The market extended losses for the second successive day today, with Sensex shaving off nearly 1000 points in last two tradng sessions as high inflation, rising interest rates, record high oil prices and political concerns continued to haunt the markets. Over the past few days, the market has witnessed a sharp fall with bears totally dominating the proceedings on the street.
The barometer index BSE Sensex today hit its lowest level in more than 14 months. Realty, consumer durables, oil & gas and capital goods stocks fell. The market breadth was weak.
Political uncertainty weighted on market sentiments. The media continues to speculate whether the ruling Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal.
The uncertainty pertains to whether there will be stability at the centre if mid-term polls are held i.e. whether the new government will complete five years and whether the new government restarts economic reforms process which has virtually come to a halt in the last two years or so.
A sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. As per provisional data, foreign funds sold shares worth a net Rs 703.11 crore on Friday, 27 June 2008. FII outflow in June 2008 totaled Rs 9349 crore (till 26 June 2008). FII outflow in calendar year 2008 totaled Rs 24,719.10 crore (till 26 June 2008).
The 30-share BSE Sensex plunged 340.62 points or 2.47% at 13,461.60. Sensex lost 396.68 points at day`s low of 13,405.54, its lowest level in more than 14 months. Sensex gained 69.84 points at its high of 13,872.06 hit in mid-morning trade.
The broader based S&P CNX Nifty was down 96.1 points or 2.32% at 4,040.55.
Sensex had slumped 619.60 points or 4.30% to 13,802.22 on Friday, 27 June 2008. A setback to stocks in Asia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled the bourses on that day. From a record high of 21,206.77 hit on 10 January 2008, Sensex has lost 7,745.17 points or 36.52% to current 13,461.60. It has declined 6,825.39 points or 33.64% in calendar year 2008 so far.
BSE clocked a turnover of Rs 4,439 crore today as compared to Rs 6,015.06 crore on Friday, 27 June 2008.
Nifty July 2008 futures were at 3960, at a steep discount of 80.55 points as compared to spot closing of 4040.55. NSE`s futures & options (F&O) segment turnover was Rs 40,590.90 crore, which was lower than Rs 45,408.54 crore on Friday, 27 June 2008.
The market breadth was weak on BSE with 542 shares advancing as compared to 2,107 that declined. 43 remained unchanged. 21 stocks ended in red from Sensex pack.
As per the provisional figures on NSE, foreign institutional investors sold shares worth Rs 208.66 crore today, 30 June 2008 while domestic funds bought shares worth Rs 724.18 crore.
The BSE Mid-Cap index declined 3.1% to 5,386.48 and BSE Small-Cap index fell 3.4% to 6,701.96. Both these indices underperformed Sensex.
BSE Realty index (down 6.81% at 4,543.47), BSE Consumer Durables index (down 4.71% to 3,477.60), The BSE Oil & Gas index (down 4.03% to 9,009.16), The BSE Power (down 3.55% to 2,252.39), BSE Capital Goods index (down 3.46% at 10,080.69), BSE Bankex (down 3.43% at 5,915.98), BSE Auto (down 2.83% at 3,585.62), BSE PSU index (down 2.67% to 5,666.42), underperformed the Sensex.
BSE IT index (up 0.38% to 4,019.82), BSE FMCG index (up 0.35% to 2,080.33), BSE Health Care index (up 0.34% at 4,164.33), BSE Metal index (down 0.64% to 13,207.30), BSE TecK index (down 1.6% to 3,043.99), outperformed the Sensex.
Realty stocks tumbled. Unitech (down 6.65% to Rs 170.65), Indiabulls Real Estate (down 8.56% to Rs 271.20) and DLF (down 6.6% to Rs 396.20) edged lower.
Consumer durables stocks declined. Rajesh Exports (down 10.36% to Rs 58.40), Videocon Industries (down 6.12% to Rs 258.55), Blue Star (down 3.89% to Rs 374.55), and Titan Industries (down 3.63% to Rs 991.55) edged lower.
Oil & Gas stocks declined. HPCL (down 5.52% to Rs 175.35), Gail (India) (down 2.4% to Rs 332.95), BPCL (down 6.3% to Rs 236), Indian Oil Corporation (down 2.74% to Rs 332.25) edged lower.
State run oil refiner ONGC declined 1.86% to Rs 814.70. It came off from session`s high of Rs 853.50. It has reportedly discovered a new oil field in the Farsi oil bloc of the Persian Gulf. ONGC will undertake the development of the newly discovered field upon determining that its development is economically feasible.
Oil prices rose to a record near $143 a barrel on Friday, 27 June 2008, as a drop in global equities markets lured more investors into commodities. Crude oil rose one dollar in electronic trading to $141.21 a barrel on Monday, 30 June 2008.
Capital Goods stocks fell. India`s largest engineering and construction firm by sales Larsen & Toubro was down 3.7% to Rs 2,183.20. It came off from session`s high of Rs 2,308. The company today said it had received an order wroth Rs 1,557 crore from Andhra Pradesh Power Development Company for the supply of steam turbine generators.
India`s biggest power equipment maker in terms of revenue, Bharat Heavy Electricals was flat at Rs 1,380.60. The company today said it has bagged an order exceeding Rs 2080 crore for a 400-megawatt thermal power project in Syria. Wind turbine maker Suzlon Energy declined 6.29% to Rs 215.90.
Anil Dhirubhai Ambani group stocks tumbled. Reliance stocks slumped. Reliance Infrastructure lost 11.47% to Rs 784.80 and Reliance Communications shed 6.58% to Rs 442.40.
Hindalco Industries (up 1.97% to Rs 142.10), ITC (up 1.66% to Rs 187), Jaiprakash Associates (up 0.84% to Rs 143.85), Cipla (up 0.29% to Rs 211.10), NTPC (up 0.4% to Rs 151.65), Tata Steel (up 0.22% to Rs 728.35) edged higher from the Sensex pack.
ACC (down 9.8% to Rs 522.50), Ambuja Cements (down 6.83% to Rs 75.70), Grasim Industries (down 6.66% to Rs 1,815), DLF (down 6.6% to Rs 396.20), Tata Motors (down 5.03% to Rs 426.50), Mahindra & Mahindra (down 5% to Rs 485.05), HDFC (down 4.4% to Rs 1,96.40), edged lower from the Sensex pack.
Reliance Petroleum clocked the highest volume of 1.51 crore shares on BSE. Reliance Natural Resources (1.44 crore shares), Chambal Fertilisers and Chemicals (84.61 lakh shares), IFCI (81.62 lakh shares) and Ispat Industries (79.15 lakh shares) were the other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 379.85 crore on BSE. Reliance Petroleum (Rs 262.7 crore), Reliance Capital (Rs 243.63 crore), Niraj Cement Structurals (Rs 148.04 crore) and Reliance Communications (Rs 141.88 crore) were the other turnover toppers in that order.
European markets which opened after Indian markets were mixed. Key benchmark indices in France and UK were up by between 0.04% to 0.81%. Germany`s DAX fell 0.91%.
Asian markets were trading mixed today. The key benchmark indices in Singapore, China, Japan and Taiwan were down by between 0.33% to 1%. Key benchmark indices in HangSeng and South Korea were up by 0.01% to 0.27%.
US markets finished lower for the second consecutive day on Friday, 27 June 2008, hit by surging crude oil prices and a fresh round of banking troubles. The Dow Jones Industrial Average fell 106.91, or 0.93 %, to 11,346.51. The Nasdaq composite index fell 5.74, or 0.25% to 2,315.63 and S&P 500 index fell 4.77, or 0.37% to 1,278.38.
Monday, June 30, 2008
Cairn India and ONGC finalise plan for joint development of Ambe, Tapti fields
Cairn India and ONGC (Oil and Natural Gas Corporation) have near-finalised the plan for joint development of Ambe and North Tapti offshore marginal gas fields in the Gujarat coast.
According to sources, the project will lead to natural gas production of 1.5 million metric standard cubic metre a day (mmscmd) from Cairn operated Ambe field and 2 mmscmd by ONGC’s North Tapti.
The entire production of 3.5 mmscmd gas and associated oil will be processed at Cairn’s existing operations at Hazira. ONGC and Cairn have opted for the joint development route to optimise the investment in pipeline, processing and other infrastructure in these marginal fields.
Ambe is a satellite gas field of Cairn (40 per cent) operated CB/OS-2 joint venture in Cambay basin.
The other partners in the joint venture are ONGC and Tata Petrodyne. The satellite field, discovered in 2001, is surrounded by ONGC’s North Tapti.
According to sources, the Cairn-operated joint venture has already pegged the estimated cost of developing Ambe at approximately Rs 300 crore.
ONGC may have to pump in Rs 500-600 crore for development of North Tapti.
When contacted, ONGC sources admitted that they were moving ahead with the plan to jointly develop the North Tapti field.
“The (joint) development plan for North Tapti is nearing finalisation and is expected to be placed before the ONGC board shortly,” a company source told Business Line.
ONGC proposes to build two platforms in North Tapti for production of 2-2.2 mmscmd gas and associated oil, which will be connected to Cairn’s existing pipeline network for processing at Hazira.
While comments were not available from Cairn, industry sources said that the CB/OS2 JV would develop one production platform at Ambe. Apart from gas, the field was expected to produce 7,000 barrels of oil and condensate.
According to a Cairn announcement in April, the CB/OS-2 JV is currently producing a little more than 1 mmscmd (36 million standard cubic feet a day) of natural gas and 10,000 barrels of oil from Lakshmi, Gauri and CB-X fields.
The offshore Lakhsmi and Gauri are ageing fields and are on a declining phase of production. CB-X is an onshore marginal field.
According to sources, the project will lead to natural gas production of 1.5 million metric standard cubic metre a day (mmscmd) from Cairn operated Ambe field and 2 mmscmd by ONGC’s North Tapti.
The entire production of 3.5 mmscmd gas and associated oil will be processed at Cairn’s existing operations at Hazira. ONGC and Cairn have opted for the joint development route to optimise the investment in pipeline, processing and other infrastructure in these marginal fields.
Ambe is a satellite gas field of Cairn (40 per cent) operated CB/OS-2 joint venture in Cambay basin.
The other partners in the joint venture are ONGC and Tata Petrodyne. The satellite field, discovered in 2001, is surrounded by ONGC’s North Tapti.
According to sources, the Cairn-operated joint venture has already pegged the estimated cost of developing Ambe at approximately Rs 300 crore.
ONGC may have to pump in Rs 500-600 crore for development of North Tapti.
When contacted, ONGC sources admitted that they were moving ahead with the plan to jointly develop the North Tapti field.
“The (joint) development plan for North Tapti is nearing finalisation and is expected to be placed before the ONGC board shortly,” a company source told Business Line.
ONGC proposes to build two platforms in North Tapti for production of 2-2.2 mmscmd gas and associated oil, which will be connected to Cairn’s existing pipeline network for processing at Hazira.
While comments were not available from Cairn, industry sources said that the CB/OS2 JV would develop one production platform at Ambe. Apart from gas, the field was expected to produce 7,000 barrels of oil and condensate.
According to a Cairn announcement in April, the CB/OS-2 JV is currently producing a little more than 1 mmscmd (36 million standard cubic feet a day) of natural gas and 10,000 barrels of oil from Lakshmi, Gauri and CB-X fields.
The offshore Lakhsmi and Gauri are ageing fields and are on a declining phase of production. CB-X is an onshore marginal field.
Tuesday, June 24, 2008
Sensex falls below 14,000 for the first time in 10 months
Equities extended losses for a fifth straight day today with the barometer index BSE Sensex falling below the psychologically important 14,000 mark for the first time in 10 months since late August 2007. Heavy selling pressure in index pivotals during the second half of the day`s trading sessions spooked the market. Metal and FMCG shares were the worst hit in today`s trade.
Choppy swings were witnessed in late trade with the market bouncing in the green, lead by solid rally in index heavyweight Reliance Industries (RIL). However, RIL quickly pared gains pulled the market sharply lower in late trade. The market breadth was weak. All sectoral indices in BSE suffered losses. Asian and European markets were trading lower.
Fears of further increase in interest rates to tame inflation continued to weigh on the market sentiment. Reserve Bank of India (RBI) governor signaled on Monday, 23 June 2008, that the central bank will tighten monetary policy further to tackle inflation that surged past 11% in early June 2008 to a 13-year high.
In a crucial global event, the US Federal Reserve is expected to hold key rate for short-term lending at its current 2%, at its two-day policy meeting that begins today, 24 June 2008. Investors will scrutinise the statement accompanying the decision for clues on the future course of monetary policy.
Meanwhile, a crucial UPA-Left meeting on the controversial civilian nuclear deal with the United States is scheduled tomorrow, 25 June 2008. The left allies, whose parliamentary support is crucial to the Congress-led United Progress Alliance (UPA) government at the Centre, have said they would withdrew support if the government went ahead with the deal.
The 30-share BSE Sensex was down 301.06 points or 2.11% at 13,992.26, as per provisional closing. Sensex lost 302.01 points at day`s low of 13,991.31 hit in fag trade. At the day`s high of 14,432.90, the Sensex gained 139.58 points in early trade.
The broader based S&P CNX Nifty slumped 105.55 points or 2.47% at 4,160.85 as per provisional closing.
The market breadth was weak. On BSE, 1930 shares declined as compared to 713 that advanced. 67 remained unchanged.
The BSE Mid-Cap index slipped 1.97% to 5,700.52 and the BSE Small-Cap index fell 1.90% to 7,000.54. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 5355 crore as against Rs 3597 crore by 14:30 IST
Among the 30-member Sensex pack, 24 declined while the rest gained.
Metal shares declined sharply. India`s largest private sector steel maker Tata Steel plunged 7.08% to Rs 692.80 on 12.52 lakh shares. It was the top loser from Sensex pack.
Sterlite Industries (down 5.39% to Rs 698.10), Hindalco Industries (down 3.65% to Rs 143), National Aluminium Company (down 11.20% to Rs 359.95), Jindal Steel & Power (down 4.95% to Rs 1810.05), and Sesa Goa (down 4.3% to Rs 3230) were the other major losers from the metal sector.
Hindustan Unilever (down 6.38% to Rs 212.10), Dabur India (down 4.40% to Rs 88.10), ITC (down 2.74% to Rs 190.05), Marico (down 5.58% to Rs 58.40), and Nestle India (down 0.70% to Rs 1648), edged lower from FMCG sector.
India`s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) saw high volatility in the day. The stock settled 0.80% higher to Rs 2038.30 on 16.45 lakh shares. The stock swung wildly in a range of Rs 2012 and Rs 2133.70 during the day. As per recent reports, RIL plans to open its first North American plant in North Carolina by investing $215 million.
India`s largest power generation company in terms of sales, NTPC lost 4.84% to Rs 154.20. As per reports, NTPC had paid 6.9% lower advance tax at Rs 188 crore in the first installment of this financial year over the corresponding period in the previous year.
India`s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) fell 4.75% to Rs 845.15. ONGC has decided to exit projects to set up a refinery and a special economic zone Andhra Pradesh, the company said on Monday, 23 June 2008. ONGC will unveil its Q4 and year ended March 2008 results on Wednesday, 25 June 2008.
Banking stocks slipped on selling pressure. ICICI Bank (down 2.95% to Rs 700.10), HDFC Bank (down 4.62% to Rs 1046) and State Bank of India (down 0.17% to Rs 1203), edged higher.
Software stocks slipped in the red after firm start. Satyam Computer Services (down 2.09% to Rs 450.50, off day`s high of Rs 465.75), Infosys Technologies (down 4.08% to Rs 1772.05, off day`s high of Rs 1859.90), and TCS (down 1.26% to Rs 847, off day`s high of Rs 864.80) declined.
Wipro, the country`s third largest software services exporter was down 2% to Rs 470. Wipro has reportedly raised close to Rs 1,400 crore (35 billion Yen) through external commercial borrowings (ECBs). The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 including Unza and Infocrossing for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.
Reliance Communications (RCom), the country`s second largest telecom services provider in terms of market capitalisation slumped 2.85% to Rs 474. RCom`s proposed merger deal with South Africa based global operator, MTN is reportedly expected to close by first week of July 2008 with RCom likely to acquire 40% stake in the merged entity.
India`s leading pharma company in terms of sales, Ranbaxy Laboratories gained 2.44% to Rs 526 on 14.58 lakh shares. It was the top gainer from Sensex pack.
Bharat Heavy Electricals (Bhel), the country`s largest state-run engineering company in terms of order book, gained 2.10% to Rs 1390. As per reports, Bhel has paid 42.8% higher advance tax at Rs 300 crore in the first installment of this financial year over the corresponding period in the previous year.
India`s dedicated housing finance company Housing Development Finance Corporation advanced 2.05% to Rs 2260. The stock moved in a range of Rs 2182 and Rs 2300 in the day.
Reliance Capital was the top traded counter on BSE with turnover of Rs 454.33 crore followed by Reliance Industries (Rs 341.56 crore), Tata Steel (Rs 239.07 crore), Reliance Communication (Rs 184.91 crore)and Anu`s Labs (Rs 177.87 crore), in that order.
Volatility is expected to remain high in the near term as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 26.50% while that of Nifty was 31%, as on Friday, 20 June 2008.
Meanwhile, as per reports, advance tax collections increased 27% to Rs 21,000 crore in Q1 June 2008 over Q1 June 2007, as of 20 June 2008. Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.
European markets, which opened after Indian market, slipped into the red after firm opening. Key benchmark indices in United Kingdom, France and Germany were down by between 1.18% and 1.48%.
Asian markets, which opened before Indian market, were trading lower except China`s Shanghai Composite which rose 1.50% at 2,801.72. Japan`s Nikkei (down 0.06% at 13,849.56), Hong Kong`s Hang Seng (down 1.14% at 22,456.02), Taiwan`s Taiwan Weighted (down 1.76% at 7,738.12), Singapore`s Straits Times (down 0.57% at 2,962.20) and South Korea`s Seoul Composite (down 0.28% at 1,710.84) slipped.
US markets lost some ground yesterday, 23 June 2008, sending financial shares to their lowest level in five years, on a deteriorating outlook for bank earnings. The Dow Jones industrial average dropped 0.33 points, or less than 0.01%, to 11,842.36. The Standard & Poor`s 500 index gained 0.07 points, or 0.01%, to 1,318.00, and the Nasdaq composite index lost 20.35 points, or 0.85%, to 2,385.74.
Crude for August delivery was up 20 cents at $136.94 a barrel today, 24 June 2008 amid fears of Nigerian supply disruptions and tensions between Israel and Iran. It had hit a record high of $139.89 on 16 June 2008.
Back home, Indian stocks suffered losses for the fourth straight session yesterday, 23 June 20008, to settle at 10-month low on sustained selling pressure throughout the day due to concerns of further policy tightening by the Reserve Bank of India with inflation reaching 13-year high and political uncertainty. The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32 and the broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40, on that day.
As per provisional data, foreign funds sold shares worth a net Rs 665.56 crore and domestic mutual funds bought shares worth a net Rs 91.75 crore yesterday, 23 June 2008.
Foreign institutional investors (FIIs) were net sellers of Rs 166.24 crore in the futures & options segment yesterday, 21 June 2008. They were net buyers of index futures to the tune of Rs 876.86 crore and sold index options worth Rs 864.33 crore. They were net sellers of stock futures to the tune of Rs 165.96 crore and sold stock options worth Rs 12.81 crore.
Choppy swings were witnessed in late trade with the market bouncing in the green, lead by solid rally in index heavyweight Reliance Industries (RIL). However, RIL quickly pared gains pulled the market sharply lower in late trade. The market breadth was weak. All sectoral indices in BSE suffered losses. Asian and European markets were trading lower.
Fears of further increase in interest rates to tame inflation continued to weigh on the market sentiment. Reserve Bank of India (RBI) governor signaled on Monday, 23 June 2008, that the central bank will tighten monetary policy further to tackle inflation that surged past 11% in early June 2008 to a 13-year high.
In a crucial global event, the US Federal Reserve is expected to hold key rate for short-term lending at its current 2%, at its two-day policy meeting that begins today, 24 June 2008. Investors will scrutinise the statement accompanying the decision for clues on the future course of monetary policy.
Meanwhile, a crucial UPA-Left meeting on the controversial civilian nuclear deal with the United States is scheduled tomorrow, 25 June 2008. The left allies, whose parliamentary support is crucial to the Congress-led United Progress Alliance (UPA) government at the Centre, have said they would withdrew support if the government went ahead with the deal.
The 30-share BSE Sensex was down 301.06 points or 2.11% at 13,992.26, as per provisional closing. Sensex lost 302.01 points at day`s low of 13,991.31 hit in fag trade. At the day`s high of 14,432.90, the Sensex gained 139.58 points in early trade.
The broader based S&P CNX Nifty slumped 105.55 points or 2.47% at 4,160.85 as per provisional closing.
The market breadth was weak. On BSE, 1930 shares declined as compared to 713 that advanced. 67 remained unchanged.
The BSE Mid-Cap index slipped 1.97% to 5,700.52 and the BSE Small-Cap index fell 1.90% to 7,000.54. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 5355 crore as against Rs 3597 crore by 14:30 IST
Among the 30-member Sensex pack, 24 declined while the rest gained.
Metal shares declined sharply. India`s largest private sector steel maker Tata Steel plunged 7.08% to Rs 692.80 on 12.52 lakh shares. It was the top loser from Sensex pack.
Sterlite Industries (down 5.39% to Rs 698.10), Hindalco Industries (down 3.65% to Rs 143), National Aluminium Company (down 11.20% to Rs 359.95), Jindal Steel & Power (down 4.95% to Rs 1810.05), and Sesa Goa (down 4.3% to Rs 3230) were the other major losers from the metal sector.
Hindustan Unilever (down 6.38% to Rs 212.10), Dabur India (down 4.40% to Rs 88.10), ITC (down 2.74% to Rs 190.05), Marico (down 5.58% to Rs 58.40), and Nestle India (down 0.70% to Rs 1648), edged lower from FMCG sector.
India`s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) saw high volatility in the day. The stock settled 0.80% higher to Rs 2038.30 on 16.45 lakh shares. The stock swung wildly in a range of Rs 2012 and Rs 2133.70 during the day. As per recent reports, RIL plans to open its first North American plant in North Carolina by investing $215 million.
India`s largest power generation company in terms of sales, NTPC lost 4.84% to Rs 154.20. As per reports, NTPC had paid 6.9% lower advance tax at Rs 188 crore in the first installment of this financial year over the corresponding period in the previous year.
India`s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) fell 4.75% to Rs 845.15. ONGC has decided to exit projects to set up a refinery and a special economic zone Andhra Pradesh, the company said on Monday, 23 June 2008. ONGC will unveil its Q4 and year ended March 2008 results on Wednesday, 25 June 2008.
Banking stocks slipped on selling pressure. ICICI Bank (down 2.95% to Rs 700.10), HDFC Bank (down 4.62% to Rs 1046) and State Bank of India (down 0.17% to Rs 1203), edged higher.
Software stocks slipped in the red after firm start. Satyam Computer Services (down 2.09% to Rs 450.50, off day`s high of Rs 465.75), Infosys Technologies (down 4.08% to Rs 1772.05, off day`s high of Rs 1859.90), and TCS (down 1.26% to Rs 847, off day`s high of Rs 864.80) declined.
Wipro, the country`s third largest software services exporter was down 2% to Rs 470. Wipro has reportedly raised close to Rs 1,400 crore (35 billion Yen) through external commercial borrowings (ECBs). The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 including Unza and Infocrossing for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.
Reliance Communications (RCom), the country`s second largest telecom services provider in terms of market capitalisation slumped 2.85% to Rs 474. RCom`s proposed merger deal with South Africa based global operator, MTN is reportedly expected to close by first week of July 2008 with RCom likely to acquire 40% stake in the merged entity.
India`s leading pharma company in terms of sales, Ranbaxy Laboratories gained 2.44% to Rs 526 on 14.58 lakh shares. It was the top gainer from Sensex pack.
Bharat Heavy Electricals (Bhel), the country`s largest state-run engineering company in terms of order book, gained 2.10% to Rs 1390. As per reports, Bhel has paid 42.8% higher advance tax at Rs 300 crore in the first installment of this financial year over the corresponding period in the previous year.
India`s dedicated housing finance company Housing Development Finance Corporation advanced 2.05% to Rs 2260. The stock moved in a range of Rs 2182 and Rs 2300 in the day.
Reliance Capital was the top traded counter on BSE with turnover of Rs 454.33 crore followed by Reliance Industries (Rs 341.56 crore), Tata Steel (Rs 239.07 crore), Reliance Communication (Rs 184.91 crore)and Anu`s Labs (Rs 177.87 crore), in that order.
Volatility is expected to remain high in the near term as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 26.50% while that of Nifty was 31%, as on Friday, 20 June 2008.
Meanwhile, as per reports, advance tax collections increased 27% to Rs 21,000 crore in Q1 June 2008 over Q1 June 2007, as of 20 June 2008. Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.
European markets, which opened after Indian market, slipped into the red after firm opening. Key benchmark indices in United Kingdom, France and Germany were down by between 1.18% and 1.48%.
Asian markets, which opened before Indian market, were trading lower except China`s Shanghai Composite which rose 1.50% at 2,801.72. Japan`s Nikkei (down 0.06% at 13,849.56), Hong Kong`s Hang Seng (down 1.14% at 22,456.02), Taiwan`s Taiwan Weighted (down 1.76% at 7,738.12), Singapore`s Straits Times (down 0.57% at 2,962.20) and South Korea`s Seoul Composite (down 0.28% at 1,710.84) slipped.
US markets lost some ground yesterday, 23 June 2008, sending financial shares to their lowest level in five years, on a deteriorating outlook for bank earnings. The Dow Jones industrial average dropped 0.33 points, or less than 0.01%, to 11,842.36. The Standard & Poor`s 500 index gained 0.07 points, or 0.01%, to 1,318.00, and the Nasdaq composite index lost 20.35 points, or 0.85%, to 2,385.74.
Crude for August delivery was up 20 cents at $136.94 a barrel today, 24 June 2008 amid fears of Nigerian supply disruptions and tensions between Israel and Iran. It had hit a record high of $139.89 on 16 June 2008.
Back home, Indian stocks suffered losses for the fourth straight session yesterday, 23 June 20008, to settle at 10-month low on sustained selling pressure throughout the day due to concerns of further policy tightening by the Reserve Bank of India with inflation reaching 13-year high and political uncertainty. The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32 and the broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40, on that day.
As per provisional data, foreign funds sold shares worth a net Rs 665.56 crore and domestic mutual funds bought shares worth a net Rs 91.75 crore yesterday, 23 June 2008.
Foreign institutional investors (FIIs) were net sellers of Rs 166.24 crore in the futures & options segment yesterday, 21 June 2008. They were net buyers of index futures to the tune of Rs 876.86 crore and sold index options worth Rs 864.33 crore. They were net sellers of stock futures to the tune of Rs 165.96 crore and sold stock options worth Rs 12.81 crore.
Friday, June 20, 2008
Market extends losses on weak Asian equities
The market succumbed to selling pressure for the second consecutive day today. Political concerns and weak Asian markets weighed on the investor sentiments. Banking, realty and capital goods stocks were hurt the most in today`s trade. All the sectoral indices on BSE ended in red.
As per provisional data, foreign funds today, 19 June 2008, sold shares worth a net Rs 598.36 crore. Domestic funds bought shares worth a net Rs 141.07 crore.
Asian markets, which opened before Indian markets, ended on a weak note. Key indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 1.88% to 6.54%. The Dow Jones Industrial Average hit its lowest level in three months on Wednesday, 18 June 2008, as worries about a weak US economy compounded by credit sector concerns dragged down shares in banks, autos and transport firms
However, European markets, which had opened on a weak note, recovered during the course of the trading session after unexpected news of a British shopping spree last month offset early gloom about the banking sector. Key indices in UK and France were up 0.21% to 0.51%. However, Germany`s DAX index was down 0.11%.
Political worries continued to weight on the market sentiment for a second day in a row. The postponement of a key meeting between the government and its communist allies on the proposed nuclear deal between US and India keeps the future of the deal uncertain. Talks were set to take place Wednesday, 18 June 2008, in New Delhi, but Communist leaders say the meeting will now take place on 25 June 2008. The delay comes as Left wing parties` reffirm their opposition to the agreement, saying it undermines India`s independent foreign policy and nuclear weapons program. As per reports, CPM, a key left party, may be working on a plan to pull out support to the Congress-led UPA government at the Centre.
The 30-share BSE Sensex lost 334.32 points or 2.17% at 15,087.99. The index shed 370.65 points at the day`s low of 15,051.66 hit in the mid-afternoon trade.
The broader based S&P CNX Nifty was down 78.15 points or 1.71% at 4504.25. Nifty June 2008 futures were at 4486, a discount of 18.25 points compared with the spot closing.
The market had dropped yesterday, 18 June 2008, led by weak European markets and following deferral of the UPA-Left coordination committee meeting on Indo-US nuclear deal. The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31 on that day.
The Sensex is down 6118.78 points or 28.85% from a record high of 21206.77 it hit on 10 January 2008. Slowdown in corporate earnings caused by moderation in economic growth and increase in risk aversion globally due to credit crisis in the United States, has triggered a massive fall on the Indian bourses this year.
Back to today`s trade, the market breadth was weak on BSE with 842 shares advancing as compared to 1804 that declined. 71 remained unchanged.
The BSE Mid-Cap index fell 2.04% to 6,230.17 and BSE Small-Cap index shed 1.48% to 7,660.42. Both the indices outperformed the Sensex.
BSE clocked a turnover of Rs 4297 crore as against Rs 6,183.16 crore on Wednesday, 18 June 2008. NSE`s futures & options (F&O) segment turnover was Rs 42696.18 crore, which was lower than Rs 47440.71 crore on Wednesday, 18 June 2008.
Banking shares witnessed selling pressure. Axis Bank (down 4.67% at Rs 718.10), HDFC Bank (down 3.93% at Rs 1120.60), and State Bank of India (down 3.69% at Rs 1301), slipped. The Bankex underperformed the Sensex, falling 4.01% to 7,013.18.
India`s largest private sector bank by assets ICICI Bank fell 4.08% at Rs 753.30. ICICI Bank has a third highest weightage of 8.27% in BSE Sensex.
Sell-off was also witnessed in the capital goods stocks. Punj Lloyd (down 5.34% at Rs 252.85), Bharat Heavy Electricals (down 5.04% at Rs 1,423.15), and Larsen & Toubro (down 4.84% at Rs 2,617.30), tumbled. The BSE Capital Goods index underperformed the Sensex, sliding 3.73% to 11,667.69.
Realty stocks, which are known to have high beta value, were the worst hit. Anant Raj Industries (down 7.67% at Rs 154.10), Unitech (down 5.82% at Rs 188.60), Indiabulls Real Estate (down 5.43% at Rs 376.30) and DLF (down 2.87% at Rs 478.20), slumped. The BSE Realty index underperformed the Sensex, falling 4.27% to 5,634.60.
India`s second largest power utility by revenue Reliance Infrastructure lost 5.68% to Rs 1012.35 following reports the company is planning to invest $7 billion in the next three years to expand its engineering and construction business in India and acquire assets overseas.
India`s largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 1.69% at Rs 2245. RIL has a highest weightage of 15.72% in BSE Sensex.
India`s second largest software exporter by sales Infosys Technologies fell 0.31% at Rs 1860. Infosys has a second highest weightage of 8.59% in BSE Sensex.
India`s largest drug maker by sales Ranbaxy Laboratories declined 7.68% at Rs 552.25 after the company agreed to keep generic versions of the Pfizer`s cholesterol pill Lipitor off the US market for extra 20 months. As per the agreement, Ranbaxy will not sell a generic of Lipitor, the world`s best-selling drug, until November 2011.
Debutant Niraj Cement Structurals settled at Rs 190.15 on BSE, a minuscule premium of 0.08% over the IPO price of Rs 190. Earlier today, the stock debuted at Rs 185, a discount of 2.63% over issue price.
State-run Mahanagar Telephone Nigam gained 1.62% to Rs 97 after the company said it has received license from the Department of Telecom for providing international long distance services.
Polymer products maker Time Technoplast surged 1.24% to Rs 780.80 after the company said its board will meet on 27 June 2008 to consider stock split. The stock earlier touched a high of Rs 845.
Automobile battery maker Exide Industries advanced 3.09% to Rs 73.35 after the company acquired a 51% stake in Leadage Alloys India, an unlisted Bangalore-based lead smelting company, for Rs 34 crore.
Engineering firm Roman Tarmat gained 3.01% to Rs 73.55 after the company said it has received two orders worth Rs 106.48 crore from Tamil Nadu Road Infrastructure Development Corporation for laying roads in Kancheepuram district at Tamil Nadu.
BOC India surged 19.82% to Rs 196.45 on reports BOC Group plc UK, a part othe Linde Group, has increased open offer price for minority shareholders to Rs 200 per share from the earlier Rs 165 per share.
Anu`s Laboratories clocked a highest turnover of 375.97 crore on BSE. Niraj Cement Structurals (Rs 337.92 crore), Ranbaxy Laboratories (Rs 302.82 crore), Reliance Capital (Rs 189.39 crore) and Reliance Petroleum (Rs 129.34), were the other turnover toppers on BSE in that order.
Debutant Niraj Cement Structurals reported a highest volume of 1.77 crore shares on BSE. Chambal Fertilizers & Chemicals (1.03 crore shares), Anu`s Laboratories (85.42 lakh shares), IFCI (81.97 lakh shares), and Reliance Petroleum (71.76 lakh shares), were the other volume toppers on BSE in that order.
Oil fell on Thursday, 19 June 2008, as supply concerns in Nigeria eased after the country`s oil ministry prevented a potentially crippling strike by workers at Chevron. But falling US oil stocks and comments from the White House that Saudi Arabia was unlikely to raise output in the near term supported prices, which have climbed 40% this year. US crude fell 73 cents to $135.95 a barrel, after settling up $2.67 at $136.68 a day ago on the Nigerian worries.
Sunday, June 15, 2008
What are managed futures?
Managed futures are futures positions entered into by professional money managers, known as commodity trading advisors, on behalf of investors. Managers invest in energy, agriculture and currency markets (among others) using futures contracts and determine their positions based on expected profit potential.
A futures contract is a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset and are standardized to facilitate trading on a futures exchange.
The potential benefits of managed futures are that the investments may help diversify one's portfolio and, under some conditions, minimize risk. For example, investing in currencies abroad may mitigate domestic risk. Managed futures may also help the individual to profit or minimize risk during periods of slow economic growth.
The potential downside is that futures investments are not guaranteed and they can be very volatile. There is also the possibility of human error because a manager is involved. In other words, if the manager makes an error it could cost the investor a bundle of money.
Finally, there may be some suitability issues as well. A minimum net worth of $150,000 (not counting your home and other items) may be necessary for investment. There may be some minimum income requirements as well.
A futures contract is a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset and are standardized to facilitate trading on a futures exchange.
The potential benefits of managed futures are that the investments may help diversify one's portfolio and, under some conditions, minimize risk. For example, investing in currencies abroad may mitigate domestic risk. Managed futures may also help the individual to profit or minimize risk during periods of slow economic growth.
The potential downside is that futures investments are not guaranteed and they can be very volatile. There is also the possibility of human error because a manager is involved. In other words, if the manager makes an error it could cost the investor a bundle of money.
Finally, there may be some suitability issues as well. A minimum net worth of $150,000 (not counting your home and other items) may be necessary for investment. There may be some minimum income requirements as well.
How to choose a mutual Fund
Many investors get a lot of anxiety chasing mutual fund returns, hoping that history repeats itself while they are in the fund. In fact, a fund which has already yielded large returns has less of a chance to do so again when compared with its peer group. A better idea, rather than stressing out over the vagaries of the financial markets, is to look for wisdom in time-tested, academic methods. Once your high-quality investment plan is set up, relax. Let your investment compound, understanding that the plan is rooted in knowledge, not hype.
Good Soil
As when growing a garden, you want to invest in good soil (strategy). Accordingly, you can expect there to be some rainy days (bear market) with the sunny (bull market). Both are needed for overall growth. Once a garden (money) starts to grow, don't uproot it and replant, lest it wither and die. Set up your investment wisely and then let it grow.
Academic research creates good soil. The body of knowledge about the market goes through a rigorous review process whose primary goal is truth or knowledge rather than profit. Thus, the information is disinterested - something you should always look for in life to make wise decisions.
Greatly distilling this body of knowledge, here are a few key points to remember when it comes to investing in the stock market.
Risk and return
This concept is similar to the saying "there is no free lunch". In money terms, if you want more return, you are going to have to invest in funds that have a greater probability of going south (high risk). Thus, the law of large numbers really comes into play here, since investing in small, unproven companies may yield better potential returns, while larger companies which have already undergone substantial growth may not give you comparable results.
Market efficiency
This concept says that everything you need to know about conventional investments is already priced into them. Market efficiency supports the concept of risk and return; thus, don't waste your time at the library with a "Value Line investment" unless it provides entertainment value. Essentially, when you look at whether or not to invest in a large corporation, it is unlikely that you are going to find any information different from what others have already found. Interestingly, this also gives insight into how you make abnormal returns by investing in unknown companies like "Bob's Tomato Shack" if you really have the time and business acumen to do front-line research.
Modern portfolio theory (MPT)
Modern portfolio theory (MPT) basically says that you want to diversify your investments as much as possible in order to get rid of company- or stock-cspecific risk, thus incurring only the lowest common denominator - market risk. Essentially, you are using the law of large numbers in order to maximize returns while minimizing risk for a given market exposure.
Best Market Portfolio
Academics have created models of the market portfolio, consisting of a weighted sum of every asset in the market, with weights in the proportions that the assets exist in the market. Many think of this as being like the S&P 500, but that is an index of only the 500 largest companies in the U.S. Instead, think total market and think globally. One limitation is that while you are investing in the world, you are spending your money in your own country, so at this point things get a little dicey.
Roughly, the world market cap is about one-thirdU.S. U.S. , this is primarily where you spend your dollars, and thus you could either hedge the currency or beef up the U.S. U.S.
Putting This Into Practice
A key item you'll want to consider when assessing your greed factor is the return potential. As a general rule, for the market portfolio estimate a 10% return on average with 20% annual swings up or down not uncommon. Compare this toU.S.
Risky Business
To uncover your personal risk status, you must assess your financial resilience first. This is how able you are to sustain a financial loss. How much portfolio value can you put at risk? Since the market generally goes up over time, this really becomes an issue of time horizon. If you have Junior's tuition due in a year, your time horizon is short on the section of your portfolio that must cover that expense. Conversely, if you are just starting your career, you can better ride out any storms from a longer time horizon.
Second, you must assess your psychological resilience. What would keep you up at night? If you are an anxious individual who checks the stock market every day, you probably should keep your market exposure low. However, if you are more comfortable with the market and are too busy to constantly review stock quotes, your psychology is better suited for a higher market portfolio weighting.
Conclusion
One of the best lines from a common cartoon to take with you each day is Lion King's "Hakuna matata," which means "No worries!" If you enjoy stock picking, go nuts, but do so for entertainment. If investing your nest egg is likely to cause you some anxiety, seek the academic, time-tested good soil and then rest well at night knowing you have done the due diligence and nothing more than modest rebalancing as necessary. A healthy harvest should follow as you learn to grow your green investing thumb.
Good Soil
As when growing a garden, you want to invest in good soil (strategy). Accordingly, you can expect there to be some rainy days (bear market) with the sunny (bull market). Both are needed for overall growth. Once a garden (money) starts to grow, don't uproot it and replant, lest it wither and die. Set up your investment wisely and then let it grow.
Academic research creates good soil. The body of knowledge about the market goes through a rigorous review process whose primary goal is truth or knowledge rather than profit. Thus, the information is disinterested - something you should always look for in life to make wise decisions.
Greatly distilling this body of knowledge, here are a few key points to remember when it comes to investing in the stock market.
Risk and return
This concept is similar to the saying "there is no free lunch". In money terms, if you want more return, you are going to have to invest in funds that have a greater probability of going south (high risk). Thus, the law of large numbers really comes into play here, since investing in small, unproven companies may yield better potential returns, while larger companies which have already undergone substantial growth may not give you comparable results.
Market efficiency
This concept says that everything you need to know about conventional investments is already priced into them. Market efficiency supports the concept of risk and return; thus, don't waste your time at the library with a "Value Line investment" unless it provides entertainment value. Essentially, when you look at whether or not to invest in a large corporation, it is unlikely that you are going to find any information different from what others have already found. Interestingly, this also gives insight into how you make abnormal returns by investing in unknown companies like "Bob's Tomato Shack" if you really have the time and business acumen to do front-line research.
Modern portfolio theory (MPT)
Modern portfolio theory (MPT) basically says that you want to diversify your investments as much as possible in order to get rid of company- or stock-cspecific risk, thus incurring only the lowest common denominator - market risk. Essentially, you are using the law of large numbers in order to maximize returns while minimizing risk for a given market exposure.
Best Market Portfolio
Academics have created models of the market portfolio, consisting of a weighted sum of every asset in the market, with weights in the proportions that the assets exist in the market. Many think of this as being like the S&P 500, but that is an index of only the 500 largest companies in the U.S. Instead, think total market and think globally. One limitation is that while you are investing in the world, you are spending your money in your own country, so at this point things get a little dicey.
Roughly, the world market cap is about one-third
Putting This Into Practice
A key item you'll want to consider when assessing your greed factor is the return potential. As a general rule, for the market portfolio estimate a 10% return on average with 20% annual swings up or down not uncommon. Compare this to
Risky Business
To uncover your personal risk status, you must assess your financial resilience first. This is how able you are to sustain a financial loss. How much portfolio value can you put at risk? Since the market generally goes up over time, this really becomes an issue of time horizon. If you have Junior's tuition due in a year, your time horizon is short on the section of your portfolio that must cover that expense. Conversely, if you are just starting your career, you can better ride out any storms from a longer time horizon.
Second, you must assess your psychological resilience. What would keep you up at night? If you are an anxious individual who checks the stock market every day, you probably should keep your market exposure low. However, if you are more comfortable with the market and are too busy to constantly review stock quotes, your psychology is better suited for a higher market portfolio weighting.
Conclusion
One of the best lines from a common cartoon to take with you each day is Lion King's "Hakuna matata," which means "No worries!" If you enjoy stock picking, go nuts, but do so for entertainment. If investing your nest egg is likely to cause you some anxiety, seek the academic, time-tested good soil and then rest well at night knowing you have done the due diligence and nothing more than modest rebalancing as necessary. A healthy harvest should follow as you learn to grow your green investing thumb.
Friday, June 13, 2008
Indian inflation at highest level in more than seven years
Inflation based on the the wholesale price index rose 8.75% in the 12 months to 31 May 2008, above the previous week`s annual rise of 8.24%, government data released today, 13 June 2008, afternoon showed. The reading is highest since 10 February 2001, when it was 8.77%.
Inflation for the week ended 5 April 2008 was revised upwards to 7.71% from 7.14%.
The Reserve Bank of India on Wednesday, 11 June 2008, raised repo rate by 25 basis points to 8% to contain inflation expectations. The repo rate is the rate at which Reserve Bank of India (RBI) lends money to banks under its liquidity adjustment facility. This is the first increase in the repo rate since 30 March 2007. The repo rate is now at its highest since November 2002
Thursday, June 12, 2008
Repo rate hike and weak Asian markets to impact Indian market
Asian stocks fell on Thursday (June 12), driving the region`s benchmark index to a 10-week low, as financial companies and commodities producers slumped on concern faster inflation and slow growth.
Babcock & Brown, Australia`s second-largest securities firm, plunged to a three-year low. BHP Billiton, the world`s largest mining company, dropped in Sydney.
Japanese benchmark index Nikkei tanked 321.78 points, or 2.27%, to trade at 13,861.70.
Hong Kong`s index Hang Seng fell 516.98 points, or 2.22%, to trade at 22,810.62.
China`s Shanghai Composite lost 38.06 points, or 1.26%, to trade at 2,986.18.
Taiwan`s Taiex index lost 193.44 points, or 2.32%, to trade at 8,152.15.
Singapore`s Straits Times fell 56.94 points, or 1.87%, to trade at 2,989.83.
South Korea`s Kospi index fell 28.18 points, or 1.58%, to trade at 1,753.49. (8.20 a.m., IST)
Indian ADRs end weak
Oil leaps to USD 136.38 a barrel
Babcock & Brown, Australia`s second-largest securities firm, plunged to a three-year low. BHP Billiton, the world`s largest mining company, dropped in Sydney.
Japanese benchmark index Nikkei tanked 321.78 points, or 2.27%, to trade at 13,861.70.
Hong Kong`s index Hang Seng fell 516.98 points, or 2.22%, to trade at 22,810.62.
China`s Shanghai Composite lost 38.06 points, or 1.26%, to trade at 2,986.18.
Taiwan`s Taiex index lost 193.44 points, or 2.32%, to trade at 8,152.15.
Singapore`s Straits Times fell 56.94 points, or 1.87%, to trade at 2,989.83.
South Korea`s Kospi index fell 28.18 points, or 1.58%, to trade at 1,753.49. (8.20 a.m., IST)
Indian ADRs end weak
US stocks slumped on Wednesday (June 11) on concerns that inflation will further pinch consumers and lead central banks to raise interest rates.
The Dow Jones industrial average fell 205.99 points, or 1.68%, to 12,083.77. The NASDAQ composite fell 54.93 points, or 2.24%, to 2,394.01.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.07% from 4.11% late Tuesday.
Indian ADRs ended on a negative note, barring Dr Reddy`s that ended marginally higher.
| ADR Watch - Jun 11, 2008 | ||
| Indian ADRs | USD($) | % Gain/(Loss) |
| Dr Reddy`S Laboratories | 16.14 | 0.88 |
| Mahanagar Telephone Nigam | 4.40 | (1.12) |
| Infosys Technologies | 44.89 | (1.84) |
| Tata Motors | 11.75 | (2.25) |
| Satyam Computer Services | 25.32 | (2.99) |
| Sterlite Industries (India) | 18.29 | (3.23) |
| Wipro | 12.69 | (3.28) |
| H D F C Bank | 80.55 | (3.77) |
| Tata Communications | 20.26 | (4.07) |
| I C I C I Bank | 32.63 | (4.51) |
| Patni Computer Systems | 11.69 | (5.5) |
Oil leaps to USD 136.38 a barrel
Oil prices climbed on Wednesday (June 11) on a weak dollar and supply concerns
Light, sweet crude for July delivery rose USD 5.07 to settle at USD 136.38 a barrel on the New York Mercantile Exchange (NYMEX).
July gasoline futures rose 14.65 cents to settle at USD 3.4658 a gallon. The retail price of a gallon of regular gas rose 0.9 cent to a new record of USD 4.052.
July heating oil futures rose 16.24 cents to settle at USD 3.9748 a gallon at the NYMEX.
In London, July Brent crude rose USD 4 to settle at USD 135.02 a barrel on the ICE Futures exchange.
July natural gas futures rose 22.5 cents to settle at USD 12.66 per 1,000 cubic feet.
Home, auto loans likely to be costlierConsumer, home, auto and other loans could become costlier with the Reserve Bank of India hiking its short-term lending rate to banks by 0.25% to 8% in the face of surging inflation.
Announcing the increase from 7.75%, the central bank said the decision was taken with a view to contain inflationary expectations as the rate of rise in prices touched a 45-month high of 8.24%.
The inflation is expected to climb over 9% once hike in petroleum prices gets reflected in the official wholesale price index.
The move to increase repo rate, at which the central bank gives short term money to banks in exchange of government securities, has been taken for first time this fiscal.
Unexpected repo rate hike of 25 basis points by the Reserve Bank of India will have an impact on the market, opined Suresh Iyer, technical analyst at Asit C Mehta.Wednesday, June 11, 2008
The promoters of Ranbaxy have sold their stake to a Japanese company – Daiichi Sankyo. Yes, the two brothers – Malvinder Singh and Shivinder Singh, who have a 34.8% stake in Ranbaxy Labs have formally agreed to sell their entire stake to Japanese major Daiichi Sankyo.
This sell of stake means a complete exit of the promoters of the company. The stake sell, expected at over 25-30% premium over today’s last traded price, makes perfect sense. Once could argue that the price is too high but that is precisely the way in which the cookie crumbles. If it is a foreign company taking over a very well reputed and established company, then a premium of 25-30% is routine.
The Japanese major will also make a mandatory open offer, as per the Indian laws, to buy an additional 20% stake in the company as also subscribing to 4.63 crore shares and 2.38 crore warrants at Rs.737 per share. At the end of this all, Daiichi Sankyo plans to have a controlling stake of above 51% stake in the Indian company.
The Board of Ranbaxy had decided to issue 462,58,063 equity shares of Rs.5 each at a premium of Rs.732 per share as also 238,34,333 warrants to be convertible at Rs.737 per share to Daiichi. This will increase the paid up equity of Ranbaxy from Rs.186.62 crore to Rs.221.67 crore, post warrant conversion. If Daiichi is able to have a 20% stake in the open offer (which is most likely) their stake would go up to 65%.
Post issue of equity by Ranbaxy to Daiichi, an open offer for about 8.88 crore shall be made by Daiichi for Ranbaxy shares at Rs.737 per share. Presently, about 18% is held by FIIs while, about 20% is held by Insurance companies and about 27% is held by the public, including mutual funds. It is expected that everyone would participate in the open offer as share price of Rs.737 is perceived to be quite attractive for any existing shareholder to get an exit route from the stock and would also, at the same time, give good arbitrage play.
Presently, Ranbaxy is holding a tad below 15% in Orchid Chemicals, Jupiter Bio and Krebs Bio while 45% in Zenotech Laboratories. Due to indirect acquisition of stake in Zenotech by Daiichi, even Zenotech would see open offer coming in the stock at a price to be determined under applicable SEBI guidelines.
As mentioned earlier, the reason for the exit, in all probability is the ongoing family feud. It all began in 1990, when Bhai Mohan Singh apportioned assets in 1990. His eldest son – Parvinder Singh got Ranbaxy, middle son Manjit got Montari Industries and youngest son, who was the apple of his eye, got Max India. In 1993, Bhai Mohan Singh was ousted in a bitter boardroom battle by Parvinder, who later threw out his father from the Board after disagreements over company management grew. Parvinder expired in 1999 and his successor, D.S.Brar took the company to greater heights.
When Bhai Mohan Singh died, he bequeathed most of his wealth to Analjit who was also made the sole legal heir to carry out all court battles. Manjit was given a gift of Rs.14 crore while grandchildren – Malvinder and Shivinder, who are now the promoters of Ranbaxy, were given Rs.5 lakhs each. So now, for the past few years, a bitter legal battle is raging between Manjit, Malvinder and Shivinder on one side and Analjit on the other side. The bone of contention is the ownership over Ranbaxy and assets like the Aurangzeb Road home where Bhai Mohan Singh had resided. Though an out-of-court settlement has been planned for some time now, it has just not happened.
And selling their stake was probably the best way out is what the grandsons of Bhai Mohan Singh, would have thought. This ends their continuous stress but shows how the new generation of today, after having got things on a platter, just does not have enough respect for anything – neither for the reputation of Bhai Mohan Singh nor for effort that has gone over decades for making Ranbaxy what it is today. The first Indian MNC would now become a Japanese company.
This sell of stake means a complete exit of the promoters of the company. The stake sell, expected at over 25-30% premium over today’s last traded price, makes perfect sense. Once could argue that the price is too high but that is precisely the way in which the cookie crumbles. If it is a foreign company taking over a very well reputed and established company, then a premium of 25-30% is routine.
The Japanese major will also make a mandatory open offer, as per the Indian laws, to buy an additional 20% stake in the company as also subscribing to 4.63 crore shares and 2.38 crore warrants at Rs.737 per share. At the end of this all, Daiichi Sankyo plans to have a controlling stake of above 51% stake in the Indian company.
The Board of Ranbaxy had decided to issue 462,58,063 equity shares of Rs.5 each at a premium of Rs.732 per share as also 238,34,333 warrants to be convertible at Rs.737 per share to Daiichi. This will increase the paid up equity of Ranbaxy from Rs.186.62 crore to Rs.221.67 crore, post warrant conversion. If Daiichi is able to have a 20% stake in the open offer (which is most likely) their stake would go up to 65%.
Post issue of equity by Ranbaxy to Daiichi, an open offer for about 8.88 crore shall be made by Daiichi for Ranbaxy shares at Rs.737 per share. Presently, about 18% is held by FIIs while, about 20% is held by Insurance companies and about 27% is held by the public, including mutual funds. It is expected that everyone would participate in the open offer as share price of Rs.737 is perceived to be quite attractive for any existing shareholder to get an exit route from the stock and would also, at the same time, give good arbitrage play.
Presently, Ranbaxy is holding a tad below 15% in Orchid Chemicals, Jupiter Bio and Krebs Bio while 45% in Zenotech Laboratories. Due to indirect acquisition of stake in Zenotech by Daiichi, even Zenotech would see open offer coming in the stock at a price to be determined under applicable SEBI guidelines.
As mentioned earlier, the reason for the exit, in all probability is the ongoing family feud. It all began in 1990, when Bhai Mohan Singh apportioned assets in 1990. His eldest son – Parvinder Singh got Ranbaxy, middle son Manjit got Montari Industries and youngest son, who was the apple of his eye, got Max India. In 1993, Bhai Mohan Singh was ousted in a bitter boardroom battle by Parvinder, who later threw out his father from the Board after disagreements over company management grew. Parvinder expired in 1999 and his successor, D.S.Brar took the company to greater heights.
When Bhai Mohan Singh died, he bequeathed most of his wealth to Analjit who was also made the sole legal heir to carry out all court battles. Manjit was given a gift of Rs.14 crore while grandchildren – Malvinder and Shivinder, who are now the promoters of Ranbaxy, were given Rs.5 lakhs each. So now, for the past few years, a bitter legal battle is raging between Manjit, Malvinder and Shivinder on one side and Analjit on the other side. The bone of contention is the ownership over Ranbaxy and assets like the Aurangzeb Road home where Bhai Mohan Singh had resided. Though an out-of-court settlement has been planned for some time now, it has just not happened.
And selling their stake was probably the best way out is what the grandsons of Bhai Mohan Singh, would have thought. This ends their continuous stress but shows how the new generation of today, after having got things on a platter, just does not have enough respect for anything – neither for the reputation of Bhai Mohan Singh nor for effort that has gone over decades for making Ranbaxy what it is today. The first Indian MNC would now become a Japanese company.
RBI hikes repo rate by 25 bps to 8%
In a bid to tame rising prices which have pushed the annual inflation rate beyond 8 per cent, the Reserve Bank of India on Wednesday raised the repo rate by 25 basis points to 8 per cent from existing 7.75 per cent.
The apex bank's move comes on the back of Prime minister Manmohan Singh's statement that both administrative and fiscal measures will be taken to contain inflation.
In fact, the inflation rate has shot up by at least 80 basis point following the steep hike in the prices of petroleum products announced on June 4.
The apex bank in a statement said it had addressed the "unprecedented uncertainties and dilemmas that exist".
It said: "Monetary policy has to respond proactively to immediate concerns. At the same time, it is critical at this juncture to demonstrate on a continuing basis a determination to act decisively, effectively and swiftly to curb any signs of adverse developments in regard to inflation expectations."
The apex bank's move comes on the back of Prime minister Manmohan Singh's statement that both administrative and fiscal measures will be taken to contain inflation.
In fact, the inflation rate has shot up by at least 80 basis point following the steep hike in the prices of petroleum products announced on June 4.
The apex bank in a statement said it had addressed the "unprecedented uncertainties and dilemmas that exist".
It said: "Monetary policy has to respond proactively to immediate concerns. At the same time, it is critical at this juncture to demonstrate on a continuing basis a determination to act decisively, effectively and swiftly to curb any signs of adverse developments in regard to inflation expectations."
Tuesday, June 10, 2008
Crude Oil Falls
Crude oil fell more than $2 a barrel as the dollar climbed against the euro and yen, curbing the appeal of commodities.
Energy and metals dropped after Federal Reserve Chairman Ben S. Bernanke said economic risks have faded, spurring bets that interest rates will rise and bolstering the dollar. Investors looking to hedge against the dollar's drop have helped lead oil, gold, corn and gasoline to records this year.
Crude oil for July delivery fell $2.92, or 2.2 percent, to $131.43 a barrel at 1:28 p.m. on the New York Mercantile Exchange. Futures, which reached a record $139.12 a barrel on June 6, are more than double the level of a year ago.
Prices climbed $10.75 a barrel on June 6, the most ever, as the dollar weakened and amid threats of supply disruptions.
Brent crude oil for July settlement declined $2.60, or 1.9 percent, to $131.31 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $138.12 on June 6.
Energy and metals dropped after Federal Reserve Chairman Ben S. Bernanke said economic risks have faded, spurring bets that interest rates will rise and bolstering the dollar. Investors looking to hedge against the dollar's drop have helped lead oil, gold, corn and gasoline to records this year.
Crude oil for July delivery fell $2.92, or 2.2 percent, to $131.43 a barrel at 1:28 p.m. on the New York Mercantile Exchange. Futures, which reached a record $139.12 a barrel on June 6, are more than double the level of a year ago.
Prices climbed $10.75 a barrel on June 6, the most ever, as the dollar weakened and amid threats of supply disruptions.
Brent crude oil for July settlement declined $2.60, or 1.9 percent, to $131.31 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $138.12 on June 6.
Asian Markets Fall Sharply For Second Consecutive Day
Asian markets traded broadly lower, led down by Shanghai and Hong Kong, where banking and real estate shares fronted declines as investors fretted about the impact of the latest round of anti-inflationary measures announced over the weekend.
After enjoying an extended holiday the Shanghai`s Composite Index tanked by 7.8% to 3,072.33 in the first day of trading since the People`s Bank of China announced it would lift the ratio of reserves banks must set aside as deposits by 1 percentage point. People Bank of China hiked banks` reserve requirement ratios for the fifth time this year, taking aim at inflation and at the flows of speculative funds pouring into the country.
The People`s Bank of China said over the weekend that it would require banks must put aside 17% of deposits as reserves, effective 15 June. A second hike to 17.5% will go into effect 25 June, for a total rise of 100 basis points above the current requirement of 16.5%.
The benchmark index for the Shenzhen stock market was down 8% at 928.20. Hong Kong`s Hang Seng Index slipped 4.1% at 23,411.40 and the Hang Seng China Enterprises Index gave up 5.4% to 12,783.96.
Japanese shares ended the morning session slightly lower, although consumer and automotives shares that were down in yesterday`s session managed to eke out modest gains. The Nikkei 225 Average closed 1.1% lower at 14,021.17. The Topix index was down by 1% at 1,383.20.
On the economic front, Japan`s core private-sector machinery orders rose for the first time in three months in April. According to the data released by the cabinet office the machinery orders by Japanese companies rose seasonally adjusted 5.5% to 1trillion yen ($9.4 billion) in April from March.
Australia`s S&P/ASX 200 was down 2.8% to 5,437.50. However on the economic release side the Australian business sentiment improved in May from April, though only slightly due to lingering concerns about slowing domestic demand in the wake of higher interest rates and fuel costs.
National Australia Bank said its business confidence index, which measures expectations in the three-month period ahead, rose 4.0 points to a still negative reading of minus 4.0 points. Its business conditions index, which measures current conditions, was unchanged at plus 7.0 index points.
The business conditions index was steady for the third straight month at the lowest reading since December 2002, and well off a peak of 20 points in October last year, NAB said.
In other regional action, South Korea`s Kospi fell 1.9% to 1,774.38. Taiwan`s Weighted Price Index slumped by 2.5% to 8,370. New Zealand`s NZX-50 added 0.3% to 3,505.90 while Malaysia`s KLSE Composite added 0.1% with a closing of 1,232.07. Singapore`s Straits Times Index was down 1.5% at 3,038.22.
In the afternoon trading India`s Sensitive Index, or Sensex, was down by 1.9% to 14,784.55 and the broader S&P/CNX Nifty fell 2% to 4,412.20.
In currencies the U.S. dollar was quoted at 106.69 yen, compared to 106.29 yen in late New York Monday.
Crude oil for July delivery climbed as much as 60 cents to $134.95 a barrel in electronic trading in mid-morning Tokyo hours. The front-month contract closed with a 3% decline, giving up $4.19 cents to $134.35 a barrel on the New York Mercantile Exchange Monday.
Shares in European markets fell sharply, with financials and automakers under particular pressure, while comments from U.S. Federal Reserve Chairman Ben Bernanke fading up inflation risks kept broader market sentiment in check.
In the opening trade the U.K. FTSE 100 index lost 0.7% to 5,836.00, the German DAX 30 index fell 1.2% to 6,730.92 and the French CAC-40 index declined 1.1% to 4,746.30.
On the economic front, the French industrial production rose 1.4% on the month in April, backed by an increase in the production of cars and equipment goods. The March data were revised down to a 1.0% decline from the 0.8% fall published last month.
Meanwhile, Germany`s wholesale prices in May rose 1.4 percent from April and increased 8.1 percent from a year earlier. Germany`s wholesale price index stood at 124.6 in May, compared with 122.9 in April and 115.3 in May 2007. In April, wholesale prices had increased 6.9 percent year-on-year and in March, the change was at 7.1 percent.
In U.K. the manufacturing production has increased slightly in April supported by a considerable increase in transport equipment. The output of manufacturing industries has increased 0.1% in the UK between March and April, as transport equipment output rose 2.8%. On the year the manufacturing production posted the same increase; 0.1%.
Another data release showed industrial production gaining 0.2% on the month as well as on the year, supported by a 7.7% increase in gas, electricity, and water output, plus the afore mentioned increase on car and aircraft production
Looking ahead the day is scheduled to release merchandise trade balance for Canada, which will be followed by Bank of Canada`s interest rate decision. In the evening we have ABC weekly consumer confidence. Late night we have a series of data from Japanese statistical houses. The series will start with current account data followed by Domestic Corporate Goods Price Index. However the key event will the Gross domestic product of Japan.
After enjoying an extended holiday the Shanghai`s Composite Index tanked by 7.8% to 3,072.33 in the first day of trading since the People`s Bank of China announced it would lift the ratio of reserves banks must set aside as deposits by 1 percentage point. People Bank of China hiked banks` reserve requirement ratios for the fifth time this year, taking aim at inflation and at the flows of speculative funds pouring into the country.
The People`s Bank of China said over the weekend that it would require banks must put aside 17% of deposits as reserves, effective 15 June. A second hike to 17.5% will go into effect 25 June, for a total rise of 100 basis points above the current requirement of 16.5%.
The benchmark index for the Shenzhen stock market was down 8% at 928.20. Hong Kong`s Hang Seng Index slipped 4.1% at 23,411.40 and the Hang Seng China Enterprises Index gave up 5.4% to 12,783.96.
Japanese shares ended the morning session slightly lower, although consumer and automotives shares that were down in yesterday`s session managed to eke out modest gains. The Nikkei 225 Average closed 1.1% lower at 14,021.17. The Topix index was down by 1% at 1,383.20.
On the economic front, Japan`s core private-sector machinery orders rose for the first time in three months in April. According to the data released by the cabinet office the machinery orders by Japanese companies rose seasonally adjusted 5.5% to 1trillion yen ($9.4 billion) in April from March.
Australia`s S&P/ASX 200 was down 2.8% to 5,437.50. However on the economic release side the Australian business sentiment improved in May from April, though only slightly due to lingering concerns about slowing domestic demand in the wake of higher interest rates and fuel costs.
National Australia Bank said its business confidence index, which measures expectations in the three-month period ahead, rose 4.0 points to a still negative reading of minus 4.0 points. Its business conditions index, which measures current conditions, was unchanged at plus 7.0 index points.
The business conditions index was steady for the third straight month at the lowest reading since December 2002, and well off a peak of 20 points in October last year, NAB said.
In other regional action, South Korea`s Kospi fell 1.9% to 1,774.38. Taiwan`s Weighted Price Index slumped by 2.5% to 8,370. New Zealand`s NZX-50 added 0.3% to 3,505.90 while Malaysia`s KLSE Composite added 0.1% with a closing of 1,232.07. Singapore`s Straits Times Index was down 1.5% at 3,038.22.
In the afternoon trading India`s Sensitive Index, or Sensex, was down by 1.9% to 14,784.55 and the broader S&P/CNX Nifty fell 2% to 4,412.20.
In currencies the U.S. dollar was quoted at 106.69 yen, compared to 106.29 yen in late New York Monday.
Crude oil for July delivery climbed as much as 60 cents to $134.95 a barrel in electronic trading in mid-morning Tokyo hours. The front-month contract closed with a 3% decline, giving up $4.19 cents to $134.35 a barrel on the New York Mercantile Exchange Monday.
Shares in European markets fell sharply, with financials and automakers under particular pressure, while comments from U.S. Federal Reserve Chairman Ben Bernanke fading up inflation risks kept broader market sentiment in check.
In the opening trade the U.K. FTSE 100 index lost 0.7% to 5,836.00, the German DAX 30 index fell 1.2% to 6,730.92 and the French CAC-40 index declined 1.1% to 4,746.30.
On the economic front, the French industrial production rose 1.4% on the month in April, backed by an increase in the production of cars and equipment goods. The March data were revised down to a 1.0% decline from the 0.8% fall published last month.
Meanwhile, Germany`s wholesale prices in May rose 1.4 percent from April and increased 8.1 percent from a year earlier. Germany`s wholesale price index stood at 124.6 in May, compared with 122.9 in April and 115.3 in May 2007. In April, wholesale prices had increased 6.9 percent year-on-year and in March, the change was at 7.1 percent.
In U.K. the manufacturing production has increased slightly in April supported by a considerable increase in transport equipment. The output of manufacturing industries has increased 0.1% in the UK between March and April, as transport equipment output rose 2.8%. On the year the manufacturing production posted the same increase; 0.1%.
Another data release showed industrial production gaining 0.2% on the month as well as on the year, supported by a 7.7% increase in gas, electricity, and water output, plus the afore mentioned increase on car and aircraft production
Looking ahead the day is scheduled to release merchandise trade balance for Canada, which will be followed by Bank of Canada`s interest rate decision. In the evening we have ABC weekly consumer confidence. Late night we have a series of data from Japanese statistical houses. The series will start with current account data followed by Domestic Corporate Goods Price Index. However the key event will the Gross domestic product of Japan.
Sensex at 3-month closing low
The market recovered some of the lost ground in late trade after the barometer index BSE Sensex and the S&P CNX Nifty had tumbled to its lowest in 2008 in mid-afternoon trade. Weakness in global markets weighed on the domestic bourses. The market breadth was weak. Healthcare stocks and shares of public sector oil marketing firms rose even as IT, realty and banking stocks declined.
The 30-share BSE Sensex lost 176.85 points or 1.17% at 14,889.25, its lowest close since mid-March 2008. At the day`s low of 14,645.31 the Sensex lost 420.79 points in mid-afternoon trade, falling below its previous year 2008 low of 14,677.24 hit 18 March 2008.
Earlier, after opening on a subdued note on weak global cues, the market had recovered to trade in green for a brief period. At the day`s high of 15,088.03 Sensex gained 21.93 points in early trade.
The broader based S&P CNX Nifty was down 41.25 points or 1.14% at 4,449.80. Nifty hit new year 2008 low of 4369.80 today. Nifty June 2008 futures were at 4453, at a premium of 3.20 points as compared to spot closing of 4449.80.
The BSE clocked a turnover of Rs 5,265 crore today as compared to a turnover of Rs 5,053.75 crore on Monday, 9 June 2008. NSE`s futures & options (F&O) segment turnover was Rs 53,893.30 crore, which was lower than Rs 58,333.52 crore on Monday, 9 June 2008.
The market breadth was weak on BSE with 964 shares advancing as compared to 1,667 that declined. 68 remained unchanged. Among the 30 stocks from Sensex pack, 21 were trading in red.
The BSE Mid-Cap index fell 1.08% to 6,103.83 and BSE Small-Cap index fell 1.02% to 7,341.16.
All the sectoral indices on BSE ended with losses except the BSE HealthCare index. BSE IT index (down 2.75% to 4,283.96), BSE Bankex (down 2.43% at 6,862.33), BSE Consumer Durables index (down 2.37% to 3,840.96), The BSE Realty index (down 2.11% at 5,630.61), BSE TecK index (down 1.94% to 3,323.17), BSE FMCG index (down 1.58% to 2,276.59), BSE PSU index (down 1.23% to 6,390.28) underperformed Sensex.
BSE HealthCare index (up 2.16% at 4,411.91), BSE Oil & Gas index (up 0.15% to 9,691.22), The BSE Auto (down 0.1% at 4,119.58), BSE Capital Goods (down 0.16% at 11,617.57), BSE Power index (down 0.47% to 2,606.96), BSE Metal index (down 0.8% to 15,265.92), BSE FMCG index (down 1.58% to 2,276.59), outperformed the Sensex.
Bharat Heavy Electricals (up 0.54% to Rs 1,382.05), Reliance Industries (RIL) (up 1.68% to Rs 2,199.40), Ambuja Cements (up 0.43% to Rs 82.30) and ACC (up 0.55% to Rs 616.40) edged higher from the Sensex pack.
ONGC (down 4.74% to Rs 831.25), HDFC (down 4.79% to Rs 2,101), Jaiprakash Associates (down 3.54% to Rs 177.15), Reliance Infrastructure (down 2.59% to Rs 1,011.60), Tata Motors (down 0.81% to Rs 512.90) edged lower from the Sensex pack.
Consumer durables stocks declined. Rajesh Exports (down 6.53% to Rs 70.85), Titan Industries (down 3.73% to Rs 1,088), Blue Star (down 3.26% to Rs 390) and Gitanjali Gems (down 1.13% to Rs 266) edged lower.
Banking stocks fell extending their recent sharp losses on concerns of further policy tightening of the monetary policy by the Reserve Bank of India to rein in inflation which is at its highest level in nearly four years. HDFC Bank (4.96% to Rs 1,130.95), State Bank of India (down 1.06% to Rs 1,279.10) and ICICI Bank (down 2.47% to Rs 731.60) edged lower.
Realty stocks extended yesterday`s huge losses. Indiabulls Real Estate (down 1.82% to Rs 391.15), Unitech (down 3.03% to Rs 179.20) and DLF (down 0.35% to Rs 479.85) edged lower.
Software services companies, which get more than half their revenue from the United States, fell on signs the US economy was heading for stagflation. BSE IT index was the top loser from the sectoral indices on BSE. It was down 2.75% to 4,283.96. Infosys (down 2.89% to Rs 1,849.10), Tata Consultancy Services (down 3.89% to Rs 880.05), Satyam Computer Services (down 2.76% to Rs 477.90), and Wipro (down 1.46% to Rs 473.55) edged lower.
Healthcare stocks rose. Ranbaxy Laboratories (up 6.53% to Rs 560.75), Cipla (up 2.13% to Rs 211.05), Dr. Reddy`s Laboratories (up 0.54% to Rs 696.50) edged higher.
Shares of oil state-run oil marketing firms rose today after witnessing heavy battering over the past few days. HPCL (up 1.86% to Rs 196.90), BPCL (up 2.24% to Rs 284.65) and Indian Oil Corporation (up 0.91% to Rs 366.55) edged higher.
IFCI clocked the highest volume of 1.85 crore shares on BSE. Reliance Petroleum (1.36 crore shares), Ispat Industries (1.34 crore shares), Reliance Natural Resources (1.31 crore shares) and Spice Communications (1 crore shares) were other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 281.98 crore on BSE. Reliance Capital (Rs 261.73 crore), Reliance Petroleum (Rs 23.74 crore), Ranbaxy Laboratories ( Rs 213.44 crore) and Anu`s Laboratories (Rs 167.13 crore) were other turnover toppers in that order.
European markets were weak. Key benchmark indices in France, Germany and UK were down by between 0.37% to 0.59%.
Stocks dropped in Asia after US Federal Reserve Chairman Ben Bernanke`s warning on inflation on Monday, 9 June 208, fanned expectations of higher US interest rates later this year. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan were down by between 1.49% to 7.73%.
The Dow staged a modest rebound on Monday from Friday`s nearly 400-point drop, as concerns about US consumer spending and the troubled US housing market were eased by better-than-expected sales figures from McDonald`s Corp and a surprising gain in pending home sales. The broader market was little changed, with a drop of more than $4 in the price of oil helping fuel-dependent sectors such as manufacturers, mitigating sharp losses in the financial and technology sectors. The Dow Jones industrial average was up 70.51 points, or 0.58%, to end at 12,280.32. The Standard & Poor`s 500 Index was up 1.08 points, or 0.08%, at 1,361.76. But the Nasdaq Composite Index was down 15.10 points, or 0.61%, at 2,459.46.
A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 2984.20 core in the first few days of this month, till 6 June 2008. They had dumped stocks worth a net Rs 5011.50 crre in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 6 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
According to a latest monthly June 2008 strategy report by HSBC Global Research, a possibility of Left parties withdrawing support to the government at the centre over the fuel price hike issue, cannot be ruled out. In such an environment with prospects of mid-term polls, the stock market is likely to remain nervous, HSBC says. Parliamentary elections are due in India in May 2009. HSBC`s 2008 year-end (calendar year) target for Sensex is 17,500, compared to current Sensex level of 15,066.10.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Market may also be keeping a watch on the industrial production numbers for April 2008, which the government will unveil on Thursday, 12 June 2008, which will give a cue on the extent of slowdown in the Indian economy caused by high interest rates.
The BSE Sensex may fall to a 10-month low of around 13,000 points by end-2008, as the Reserve Bank of India may raise interest rates to check inflation due to record oil prices, Credit Suisse said on Monday, 9 June 2008.
The 30-share BSE Sensex lost 176.85 points or 1.17% at 14,889.25, its lowest close since mid-March 2008. At the day`s low of 14,645.31 the Sensex lost 420.79 points in mid-afternoon trade, falling below its previous year 2008 low of 14,677.24 hit 18 March 2008.
Earlier, after opening on a subdued note on weak global cues, the market had recovered to trade in green for a brief period. At the day`s high of 15,088.03 Sensex gained 21.93 points in early trade.
The broader based S&P CNX Nifty was down 41.25 points or 1.14% at 4,449.80. Nifty hit new year 2008 low of 4369.80 today. Nifty June 2008 futures were at 4453, at a premium of 3.20 points as compared to spot closing of 4449.80.
The BSE clocked a turnover of Rs 5,265 crore today as compared to a turnover of Rs 5,053.75 crore on Monday, 9 June 2008. NSE`s futures & options (F&O) segment turnover was Rs 53,893.30 crore, which was lower than Rs 58,333.52 crore on Monday, 9 June 2008.
The market breadth was weak on BSE with 964 shares advancing as compared to 1,667 that declined. 68 remained unchanged. Among the 30 stocks from Sensex pack, 21 were trading in red.
The BSE Mid-Cap index fell 1.08% to 6,103.83 and BSE Small-Cap index fell 1.02% to 7,341.16.
All the sectoral indices on BSE ended with losses except the BSE HealthCare index. BSE IT index (down 2.75% to 4,283.96), BSE Bankex (down 2.43% at 6,862.33), BSE Consumer Durables index (down 2.37% to 3,840.96), The BSE Realty index (down 2.11% at 5,630.61), BSE TecK index (down 1.94% to 3,323.17), BSE FMCG index (down 1.58% to 2,276.59), BSE PSU index (down 1.23% to 6,390.28) underperformed Sensex.
BSE HealthCare index (up 2.16% at 4,411.91), BSE Oil & Gas index (up 0.15% to 9,691.22), The BSE Auto (down 0.1% at 4,119.58), BSE Capital Goods (down 0.16% at 11,617.57), BSE Power index (down 0.47% to 2,606.96), BSE Metal index (down 0.8% to 15,265.92), BSE FMCG index (down 1.58% to 2,276.59), outperformed the Sensex.
Bharat Heavy Electricals (up 0.54% to Rs 1,382.05), Reliance Industries (RIL) (up 1.68% to Rs 2,199.40), Ambuja Cements (up 0.43% to Rs 82.30) and ACC (up 0.55% to Rs 616.40) edged higher from the Sensex pack.
ONGC (down 4.74% to Rs 831.25), HDFC (down 4.79% to Rs 2,101), Jaiprakash Associates (down 3.54% to Rs 177.15), Reliance Infrastructure (down 2.59% to Rs 1,011.60), Tata Motors (down 0.81% to Rs 512.90) edged lower from the Sensex pack.
Consumer durables stocks declined. Rajesh Exports (down 6.53% to Rs 70.85), Titan Industries (down 3.73% to Rs 1,088), Blue Star (down 3.26% to Rs 390) and Gitanjali Gems (down 1.13% to Rs 266) edged lower.
Banking stocks fell extending their recent sharp losses on concerns of further policy tightening of the monetary policy by the Reserve Bank of India to rein in inflation which is at its highest level in nearly four years. HDFC Bank (4.96% to Rs 1,130.95), State Bank of India (down 1.06% to Rs 1,279.10) and ICICI Bank (down 2.47% to Rs 731.60) edged lower.
Realty stocks extended yesterday`s huge losses. Indiabulls Real Estate (down 1.82% to Rs 391.15), Unitech (down 3.03% to Rs 179.20) and DLF (down 0.35% to Rs 479.85) edged lower.
Software services companies, which get more than half their revenue from the United States, fell on signs the US economy was heading for stagflation. BSE IT index was the top loser from the sectoral indices on BSE. It was down 2.75% to 4,283.96. Infosys (down 2.89% to Rs 1,849.10), Tata Consultancy Services (down 3.89% to Rs 880.05), Satyam Computer Services (down 2.76% to Rs 477.90), and Wipro (down 1.46% to Rs 473.55) edged lower.
Healthcare stocks rose. Ranbaxy Laboratories (up 6.53% to Rs 560.75), Cipla (up 2.13% to Rs 211.05), Dr. Reddy`s Laboratories (up 0.54% to Rs 696.50) edged higher.
Shares of oil state-run oil marketing firms rose today after witnessing heavy battering over the past few days. HPCL (up 1.86% to Rs 196.90), BPCL (up 2.24% to Rs 284.65) and Indian Oil Corporation (up 0.91% to Rs 366.55) edged higher.
IFCI clocked the highest volume of 1.85 crore shares on BSE. Reliance Petroleum (1.36 crore shares), Ispat Industries (1.34 crore shares), Reliance Natural Resources (1.31 crore shares) and Spice Communications (1 crore shares) were other volume toppers in that order.
Reliance Industries clocked the highest turnover of Rs 281.98 crore on BSE. Reliance Capital (Rs 261.73 crore), Reliance Petroleum (Rs 23.74 crore), Ranbaxy Laboratories ( Rs 213.44 crore) and Anu`s Laboratories (Rs 167.13 crore) were other turnover toppers in that order.
European markets were weak. Key benchmark indices in France, Germany and UK were down by between 0.37% to 0.59%.
Stocks dropped in Asia after US Federal Reserve Chairman Ben Bernanke`s warning on inflation on Monday, 9 June 208, fanned expectations of higher US interest rates later this year. Key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan were down by between 1.49% to 7.73%.
The Dow staged a modest rebound on Monday from Friday`s nearly 400-point drop, as concerns about US consumer spending and the troubled US housing market were eased by better-than-expected sales figures from McDonald`s Corp and a surprising gain in pending home sales. The broader market was little changed, with a drop of more than $4 in the price of oil helping fuel-dependent sectors such as manufacturers, mitigating sharp losses in the financial and technology sectors. The Dow Jones industrial average was up 70.51 points, or 0.58%, to end at 12,280.32. The Standard & Poor`s 500 Index was up 1.08 points, or 0.08%, at 1,361.76. But the Nasdaq Composite Index was down 15.10 points, or 0.61%, at 2,459.46.
A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 2984.20 core in the first few days of this month, till 6 June 2008. They had dumped stocks worth a net Rs 5011.50 crre in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 6 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
According to a latest monthly June 2008 strategy report by HSBC Global Research, a possibility of Left parties withdrawing support to the government at the centre over the fuel price hike issue, cannot be ruled out. In such an environment with prospects of mid-term polls, the stock market is likely to remain nervous, HSBC says. Parliamentary elections are due in India in May 2009. HSBC`s 2008 year-end (calendar year) target for Sensex is 17,500, compared to current Sensex level of 15,066.10.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Market may also be keeping a watch on the industrial production numbers for April 2008, which the government will unveil on Thursday, 12 June 2008, which will give a cue on the extent of slowdown in the Indian economy caused by high interest rates.
The BSE Sensex may fall to a 10-month low of around 13,000 points by end-2008, as the Reserve Bank of India may raise interest rates to check inflation due to record oil prices, Credit Suisse said on Monday, 9 June 2008.
Sejal Architectural Glass IPO subscribes 32.84% on day one
Initial public offering of Sejal Architectural Glass, a Mumbai based company engaged in the business of processing glass, received good response from investors on the first day, which was subscribed 32%. It received 2.94 million bids as against issue size of 9.19 million shares. Total of 1.87 million bids were received at cut-off price.
Sejal tapped the capital market with a public issue of 9,194,155 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process to raise maximum of Rs 1,057.33 million to finance its expansion plans.
The issue will close on June 12. It has fixed the price band at Rs 105 to Rs 115 a share. The issue would constitute 32.84% of the fully diluted post issue paid-up equity capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Saffron Capital Advisors is helping to the company in the process of raising funds from the market.
The issue has been graded by the leading credit rating agency CRISIL. It has assigned the IPO grade `1/5`, indicating that the fundamentals of the issue are poor relative to other listed equity securities in India.
Incorporated in January 1998, Sejal is engaged in the business of processing glass. The company has processing facilities for insulating, toughened, laminated glasses and for decorative glass. The existing plant of the company is located in Silvassa. As a step towards backward integration, the company proposes to set up a new manufacturing facility for float glass with a capacity of 200,750 MT per annum at Bharuch, Gujarat.
Sejal tapped the capital market with a public issue of 9,194,155 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process to raise maximum of Rs 1,057.33 million to finance its expansion plans.
The issue will close on June 12. It has fixed the price band at Rs 105 to Rs 115 a share. The issue would constitute 32.84% of the fully diluted post issue paid-up equity capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Saffron Capital Advisors is helping to the company in the process of raising funds from the market.
The issue has been graded by the leading credit rating agency CRISIL. It has assigned the IPO grade `1/5`, indicating that the fundamentals of the issue are poor relative to other listed equity securities in India.
Incorporated in January 1998, Sejal is engaged in the business of processing glass. The company has processing facilities for insulating, toughened, laminated glasses and for decorative glass. The existing plant of the company is located in Silvassa. As a step towards backward integration, the company proposes to set up a new manufacturing facility for float glass with a capacity of 200,750 MT per annum at Bharuch, Gujarat.
First Winner Industries IPO subscribe 2% on day one
Initial public offering (IPO) of First Winner Industries, a Mumbai based company engaged in the business of trading of textile fabric and manufacturing of grey fabric, subscribed 2% on the first day. It received 106,500 bids as against issue size of 5.50 million shares. Total of 6,150 bids were received at cut-off price.
First Winner Industries enters the capital market with a public issue of 5.50 million equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process to raise maximum of Rs 715 million to finance its expansion activities.
The issue, which opened today (June 9), will close on June 12. The company has fixed the price band at Rs 120 to Rs 130 a share. The issue would constitute 31.02% of the post issue paid-up capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Almondz Global Securities is helping the company in the process of raising funds from the market.
CARE, a leading credit rating agency, has assigned `IPO Grade 1` to the public issue of the company. IPO Grade 1 indicates poor fundamentals.
Incorporated in January 2003, First Winner Industries is engaged in trading of textile fabric and manufacturing of grey fabric. The manufacturing facilities are located in Thane, Maharashtra. The unit has total installed capacity to manufacture 10.80 million meter grey fabrics per annum. In order to diversify and expand its business activities by means of forward integration, the company proposes to set up apparel manufacturing facility and new weaving unit, which will be funded by the issue of proceeds of the public issue.
First Winner Industries enters the capital market with a public issue of 5.50 million equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process to raise maximum of Rs 715 million to finance its expansion activities.
The issue, which opened today (June 9), will close on June 12. The company has fixed the price band at Rs 120 to Rs 130 a share. The issue would constitute 31.02% of the post issue paid-up capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Almondz Global Securities is helping the company in the process of raising funds from the market.
CARE, a leading credit rating agency, has assigned `IPO Grade 1` to the public issue of the company. IPO Grade 1 indicates poor fundamentals.
Incorporated in January 2003, First Winner Industries is engaged in trading of textile fabric and manufacturing of grey fabric. The manufacturing facilities are located in Thane, Maharashtra. The unit has total installed capacity to manufacture 10.80 million meter grey fabrics per annum. In order to diversify and expand its business activities by means of forward integration, the company proposes to set up apparel manufacturing facility and new weaving unit, which will be funded by the issue of proceeds of the public issue.
Lotus Eye Care IPO opens on June 12
Coimbatore based Lotus Eye Care Hospital is all set to tap capital market with a public issue of 10 million equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process to raise maximum of Rs 420 million to finance its expansion plans.
The issue will open on June 12 and will close on June 17. The company has fixed the price band at Rs 38 to Rs 42 a share. The issue would constitute 48.09% of the fully diluted post issue paid-up equity capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Keynote Corporate Services is helping the company in the process of raising funds from the market.
This issue has been graded by Credit Analysis & Research (CARE) and has been assigned an `IPO Grade 3` indicating average fundamentals.
Of the total equity float, at least 50% of the issue shall be allocated on a proportionate basis to qualified institutional bidders (QIBs) including 5% of the QIB portion that would be especially reserved for mutual funds. Further, not less than 15% of the issue shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the issue shall be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price.
Lotus Eye Care Hospital is the eye care hospital group functioning in South India with specialization in super-specialty service related to eye care. It has network of four eye care hospitals based at Coimbatore (2), Salem (1), Tirupur (1). It operates in outpatient, daycare and inpatient hospital services and retail sales in the pharmacy and optical. During the financial year 2006-2007, it reported a net profit of Rs 12.87 million on total income of Rs 72.99 million.
The issue will open on June 12 and will close on June 17. The company has fixed the price band at Rs 38 to Rs 42 a share. The issue would constitute 48.09% of the fully diluted post issue paid-up equity capital of the company. The equity shares are proposed to be listed on Bombay Stock Exchange of India (BSE) and National Stock Exchange (NSE). Keynote Corporate Services is helping the company in the process of raising funds from the market.
This issue has been graded by Credit Analysis & Research (CARE) and has been assigned an `IPO Grade 3` indicating average fundamentals.
Of the total equity float, at least 50% of the issue shall be allocated on a proportionate basis to qualified institutional bidders (QIBs) including 5% of the QIB portion that would be especially reserved for mutual funds. Further, not less than 15% of the issue shall be available for allocation on a proportionate basis to non-institutional bidders and not less than 35% of the issue shall be available for allocation on a proportionate basis to retail individual bidders, subject to valid bids being received at or above the issue price.
Lotus Eye Care Hospital is the eye care hospital group functioning in South India with specialization in super-specialty service related to eye care. It has network of four eye care hospitals based at Coimbatore (2), Salem (1), Tirupur (1). It operates in outpatient, daycare and inpatient hospital services and retail sales in the pharmacy and optical. During the financial year 2006-2007, it reported a net profit of Rs 12.87 million on total income of Rs 72.99 million.
Monday, June 9, 2008
Asian Markets Slips on High oil prices
Asian markets could not carry their broad advance of previous week closing sharply lower today, with banking and automotive shares leading decliners as oil stayed near record highs and investors fretted the global economy could be headed into another round of credit market turmoil.
Light, sweet crude oil for July delivery fell as much as 76 cents to $137.78 a barrel in electronic trading, after climbing nearly $11 a barrel to close at $138.54 Friday on the New York Mercantile Exchange. Friday`s surge in oil prices was driven by heightened concerns that Israel may attack Iran, one of the world`s biggest oil producers, and that a conflict could result in a blockade of the Straits of Hormuz, through which 20% of the world`s crude oil passes each day.
Japan`s Nikkei 225 Average and the Topix index both closed 2.1% lower to 14,181.38 and 1,397.54 respectively. On the economic front, Japan`s index of leading indicators came in at 30.0 in April continuing its run for below the boom-or-bust threshold of 50.0 in the ninth straight month. The coincident index, which measures the current state of the economy, stood at 22.2. In March it stood at 27.3.
After plummeting by about 550 points in the opening trade India`s Sensex down recovered a bit but continued to be the biggest loser of the region. In the afternoon trading the Sensex was down by 3.1% to 15,084.70.
South Korea`s Kospi index shed 1.3% to 1,808.96. Singapore`s Straits Times index was off 2.1% to 3,080.29 while Taiwan`s Weighted Price Index fell 1.8% to 8,578.96.
Markets in Australia, China, Hong Kong and the Philippines were closed for public holidays.
The slump in Asia follows a punishing session for U.S. stocks Friday, as weak employment data and a surge in crude oil prices combined to lead the Dow Jones Industrial Average to its worst one-day decline in 15 months. At the end of Friday, the Dow Jones Industrial Average plunged 394.64 points, or 3.1%, to end 12,209.81, giving it a weekly loss of 3.5%. The S&P 500 Index fell 43.36 points, or 3.1%, to 1,360.69, leaving it down 2.9% for the week. The technology-heavy Nasdaq Composite Index shed 75.38 points i.e. 3%, to 2,474.56 for a weekly decline of 1.9%.
In currencies, the yen was exchanged at 105.19 yen against the U.S. dollar, compared to 104.85 in New York late Friday.
In other regional action, New Zealand`s NZX-50 gave up 1.4% and Malaysia`s KLSE Composite shed 1.6%. Indonesia`s Jakarta Composite fell 0.9% and Thailand`s SET Index fell 1.2%.
European markets followed Asian markets with negative opening as shares of banks and airlines again fall down following the soaring crude oil prices.
Of national indexes, the German DAX 30 index fell 0.5% to 6,773.61, the French CAC-40 index declined 0.3% to 4,782.51 and the U.K. FTSE 100 index lost 0.2% to 5,896.50.
On the economic release side, Germany`s trade surplus rose in April on stronger exports, giving little sign that the country`s exports are being squeezed by a global economic slowdown.
The German trade surplus totaled EUR18.7 billion - higher than a revised EUR16.6 billion surplus in March, which was originally reported at EUR16.7 billion.
Exports totaled EUR85.4 billion on a seasonally adjusted basis, showing a 1.2% rise from March, following two consecutive months of declines. April exports surged 13.9% from a year earlier.
German seasonally adjusted imports eased slightly in April, falling to EUR67.6 billion from EUR69.1 billion in March, a figure originally reported as EUR69.2 billion. But imports over the full year are holding up. Total imports so far this year were EUR272.9 billion, up from EUR253.1 billion in the year-earlier period.
The country`s current account surplus fell to EUR14.5 billion, from EUR17.5 billion in March, which was previously reported as EUR17.2 billion.
U.K. factory gate prices soared in May, climbing at their fastest pace since records began in 1986, highlighting the policy dilemma faced by the Bank of England in the coming months as the corporate and consumer mood darkens.
The output price index for home sales and manufactured products rose 1.6% on the month in May - driven largely by recovered secondary raw materials and petroleum products. On the year, the output PPI rose 8.9%, much more than the upwardly revised 7.6% gain in April.
Excluding volatile food, beverages, tobacco and petroleum prices, output producer prices rose 1.3% on the month and 5.9% on the year in May - Sharpest annual gain since March 1991. In April, the core index rose 1.2% on the month and 4.6% on the year.
Meanwhile, the annual rate of gain in input prices also surged to a fresh record high in May, mainly due to the climbing price of crude oil, indicating yet more price pressures in the pipeline.
The input price index for materials and fuels purchased by the manufacturing industry gained 27.6% on the year in seasonally adjusted terms, following a 24.7% rise in April. In monthly terms, the index rose 3.8% on the month, following a 3.2% rise in April.
Looking ahead the day is scheduled to release housing starts from Canada followed by pending home sales from United States. In the late evening BRC will release its retail sales for the United Kingdom which will be accompanied by Bernanke`s Speech and Japan`s Core machinery orders.
Light, sweet crude oil for July delivery fell as much as 76 cents to $137.78 a barrel in electronic trading, after climbing nearly $11 a barrel to close at $138.54 Friday on the New York Mercantile Exchange. Friday`s surge in oil prices was driven by heightened concerns that Israel may attack Iran, one of the world`s biggest oil producers, and that a conflict could result in a blockade of the Straits of Hormuz, through which 20% of the world`s crude oil passes each day.
Japan`s Nikkei 225 Average and the Topix index both closed 2.1% lower to 14,181.38 and 1,397.54 respectively. On the economic front, Japan`s index of leading indicators came in at 30.0 in April continuing its run for below the boom-or-bust threshold of 50.0 in the ninth straight month. The coincident index, which measures the current state of the economy, stood at 22.2. In March it stood at 27.3.
After plummeting by about 550 points in the opening trade India`s Sensex down recovered a bit but continued to be the biggest loser of the region. In the afternoon trading the Sensex was down by 3.1% to 15,084.70.
South Korea`s Kospi index shed 1.3% to 1,808.96. Singapore`s Straits Times index was off 2.1% to 3,080.29 while Taiwan`s Weighted Price Index fell 1.8% to 8,578.96.
Markets in Australia, China, Hong Kong and the Philippines were closed for public holidays.
The slump in Asia follows a punishing session for U.S. stocks Friday, as weak employment data and a surge in crude oil prices combined to lead the Dow Jones Industrial Average to its worst one-day decline in 15 months. At the end of Friday, the Dow Jones Industrial Average plunged 394.64 points, or 3.1%, to end 12,209.81, giving it a weekly loss of 3.5%. The S&P 500 Index fell 43.36 points, or 3.1%, to 1,360.69, leaving it down 2.9% for the week. The technology-heavy Nasdaq Composite Index shed 75.38 points i.e. 3%, to 2,474.56 for a weekly decline of 1.9%.
In currencies, the yen was exchanged at 105.19 yen against the U.S. dollar, compared to 104.85 in New York late Friday.
In other regional action, New Zealand`s NZX-50 gave up 1.4% and Malaysia`s KLSE Composite shed 1.6%. Indonesia`s Jakarta Composite fell 0.9% and Thailand`s SET Index fell 1.2%.
European markets followed Asian markets with negative opening as shares of banks and airlines again fall down following the soaring crude oil prices.
Of national indexes, the German DAX 30 index fell 0.5% to 6,773.61, the French CAC-40 index declined 0.3% to 4,782.51 and the U.K. FTSE 100 index lost 0.2% to 5,896.50.
On the economic release side, Germany`s trade surplus rose in April on stronger exports, giving little sign that the country`s exports are being squeezed by a global economic slowdown.
The German trade surplus totaled EUR18.7 billion - higher than a revised EUR16.6 billion surplus in March, which was originally reported at EUR16.7 billion.
Exports totaled EUR85.4 billion on a seasonally adjusted basis, showing a 1.2% rise from March, following two consecutive months of declines. April exports surged 13.9% from a year earlier.
German seasonally adjusted imports eased slightly in April, falling to EUR67.6 billion from EUR69.1 billion in March, a figure originally reported as EUR69.2 billion. But imports over the full year are holding up. Total imports so far this year were EUR272.9 billion, up from EUR253.1 billion in the year-earlier period.
The country`s current account surplus fell to EUR14.5 billion, from EUR17.5 billion in March, which was previously reported as EUR17.2 billion.
U.K. factory gate prices soared in May, climbing at their fastest pace since records began in 1986, highlighting the policy dilemma faced by the Bank of England in the coming months as the corporate and consumer mood darkens.
The output price index for home sales and manufactured products rose 1.6% on the month in May - driven largely by recovered secondary raw materials and petroleum products. On the year, the output PPI rose 8.9%, much more than the upwardly revised 7.6% gain in April.
Excluding volatile food, beverages, tobacco and petroleum prices, output producer prices rose 1.3% on the month and 5.9% on the year in May - Sharpest annual gain since March 1991. In April, the core index rose 1.2% on the month and 4.6% on the year.
Meanwhile, the annual rate of gain in input prices also surged to a fresh record high in May, mainly due to the climbing price of crude oil, indicating yet more price pressures in the pipeline.
The input price index for materials and fuels purchased by the manufacturing industry gained 27.6% on the year in seasonally adjusted terms, following a 24.7% rise in April. In monthly terms, the index rose 3.8% on the month, following a 3.2% rise in April.
Looking ahead the day is scheduled to release housing starts from Canada followed by pending home sales from United States. In the late evening BRC will release its retail sales for the United Kingdom which will be accompanied by Bernanke`s Speech and Japan`s Core machinery orders.
RCom strikes back in weak market
The market remained subdued although it recovered some ground from its intra-day lows in mid-afternoon trade. Earlier Indian benchmark indices had slumped due to a sharp surge in global crude oil price and setback in US stocks on Friday, 6 June 2008. BSE. Sensex had fallen below 15,000 mark for the first time since 19 March 2008. The S&P CNX Nifty hit a fresh 2008 low.
Except the BSE HealthCare index, all the other sectoral indices on BSE were in red. The market breadth was extremely weak. IT, realty, power stocks were worst in today`s market fall. European markets which opened after Indian markets were mixed.
Oil prices surged by their biggest one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year`s gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.
At 13:28 IST, the 30-share BSE Sensex was down 415.28 points or 2.61% at 15,165.12. At the day`s low of 14846.18 hit during mid-morning trade, the Sensex lost 726 points.
The broader based S&P CNX Nifty was down 123.05 points or 2.66% at 4,504.75. It hit a low of 4411.60 today in mid-morning trade. The index fell below 2008 low of 4448.50 hit on 22 January 2008.
The market breadth was extremely weak on BSE with 367 shares advancing as compared to 2216 that declined. 41 remained unchanged. From the 30-share Sensex pack, 27 fell.
The BSE Mid Cap index declined 3.22% to 6145.94 and BSE Small-Cap index fell 3.77% to 7405.75. Both these indices underperformed Sensex.
India`s second largest telecom services provider by sales Reliance Communication rose 2.21% to Rs 557.50. The stock recovered from session`s low of Rs 507.90. Reliance Communication (RCom) and the South African telco MTN will reportedly decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.
Metal stocks dropped. National Aluminium Company (down 2.91% to Rs 477), Sterlite Industries (down 1.97% to Rs 838), Hindalco Industries (down 1.03% to Rs 173.80), Tata Steel (down 0.48% to Rs 819.20) and Steel Authority of India (down 0.23% to Rs 153.35) edged lower.
IT stocks declined. Wipro (down 4.22% to Rs 484.50), Infosys (down 3.1% to Rs 1,931), Tata Consultancy Services (down 2.8% to Rs 932.75) and Satyam Computer Services (down 2.63% to Rs 495.65) edged lower.
Capital goods stocks fell. Suzlon Energy (down 8.99% to Rs 255), Bharat Heavy Electricals (down 2.66% to Rs 1,383.60) and Larsen & Toubro (down 3.04% to Rs 2604) edged lower.
BSE Realty index was down 7.23% to 5,761.04. It was the top loser from the sectoral indices on BSE. Unitech (down 8.79% to Rs 185.75), Indiabulls Real Estate (down 6.15% to Rs 399) and DLF (down 7.87% to Rs 479.05) edged lower from the realty pack.
BSE Power index was the second biggest loser from the sectoral indices on BSE. It was down 3.76% to 2598.44. Reliance Infrastructure (down 7.6% to Rs 1,016), Reliance Power (down 4.44% to Rs 185), PowerGrid Corporation of India (down 2.7% to Rs 84.60), Tata Power Company (down 4.16% to Rs 1,222), NTPC (down 1.9% to Rs 162.45) edged lower from the BSE Power index.
Jaiprakash Associates (down 8.33% to Rs 184.30), HDFC (down 6.57% to Rs 2199.45), Tata Motors (down 6.12% to Rs 507), ONGC (down 5.38% to Rs 887.85), HDFC Bank (down 4.65% to Rs 1179.90), Bharti Airtel (down 4.25% to Rs 768), Ambuja Cements (down 4.04% to Rs 81.80), State Bank of India (down 3.49% to Rs 1288.50), Mahindra & Mahindra (down 3.38% to Rs 563), edged lower from the Sensex pack.
Ranbaxy Laboratories jumped 3.65% to Rs 525.30. It was the top gainer from the Sensex pack.
European markets were trading mixed. Key benchmark indices in France and Germany were down by between 0.08% to 0.09%. The UK”S FTSE 100 however rose by 0.18%.
In Asia, key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 1.27% to 2.13% today. Markets in China, Hong Kong and the Philippines were closed for public holidays.
US stocks plunged on Friday, 6 June 2008, marking the Dow`s worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation. The Dow Jones industrial average tanked 394.64 points, or 3.13% to end at 12,209.81, its biggest drop since February 2007. The S&P 500 slid 43.37 points, or 3.09%, to finish the day at 1,360.68. The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56.
Surging global crude oil prices, a hike in domestic fuel prices and rising inflation have spooked the domestic bourses in the past few days. Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices. From a recent high of 17,434.94 on 16 May 2008, the barometer index, BSE Sensex tanked 1,862.76 points or 10.68% in a short span to 15,572.18 on 6 June 2008.
FIIs sold shares worth a net Rs 3291.20 core in the first few days of this month, till 5 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to helpcurb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Except the BSE HealthCare index, all the other sectoral indices on BSE were in red. The market breadth was extremely weak. IT, realty, power stocks were worst in today`s market fall. European markets which opened after Indian markets were mixed.
Oil prices surged by their biggest one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year`s gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.
At 13:28 IST, the 30-share BSE Sensex was down 415.28 points or 2.61% at 15,165.12. At the day`s low of 14846.18 hit during mid-morning trade, the Sensex lost 726 points.
The broader based S&P CNX Nifty was down 123.05 points or 2.66% at 4,504.75. It hit a low of 4411.60 today in mid-morning trade. The index fell below 2008 low of 4448.50 hit on 22 January 2008.
The market breadth was extremely weak on BSE with 367 shares advancing as compared to 2216 that declined. 41 remained unchanged. From the 30-share Sensex pack, 27 fell.
The BSE Mid Cap index declined 3.22% to 6145.94 and BSE Small-Cap index fell 3.77% to 7405.75. Both these indices underperformed Sensex.
India`s second largest telecom services provider by sales Reliance Communication rose 2.21% to Rs 557.50. The stock recovered from session`s low of Rs 507.90. Reliance Communication (RCom) and the South African telco MTN will reportedly decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.
Metal stocks dropped. National Aluminium Company (down 2.91% to Rs 477), Sterlite Industries (down 1.97% to Rs 838), Hindalco Industries (down 1.03% to Rs 173.80), Tata Steel (down 0.48% to Rs 819.20) and Steel Authority of India (down 0.23% to Rs 153.35) edged lower.
IT stocks declined. Wipro (down 4.22% to Rs 484.50), Infosys (down 3.1% to Rs 1,931), Tata Consultancy Services (down 2.8% to Rs 932.75) and Satyam Computer Services (down 2.63% to Rs 495.65) edged lower.
Capital goods stocks fell. Suzlon Energy (down 8.99% to Rs 255), Bharat Heavy Electricals (down 2.66% to Rs 1,383.60) and Larsen & Toubro (down 3.04% to Rs 2604) edged lower.
BSE Realty index was down 7.23% to 5,761.04. It was the top loser from the sectoral indices on BSE. Unitech (down 8.79% to Rs 185.75), Indiabulls Real Estate (down 6.15% to Rs 399) and DLF (down 7.87% to Rs 479.05) edged lower from the realty pack.
BSE Power index was the second biggest loser from the sectoral indices on BSE. It was down 3.76% to 2598.44. Reliance Infrastructure (down 7.6% to Rs 1,016), Reliance Power (down 4.44% to Rs 185), PowerGrid Corporation of India (down 2.7% to Rs 84.60), Tata Power Company (down 4.16% to Rs 1,222), NTPC (down 1.9% to Rs 162.45) edged lower from the BSE Power index.
Jaiprakash Associates (down 8.33% to Rs 184.30), HDFC (down 6.57% to Rs 2199.45), Tata Motors (down 6.12% to Rs 507), ONGC (down 5.38% to Rs 887.85), HDFC Bank (down 4.65% to Rs 1179.90), Bharti Airtel (down 4.25% to Rs 768), Ambuja Cements (down 4.04% to Rs 81.80), State Bank of India (down 3.49% to Rs 1288.50), Mahindra & Mahindra (down 3.38% to Rs 563), edged lower from the Sensex pack.
Ranbaxy Laboratories jumped 3.65% to Rs 525.30. It was the top gainer from the Sensex pack.
European markets were trading mixed. Key benchmark indices in France and Germany were down by between 0.08% to 0.09%. The UK”S FTSE 100 however rose by 0.18%.
In Asia, key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 1.27% to 2.13% today. Markets in China, Hong Kong and the Philippines were closed for public holidays.
US stocks plunged on Friday, 6 June 2008, marking the Dow`s worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation. The Dow Jones industrial average tanked 394.64 points, or 3.13% to end at 12,209.81, its biggest drop since February 2007. The S&P 500 slid 43.37 points, or 3.09%, to finish the day at 1,360.68. The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56.
Surging global crude oil prices, a hike in domestic fuel prices and rising inflation have spooked the domestic bourses in the past few days. Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices. From a recent high of 17,434.94 on 16 May 2008, the barometer index, BSE Sensex tanked 1,862.76 points or 10.68% in a short span to 15,572.18 on 6 June 2008.
FIIs sold shares worth a net Rs 3291.20 core in the first few days of this month, till 5 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to helpcurb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Cairn India speeds up on rally in crude oil price
Meanwhile, the BSE Sensex was down 538.54 points, or 3.52%, at 15024.64, on weak cues from global markets. US stocks plunged on Friday, 6 June 2008, marking the Dow`s worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation.
On BSE, 17.9 lakh shares were traded in the counter. The scrip had an average daily volume of 28.94 lakh shares in the past one quarter.
The stock hit a high of Rs 304.90 and a low of Rs 285 so far during the day. The stock had a 52-week high of Rs 342.50 on 21 May 2008 and a 52-week low of Rs 131.30 on 12 June 2007.
The scrip had outperformed the market over the past one month till 6 June 2008, gaining 2.42% compared to the Sensex`s 8.83% decline. It had also outperformed the market in the past one quarter, rising 36.80% compared to Sensex`s 2.52% fall.
The large-cap private sector oil exploration firm has an equity capital of Rs 1894.43 crore. Face value per share is Rs 10.
Cairn India reported a net loss of Rs 8.74 crore in Q1 March 2008 as compared to net loss of Rs 8.54 crore in Q1 March 2007. Sales rose 78% to Rs 0.89 crore in Q1 March 2008 over Q1 March 2007.
Cairn India`s principal activity is to explore, develop and produce crude oil and natural gas.
On BSE, 17.9 lakh shares were traded in the counter. The scrip had an average daily volume of 28.94 lakh shares in the past one quarter.
The stock hit a high of Rs 304.90 and a low of Rs 285 so far during the day. The stock had a 52-week high of Rs 342.50 on 21 May 2008 and a 52-week low of Rs 131.30 on 12 June 2007.
The scrip had outperformed the market over the past one month till 6 June 2008, gaining 2.42% compared to the Sensex`s 8.83% decline. It had also outperformed the market in the past one quarter, rising 36.80% compared to Sensex`s 2.52% fall.
The large-cap private sector oil exploration firm has an equity capital of Rs 1894.43 crore. Face value per share is Rs 10.
Cairn India reported a net loss of Rs 8.74 crore in Q1 March 2008 as compared to net loss of Rs 8.54 crore in Q1 March 2007. Sales rose 78% to Rs 0.89 crore in Q1 March 2008 over Q1 March 2007.
Cairn India`s principal activity is to explore, develop and produce crude oil and natural gas.
Nifty hits fresh 2008 low; Sensex falls 15,000
Realty, banking, oil & gas and power stocks led sell-off on the bourses caused by a sharp surge in global crude oil price and setback in US stocks on Friday, 6 June 2008. BSE Sensex fell below 15,000 mark for the first time since 19 March 2008. The S&P CNX Nifty hit a fresh 2008 low. All the sectoral indices on BSE were in red. The market breadth was extremely weak.
Oil prices surged by their biggest one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year`s gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.
At 11:21 IST, the 30-share BSE Sensex was down 699.51 points or 4.48% at 14,874.55. At the day`s low of 14846.18 hit during mid-morning trade, the Sensex lost 726 points.
The broader based S&P CNX Nifty was down 204 points or 4.41% at 4,423.80. It hit a low of 4411.60. Nifty fell below 2008 low of 4448.50 hit on 22 January 2008.
The market breadth was extremely weak on BSE with 182 shares advancing as compared to 2110 that declined. 22 remained unchanged.
All the 30 stocks from Sensex pack were trading in red.
Oil & Gas stocks fell after global crude oil prices hit the roof. PSU oil marketing companies which had found little solace after government had hiked domestic retail fuel prices were battered today. HPCL (down 11.34% to Rs 188.75), BPCL (down 10.23% to Rs 269), and Indian Oil Corporation (down 7.31% to Rs 350.35) edged lower. Reliance Industries (down 3.78% to Rs 2147.95) and ONGC (down 6.82% to Rs 874.50) also edged lower.
Banking stocks plummeted on concerns the Reserve Bank may hike interest rates to rein in inflation which is at its highest level in nearly four years. HDFC Bank (down 5.54% to Rs 1168.95), State Bank of India (down 4.48% to Rs 1276) and ICICI Bank (down 3.98% to Rs 740.15) edged lower.
Realty index was the top loser from the sectoral indices on BSE. Unitech (down 8.71% to Rs 186.05), Indiabulls Real Estate (down 11.02% to Rs 377.355) and DLF (down 7.01% to Rs 483.45) edged lower.
Power stocks fell. Reliance Infrastructure (down 7.15% to Rs 1022), Reliance Power (down 5.37% to Rs 183.35), PowerGrid Corporation of India (down 5.12% to Rs 82.50), Tata Power Company (down 5.49% to Rs 1205), NTPC (down 3.44% to Rs 159.85) edged lower.
Jaiprakash Associates (down 8.03% to Rs 184.80), HDFC (down 8.06% to Rs 2158), Ambuja Cements (down 6.2% to Rs 80.20), Bharti Airtel (down 5.12% to Rs 762), Bharat Heavy Electricals (down 4.6% to Rs 1356), edged lower from the Sensex pack.
India`s second largest telecom services provider by sales Reliance Communication declined 6.24% to Rs 513.60. Reliance Communication (RCom) and the South African telco MTN will reportedly decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.
India`s largest commercial vehicles maker by sales Tata Motors declined 5.7% to Rs 509.25.
In Asia, key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 1.32% to 2.02% today. Markets in China, Hong Kong and the Philippines were closed for public holidays.
US stocks plunged on Friday, 6 June 2008, marking the Dow`s worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation. The Dow Jones industrial average tanked 394.64 points, or 3.13% to end at 12,209.81, its biggest drop since February 2007. The S&P 500 slid 43.37 points, or 3.09%, to finish the day at 1,360.68. The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56.
Surging global crude oil prices, a hike in domestic fuel prices and rising inflation have spooked the domestic bourses in the past few days. Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices.
From a recent high of 17,434.94 on 16 May 2008, the barometer index, BSE Sensex tanked 1,862.76 points or 10.68% in a short span to 15,572.18 on 6 June 2008.
FIIs sold shares worth a net Rs 3291.20 core in the first few days of this month, till 5 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall ditribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Oil prices surged by their biggest one-day gain ever on Friday, 6 June 2008, rocketing over $10 to a new record high above $139 a barrel, taking this year`s gains to 44%. Oil prices edged lower to $137.7 today, 9 June 2008.
At 11:21 IST, the 30-share BSE Sensex was down 699.51 points or 4.48% at 14,874.55. At the day`s low of 14846.18 hit during mid-morning trade, the Sensex lost 726 points.
The broader based S&P CNX Nifty was down 204 points or 4.41% at 4,423.80. It hit a low of 4411.60. Nifty fell below 2008 low of 4448.50 hit on 22 January 2008.
The market breadth was extremely weak on BSE with 182 shares advancing as compared to 2110 that declined. 22 remained unchanged.
All the 30 stocks from Sensex pack were trading in red.
Oil & Gas stocks fell after global crude oil prices hit the roof. PSU oil marketing companies which had found little solace after government had hiked domestic retail fuel prices were battered today. HPCL (down 11.34% to Rs 188.75), BPCL (down 10.23% to Rs 269), and Indian Oil Corporation (down 7.31% to Rs 350.35) edged lower. Reliance Industries (down 3.78% to Rs 2147.95) and ONGC (down 6.82% to Rs 874.50) also edged lower.
Banking stocks plummeted on concerns the Reserve Bank may hike interest rates to rein in inflation which is at its highest level in nearly four years. HDFC Bank (down 5.54% to Rs 1168.95), State Bank of India (down 4.48% to Rs 1276) and ICICI Bank (down 3.98% to Rs 740.15) edged lower.
Realty index was the top loser from the sectoral indices on BSE. Unitech (down 8.71% to Rs 186.05), Indiabulls Real Estate (down 11.02% to Rs 377.355) and DLF (down 7.01% to Rs 483.45) edged lower.
Power stocks fell. Reliance Infrastructure (down 7.15% to Rs 1022), Reliance Power (down 5.37% to Rs 183.35), PowerGrid Corporation of India (down 5.12% to Rs 82.50), Tata Power Company (down 5.49% to Rs 1205), NTPC (down 3.44% to Rs 159.85) edged lower.
Jaiprakash Associates (down 8.03% to Rs 184.80), HDFC (down 8.06% to Rs 2158), Ambuja Cements (down 6.2% to Rs 80.20), Bharti Airtel (down 5.12% to Rs 762), Bharat Heavy Electricals (down 4.6% to Rs 1356), edged lower from the Sensex pack.
India`s second largest telecom services provider by sales Reliance Communication declined 6.24% to Rs 513.60. Reliance Communication (RCom) and the South African telco MTN will reportedly decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.
India`s largest commercial vehicles maker by sales Tata Motors declined 5.7% to Rs 509.25.
In Asia, key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 1.32% to 2.02% today. Markets in China, Hong Kong and the Philippines were closed for public holidays.
US stocks plunged on Friday, 6 June 2008, marking the Dow`s worst day in 15 months, after the US government said the May 2008 unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the US economy faces 1970s-style stagflation. The Dow Jones industrial average tanked 394.64 points, or 3.13% to end at 12,209.81, its biggest drop since February 2007. The S&P 500 slid 43.37 points, or 3.09%, to finish the day at 1,360.68. The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56.
Surging global crude oil prices, a hike in domestic fuel prices and rising inflation have spooked the domestic bourses in the past few days. Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices.
From a recent high of 17,434.94 on 16 May 2008, the barometer index, BSE Sensex tanked 1,862.76 points or 10.68% in a short span to 15,572.18 on 6 June 2008.
FIIs sold shares worth a net Rs 3291.20 core in the first few days of this month, till 5 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 18660.60 crore, till 5 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.
Brokerage earnings downgrades of Indian firms/stock prices amid rising input and interest costs for India Inc, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. If inflation remains high, the Reserve Bank of India (RBI) would be forced to hike repo rate – a move that could choke overall growth of the economy. The Indian industry and consumer have already been reeling under high interest rates over the past few months. A further hike in rates would raise interest costs of corporate India and hit bottomline.
After 10 days of debate, the Union government on Wednesday, 4 June 2008 agreed to raise retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners. A sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.
According to rating agency CRISIL, headline inflation is expected to increase by 95 basis points on account of direct and indirect effects of the fuel price hike. The indirect impact which will be felt over the course of the next few months, it states in a note.
A well distributed monsoon will bolster food production, helping douse inflation. Agricultural output in India depends on good rains. The Indian Meteorological Department (IMD)`s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this months which may indicate spatial rainfall ditribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.
A section of the market is of the view that the central bank may only use the reserve requirement route to tame inflation, fearing any hike in rates would further hurt growth already seen moderating to a still strong 8%-8.5% this fiscal year from 9% in 2007/08. To rein in inflation, in its monetary policy review for 2008-09 on 29 April 2008, the RBI raised cash reserve ratio (CRR) by 25 basis points to 8.25% to suck out excess liquidity in the banking system. RBI often says pass-through of high global oil prices is incomplete in India, complicating policy making.
Another near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.
Asian markets slip on growth concern , Indian markets to open lower
Asian markets declined in the initial session of trade on Monday (June 09), led by automakers and technology companies, after U.S. unemployment increased by the most in 22 years and oil touched new high.
Toyota Motor and Samsung Electronics led the declines on concern demand for their exports will reduce in US.
Japanese benchmark index Nikkei declined 298.56 points, or 2.06%, to trade at 14,190.88.
Hong Kong`s index Hang Seng and China`s Shanghai Composite are closed today.
Taiwan`s Taiex index lost 180.02 points, or 2.06%, to trade at 8,565.33.
South Korea`s KOSPI declined 31.62 points, or 1.73%, to trade at 1,800.69.
Singapore`s Straits Times lost 61.27 points, or 1.95%, to trade at 3,085.46. (8.18 a.m., IST).
Indian markets are likely to retest last week` low of 4,530 levels. 4,680/4,725 are resistance levels on upside. However some relief rally is likely towards later part of the week, as markets have become extremely oversold,
Toyota Motor and Samsung Electronics led the declines on concern demand for their exports will reduce in US.
Japanese benchmark index Nikkei declined 298.56 points, or 2.06%, to trade at 14,190.88.
Hong Kong`s index Hang Seng and China`s Shanghai Composite are closed today.
Taiwan`s Taiex index lost 180.02 points, or 2.06%, to trade at 8,565.33.
South Korea`s KOSPI declined 31.62 points, or 1.73%, to trade at 1,800.69.
Singapore`s Straits Times lost 61.27 points, or 1.95%, to trade at 3,085.46. (8.18 a.m., IST).
Indian markets are likely to retest last week` low of 4,530 levels. 4,680/4,725 are resistance levels on upside. However some relief rally is likely towards later part of the week, as markets have become extremely oversold,
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