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Friday, February 05, 2010
Jaiprakash Power Ventures
We recommend a sell in the stock of Jaiprakash Power Ventures from a short-term perspective.
It is evident from the charts that the stock lost its bullish momentum in June 2009, encountering resistance at around Rs 100. Since then it has been on an intermediate-term downtrend, forming lower troughs and lower peaks.
It is also in a short-term downtrend since early January. It breached the 50 and 200-day moving averages in the recent times and is trading well below them. Furthermore, a 6-per-cent decline on February 4 reinforces the downtrend. The daily relative strength index has re-entered the bearish zone and the weekly RSI is slipping towards this zone in the neutral region. The daily moving average convergence and divergence indicator is declining in the negative territory. Our short-term forecast is bearish for the stock. We expect it to decline further until it hits our price target of Rs 59 in the approaching trading sessions. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 69.
via BL
Crude slumps
Prices end almost 5% lower as dollar stays strong
Crude oil prices slumped on Thursday, 04 February 2010. Prices fell, as the dollar extended a strong rally on Thursday buoyed by debt problems in Europe and disappointing jobless claims data in US.
Strong economic reports generally tend to push crude prices higher on anticipation of higher demand in coming months and vice versa. The strong dollar further pushed crude price lower today.
On Thursday, crude-oil futures for light sweet crude for March delivery closed at $73.14/barrel (lower by $3.84 or 4.9%). It was the biggest percentage drop for crude in six months. Last week, crude ended lower by 2.4%. In January 2010, crude ended lower by 8.3%. On a year to date basis, crude is lower by 9.2%.
In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.7%.
As per latest reports, Greece is struggling to curb budget deficits that are in excess of European Union limits. The euro weakened to its lowest level since June against the dollar after European Central Bank President Jean-Claude Trichet said the economic outlook is subject to “uncertainty.”
Among economic data expected for the day, the Labor Department in US reported on Thursday, 04 February 2010, that first-time filings for state unemployment benefits climbed to their highest level since mid-December last week. Market was expecting a drop in the number.
As per the report, initial claims rose 8,000 to stand at 480,000 for the week ended on 30 January, 2010. Market was expecting a figure around 450,000. The four-week moving average for initial claims, which smoothes out fluctuations in the weekly data, rose to 468,750, up 11,750. This is the highest level since the week ended 5 December 2009.
The Energy Department in US reported yesterday that crude oil inventories rose by 2.3 million barrels in the week ended 29 January 2010. Market was expecting a decline of 1 million barrels in crude stocks. In the weekly inventory report, the EIA also said inventories of distillate, which includes heating oil, fell by 948,000 barrels, while gasoline stocks fell by 1.3 million barrels. Market was expecting a buildup of 1.5 million barrels in gasoline stocks. The report also stated that refinery utilization fell to 77.7%, while it was expected to rise 0.25% to 78.75%.
Among other energy products on Thursday, March reformulated gasoline futures fell 8.6 cents, or 4.2%, to $1.95 a gallon and March heating oil declined 7 cents, or 3.5%, to $1.94 a gallon.
Also on Thursday, March natural-gas futures finished little changed at $5.42 per million British thermal units, as cold weather forecasts helped offset a smaller than expected drawdown in U.S. supplies. It earlier slumped 2% after the Energy Information Administration said natural gas in storage in the storage fell by 115 billion cubic feet in the week ended 29 January 2010 against an expectation of a drawdown of between 121 billion and 125 billion cubic feet.
Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 53.5% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for February delivery closed Rs 161 (4.5%) lower at Rs 3,412/barrel. Natural gas for February delivery closed lower by Rs 5.8 (2.3%) at Rs 248.2/mmbtu.
Biggest drop for bullion metals in three months
Prices plunge as dollar extends a strong rally
Precious metals witnessed their biggest drop in three months on Thursday, 04 February 2010. Prices fell, as the dollar extended a strong rally on Thursday buoyed by debt problems in Europe and disappointing jobless claims data in US.
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 Thursday, gold for April delivery ended at $1,063 an ounce, lower by $49 (4.4%) an ounce on the New York Mercantile Exchange. Last week, gold lost 0.6%. For January 2010, gold lost 1.2%. Year to date, gold has shed 3%.
On Thursday, March Comex silver futures ended lower by 84.2 cents (5.2%) at $15.475 an ounce. Last week, silver ended lower by 4.3%. In January 2010, silver shed 3.9%. Year to date in FY 2010, silver has dropped by almost 8.2%.
In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.7%.
As per latest reports, Greece is struggling to curb budget deficits that are in excess of European Union limits. The euro weakened to its lowest level since June against the dollar after European Central Bank President Jean-Claude Trichet said the economic outlook is subject to “uncertainty.”
Among economic data expected for the day, the Labor Department in US reported on Thursday, 04 February 2010, that first-time filings for state unemployment benefits climbed to their highest level since mid-December last week. Market was expecting a drop in the number.
As per the report, initial claims rose 8,000 to stand at 480,000 for the week ended on 30 January, 2010. Market was expecting a figure around 450,000. The four-week moving average for initial claims, which smoothes out fluctuations in the weekly data, rose to 468,750, up 11,750. This is the highest level since the week ended 5 December 2009.
Precious metal prices have been slipping since last week due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand of metals in coming months.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
At the MCX, gold prices for April delivery closed lower by Rs 495 (2.97%) at Rs 16,152 per ten grams. Prices rose to a high of Rs 16,644 per 10 grams and fell to a low of Rs 16,079 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed Rs 1,043 (4.08%) lower at Rs 24,498/Kg. Prices opened at Rs 25,577/kg and fell to a low of Rs 24,375/Kg during the day's trading.
Thursday, February 04, 2010
Turnover declines in a down market
Nifty February 2010 futures at discount
Nifty February 2010 futures were at 4,838.50, at a discount of 6.85 points as compared to the spot closing of 4,845.35. Turnover in NSE's futures & options (F&O) segment was Rs 71,019.05 crore, lower than Rs 78,755.97 crore on Wednesday, 3 February 2010.
Tata Steel February 2010 futures were at discount at 572.10 compared to the spot closing of 575.80.
Tata Motors February 2010 futures were at discount at 687 compared to the spot closing of 690.95.
Reliance Industries February 2010 futures were at slight discount at 1,019 compared to the spot closing of 1,020.
In the cash market, the S&P CNX Nifty lost 86.50 points or 1.75% at 4,845.35.
NTPC FPO subscribed 79%
Domestic institutions make a beeline for the issue
The follow-on public offer (FPO) of state-run power generation giant NTPC was bid 79% by 15:00 IST on day two, data on NSE showed. Most bids were at Rs 209 per share. The government has fixed the benchmark price for the proposed divestment of government stake at Rs 201 per share.
The institutional segment was oversubscribed on day one on Wednesday, 3 February 2010, as domestic institutional investors (DIIs). DIIs made a beeline for the issue. DIIs excluding mutual funds put in bids for 31.15 crore shares compared to 20.4 crore shares reserved for the qualified institutional buyers (QIB) segment as a whole. Foreign funds put in bids for 45.01 lakh shares on Wednesday.
NTPC's FPO is the first public issue which is adopting the French Auction route to raise funds. Under the French Auction model, institutional buyers are free to bid above a certain floor price. The highest bidder gets preference during the allotment of shares
The government currently holds an 89.5% stake in NTPC and it plans to dilute 5% through the FPO. At the floor price, the government would mop up Rs 8286 crore
Sensex ends sharply lower; Realty, metal drop
The Sensex wrapped on a depressing note weighed by realty, metal, auto and IT stocks. After a flat-to-positive opening, the index fell into the red due to profit booking. It continued to trade in a sluggish manner till noon. In the second half, the market slipped further on the back of aggressive sell-off witnessed across board,and negative opening of European market pulled down the sentiment. Finally, it closed sharply lower after touching a low of 16,188.80.
Food inflation inched up to 17.56% for the week ended January 23, on account of rising prices of potato and pulses. The wholesale price-based food inflation was 17.40% in the previous week.
At the close, the benchmark 30-share index, BSE Sensex declined 271.10 or 1.64% at 16,224.95 with 27 components registering drop. Meanwhile, the broad based NSE Nifty went down by 86.50 or 1.75% at 4,845.35 with 45 components posting drop.
On global front, European stocks open negative, after earnings reports from companies including Royal Dutch Shell, Zurich Financial Services and Vodafone Group. US futures dropped.
Meanwhile, Asian stocks dropped, dragging the MSCI Asia Pacific Index lower for the first time in three days, after Australian retail sales unexpectedly fell in December and commodity prices declined.
Sensex Movers
Reliance Industries contributed fall of 31.24 points in the Sensex. It was followed by Infosys Technologies (29.88 points), Housing Development Finance Corporation (26.57 points), State Bank Of India (18.57 points) and Tata Steel (18.17 points).
However, Oil & Natural Gas Corporation contributed rise of 3.47 points in the Sensex. It was followed by ITC (2.72 points), Hero Honda Motors (0.07 points), Reliance Infrastructure (0.56 points) and Sun Pharmaceutical Industries (0.62 points).
Biggest gainers in the 30-share index were Oil & Natural Gas Corporation (0.56%), I T C (0.32%), and Hero Honda Motors (0.03%).
On the other hand, Hindalco Industries (6.37%), Jaiprakash Associates (4.59%), Tata Motors (4.36%), D L F (4.33%), Tata Steel (3.85%), and Reliance Communications (3.60%) were the major losers in the Sensex.
Mid & Small-cap Space
The BSE Midcap index was at 6517.14 down by 129.45 points or by 1.95%.The major losers were Reliance MediaWorks (3.93%), A I A Engineering (2.5%), Aban Offshore (1.8%), Alstom Projects India (0.75%) and Core Projects and Technologies (0.21%).
The BSE Smallcap index was at 8344.74 down by 136.27 points or by 1.61%.The major losers were Abhishek Industries (3.76%), Provogue (India) (2.82%), Aarti Industries (2.62%), A B G Shipyard (1.96%) and A B G Infralogistics (1.25%).
Sectors in Limelight
The Realty index was at 3,398.59, down by 137.63 points or by 3.89%. The major losers were D L F (4.33%), Anant Raj Industries (3.15%), Ansal Properties and Infrastructure (3.02%), Indiabulls Real Estate (2.82%) and Ackruti City (2.14%).
The Metal index was at 16,044.79, down by 557.34 points or by 3.36%. The major losers were Hindalco Industries (6.37%), Jai Corp (5.38%), Hindustan Zinc (4.67%), Jindal Steel & Power (1.52%) and Gujarat N R E Coke (0.85%).
The Auto index was at 6,941.36, down by 150.12 points or by 2.12%. The major losers were Bharat Forge (3.14%), Escorts (3.09%), Apollo Tyres (1.96%), Bajaj Auto (1.56%) and Amtek Auto (0.34%).
The IT index was at 4,917.98, down by 105.35 points or by 2.1%. The major losers were Mphasis (4.34%), Oracle Financial Services Software (3.8%), H C L Technologies (3.38%), Infosys Technologies (1.9%) and Aptech (1.34%).
Market Breadth
Market breadth was negative with 841 advances against 2,029 declines.
Value and Volume Toppers
Infinite Computer Solutions (India) topped the value chart on the BSE with a turnover of Rs. 2,484.90 million. It was followed by State Bank Of India (Rs. 1,531.42 million), Tata Steel (Rs. 1,181.75 million) and Aban Offshore (Rs. 839.34 million).
The volume chart was led by Shree Ashtavinayak Cine Vision with trades of over 14.27 million shares. It was followed by Dynamic Infotel (11.93 million), Infinite Computer Solutions (India) (11.84 million) and I F C I (7.32 million).
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