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Tuesday, March 24, 2009
Institutional Activity
FIIs: Foreign institutional investors (FIIs) sold Rs 2276.20 crore more shares than they bought from 2 to 12 March 2009. However, daily net sales, which ranged from Rs 450 crore to Rs 600 crore in the four trading sessions from 2 to 5 March 2009, eased substantially in the next three trading sessions from 6 to 12 March 2009. In fact, FIIs were net buyers on 9 March 2009, albeit marginally, with an inflow of Rs 12 crore.
DIIs: Domestic institutional investors (DIIs) bought Rs 2674.06 crore more shares than they sold from 2 to 13 March 2009. DIIs have been absorbing heavy sales by foreign funds in the past one year. However, within DIIs, mutual funds were in a selling mode. Mutual funds sold Rs 621.90 crore more shares than they bought from 2 March 2009 to 12 March 2009.
Gains may continue
The market is likely to see further action on the back of a firm US markets and over 1-2% gains in majority of the Asian indices in the prevailing trades. Surging FIIs fund inflows coupled with firm economy outlook also may help the market advance further. Among the key local indices, the Nifty has a strong support between 2900-2850 range, while on the upside the index could test higher level in the 3000-3050 range. The Sensex has a likely support at 9275 and may face resistance at 9600.
The Dow Jones soared about 500 points to a close on Monday, posting its biggest gain since November, after Treasury's plan to buy up billions in bad bank assets and a better-than-expected existing home sales report raised hopes that the economy is stabilizing. While the Nasdaq surged by 99 points at 1556 and Dowjones gained 497 points at 7776.
All the Indian ADRs witnessed strong buying support on US bourses. HDFC Bank notched up significant gains and soared over 23% . The other Indian floats, Wipro, MTNL, ICICI Bank, Tata Motors and VSNL surged over 12-16% each. while Infosys, Satyam, Dr Reddy's, Rediff and Patni Computers were up around 3-7% each.
Crude oil prices gained marginally. The US light crude oil for April series advanced by $1.73 at $53.80 a barrel. In the commodity space, the Comex gold for April delivery declined by $3.70 to settle at $952.50 an ounce
Asian stocks open in green
Asian stocks gained, led by finance and energy stocks, after a US Treasury plan to remove toxic assets from banks triggered a global rally in equities.
Toyota Motor rose more than 3.5% in Tokyo after the yen weakened against the dollar.
Japanese benchmark index Nikkei advanced 201.66 points, or 2.45%, to trade at 8,417.19.
Hong Kong`s Hang Seng index gained 325.75 points, or 2.42%, to trade at 13,773.17.
China`s Shanghai Composite climbed 33.82 points, or 1.45%, to trade at 2,359.30.
Taiwan`s Taiex index went up 92.90 points, or 1.81%, to trade at 5,217.08.
South Korea`s Kospi index rose 12.11 points, or 1.01%, to trade at 1,211.61.
Singapore`s Straits Times increased 25.12 points, or 1.51%, to trade at 1,689.20. (7.48 a.m., IST).
Vijaya Bank
We recommend a buy on Vijaya Bank stock from a short-term trading perspective. It is apparent from the charts of Vijaya Bank that it was on medium-term downtrend from its January high of Rs 39.3 to its March low of Rs 20. The stock had lost almost 50 per cent of its value from this peak. However, the stock found support in the range of Rs 20 to Rs 20.50 recently and reversed direction. The stock has been on a short-term uptrend from this support zone. The stock conclusively penetrated its medium-term down trendline by gaining 3 per cent on March 23, confirming end of the medium-term downtrend. The daily relative strength index has entered the neutral region from the bearish zone. We notice a buy signal in daily moving average convergence and divergence indicator. From a short-term perspective we are bullish on the stock. We expect its short-term uptrend to continue until it hits our price target of Rs 26 in the forthcoming sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 22.
via BL
Daily News Roundup - March 24 2009
The Tata Group is likely to consolidate the varied beverages businesses under a single entity; may also merge Mount Everest Mineral Water with Tata Tea. (ET)
TCS plans to hire 2,000 people for the Passport Seva Project, which is ready for a pilot launch in June this year. (FE)
GE Hitachi Nuclear Energy has signed preliminary agreements with Nuclear Power Corporation of India Ltd and BHEL to build reactors in India. (BL)
Tata Motors launched its much awaited Rs100,000 car Nano. (BL)
Tata Motors plans to re-design the Nano for the US and launch it in the next three years. (BL)
Reliance Industries has raised the marketing margin it will charge on selling natural gas from eastern offshore KG-D6 fields to US$0.15 per mmbtu from US$0.12 per mmBtu earlier. (BS)
The Government has issued oil bonds amounting to Rs100bn to HPCL, BPCL and IOC. (BL)
The Government-appointed board of Satyam is understood to have short-listed six bidders, including Spice Group, L&T and Tech Mahindra. (BS)
The short-listed bidders for Satyam may be asked to submit their financial bids around April 9. (BL)
The Spice Group is having second thoughts and planning to re-evaluate its interest in the Satyam bid. (ET)
Drug regulators of the UK and Australia have approved Ranbaxy Laboratories’ Paonta Sahib manufacturing facility. (BL)
UB Group is planning to enter the tourism industry, by promoting its Four Seasons winery at Baramati in Maharashtra as a lifestyle destination. (BS)
Punjab National Bank’s credit growth is likely to slow down to 20% for the next fiscal, according to its CMD, Dr K.C. Chakrabarty. (BL)
Credit Analysis and Research (CARE) has assigned the highest ratings of AAA and PR1 for Tech Mahindra’s short-term and long-term borrowing programs respectively. (ET)
BSNL has decided to lease out towers in semi-urban areas to other telecom companies. (FE)
Nigeria has short-listed GAIL India to develop the African nation’s natural gas reserves. (FE)
SBI to provide seven year term for paying Nano’s loan. (FE)
A consortium of 11 banks led by IDBI Bank has offered to extend structured funding facilities worth Rs38.5bn to BGR Energy to execute Rajasthan Rajya Vidyut Utpadan Nigam Ltd’s 1,200mw Kalisindh Thermal Power Project at Jhalawar. (FE)
NDTV is ready for a demerger of its news and entertainment business. (BS)
Share Microfin Ltd has entered into a rated loan assignment transaction of Rs493mn with Yes Bank. (BL)
Hikal Ltd’s board to meet this week to consider the merger of its subsidiary Hikal Pharmaceuticals with itself. (FE)
Subhash Projects has bagged an order worth Rs4.9bn from a Mumbai suburban municipal corporation for an underground sewerage project. (BS)
Srei Infrastructure Finance Ltd has signed a letter of intent with the Netherlands-based FMO for external commercial borrowing of US$100mn. (BL)
Bosch Ltd plans to open 230 multibrand Bosch Car Service centres by 2010 across the country, taking the total number to 500. (BS)
Highway developers are looking at selling small stakes in various central road projects to raise funds, as banks deny loans for high–risk BOT projects. (ET)
National Highway Builders Federation NHBF has alleged that cement manufacturers have been consistently increasing prices in the last few months instead of passing on the duty cuts to customers. (BL)
The Indian Sugar Mills Association has opposed duty-free import of white sugar into the country. (BL)
Whole-sale sugar prices have fallen below production cost for the first time in India. (ET)
India and Association of South-East Asian Nations are likely to reschedule the June 1 deadline for eliminating duties on more than 4,000 products traded between the tow sides. (ET)
The prices of IT services in outsourcing are anticipated to shrink by 5-20% globally during 2009 and 2010. (FE)
A nano change in sentiment!
A nano change in sentiment!
The more difficult the problem, the greater the challenge in working it out.
After an arduous six-year drive, the Tata Nano has finally found some stability and will hopefully roll on smoothly. Ratan Tata’s engineering marvel could potentially turn out to be a game-changing product. However, some teething troubles are a given. Whether it is a boon or a bane for Tata Motors only time will tell.
The bulls too are driving ahead as markets globally seem to be on overdrive. The latest catalyst powering the global rally is the US government’s plan to buy banks’ soured assets and get credit flowing again. The news was out early on Monday morning, sending stocks in Asia and Europe sharply higher. The Wall Street followed the global trend with the key indices there up 6-7%.
The fact that the US news was already discounted yesterday leaves limited scope for the Indian market to react to the Wall Street rally. Still, we will see the key indices building on the recent momentum. Banking shares are likely to be among the leading gainers.
Remember, except for the current half-hearted sentiment, things haven’t changed dramatically. The upside appears limited. Check your fuel before planning a long drive.
FIIs were net buyers in the cash segment on Monday at Rs3.76bn while the local institutions too poured in a similar amount. In the F&O segment, the foreign funds were net buyers at Rs5.02bn. On Friday, FIIs were net buyers of Rs494mn. Mutual Funds were net sellers of Rs1.6bn on the same day.
US stocks soared on Monday, spurred on by the Treasury Department's proposed new plan that will enable banks to get rid of their rotten assets and revive the comatose credit markets. An encouraging report on existing home sales added fuel to the fire.
The Dow Jones Industrial Average surged 497 points, its biggest one-day point gain since Nov. 21. The gain was equivalent to 6.8%, which was the biggest one-day percentage gain since Oct. 28. The blue-chip barometer ended at 7,775.86.
The S&P 500 index shot up 54 points, its best one-day point gain since Nov. 13. The percentage gain of 7.1% was the best since Oct. 28. It closed at 822.92.
The Nasdaq Composite index jumped 99 points or 6.8% to 1,555.77 for the best one-day point and percentage gain since Oct. 2.
US stocks have gained for the past two weeks, notwithstanding the reversals on Thursday and Friday. But that retreat gave investors an opportunity to jump back in Monday, with bank shares leading the advance.
Since tumbling to 12-year lows two weeks ago, the S&P 500 has now rallied 18% as of Monday's close, blasting through 800, a key resistance level that analysts have been watching.
Treasury rolled out its long-awaited plan to purge bank balance sheets of as much as $1 trillion in sour assets that are limiting lending and prolonging the recession. The government will commit $75 billion to $100 billion of taxpayer money to launch the "Public-Private Investment Program," which seeks to create a market for that bad debt.
The government plans to run auctions between the banks looking to unload the bad assets and the investors looking to buy them. The Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) will be involved.
Last week, the Federal Reserve announced it was pumping another trillion into the economy to try to get credit flowing.
Existing home sales rose 5.1% in February, according to the National Association of Realtors. Sales rose at a seasonally-adjusted 4.72 million unit annual rate versus a 4.49 million unit annual rate in January. Economists had expected sales to dip to a 4.45 million unit rate.
Suncor Energy, Canada's No. 2 oil company, said that it will buy rival Petro-Canada for $14.86 billion to create the country's biggest energy company. Suncor shares lost 1.8% and Petro shares gained 23%.
In other deal news, an Abu Dhabi fund, Aabar Investments, bought a 9.1% stake in German carmaker Daimler in a $2.67 billion deal announced late Sunday.
Treasury prices dipped, raising the yield on the benchmark 10-year note to 2.64%, up from 2.63% late on Friday.
Lending rates were little changed. The 3-month Libor rate held steady at 1.22%, unchanged from late Friday, while the overnight Libor rate rose to 0.29% from 0.28% Friday. Libor is a bank-to-bank lending rate.
In currency trading, the dollar gained versus the euro and the yen.
US light crude oil for May delivery gained $1.73 to settle at $53.80 a barrel on the New York Mercantile Exchange.
COMEX gold for May delivery fell $3.60 to settle at 953.80 an ounce.
Across the Atlantic, European stocks continued last week's advance. The market closed near the day's highs. The pan-European Dow Jones Stoxx 600 index rose 3% to 177.73.
The UK's. FTSE 100 rose 2.9% to 3,952.81, while Germany's DAX 30 added 2.7% to 4,176.37, and the French CAC 40 gained 2.8% to 2,869.57.
Heading into Monday's session, the FTSE 100 was up 8.8%, the DAX 30 had gained 11% and the CAC 40 had advanced 8.2% over a two-week period.
Indian market ended with stellar gains on Monday with huge turnover. Exchanges recorded its highest turnover ~72,000cr since September 2008. After a bright start, key indices gained momentum as the day progressed.
Unabated buying in the banking, oil & gas and metals stocks lifted the BSE Sensex and the NSE Nifty t close above the 9,400 and 2900 levels respectively.
Finally, the BSE Sensex surged 457 points to close at 9,424 and the NSE Nifty surged 132 at 2,939.
Among the 30-components of Sensex, 29 stocks ended in positive terrain and only DLF ended in the red. Ranbaxy, Tata Steel, Hindalco, HDFC, Reliance Infra, Reliance Industries and ICICI Bank were among the top gainers.
Among the BSE Sectoral indices BSE Bankex index was the top gainer, the index surged 7%. Among the other major gainers were BSE Oil & Gas index (up 7%), BSE Metals index (up 6.5%) and BSE PSU index (up 4.5%).
Market breath was positive, 1,613 stocks advanced against 920 declines, while, 109 stocks remained unchanged.
Shares of Tata Motors surged over 3% to Rs166 after hitting an intra-day high of Rs173 and a low of Rs164 and recorded volumes of over 2.7mn shares on BSE.
The Nano would come in three versions -- standard and two deluxe models with air conditioning.
After the launch in Mumbai, Nano would be displayed at the company's dealerships from the first week of April, while the bookings would start from the following week.
Shares of Infosys surged by over 2.5% to Rs1330 after reports stated that the company may bag IT project from government which would run on transaction based pricing model. The scrip touched an intra-day high of Rs1340 and a low of Rs1300 and recorded volumes of over 0.15mn shares on BSE.
Shares of Sun Pharma advanced by 4% to Rs1082 after reports stated that the company would extend the offer to acquire the remaining stake in Taro to April 3. The scrip touched an intra-day high of Rs1091 and a low of Rs1029 and recorded volumes of over 21,000 shares on BSE.
BGR Energy Systems signed up credit lines to fund its working capital requirements for execution of EPC contract for 2 x 600 MW Thermal Power Project at Kalisindh of Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL).
The Company has estimated its fund based and non fund based working capital facilities at Rs38.5bn and mandated IDBI Bank Ltd to arrange the financing facilities.
Shares of BGR surged by 5% to Rs128 after hitting an intra-day high of Rs130 and a low of Rs118 and recorded volumes of over 0.15mn shares on BSE.
The board of directors of Hikal Ltd would meet on March 25, 2009 for considering a proposal for merger of Hikal Pharmaceuticals Ltd, a wholly owned subsidiary of the Company, with itself pursuant to a Scheme of Arrangement and all matters related and incidental thereto.
Shares of Hikal surged by over 7% to Rs169 after hitting an intra-day high of Rs178 and a low of Rs157 and recorded volumes of over 6,000 shares on BSE.
Shares of Subhash Projects surged by over 14% to Rs53 after hitting an intra-day high of Rs54.9 and a low of Rs47 and recorded volumes of over 4mn shares on BSE.
Bulls would look to carry on the momentum, however, there could be wild swings ahead of F&O expiry. Also, some resistance is likely at higher levels as investors could turn cautious ahead of an eventful April. We will have to contend with earnings, elections and RBI policy next month.
Bullion metals end mixed again
Gold drops but silver manages to crawl up
Gold prices ended lower on Monday, 23 March, 2009 but silver rose. The Treasury Department today detailed their plan to remove toxic assets from banks' balance sheets. This boosted the confidence of the investors and decreased the appeal of precious metals as a safe haven against alternatives. Fed's recent moves had sparked some good notions about the recovery from the recent recession in US. The rebounding dollar was also responsible for precious metals ending lower today.
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.
On Monday, Comex Gold for April delivery fell $3.7 (0.4%) to close at $952.5 an ounce on the New York Mercantile Exchange. Last week, the yellow metal ended higher by 2.8%. For the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 15.1%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (7.9%) since then.
On Monday, Comex silver futures for May delivery rose 3.5 cents (0.3%) to end at $13.875 an ounce. In February, 2009, silver had rose 4.3% after climbing 14% in January. Year to date, silver has climbed 26.3% this year. For 2008, silver had lost 24%.
The Treasury Department unveiled their plan today about buying back most of the bank's toxic assets thereby cleaning up their balance sheet to the extent possible. Treasure Secretary Tim Geithner detailed today that the Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies.
US stocks rallied today on the back of this news and the Dow ended more than 500 points higher for the day.
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 April delivery closed lower by Rs 76 (0.5%) at Rs 15,425 per 10 grams. Prices rose to a high of Rs 15,518 per 10 grams and fell to a low of Rs 15,355 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 90 (0.4%) higher at Rs 22,827/Kg. Prices opened at Rs 22,700/kg and rose to a high of Rs 22,936/Kg during the day's trading.
Crude glides up
Oil prices end higher in sync with US stocks
Following strong gains at Wall Street today, crude prices ended higher on Monday, 23 March, 2009. The rebounding dollar was mainly the reason for this. The Treasury Department today detailed their plan to remove toxic assets from banks' balance sheets. This boosted the confidence of the investors.
On Monday, crude-oil futures for light sweet crude for May delivery closed at $53.8/barrel (higher by $1.73 or 3.3%) on the New York Mercantile Exchange. Last week, crude ended higher by 10.4%. For the month of February, crude prices had ended higher by 1.5%.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63% since then. Year to date, in 2009, crude prices are higher by 21.8%. On a yearly basis, crude prices are lower by 49%.
The Treasury Department unveiled their plan today about buying back most of the bank's toxic assets thereby cleaning up their balance sheet to the extent possible. Treasure Secretary Tim Geithner detailed today that the Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies.
US stocks rallied today on the back of this news and the Dow ended more than 500 points higher for the day.
Also at the Nymex on Monday, April reformulated gasoline rose 2.1% to $1.4881 a gallon and April heating oil gained added 6.3% to $1.4707 a gallon.
April natural-gas futures rose 1.6% to $4.294 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for March delivery closed at Rs 2,694/barrel, higher by Rs 65 (2.5%) against previous day's close. Natural gas for April delivery closed at Rs 221.7/mmbtu, higher by Rs 3.1/mmbtu (1.4%).
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