via Rediff
Wednesday, March 25, 2009
Pre Session Commentary - March 25 2009
Today domestic markets are likely to open negative as the other Asian markets have opened with blood bath and the US markets closed in red yesterday. The profit booking pressures on the broader level shows the weak sentiments prevailing across the world. A phenomenal rally in the previous trading sessions has prompted investors to book profits. Today one may witness further profit booking pressures as the markets closed flat yesterday. The early gains are yet to be discounted at broader level. One may witness cautious trade with an essence of selling pressure.
On Tuesday, the domestic markets opened with a positive gap but could not withstand the profit booking pressures. The positive opening was backed by the US treasury plan of $ 1 trillion and hence phenomenal opening of other Asian markets as well. The northward movement was however later impeded by immense selling pressures of profit booking. It was very obvious that the gains piling up since the last week was at its peak level for fall. Unlike the domestic markets, other Asian markets managed to close with remarkable gains. However due to the intense selling pressure Sensex closed with shallow gains, whereas NSE Nifty ended flat. European markets on the other hand had a mixed trading. Sectors like Bankex, Realty, CG, FMCG and Auto ended in green, however sectors like Metal, CD and PSU closed in red. During the session we expect the markets to be trading highly volatile with negative bias.
The BSE Sensex closed with gain of 47.02 points at 9,471.04 and NSE Nifty ended with a marginal loss of 1.20 points at 2,938.70. BSE Mid Caps and BSE Small Caps ended with losses of 16.36 points and 21.47 points at 2,820.08 and 3,155.45 respectively. The BSE Sensex touched intraday high of 9,699.04 and intraday low of 9,402.64.
The US stock markets closed lower on Tuesday after a sharp rally in the previous session as investors paused to re-assess the likely success of the government''s latest plans to clean up bank balance sheets and revive the financial system. Further there are reports that the SEC is considering modifying its uptick rules. Meanwhile, the Fed Chairman Bernanke and Treasury Secretary Geithner were put at the mercy of a House Financial Services Committee hearing regarding the rescue of AIG. US light crude oil for May delivery grew by 0.5% to settle at $54.05 a barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed low by 115.65 points at 7,660.21, the NASDAQ Composite (RIXF) index fell 37.18 points to close at 1,518.59 and the S&P 500 (SPX) fell by 16.57 points to close at 806.35.
Today major stock markets in Asia are trading mixed. Hang Seng is trading lower by 49.56 points at 13,860.78 followed by Japan''s Nikkei by 12.53 points at 8,475.77, Strait Times by 6.87 points at 1,699.47. While Taiwan Weighted and Seou Composite are trading with gains of 82.94 points and 2.14 points at 5,325.12 and 1,223.84 respectively.
Indian ADRs ended down. In technology sector, Patni Computers ended lower by 8.11% along with Infosys that ended down by 4.92%. Further, Satyam lost 3.07% and Wipro closed down by 2.99%. In banking sector ICICI Bank and HDFC Bank lost 3.09% and 5.85% respectively. In telecommunication sector, MTNL dropped by 5.20% along with Tata Communication by 1.56%. Further, Sterlite Industries decreased by 7.61%.
The FIIs on Tuesday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs 1,445.90 Crore and gross debt purchased stood at Rs 156.90 Crore, while the gross equity sold stood at Rs 1,130.20 Crore and gross debt sold stood at Rs. 496.20 Crore. Therefore, the net investment of equity and debt reported were Rs 315.80 Crore and Rs (339.30) Crore respectively.
On Tuesday, the Indian rupee closed at 50.73/74, 0.5% weaker than its previous close 50.46/47. Rupee lost its charm as the domestic stock markets pared its gains towards the closing bell.
On BSE, total number of shares traded were 34.31 Crore and total turnover stood at Rs 4,258.49 Crore. On NSE, total number of shares traded was 83.99 Crore and total turnover was Rs 13,308.11 Crore.
Top traded volumes on NSE Nifty – Unitech with 68325551, Suzlon Energy with 52820733 shares, ICICI Bank with 22747200 shares, SAIL with 21864661 shares followed by DLF with 17455586 shares.
On NSE Future and Options, total number of contracts traded in index futures was 1444913 with a total turnover of Rs 20,808.98 Crore. Along with this total number of contracts traded in stock futures were 750002 with a total turnover of Rs 22,635.53 Crore. Total numbers of contracts for index options were 2200776 with a total turnover of Rs 32,782.07 Crore and total numbers of contracts for stock options were 63936 and notional turnover was Rs 2,044 Crore.
Today, Nifty would have a support at 2,872 and resistance at 2,969 and BSE Sensex has support at 9,313 and resistance at 9,595.
Market seen lower in volatile trade
Key benchmark indices are likely to open lower following mixed to negative global cues. The SGX Nifty futures for March 2009 series declined 19.50 points in Singapore.
However volatility may remain high ahead of the expiry of March 2009 derivatives contracts for March 2009 series on Thursday, 26 March 2009. As per reports, rollover of Nifty positions from March 2009 series to April 2009 was around 50% as on Tuesday, 24 March 2009.
Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday, 24 March 2009 scaled down the GDP (gross domestic product) growth projection for the current fiscal to 6.5% from the 7.1% increase estimated by the government earlier during the year, owing to the ongoing global crisis.
Meanwhile, traders and brokers can now have a higher exposure in the currency futures market after the market regulator Sebi on Tuesday, 24 March 2009 doubled the gross outstanding limit to $10 million for small traders, $50 million for brokers. However, the limits for banks — the biggest participants in the market so far — have been left untouched at $100 million.
Asian shares were mixed retreating from two-month highs today, 25 March 2009 as investors paused to assess whether a U.S. plan to deal with banks' toxic debt would revive the financial system and help pull the economy out of recession.
Key benchmark indices in China, South Korea and Taiwan were up by between 0.15% and 1.58%. However indices in Hong Kong, Japan and Singapore were down by between 0.11% and 0.40%.
Japan reported a record fall in exports in February 2009, with no signs of a demand recovery in its key U.S. and European markets, as well as a sharp decline in imports. The data pointed to more pain for an economy already mired in its worst recession since the 1974 oil shocks, showing both domestic consumption and overseas demand were crumbling under the weight of the global slowdown.
US stocks ended lower on Tuesday, 24 March 2009 giving back some of the previous session's big gains, as investors paused to re-assess the likely success of the government's bank rescue plan.
The Dow Jones industrial average fell 115.65 points, or 1.5%, to 7,659.97. The Standard & Poor`s 500 index fell 16.67 points, or 2.03%, to 806.35, while the Nasdaq Composite index fell 39.25 points, or 2.52%, to 1,516.52.
Back home, key benchmark indices saw divergent trend on Tuesday, 24 March 2009, with the BSE Sensex logging small gains while its peer the S&P CNX Nifty ended marginally lower after a strong start as European stocks gave up early gains and lower US index futures.
The BSE 30-share Sensex rose 47.02 points or 0.5%, to 9,471.04, its highest close since 13 February 2009. The S&P CNX Nifty was down 1.20 points or 0.04% to 2,938.70. It came off a high of 3,017.40.
From a three-year closing low of 8,160.40 on 9 March 2009, the BSE Sensex has risen 1,310.64 points or 16.06%.
According to provisional data on NSE, foreign institutional investors (FIIs) were net buyers worth Rs 501.76 crore while mutual funds sold shares worth Rs 192.99 crore on Tuesday, 24 March 2009.
Market may remain cautious
The market is likely to witness cautious trend as major Asian gauges like the Nikkei, the Kospi index and the Jakarta index have declined in current trades and may drag down the indices in early trades. Although the domestic indices moved up in the last couple of sessions, intra-day volatility remains the major concern. Among the local indices, the Nifty may slip to 2900 and 2850 while on the upside it could test 3000 to 3050 level. The Sensex has a likely support at 9300 and could test higher levels at 9600.
US indices closed weak on Tuesday as investors stepped back after the previous session's big rally, Wall Street's best in four months. While the Dow Jones dropped 115 points at 7660, the Nasdaq was down 39 points at 1517.
Indian floats, also, bucked the weak US market trend and ended lower. Patni Computer, HDFC Bank and MTNL lost over 5-8% each, while Infosys, Wipro, Satyam, Dr Reddy, Tata Motors, ICICI Bank and VSNL lost around 1-4% each. Rediff however, was the only gainer amongst the ADRs and gained by 1.22% respectively.
Crude oil prices gained marginally. The US light crude oil for May series advanced by 18 cents at $53.98 a barrel. In the commodity space, the Comex gold for April delivery declined by $28.70 to settle at $923.80 an ounce.
US markets drop
Indices witness a lackluster day with no major catalyst
Stocks at Wall Street managed to somewhat steady during the day on Tuesday, 24 March, 2009 but ended in the red ultimately. After yesterday's huge rally, there was as such no market moving news or event today. Fed Chairman Ben Bernanke and Treasury Secretary Geithner endured a question and answer session at a House Financial Services Committee meeting regarding the rescue of AIG. There was single economic report scheduled today pertaining to the housing sector.
Stocks started the day in the red and ended with modest losses. For a very brief period, Dow had inched up to the green.
After starting the day 86 points down earlier during the day, The Dow Jones Industrial Average ended lower by 115 points at 7,660. The Nasdaq Composite Index, ended lower by 37 points at 1,518. S&P 500 ended lower by 17 points at 806.
All ten sectors registered losses led by the financial sector. Among Dow components, while GE tried to support the Dow, Microsoft and Intel were big losers.
Among major economic report for the day, The Federal Housing Finance Agency reported today that U.S. home prices rose 1.7% in January compared with December. It was the first monthly increase in a year. Home prices are down 6.3% in the past year and are down 9.6% from the peak in April 2006. In December, the year-over-year decline was 8.8%. December's index, originally reported as a 0.1% increase, was revised down to a 0.2% decline.
The report detailed that prices rose or were flat in eight of nine regions in January. only the Pacific states registered a decline, down 0.9%. Prices rose 3.9% in the East North Central region, which includes most of the Great Lakes states. Prices rose 3.6% in the South Atlantic region. In the past year, prices are down in all nine regions, led by the Pacific with a 21.1% decline. The smallest price decline has been the 0.4% drop in the West South Central (which includes Texas, Oklahoma, Arkansas and Louisiana).
Crude prices ended lower on Tuesday, 24 March, 2009 as traders anticipated that tomorrow's weekly inventory report will show build up in crude inventories for last week. Market is expecting the report to show a build up of more crude inventories to the tune of more than 1 million barrels. The rebounding dollar was also the reason for lower crude price.
On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $53.11/barrel (lower by $0.69 or 1.3%) on the New York Mercantile Exchange. Earlier it fell to a low of $52.45 and also rose to a high of $53.50. Last week, crude ended higher by 10.4%. For the month of February, crude prices had ended higher by 1.5%.
In the currency market today, the dollar strengthened against its rivals. The dollar index, which measures the strength of the dollar against a basket of six currencies rose 0.3%.
Tomorrow, among economic reports expected are February durable goods orders data and February new home sales data. In addition, the weekly crude inventory report is due at 10:30ET.
Daily News Roundup - March 25 2009
- Coal India expects the exploration of coal block for its proposed coal gasification project in JV with ONGC to be complete within 18 months. (BS)
- Reliance Infrastructure achieved the financial closure for the Rs28.8bn New Delhi Airport Express line project. (FE)
- Crompton Greaves will acquire 41% stake in Avantha Power and Infrastructure Ltd for Rs2.3bn. (Mint)
- Idea forays into global long distance business. (ET)
- Essar Group, GVK Power and Infrastructure and BG Group along with other firms have bid to hire Dhabol’s LNG terminal which will become operational next month. (FE)
- HDFC announced a 50 bps reduction in its retail PLR to 14%. (ET)
- Ashok Leyland in association with Australian Eden Energy developed hythane engines to power its buses. (Mint)
- Bombay Rayon Fashions board approved raising of Rs3.3bn through a preferential allotment of 18mn shares at Rs185 each. (Mint)
- Satyam buyers may have to pay Goldman Sachs and Avendus. (ET)
- Government suggests creation of a separate bank account for Maytas Properties’ flagship project Maytas Hill Country to protect the investors’ money. (FE)
- The board of Maytas Infra will meet its lenders and partners in various BOT projects on Wednesday to consider the process of debt restructuring. (BL)
- NIIT bagged Rs214mn 5 year contract from Rajasthan government for introducing computer related learning in 1672 schools. (F)
- Patel Engineering bagged an order worth Rs8bn from Narmada Valley Development Authority. (ET)
- Welspun Power and Steel has raised Rs7bn debt to part finance its Rs10.3bn acquisition of Vikram Ispat from Grasim Industries. (ET)
- Firstsource has reorganized its businesses into 4 strategic business units, which will function as an independent profit centre. (ET)
- Essar Steel is setting up service centres in the country, at an investment of Rs750mn each. (BS)
- Nagarjuna Fertilisers and Chemicals commissioned a 450MTPD carbon dioxide recovery plant at its existing urea facilities at Kakinada, Andhra Pradesh. (BS)
- Orissa High Court has asked SEBI to investigate if Bhushan Steel’s group companies had violated SEBI Takeover Regulations and purchased shares of Orissa Sponge Iron and Steel. (ET)
- Ratnagiri Gas and Power is facing technical snag and insurance glitches which may result in delay in generation of additional power. (ET)
- Ministry of Finance and RBI will meet tomorrow to discuss the governments borrowing programme for the first half of FY10. (ET)
- FIPB stated that foreign investors in Indian real estate cannot sell their stakes to another foreign investor before 3 years. (ET)
- Finance ministry has rejected banks proposal to fix the period for which private partners in PPP road projects collect tolls. (ET)
- IATA expects India’s air travel demand to fall by 7%. (FE)
- Cement consumption in the country grew by 8% in the current year against 9% last year. (FE)
- The government today imposed safeguard duty on import of some aluminium and chemical products. (BS)
- The Finance Ministry scrapped customs duty on crude soyabean oil. (BL)
Nothing great to expect!
Greatness is nothing unless it be lasting.
After a great start on Monday, weakness did set in after all on Tuesday. The bulls expectedly failed to sustain the buying momentum. Key indices tumbled from a day's high even as Asian markets closed mostly higher.
To sum up the recent gains, FIIs have been buying, global markets have staged a smart comeback, No major bad news has hit Wall Street and currency fluctuations have ebbed to an extent.
The US markets ended in the red. The Dow Jones lost 115 points, or 1.5%. The S&P 500 fell 17 points, or 2%. The Nasdaq was down 40 points, or 2.5%. Asian markets are trading lower.
US President Barack Obama says his administration has a strategy in place to 'attack this crisis on all fronts' adding that there are no quick fixes.
"We'll recover from this recession, but it will take time, it will take patience, and it will take an understanding that, when we all work together, when each of us looks beyond our own short-term interest to the wider set of obligations we have towards each other, that's when we succeed," he said.
Back to our market, we expect the market to open flat and thereafter slide. Some volatility could set in ahead of tomorrow's F&O expiry. Given the recent rally, the bulls and the bears are pretty indecisive at this juncture.
Like the Sensex, the Nifty too will switch to a free float market capitalisation methodology. Investors may start making adjustments to their portfolios before the new formula comes into effect from June 26 ’09.
In other news in the media:
Reliance Industries and Cairn are expected to start production of natural gas from KG basin and crude oil from the Barmer field respectively in a month.
Kalpataru Power Transmission bagged 3 orders worth Rs4bn from the PGCIL for 765kv and 400kv transmission line projects.(BL)
MRPL will buy Cairn India’s initial output from its Barmer field.
DLF plans to book ~Rs20bn revenue from sale of 4.5mn sq ft of commercial space to the group company, DAL.
Tata Motors chairman, Ratan Tata, says job losses and redundancies would be inevitable unless British government provides credit support to JLR.
Government may soon allow NTPC to offer an additional 15% of electricity generated from all new plants to home states.
Indian markets ended with modest gains on Tuesday as key indices were unable to hold on to their gains. After surging past the 3000 mark, profit booking coupled with weak European markets dragged key indices from day’s high. The BSE benchmark Sensex slipped nearly 300 points and the NSE Nifty index declined almost 100 points from their respective day’s high.
The F&O segment recorded its highest non-expiry day turnover since January 2008. The F&O segment recorded a turnover of ~77,000cr and the total turnover was at ~94,000cr.
The BSE Sensex was up 47 points to close at 9,471 and the NSE Nifty was flat at 2,938.
Among the 30-components of Sensex, 16 stocks ended in positive terrain and 14 stocks ended in the red. HDFC Bank, ICICI Bank, HDFC, BHEL, Ranbaxy and Bharti Airtel were among the top gainers.
Reliance Industries shares gained by 1% to Rs1451. According to reports, the company 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. The scrip touched an intra-day high of Rs1472 and a low of Rs1442 and recorded volumes of over 1.9mn shares on BSE.
Crompton Greaves erased gains and slipped sharply by 9% to Rs122. The stock had surged after the board of directors approved Buy-back of fully paid Equity Shares of Rs2/- each, from the open market through the Stock Exchanges, at a price not exceeding Rs170/- per share, upto an amount of Rs2241.52mn being 25% of the total Paid-Up Capital plus Free Reserves as per the audited Balance Sheet of the Company for the year ended March 31, 2008.
Shares of Bajaj Hindusthan gained by a percent to Rs45.1 after the company announced that the board of directors would meet on April 01, 2009, to consider, issue of equity shares / convertible securities / warrants to the promoters on preferential allotment basis.
The scrip has touched an intra-day high of Rs47.2 and a low of Rs44.8 and has recorded volumes of over 1.2mn shares on BSE.
Shares of Vakrangee Softwares slipped by 0.5% to Rs23. The company announced that its board of directors would meet on March 25, 2009, to consider incorporation of 100% subsidiary at Philippines and setting up of STP (Software Technology Park) unit. The scrip touched an intra-day high of Rs24.6 and a low of Rs23 and recorded volumes of over 0.1mn shares on BSE.
Nagarjuna Fertilizers announced that the company has completed installation of the 450 MTPD Carbon Dioxide Recovery (CDR) Plant to meet the shortfall in CO2.
The plant is being commissioned on March 24, 2009 and commercial production shall be declared to be effective from March 24, 2009.
The stock ended slipped 3% to Rs15.2 after hitting an intra-day high of Rs16 and a low of Rs15.10 and recorded volumes of over 1mn shares on BSE.
Looking at the offloading towards the end, the slide may continue further. There could be wild swings for sure ahead of F&O expiry also the political uncertainty would continue to take its toll over the market sentiment.
Asian stocks open on a negative note
Asian stocks declined after Japan`s exports slumped by a record, metal prices dropped and Sanyo Electric forecast a loss.
Sony Corp fell more than 3%. Panasonic which is acquiring Sanyo, declined almost 4%.
Japanese benchmark index Nikkei fell 63.04 points, or 0.74%, to trade at 8,425.26.
Hong Kong`s Hang Seng index dropped 155.57 points, or 1.12%, to trade at 13,754.77.
China`s Shanghai Composite declined 10.80 points, or 0.46%, to trade at 2,327.62.
Taiwan`s Taiex index went up 34.19 points, or 0.65%, to trade at 5,276.37.
South Korea`s Kospi index slipped 7.75 points, or 0.63%, to trade at 1,213.95.
Singapore`s Straits Times decreased 14.90 points, or 0.87%, to trade at 1,691.44. (7.50 a.m., IST).
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