Thursday, January 22, 2009
Trading Calls - Jan 22 2009
Nifty (2706) Sup 2665 Res 2789
Buy Hero Honda (842) SL 835
Tgt 852, 856
Buy Bharti Airtel (584) Sl 578
Tgt 594, 598
Buy Bank of India (240) SL 236
Tgt 247, 250
Buy Crompton Greaves (129) SL 125 Tgt 138, 140
Sell Ranbaxy (204) SL209
Tgt 196, 194
Daily News Roundup - Jan 22 2009
LIC and ICICI Prudential Life Insurance are supporting L&T’s move to acquire Satyam. (BS)
L&T to present revival plan to Satyam board. (ET)
Satyam gets termination notice from two clients. (BS)
The Company Law Board restrained the key personnel of erstwhile Satyam management from selling any movable and immovable properties. (BL)
Tata Steel to sell aluminium smelters of Corus to Klesch & Co.. (ET)
Patni and General Atlantic may team up to acquire Satyam. (ET)
Bajaj Auto plans to manufacture gearless scooter. (BL)
HCC plans IPO for Lavasa project by 2010. (BS)
Genpact and Quatrro interested in buying parts of Satyam business. (BL)
Maharashtra government cancels the Rs4.8bn contract given to Maytas Infrastructure earlier. (BS)
Tata Motors launches its pre-owned car business, christened Tata Motors Assured, in major cities. (BS)
Tata's acquires 30% stake in Neotal, increasing the total stake to 70%. (FE)
Petron Engineering bags Rs87mn order to setup electrical erection power plant from Lanco Infratech. (FE)
Unitech puts on hold Sonepat SEZ in Haryana. (FE)
Kesoram Industries to halt production at its Orissa plant amid slowdown in demand. (FE)
Bajaj-Auto to roll-out Kawasaki and Ninja bikes in India. (FE)
The joint venture between ONGC and SCI to build rigs has not taken off due to the easy availability of rigs. (BS)
Refex Energy Ltd to invest Rs10bn for setting up a 50MW solar power plant in Gujarat. (BL)
Royal Orchid ties up with Vaswani group to launch service apartment. (BL)
Whirlpool eyes over 20% market share in consumer durables segment by the end FY10. (ET)
NPCIL plans to raise Rs350-400bn by debt over next five years to meet the requirement of the civil nuclear program. (ET)
Big Bazaar, a part of future group, to open 40 new outlets by June '09. (ET)
Sebi has made it mandatory for promoters to disclose details of shares pledged by them in their listed entities. (BS)
On account of lower tax receipts, States have asked the Centre not to reduce the central sales tax (CST) rate by one percentage point from April this year. (BS)
The Centre and the states may reach an agreement to have 16% rate for goods and services tax (GST), which will be implemented from April 2010. (BS)
The Tamil Nadu government, along with the Tamil Nadu Electricity Board (TNEB), is planning to add 4,300MW power by 2011-12, with an investment of Rs222bn. (BS)
Government may extend fresh Rs50bn credit line to NBFC and AFCs. (ET)
India may face deflation between March-June'09, says Pronab Sen (Chief Statistician of India). (ET)
Exporters are likely to get fresh dose of subsidies. (FE)
Government rules out import duty on crude palm oil. (FE)
A pick up at start!
Whenever you fall pick up something!
Picking up oneself after a market fall is in itself an achievement. The world has to grapple with fresh signs of economic weakness even as Barack Obama gradually settles down in the White House. The bad news is coming from other parts of the globe, like Europe and Asia. China’s economy grew at the slowest pace in seven years in Q4 of 2008. South Korea’s GDP has shrunk by a bigger-than-expected 5.6%. Singapore’s economy is likely to contract by up to 5% this year. Europe is engaged in renewed fire-fighting to keep its banking sector from collapsing. News from the corporate side is anything but cheerful, with job cuts and plant shutdowns galore.
Back to India, we may still get away with a slight bounce early on due to the overnight rally in US stocks. A few Asian indices are up about 1%. But, one must not get carried away as the outlook remains murky. Inflation will be out today, and may slip below 5%. A top government official sees deflation in the next few months. This may prompt the RBI to go for further monetary easing. However, it remains to be seen what it does in next week’s review. Market is also eagerly awaiting some crucial results today, including that of index bellwether RIL. Chances are RIL will maintain its gross refining margins. The overall numbers may be a different picture altogether.
Key Results Today: 3i Infotech, Bank of India, Bharat Forge, BPL, Cipla, Dish TV, Future Capital, Gateway Distriparks, Idea Cellular, Inox, Ipca Labs, JB chemicals, J Kumar Infra, JK Tyre, Kotak Mahindra Bank, Marico, Navneet Publication, NDTV, Noida Toll, Novartis, Piramal Healthcare, Praj Industries, Ranbaxy, Reliance Infra, Reliance Industries, Reliance Power, Tata Sponge, TVS Motor, Voltas, Zandu Pharma and Zee News.
US shares closed sharply higher on Wednesday, led by strong gains in the financial space, as traders perceived the previous day's sell-off as overdone. IBM's solid earnings coupled with news of Bank of America share purchases by company executives helped improve sentiment.
The Dow Jones Industrial Average advanced 279.01 points, or 3.5%, to 8,228.1. The Standard & Poor’s 500 Index rose 35.03 points, or 4.4% to 840.24, its steepest gain since Dec. 16. The Nasdaq Composite index gained 66.21 points, or 4.6%, to 1,507.07.
The Dow had earlier reversed an early triple-digit rise to briefly dip into negative territory before resuming its course higher.
Bank of America jumped 31%, the most since at least 1980, after CEO Kenneth Lewis and five directors bought shares. Citigroup and JPMorgan Chase rallied more than 25%, helping the S&P 500 Financials Index rebound from its lowest level since 1995 with a 15% gain.
US stocks had fallen to two-month lows on Tuesday, closing below 8,000 for the first time since November, as worries about the banking sector overshadowed President Barack Obama's historic inauguration. It was the market's worst Inauguration Day performance ever, according to S&P.
Market sentiment was better on Wednesday, as demonstrated by the CBOE Volatility index or the VIX. The market's fear gauge dropped a good 10 points after jumping more than 10 points on Tuesday.
IBM reported quarterly earnings late on Tuesday that rose from a year earlier and topped estimates, on revenue that fell from the prior year and missed estimates. The IT services company also forecast that it would earn $9.20 per share this year, 45 cents more than what analysts had been expecting. IBM shares gained 11.5%.
S&P 500 earnings are expected to have fallen more than 20% in the fourth quarter of 2008, according to the latest Thomson Reuters tallies. That would make it the sixth consecutive quarter of slowing earnings.
United Technologies reported higher quarterly earnings that topped forecasts on revenue that fell from a year earlier and missed forecasts. The company also reiterated its 2009 forecast. Shares ended little changed.
GM lost its crown as the world's largest automaker to Toyota in 2008, as the company sold 610,000 fewer cars than its rival. GM's global sales fell 10.8% in 2008 to 8.36 million vehicles. Shares erased losses to end with modest gains.
Ericsson reported fourth-quarter earnings that beat estimates and also said it was cutting 5,000 jobs to save costs. Shares of the Swedish telecom rose 16.6%.
United Airlines' parent UAL also reported a wider quarterly loss versus a year ago. However the loss was not as steep as some analysts were expecting. Shares fell 6%. Fellow airline AMR reported a wider quarterly net loss that was worse than expected. AMR shares fell 24%.
Obama's pick for Treasury Secretary, Tim Geithner, testified before the Senate Finance Committee. He said that bold action is needed to soften the blow of the economic downturn. Geithner also said that if confirmed, he would work to reform the Troubled Asset Relief Program (TARP), the government's much-maligned $700bn bank rescue plan.
After the close, Apple reported higher fiscal first quarter sales and earnings that topped estimates. The tech leader also issued a fiscal second quarter sales and earnings forecast that was short of forecasts. But investors focused on the earnings and sent shares 9% higher in extended-hours trading.
eBay reported a lower fourth-quarter profit that nonetheless topped estimates. The online auctioneer also issued a current-quarter profit forecast that is short of expectations. Shares fell in extended-hours trading.
Intel said that it was shuttering sites in Asia and scaling back US operations in a restructuring move that will affect up to 6,000 people.
Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.52% from 2.33% on Tuesday. 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 were mixed. The 3-month Libor rate held steady at 1.12%. Overnight Libor rose to 0.19% from 0.14%. Libor is a bank-to-bank lending rate.
US light crude oil for March delivery rose $2.71 to settle at $43.55 a barrel on the New York Mercantile Exchange. Gasoline prices rose one-half of a cent to a national average of $1.848 a gallon.
The dollar fell against the euro and the yen. COMEX gold for February delivery fell $5.10 to settle at $850.10 an ounce.
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 extended losses to third straight trading session on Wednesday as a sell off in the equity markets across the globe triggered a broad-based selling on the Indian bourse. The slide was led by metal, banking, oil & gas, realty and IT stocks.
The BSE benchmark Sensex lost 321 points to close at 8,779 and the NSE Nifty lost 90 points to close at 2,706.
Among the 30-components of Sensex, 28 stocks ended in the red and only 2 stocks ended in the positive terrain. Among the major losers in Sensex were Reliance Industries, Bharti, ICICI Bank, HDFC and Infosys.
Bucking the negative trend were Hindustan Unilever and ITC.
Shares of Educomp plunged by over 22% to Rs1534 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.
The company said that it has lodged a complaint with the police to investigate "malicious emails" and rumors about the company.
The stock had hit 52-week high of Rs4,860 on January 21, 2008 and a 52-week low of Rs1,376 on January 21, 2009.
Shares of Wipro have slipped by 3.5% to Rs219 after the company announced its consolidated results for third quarter missing market estimates. The company posted net profit of Rs10.04bn against Rs9.70bn in the July to September quarter.
Net sales were at Rs66.34bn against Rs65.20bn in the second quarter. The scrip touched an intra-day high of Rs224 and a low of Rs215 and recorded volumes of over 7,00,000 shares on BSE.
Shares of Dr. Reddy’s Lab slipped by 4% to close at Rs444. The company announced its Q3 results posting net profit from a loss a year earlier. Net income for the quarter ended Dec. 31 was Rs1.92bn. The scrip touched an intra-day high of Rs467 and a low of Rs442 and recorded volumes of over 72,000 shares on BSE.
Shares of Hero Honda advanced by a percent to Rs839 after the company announced a better-than-estimated 9.1% gain in third-quarter profit. Net income rose to Rs3bn. The scrip touched an intra-day high of Rs848 and a low of Rs830 and recorded volumes of over 1,00,000 shares on BSE.
Shares of Indian Bank gained by 0.2% to Rs124 after the company’s net profit rose by 14% to Rs3,507.02mn for the quarter ended December 31, 2008 as compared to Rs3,075.04mn for the quarter ended December 31, 2007.
Total Income increased from Rs16,760mn for the quarter ended December 31, 2007 to Rs20,713.72mn for the quarter ended December 31, 2008. The scrip touched an intra-day high of Rs129 and a low of Rs123 and recorded volumes of over 2,00,000 shares on BSE.
Madras Aluminium was locked at 5% upper circuit to Rs62.10 after reports stated that Vedanta Resources Plc is planning to buyback the remaining 20% stake held by the public in Madras Aluminium Ltd. The scrip touched an intra-day high of Rs62.10 and a low of Rs62.1 and recorded volumes of over 4,000 shares on BSE.
Market mood would continue to remain jittery ahead of the important results to be announced on Thursday. Also weekly inflation data to be released would effect the market sentiments.
Precious metals end mixed again
Gold drops today but silver rises
After two successive sessions of rise, gold prices ended lower on Wednesday, 21 January, 2009. Prices fell due to the strong dollar. 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 Wednesday, Comex Gold for February delivery fell $5.1 (0.6%) to close at $850.1 an ounce on the New York Mercantile Exchange. Earlier, prices fell to a low of $843. Last week, gold prices ended down by 1.8%. This year gold has lost 4.1% 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 Wednesday, Comex silver futures for March delivery gained 15 cents (1.3%) to end at $11.325 an ounce. Last week, silver has lost 10.5 cents. For 2008, silver had lost 24%.
At the currency market on Wednesday, the dollar index remained relatively unchanged after gaining almost 2% yesterday.
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 lower by Rs 33 (0.24%) at Rs 13,460 per 10 grams. Prices rose to a high of Rs 13,648 per 10 grams and fell to a low of Rs 13,337 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 123 (0.7%) higher at Rs 18,567/Kg. Prices opened at Rs 18,441/kg and rose to a high of Rs 18,835/Kg during the day's trading.
Crude shoots up
Prices rise by another 6% on stimulus plan
Crude oil prices shot up substantially on Wednesday, 21 January, 2009. Prices rose as traders anticipated that new President Barack Obama would soon implement a new stimulus package for $850 billion which would in turn increase energy demand in the coming months. Prices were also volatile as traders moved their positions to cover the March positions as it was the first day of trading for the March contract.
On Wednesday, crude-oil futures for light sweet crude for March delivery closed at $43.55/barrel (higher by $2.71 or 6.6%) on the New York Mercantile Exchange. 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 12.5%. On a yearly basis, crude prices are lower by 52%.
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.
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, March reformulated gasoline rose 3 cents to $1.20 a gallon and March heating oil added 1 cent to $1.38 a gallon.
February natural-gas futures rose 14 cents to end at $4.78 per million British thermal units.
At the MCX, crude oil for February delivery closed at Rs 2,093/barrel, higher by Rs 61 (3%) against previous day's close. Natural gas for January delivery closed at Rs 235.9/mmbtu, higher by Rs 4.4/mmbtu (1.9%).
Energy traders will have to wait another day for the latest government data on U.S. petroleum stockpiles. The Energy Information Administration will report its latest data at 11 a.m. Eastern time on Thursday, a day late because of Martin Luther King Jr. Day on Monday, 19 January, 2009.
Companies which have pledged shares
| 2.32% | Indiabulls Finance | 7th Jan | |
| 8% | India Infoline | 20th Oct | |
| 10.30% | ECL Finance | 4th Nov | |
| 6.24% | Rapid Estate Pvt | 30th Sept | |
| 5.09% | ECL Finance | 27th Oct | |
| 0.78% | Kotak Mahindra Prime | 25th Oct | |
| 10.27% | IDBI Trustee | 29th Oct | |
| 7.50% | ECL Finance | - | |
| 10.05% | United Phos | 5th Sept | |
| 13.72% | Bank Sarasin | 1th Sept 2007 | |
| 5.39% | ECL Finance | Mar'07-Sept'08 | |
| 7.74% | India Infoline | 17th Sept | |
| 5.18% | ECL Finance | June-Aug'08 | |
| 2.32% | Indiabulls Finance | 7th Jana | |
| 20.02% | Carburettors | 15th July | |
| 26% | IL&FS | - | |
| 9.90% | India Infoline | June'08 | |
| 13.34% | JM Financial | 4th June | |
| 9.75% | Motilal Oswal | 28th May | |
| 8.23% | Indiabulls Finance | 22nd April | |
| 9.54% | IL&FS | 9th Jan 2007 | |
| 12.30% | Cholamandalam | 4th April | |
| 14.09% | Indiabulls Finance | 24th Mar | |
| 7.86% | IDBI Trustee | 27th March | |
| 10.34% | IDBI Trustee | 24th Mar | |
| 8.72% | ABS Reddy | 26th Feb | |
| 14.40% | Indiabulls Finance | 4th Feb |
Wednesday, January 21, 2009
Nifty January 2009 futures at discount
Turnover surges
Nifty January 2009 futures were at 2677.75, at a discount of 28.40 points as compared to the spot closing of 2706.15. Turnover in NSE's futures & options (F&O) segment surged to Rs 43,026.95 crore from Rs 35,511.58 crore on Tuesday, 20 January 2009.
Reliance Industries January 2009 futures were at discount at 1113 compared to the spot closing of 1119.85.
Educomp Solutions January 2009 futures were at discount at 1522.05 compared to the spot closing of 1526.85.
Housing Development Finance Corporation January 2009 futures were at discount at 1360 compared to the spot closing of 1373.55.
In the cash market, the S&P CNX Nifty lost 90.45 points or 3.23% at 2706.15.
Subscribe to:
Posts (Atom)