The coal ministry has indicated that the standing linkage committee is likely to restrict coal allocation within overall approved ceiling of 299mn tons during 2008-09. (FE)
Government mulls ‘golden share’ concepts in infrastructure projects built under PPP models (BS)
The Government has scrapped its export ban on basmati rice and cut the floor price for overseas shipments. (ET)
India’s sugar production may fall by over 30% to 18mn tons in the current season. (ET)
SEBI may ease norms to speed up fund raising. (ET)
Service tax collections from Mumbai have increased by 26% yoy to Rs135.78bn during Apr-Dec’08. (ET)
Market lacks vigor
The method of the enterprising is to plan with audacity and execute with vigor.
The audacity of hope as shown by Obama has resulted in history being made in the US, with the first African-American taking charge as its new president. The US and the world had pinned lot of hopes on him even before his momentous inauguration. Now that he has formally taken the reigns at the White House, the world is watching with bated breath what change he brings, and perhaps more importantly, how fast he does it?
But, leaving aside the rhetoric and the euphoria surrounding Obama, one should focus more on the immediate issues plaguing the global economy. That’s what Wall Street seemed to have done, with the key indices down 4-6%. Bank stocks led another fall in Europe as well. Asian markets too are down 1-2%.
There is no dearth of bad news, both on corporate as well as economic front. Wipro numbers are out, and they don’t seem to be too encouraging. The December rally had raised hopes of an intermediate uptrend. However, the new year has been anything but happy so far. The last few days have proved that not all the bad news has been discounted. Today, we expect another weak day. Possibility of a pull-back appears to be slim given the grim global cues. But it can always happen.
US stocks slumped to two-month lows on Tuesday as investors looked beyond President Barack Obama's historic inauguration to the battered economy. Financial stocks plunged, falling almost 17% to match their biggest percentage decline ever.
The Dow Jones Industrial Average tumbled 4%, closing at the lowest point since Nov. 21. The Standard & Poor's 500 index plummeted 5.3% and the Nasdaq Composite index slumped 5.8%. The Dow had its worst Inauguration Day decline.
The S&P 500 Financials Index fell 17% to below its lowest closing level since March 1995 as concerns about the health of the European banks weighed on the group. Both the Dow and S&P 500 retreated to two-month lows.
The S&P 500 is off to its worst start to a year, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83% and companies signal worse to come.
The S&P 500 is down 11% in the first 12 trading days of 2009, exceeding last year’s 9.2% drop. The decline helped erase more than two-thirds of a 24% rally since Nov. 20 as optimism that government spending would revive the economy evaporated.
In his inaugural address, Obama said: "The state of the economy calls for action, bold and swift. And we will act, not only to create new jobs but to lay a new foundation for growth."
Although Obama is a positive for the markets, his inauguration does not change the underlying issues, according to one analyst. Fourth-quarter earnings are going to be disastrous, and the company management is providing conservative or negative guidance.
Optimism about what changes the new administration will bring could fuel some stock gains over the next few weeks. However, the underlying issues remained in focus.
US earnings are currently on track to have fallen 20.2% in the fourth quarter from a year earlier, according to the latest Thomson Reuters figures.
Dow component IBM was likely to be active on Wednesday. The tech leader reported quarterly earnings late on Tuesday that rose from a year ago and topped estimates, on revenue that fell from a year ago and missed estimates. IBM shares gained 3.5% in extended-hours trading.
Intel Corp., the world’s largest chipmaker, raised the possibility of reporting a loss this quarter, ending its more than 21-year run of profitability.
On Monday, Royal Bank of Scotland (RBS) warned that it may report a loss of $41.3bn - the biggest loss in British corporate history. The news rattled investors, even as Britain announced a second bank rescue plan. Royal Bank's US shares plunged 69% on Tuesday.
A number of US companies issued weak earnings and dour forecasts.
US bank State Street warned on Tuesday that fourth-quarter earnings toppled 71% and said it could face billions of dollars in new credit losses. The company also warned that 2009 revenue and earnings will likely be flat with the previous year, missing forecasts for growth. State Street shares fell 59%.
TD Ameritrade said its first-quarter profit fell 23% and cut its outlook for the year. Shares fell 10.3%.
Dow component Johnson & Johnson reported higher quarterly earnings that beat forecasts on weaker revenue that missed forecasts. The company also forecast 2009 earnings that are short of forecasts. JNJ shares ended 1% lower.
New York Times shares fell 8% after it agreed to take an expensive $250 million loan from Mexican billionaire Carlos Slim that it will use to repay debt.
Italy's Fiat said it was taking a 35% stake in U.S. car-maker Chrysler.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.37% from 2.20% on Friday. Treasury prices and yields move in opposite directions. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates loosened. The 3-month Libor rate fell to 1.12% from 1.13% on Monday. Overnight Libor held steady at 0.12%. Libor is a bank-to-bank lending rate.
The dollar gained against the euro and fell against the yen. COMEX gold for February delivery rose $15.30 to settle at $855.20 an ounce.
US light crude oil for February delivery rose $2.23 to settle at $38.74 a barrel on the New York Mercantile Exchange. Gasoline prices rose one-tenth of a cent to a national average of $1.843 a gallon.
Fellow Dow component United Technologies reports quarterly results Wednesday morning, while Apple reports after the close. Also, Treasury Secretary nominee Timothy Geithner's confirmation hearing in the Senate.
Banks dropped again in Europe on Tuesday, weighing on the broader market. The pan-European Dow Jones Stoxx 600 index declined 2.1% to 185.70, as the banking sector tanked 7.3%.
The French CAC-40 index declined 2.2% to 2,925.28, while Germany's DAX 30 index fell 1.8% to 4,239.85 and the UK's FTSE 100 index closed down 0.4% to 4,091.40.
Indian market witnessed a sharp cut on Tuesday as the NSE Nifty index closed below the 2,800 mark. Key indices started off with a negative gap amid sharp falls across Asian markets. Bears continued to tighten their grip over the bourses as the day progressed.
However, a sharp bounce back was witnessed as traders covered their shorts after CERC announced that it had hiked return on equity for power units from 15.5% to 14%, which would be applicable from 2009 to 2014.
Although the spike was short lived and another bout of selling dragged the NSE Nifty index to close below the 2,800 mark.
Finally, The BSE benchmark Sensex lost 229 points to close at 9,100 and the NSE Nifty lost 49 points to close at 2,796.
Shares of Educomp nose-dived by over 6% to Rs1969 after reports surfaced that the company may have fabricated its accounts overstating its turnover and profits to boost its shares and the promoters exited when stock prices reached its peak.
According to reports, the promoters made over Rs2.5bn in the open market in trading in their own shares. The promoters held 10.8mn shares as on March 31, 2006.
The holding came down to 9.5mn shares on June 30, 2008, showing that the promoters sold more than 1.3mn shares of their company during the period between March 31, 2006 and June 30, 2008.
However, later on the Managing Director, Shantanu Prakash came out and clarified saying that rumors about directors quitting the company and promoters pledging stake, were baseless.
The promoters of the company have not pledged any share and that just 5% of their stake has been sold over three years for personal needs, added Prakash.
The stock had hit 52-week high of Rs4,799 on January 21, 2008 and a 52-week low of Rs1,515 on October 27, 2008.
Shares of KPIT Cummins surged by over 2% to Rs22.5 after the company announced results for the third quarter ended December 31, 2008.
The total revenue for Q3 FY-09 was at Rs1845.22mn, registering a yoy growth of 22.06% and net profit for Q3 FY-09 has increased by 19.36% to Rs168.66mn over the same period last year. The scrip touched an intra-day high of Rs23.4 and a low of Rs20 and recorded volumes of over 86,000 shares on BSE.
TTML have gained by 2.2% to Rs22.5. The company announced its results with a net loss of Rs (450.664)mn for the quarter ended December 31, 2008 as compared to net loss of Rs (274.255)mn for the quarter ended December 31, 2007.
The total income has increased from Rs4.595bn for the quarter ended December 31, 2007 to Rs5.158bn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs22.8 and a low of Rs21.6 and recorded volumes of over 19,00,000 shares on BSE.
Power stocks were in momentum after CERC hiked return on equity for power units from 15.5% to 14%, which would be applicable from 2009 to 2014. NTPC, Power Grid, PTC and Neyveli Lignite were among the major gainers.
Obama - Inaugural speech
Throughout America’s history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past, and set a new course for our nation.
This is one of those years.
We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.
I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.
In short, a bad situation could become dramatically worse.
This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.
Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth. Our universities are still the envy of the world. We are still home to the most brilliant minds, the most creative entrepreneurs, and the most advanced technology and innovation that history has ever known. And we are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.
That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.
It’s a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it – and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility. It is time to finally change the ways of Washington so that we can set a new and better course for America.
There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.
That is why we need to act boldly and act now to reverse these cycles. That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.
That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.
To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.
To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.
To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.
To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.
Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.
I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.
Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.
We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. That’s why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.
That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests.
Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.
No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.
It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.
That is not the country I know, and it is not a future I will accept as President of the United States. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. And that is what we will do.
It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.
That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. That’s why I’m asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks. That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?”
More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself. And if we do – if we are able to summon that spirit again; if are able to look out for one another, and listen to one another, and do our part for our nation and for posterity, then I have no doubt that years from now, we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. Thank you, God Bless You, and may God Bless America.
Precious metals end mixed
Gold rises for second consecutive day
After four successive sessions of drop, gold prices ended higher for the second consecutive day on Tuesday, 20 January, 2009. Prices rose as deep recession fears increased the appeal of the precious metals as a safe haven against alternatives. But a strong dollar limited gold's gains. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. But silver prices dropped.
On Tuesday, Comex Gold for February delivery rose $15.3 (1.8%) to close at $855.2 an ounce on the New York Mercantile Exchange. Last week, gold prices ended down by 1.8%. This year gold has lost 3.5% till date. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (20%) since then.
On Tuesday, Comex silver futures for March delivery lost gained 4 cents (0.4%) to end at $11.175 an ounce. Last week, silver has lost 10.5 cents. For 2008, silver had lost 24%.
At the currency market on Tuesday, the U.S. dollar rose against its major rivals. Worries about the U.K. banking sector sent the British pound to a six-year low versus the U.S. dollar and an all-time low versus the Japanese yen.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for February delivery closed higher by Rs 396 (3.02%) at Rs 13,493 per 10 grams. Prices rose to a high of Rs 13,637 per 10 grams and fell to a low of Rs 13,001 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 192 (1.05%) higher at Rs 18,444/Kg. Prices opened at Rs 18,192/kg and rose to a high of Rs 18,675/Kg during the day's trading.
Crude pares earlier losses
Prices rise by more than 6% as February contract expires
Crude oil prices pared their earlier losses and ended higher on Tuesday, 20 January, 2009. Prices rose due to the impending stimulus package that is expected to be announced by new President Barack Obama soon. Prices were also volatile as traders moved their positions to cover the March positions as the February expired today.
On Tuesday, crude-oil futures for light sweet crude for February delivery closed at $38.74/barrel (higher by $2.23 or 6.1%) on the New York Mercantile Exchange. Earlier it dropped to a low of $32.5. March crude, the new front-month contract, fell $1.73 to end at $40.84 a barrel on Nymex. Last week, crude prices shed 10.6%.
Prices reached a high of $147 on 11 July but have dropped almost 68% since then. Year to date, in 2009, crude prices are lower by 18%.
Earlier last week, in its monthly report, OPEC announced that oil consumption will drop for the second consecutive year in 2009. As per the report, oil consumption is expected to fall 200,000 barrels a day this year. Consumption declined 100,000 last year, the first year of negative growth since 1983, the cartel, which controls about a third of the world's oil production.
The Energy Information Administration also said last week that global oil consumption is projected to fall by 800,000 barrels per day in 2009. That's 400,000 barrels more than the previous month's forecast. Half of the consumption reduction in 2009 will come from the U.S., the world's largest oil consumer,
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
OPEC has been trying to cut production consistently in order to step up prices from their current low levels.
Against this background, ebruary reformulated gasoline fell 3 cents to $1.14 a gallon and February heating oil dropped 9 cents to $1.38 a gallon.
February natural gas futures fell 16 cents to end at $4.64 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 2,032/barrel, higher by Rs 34 (1.7%) against previous day's close. Natural gas for January delivery closed at Rs 231.5/mmbtu, lower by Rs 1.1/mmbtu (0.5%).
Tuesday, January 20, 2009
Sensex cools, drops 229 points
The market took a sharp dip in the early trades and continued to move down. The Sensex began the trading session with a negative gap of 170 points at 9160 and exhibited weakness through the day. The selling pressure in front-line stocks kept the metal and reality stocks in the red that dragged down the index to an intra-day low of 9034. The Sensex pared some losses on selective buying in power and PSU stocks and ended the session with losses of 229 points at 9101. The Nifty was 50 points down and closed at 2797.
The breadth of the market was negative. Of the 2,455 stocks traded on the BSE, 1,342 stocks declined, 1,018 stocks advanced and 95 stocks ended unchanged. Among the sectoral indices the BSE Metal Index shed 3.76% followed by the BSE Reality Index (down 3.31%) and the BSE Bankex (down 3.11%). On the other hand, the BSE Power Index was up 1.44%.
Among the Sensex stocks, Tata Steel tumbled 6.22% at Rs195.25, Bharti Airtel plunged 5.40% at Rs612, Reliance Communication slumped 4.76% at Rs176.15, JP Associate dropped 4.41% at Rs66.15, ICICI Bank shed 4.10% at Rs396.10, Reliance Communication lost 3.88% at Rs1182, Sterlite Industries was down 3.75% at Rs260.50 and Hindalco declined 3.65% at Rs48.90. The other front-line stocks lost around 1-3% each. However, NTPC was marginally up at Rs185.70, Reliance Infra gained 3.16% at Rs552 and Tata Power was up at Rs769.95.
Over 4.59 crore Satyam shares changed hands on the BSE followed by Cals Refinery (2.71 crore shares), Unitech (2.47 crore shares), GVK Power (1.15 crore shares) and Suzlon (98.36 lakh shares).
BSE Bulk Deals to Watch - Jan 20 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
20/1/2009 526556 AVERY INDIA PAT FINANCIAL CONSULTANTS B 111430 80.67
20/1/2009 526556 AVERY INDIA MINAL B. PATEL S 75131 80.90
20/1/2009 526785 CREST ANIM V. SHANKAR VENKATRAMAN B 114438 22.00
20/1/2009 526285 DIVYAJYO IND JAGDISH CHANDRA NYATI B 123000 6.80
20/1/2009 526285 DIVYAJYO IND BRIJMOHAN RATHI S 140000 6.80
20/1/2009 531913 GOPAL IRON CHANDRA SHEKHAR SUNIL BHATT S 100000 3.60
20/1/2009 530255 KAY POW PAP PARKASH CHAND GUPTA S 64750 6.76
20/1/2009 531602 KOFF BR PICT APURVA GIRISHBHAI RAMOLIA B 300000 2.67
20/1/2009 531602 KOFF BR PICT VIPUL VIRENDRAKUMAR PATEL S 262010 2.70
20/1/2009 590077 RANKLIN SOLU PURE VALVE INVESTMENTS PVT LTD B 50000 23.15
20/1/2009 590077 RANKLIN SOLU SATISH YECHAREDDY B 75000 22.70
20/1/2009 590077 RANKLIN SOLU PABBATHI SRINIVASA RAO S 50000 22.40
20/1/2009 590077 RANKLIN SOLU VENKATA RAGHAVANAGAR ANJANEYA S 50000 22.40
20/1/2009 590077 RANKLIN SOLU PROMPT CORPORATE SERVICES LIMITED S 93569 22.43
20/1/2009 507649 RASOI LTD TRINCAS AGENCIES AND COMMERCE B 10000 342.15
20/1/2009 507649 RASOI LTD TEJASWI VINIMAY PVT LTD B 10000 342.30
20/1/2009 531898 SANGUINE MD SUKUSAMA TRADING AND INVESTMENTS PVT LTD S 300069 6.93
20/1/2009 531898 SANGUINE MD KHAITAN WEAVING MILLS LTD S 135036 6.82
20/1/2009 501756 THANA ELE SU NIKESH B MEHTA B 10000 12.00
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