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Tuesday, September 30, 2008
Inflows will be affected
With markets abroad tumbling as the fate of US bailout package hangs in balance, a key Finance Ministry official on Tuesday said that the global financial crisis will hurt capital inflows in India.
"The situation is staring on the face of huge mind-boggling crisis in the western world, especially the US. There will be shortage of money in the country, that is the financial crisis is to hurt capital inflows in India," Economic Affairs Secretary Ashok Chawla said in a seminar here.
At the same seminar, stock market regulator C B Bhave said once the crisis is over, India will come stronger and the balance would be in the country's favour. He also said in the future, there will be more open market in the recently-launched currency futures.
Former chairman of PM economic advisory panel C Rangarajan said, "We are going through an international crisis which we cannot ignore."
Yesterday, the US House of Representatives had rejected around USD 700 billion bailout package, sending stock markets around the world into a tailspin.
After coming into major selling pressure yesterday and in the early morning trade today, Indian markets recovered after Bhave's statement that there is no panic and no settlement issues in the markets.
US plans for a new bailout plan
Top Congressional and White House officials, stunned when the House rejected a massive rescue plan for the nation's economy, scrambled to structure a new bailout proposal that would attract reluctant lawmakers and still soothe the unnerved financial markets.
"Doing nothing is not an option," House Majority Leader Steny Hoyer, D-Md, said after seeing the USD 700 billion emergency package for the nation's financial systems fail 228-205 on Monday.
With the House not scheduled to meet again until Thursday, Congressional leaders and Bush administration officials promptly sought to assess what types of changes could win over enough votes to guarantee success. President Bush planned to make a statement on the rescue plan at 8:45 am EDT Tuesday.
The outcome of Monday's vote fed a huge sell-off in the stock market, sending the Dow Jones Industrial Average into its biggest single-day plunge, 777 points. The House vote and the market's terrified reaction shook Washington and New York centers of power — even overseas markets — but no immediate solution seemed at hand.
The bill's failure came despite furious personal lobbying by Bush and support from House leaders of both parties. But the legislation was highly unpopular with the public, ideological groups on the left and the right organized against it, and Bush no longer wielded the influence to leverage tough votes. Even pressure in favour of the bill from some of the biggest special interests in Washington, including the US Chamber of Commerce and the National Association of Realtors, could not sway enough votes.
The legislation the administration promoted would have allowed the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believed it would help lift a major weight off the already sputtering national economy.
Treasury Secretary Henry Paulson emerged after the vote and warned of a credit crunch that would affect American businesses and said families would find it harder to get student loans and car loans.
"We need to work as quickly as possible," he said gravely. "We need to get something done."
The sense of urgency was not universal. Many opponents of the bill argued that the package amounted to a too-costly commitment of taxpayer money to bail out financial institutions for their own mistakes.
Rep Dean Heller, R-Nev, offered a typical sentiment. "I cannot with good conscience put Nevada's taxpayers on the hook for the foolish excesses of Wall Street," he said. "Congress should pass legislation that protects the taxpayer, assists with bad assets and allows the market to correct itself."
Immediately following the vote, Republican leaders blamed their failure to secure more votes on the partisan tone of Speaker Nancy Pelosi's pre-vote speech on the House floor. "There were a dozen members who we thought ... we had a really good chances of getting on the floor," said Minority Leader John Boehner of Ohio. "And all that evaporated with that speech."
Rep Barney Frank, D-Mass, the gruff but quick-witted chairman of the House banking committee, countered, "Give me the names of those 12 people and I'll go talk uncharacteristically nice to them."
Behind the bluster, lawmakers pledged to work again. Hoyer met with House Republican Whip Roy Blunt of Missouri, one of the lead GOP negotiators from the House.
Blunt, noting that the House would break for the Jewish holidays until Thursday, said, "We are going to have a couple days to see how the marketplace reacts to all this, and maybe that's a good thing."
House members weren't going home to campaign for re-election "until this is addressed," Hoyer vowed.
Both Blunt and Hoyer suggested that the Senate could vote first on a bill then send it to the House, but Senate leaders showed no inclination to take up a bill without being certain of its fate in the House.
"What would be wrong, I think, would be to act without some kind of clear indication from the House about how they're going to proceed," said Sen Christopher Dodd, D-Conn, the chairman of the Senate Banking Committee. "We don't need to start all over."
The two men campaigning to replace Bush watched the situation closely — from afar — and demanded action.
In Iowa, Republican John McCain said his rival Barack Obama and Congressional Democrats "infused unnecessary partisanship into the process. Now is not the time to fix the blame; it's time to fix the problem."
Obama said, "Democrats, Republicans, step up to the plate, get it done."
The burden for votes fell more strongly on Republican leaders. About three out of five House Democrats voted for the legislation; only a third of Republicans backed it.
Republicans, already seeking possible votes, floated several ideas. One would double the USD 100,000 ceiling on federal deposit insurance. Another would end rules that require companies to devalue assets on their books to reflect the price they could get in the market.
Post Session Commentary - Sep 30 2008
Domestic markets rebounded sharply from days low after sun outage session to end the day with handsome gains. The assuring comments from Finance Minster P Chidambaram that the Indian banking and financial system is well capitalized had provided some boost to the markets after sharp slide. Sentiments also got boosted on expectations that US administration will put forward a revised rescue package for the US financial sector. The BSE Sensex recovered nearly 700 points from days low to end above 12,800 level and the NSE Nifty above the 3900 mark. Markets opened on extremely negative note on weak global cues due to defeat of bailout package. Yesterday House of Representatives rejected the $700 billion bailout plan to save the US financial system. However, the markets suddenly managed to recover a bit but were still below dotted line till sun outage close. Markets extended its gains further to conclude the day in green. From the sectoral front, most of the indices ended with gains and Bank index out performed the benchmark index as witnessed sharp rise of around 5%. Apart from that, smart pullback was led by Capital Goods, Oil & Gas, Reality and Consumer Durables stocks. However, Metal and FMCG stocks remained out of favor as witnessed most of the selling from these baskets. The market breadth was negative as 1316 stocks closed in red while 1277 stocks closed in green and 79 stocks remained unchanged.
The BSE Sensex closed higher by 264.68 points at 12,860.43 and NSE Nifty ended up by 71.15 points at 3,921.20. The BSE Mid Caps and Small Caps closed with gains of 68.96 points at 4,798.29 and by 24.44 points at 5,577.47. The BSE Sensex touched intraday high of 12,995.20 and intraday low of 12,153.55.
Gainers from the BSE are ICICI Bank Ltd (8.42%), TCS Ltd (6.96%), HDFC (5.33)%, Bharti Airtel (5.14%), BHEL (5.07%), SBI (4.32%), L&T Ltd (4.16%), JP Associates (4.12%), Maruti Suzuki (3.73%), NTPC Ltd (3.31%) and HDFC Bank Ltd (2.46%).
The BSE Capital Goods index surged 310.53 points to close at 10,581.13. Major gainers are As Bharat Bijli (6.32%), Usha Martin (5.35%), BHEL (5.07%), Bharat Elect (4.65%), Punj Lloyd (4.53%) and L&T Ltd (4.16%).
The BSE Bank index advanced by 303.75 points to close at 6,478.15. As ICICI Bank Ltd (8.42%), Axis Bank (7.28%), Indus Ind Bank (4.52%), Bank of India (4.45%), SBI (4.32%) and IDBI Bank Ltd (4.27%) closed in positive territory.
The BSE Oil & Gas index ended up by 114.27 points at 9,039.28 as BPCL (5.59%), HPCL (5.39%), IOC Ltd (5.18%), Reliance Natural Resources (5.01%), Aban Offshore (3.10%) and Cairn India (1.24%) ended in positive territory.
The BSE Reality index closed higher by 100.90 points at 3,508.77. Gainers are Ansal Infra (11.63%), Akruti City (10.75%), Orbit Co (7.98%), Unitech Ltd (7.03%), Penland Ltd (3.43%) and Housing Dev (2.50%).
The Consumer Durables index gained 56.02 points to close at 2,929.18. As Titan Ind (3.10%), Gitanjali GE (2.83%), Blue Star L (2.06%) and Videocon Ind (0.69%) closed in positive territory.
The BSE Metal index plunged 152.17 points to close at 8,992.06. Major losers are Jai Corp Ltd (7.42%), JSW SL (4.94%), SAIL (4.87%), Hindustan Zinc (4.82%), Tata Steel (4.43%) and NMDC Ltd (2.19%).
Markets brave it out
After the 777-point fall, the highest-ever for the Dow Jones Industrial Average (Dow) as the $700-billion financial-rescue bill failed to get through the US’s house of representatives, the markets across the globe were expected to fall. In line, the Asian markets reported losses and witnessed high volatility for the major part of their trading session. In the early trades, the Sensex too seemed to take a leaf out of Dow’s book and plunged nearly 418 points on massive selling in front-line stocks, However sustained buying in heavyweights, banking and realty stocks lifted the market’s sentiment and the Sensex turned positive. Thereafter, the market witnessed choppy trades and with some range-bound moves the Sensex slipped in the red in the afternoon again. The market bounced back from its lows once again towards the close and touched the day’s high of 12,995 led by ICICI Bank, Tata Consultancy Services (TCS), HDFC and Bharti Airtel. The Sensex finally ended the session with a gain of 265 points at 12,860. Nifty ended the session at 2,921 by adding 71 points.
The breadth of the market was neutral. Of the 2,671 stocks traded on the BSE, 1,283 stocks advanced, whereas 1,309 stocks declined. Seventy nine stocks ended unchanged. Among the sectoral indices the BSE Bankex advanced by 4.92% at 6,479 followed by the BSE CG (up 3.02% at 10,581) and BSE Realty (up 2.96% at 3,508). However, the BSE Metal and BSE FMCG closed in the negative territory.
Select blue chips notched up significant gains. ICICI Bank jumped 8.42% to Rs534.85, TCS rose 6.96% at Rs662.75, HDFC advanced 5.33% at Rs2,141.15, Bharti Airtel climbed 5.14% at Rs785.05, BHEL surged 5.07% at Rs1,586, State Bank of India scaled up 4.32% at Rs1,465, Larsen & Toubro (L&T) gained 4.16% at Rs2,442.85 and JP Associates added 4.12% at Rs111.10 while Maruti Suzuki India, NTPC and HDFC Bank ended with gains. Among the laggards Tata Steel tumbled by 4.43% at Rs425.60, Tata Motors dropped 3.27% at Rs344.20 and Ranbaxy Laboratories declined 3.17% at Rs247.75 while Grasim Industries, Tata Power, ITC, Hindustan Unilever, Sterlite Industries, Wipro and Reliance Energy ended with marginal losses.
Over 2.33 crore Reliance Natural Resources shares changed hands on the BSE followed by IFCI (1.27 crore shares), Suzlon Energy (0.89 crore shares), Chambal Fertilisers and Chemicals (80.34 lakh shares) and Ispat Industries (72.22 lakh shares).
Valuewise, Reliance Capital registered a turnover of Rs405 crore on the BSE followed by Reliance Industries (Rs356 crore), ICICI Bank (Rs336 crore), L&T (Rs206 crore) and Axis Bank (Rs203 crore).
BSE Bulk Deals to Watch - Sep 30 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
30/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD B 170915 200.58
30/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD S 170915 201.06
30/9/2008 532678 BOMBAY RAYON CREDIT SUISSE SINGAPORE LIMITED B 388522 291.50
30/9/2008 532678 BOMBAY RAYON MORGAN STANLEY MAURITIUS COMPANY LIMITED S 388522 291.50
30/9/2008 526141 COMP DISC IN EMKAY GLOBAL FINANCIAL SERVICES LTD PRODIGY SCHEME S 62955 39.06
30/9/2008 513059 G.S. AUTO D.C SECURITIES SERVICES P.LTD S 17500 79.37
30/9/2008 513059 G.S. AUTO MEET SHARES AND STOCK P.LTD S 29070 79.88
30/9/2008 531439 GOLDSTON TEC BHAVESH PRAKASH PABARI B 130000 108.84
30/9/2008 531602 KOFF BR PICT LAXMI CAP BROKIONG PVT LTD B 46846 36.66
30/9/2008 531602 KOFF BR PICT MANJUBEN HARSHADBHAI UKANI B 26759 37.44
30/9/2008 531366 KOHINOOR BRO S V ENTERPRISES B 704087 6.03
30/9/2008 531366 KOHINOOR BRO S V ENTERPRISES S 736882 6.02
30/9/2008 531213 MANAP GEN FI SWISS FINANCE CORPORATION MAURITIUS LTD B 215907 139.90
30/9/2008 531213 MANAP GEN FI GMO EMERGING ILLIQUID MAURITIUS FUND S 210000 140.00
30/9/2008 531096 MOUNT EVE MI TATA TEA LTD B 185000 139.95
30/9/2008 590011 MOVING PICTU-PMS HARDEEP SINGH B 45051 12.60
30/9/2008 590011 MOVING PICTU-PMS GURBACHAN KAUR S 39000 12.60
30/9/2008 532045 NEXXOFT INFO MANOJ H.MEHTA B 31840 36.94
30/9/2008 500304 NIIT LTD INDIA CAPITAL PTE LTD A/C INDEA LONG TERM OPPORTUNITIES MASTER FU B 865000 45.52
30/9/2008 531349 PANACEA BIOT SERUM INSTITUTE OF INDIA LTD B 500657 222.00
30/9/2008 531349 PANACEA BIOT THE INDIA FUND INC S 502512 222.00
30/9/2008 531769 PFL INFOTECH BHARAT VALJIBHAI BHANUSHALI B 30001 11.96
30/9/2008 514300 PIONER EMBRO MANMOHAN RATHI B 93399 18.15
30/9/2008 514300 PIONER EMBRO RELIGARE FINVEST LTD LIQUIDATI S 260454 17.75
30/9/2008 514300 PIONER EMBRO SARSWATI VINCOM LTD S 100000 18.18
30/9/2008 514300 PIONER EMBRO MEENAL NITESH THAKU S 78140 18.80
30/9/2008 531646 RFL INTERNAT KALAVATIBEN BHARATKUMAR SHAH S 26850 0.99
30/9/2008 532833 SPARSH BPO KAPILPURI B 127858 44.00
30/9/2008 512640 STOCKNET INT SANT LAL KHANEJA HUF B 30164 1.22
30/9/2008 512640 STOCKNET INT NOBLEMAN MANAGEMENT CONSULTANTS PVT LTD S 30164 1.22
30/9/2008 532948 TULSI EXTRU RIDDHI SIDDHI MULTITRADE PV LT B 70000 26.24
30/9/2008 532948 TULSI EXTRU NEW PLANET TRADING CO PVT LTD S 70000 26.24
NSE Bulk Deals to Watch - Sep 30 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
30-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,PABARI BHAVESH PRAKASH,BUY,120000,108.21,-
30-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,3615813,27.48,-
30-SEP-2008,NIITLTD,NIIT Limited,INDEA CAPITAL PTE LTD A/C IND LONG TERM OPPORT MASTER FUND,BUY,935000,46.00,-
30-SEP-2008,PANACEABIO,Panacea Biotec Ltd.,SERUM INSTITUTE OF INDIA LTD,BUY,500845,221.99,-
30-SEP-2008,PHOENIXLTD,The Phoenix Mills Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,1030000,144.00,-
30-SEP-2008,ZEENEWS,Zee News Limited,PRUDENTIAL ICICI TRUST LTD,BUY,1995744,39.75,-
30-SEP-2008,IBREALEST,Indiabulls Real Estate Li,MIRAE ASSET INVESTMENT MANAGEMENT CO LTD A/C MIRA,SELL,1316427,169.81,-
30-SEP-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,3615813,27.49,-
30-SEP-2008,PANACEABIO,Panacea Biotec Ltd.,THE INDIA FUND INC,SELL,500000,222.00,-
30-SEP-2008,PHOENIXLTD,The Phoenix Mills Limited,HSBC FINANCIAL SERVICES(MIDDLE EAST) LIMITED,SELL,1037500,144.00,-
30-SEP-2008,PIONEEREMB,Pioneer Embroideries Limi,SARSWATI VINCOM LTD,SELL,100000,18.13,-
Asian Equities Slide As Wall Street Tumble
Nikkei, Sydney Fell By 4% While Sensex Showed A Gain Of 2%
The stock markets across the Asian region closed mostly lower after U.S. lawmakers rejected a $700 billion plan to bailout the ailing U.S. banks and ward off recession. However, the Asian markets pared back some of the losses on news that U.S. President George Bush will make a statement later today on his administration's response to the crisis in financial markets. The stock markets in Hong Kong and India recovered sharply and moved into positive territory. The Chinese market and the Indonesian market remained closed on account of public holidays.
Oil was quoted at $95.16 a barrel, down $1.21, by 4:38 a.m. ET after the contract for November delivery plunged $10.52 to settle at $96.36 on the New York Mercantile Exchange on Monday.
In the currency market, the U.S. dollar strengthened to the upper 104-yen levels in late Tokyo deals from the upper 103-yen range in early trade. On Monday, the dollar closed the local session at 106.14-106.15 yen.
The weak current account data added to pressure on the South Korean won. The won finished the local session down 1.5%, its lowest level since early 2003. The local currency closed at 1,207.0 won to a dollar, down 18.2 from Monday's close of 1,188.8 to a dollar.
The Australian dollar fell to its lowest in two weeks against the U.S. dollar on Tuesday. The Aussie fell to US$0.8013 in late trade from US$0.8250 on Monday, but was off the day's low of US$0.7935, helped in part by better-than-expected domestic retail sales data.
The New Zealand dollar was sold off following the surprise vote against the US$700 billion bailout plan for U.S. banks. The kiwi finished the session at US$0.6700, recovering from the day's low around US$0.6640, but well down from Monday's close at US$0.6858.
The Philippine currency also came under pressure after the US rejected a $700-billion bailout plan for the financial sector and plunged back to the P47 to a dollar level. The peso opened at P47.10 to a dollar on Tuesday, 35 centavos weaker than it’s opening rate on 29 September 2008.
Coming back in equities, the Japanese stock market plummeted to its lowest level in three years, extending losses for the fourth straight trading session. Japanese stocks plunged around 5% in the opening move, tracking the overnight sell-off on Wall Street, after the U.S. Congress rejected a $700 billion bailout plan for the troubled American financial sector, but recouped some of their losses in the afternoon session on news that U.S. President George Bush will make a statement later today on his administration's response to the crisis in financial markets.
The benchmark Nikkei 225 Index closed down 483.75 points or 4.1% at 11,259.86, its lowest closing level since June 9, 2005. The index hit an intraday low of 11,160.83. The broader Topix Index of all First Section issues fell 40.46 points or 3.6% to finish at 1,087.41.
A slew of economic data were released today. The Ministry of Internal Affairs and Communications said that the seasonally adjusted rate of jobless people in Japan was 4.2% in August, higher than the analysts' expectation of 4.1%, and also came in higher than the 4.0% reported in July.
The Ministry of Economy, Trade and Industry reported that industrial output in Japan was down 3.4% in August compared to that for the previous month, representing the first decline in two months. That was sharply lower than the analysts' expectation that called for a 2.4% decline.
An index that measures Japanese manufacturing activity came in at a six-year low, according to the Nomura/JMMA Japan Purchasing Managers Index, standing at a seasonally adjusted 44.3 in September, lower than the August figure of 46.9.
Japan's housing starts picked up in August, exceeding economists' expectation, a report by the Ministry of Land, Infrastructure and Transport said Tuesday. Housing starts surged 53.6% year-over-year in August, marking a faster rate than the 19% recorded in July, and above the 49.8% expected by analysts.
Average Japanese monthly household spending in August fell a real 4.0% from a year earlier to 291,154 yen, the government said Tuesday.
Stock markets on Mainland China are closed for National Day holidays this week.
The Hong Kong stock market closed higher, staging a remarkable recovery, after bargain hunting picked up in late trade. The benchmark Hang Seng index closed up 135.53 points or 0.76% at 18,016.21, off the day's low of 16,799.29. For the month of September, the index has lost 3,245.68 points or 15%, while for the third quarter it has dropped 4,085.8 points or 18.5%.
The Australian stock market closed sharply lower on Tuesday, extending losses for the fourth consecutive trading session. After plunging more than 5% within minutes of opening on news that the House of Representatives failed to pass the U.S. government's proposed rescue plan for banks, the Australian market clawed back some ground in the afternoon but dropped again in the last minutes of trade to finish the session down 4.3%.
The benchmark S&P/ASX 200 index closed down 206.9 points at 4,600.5, its lowest close since December 2005. The broader All Ordinaries index fell 207.9 points or 4.3% to finish at 4,631.3.
Among a slew of economic data released today, the number of houses and apartments approved for construction in Australia in August decreased by a seasonally adjusted 3.7% from July, while the amount of credit extended to private sector entities rose by 0.5% in August following a 0.6% increase in July and retail trade increased 0.3% in August in trend terms to A$18.378 billion compared to an upwardly revised total of $18.319 billion in July.
The New Zealand stock market closed sharply lower on Tuesday, reversing Monday's mild gains. The benchmark NZX 50 index started off weak, plunging 148 points within the first thirty minutes of trading, after Wall Street slumped overnight following the news that the House of Representatives failed to pass the U.S. government's proposed rescue plan for banks. However, the key index recovered some ground over the course of the trading session. The benchmark NZX 50 index closed down 98.32 points or 3.18% at 3,090.22 and the broader NZX All Capital index lost 95.52 points or 3.07% to finish at 3,114.47.
On the economic front, the Statistics New Zealand reported that consents for new dwellings, including apartment units, continued to fall in August. The number of consents issued totaled 1,328 in August, marking the lowest monthly total since December 2000, down a seasonally adjusted 7.9% from July. For the full year through August 2008, consents for all new dwellings fell 20%.
Meanwhile, business confidence continued to improve in September, with the National Bank Business Outlook survey hitting positive territory for the first time in over six years. A net 2% expected better times over the year ahead, a turnaround from the net 20.5% expecting a worse outlook in the August survey.
The South Korean market closed slightly lower, recovering sharply from the 5.5% slump in early trade after U.S. Congress rejected a financial bailout plan. The market finished lower for the 3rd straight trading session. The benchmark Korea Composite Stock Price Index or Kospi closed down 8.30 points or 0.57% at 1,448.06 points, after hitting a session low of 1,376.72.
The recovery in the local stock market is partly attributable to market measures introduced by the government earlier in the day. The Financial Services Commission said that it would ban short selling of stocks for the time being and allowed listed firms to buy back more of their own shares.
Meanwhile, domestic economic data released today pointed to a slump in the real economy and worsening export market conditions. South Korea's industrial output fell a seasonally adjusted 2.2% in August from July, a deeper decline than expected. The current account balance hit its biggest deficit on record in August. The current account deficit reached a 12-year high of US$4.71 billion in August compared to a revised $2.53 billion deficit in the previous month. Additionally, the business survey index for manufacturers' expectations declined to 78 for October compared to 79 in the previous month, according to the Bank of Korea.
The Philippines stock exchange declined by 1.45% after the US House of Representatives rejected a $700-billion bailout plan for the financial sector. However the drop was much lower than the session's opening which saw the Philippines stocks tumbling as much as 155.81 points or 6% while the all-share index plummeting 76.6 points or 4.6502 %.
The benchmark index PSEi lost 37.93 points or 1.45 % at 2,569.65 while the all-share index shed 26.0 points or 1.80% to 1,622.25. Losers trampled gainers, 95 to 24, while 30 stocks were unchanged. Volume traded reached 3.617 billion valued at P3.033 billion.
In India, the BSE 30-share Sensex closed up 264.68 points or 2.10% to 12,860.43. The index shed 442.2 points at the day's low of 12,153.55, hit in early trade, its lowest level in two years. The Sensex rose 368.25 points at day’s high of 15,964 hit in mid-afternoon trade.
The Reserve Bank of India said the country's second largest lender, ICICI Bank has sufficient liquidity, including in its current account with the central bank, to meet the requirements of its depositors. The RBI added that it is monitoring the developments and has arranged to provide adequate cash to ICICI, adding that ICICI and its overseas subsidiary banks are well capitalized. The central bank's statement followed speculation about the bank's financial strength.
In addition the Securities & Exchange Board of India (Sebi) chairman C B Bhave today, 30 September 2008, said he did not have concerns that institutional investors were short-selling stocks and added that no change in the rules governing short selling was expected. The market surveillance system is already in place, Bhave said.
Singapore's Strait Times Index closed flat at 2,358 as Singapore's import and export price fell by 1.2% and 2.3% respectively in August 2008 over the previous month, due to lower oil prices.
Elsewhere, Taiwan's Taiex, which slid more than 6% earlier in the session, ended down 3.6% at 5,719.28, as trading resumed after a holiday; Malaysia's KLCI closed flat at 1,018. On the economic front, Malaysian producers price index, which is designed to measure the changes in the price of commodities, charged by domestic producers and those paid by importers for importing goods into Malaysia, increased by 11.33% in the month of August 2008.
In other regional market, European shares moved off lows in a volatile session, with miners clawing back some ground lost in the previous session, as investors started to hope that a $700 billion U.S plan to shore up financial markets will eventually be approved.
In the opening trade, the U.K. FTSE 100 index lost 0.6% to 4,791.68, the German DAX 30 index fell 1.2% to 5,739.19 and the French CAC-40 index declined 0.6% to 3,934.34. At 10.53 GMT, the U.K. FTSE 100 index recovered a bit as it was down by 0.15% to 4,811.52, the German DAX 30 index lost 1.1% to 5,743.80 and the French CAC-40 index declined 0.1% to 3,949.08.
Looking ahead, the Conference Board will release the results of its consumer confidence index for the month of September. The National Association of Purchasing Management – Chicago will also release its index of business conditions in the Chicago area. The purchasing manager’s index is expected to fall to a reading of 53.0 in September after rising to 60.2 in August. In Fed Speak, Atlanta Federal Reserve Bank President Dennis Lockhart is scheduled speak Tuesday afternoon about the US economic outlook in New Orleans, Louisiana.
Sensex bounces back from 2 year lows
The key benchmark indices snapped last three days losses to post decent gains today, 30 September 2008. Sensex rose 264.58 points. The barometer index had lost 1,096.77 points or 8% in the past three trading sessions to 13,102.18 on Monday, 29 September 2008, from a recent high of 13,692.52 hit on 24 September 2008
Expectations that a revised rescue package for the US financial sector would be put forward quickly by the US administration, triggered a recovery on the domestic bourses today, 30 September 2008, after an initial sharp fall that pushed Sensex to 2-year low. The US House of Representatives on Monday, 29 September 2008, unexpectedly rejected a plan to buy toxic assets from struggling banks that had been designed to revitalise strained lending markets. US stock futures were trading higher. Nasdaq futures were up 32.25 points while Dow Jones futures gained 211 points.
Banking stocks climbed. Index pivotal ICICI Bank rose more than 8%, Tata Consultancy Services rose close to 7%. Bharat Heavy Electricals and Bharti Airtel rose more than 5% each.
Finance minister P Chidambaram today said Indian banks are well capitalised and regulated. He further added that foreign institutional investors are not selling all the time.
European markets were trading mixed. France’s CAC 40 and UK’s FTSE 100 were up by between 0.02% to 0.16%. Germany’s DAX was down 0.89%.
The Securities & Exchange Board of India (Sebi) chairman C B Bhave today, 30 September 2008, said he did not have concerns that institutional investors were short-selling stocks and added that no change in the rules governing short selling was expected. The market surveillance system is already in place, Bhave said.
The rejection of the US bailout plan has heightened concerns that more banks will fail and global credit-losses will widen, leading to a global slowdown. The Dow Jones industrial average on Monday, 29 September 2008, posted its largest point decline ever on Monday, and its biggest daily percentage slide since the 1987 stock market crash.
Adding to the woes were troubles in Europe, where authorities were scrambling to prop up a slew of banks. On Tuesday, 30 September 2008, the Belgian-French financial services group Dexia got a 6.4 billion euro ($9.18 billion) capital boost from public shareholders to help it fight the global credit crisis. Ireland also offered to guarantee all bank deposits for two years to improve banks' access to funds on international markets.
Meanwhile, global central banks on Tuesday, 30 September 2008, more than doubled the amount of dollar funding to $620 billion, but the move showed no signs of thawing the freeze in money markets where banks are hoarding cash and bracing for more trouble ahead in the deepening year-long credit crisis.
The BSE 30-share Sensex jumped 264.58 points or 2.1% to 12,860.43. The index shed 442.2 points at the day's low of 12,153.55, hit in early trade, its lowest level in two years. The Sensex rose 399.45 points at day’s high of 15,995.20 hit in mid-afternoon trade.
The S&P CNX Nifty was up 71.15 points or 1.85% to 3,921.20. Nifty hit a low of 3,715.05 in early trade, its lowest level in 17 months.
The BSE Sensex is down 7,426.56 points or 36.6% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8,346.34 points or 39.35% below its all-time high of 21,206.77 struck on 10 January 2008.
The BSE clocked a turnover of Rs 5,164 crore today, 30 September 2008 as compared to a turnover of Rs 4,594.16 on 29 September 2008.
Nifty October 2008 futures were at 3923.15, at a premium of 1.95 points as compared to spot closing of 3921.20. NSE's futures & options (F&O) segment turnover was Rs 56,549.63 crore, which was higher than Rs 55,905.71 crore on Monday, 29 September 2008.
The BSE Mid-Cap index was up 1.46% at 4,798.29 and the BSE Small-Cap index was up 0.44% at 5,577.47.
BSE Bankex (up 4.92% to 6,478.85), BSE Capital Goods index (up 3.02% to 10,581.13), BSE Realty index (up 2.96% to 3,508.77), BSE Teck index (up 2.24% to 2,545.91) outperformed Sensex.
BSE Metal index (down 1.66% to 8,992.06), BSE FMCG index (down 0.86% to 2,160.76), BSE HealthCare index (up 0.58% to 3,672.18), BSE IT index (up 1.22% to 3,095.08), BSE Oil & Gas index (up 1.28% to 9,039.28), BSE Auto index (up 1.4% to 3,674.98), BSE Power index (up 1.58% to 2,260.27), BSE PSU index (up 1.62% to 6,246.03) and BSE Consumer Durables index (up 1.98% to 2,929.18) underperformed Sensex.
The market breadth was weak on BSE with 1,277 shares advancing as compared to 1,316 that declined. 79 shares remained unchanged.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries rose 0.8% to Rs 1,946.35. The stock recovered from the session’s low of Rs 1,862.60.
Tata Consultancy Services (up 6.96% to Rs 662.75), Bharat Heavy Electricals (up 5.07% to Rs 1,586), Bharti Airtel (up 5.14% to Rs 785.05), Maruti Suzuki India (up 3.73% to Rs 687.15), Larsen & Toubro (up 4.16% to Rs 2442.90), HDFC (up 5.33% to Rs 2,141.15), Jaiprakash Associates (up 4.12% to Rs 111.10), edged higher from the Sensex pack.
Ranbaxy Laboratories (down 3.17% to Rs 247.75), Tata Motors (down 3.27% to Rs 344.20), Tata Steel (down 4.43% to Rs 425.60), Grasim Industries (down 2.58% to Rs 1,687.60), Sterlite Industries (down 1.02% to Rs 428.45), edged lower from the Sensex pack.
India’s largest private sector bank in terms of net profit ICICI Bank rose 8.42% to Rs 534.85. The stock recovered from the session’s low of Rs 458. ICICI Bank today said rumours about its financial strength were baseless and malicious. The bank said it has a very strong capital position. In a statement, chief executive K.V. Kamath said ICICI's banking and non-banking units were well capitalised and the impact of the current market conditions on its investment portfolio would not pose any challenge to its capital position.
The stock had slumped 12.11% to Rs 493.30 yesterday despite the bank clarifying that 98% of ICICI Bank UK PLC's non-India investment book is rated investment grade and above. ICICI Bank UK PLC has zero exposure to US subprime-credit, it had said.
India’s largest commercial bank State Bank of India rose 4.32% to Rs 1,465.65. It recovered from the session’s low of Rs 1,353. India’s second largest private sector bank by net profit, HDFC Bank, rose 2.46% to Rs 1,229. The stock recovered from session’s low of Rs 1,125.
Reliance Natural Resources clocked the highest volume of 2.33 crore shares on BSE. IFCI (1.27 crore shares), Suzlon Energy (89.37 lakh shares), Chambal Fertilisers and Chemicals (80.36 lakh shares) and Ispat Industries (72.22 lakh shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 405.22 crore on BSE. Reliance Industries (Rs 356.18 crore), ICICI Bank (Rs 336.95 crore), Larsen & Toubro (Rs 206.55 crore) and Axis Bank (Rs 203.49 crore) were the other turnover toppers in that order.
US stocks slumped on Monday, 29 September 2008 as the House of Representatives rejected the $700 billion bailout plan to rescue the financial system. The S&P 500 index tumbled the most since the 1987 crash and the Dow Jones saw it's biggest single day point fall ever. The Dow Jones Industrial Average plunged 777.68 points, or 6.98%, to 10,365.45. The S&P 500 index fell 106.62 points, or nearly 9%, to 1,106.39. The Nasdaq Composite index declined 199.61 points, more than 9%, to 1,983.73.
Most Asian markets pared initial sharp fall triggered by overnight setback in US stocks. Hong Kong's Hang Seng rose 0.76%. Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul Composite and Taiwan's Taiwan Weighted fell between 0.57% to 4.12%.
US light crude for November 2008 delivery fell 59 cents to $95.78 a barrel today, 30 September 2008 plunging $10.52 its second biggest fall since 23 April 2003, on the previous day.
Panic strikes US Market
Dow suffers worst one day loss in twenty one years as bailout plan gets rejected
US stocks were pushed back to the wall on Monday, 29 September, 2008 and the Dow suffered its worst loss in more than twenty years. The rejection of the $700 billion bailout plan for the financial market acted as the main catalyst for the steep losses of the day. Other than that there were a couple of other factors too. European governments agreed to a $16.4 billion bailout for Fortis NV, Belgium's largest retail bank. Also, the British government said it was nationalizing mortgage lender Bradford & Bingley, which has a $91 billion mortgage and loan portfolio.
The Dow Jones industrial Average ended the day with a huge loss of 777.77 points at 10,365.45. It surpassed the loss of 684 points in incurred the day market reopened after 11 September, 2001 crashes. The Nasdaq Composite Index, finished today lower by 199.61 points at 1,983.71. S&P 500 finished lower by 106.59 points at 1,106.42.
All the thirty Dow stocks plunged in the red. American Express and Banc of America were the topmost losers shedding almost 18% each. All ten of the economic sectors posted a loss. The worst performing sector, financials, fell 16%, while the best-performing sector, consumer staples, fell 4.2%.
The House of Representatives failed to pass the Emergency Economic Stabilization Act today. The $700 billion financial relief plan was rejected today. A total of 218 votes were needed to pass the vote. Democrats voted 141 for, 94 against. Republicans voted 66 for, 132 against. Presumably, Congress will work toward a new plan to ease the financial market turmoil, although it is not clear how long it might take.
Among major news of the day at Wall Street, Citigroup is acquiring Wachovia's banking operations. Citi will absorb up to $42 billion of losses on a $312 billion pool of loans. Wachovia will continue to own AG Edwards and Evergreen. Market started the downward slide today with this piece of news. But then, indices just plunged once the failure of the bailout plan hit the market.
Nasdaq suffered heavy losses today after Apple shares skidded by 18% once two firms cut their rating on the stock.
Among earning news of the day, Circuit City posted a second quarter loss of as revenue fell 9.6% year-over-year. The consumer electronics retailer withdrew its previous 2009 outlook so it can take a comprehensive review. On the other hand, Walgreen earnings per share by 12.5% which matched expectations. The company said it saw a negative impact on overall margins due to an increase in nonretail businesses.
The strength in the dollar and concerns over global growth drove down the price of most commodities. Oil prices were down 11% to $95 per barrel. Gold bucked the negative trend, thanks to the precious metal's perceived safety.
Volume on the New York Stock Exchange topped 2 billion, with decliners ousting advancers more than 15 to 1. On the Nasdaq, 1.1 billion shares exchanged hands, and decliners ran past advancing stocks more than 6 to 1.
For tomorrow, economic data will take center stage. The release of the Chicago PMI and Consumer Confidence reports will draw some attention. In light of the huge losses seen today, the behavior of the market itself will be the focal point on Tuesday.
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