The ancient Greek definition of happiness was the full use of your powers along lines of excellence.
Happiness and Excellence are reserved for Reliance Power, as the Rs117bn IPO was gone in 60 seconds. India's biggest public issue was fully subscribed within a minute of opening. Imagine, the FM, who has never commented on public issues, too had a quote to deliver – "It is a reflection of what the world thinks about the future of India."
But what about the future of the market? It's a sorry state for the bulls as of now. The persistent global weakness and liquidity crunch on account of mega IPOs could keep the sentiment weak. Remember, many heavyweights like Reliance and ONGC haven't fallen much. So, there is room for further fall. Banking on fresh buying today is wishful thinking. But it's a market all the same and nothing wrong in hoping for the best.
Results Today: Allahabad Bank, Asian Granito, Chambal Fertilizers, GTC Industries, India Cements, Infotech Enterprises, LIC Housing Finance, MRPL, Petronet LNG, Rallis India, TCS, Ucal Fuel, Vardhman Textiles, Welspun Gujarat and Zuari Industries.
Southern Ispat's Board has accorded its in-principle approval for the merger of Kerala Sponge Iron. The Board has also authorised the MD to do all the necessary works related to the procurement of raw material to the upcoming Integrated Steel Plant at Kannur. The Board also decided to change the name of the company to Southern Ispat & Power Ltd.
Great Offshore has edged out its Mumbai-based rival Mercator Lines in the race to acquire the UK-based SeaDragon Offshore for $1.4bn. The overseas company will own, upon delivery, two harsh environment, semi-submersible, sixth generation drilling rigs, which are currently under construction.
Essar Energy Overseas, a subsidiary of Essar Oil, has entered into an agreement to acquire 50% stake in Kenya Petroleum Refineries (KPRL), a 4 million metric tonnes per annum (MMTPA) refinery in Mombasa. The Government of Kenya holds the remaining 50% of KPRL.
US stocks got pounded on Tuesday, with all the three major indexes closing at their lowest levels yet this year, following a grim report on December retail sales and Citigroup's steep quarterly loss.
The S&P 500 Index lost 35 points, or 2.5%, to 1,380.95, marking its worst start since the first 10 trading days of 1978. The Dow Jones Industrial Average slumped 277 points, or 2.2%, to 12,501.11, the fifth decline of more than 220 points this year. The Nasdaq slid 61 points, or 2.5%, to 2,417.59.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by nearly 3 to 1 on volume of 1.82 billion shares.
After the close, Intel reported quarterly results and an outlook that disappointed investors, sending shares of the chipmaker tumbling in after-hours trade. Intel also knocked stock futures lower, suggesting a big selloff at Wednesday's open.
JP Morgan and Wells Fargo report earnings Wednesday morning and both are expected to post yearly declines.
Treasury prices rallied as investors sought safety in government debt, sending the 10-year note yield down to a nearly four-year low. The dollar slipped versus the yen and gained versus the euro. Oil and gold prices fell.
Wall Street is looking at some more pain in the near term, unless some really strong earnings come out or the Federal Reserve decides to bite the bullet and announce an aggressive rate cut ahead of the scheduled Jan. 29-30 meeting.
On Wednesday, the Joint Economic Committee holds a hearing on what action the Bush government should take to help avoid a recession. Economic reports are due on consumer prices, industrial production, capacity utilization and the Fed's beige book reading on the economy.
Though the Fed is expected to cut rates at the next meeting, the big worry is that that perhaps won't be sufficient to stop the slide.
According to futures contracts on the Chicago Board of Trade, Wall Street is now betting that the Fed will cut the fed funds rate by 50 basis points at its month-end meeting. There is also the possibility that the central bank may cut rates by 75 basis points.
Retail sales fell 0.4%, short of forecasts and the biggest drop in six months. Excluding volatile auto sales, retail sales also fell a worse-than-expected 0.4 %.
In other economic news, the Producer Price Index (PPI), which measures inflation at the wholesale level, fell 0.1%, versus forecasts for a rise. Core PPI, which excludes volatile food and gas prices, rose 0.2%, as expected. Overall wholesale inflation rose 6.3% in 2007, the worst annual increase in 26 years.
The NY Empire State index, which measures regional manufacturing, fell more than expected.
Citigroup reported an almost $10bn quarterly loss that was worse than expected, slashed its dividend, and said it was taking an $18.1bn writedown related to bad subprime mortgage bets. The top US bank also said it was receiving a $12.5bn cash infusion from investors in Kuwait, Singapore and New Jersey. Citigroup shares slipped 8%.
Merrill Lynch, which reports quarterly results on Thursday, said it had received a $6.6bn cash infusion from investors in Kuwait, Korea and Japan, among other areas of the world. Despite the investment, Merrill shares slipped.
European shares dropped to 16-month lows, with Tesco and Hypo Real Estate notable laggards. The pan-European Dow Jones Stoxx 600 index fell 2.6% to 335.94. The UK's FTSE 100 closed down 3.1% at 6,025.60 and the French CAC-40 dropped 2.8% to 5,250.82. Germany's DAX 30 lost 2.1% at 7,566.38.
In the emerging markets, the Bovespa in Brazil was down 3.7% at 59,907 while the IPC index in Mexico slipped 2.3% to 27,961. The RTS index in Russia fell 0.4% to 2330 while the ISE National-30 index in Turkey was down 2.2% at 63,131.
Asian markets are trading deep in the red. The Nikkei in Tokyo was down 130 points at 13,841 while the Hang Seng in Hong Kong plunged by 1,050 points to 24,787. The Kospi in Seoul slumped 31 points to 1715 while the Straits Times in Singapore was down 67 points at 3086. The Shanghai Composite index in China fell 129 points to 5314 and the Taiex in Taiwan dived 130 points to 8298.
Bounce back on the cards
After a strong start, it was bears in control throughout the session. The mega Rs12,000 cr Reliance Power IPO looked to be attracting a lot of investors as markets witnessed a constant fall in volumes. It was visible that traders and investors were selling stocks to participate in the biggest IPO in history. Media reports also stated that frontline stocks like ICICI Bank, Bharti Airtel and NTPC witnessed delivery based selling.
Selling was seen across the board. The Banking and the Power stocks were worst hit. Even the Mid-Cap and the Small-Cap stock were under pressure. Further weak cues from the Asian and the European markets further dampened the sentiments. The Hang Seng index in Hong Kong was down % and the Nikkei index was down %. In Europe the DAX index was down and FTSE index slipped %.
Finally, 30-share Sensex closed at 20,251 losing 476 points and Nifty lost 132 points to close at 6,074.
Jet Airways was up by 1.4% to Rs904 following reports that the company may soon be allowed to fly to China. The scrip touched an intra-day high of Rs934 and a low of Rs897 and recorded volumes of over 1,00,000 shares on NSE.
Eicher Motors was down 1.4% to Rs377. The company agreed to transfer its trucks division to a joint venture with Sweden’s Volvo for a consideration of Rs4bn in cash, could possibly deploy the funds to create an engineering business according to reports. The scrip touched an intra-day high of Rs420 and a low of Rs375 and recorded volumes of over 16,000 shares on NSE.
Venus Remedies slipped 3% to Rs508. The company announced that they have inaugurated their R&D facility at Baddi. The scrip touched an intra-day high of Rs528 and a low of Rs505.
ONGC slipped 1% to Rs1277. The company struck gas in the Mahanadi basin for the third time according to reports. The scrip touched an intra-day high of Rs1308 and a low of Rs1270 and recorded volumes of over 9,00,000 shares on NSE.
SBI was down 1.6% to Rs2423. The board of directors of the company cleared the proposal to raise capital through rights issue in the ratio of 1:5 at a price of Rs1,590. The scrip touched an intra-day high of Rs2497 and a low of Rs2407 and recorded volumes of over 9,00,000 shares on NSE.
Peninsula Land was down 4% to Rs147. According to reports Essar group bought the company’s Kurla commercial project for Rs12bn. The scrip touched an intra-day high of Rs164 and a low of Rs146 and recorded volumes of over 8,00,000 shares on NSE.
Rohit Ferro gained 1.7% to Rs111 after the company announced that the Jaipur unit of the company has become fully operational with the start of it's 4th furnace. Further, the Bishnupur unit has converted two of it's 9 MVA furnace to produce Ferro Manganese in place of H.C. Ferro Chrome. The scrip touched an intra-day high of Rs117 and a low of Rs110 and recorded volumes of over 4,00,000 shares on NSE.
IDFC fell 1.5% to Rs219. The company announced its consolidated results the group posted a net profit of Rs2172.80mn for the quarter ended December 31, 2007 as compared to Rs1249.90mn for the quarter ended December 31, 2006. Total Income increased from Rs4023mn for the quarter ended December 31, 2006 to Rs7667mn for the quarter ended December 31, 2007. The scrip touched an intra-day high of Rs234 and a low of Rs217 and recorded volumes of over 1,00,00,000 shares on NSE.
Apollo Tyre lost 5% to Rs52. The company announced its Q3 result with net profit at Rs621.7mn (up 77.2%) and net sales at Rs9.74bn (up 13.7). The scrip touched an intra-day high of Rs58 and a low of Rs51 and recorded volumes of over 1,00,00,000 shares on NSE.
What the FIIs are doing
FIIs were net sellers of Rs3.65bn (provisional) in the cash segment on Tuesday while the local institutions were net sellers of just Rs897.4bn.
In the F&O segment, they were net sellers to the tune of Rs14.92bn.
On Monday, FIIs were net buyers of just Rs1.74bn in the cash segment. Mutual Funds were net sellers of Rs5.51bn on the same day.
News Snippets:
Tata’s Nano to be challenged by Volkswagon. (BS)
Videocon Industries is venturing into the grocery and retailing space through cash & carry format across the country. (ET)
Bharti AXA to infuse Rs.5bn fresh equity by March. (ET)
Jet Airways' market share fell to 22.6% in 2007 from 31.2% in 2006. Kingfisher group together accounted for 29.3% share in 2007 from 26.8%.(Mint)
SBI, PNB, BOI defer plan to set up branches in Pakistan. (FE)
ITC setting up a new cigarette manufacturing facility in Pune. (FE)
ITC Food Business Division (FBD) to set up its second manufacturing facility in Pune for Rs3.5bn. (FE)
Nicolas Piramal’s subsidiary Wellspring in pact with Dr. LH Hiranandani Hospital for outsourcing of radiology activity. (FE)
HCL Infosystems introduces an ultra low-cost range of laptops at a price of Rs13,990. (ET)
Vedanta Resources plans to enter the Indian steel market with a 5mn tons per annum plant at an investment of Rs240bn.(TOI)
Wockhardt Hospitals is setting up its fifth hospital in Bangalore. (ET)
Tata Motors plans multi-manufacturing hubs that will focus on making different vehicles at different locations. (ET)
The Government has brokered a deal, wherein BHEL will receive assured bulk orders of 800 mw sets from NTPC. (ET)
Gail India has cleared the Dabhol-Bangalore pipeline project. (ET)
Reliance Petroleum has reported 82% progress at its proposed SEZ refinery complex in Jamnagar. (FE)
M&M to launch its global SUV by 2010. (TOI)
Northgate Technologies secures Govt approval for ILD services. (BS)
HPCL, BPCL jointly plan to set up desalination plant in Mumbai to meet requirement of raw water in their refineries. (BS)
US patent office has rejected Pfizer’s claim on the basic patent on Lipitor. (BS)
Blackstone may pull out from the PE deal in media group Ushodaya Enterprises, owners of Telugu publication Eenadu. (ET)
Avesthagen, a knowledge based life sciences company, aims to raise between Rs8bn and Rs12bn. (ET)
Economic Front Page:
TRAI has accused the DoT of misinforming the courts on the issue of subscriber-linked spectrum allocation norms. (ET)
Hotel room rates in Bangalore may come down in the next fiscal as demand-supply gap is set to reduce. (ET)
The Government may withdraw customs duty on LNG to partially offset rising prices. (Mint)
Bird Flu has affected four districts in West Bengal. (Mint)
The Centre has mandated the Power Ministry to facilitate foreign participation in hydro power projects in sensitive areas. (FE)
SEBI allows construction of volatility index for stocks exchanges and intends to introduce futures & option based on this index. (FE)