Eveninger - Oct 23 2008
Thursday, October 23, 2008
Nifty October 2008 futures below 3000
Turnover increases
Nifty October 2008 futures were at 2932.60, at a discount of 10.55 points as compared to spot closing of 2943.15. NSE's futures & options (F&O) segment turnover was Rs 53,624.95 crore, which was higher than Rs 50,046.83 crore on Wednesday, 22 October 2008.
State Bank of India October 2008 futures were at premium at 1330.35 compared to the spot closing of 1326.25.
Reliance Industries October 2008 futures were at premium at 1219.05 compared to the spot closing of 1217.65.
ICICI Bank October 2008 futures were at premium at 366.40 compared to the spot closing of 365.80.
In the cash market, the S&P CNX Nifty lost 122 points or 3.98% at 2943.15.
BSE Bulk Deals to Watch - Oct 23 2008
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
23/10/2008 532989 BAFNA PHARMA PR VYAPAAR PRIVATE LIMITED S 275000 11.96
23/10/2008 512624 CHANDRIK TRA H. H. JAVERI B 27500 3.19
23/10/2008 632700 ENT NETWORK RUANE CUNNIFF GOLDFARB INC B 372210 187.93
23/10/2008 632700 ENT NETWORK HSBC FINANCIAL SERVICES MIDDLE EAST S 628000 188.04
23/10/2008 511728 KZLEASING ANJALI YOGESH PADYA B 18270 16.27
23/10/2008 511728 KZLEASING ALPESH MADHUBHAI KATHIRIYA B 50000 15.01
23/10/2008 511728 KZLEASING ANJALI YOGESH PADYA S 17464 15.76
23/10/2008 590077 RANKLIN SOLU AJAY NATVARLAL SH STOCK P L S 49101 53.70
23/10/2008 530461 SABOO SOD CH CHIRAGPURI KAILASHPURI GOSWAMI S 100000 8.99
23/10/2008 508976 SPANC TELESY INTELL INVOFIN INDIA PVT LTD B 827116 39.38
23/10/2008 508976 SPANC TELESY GUNNY CHEM TEX INDIA LTD S 123373 40.00
23/10/2008 508976 SPANC TELESY RBA FINANCE AND INVESTMENT COMPANY S 469834 40.00
23/10/2008 511730 TRC FINAN SE LRS PORTFOLIO AND SER P LTD B 51300 9.65
23/10/2008 531390 UPSURGE INVS ALKEN MANAGEMENT AND FINANCIAL S S 60000 6.19
23/10/2008 511601 YASH MANA SA BIL POWER LIMITED B 120200 5.35
NSE Bulk Deals to Watch - Oct 23 2008
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
23-OCT-2008,IBREALEST,Indiabulls Real Estate Li,ORIENT GLOBAL CINNAMON CAPITAL LIMITED,BUY,1560000,121.04,-
23-OCT-2008,IVRPRIME,IVR Prime Urban Developer,THE MASTER TRUST BANK OF JAPAN LTD HSBC INDIAN EQUITY MOTH,BUY,600000,47.23,-
23-OCT-2008,IBREALEST,Indiabulls Real Estate Li,SHAIL INVESTMENT PVT.LTD,SELL,1400000,120.68,-
23-OCT-2008,IVRPRIME,IVR Prime Urban Developer,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,600000,47.23,-
Sensex ends at 2 year low
The benchmark Sensex on Thursday tumbled to below 10,000-point level for the second time in five days as sustained selling continued on fears of credit crisis deepening and grim outlook for the domestic corporates.
With foreign funds as the top net sellers, the Sensex, which has breached 10,000-point level twice in the past five days, tumbled by 398.20 points, or 3.92 per cent to 9,771.70, a level last seen on June 20, 2006. The key index hovered between the day's low of 9,681.28 and the high of 10,260.55.
The wide-based National Stock Exchange
index Nifty also saw a drop of 122 points to close at 2,943.15 after touching an intra-day low of 2,917.15 as concerned over a slower growth for corporates, fence-sitters are on a fresh selling spree.
Also adding to the bearish sentiment due to global trouble was Prime Minister Manmohan Singh's statement yesterday that said the country could face a 'temporary slowdown' from 'the ripple effects' of the global financial crisis.
The market major and trend-setter Reliance Industries, tumbled by Rs 100.30, or 7.62 per cent at Rs 1,215.25, its lowest since December 2006.
The second largest heavy-weight on the Sensex, Infosys Technologies dropped by Rs 17.60, 1.35 per cent to Rs 1,282.75. The two carry nearly 23 per cent weightage on the index.
Metal Index suffered the most by losing 622.53 points, or 11.08 per cent at 4,996.92, followed by Auto Index by 215.37 points, or 7.21 per cent at 2769.79.
Post Session Commentary - Oct 23 2008
The Indian market slipped further for the second straight day to close deeper into red. Market shed more than 3% as investors are skeptic about the domestic as well as global economy. Lack of confidence among domestic investors, huge selling by foreign funds and recession fears aggravated the situation. The relaxation of ECB norms by the RBI failed to benefit the investor’s sentiment. Domestic market opened sharply lower on weak global cues as credit concerns had become strong in the emerging markets. Though the markets pared off its early losses in the afternoon, it could not sustain due to huge selling pressure. Eased inflation number and finance ministers’ comment that Sebi has asked FIIs to reverse short positions, also contributed a bit to the rebound. Sustained selling again hammered markets to end with sharp losses. NSE Nifty ended below 3,000 mark and BSE Sensex closed below 9,800 level. From the sectoral front, Metal index was worst performer as it ended with a deep cut of more than 11%. Besides, Oil & Gas, Auto, Bank, Pharma and Reality stocks also took huge beating on the bourses. However, Capital Goods and Consumer Durable stocks ended with gains.
Among the Sensex pack 24 stocks ended in red terrain while 6 in green. The market breadth was negative as 1908 stocks closed in red while 622 stocks closed in green and 66 stocks remained unchanged.
The BSE Sensex closed lower by 398.20 points at 9,771.70 and NSE Nifty ended down by 122 points at 2,943.15. The BSE Mid Caps and Small Caps closed with losses of 111.67 points 3,378.72 and by 145.99 points at 3,965.70. The BSE Sensex touched intraday high of 10,260.55 and intraday low of 9,681.28.
Inflation for the week ended 11th October 2008, stood at 11.07% as against to 11.44% of the previous week. The annual inflation rate was 3.07% during the corresponding week of the previous year. Reduction in inflation is contributed by lower prices of food and non food items. In the non food category, sunflower and raw cotton became cheaper. Among food articles, the prices of fruits, vegetables and eggs dropped during the week.
Losers from the BSE Sensex pack are Tata Steel (14.85%), Tata Motors (14.57%), Hindalco (13.10%), Ranbaxy Lab (10.94%), M&M Ltd (9.77%), Maruti Suzuki (8.82%), ICICI Bank (7.79%), Bharti Airtel (7.76%), HDFC (7.71%), Reliance (7.62%), Sterlite Industries (7.47%) and JP Associates (6.41%).
Gainers from the BSE Sensex pack are Grasim Industries (4.74%), BHEL (2.74%), L&T Ltd (2.43%), HDFC Bank (2.23%), ONGC Ltd (1.94%) and TCS Ltd (0.20%).
The BSE Metal index ended down by 622.53 points at 4,996.92. Major losers are Tata Steel (14.85%), Steel Authority (14.39%), Nalco (14.08%), Hindalco (13.10%), Jindal Steel (10.98%) and Hindustan Zinc (10.03%).
The BSE Oil & Gas index plunged 399.30 points to close at 6,058.28. Major losers are Aban Offshore (16.54%), Reliance Petroleum (10.29%), Essar Oil Ltd (10.27 %), Reliance (7.62%), HPCL (7.42%) and BPCL (6.69%).
The BSE Auto index ended down by 215.37 points at 2,169.79. Losers are Tata Motors (14.57%), Apollo Tyre (12.26%), Amtek Auto (11.09%), M&M Ltd (9.77%), Maruti Suzuki (8.82%) and Bharat Forge (6.98%).
The Bank index lost 183.44 points to close at 5,504.58 as ICICI Bank (7.79%), Kotak Bank (6.27%), Bank of India (5.12%), SBI (4.84%), Indian Overseas Bank (4.37%) and IDBI Bank (3.46%) in negative territory.
The BSE Pharma index closed lower by 134.88 points at 3,064.44. Losers are Glenmark Pharma (11.50%), Ranbaxy Lab (10.94%), Sunpha Adv (7.33%), Apollo Hos E (6.46%), Matrix Lab (6.12%) and Aurobindo Pharma (4.51%).
The BSE Consumer Durable index gained 21.62 points to close at 1,969.56 as Titan Ind (5.31%), Rajesh Export (0.59%) and Blue Star L (0.57%) ended in positive territory.
Asian markets sink deeper
Kospi plunges by 7% while Singapore & Sydney registers losses of around 4%
The stock markets across the Asian region closed sharply lower after Wall Street extended its losses for a second day on growing recession fears. On Wall Street, the Dow Jones Industrial Average ended the day down by 514 points, to 8,519. The Nasdaq Composite Index finished lower by 80 points at 1,615. S&P 500 finished lower by 58 points at 896.78.
In commodity market, crude oil rose in New York, rebounding from a 16-month low before the Organization of Petroleum Exporting Countries meets to discuss production cuts. Crude oil for December delivery rose as much as $1.06, or 1.6 percent, to $67.81 a barrel on the New York Mercantile Exchange. It was at $67.51 a barrel at 10:42 a.m. Singapore time. Yesterday, crude oil futures fell $5.43 to $66.75 a barrel in New York, the lowest settlement since 13 June 2007.
In the currency market, the U.S. dollar traded in the mid 97-yen levels in late Tokyo deals. The dollar was quoted at 97.64-97.66 yen compared to Wednesday's late quotes of 99.29-99.31 yen in Tokyo.
The Australian dollar closed lower for the third consecutive day. The Aussie finished the session at US$0.6669-0.6673, down from Wednesday's close of US$0.6687-0.6692.
The New Zealand dollar managed to rise after the central bank cut the official cash rate to 6.5%. The kiwi, which was trading at around US$0.5830, rose to a high of US$0.5975 after the rate cut, before retreating to finish the domestic session at US$0.5904 compared to US$0.6020 late Wednesday.
The won extended its losses, hitting a 10-year low against the U.S. dollar. The local unit finished the domestic session at 1,408.8 a dollar, down from Wednesday's close of 1,363.0 a dollar.
The Philippines peso fell sharply against the US dollar on Thursday morning in Asia, continuing to linger around an 18-month low. The peso tumbled to a low of 49.01 against the US dollar today. The currency moved sideways thereafter and is currently trading at 49. The dollar-Philippine peso pair closed yesterday's deals at 48.675.
The Taiwan's dollar dropped to a 17-month low on concern the island's electronics exports may shrink as global demand slows. The currency weakened as much as 1.3 percent to NT$33.408 against the U.S. dollar, the lowest level since May 2007.
Coming back in equities, the Japanese stock market extended its losses for a second day, with the key Nikkei average hitting its lowest point since May 2003. However, the market pared its losses following a report that the U.S. administration might consider a $40 billion proposal to help stop foreclosures. A stronger yen also hit market sentiment, as Japanese exporters became less competitive overseas. The benchmark Nikkei Stock Average closed down 213.71 points or 2.46% at 8,460.98, recovering from a more than 7% slump in early trade. The broader Topix index of all First Section issues lost 17.53 points or 1.97% to 871.70.
Early in the day, the Ministry of Finance said that Japan's merchandise trade surplus fell to 95.1 billion yen in September, plummeting 94.1% on year. That was sharply lower than analysts' expectation that called for a decline of 33.9%. In August, the surplus was 327.56 billion yen. Imports soared 28.8% on year, while exports were up an annual 1.5%.
The Ministry of Finance also announced weekly numbers for capital inflow of stocks and bonds. Residents of Japan remained net buyers of foreign stocks last week and became net buyers of foreign bonds and notes. Foreigners, meanwhile, were net sellers of Japan-based stocks, bonds and notes. Japan residents bought a net 348.4 billion yen worth of foreign stocks for the week of October 12-18, and bought a net 113.6 billion yen in overseas bonds and notes. Foreign residents, meanwhile, sold a net 300.1 billion yen in Japanese stocks for the week, and were sellers of a net 792.2 billion yen in Japan bonds and notes.
The Chinese stock market closed lower amid a fresh wave of sell offs in global markets. The benchmark Shanghai Composite Index closed lower for a third day, falling 20.26 points or 1.07% to 1,875.56 while the Shenzhen A-share Index gained 3.91 points or 0.76% to 514.56.
In Hong Kong, the Hang Seng Index dropped below the psychologically crucial 14,000-point level for the first time since July 8, 2005. The Hang Seng Index fell by 506.11 points or 3.5% to 13,760.49, while the Hang Seng China Enterprises Index slumped by 297.72 points 4.4% to 6,403.15.
On economic front, Hong Kong’s overall consumer prices rose by 3.0% to 6.1% in September 2008 over a year earlier. The year-on-year rates of change in the CPIs in September 2008 were affected by three Government's one-off relief measures, including the Government's payment of three month's public housing rentals, two years' suspension of Employees Retraining Levy and the granting of electricity charge subsidy. These three one-off measures had together lowered the year-on-year rate of increase in the Composite CPI for September 2008 by 3.1%. Netting out their effects, the year-on-year rate of increase in the Composite CPI in September 2008 (i.e. the underlying inflation rate) was 6.1%.
The Australian stock market closed sharply lower, extending yesterdays' 3.4% losses. The benchmark S&P/ASX 200 index closed down 181.7 points or 4.4% at 3,974.4 in a late sell-off. The broader All Ordinaries index lost 180.8 points or 4.4% to 3,939.3.
On the economic front, home buying in Australia became slightly more affordable during the three months to September 2008, according to a survey from the Housing Industry Association and Commonwealth Bank of Australia. The group's First Home Buyer Affordability Index improved by 3.0% for the September quarter. The index remained at near record lows, at 1.1% below the level of the September 2007 quarter.
The New Zealand stock market ended in the red, despite the interest rate cuts by the Reserve Bank of New Zealand today. The benchmark NZX 50 plummeted 3.18%, or 92.05 points, to 2807.339. The NZX 15 plunged 3.58%, or 186.5 points, to 5020.432.
The Reserve Bank of New Zealand today reduced the Official Cash Rate (OCR) from 7.5% to 6.5%. The central bank's Governor Alan Bollard commented that the ongoing financial market turmoil and the deteriorating outlook for global growth have played a large role in shaping today's decision.
The South Korean stock market fell for the third straight session, with the benchmark Korea Composite Stock Price Index or Kospi tumbling 7.5% or 84.88 points at 1,049.71 -its lowest level in more than three years amid fears of a global recession. The key index, which sank more than 9% in early trade, recovered some of the losses as the National Pension Service, the country's state pension fund, picked up stocks. Program selling was halted for five minutes in the morning due to heavy selling in futures.
In Philippines, the Philippines stock market sunk 4.63%, heading for its lowest close since 24 October 2005. The benchmark index PSEi skid 4.63% or 97.09 points to 1,995.92. The composite index was dragged down as scared investors sold their stocks as overseas markets suffered another heavy blow on fears of spreading global recession.
In Taiwan, Taiex continued to remain below the key 5,000 points level breaching the previous five-year low level. The weighted index closed down 132.08 points or 2.72% at 4,730.51 - the lowest level since 3 June 2003 when it ended at 4,678.08 points.
Apart from global financial problem local investors were also inclined to be extra cautious ahead of a massive anti-government demonstration by pro-independence activists on Saturday. The rally is being mounted ahead of a visit to Taiwan by chairman Chen Yunlin of China's Association for Relations Across the Taiwan Strait, which is authorized by Beijing to handle civilian exchanges with Taipei in the absence of official contacts. Chen's upcoming visit has taken on extra weight since his deputy, Zhang Mingqing, was jostled and shoved to the ground by anti-China activists during a visit to the island earlier this week.
In Singapore, the Strait Times was trading lower by 57.83 points or 3.18% at 1,763.30. On the economic front, Singapore's annual inflation accelerated to an expected 6.7% in September on higher food and housing costs, but below a 26-year high of 7.5% seen throughout the second quarter. Arising from higher accommodation costs and electricity tariff, housing cost advanced by 14.6%. Food prices increased by 8.2% following dearer cooked food, rice and other cereals, fresh poultry, seafood, cooking oils, fresh vegetables and milk products.
In India, a strong rebound was witnessed on the bourses in mid-afternoon trade on Finance minister P Chidambaram’s comments that the stock market regulator Securities & Exchange Board of India (Sebi) has asked foreign institutional investors (FIIs) to reverse short positions on borrowed shares. The market, however, soon slipped into the red again. At 15.30 IST the BSE Sensex was down 372.66 points or 3.66%.
In other regional markets, European shares opened lower. The German DAX 30 index lost 2% to 4,479.14, the French CAC-40 index fell 1% to 3,264.34 and the U.K. FTSE 100 index lost 0.9% to 4,004.13
Meanwhile according to the data release by the national statistics of U.K the British retail sales volumes fell in September and the annual rate of growth slowed to its weakest in 2-1/2 years, showing consumers struggling as the economy slows. The Office for National Statistics said sales fell 0.4 percent last month, after a revised 1.1 percent gain in August, taking the annual rate down to 1.8 percent from 3.3 percent, the weakest since February 2006.
Looking ahead the day is scheduled to release industrial orders data from Euro zone which will be followed by weekly data on Jobless claims from US bureau of labour. In the evening we will get housing price index for the month of August. In the late evening the Bank of Canada will release it monetary policy report.
Auto, metal shares lead 398-point Sensex slide
A strong rebound in mid-afternoon trade on Finance minister P Chidambaram’s comments that the Securities & Exchange Board of India (Sebi) has asked foreign institutional investors (FIIs) to reverse short positions on borrowed shares, proved short-lived. Auto and metal stocks led 398.20 points or 3.92% fall in the BSE Sensex, which ended below the 10,000 mark. Relaxation of the overseas borrowing norms for corporates and softening inflation failed to lift the gloom.
Chidambaram told a television channel that the reversal of FIIs' short postions on borrowed shares, is likely to take place over the next few days. Early this week, Sebi had disapproved overseas lending of shares by foreign funds after data showed that FIIs had lent equities worth Rs 348 crore to overseas entities for the purpose of short selling, during 10 October-14 October 2008. The data had later showed that their FIIs had lent equities worth Rs 1000 crore between 10 October-17 October 2008.
Meanwhile, the liberal overseas borrowing norms will help Indian firms with good credit rating in raising overseas funds once the global credit market crises eases. According to the new rules notified by the Reserve Bank of India, external commercial borrowings up to $500 million per borrower per financial year would be permitted for rupee expenditure or foreign currency expenditure for permissible end uses under the automatic route.
Stocks fell in Europe as bearish updates from engineering group ABB and auto group Daimler added to worries about the global economy that sent banks and commodity shares sharply lower. Key benchmark indices in France, UK and Germany fell by between 2.25% to 3.94%.
Asia markets, which had tumbled earlier in the day on fears of a severe global downturn, however, cut steep intraday losses on news the Federal Deposit Insurance Corp Chairman Sheila Bair is expected to suggest in a Senate Banking Committee on Thursday, that the government give banks incentives to turn troubled loans into more affordable mortgages. Yet, most markets ended in the red. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were down by between 1.07% to 7.48%.
The BSE 30-share Sensex lost 398.20 points or 3.92% to 9.771.70. The index rose 90.65 points at the day's high of 10,260.55 in mid-afternoon trade soon after the FM's comments on short selling. The Sensex fell 488.62 points at day’s low of 9,681.28 in early trade, its lowest level since 15 June 2006.
The S&P CNX Nifty was down 122 points or 3.98% to 2,943.15. Nifty hit a low of 2,918.10 in early trade its lowest level since 24 July 2006.
There has been a massive erosion in investors' wealth this year. The barometer index is down 10,515.29 points or 51.83% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,435.07 points or 53.92% below its all-time high of 21,206.77 struck on 10 January 2008.
BSE clocked a turnover of Rs 3747 crore today as compared to a turnover of Rs 3,095.17 crore on 22 October 2008.
Nifty October 2008 futures were at 2932.60, at a discount of 10.55 points as compared to spot closing of 2943.15. NSE's futures & options (F&O) segment turnover was Rs 53,624.95 crore, which was higher than Rs 50,046.83 crore on Wednesday, 22 October 2008.
The BSE Mid-Cap index was down 3.2% at 3,378.72 and the BSE Small-Cap index was down 3.55% at 3,965.70. Both the indices outperformed the Sensex.
BSE Metal index (down 11.08% to 4,996.92), BSE Auto index (down 7.21% to 2,769.79), BSE Oil & Gas index (down 5.3% to 6,058.28), BSE Realty index (down 5.26% to 2,305.58), BSE HealthCare index (down 4.22% to 3,064.44) underperformed the Sensex.
BSE Teck index (down 3.38% to 2,087.08), BSE Bankex (down 3.33% to 5,321.14), BSE PSU index (down 2.3% to 4,930.03), BSE Power index (down 2.16% to 1,640.34), BSE IT index (down 1.81% to 2,739.80), BSE FMCG index (down 1.68% to 1,936.53), BSE Capital Goods index (up 0.25% to 7,244.86), BSE Consumer Durables index (up 0.99% to 2,210.95), outperformed the Sensex.
The market breadth was weak. On BSE, 622 shares advanced as compared to 1,908 that declined. 66 shares remained unchanged.
India’s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 7.62% to Rs 1,215.15 ahead of the results unveiled after trading hours. The net profit rose 7.4% rise in net profit to Rs 4122 crore on 39.5% rise in total income to Rs 44938 crore in Q2 September 2008 over Q2 September 2007.
HDFC (down 7.71% to Rs 1758.10), Bharti Airtel (down 7.76% to Rs 615.60) and Jaiprakash Associates (down 6.41% to Rs 67.85) were the other major losers from the Sensex pack.
Grasim Industries (up 1.89% to Rs 1,182), Bharat Heavy Electricals (up 2.74% to Rs 1,170.35), and ONGC (up 1.94% to Rs 776.05) were the gainers from the Sensex pack.
Metal and mining stocks extended recent losses on slump in metal prices on the London Metal Exchange. The BSE Metal index was down 11.08% and was the major loser from the sectoral indices on BSE. Hindustan Zinc, National Aluminum Company, Steel Authority of India fell by between 10.03% to 14.39%. Sterlite Industries fell 7.43% despite 18.51% rise in net profit to Rs 1280 crore on 0.3% rise in net sales to Rs 6590 crore in Q2 September 2008 over Q2 September 2007.
Concerns that the global economy will slide into recession rattled commodities markets on Wednesday, 22 October 2008.
India’s largest steel maker by sales Tata Steel fell 14.85% tumbling for the second day in a row, after Moody's Investors Service yesterday lowered outlook on corporate family rating to negative from stable due to weak operating enviourment at its UK unit. The stock had plunged 12.04% yesterday, 22 October 2008.
Sesa Goa tumbled 6.45%, as weak global spot iron ore prices offset strong Q2 results.
Key banking pivotals dropped in volatile trade on sharp fall in ICICI Bank ADR overnight. India’s largest private sector by bank by net profit ICICI Bank fell 7.79% to Rs 365.55. Its ADR fell sharply by 15.2% overnight. India’s largest commercial bank State Bank of India fell 4.84%.
India’s second largest private sector bank by net profit HDFC Bank rose 2.23%. ICICI Bank, State Bank of India and HDFC Bank have a weightage of 24.21%, 22.44% and 20.55%, respectively, in the Bankex.
Inflation based on the wholesale price index (WPI) rose 11.07% in the year through 11 October 2008, much lower than previous week’s 11.44% rise, data released by the government during trading hours, showed. The Reserve Bank of India cut repo rate by 100 basis points to 8% on 20 October 2008. The repo rate is the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days.
Auto stocks tumbled across-the-board on prospects of dismal Q2 September 2008 results from auto majors, as higher interest rates hit demand. Mahindra & Mahindra, Maruti Suzuki India, Tata Motors and Hero Honda Motor fell by between 6.51% to 14.57%.
Most realty stocks declined today despite hopes cut in lending rates will spur demand for residential properties. The BSE Realty index fell 5.26%. Realty majors, DLF, Indiabulls Real Estate and Unitech fell by between 6.7% to 13.81%.
PSU OMCs fell after crude oil rebounded from a 16-month low after Iran said Organisation of Petroleum Exporting Countries should cut production by 2 million barrels a day to stem the slump in prices. BPCL, HPCL and Indian Oil Corporation fell by between 5.45% to 7.42%. State-run oil firms suffer revenue losses on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Crude oil for December delivery rose as much as $1.75, or 2.6 % to $68.50 a barrel on the New York Mercantile Exchange today.
Weak rupee had helped IT stocks recover from initial fall caused by overnight slide in American depository receipts (ADRs) and on lower-than-expected results of Tata Consultancy Services, India's largest IT exporter by sales. TCS led the rebound, gaining 0.2% to Rs 547.45, recovering from the day's low of Rs 497. TCS' net profit fell 2.57% to Rs 1173.04 on a 9.36% rise in sales to Rs 5699.96 in Q2 September 2008 over Q1 June 2008.
India's fourth largest IT exporter by sales Wipro fell 2.55% to Rs 272.25. Wipro ADR fell 7.75% overnight after the results.
India's third largest IT exporter by sales Satyam Computer Services fell 2.73% to Rs 299.75. Its ADR skidded 4.88% overnight. The company raised its earnings guidance in rupee terms at the time of announcing Q2 September 2008 results on Friday, 17 October 2008.
India's second largest IT exporter by sales Infosys down 1.35% to Rs 1,282.75. Infosys ADR lost 4.52% overnight.
Infosys, Satyam Computer Services, Tata Consultancy Service and Wipro have a weightage of 55.06%, 16.01%, 10.45% and 7.09%, respectively, in the BSE IT index.
The Indian rupee dropped to a record low beyond 49.50 per dollar in opening deals on Thursday as sharp falls in Asian shares heightened fears of more capital outflows from the local stock market. The partially convertible rupee was at 49.68/69 per dollar, 0.80% weaker than Wednesday's close of 49.28/29. A weak rupee results in higher revenues for IT companies as they earn most of their revenues in dollar terms.
Pharma majors fell on poor Q2 resuls. Dr Reddys Laboratories declined 2.71% on BSE, as net profit declined 27.19% to Rs 91.01 crore in Q2 September 2008 over Q2 September 2007. Cipla declined 1.5%, as net profit fell 20.6% to Rs 151.43 crore in Q2 September 2008 over Q2 September 2007.
India’s largest drugmaker by sales Ranbaxy Laboratories declined 10.94% to Rs 229.95. The company will announce Q3 September 2008 result on 31 October 2008.
Ajanta Pharma rose 3.18%, as net profit surged 53.74% to Rs 4.32 crore in Q2 September 2008 over Q2 September 2007.
India’s largest cement maker by sales ACC fell 2.02% as net profit remained flat at Rs 283.43 crore on 7.9% rise in total income to Rs 1870.65 crore in Q3 September 2008 over Q3 September 2007.
Reliance Petroleum clocked the highest volume of 1.64 crore shares on BSE. Housing Development & Infrastructure (89.75 lakh shares), Indiabulls Real Estate (83.58 lakh shares), Reliance Natural Resources (73.13 lakh shares) and Cals Refineries (72.32 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 281.19 crore on BSE. Reliance Capital (Rs 268.9 crore), State Bank of India (Rs 201.76 crore), ICICI Bank (Rs 181.82 crore) and Reliance Petroleum (Rs 153.51 crore) were the other turnover toppers in that order.
Crompton Greaves rose 1.51% as the company sees a robust order intake.
ICI India rose 0.25%, on decision to buy back own shares at a price not exceeding Rs 575 a share, a 30.6% premium to the ruling market price.
Exide Industries spurted 5.1% as net profit rose 25% to Rs 77.84 crore in Q2 September 2008 over Q2 September 2007.
United Spirits spurted 6.4%, extending gains for the fourth session in a row on buzz that a foreign liquor firm may buy stake.
Lignite based power producer Neyveli Lignite Corporation declined 4.26%, as net profit dropped 18.5% to Rs 188.39 crore in Q2 September 2008 over Q2 September 2007.
Zen Technologies rose 0.39% on proposal to consider buyback of own shares.
Pre Session Commentary - Oct 23 2008
Today Markets are likely to open with huge negative gap as the US markets nose dived into deep red yesterday and other Asian markets today opened with heavy blood bath. Yesterday’s loss in the markets has already spread a strong negative sentiment and therefore today’s worse market scenario across the world would further pulled down the domestic markets to new lows. The economic slowdown in US coupled with deteriorating markets in Asian and Europe testifies the fact that the pessimistic sentiments are prevailing across the world, which would last for a longer period of time.
On Wednesday, domestic Markets opened with a negative gap as Asian markets also opened with a blood bath and US markets had ended in red. Profit booking was witnessed in sectors like Realty and Metal that had gained momentum in the previous trading day. The carnage was further fuelled by the Nikkei (Japan) which was brutally shattered by 6.79% due to negative outlook of the earnings in the US. Except the FMCG sector all the other indices felt the heat of selling pressures. Metal, Realty, Bankex and Oil & Gas witnessed heavy profit booking and therefore tumbled by 7.90%, 7.57%, 5.78% and 5.56% respectively. In the metal index Tata Steel and Sterlite plummeted heavily by 12.04% and 10.04% respectively. During the trading session we expect the market to be in deep red.
The BSE Sensex closed lower by 513.49 points at 10,169.90 and NSE Nifty ended down by 169.75 points at 3,065.15. The BSE Mid Caps and Small Caps closed with losses of 96.85 points 3,490.39 and by 84.59 points at 4,111.69. The BSE Sensex touched intraday high of 10,484.85 and intraday low of 10,128.22.
On Wednesday, US markets nose dived into red on the back of negative outlooks of various companies. AT&T and Boeing missed the earning estimates showing signs of economic slowdown. On the other hand 56% of the majority of companies reported better than expected results; however the outlook of 39% companies very negative, 29% were in line, 24% mixed and only 7% were positive. The fundamental worries are yet to haunt the markets in US for a long period of time. Crude oil futures for the December delivery fell $5.43 to $66.75 a barrel on New York Mercantile Exchange, which is less than half of the $147 high seen in July. Oil tumbled to a 16-month low amid more evidence that the economic downturn was drying up energy demand. US Energy Information Administration informed that the country''s oil stocks jumped by 3.2 million barrels last week, above the expected increase of 2.9 million.
The Dow Jones Industrial Average (DJIA) closed lower by 514.45 points at 8,519.21. NASDAQ index lost 80.93 points at 1,615.75 and the S&P 500 (SPX) also fell by 58.27 points to close at 896.78 points.
Indian ADRs ended negative. In technology sector, Infosys slipped (4.52%) and Wipro lost by (7.75%) followed by Satyam that ended low by (4.84%) and Patni Computers closing low by (12.64%). In banking sector ICICI Bank was down by (15.20%), while HDFC Bank lost (9.61%). In telecommunication sector, Tata Communication declined by (10.28%), while MTNL was low by (6.45%). Sterlite Industries was down by (11.01%).
Today the major stock markets in Asia opened negative. The Shanghai Composite is trading low by 53.09 points, at 1,842.73. Hang Seng is low by 799.83 points at 13,466.77. Further Japan''s Nikkei is low by 510.26 points at 8,164.43. Straits Times is trading is also trading low by 71.11 points at 1,750.02 and South Korea’s Seoul Composite is low by 94.65 points at 1,039.94.
The FIIs on Wednesday stood as net buyers in equity however in debt there was no trading. Gross equity purchased stood at Rs2725.60 Crore and gross debt purchased stood at Rs0.0 Crore, while the gross equity sold stood at Rs2611.80 Crore and gross debt sold stood at Rs0.0 Crore. Therefore, the net investment of equity and debt reported were Rs113.90 Crore and Rs0.0 Crore respectively.
On Wednesday, the partially convertible rupee ended at 49.28/29 per dollar, 0.15weaker than Tuesday''s close of 49.04/06. The rupee hit to level of 49.50 during the trading. Rupee slumped on heavy dollar sales by state-run banks and slide in domestic stock market.
On BSE, total number of shares traded was Rs. 21.21 Crore and total turnover stood at Rs. 3,095.17 Crore. On NSE, total volume of shares traded was Rs. 46.05 Crore and total turnover was Rs 8,733.63 Crore.
Top traded volumes on NSE Nifty – Reliance Petro with total traded volume of 13626942 shares, followed by ICICI with 11560559 shares, Idea Celluar with 10412416 shares, SAIL with 9879175 shares and ITC with 9025043 shares respectively.
On NSE Future and Options, total numbers of contracts traded in index futures were 1092600 with a total turnover of Rs 16,063.48 Crore. Along with this total number of contracts traded in stock futures were 1025460 with a total turnover of Rs 12,379.68 Crore. Total numbers of contracts for index options were 1272509 and total turnover was Rs 21,086.72 Crore and total numbers of contracts for stock options were 35768 and notional turnover was Rs 516.96 Crore.
Today, Nifty would have a support at 2,815 and resistance at 2,925 and BSE Sensex has support at 9,445 and resistance at 9,815.
Market to extend losses
The market is likely extend Wednesday’s (22 October 2008)’ steep slide as weak Asian markets will offset relaxation of overseas borrowing norms for corporates. With sentiments edgy due to global financial sector crisis, expectation of a further fall in inflation may do little to stem the slide.
The Q2 results of Reliance Industries (RIL), India’s biggest private sector firm and oil refiner, due today, hold key at a time when there are concerns of fall in refining margins. Q2 earnings remains a mix bag so far. After trading hours on Wednesday, TCS reported fall in net profit in Q2 September 2008 over Q1 June 2008, due to hedging loses and provisions for doubtful debts.
Asian stocks fell to a 4-year low on growing fears a global recession would depress corporate earnings. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, China and Taiwan were down by between 2.6% to 9.2%.
According to the new rules notified by the Reserve Bank of India, external commercial borrowings up to $500 million per borrower per financial year would be permitted for rupee expenditure or foreign currency expenditure for permissible end uses under the automatic route. Indian companies can also pay higher interest rate of up to 500 basis points over the six-month libor on external commercial borrowing.
The government will today release data on inflation for the year through 11 October 2008. Inflation is seen falling further in line with the trend witnessed in recent weeks.
The domestic bourses tumbled on Wednesday on weak global markets and on cautious outlook by IT firm Wipro. The BSE 30-share Sensex lost 513.49 points or 4.81% to 10,169.90
weak global markets, cautious outlook by IT firm Wipro
Cautious guidance hammers US stocks
Merck and Yahoo announce layoffs and Apple gives cautious guidance
Stocks at Wall Street registered substantial loses for the second consecutive day on Wednesday, 22 October, 2008. The Dow ended the day with a 514 point drop today following yesterday’s 237 point drop. Couple of companies that came out with earning reports announced job cuts on Wall Street today. Market had started the day in the red. Earning reports dominated overall market sentiments. While more companies beat expectations, outlooks, however, leaned negative as companies remained uncertain about the economic environment. All ten sectors posted a loss.
The Dow Jones Industrial Average ended the day down by 514 points, to 8,519. The Nasdaq Composite Index, finished lower by 80 points at 1,615. S&P 500 finished lower by 58 points at 896.78.
All thirty Dow stocks ended in the red led by Aloca. The stocks closed lower by 11%.
Among the major companies that reported earnings today, and topped earnings estimates were Apple, McDonald's and Merck. Merck said that it plans to cut 7,200 jobs, or 13% of its workforce.
AT&T and Boeing were two of the bigger names that missed earnings estimates.
The technology sector witnessed lesser losses due to positive reactions to earnings reports from Apple and Yahoo!.
Apple reported better-than-expected quarterly earnings due to strong iPhone sales. The company's outlook for its current quarter, however, was cautious and was well below the market estimates. On the other hand, Yahoo! reported in-line earnings, and the results were better-than-feared. Yahoo said it plans to cut 1,500 jobs, or 10% of its workforce.
Crude prices fell today, and closed at the $65/barrel level for the first time in eighteen months. Prices fell due to a strong dollar and also after the Energy Department reported a more than expected build up in crude inventories for the week ended 17 October.
Crude-oil futures for light sweet crude for December delivery closed at $66.75/barrel (lower by $5.45 or 7.5%) on the New York Mercantile Exchange. Prices reached a high of $147 on 11 July but have dropped almost 55% since then. On a yearly basis, crude price is lower by 24%. For this year in 2008, crude prices have dropped 34%.
In the currency market on Wednesday, the dollar soared against the euro and the British pound pressured by further fund repatriation and expectations that the European Central Bank and the Bank of England will move to aggressively cut interest rates in coming months. But the greenback slipped against the yen. The dollar index, a measure of the greenback against a trade-weighted basket of six major currencies, traded at 85.602, up from 84.434 on late Tuesday.
Volume on the New York Stock Exchange topped 1.5 billion, and for every stock on the rise, six fell. On the Nasdaq, 1.1 billion shares traded, and decliners topped advancers, also by a 6-to-1 ratio.
Initial jobless claims for the week ending 18 October are due ahead of the opening bell tomorrow. Other than that, earning reports will dominate the day once again.
REC - SELL
We recommend a sell in Rural Electrification Corporation from a short-term perspective. It is apparent from the chart of Rural Electrification that it has been on an intermediate-term downtrend since the day of its listing in March. The stock touched Rs 128, its all-time high on that day and it has been forming lower tops and lower bottoms since then.
However, after recording a life-time low of Rs 62 on October 10, the stock witnessed a corrective up move to Rs 75 level. Due to the presence of significant resistance at around Rs 75 level, the stock failed to surpass this level.
On October 22, the stock tumbled 6 per cent accompanied with above average volume. The daily relative strength index (RSI) is on the verge of entering the bearish zone from the neutral region and the weekly RSI is featuring in the bearish zone. The intermediate-term down trendline is intact.
Our short-term forecast for the stock is bearish. We anticipate the stock to decline further until it hits our price target of Rs 63 in the forthcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 74.
via BL
Daily News Roundup - Oct 23 2008
Moody’s lowers Tata Steel outlook to negative. (ET)
NTPC plans to raise US$1bn to fund expansion plans. (ET)
TVS Motors to reduce investment by 20% and cut production. (BS)
Ashok Leyland to cut its vehicle output in second half of the current financial year. (BS)
Jet, Kingfisher likely to reduce flight. (ET)
Singapore based PE firm buys into HDIL and Indiabulls Real Estate. (ET)
SAIL to set up steel processing units in Himachal Pradesh and Rajasthan. (DNA)
DLF emerges as sole bidder for developing Mumbai rail land. (BL)
Elder Pharma buys 3 small Bulgarian-based pharma companies. (ET)
Areva T&D bags Bhilai Steel order worth Rs2.2bn. (BS)
Tata Tele Services to roll-out services in J&K and North East region from November. (FE)
JSW Steel and Georgian Steel Holding Group have closed US$28mn debt financing for setting up steel plant in Georgia. (DNA)
Crompton Greaves is considering cutting down its capex budget for this year. (DNA)
HOV services open facility in North California. (BS)
DLF enter into an agreement with Italian apparel brand Alcott and Paris based SIA group to launch them in India. (ET)
HDFC Bank opens a branch in Bahrain. (BS)
Honda India and Hero Honda ventures to jointly source auto parts. (BL)
LIC to launch credit card with Corporation Bank. (FE)Government may pump Rs30bn into 7 public sector banks to shore up their capital adequacy ratio to 12%. (BS)
Government may miss FY09 budget targets for fiscal and revenue deficit. (ET)
Government allows airlines to clear fuel dues owed to oil companies, totaling about Rs30bn in six EMIs. (ET)
Indian Banks ask RBI to ease norms on reserve requirements. (ET)
RBI eases norms on overseas borrowing for Indian companies. (ET)
DoT faces 3G spectrum crunch in 9 other circles. (ET)
Petroleum secretary says government has no immediate plans to cut fuel prices. (ET)
SEBI plans to review direct market access facility rules. (ET)
Government may import 100mn ton of coal to meet the projected demand in the 11th five year plan. (BS)
DoT to meet defence ministry on Oct24 to discuss the issue on spectrum vacation. (DNA)
Banks unlikely to extend credit support to airlines. (BL)
Easy be norms...Borrow and sorrow!
“It is far better to borrow experience than to buy it”.
The easing of ECB norms and the crash in crude prices should have brought cheer. Alas, we remain at the mercy of global markets which promise new lows for our indices today. Investors, who have been waiting with cash can look to make some deployment today. And don't forget to get back to cash during a bounce back in the coming days.
We are likely to witness an opening carnage today on the back of another round of vicious sell-off across global markets. Stock markets across the globe have taken a severe beating amid mounting fears of a world-wide recession. Even the commodities have not been spared, with oil prices plumbing to a 16-month low, gold slipping to one-year low and a key commodities index hitting a four-year nadir. The yen is gaining ground against the dollar and euro, suggesting a reversal in the so-called carry trades.
Asian markets have opened sharply lower this morning. We see a gap-down opening despite the RBI announcing further easing in the ECB norms to help Indian companies raise funds abroad amid the crippling credit crisis. FIIs continue to offload money from emerging markets like India as risk aversion is on the rise.
The macro-economic picture too remains grim, with the Prime Minister saying that FY09 GDP growth will be sharply lower from last year and the Finance Minister saying that the targets on fiscal deficit will be missed. A weakening rupee is only adding to the pressure on the domestic liquidity situation and worries for the policymakers.
Meanwhile, the RBI may further relax its monetary stance on Friday, when it undertakes a mid-year review of its annual policy. However, one needs to see what kind of impact it will have on the markets if global markets continue to bleed.
Amidst all this chaos, Reliance, the once upon a time microcosm of the Indian capital market will announce its results.
FIIs were net sellers of Rs5.4bn (provisional) in the cash segment on Wednesday while the local institutions poured in Rs4.04bn. In the F&O segment, the foreign funds were net sellers at Rs7.49bn. On Tuesday, FIIs were net buyers of Rs1.14bn in the cash segment, taking their total outflows this year to above $11.9bn.
US stocks another beating on Wednesday, with the Dow Jones Industrial Average slumping by more than 500 points, as mounting fears of a global recession sparked selloff of equities across the globe as well as commodities.
The S&P 500 index finished at its lowest level in more than five years.
Having sunk by nearly 700 points in the final 15 minutes of trade, the Dow finally tumbled by 514 points, or 5.7%, to end at 8,519.21. Wednesday's point loss was the blue chip American index's seventh worst daily performance ever.
The S &P 500 index nose-dived 58.27 points, or 6.1%, to 896.78, its lowest finish since April 21, 2003, when the S&P ended at 892.01. The Nasdaq Composite index slid 80.93 points, or 4.8%, to 1,615.75, closing at its lowest level since June 26, 2003.
Market breadth was negative. About 24 stocks fell for each that rose on the New York Stock Exchange.
On the positive side, lending rates continue to improve in inter-bank markets, as the efforts of governments to resolve the financial mess starts to kick in. But any relief about the improvement in the credit markets has been overshadowed by recession fears.
US light crude oil for November delivery settled down $5.43 to $66.75 a barrel on the New York Mercantile Exchange, a 16-month low. Oil prices have been dropping since crude peaked at an all-time high of $147.27 a barrel on July 11.
Gasoline prices fell another 3.1 cents overnight, to a national average of $2.858 a gallon. It was the 35th consecutive day that prices have decreased. During that time, prices have fallen by nearly $1 a gallon.
Treasury prices rose, lowering the yield on the 10-year note to 3.59% from 3.70% on Wednesday. COMEX gold for December delivery fell $24.10 to $743.90 an ounce. In currency trading, the dollar rose against the euro and fell against the yen.
Across the Atlantic, markets across European markets slumped for the second straight session amid fresh worries about how earnings will hold up in an environment of economic contraction.
The pan-European Dow Jones Stoxx 600 index dropped 5.1% to 209.57, giving back gains made earlier in the week. For the year, the Stoxx 600 is down over 40%. The UK's FTSE 100 closed down 4.5% at 4,040.89, while Germany's DAX 30 dropped 4.5% to 4,571.07 and the French CAC-40 slid 5.1% to 3,298.18.
Emerging markets too closed sharply down. The Bovespa in Brazil was down 10.2% at 35,069 while the IPC index in Mexico slid 7% to 18,787. The RTS index in Russia slipped 7.2% to 665 and the ISE National 30 index in Turkey was down 4.6% at 31,902.
Markets plunged on Wednesday, reversing previous day's gains. The fall could be attributed to weak global cues and heavy selling witnessed in the metal and realty stocks.
The Asian markets ended sharply lower, with the Hang Seng, Nikkei and the Kospi index dropping over 5%
All the BSE Sectoral indices ended in the red except for the FMCG index. The BSE metal index was the biggest loser down almost 8%. Among the major laggards were Tata Steel and Sterlite Industries, falling more than 10%.
The BSE benchmark Sensex lost 513 points or 4.8% to close 10,169 and the NSE Nifty index declined 169 points to close at 3,065.
Century Textile recovered sharply from day’s low and closed at Rs203 after the company registered a net profit for the period of Rs285.50mn for the quarter ended September 30, 2008 as compared to Rs663.70mn for the quarter ended September 30, 2007.
The total income increased from Rs7849.5mn for the quarter ended September 30, 2007 to Rs8721.1mn for the quarter ended September 30, 2008. The stock was down by 1.5% at Rs203 touching an intra-day high of Rs211 and a low of Rs186 and recorded volumes of over 8,00,000 shares on BSE.
Shares of UTV Software rallied by over 10% in October Futures to Rs330 as compared to flat in cash market. A huge gap of Rs285 was created between the spot and the current Futures prices.
In the cash market the scrip touched an intra-day high of Rs620 and a low of Rs599 and recorded volumes of over 93,000 shares on NSE. The stock had hit 52-week high of Rs1132 on December 13, 2007 and 52-week low of Rs592 on October 21, 2008.
Gemini Comm slipped by 1% to Rs18. The board of directors of the company approved Buy back up to 10% equity shares capital and reserve of the Company. The scrip touched an intra-day high of Rs19.3 and a low of Rs18.1 and recorded volumes of over 24,000 shares on BSE.
Educomp Solutions announced consolidated results for the Quarter ended September 30, 2008
The Group posted a profit after tax of Rs288mn (up 121%) for the quarter ended September 30, 2008 as compared to Rs131mn for the quarter ended September 30, 2007. Total Revenue increased by 150% to Rs1429.925 million for the quarter ended September 30, 2008 from Rs568.933 million for the quarter ended September 30, 2007.
The stock dropped by over 11% to Rs1829 hitting an intra-day high of Rs2040 and a low of Rs1811 and recorded volumes of over 3,00,000 shares on BSE.
SGX Nifty Update - 2 - Oct 23 2008
SGX Nifty currently trading at 2,909.0, down -148.5 points
SGX Nifty November Futures currently trading at 2,902.5, down -172.5 points
Real Crisis for real estate employees
DLF, Unitech, Omaxe, Parsvnath and BPTP plan to lay off staff in significant numbers soon after Diwali
Developers wait for Diwali to get over as they don’t want to dampen sentiments further
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