India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Friday, March 20, 2009
March 2009 derivatives expiry to keep market volatile
The market may see volatility ahead of the expiry of March 2009 derivatives contracts. Local investors will continue to closely monitor movement in global equities. Foreign institutional investors' investment activity holds key. Derivative contracts for March 2009 series are set for expiry on Thursday, 26 March 2009.
Hopes of further rate cuts by the Reserve Bank of India (RBI) remain with the wholesale price inflation at record low. Inflation based on wholesale prices rose 0.44% in the week to 7 March 2009 from a year earlier after gaining 2.43% in the previous week, government data released on Thursday, 19 March 2009 showed.
Foreign securities firm Nomura expects another 100 basis points cut in both the repo and reverse repo rates from the Reserve Bank of India (RBI) by mid-2009. Governor Duvvuri Subbarao on 4 March 2009 cut the key repurchase rate or repo rate to an all-time low of 5%, having reduced the measure by 400 basis points since October 2008. On the same say a 50 basis points cut in reverse repo rate was also announced, with immediate effect. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.
The International Monetary Fund (IMF) on Wednesday, 18 March 2009, said India should rely more on monetary policy to support the economy. IMF said the Indian economy is slowing fast and the outlook for the next year remains uncertain. The main upside risk was a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented.
The IMF forecast India's gross domestic product growth would slow to 6.3% in the 2008-2009 fiscal year, and to 5.3% in 2010. Indian economy has grown at average rate of 9% in the previous four years.
The impact of economic slowdown was clearly visible in advance tax collections as 18 out of 50 big corporate tax payers contributed less to the Government kitty this fiscal compared to Q4 payments in the last fiscal. However, the Government collected 10.54% more from the Rs 16,252.48-crore advance tax paid by 50 big corporates in the fourth quarter this fiscal as against Rs 14,703.19 crore a year ago.
The activity of foreign institutional investors (FII) will be closely watched after they turned buyers to the tune of Rs 975.10 crore in four trading sessions from 13 March 2009 to 18 March 2009. They still remain net sellers in this month and year as their outflow totaled Rs 1301.10 crore in March 2009 and Rs 8,242.10 crore in calendar year 2009 (till 18 March 2009).
Investors are unlikely to build large positions in India due to political uncertainty with general election to be held in mid-April 2008 to mid-May 2009. More so at a time when it is highly unlikely that either Congress or BJP comes to power on its own i.e. without the support of other smaller/regional parties.
The market may recover if a coalition led either by Congress or BJP comes to power. But the recovery will be subject to BJP or Congress led coalition coming to power without a support from the Left front which is against key economic reforms. The market will then look for whether the new government which comes to power undertakes second generation reforms that could bring India back on a strong growth path witnessed in five years between 2003 and 2008.
Meanwhile, the US Federal Reserve in an aggressive move on Wednesday, 18 March 2009 said it would buy $300 billion in longer-dated Treasury over the next six months, along with another $850 billion in mortgage-related debt, to pump liquidity into near-frozen credit markets. On the same day, the Fed kept the benchmark federal funds rate-the interest charged by banks for overnight loans to one another, unchanged in the range of 0 to 0.25%.
Earlier, global stocks had risen after the US Federal Reserve chairman Ben Bernanke on 15 March 2009 said the US economy should start recovering from recession next year if there is the political will to complete the costly rescue of the shattered banking system.
Meanwhile, battered US banks showed signs of life after chiefs of Citigroup
, Bank of America and JPMorgan Chase made statements saying they have returned to black early this year and assured they should ride out the recession without more taxpayer help.
Post Market Commentary - March 20 2009
The Sensex closed lower led by realty, consumer goods and banking stocks dropped, while metals bucked the trend with rise in commodities prices. The 30-share index, BSE Sensex opened with a loss of 50.41 points, at 8,951.34 on Friday. As the day progressed, it slipped further on heavy selling pressure seen in index pivotals, touching a low of 8,867.13. Later the Sensex pared most of its losses towards the final close as select buying was seen in frontliners.
BSE Midcap index declined 0.47%, while Smallcap index rose 0.54% respectively.
Amongst the sectoral indices, BSE Realty was worst hit. The counter plunged 4.14% followed by Consumer goods, which dipped 2.54% and Bankex down by 1.95%.
Asian stocks fell, led by banks and technology companies, after the benchmark index`s biggest weekly gain since August 2007 drove valuations to the highest in more than a year. Hang Seng index lost 297.41 points, or 2.26%, to close at 12,833.51 and Shanghai Composite increased 15.33 points, or 0.68%, to settle at 2,281.09.
European stocks fell. Barclays fell almost 3.5%. Deutsche Telekom declined more than 2% after Credit Suisse Group recommended selling shares of Europe`s largest phone company. FTSE 100 fell 36.47 points, or 0.96%, to trade at 3,780.46, CAC 40 declined 31.74 points, or 1.14%, to trade at 2,745.25 and DAX dropped 28.18 points, or 0.70% to trade at 4,015.28. (4.14 p.m., IST)
The Sensex ended the day with a loss of 35.07 points, or 0.39% at 8,966.68 after touching a high of 8,999.98 and a low of 8,867.13. The broad-based NSE Nifty declined 0.10 points at 2,807.05 after hitting a high of 2,816.10 and a low of 2,773.65.
Major gainers in the 30-share index were Hindalco Industries (5.66%), Oil & Natural Gas Corporation (3.41%), Tata Steel (1.67%), Sun Pharmaceutical Industries (1.58%), Housing Development Finance Corporation (1.57%), and Hindustan Unilever (1.17%).
On the other hand, Tata Motors (6.24%), ICICI Bank (4.50%), Larsen & Toubro (4.01%), Maruti Suzuki India (2.59%), Bharat Heavy Electricals (2.32%), and Reliance Capital (1.81%) were the major losers in the Sensex.
Overall market breadth was mixed. Out of the total 2,569 stocks traded at BSE, 1,245 advanced, 1,219 declined while 105 remained unchanged.
BSE Bulk Deals to Watch - March 20 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
20/3/2009 530499 A K CAPITAL FIRSTRAND IRELAND PUB LTD S 85000 141.60
20/3/2009 526955 ABL BIOTECHN AXIS BANK LTD AC CHENNAI BRANCH S 73443 9.96
20/3/2009 532799 AKRUTI CITY OPG SECURITIES P LTD B 513285 1682.39
20/3/2009 532799 AKRUTI CITY OPG SECURITIES P LTD S 513285 1683.69
20/3/2009 531682 CAT TECHNOL ALKA INDIA LIMITED B 323080 2.98
20/3/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 96259 141.06
20/3/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 96259 141.20
20/3/2009 531863 GEEKAY FINAN GOPALA PILLAI VIJAYAKUMAR B 296769 59.16
20/3/2009 531137 GEMSTONE INV PARMAR BHARATKUMAR B B 15000 23.75
20/3/2009 503699 GEOD LTD SLOANE ROBINSON INVESTMENT B 1067444 57.60
20/3/2009 503699 GEOD LTD ABN AMRO BANK N.V. LONDON S 1067444 57.60
20/3/2009 530405 JINDAL CAP. SARITA AGARWAL B 45367 8.50
20/3/2009 530405 JINDAL CAP. PAWAN KUMAR JINDAL B 17200 8.50
20/3/2009 530955 KAILASH FICO G R PANDYA SHARE BROKING LTD B 60000 23.84
20/3/2009 502933 KATARE SPG. REENA JASVANTBHAI JANI B 15000 19.80
20/3/2009 502933 KATARE SPG. DIVYA STOCK BROKING LTD S 38260 19.69
20/3/2009 502933 KATARE SPG. JYOTIKABEN MAHESHBHAI HADVANI S 31976 19.80
20/3/2009 511728 KZLEASING AMI STOCK SHARE BROKERS PLTD S 30000 74.50
20/3/2009 511728 KZLEASING NAINESH HIMAT JATANIA S 26800 74.16
20/3/2009 501209 MAST MEDI SY* DIVYA INVESTMENTS S 47750 48.10
20/3/2009 514242 MH MILLS & I MALIBU KAPITAL LTD S 358000 4.25
20/3/2009 517344 MINDTECK IND SHANTILAL NATHALAL KANSAGARA B 125667 15.20
20/3/2009 517344 MINDTECK IND BHUPENDRA KANSAGRA S 125667 15.20
20/3/2009 532718 PRATIBHA IND KOTAK MAHINDRA UK LTD AC PREMIER INVESTMENT B 354426 60.93
20/3/2009 532718 PRATIBHA IND GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 354426 60.93
20/3/2009 516092 PUDMJEE IND THACKER AND COMPANY LTD B 100000 7.64
20/3/2009 524480 RIDD SID GLU SHREEPAL STARCH PRODUCTS PVT.LTD B 100000 58.00
20/3/2009 524480 RIDD SID GLU CREELOTAX ENGINEERS PVT.LTD B 107744 58.39
20/3/2009 524703 SANDU PHARMA REENA JASVANTBHAI JANI B 45000 7.75
20/3/2009 524703 SANDU PHARMA AMI STOCK SHARE BROKERS PLTD S 45001 7.88
20/3/2009 531898 SANGUINE MD PRASHANT MAHADEV KAMBLE S 192830 2.52
20/3/2009 500387 SHREE CEMENT LTD. SMALL CAPITAL WORLD FUND INC S 182409 610.00
20/3/2009 505729 SINGER INDI D GOPINATHAN B 10000 28.66
20/3/2009 505729 SINGER INDI BHAGWATI PRASAD KANODIA B 8816 28.92
20/3/2009 505729 SINGER INDI BHAGWATI PRASAD KANODIA S 10000 29.01
20/3/2009 505729 SINGER INDI DHRAM CHAND CHAUDHRY S 18360 28.13
20/3/2009 505729 SINGER INDI GIRDHARI LAL SINGH S 20000 28.97
20/3/2009 505729 SINGER INDI NARAYAN SINGHANIA S 15000 28.97
20/3/2009 505729 SINGER INDI PUSHPA SINGHANIA S 15000 28.97
20/3/2009 512048 SPLASH MEDIA NIKHILASHOKSHIVDIKAR B 15000 101.50
20/3/2009 512048 SPLASH MEDIA ANAND BHATT B 6543 107.37
20/3/2009 512048 SPLASH MEDIA ITRA SECURITIES PRIVATE LIMITED S 6543 107.33
20/3/2009 512048 SPLASH MEDIA TAPAN GANGWAL S 18350 101.55
20/3/2009 506854 TANFAC INDUS FOUR DIMENSIONS CAPITAL MARKETS PRIVATE LIMITED B 238023 29.00
20/3/2009 506854 TANFAC INDUS ARONI COMMERCIALS LIMITED S 238023 29.00
20/3/2009 530459 VALSON IND AMI STOCK SHARE BROKERS PLTD S 25000 25.30
NSE Bulk Deals to Watch - March 20 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
20-MAR-2009,AKRUTI,Akruti City Limited,C D INTEGRATED SERVICES LTD,BUY,342361,1682.53,-
20-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,BUY,254068,140.26,-
20-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,139127,1885.23,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PVT LTD,BUY,82518,139.99,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,104316,140.03,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,BUY,105722,140.30,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,OM INVESTMENTS,BUY,223432,140.29,-
20-MAR-2009,GUJNRECOKE,GUJARAT N R E COKE LTD,MOHSIN MIYANA,BUY,4240000,19.61,-
20-MAR-2009,NITINFIRE,Nitin Fire Protection Ind,BP FINTRADE PRIVATE LIMITED,BUY,79595,188.26,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,BP FINTRADE PRIVATE LIMITED,BUY,60074,55.84,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,BUY,81133,57.12,-
20-MAR-2009,SREINTFIN,SREI Infrastructure Finan,ADHYATMA COMMERCIAL PRIVATE LIMITED,BUY,760000,29.98,-
20-MAR-2009,AKRUTI,Akruti City Limited,C D INTEGRATED SERVICES LTD,SELL,342361,1683.75,-
20-MAR-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,SELL,261479,140.37,-
20-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,139127,1886.49,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PVT LTD,SELL,80118,140.34,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,SELL,104316,140.54,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,GENUINE STOCK BROKERS PVT LTD,SELL,105722,140.30,-
20-MAR-2009,EVERONN,Everonn Systems India Lim,OM INVESTMENTS,SELL,223432,140.39,-
20-MAR-2009,GRABALALK,Grabal Alok Impex Limited,DEV KUMAR H VAIDYA,SELL,190000,55.00,-
20-MAR-2009,GUJNRECOKE,GUJARAT N R E COKE LTD,MOHSIN MIYANA,SELL,4250000,19.50,-
20-MAR-2009,NITINFIRE,Nitin Fire Protection Ind,BP FINTRADE PRIVATE LIMITED,SELL,86485,186.87,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,BP FINTRADE PRIVATE LIMITED,SELL,58779,55.54,-
20-MAR-2009,SHYAMTEL,Shyam Telecom Limited,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,SELL,61633,57.03,-
20-MAR-2009,SREINTFIN,SREI Infrastructure Finan,CALLIDORA MERCANTILES PRIVATE LIMITED,SELL,750000,29.98,-
Post Session Commentary - March 20 2009
Indian market ended the session on flat note tracking mixed global markets. During final trading, market witnessed some recovery after trading volatile with negative bias throughout the session. Hopes of further relief in monetary policy by central bank, along with some buying by FIIs, tried to support the sentiments.
The market tumbled since initial bell backed by negative cues from the markets all over the world. Thursday, the US stock markets closed lower after a choppy session with the financial shares drag due to uncertainty about the Federal Reserve''s plan to buy bonds will revive the economy. Further, weakness together with instability continued to strike the domestic bourses. During last trading hours, benchmark indices tried to recover and managed to cross the dotted line on some bouts of buying. However, market was not able to hold the momentum and slipped again. Towards the end, market closed on flat note after shedding most of its earlier losses. BSE Sensex ended below 9,000 level and NSE Nifty above 2,800 level. From the sectoral front, most of the selling was seen in Reality, Capital Goods, Bank, Auto and Pharma stocks. However, Metal, FMCG, Oil & Gas and Teck stocks were able to gain the market favor.
Among the Sensex pack 17 stocks ended in red territory and 13 in green. The market breadth indicating the overall health of the market remained flat as 1246 stocks closed in green while 1218 stocks closed in red and 103 stocks remained unchanged in BSE.
The BSE Sensex closed marginally lower by 35.07 points at 8,966.68 whereas NSE Nifty ended flat at 2,807.05. BSE Mid Caps ended with losses of 13.06 points at 2,761.06 while BSE Small Caps closed with gains of 16.85 points at 3,114.38. The BSE Sensex touched intraday high of 8,999.98 and intraday low of 8,867.13.
Losers from the BSE Sensex pack are Tata Motors (6.24%), ICICI Bank (4.50%), L&T Ltd (4.01%), Maruti Suzuki (2.59%), BHEL (2.32%), SBI (1.51%), DLF Ltd (1.30%), TCS Ltd (0.97%) and Ranbaxy Lab (0.62%).
Gainers from the BSE Sensex pack are Hindalco (5.66%), ONGC Ltd (3.41%), Tata Steel (1.67%), Sun Pharma (1.58%), HDFC (1.57%), HUL (1.17%) and RCom (1.12%).
India ranked 75th in the world’s best nations for business after skidding 11 positions. The data is accumulated by US publication Forbes. India slipped from its position as lost position in many areas like technology, corporate tax rate, freedom and calming corruption. Forbes'' annual list ranks 127 nations on the basis of business environment in a country for entrepreneurs, investors and workers.
On the global markets front the Asian markets which opened before the Indian market, ended mixed. Shanghai Composite, Straits Times index and Seoul Composite ended higher by 15.33, 12.06 and 9.13 points at 2,281.09, 1,596.92 and 1,170.94 respectively. However, Hang Seng lost 297.41 at 12,833.51. Japanese markets are close for a holiday. Hong Kong''s inflation eased to an annualized 0.8% in February, a two-year low, from a 3.1% rise in January, on softer food prices and government waivers on some public services.
European markets which opened after the Indian market are trading lower. In Frankfurt the DAX index is trading down by 29.41 points at 4,014.05 and in London FTSE 100 is trading lower by 26.9 points at 3,790.03.
The BSE Reality ended down by (4.14%) or 67.25 points at 1,556.02 on reports that falling interest rates have failed to revive housing demand. Losers are Akruti City (27.83%), Parsvnath (2.65%), Anant Raj (2.42%), Housing Dev (2.39%) and Orbit Co (1.42%).
The BSE Capital Goods index tumbled (2.54%) or 150.73 points to close at 5,774.24. Main losers are Crompton Greaves (4.41%), Thermax Ltd (4.39%), L&T Ltd (4.01%), Walchand In (3.12%) and Siemens Ltd (2.34%).
The BSE Bank stocks also dropped by (1.95%) or 80.63 points to close at 4,055.63 on fears of rising defaults in weakening economy and slide in ADRs. Major losers are Kotak Bank (4.56%), ICICI Bank (4.50%), Axis Bank (4.26%), Bank of India (2.85%) and Punjab National Bank (1.97%).
The BSE Auto index lost (1.32%) or 37.75 points to close at 2,832.33 on fears that slow consumer spending may affect demand. Losers are Ashok Leyland (6.50%), Tata Motors (6.24%), Exide Indus (3%), Maruti Suzuki (2.59%) and MRF Ltd (2.06%).
The BSE Metal index closed with increase of (1.61%) or 83.29 points at 5,260.46 on rise in metal prices on London Metal Exchange. Scrips that gained are Gujarat NRE C (11.47%), Hindalco (5.66%), Jai Corp Ltd (4.73%), Steel Authority (3.32%) and Sesa Goa Ltd (2.35%).
The BSE FMCG index ended higher by (0.21%) or 3.96 points to close at 1,922.57. Britania In (3.42%), Colgate Palm (3.36%), Ruchi Soya (2.47%), Tata Tea (2.40%) and HUL (1.17%) ended in positive territory.
Larsen & Toubro slipped 4.01% on reports the firm will pay four years of pending dividend to Grasim, along with arrears and interest as a cross-holding dispute settlement.
Unitech ended lower by 0.19%. The company plans to launch residential projects in the range of Rs 5-10 lakh in metro and suburban cities like Gurgaon, Chennai and Kolkata over the next few months.
Geometric Ltd lost 3.10%. Geometric Technologies, Inc., a subsidiary of the company and an industry leader in developing advanced manufacturing software will showcase CAMWorks 2009, the latest version of its solid-based CNC programming solution.
Tata Motors fell 6.24%, ahead of the launch of its Rs 1-lakh car Nano on 23rd March 2009.
Aurobindo Pharma Limited gained 1.43%. The company has received registrations from the Medicines Control Council (MCC) to manufacture and market three products in South Africa. The approvals are for Auro-Cefepime injectables in 500mg, 100mg and 2,000mg strengths and Loxip 250mg and 500mg under anti-infective category, and Keysal 5mg and 10mg under the cardiovascular system category.
Hindustan Zinc rose 2.01% after the company hiked lead prices by 3.9% to match international rates.
Small-cap, mid-cap indices outperform Sensex
Key benchmark indices logged gains for the second straight week trading firm global markets after the US Federal Reserve in an aggressive move announced a plan to buy $1.2 trillion of debt to revive the US economy which is in recession for more than a year. Also buying by foreign institutional investors lifted sentiment. Small and mid-cap indices outperformed the Sensex.
The US Federal Reserve on Wednesday, 18 March 2009 said it would buy $300 billion in longer-dated Treasury over the next six months, along with another $850 billion in mortgage-related debt, to pump liquidity into near-frozen credit markets. On the same day, the Fed kept the benchmark federal funds rate-the interest charged by banks for overnight loans to one another, unchanged in the range of 0 to 0.25%.
Earlier, global stocks had risen after the US Federal Reserve chairman Ben Bernanke on 15 March 2009 said the US economy should start recovering from recession next year if there is the political will to complete the costly rescue of the shattered banking system. Battered US banks showed signs of life after chiefs of Citigroup, Bank of America and JPMorgan Chase made statements saying they have returned to black early this year and assured they should ride out the recession without more taxpayer help.
Foreign institutional investors (FII) turned buyers to the tune of Rs 1132.80 crore in five trading sessions from 13 March 2009 to 19 March 2009. They still remain net sellers in this month and year as their outflow totaled Rs 1143.40 crore in March 2009 and Rs 8084.40 crore in calendar year 2009 (till 19 March 2009).
The BSE 30-share Sensex rose 210.07 points or 2.40% to 8,966.68 in the week ended 20 March 2009. The S&P CNX Nifty gained 87.80 points or 3.22% to 2,807.05 in the week.
The BSE Mid-Cap index gained 120.70 points or 4.57% to 2,761.06 and the BSE Small-Cap index advanced 180.32 points or 6.15% to 3,114.38 in the week.
The Sensex is down 680.63 points or 7.05% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 152.10 points or 5.13% in calendar 2009 from its close of 2,959.15 on 31 December 2008.
Trading for the week began on an upbeat note with the market advancing on Monday, 16 March 2009 on positive global cues. The BSE 30-share Sensex gained 186.93 points, or 2.13%, to 8,943.54. The S&P CNX Nifty rose 58 points, or 2.13%, to 2,777.25.
Key benchmark indices declined on Tuesday, 17 March 2009 on profit taking after solid gains in the previous three trading sessions. The BSE 30-share Sensex fell 79.72 points, or 0.89%, to 8,863.82 and the S&P CNX Nifty lost 19.80 points or 0.71% to 2,757.45.
Market came sharply off the day's high in late trade on Wednesday, 18 March 2009 as stocks pared gains amid caution ahead of the outcome of the two-day meeting of the US Federal Reserve. The BSE 30-share Sensex rose 112.86 points, or 1.27%, to 8,976.68. The S&P CNX Nifty gained 37.25 points or 1.35% to 2,792.90.
In a day marked with high volatility, key benchmark indices eked out small gains on Thursday, 19 March 2009 on expectations of a further cut in policy rates by the Reserve Bank of India and firm European markets. The BSE 30-share Sensex rose 25.07 points, or 0.28%, to 9,001.75 and the S&P CNX Nifty was up 12.45 points or 0.45% to 2,807.15.
The market dropped on Friday, 20 March 2009 in what was a volatile trading session. Expectations of a further easing of the monetary policy by the Reserve Bank of India and continued buying by foreign funds triggered a strong rebound in late trade after early slide caused by lower Asian indices. The BSE 30-share Sensex slipped 35.07 points, or 0.39%, to 8,966.68 even as the S&P CNX Nifty ended unchanged at 2,807.05
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 4.38% to Rs 1338.55 in the week ahead of production of gas from KG basin, off the east coast, this month. Meanwhile, as per reports, RIL's advance tax payment fell 16.47% to Rs 370 crore in Q4 March 2009 over Q4 March 2008.
Banking shares gained on hopes lower interest rates may boost lending growth. India's largest private sector bank by net profit ICICI Bank rose 4.60%. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 when compared to Q4 March 2008.
India's second largest private sector bank by operating income HDFC Bank rose 0.38%. Its advance tax payment rose 10% to Rs 275 crore in Q4 March 2009 over Q4 March 2008.
India's largest bank in terms of assets and branch network State Bank of India rose 0.05% after its advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.
Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. DLF (up 12.16%), Indiabulls Real Estate (up 6.58%), and Housing Development & Infrastructure (up 7.85%), rose. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
Akruti City jumped 36.76% on speculative buying. The National Stock Exchange (NSE) in a circular released late evening on 19 March 2009 barred derivatives trade in India's second largest real estate developer by market capitalisation Akruti City from the end of this month. Meanwhile the Securities and Exchange Board of India (Sebi) is reportedly probing three brokerages - two in Mumbai and one in Kolkata - as part of an investigation into the recent massive rise in shares of Akruti City.
Auto shares were mixed as hopes lower interest rates would spur demand for vehicles which is mainly driven by finance were offset by rising crude oil prices which moved past $50 a barrel. India's largest commercial vehicle maker by sales Tata Motors was down marginally by 0.43% ahead of the launch of its Rs 1-lakh car Nano on 23 March 2009. The company did not pay any advance tax in Q4 March 2009 compared to Rs 75 crore in Q4 March 2008.
India's largest car maker by sales Maruti Suzuki India fell 0.15%. But India's largest tractor maker by sales Mahindra & Mahindra spurted 3.15%.
Metal stocks rose on rally in metal prices on London Metal Exchange. India's largest copper maker by sales Hindalco Industries rose 11.87% as it is seen benefiting the most from imposition of import duty by the government on Friday, 13 March 2009. In its bid to safeguard interests of the domestic producers, the government has imposed import duty on aluminium products imported from China.
India's largest steel maker by sales Tata Steel rose 5.64% as its advance tax payment rose 92.41% to Rs 406 crore in Q4 March 2009 over Q4 March 2008. Other metal stocks, National Aluminum Company (up 4.33%), Sterlite Industries (up 11.54%), and Hindustan Zinc (up 11.96%), gained.
Outsourcing focussed IT firms rose on hopes of a recovery in the US economy, their biggest market. India's largest software services exporter by sales TCS rose 0.64%. On 12 March 2009, TCS said it signed a multi-year IT solutions contract with German semiconductor maker Infineon Technologies AG, one of the leading semiconductor manufacturers. The financial details were not disclosed.
India's second largest software services exporter Infosys Technologies was up marginally by 0.08%. Infosys chief and co-founder Mr S Gopalakrishnan said on Sunday, 15 March 2009, the Indian IT industry would tide over the current downturn and might surpass the US in terms of having the largest number of IT professionals in the world in the next three years.
India's fifth largest IT major by sales HCL Technologies rose 8.42% on securing a contract worth $350 million on 16 March 2009.
India's third largest software services exporter, Wipro advanced 3.07%. Last week its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC).
India's largest telecom services provider by sales Bharti Airtel rose 1.90% on reports the company will restructure its businesses into nine verticals under different chief executives, as it looks to expand into areas beyond its mainstay, voice telephony
India's second largest telecom services provider by sales Reliance Communication surged 7.83%.
India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 4.85% despite reports L&T and Grasim Industries are on the verge of settling their 7-year old legal dispute over Grasim`s 0.62% stake in L&T and the latter`s 11.49% stake in Ultratech, the Birla group cement firm. Grasim Industries and Ultratech Cement are Aditya Birla group companies. Shares of Grasim Industries slipped 1.96% while Ultratech Cement rose 0.87%.
Inflation based on wholesale prices rose at a record pace of 0.44% in the week to 7 March 2009 from a year earlier after gaining 2.43% in the previous week, government data released on Thursday, 19 March 2009 showed.
The International Monetary Fund (IMF) on Wednesday, 18 March 2009, said India should rely more on monetary policy to support the economy. IMF said the Indian economy is slowing fast and the outlook for the next year remains uncertain. The main upside risk was a larger-than-anticipated impact of the stimulus measures that the authorities have already implemented.
The IMF forecast India's gross domestic product growth would slow to 6.3% in the 2008-2009 fiscal year, and to 5.3% in 2010. Indian economy has grown at average rate of 9% in the previous four years.
The impact of economic slowdown was clearly visible in advance tax collections as 18 out of 50 big corporate tax payers contributed less to the Government kitty this fiscal compared to Q4 payments in the last fiscal. However, the Government collected 10.54% more from the Rs 16,252.48-crore advance tax paid by 50 big corporates in the fourth quarter this fiscal as against Rs 14,703.19 crore a year ago.
Advance tax payment gives indication on the outlook on earnings. Thus if a company pays higher advance tax, it could indicate a good financial performance for the quarter and vice versa.
Foreign direct investment (FDI) in India in January 2009 was up 55% at $2.73 billion from $1.76 billion for the same month in the preceding year. Up to September this fiscal year, the monthly inflows were in excess of $2 billion. However, the following three months witnessed a sharp dip in the overseas investment, due to the backdrop of the global financial crisis. The January figures bring a renewed hope that India is back on the radar of global investors.
Group of 20-finance ministers meeting at the weekend pledged to combat the global recession and restore the financial system to health. The key priority now is to restore lending, a G- 20 statement on 14 March 2009 said.
At a policy meeting, the Bank of Japan on 18 March 2009 kept interest rates unchanged at 0.1% but said it would broaden its purchases of government bond to bolster liquidity and ensure market stability. The Bank of Japan also forecast that the economy would remain under stress in the new fiscal year and said that substantial liquidity is required to ensure stability in financial markets.
The Bank of Japan had announced late Tuesday, 17 March 2009 that it would provide up to one trillion yen ($10.2 billion) in subordinated loans to financial institutions in an effort to bolster banks' capital ratios and ease strains in Japan's financial system.
ICICI Bank, L&T lead decline in Sensex
Key benchmark indices posted small losses in what was a volatile trading session. Metal stocks surged even as realty stocks dropped. The barometer index BSE Sensex fell below the psychological 9,000 level. Banking stocks were volatile. Index heavyweight Reliance Industries (RIL) edged lower. The Sensex was down 35.07 points, or 0.39%, up close to 100 points from the day's low and off close to 35 points from the day's high.
Volatility was high. After a weak opening triggered by lower US index futures and mostly lower Asian stocks, the market extended losses in morning trade. It soon staged a strong rebound from lower level. However, the recovery proved short-lived. The market weakened further in afternoon trade.
Expectations of a further easing of the monetary policy by the Reserve Bank of India and buying by foreign funds triggered a strong rebound on the bourses in mid-afternoon trade. High volatility was witnessed in the last one hour of trade.
The market has risen sharply in the past few days. From a recent low of 8,160.40 on 9 March 2009, the Sensex jumped 841.35 points or 10.31% in six trading sessions to 9,001.75 on Thursday 19 March 2009.
The fall in headline inflation to a record low has raised expectations of further easing of the monetary policy by RBI to boost demand in the economy. Inflation based on the wholesale price index (WPI) rose 0.44% in the year through 7 March 2009, a record low for the current series, data released by the government during trading hours on Thursday, 19 March 2009, showed. The rate of growth in inflation was much lower than previous week's annual rise of 2.43%.
Interest rates in India have to fall further to channel more funds into infrastructure projects, Planning Commission member Kirit Parikh said on Friday. The Reserve Bank of India (RBI) has aggressively cut its policy lending rate by 400 basis points since October 2008, but banks are yet to reduce their individual lending rates to that extent.
Parikh also said India needs to use a portion of its foreign exchange reserves to fund mega projects. India needs to spend $500 billion in the five-year period ending March 2012 to upgrade its infrastructure.
Earlier the global financial crisis ends and sooner the risk appetite of global investors and global companies improves, better it will be for India Inc. An increase in risk appetite of global investors/global companies will help Indian firms raise overseas funds required for business expansion. The global financial crisis has chocked the overseas funding route for Indian firms.
Lack of funding has hit a slew of long-gestation infrastructure projects in India. World Bank Chief Economist & Senior Vice-President, Dr Justin Yifu Lin, on 13 March 2009, said if India can improve its infrastructure such as electricity, power, transportation and port facilities, it will be well on its path to achieve a 9-10% growth.
Meanwhile, foreign institutional investors are now in buying mode which follows easing of FII selling vigour in the past few days. As per the provisional data released by the stock exchanges, foreign funds bought shares worth a net Rs 23 crore on Thursday. FIIs had bought shares worth a net Rs 975.10 crore in four trading sessions from 13 March 2009 to 18 March 2009.
Foreign funds can take solace in the recent sharp rebound in the rupee against the dollar. The Indian rupee today reversed early gains. The partially convertible rupee was at 50.61 per dollar, below Thursday's close of 50.3650/3850. A recent sharp slide in the rupee to a record low had resulted in a depreciation in the value of FIIs equity portfolio to the extent of the fall in rupee. The rupee hit a record low beyond 52 per dollar early this month.
Domestic institutional investors have been absorbing heavy selling by foreign funds in calendar year 2009. However, the upside on the domestic bourses will be capped in the next two months due to political uncertainty ahead of parliamentary election to be held between mid-April 2009 to mid-May 2009.
European shares reversed losses. Key benchmark indices in France, Germany were up by between 0.25% to 0.32%. But UK's FTSE 100 was down 0.28%.
Asian markets were a mixed bag today. Key benchmark indices in South Korea, Singapore, China, Indonesia and Malaysia were up by between 0.68% to 1.44%, boosted by US Federal Reserve's plan to end the worst global recession in 60 years by spending $1 trillion buying back debt.
But key benchmark indices in Taiwan, and Hong Kong were down by between 0.33% to 2.26%, on profit taking after recent strong gains.
Trading in US index futures indicated the Dow could slide 20 points at the opening bell on Friday, 20 March 2009.
The BSE 30-share Sensex was down 35.07 points, or 0.39%, to 8,966.68. At the day's high of 8,999.98, the Sensex fell 1.77 points in mid-afternoon trade. At the day's low of 8867.13, the Sensex slipped 134.62 points in afternoon trade.
The S&P CNX Nifty was flat at 2,807.05.
The Sensex is down 680.63 points or 7.59% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 152.10 points or 5.13% in calendar 2009 from its close of 2,959.15 on 31 December 2008.
The BSE clocked a turnover of Rs 2,929 crore, much lower than Rs 3,977.84 crore on Thursday, 19 March 2009.
Nifty March 2009 futures were at 2798.55, at a discount of 8.50 points as compared to the spot closing of 2807.05. Turnover in NSE's futures & options (F&O) segment was Rs 43,647.51 crore, lower than Rs 48,752.20 crore on Thursday, 19 March 2009.
The BSE Mid-Cap index was down 0.47%, underperforming the Sensex while BSE Small-Cap index rose 0.54% outperforming the Sensex.
The BSE Metal index (up 1.61%), the BSE FMCG index (up 0.21%), the BSE Oil & Gas index (up 0.2%), the BSE TECk index (up 0.14%), the BSE PSU index (up 0.03%), the BSE IT index (down 0.08%), the BSE Consumer Durables index (down 0.26%), outperformed the Sensex.
The BSE Power index (down 0.66%), the BSE Healthcare index (down 0.76%), the BSE Auto index (down 1.32%), the BSE Bankex (down 1.95%), the BSE Capital Goods index (down 2.54%), the BSE Realty index (up 4.14%) underperfomed the Sensex.
The market breadth, indicating the overall health of the market, was negative on BSE with 1,214 shares advancing as compared with 1,273 that declined. A total of 64 shares remained unchanged.
From the 30 share Sensex pack, 17 stocks fell while rest rose.
India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 0.45% to Rs 1,338.55 on profit taking after recent surge. Nonetheless, the stock came off the day's low of Rs 1,321. The company will start production of gas from KG basin, off the east coast, this month. Meanwhile, RIL is reported to be in talks with Essar Oil to source petroleum products from the latter's refinery in Gujarat to restart its retail outlets that were shut for nearly a year.
RIL's advance tax payment fell 16.47% to Rs 370 crore in Q4 March 2009 over Q4 March 2008.
India's largest oil exploration firm by sales Oil & Natural Gas Corporation (ONGC) rose 3.41% to Rs 755.05 on a surge in global crude oil prices. Crude oil for April 2009 delivery rose 7.21% or $3.47 to $51.61 a barrel on the New York Mercantile Exchange (NYMEX) on Thursday, 19 March 2009 as the dollar tumbled following the US Federal Reserve's plan to pump $1 trillion into the recession-hit economy.
The prices settled above $50 on Thursday, 19 March 2009, for the first time in almost four months, since November 2008. Rise in crude oil prices would result in higher realizations from crude sales for the oil exploration firms.
Three PSU OMCs fell as crude oil prices surged over 7% on the New York Mercantile Exchange on Thursday, 19 March 2009. BPCL, HPCL and Indian Oil Corporation fell by between 0.7% to 3.71%. Higher crude oil prices will increase the under-recoveries for PSU OMCs on sale of fuel at controlled prices.
Telecom firms were mixed on reports telecom companies may reduce text message tariff by 40% from May 2009 for customers outside their home network after being warned by the industry regulator for overcharging. India's largest telecom services provider by sales Bharti Aitel fell 0.37% even as rival Reliance Communications rose 1.12%.
At present, a phone call is cheaper than an SMS for roaming customers, because competition has forced telecom companies to keep call rates low report said. The cut will negatively impact revenues of telecom firms
India's largest electric equipment maker by sales Bharat Heavy Electricals dropped 2.32% on reports the company paid 33.33% lower advance tax at Rs 400 in Q4 March 2009 over Q4 March 2008.
India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 4.01% despite reports L&T and Grasim Industries are on the verge of settling their 7-year old legal dispute over Grasim`s 0.62% stake in L&T and the latter`s 11.49% stake in Ultratech, the Birla group cement firm. Grasim Industries and Ultratech Cement are Aditya Birla group companies. Shares of Grasim Industries was flat at Rs 1,462.15.
Rate sensitive realty stocks fell on reports falling interest rates have failed to revive housing demand. DLF, Housing Development & Infrastrucutre and Unitech fell by between 0.19% to 2.39%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.
Akruti City slumped 27.83% after a recent solid surge in the stock price forced the National Stock Exchange to ban derivatives trading in the stocks from end-March 2009.
Metal stocks gained on a surge in metal prices on London Metal Exchange. Steel Authority of India, Hindustan Zinc, Sterlite Industries, Tata Steel, National Aluminum Company and Hindalco Industries rose by between 0.43% to 3.32%.
A measure of six metals jumped 5.6% in London on Thursday, 19 March 2009.
Banking stocks fell in choppy trade on fears of rising defaults in a weakening economy and on weak ADRs. India's largest private sector bank by net profit ICICI Bank fell 4.5%. Its American depository receipts (ADR) fell 3.96% on Thursday, 19 March 2009. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 when compared to Q4 March 2008.
India's largest bank in terms of assets and branch network State Bank of India fell 1.51% to Rs 953.55. Its advance tax payment jumped 27.64% to Rs 1810 crore in Q4 March 2009 over Q4 March 2008.
Other PSU stocks, Punjab National Bank, Bank of Baroda, Bank of India, India Overseas Bank, fell by between 1.13% to 1.97%.
But India's second largest private sector bank by operating income HDFC Bank rose 0.9% to Rs 837.70. The stock was off the day's low of Rs 810.15. Its ADR fell 3% on Thursday. Its advance tax payment rose 10% to Rs 275 crore in Q4 March 2009 over Q4 March 2008.
Investors are concerned about non-performing loans at banks and asset quality, Aditya Singhania, an analyst at Credit Suisse Group, said in a note to clients.
Rate sensitive auto shares were higher on expectations of good sales in the current month. Mahindra & Mahindra and Hero Honda Motors rose by between 0.14% to 0.57%. But India's largest car maker by sales Maruti Suzuki India fell 2.59%.
India's largest commercial vehicle maker by sales Tata Motors fell 6.24%. The stock had risen recently ahead of the launch of its Rs 1-lakh car Nano on Monday, 23 March 2009. Tata Motors paid no advance tax in Q4 March 2009 compared to Rs 75 crore in March 2008.
Some FMCG stocks fell on profit taking after recent gains triggered by expectations of better Q4 March 2009 results following reports of higher advance tax payment by these firms. Nestle India, Tata Tea, United Spirits, ITC, REI Agro, Marico fell by between 0.21% to 3.07%. India's largest FMCG firm by sales Hindustan Unilever rose 1.17%. The company's advance tax payment rose 30% to Rs 130 crore in Q4 March 2009 over Q4 March 2008.
Dabur India fell 1.9% on reports the firm is looking for a buyer for its wellness retail chain 'new-u' as the current economic downturn made it tough for it to pursue its retail plans.
Some healthcare stocks fell after recent gains triggered by expectations of better Q4 March 2009 results on reports of higher advance tax payment by these firms. Sun Pharmaceuticals Industries, Ranbaxy Laboratories, Biocon, Pfizer, Lupin fell by between 0.5% to 4.89%.
Dr Reddy Laboartories fell 3.13% after company said it would re-align its global generics business by gradually exiting some very small markets that contribute less than a percent to revenues.
Outsourcing focussed IT firms recovered on hopes of a revival in the US economy, the biggest market for IT firms. A surprise move by the US Federal Reserve to buy government bonds has revived hopes the battered US economy could soon begin its recovery.
India's largest software services exporter by sales TCS was down 0.97% to Rs 509.80, off the day's low of Rs 500. The company's advance tax payment fell 54.3% to Rs 53 crore in Q4 March 2009 over Q4 March 2008. The company during trading hours on Monday 16 March 2009 said its promoter Tata Sons has pledged more than 12.06 crore shares or 12.33% of the equity capital of the firm.
India's fifth largest IT major by sales HCL Technologies was down 0.24% to Rs 104.235, off the day's low of Rs 102.05. India's third largest software services exporter, Wipro was down 0.86% to Rs 30.70, off the day's low of Rs 227.2 even as its ADR rose 1.95% on Thursday. Recently its unit Wipro Infotech won an outsourcing contract worth Rs 1,182 crore from the Employees State Insurance Corporation (ESIC).
India's second largest software services exporter Infosys Technologies rose 0.12% to Rs 1,297.35, off the day's low of Rs 1,281 as its ADR gained 2.1% on Thursday. Infosys chief and co-founder Mr S Gopalakrishnan said on Sunday, 15 March 2009, the Indian IT industry would tide over the current downturn and might surpass the US in terms of having the largest number of IT professionals in the world in the next three years.
However, the rebound in the rupee against the dollar may cap upside in IT stocks. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.
Vishal Information Technologies declined 5.6% after the company said its only promoter Tutis Technologies has pledged 15 lakh shares representing 1.40% of the equity capital of the firm.
Firstsource Solutions clocked the highest volume of 1.28 crore shares on BSE. Cals Refineries (1.05 crore shares), Satyam Computer Services (95.45 lakh shares), Gujarat NRE Coke (89.33 lakh shares) and Reliance Natural Resources (88.69 lakh shares) were the other volume toppers in that order.
Akruti City clocked the highest turnover of Rs 455.63 crore on BSE. Reliance Industries (Rs 165.75 crore), Educomp Solutions (Rs 136 crore), ICICI Bank (Rs 120.84 crore) and State Bank of India (Rs 81.77 crore) were the other turnover toppers in that order.
Market may remain cautious
The market is likely to remain under pressure following an overnight fall on the US market and weakness among major Asian indices in the ongoing trades and it may exhibit strong volatility during the intra-day trades. However, prevailing bullish sentiment may help the market to get some buying support in initial trades. Among the key local indices, the Nifty could decline to 2750 on the downside while on the upside there is a near term resistance at 2850. The Sensex has a likely support at 8850 and may face resistance at 9150.
US indices tumbled Thursday, as rising oil and gold prices, a weaker dollar and more dour reads on the economy gave investors a reason to step back after the recent rally. While the Dow Jones tumbled by 86 points to close at 7401, the Nasdaq dropped 8 points at 1483.
Major Indian ADRs, too, buckled under selling pressure on the US bourses. Dr Reddy slipped 6.31%, Tata Motors declined 3.60%, ICICI Bank dropped 3.96%, HDFC Bank lost 3% and Rediff lost 1.26% while MTNL and VSNL slipeed marginally. However, Infosys, Satyam, Wipro and Patni Computers closed with the marginal gains.
Crude oil prices gained sharply, with the Nymex light crude oil for April series gains by $3.47 to close at $51.61 a barrel. In the commodity space, the Comex gold for April series gained $69.70 to settle at $958.80 a troy ounce.
Pre Session Commentary - March 20 2009
Today domestic markets are likely to have negative opening tracking the weakness in the global markets. US Federal Reserve''s move to buy up to $300 bn in government securities lead the concerns of rising inflations. Along with this, Fed also announced to expand its balance sheet by purchasing up to an additional $750bn of mortgage-backed securities. The key rates have been left unchanged at near zero. The other Asian markets are also not supportive and Japan''s market is closed for public holiday. On the domestic front one could witness some softening in the opening session and the market will remain volatile and will take further direction on the later half tracking the opening of the European markets. However, the domestic inflation, which is heading towards the zero level may further result in monetary easing and this will be closely observed by the investors.
On Thursday, the domestic markets opened positive however later turned volatile. The positive opening could not push the sentiments of investors as other Asian markets also traded sluggish. Enough rally in the previous sessions prompted investors to book profits at the current high level. There was no specific news to propel the market sentiments. Inflation data was very low at 0.44% as against 2.43% in the previous level. The poor inflation data showed signs of deflation and therefore nevertheless investors were pessimistic. The volatility was low in wave length and at last markets managed to close in green. Realty, IT, Teck and Oil & Gas gained by 2.48%, 1.58%, 0.83% and 0.74% respectively During the session we expect the markets to be remain volatile.
The BSE Sensex closed high by 25.07 points at 9,001.75 and NSE Nifty ended up by 12.45 points at 2,807.15. BSE Mid Caps and Small Caps ended with gains of 14.22 points and 33.05 points at 2,774.12 and 3,097.53 respectively. The BSE Sensex touched intraday high of 9,086.77 and intraday low of 8,900.39.
On Thursday, the US stock markets closed the day lower. There was mixed employment report from the government, as the Labour Department said the number of people that have lost their jobs previous week dropped by 12,000. However, the number of Americans without jobs still climbed to a record 5.5 million. US light crude oil for April delivery settled up by $3.47 to $51.61 a barrel on the New York Mercantile Exchange, the highest since 1st December. US Federal Reserve''s move to buy up to $300 bn in government securities lead the concerns of rising inflations.
The Dow Jones Industrial Average (DJIA) closed down by 85.78 points at 7,400.80, the NASDAQ Composite (RIXF) index lost 7.74 points to close at 1,483.48 and the S&P 500 (SPX) declined by 10.31 points to close at 784.04.
Today major stock markets in Asia are trading mixed. Shanghai composite is up by 6.85 points at 2,272.61 followed by South Korea''s Seoul Composite that is also up by 6.06 points at 1,167.87. Further, Hang Seng is down by143.92 points at 12,987 and Taiwan Weighted lost 28.38 points at 5,007.55. Further, Singapore''s Strait Times is down by 5.81 points at 1,579. Japanese markets are close for a holiday.
Indian ADRs ended mixed. In technology sector, Patni Computers ended higher by 1.11% along with Infosys by 2.10%. Further, Wipro gained 1.95 and Satyam closed up by 1.20%. In banking sector ICICI Bank and HDFC Bank lost 3.96% and 3% respectively. In telecommunication sector, Tata Communication dropped by 0.27% along with MTNL by 0.77%. Further, Sterlite Industries increased by 6.70%.
The FIIs on Thursday stood as net buyer in equity and net seller in debt. Gross equity purchased stood at Rs 1,807.50 Crore and gross debt purchased stood at Rs 913.10 Crore, while the gross equity sold stood at Rs 1,453.80 Crore and gross debt sold stood at Rs. 1,572 Crore. Therefore, the net investment of equity and debt reported were Rs 353.70 Crore and Rs (658.90) Crore respectively.
On Thursday, the Indian rupee closed at 51.29/30, 1.8% stronger than its previous close of 51.29/30. Rupee inclined to four months high on the back of dollar weakening against euro and the surging stock markets.
On BSE, total number of shares traded were 29.61 Crore and total turnover stood at Rs 3,977.84 Crore. On NSE, total number of shares traded were 61.05 Crore and total turnover was Rs 10,343.54 Crore.
Top traded volumes on NSE Nifty – Unitech with 33777418, Suzlon with 28805374 shares, ICICI Bank with 21624698 shares, DLF with 12604392 shares followed by SAIL with 12304015 shares.
On NSE Future and Options, total number of contracts traded in index futures was 929335 with a total turnover of Rs 12,377.20 Crore. Along with this total number of contracts traded in stock futures were 493699 with a total turnover of Rs 14,630.41 Crore. Total numbers of contracts for index options were 1449979 with a total turnover of Rs 20,393.89 Crore and total numbers of contracts for stock options were 44081 and notional turnover was Rs 1,350.70 Crore.
Today, Nifty would have a support at 2,768 and resistance at 2,862 and BSE Sensex has support at 8,823 and resistance at 9,108.
Market may drift lower
The market may edge lower on subdued trend in Asian stocks but shares of metal firms oil exploration firms may gains on firm global metal and oil prices. Expectations of a further easing of the monetary policy by the Reserve Bank of India and buying by foreign funds may support the market at lower level.
Asian stocks fell on Friday, 20 March 2009, after the benchmark index's biggest weekly rally since August 2007 drove valuations to the highest in more than a year
Closer home, the fall in headline inflation to a record low has raised expectations of further easing of the monetary policy by RBI to boost demand in the economy. Inflation based on the wholesale price index (WPI) rose 0.44% in the year through 7 March 2009, a record low for the current series data released by the government during trading hours on Thursday, 19 March 2009, showed. The rate of growth in inflation was much lower than previous week's annual rise of 2.43%.
Meanwhile, foreign are now in buying mode which follows easing of FII selling vigour in the past few days. A recent sharp slide in the rupee to a record low had resulted in a depreciation in the value of their equity portfolio to the extent of the fall in rupee.
DIIs have been absorbing heavy selling by foreign funds in calendar year 2009. However, the upside on the domestic bourses will be capped in the next two months due to political uncertainty ahead of parliamentary election to be held between mid-April 2009 to mid-May 2009.
Earlier the global financial crisis ends and sooner the risk appetite of global investors and global companies improves, better it will be for India Inc. An increase in risk appetite of global investors/global companies will help Indian firms raise overseas funds required for business expansion. The global financial crisis has chocked the overseas funding route for Indian firms.
Lack of funding has hit a slew of long-gestation infrastructure projects in India. World Bank Chief Economist & Senior Vice-President, Dr Justin Yifu Lin, on 13 March 2009, said if India can improve its infrastructure such as electricity, power, transportation and port facilities, it will be well on its path to achieve a 9-10% growth.
US stocks back in the red
Profit taking in the financial sector offsets gains in material and energy sectors
After registering gains in the past six sessions out of seven sessions, stocks at Wall Street were back in the red on Thursday, 19 March, 2009. The losses came after quite a few days of consecutive gains. Though there were a couple of better than expected earning reports, economic reports checked in line with expectations. The financial sector bore the brunt of the recent rally in the past few days as profit takers have stepped in today.
Stocks started the day in the red and continued to linger in the red for the entire day. The Dow Jones Industrial Average ended lower by 85 points at 7,400, the Nasdaq closed lower by 7.7 points at 1,483 and the S&P 500 closed lower by 10 points at 784.
Four of the ten sectors ended in the green today led by energy and materials sector. But financial sectors led the pack of losers.
Among earning reports for the day, Nike reported better-than-expected quarterly earnings results. FedEx on the other hand reported disappointing earnings and a disappointing outlook. But surprisingly, Nike traded lower and FedEx traded higher today.
Among major economic news at Wall Street today, The Labor Department reported today that the number of people collecting state unemployment benefits jumped by 185,000 to a record seasonally adjusted 5.47 million in the week ending 7 March, 2009 while new claims dipped by 12,000 to 646,000. The 185,000 weekly increase in continuing claims was the second largest in the past year.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. The jobless claims report shows businesses are laying off workers at a rapid pace, and finding a replacement job is ever harder for those who've lost work.
The report detailed that the four-week average of new claims rose by 3,750 to 654,750, the highest level in 26 years. The four-week average of continuing claims rose by 118,750 to 5.25 million, also a record high. Compared with the same week a year ago, new jobless claims are up about 84%, while continuing claims are up 87%. Since the beginning of the year, new claims have risen 18% and continuing claims have risen 17%.
In a separate report, the Conference Board in US reported that the index of leading economic indicators fell 0.4% in February, following a downwardly revised gain of 0.1% in January. The interest rate spread was the largest positive contributor in February, while initial claims for unemployment insurance were the largest negative contributor.
The index is designed to forecast economic activity six to nine months ahead. For February, six of the 10 indicators rose, and four fell. The recession will continue in the near term, and a return to strong growth is unlikely until next year. As per the report, with losses in the financial and job markets taking their toll, the recession will continue in the near term, and a return to strong growth is unlikely until next year.
Crude prices shot up substantially today. The weak dollar was mainly the reason for this. The dollar once again slumped today after Fed said yesterday that it will buy long term treasuries and this also increased the appeal of precious metals as a safe haven against alternatives. Fed's recent moves sparked some good notions about the recovery from the recent recession in US.
On Thursday, crude-oil futures for light sweet crude for April delivery closed at $51.61/barrel (higher by $3.47 or 7.2%) on the New York Mercantile Exchange. The more active May contract rose 6.4% to settle at $52.04/barrel. The April futures contract will end tomorrow.
In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by almost 1.5% following yesterday's 3% drop.
Tomorrow, among economic reports, February leading indicators and March Philadelphia Fed will be released at 10:00 ET. Fed Chairman Bernanke will speak at the Independent Community Bankers America convention at 11:00ET.
Daily News Roundup - March 20 2009
Shell’s India unit and IOC are in race to pick up 50% stake in RIL’s new venture that will house its loss-making fuel retailing business. (ET)
RIL is in talks with Essar Oil to source petroleum products from the latter’s refinery in Vadinar in Gujarat in a bid to restart its retail outlets. (BS)
ONGC has finalised tenders and awarded contracts for hiring 11 vessels in a record time of about one month, as part of its preparations for the forthcoming bidding for NELP-8. (BL)
Satyam Computer is set to lower its reported revenues over the past 7-years by at least 10-15%. (ET)
HUL and ITC Foods to extend its presence in the branded health foods sector. (FE)
Tech Mahindra bags Rs15bn credit line to back in Satyam EoI. (ET)
Satyam Computer has lost Coca-Cola’s ERP contract to HP. (ET)
Maytas Infra to fully divest its stakes in some projects that it will not be able to execute. (ET)
RIL will commission all secondary units of its new refinery in a few weeks. (ET)
The consortium of IL&FS group company ITNL ENSO Rail Systems Ltd (IERS) and real estate major DLF emerged as the sole bidder for the 3.2-km Rs10bn Gurgaon Metro rail project. (BS)
Dr Reddy’s to exit small generic drug markets abroad. (BL)
Unitech plans to launch mid-segment residential projects in the range of Rs0.5-1mn in metro and suburban cities like Gurgaon, Chennai and Kolkata over the next few months. (BS)
Grasim and L&T are close to settling their 7-year old legal dispute over Grasim’s 0.62% stake in L&T and the latter’s 11.49% stake in UltraTech. (ET)
Fitch downgrades credit rating assigned to Pantaloon Retail’s short-term debt instruments from F1 to F2 +. (FE)
Dabur India puts its wellness retail chain ‘new-u’ on the block just two years after announcing its launch in March 2007. (ET)
The Essar Group has got back highly prospective oil block in Nigeria. (FE)
Adani Power may light the first boiler for the 330MW of the proposed 4,620MW thermal power plant at Mundra next week. (BL)
Prozone, the mall development joint venture between apparel retailer Provogue and the UK’s Liberty International, is scaling down its projects. (BS)
Binani Cement, part of the Rs25bn Braj Binani group is planning to get listed on the London Stock Exchange. (BS)
The SPI Ports, a division of the Chennai based Rs13bn SPI group, has joined the race with Arcelor-Mittal and Adhunik Metaliks to set up a greenfield port at south Barunei Muhan in Kendarapara district of Orissa. (BS)
Software companies in India are anticipating a bonanza, with the country’s defence forces expected to dish out ICT orders worth US$500mn (Rs25bn) in the next 24-36 months. (BL)
The government may stipulate a 7-year lock-in for foreign companies setting up manufacturing facilities for new generation power equipment. (ET)
Telecom companies are set to reduce SMS tariffs for roaming customers by up to 40% from May after a warning from TRAI. (ET)
India is mulling a proposal to let state-run trading companies import ready-to-eat refined sugar at zero duty. (ET)
India’s total external financial assets declined by US$19.7bn to US$358.2bn as at end of September 2008 over the previous quarter. (FE)
The growth of mobile subscriber base in February was slower by 12.7% with addition of 13.44mn subscribers, compared to 15.41mn subscribers in January. (FE)
The gross fiscal deficit is expected to remain high in fiscal FY10, for the second consecutive year, says CMIE. (ET)
The Government has removed the 20% customs duty on crude soyabean oil imports in order to keep it on par with imported palm oil that is currently allowed duty free. (BL)
The National Insurance Company (NIC) may fall short of its target of collecting Rs45bn in premium by March this fiscal. (BL)
Illusion may be short-lived!
Pleasure can be supported by an illusion; but happiness rests upon truth.
The bulls have had the pleasure of magic moments with red turning to green for quite a few days on their screens. Inflation is heading towards sub-zero levels. The truth is that this is just a statistical illusion. At the retail level (except for stocks), prices remain quite high. But that does not rule out the chances for further monetary easing.
The major indices may see some cooling today, especially at start. Global cues are nothing to write home about for bulls or bears. An improvement globally can bring the Indian indices back into green. Mid-cap and small-cap space may continue to swing wildly and given their erratic behaviour, we strongly advocate less exposure for now.
The Fed’s latest move was well received by markets. For India and other emerging markets, the move spells good news as fund raising may become easier and cheaper. Emerging market currencies, like the rupee will advance. However, as always doubts still persist about the efficacy of the plan. Also, there are fears that the unprecedented liquidity injection could revive inflation. Investors, take it easy for now.
FIIs were net buyers in the cash segment on Thursday at Rs230mn while the local institutions were net sellers at Rs187.5mn. In the F&O segment, the foreign funds were net buyers at Rs450.3mn. On Wednesday, FIIs were net buyers of Rs3.54bn. Mutual Funds were net buyers of Rs2.66bn on the same day.
US stocks retreated on Thursday as weak economic reports and a selloff in bank stocks led the declines. Rising oil and gold prices, coupled with a weaker dollar accentuated the fall.
The Dow Jones Industrial Average lost 86 points, or 1.2%, to 7,400.80. The S&P 500 index fell 10 points, or 1.3%, to 784.04. The Nasdaq Composite index shed almost 8 points or 0.5%, to 1,483.48.
After rallying 17% in seven sessions, the S&P 500 and the broader market were always in danger of some softening. That retracement materialised on Thursday on the back of some disappointing economic reports and a selloff in bank stocks.
But, the bottoming-out process is still underway. Stocks are likely to remain rangebound for the rest of the first half. In the second half, stocks could then start a slow climb higher through the year-end, assuming investors get some good news on the economy.
Autos and auto parts makers gained after Treasury said it is providing a $5 billion bailout of auto suppliers, which have been hit hard by the slump in the automaker industry. GM shares jumped 8.7% on the news. Parts makers American Axle, Lear and ArvinMeritor gained as well.
The US markets gained on Wednesday after the Fed said it was buying $300 billion in long-term bonds over the next six months as part of a larger initiative to put $1 trillion into the economy and get credit flowing again.
The House of Representatives voted to impose a steep tax on large employee bonuses at firms that accepted government bailout money. The bill was hatched in the wake of the public outcry after AIG paid out $165 million in bonuses to top executives after accepting more than $170 billion in taxpayer-funded help.
AIG shares jumped 17%. In an interview with CNN, Treasury Secretary Timothy Geithner said his department was responsible for a provision in the $787 billion stimulus package that allowed AIG to award bonuses.
Citigroup said it was pursuing a reverse stock split to help counter the conversion of the government's big preferred share stake into common stock. After initially rallying over 20%, shares turned lower.
Other bank shares retreated too, including Bank of America, Morgan Stanley and Wells Fargo. The banking sector, as measured by the KBW Bank index, rallied 52% through Wednesday's close after ending at multi-year lows two weeks ago. On Thursday, the KBW lost 9%.
Oracle reported higher fiscal third-quarter earnings and a smaller-than-expected drop in sales late Wednesday. The business software maker also declared its first quarterly dividend. Shares jumped 9.7%.
FedEx reported weaker-than-expected third quarter results and also said it will cut back spending by about $1 billion each year.
The number of Americans filing new claims for unemployment fell last week to 646,000 from a revised 658,000 the prior week. Economists thought claims would fall to 655,000. However, the number of Americans continuing to receive unemployment benefits rose to a record 5.473 million.
The Philadelphia Fed index, a regional reading on manufacturing, improved to negative 35 in March from negative 41.3 in February, but the number indicated the economy remains deep in recession. Economists had predicted a level of negative 39.
The index of leading economic indicators fell 0.4% in February, short of expectations for a drop of 0.6%. LEI rose a revised 0.1% in the previous month.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.60% from 2.54% on Wednesday.
Lending rates were improved. The 3-month Libor rate fell to 1.23% from 1.29% Wednesday, while the overnight Libor rate dipped to 0.3% from 0.31%. Libor is a bank-to-bank lending rate.
In currency trading, the dollar fell versus the euro and the yen.
US light crude oil for April delivery settled up $3.47 to $51.61 a barrel.
COMEX gold for April delivery rose $69.70 to settle at $958.80 an ounce.
Stocks in Europe advanced on Thursday as markets focused more on the Fed's actions than the ECB's lack of them. The steps taken by the Fed and the Bank of England would be more difficult to replicate across the euro zone, Standard & Poor's warned Thursday.
The pan-European Dow Jones Stoxx 600 index rose 0.7% to 171.87 with insurers and miners fronting the advance. The FTSE 100 index closed up 0.3% at 3,816.93. Germany's DAX 30 index added 1.2% to 4,043.46 and the French CAC 40 index gained 0.6% at 2,776.99.
The BSE Sensex shut shop above the 9,000 mark for the first time since February, 19, 2009. Also, the NSE Nifty index managed to close above the 2,800 mark. Bulls were unable to unable to hold on to their positive start as profit booking and mixed cues from the Asian markets dragged the key indices in the red.
Sliding inflation also was unable to prop up the sentiment. The annual, point-to-point inflation rate slid further to 0.44% in week ended March 7 as against 2.43% in the previous week.
However, as the day progressed, bulls managed to stage a come back in the last hour of the day tracking firm cues from the European markets and some buying witnessed in the realty and the IT index. The BSE Sensex finally gained 25 points to close at 9,001 and the NSE Nifty was up 12 at 2,807.
The BSE Sensex finally gained 25 points to close at 9,001 and the NSE Nifty was up 12 at 2,807.
Among the 30-components of Sensex, 19 stocks ended in positive terrain and 10 stocks ended in the red. Sterlite, HDFC, TCS, Sun Pharma, Maruti and JP Associates were among the major gainers. L&T, BHEL, Tata Motors, Tata Steel and RCom were among the major losers.
Shares of Aurobindo Pharma advanced by 1.2% to Rs167 after the company announced that it secured 3 new registrations from MCC South Africa. The scrip touched an intra-day high of Rs173 and a low of Rs166 and recorded volumes of over 0.14mn shares on BSE.
Shares of Essar Shipping gushed over 18% to Rs32.2 after reports stated that Essar Oilfield Services Ltd. will generate at least a quarter of its annual revenue after the unit is merged with the parent. The scrip touched an intra-day high of Rs32.7 and a low of Rs27.7 and recorded volumes of over 0.45mn shares on BSE.
The dream run for Everonn Systems came to an end. After rallying over 80% in last four trading sessions, the stock slipped by 8% to Rs143 on the back of profit booking. The scrip touched an intra-day high of Rs160 and a low of Rs137 and recorded volumes of over 3.9mn shares on BSE.
Shares of NIIT Ltd rallied by over 16% to Rs20 after almost 1.3% equity shares of the company changed hands in a single block. The scrip touched an intra-day high of Rs22 and a low of Rs17.8 and recorded volumes of over 7.2mn shares on NSE.
Shares of MindTree surged by over 33% to Rs258 as the company is reportedly planning to split its business into five separate units. The scrip touched an intra-day high of Rs285 and a low of Rs200 and recorded volumes of over 2.1mn shares on BSE.
With key indices managing to end above the crucial levels on Thursday, bulls would look to extend gains, provided positive cues from the global equity markets. Avoid mid-caps and small-caps as the current rally may soon fizzle out.
Bullion metals continue to shine
Gold surges but silver witnesses huge rally
After dropping for two straight days, bullion metals started shining for second straight day on Thursday, 19 March, 2009. The weak dollar was mainly the reason for this. The dollar once again slumped today after Fed said yesterday that it will buy long term treasuries and this also increased the appeal of precious metals as a safe haven against alternatives. Fed's recent moves sparked some good notions about the recovery from the recent recession 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, Comex Gold for April delivery rose $68.7 (7.8%) to close at $958.8 an ounce on the New York Mercantile Exchange. During intra day trading, it rose to a high of $969. Last week on Tuesday, gold had dropped below $900 for first time in two months. Last week, the yellow metal ended lower by 1.5%. 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 15.8%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.
On Thursday, Comex silver futures for May delivery rose 85 cents (13.3%) to end at $13.52 an ounce. Last week, silver fell 0.8% In February, 2009, silver had rose 4.3% after climbing 14% in January. Year to date, silver has climbed 23.6% this year. For 2008, silver had lost 24%.
Yesterday, the Fed said it was committed to buying $300 billion in longer-term Treasurys to help the struggling American economy recover.
In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by almost 1.5% following yesterday's 3% drop.
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 higher by Rs 662 (4.5%) at Rs 15,414 per 10 grams. Prices rose to a high of Rs 15,460 per 10 grams and fell to a low of Rs 14,835 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 1,597 (7.7%) higher at Rs 22,222/Kg. Prices opened at Rs 20,800/kg and rose to a high of Rs 22,425/Kg during the day's trading.
Crude shoots up
Oil prices witness highest levels in 2009
Crude prices shot up substantially on Thursday, 19 March, 2009. The weak dollar was mainly the reason for this. The dollar once again slumped today after Fed said yesterday that it will buy long term treasuries and this also increased the appeal of precious metals as a safe haven against alternatives. Fed's recent moves sparked some good notions about the recovery from the recent recession in US.
On Thursday, crude-oil futures for light sweet crude for April delivery closed at $51.61/barrel (higher by $3.47 or 7.2%) on the New York Mercantile Exchange. The more active May contract rose 6.4% to settle at $52.04/barrel. Last week, crude ended higher by 1.6%. For the month of February, crude prices had ended higher by 1.5%. The April futures contract will end tomorrow.
Prices had remained extremely volatile last week also. Prices reached a high of $147 on 11 July, 2008 but have dropped almost 67% since then. Year to date, in 2009, crude prices are higher by 19.7%. On a yearly basis, crude prices are lower by 53%.
Yesterday, the Fed said it was committed to buying $300 billion in longer-term Treasurys to help the struggling American economy recover. In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by almost 1.5% following yesterday's 3% drop.
The EIA reported yesterday that gasoline inventories rose by 3.2 million barrels in the week ended 13 March, 2009. The EIA also reported an increase of 2 million barrels in crude inventories. Market was expecting a decline in either case. The EIA also said distillate stockpiles, which include diesel and heating oil, rose by 100,000 barrels.
Last Friday, the IEA said in the monthly report that global oil supply in February is estimated at 83.9 million barrels a day, down 1 million barrels from a month ago and 3.4 million barrels from a year ago. The agency also lowered its forecast for this year's global oil demand to 84.4 million barrels a day, 1.5%, or 1.2 million barrels, lower than a year ago.
Also at the Nymex on Thursday, April-reformulated gasoline rose 5.2% to $1.4373 a gallon and April heating oil gained 7.3% to $1.3563 a gallon.
April natural-gas futures rose 13.3% to $4.174 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 2,601/barrel, higher by Rs 78 (3.1%) against previous day's close. Natural gas for April delivery closed at Rs 213/mmbtu, higher by Rs 16.6/mmbtu (8.5%).
Subscribe to:
Posts (Atom)