Wednesday, March 05, 2008
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
5/3/2008 531223 ANJANI SYNTH NATRAJ FINANCIAL AND SERVICES LTD B 174023 56.43
5/3/2008 531223 ANJANI SYNTH NATRAJ FINANCIAL AND SERVICES LTD S 174023 58.29
5/3/2008 531223 ANJANI SYNTH ANKIT NARENDRA BAHUVA S 84000 57.60
5/3/2008 500029 AUTOLITE INE ARENA TEXTILES AND IND LTD S 50328 87.46
5/3/2008 532946 BANG SUMIT JINDAL B 200000 115.99
5/3/2008 532767 GAYATRI PROJ AIG TRUSTEE CO AC INFRASTRUCT B 141109 465.00
5/3/2008 532825 JAGJANANI LUCAS MAYES INDUSTRIED PRIVATE LIMITED B 176091 8.00
5/3/2008 532825 JAGJANANI SUNITHA KHANDELWAL S 176091 8.00
5/3/2008 531784 KADAMB CONST BASAL VINIMOY PVT.LTD. B 14500 32.90
5/3/2008 531241 LINC PEN PLA B.S. AGENCY PVT. LTD. B 60000 40.36
5/3/2008 531241 LINC PEN PLA SHREE BALAJI SAREES PVT LTD S 50000 40.50
5/3/2008 532728 MALU PAPER DIAMANT INVESTMENT AND FINANCE S 107764 30.46
5/3/2008 532950 MANJUSHREE N D NISSAR B 289955 31.28
5/3/2008 532950 MANJUSHREE BHANDARI RAKHI KALPESH B 85000 31.20
5/3/2008 532950 MANJUSHREE N D NISSAR S 289955 31.34
5/3/2008 532950 MANJUSHREE BHANDARI RAKHI KALPESH S 85000 30.40
5/3/2008 512267 MEDIA MATRIX COMMITTED TRADING PVT LTD B 188354 4.53
5/3/2008 512267 MEDIA MATRIX R K DHAWAN B 214432 4.47
5/3/2008 512267 MEDIA MATRIX ANIL VED MEHTA S 151609 4.46
5/3/2008 513446 MONNE ISPAT BSMA LIMITED B 306500 464.95
5/3/2008 526169 MULTIBASE 1 MADHAV EDU AND RESERCH INSTITUTE INDIA PVT LTD B 214582 31.01
5/3/2008 500331 PIDILITE IND F IDE FIMHK FIDELITY FUNDS MAURITIUS LIMITED S 2500000 145.00
5/3/2008 524570 PODDAR PIGME BHUMIKA ENTERPRISES PRIVATE LIMITED S 1800000 56.00
5/3/2008 531219 POONAM PHARM SWARN GANGA TRADING PVT. LTD. B 56800 3.27
5/3/2008 523606 SIKA INTERP RAJIV ARORA B 37327 68.87
5/3/2008 523606 SIKA INTERP RAJIV ARORA S 32030 71.05
5/3/2008 504375 SOFTBPO GLOB ANJU ADVISORY SERVICES PVT LTD S 4500 233.76
5/3/2008 532863 SPICE TELE FIDELITY MUTUAL FUND S 3527046 32.50
5/3/2008 530155 TONIRA PHARM IPCA LABORATORIES LIMITED B 74782 27.70
5/3/2008 532948 TULSI EXTRU N D NISSAR B 104111 97.21
5/3/2008 532948 TULSI EXTRU N D NISSAR S 104111 97.05
5/3/2008 532311 TUTIS TECH SUMIT J JAIN B 100000 13.96
5/3/2008 519602 VMF SOFT TEC PENUMATCHA INDUSTRIES LTD B 97390 3.29
5/3/2008 532144 WELSP GUJ SR KRISHIRAJ TRADING LIMITED B 3724116 400.00
5/3/2008 532144 WELSP GUJ SR NEXTGEN FAR EAST LIMITED S 3724116 400.00
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-MAR-2008,ARIHANT,Arihant Foundations & Hou,SARAOGI MADHU,BUY,50000,340.00,-
05-MAR-2008,ARIHANT,Arihant Foundations & Hou,SARAOGI SHYAM,BUY,50000,340.00,-
05-MAR-2008,JETAIRWAYS,Jet Airways (India) Ltd.,BAYTREE INVESTMENTS MAURITIUS PRIVATE LIMITED,BUY,849810,726.00,-
05-MAR-2008,QUINTEGRA,Quintegra Solutions Ltd,STUPENDORS TRADERS PVT LTD,BUY,200000,94.10,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,ADROIT FINANCIAL SERVICES PVT LTD,BUY,273183,98.13,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,ASHU GUPTA,BUY,68206,103.46,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,BUY,117527,96.77,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,BUY,99443,96.18,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,R.M. SHARE TRADING PVT LTD,BUY,123319,97.35,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,BUY,97130,100.84,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,BUY,221931,97.37,-
05-MAR-2008,ARIHANT,Arihant Foundations & Hou,SURBHI BAJORIA,SELL,35000,340.00,-
05-MAR-2008,JETAIRWAYS,Jet Airways (India) Ltd.,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,SELL,498323,726.00,-
05-MAR-2008,QUINTEGRA,Quintegra Solutions Ltd,J V S SECURITIES PRIVATE LIMITED,SELL,200000,94.10,-
05-MAR-2008,SRF,SRF Ltd.,MORGAN STANLEY DEAN WITTER MAURITIUS CO. LTD,SELL,750000,117.00,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,ADROIT FINANCIAL SERVICES PVT LTD,SELL,273183,98.32,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,ASHU GUPTA,SELL,68206,103.58,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,CPR CAPITAL SERVICES LTD.,SELL,117527,96.94,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,PASHUPATI CAPITAL SERVICES PVT. LTD.,SELL,99443,97.02,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,R.M. SHARE TRADING PVT LTD,SELL,123319,97.14,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,RAJEEV GUPTA,SELL,97130,101.32,-
05-MAR-2008,TULSI,Tulsi Extrusions Limited,TRANSGLOBAL SECURITIES LTD.,SELL,221931,97.51,-
It was volatile day for Indian markets and managed to end in green after value buying seen in some counters. Markets started on a subdued note following the mix global cues. US worries continued to prevail as Fed Chairman Ben Bernanke words which forecasted more home foreclosures to continue. Markets traded range in the same trend on lack of buying activities. Markets saw very volatile, trading to and fro on either sides. But some value buying at lower level lifted the indices to end in green. Only the large caps gained, small and mid caps were under pressure. IT sector was the pick of the day, gaining around 4% Metals and Oil & gas also gained over 1%. Power, Realty and Banking stocks were under check. The cues from Asia are not very encouraging with most of the Asia ended lower, while European indices are trading firm in green.
Sensex closed up by 202 points at 16542.08. It was helped up by gains in Satyam (433.8,+7 percent), ITC (194.25,+5 percent), HDFC (2755.25,+4 percent), Hindalco (208.1,+4 percent) and Dr Reddys (579.9,+4 percent). Restricting the gains were Bajaj Auto (2128.05,-3 percent), Rel Energy (1459.45,-3 percent), Bharti Tele (750.2,-2 percent), HDFC Bk (1336.4,-2 percent) and HLL (225.55,-2 percent).
Reliance Energy Ltd (REL) has approved a buy-back of its outstanding equity shares for an aggregate amount of up to approximately Rs 2,000 crore in two phases. An amount of Rs 800 crore will be expended in the first phase on the share buyback. A further amount of Rs 1,200 crore will be expended in the second phase. REL will buy-back shares up to a maximum price of Rs 1,600. The buy-back news were around the corner for sometime but it failed to sustain REL?s price on the bourses. REL closed 3% down.
McLeod Russel India Ltd (McLeod) is largest tea plantation company in the world. Mcleod , has around 52 tea estates with total capacity of 70mn kg. Tea production is expected to be stagnant with limited land availability. This has led to good realisation and it is expected to futher go up. For short term Kenya's drought problem and political issues has affected production there. McLeod Russel sees a rise of Rs 5-7 for the rest of the year in tea prices.This has led to a recent run in tea stocks. We are positive on Mcleod. Do read our note to know more.
Technically Speaking: Markets ended on volatile manner with negative breadth and low volume. Sensex made an intra day high of 16596 and low of 16253. The breadth was in favor of Declines, as there were 783 Advances against 1920 Declines. Market turnover was at Rs 5348 cr. Sensex support stands at 16200 and 15800. Resistance lies at 17000 and 17250.
The Indian market surged in the final trading hours of the session losing a four day losing trend on the back of selective buying across the counters. The market opened flat but managed to make a turnaround after the mid session as the investors showed some buying interest. Also, the statement by the Finance Minister that the FIIs were not behind the recent sharp fall in the market and it could be attributed to sub prime crises and recession concerns in US gave a boost to the investors sentiments. A lot of volatility was witnessed during the trading session. From the sectoral front, the oil & gas, metal and IT stocks remained the centre of attraction as most buying was seen from these baskets. The BSE Sensex closed higher by 202.19 points at 16,542.08 and NSE Nifty grew by 57.15 points to close at 4,921.40. While, the BSE Mid Cap and Small Cap also closed lower by 68.05 points and 143.49 points at 7,114.18 and 8,809.79 respectively.
The Indian stock market will remain closed tomorrow i.e. on 06-03-2008 (Thursday) for the celebration of Maha Shivratri.
The Capital Goods index declined 133.88 points to close at 14,688.40. Major losers are Punl Lloyd (6.31%), Praj Industries (2.48%), Siemens (2.56%), BHEL (0.80%) and Bharat Electrical (0.48%).
The Realty index closed lower by 131.93 points at 8,335.48 as Omaxe (5.54%), Unitech (4.27%), Sobha Developers (2.27%), HDIL (2.01%), India Bull Real (1.32%) and Purvankara (0.70%) closed lower.
The Bankex index slipped by 140.73 points to close at 8,916.03. Losers are BOI (7.64%), Union Bank (6.63%), BOB (6.50%), IOB (5.96%), Andhra Bank (1.17%), AXIX Bank (1.08%) and SBI (1.06%).
The Oil and Gas index closed up by 164.63 points at 10,330.75 as ONGC (3.05%), BPCL (3.01%), Reliance Inds (2.29%), Gail India (1.21%), RPL (0.90%), Aban Offshore (0.45%) closed lower.
From the IT index, Satyam (6.70%), Finance Tech (5.91%), HCL Tech (4.44%), Infosys (3.87%), Wipro (3.25%), TCS (2.48%), Tech Mahindra (1.40%) closed in green
Snapping a four-day losing streak, the key benchmark indices surged in late trade today. Volatility was high. Index heavyweight Reliance Industries witnessed an upward momentum at the fag end of the trade. Software stocks were the flavor of the day. Banking, realty and power stocks dropped
19 out of 30 stocks from the Sensex pack were in the green. The market breadth was weak. European markets, which opened after Indian market, were in the green. Asian markets, which open before the Indian markets, were mixed.
The market remains close tomorrow, 6 March 2008 on account of Mahashivratri.
Trading on the bourses will halt between 11:45 IST to 12:30 IST daily till 18 March 2008 due to sun outage. The trading time has been extended till 16:15 IST.
The 30-share BSE Sensex rose 202.19 points or 1.24% at 16,542.08. The Sensex gained 255.75 points at session’s high of 16,595.64, hit at the fag end of the day. The index lost 86.87 points at the day’s low of 16,253.02, hit in early trade.
The broader CNX S&P Nifty was up 57.15 points or 1.17% at 4921.40.
As per provisional data, FIIs sold shares worth a net Rs 285.03 crore today. Domestic funds sold shares worth a net Rs 131.68 crore.
The BSE Sensex had plunged 1484.59 points or 8.32% to 16,339.89 on 4 March 2008 from 17824.48 on 28 February 2008, hit by Budget blues. Traders, domestic funds and some foreign institutional investors (FIIs) are likely to be hit by a hike in short term capital gains tax on sale of shares to 15% from 10%, which amounts to a massive 50% hike in the tax rate, in Union Budget 2008-09 announced on Friday, 29 February 2008.
The change in tax treatment of the Securities Transaction Tax (STT) in the budget, meanwhile, may impact arbitrage volumes on the bourses. STT will now be treated like any other deductible expenditure against business income for the assesse. This is against the current practice whereby an assesse gets 100% rebate for STT paid against the tax liability for the year. A fall in arbitrage will result in decline in liquidity on the bourses.
The Indian economy is currently witnessing a moderation in growth from a solid growth last year mainly due to sluggish consumption growth. Concerns also remain about possible spike in inflation. Analysts reckon that the finance minister (FM) has targeted these two areas in Union Budget 2008-09, which he unveiled on Friday, 29 February 2008.
FM seeks to revive consumption growth through higher disposable income in the hands of the middle class through remit in personal income tax slabs, which will result in substantial tax saving for individual tax payers. Analysts also reckon that the implementation of the Sixth Pay Commission, which will result in hike in salaries of government employees, will aid consumption growth. The Sixth Pay Commission was constituted in October 2006 to recommend comprehensive changes in salary structure of the government employees.
The measures aimed at inflation control include a major fillip to agricultural and irrigation sector to boost farm production, across the board cut in Cenvat to 14% from 16% and specific excise duty cuts.
The BSE Mid-Cap index fell 0.95% at 7,114.18, while the BSE Small-Cap fell 1.60% at 8,809.79. Both these indices underperformed the Sensex.
The market breadth was weak: on BSE 760 advanced as compared to 1942 that declined. 48 stocks remained unchanged.
BSE clocked a turnover of Rs 5348 crore as against Rs 5,819.09 on Tuesday, 4 March 2007.
Nifty March 2008 futures were at 4915.10, a discount of 6.3 points as compared to spot closing of 4921.40.
The NSE's futures & options (F&O) segment turnover was Rs 33581.65 crore, which was lower than Rs 40644.5 crore on Tuesday, 4 March 2008.
India's largest private sector bank by assets ICICI Bank fell 1.15% to Rs 960.40, off session’s low of Rs 925. The stock declined after some reports on Wednesday, 4 March 2008 suggested the bank lost $264 million on account of the subprime crisis. However, ICICI Bank's Joint Managing Director Chanda Kochhar clarified that ICICI Bank may have to provide for another $50 million of investment losses in this quarter on top of $70 million already provided for in Q3 December 2007. The write off will be due to its investments being marked to market rather than provisioning for a subprime loss as many large international banks have done.
India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 2.29% to Rs 2292.75 on reports its unit Reliance Retail has signed a joint venture with Pearle Europe for the launch of a chain of optical stores in India
India’s biggest state-run oil refiner by market capitalisation ONGC rose 3.05% to Rs 987.90 after the Macquarie Research raised the rating on the stock to ‘outperform’ from ‘neutral’ and raised 12-month price target to Rs 1,100 from Rs 1,050 earlier. The increase in the stock rating was based on Macquarie Research’s expectation that crude oil prices will remain high.
Top Sensex gainers were, Satyam Computer (up 6.70% at Rs 433.80), ITC (up 5.09% at Rs 194.25), Housing Development Finance Corporation (up 4.50% at Rs 2755.25), Hindalco Industries (up 4.10% at Rs 208.10), and Maruti Suzuki (up 3.80% at Rs 940.15).
Top Sensex losers were, Bajaj Auto (down 3.26% at Rs 2128.05), Reliance Energy (down 3.01% at Rs 1459.45), Bharti Airtel (down 2.44% at Rs 750.20), HDFC Bank (down 1.54% at Rs 1336.40) and Hindustan Unilever (down 1.51% at Rs 225.55).
The BSE IT index rose 3.82% to 3,752.47. It outperformed the Sensex. Satyam Computer (up 6.70% at Rs 433.80), Financial Technologies (rose 5.91% at Rs 1,926.15), Infosys Technologies (up 3.87% at Rs 1,474.85), Wipro (up 3.25% at Rs 430.75) and TCS (up 2.48% at Rs 874.70), moved up.
The BSE Bankex fell 1.55% to 8,916.03. It underperformed the Sensex. Bank of India (down 7.64% at Rs 286.05), Bank of Baroda (down 6.50% at Rs 311.55), Oriental Bank of Commerce (down 6.38% at Rs 212.05), and Federal Bank (down 2.69% at Rs 280), slipped.
Indian Overseas Bank (down 5.96% at Rs 146.05) and Union Bank of India (down 6.63% at Rs 152.90) and Punjab National Bank (up 1.30% to Rs 523.30) got their rating cut to ‘neutral’ from ‘outperform’ by Credit Suisse after the government proposed waiving Rs 60,000 crore of loans to farmers. Credit Suisse cut Punjab National's share price target by 29% to Rs 535, Indian Overseas Bank by 31% to Rs 155 and Union Bank of India by 29% to Rs 169.
According to Credit Sues, the risk perception associated with agricultural lending for government banks has risen significantly. Uncertainty is likely to continue for at least two quarters until the loan waiver is finalized.
The BSE Power index fell 1.20% to 3,341.10. It underperformed the Sensex. GVK Power & Infrastructure (down 7.45% at Rs 40.40), Reliance Power (down 4.10% at Rs 376.25), Areva T&D (down 3.26% at Rs 1860), Tata Power (down 3.18% at Rs 1,197.30) and Torrent Power (down 2.62% at Rs 129.95), declined.
The BSE Realty index fell 1.56% to 8,335.48. It underperformed the Sensex. Omaxe (down 5.54% at Rs 221.60), Sobha Developers (down 2.27% at Rs 795.55), Housing Development & Infrastructure (down 2.01% at Rs 710.30), Indiabulls Real Estate (down 1.32% at Rs 543.65), went down. However, DLF rose 0.47% to Rs 681.35.
India’s second biggest real estate developer Unitech fell 4.27% to Rs 312.55 on reports it has put on hold a $1.5 billion qualified institutional placement planned for the first quarter of 2008, on account of the instability in domestic stock markets and the global liquidity crunch.
Reliance Capital clocked the highest turnover of Rs 289.50 crore on BSE. Reliance Energy (Rs 198.47 crore), ICICI Bank (Rs 184.91 crore), Reliance Natural Resources (Rs 181.71 crore) and Reliance Industries (Rs 176.17 crore), were the other turnover toppers in BSE in that order.
Reliance Natural Resources registered highest volume of 1.52 crore shares on BSE. Ispat Industries (1.02 crore shares), Reliance Petroleum (87.14 lakh shares), Tulsi Extrusion (68.36 lakh shares) and Essar Oil (64.78 lakh shares), were the other volume toppers on BSE in that order.
In Europe, key indices in UK, Germany and France were up between 0.32% to 1.16%.
Asian markets were trading mixed today, 5 March 2008. Key indices in China, Singapore, and Japan were down between 0.16% to 0.99%. However, key indices in South Korea, Hong Kong and Taiwan were up between 0.05% to 0.16%.
US markets closed mixed on Tuesday, 4 March 2008, after taking a beating in early trade. Fed Chairman Ben Bernanke said that defaults and foreclosures in the housing market were likely to increase and urged banks to forgive further mortgage delinquencies.
The Dow Jones industrial average slipped 45.10 points, or 0.37%, to 12,213.80. The Standard & Poor's 500 index declined 4.59 points, or 0.34%, to 1,326.75, while the Nasdaq composite index gained 1.68 points, or 0.07 %, to 2,260.28.
The market is likely witness volatility during intra-day trades and may succumb to selling pressure amid overnight weakness in the US indices and the bearish looking Asian indices in the ongoing trades. Among the key domestic indices, the Nifty could get support at 4800 and a slip below this level may see it dip further, while on the upside, the index has a key resistance at 4900. The Sensex has a likely support at 16160 and could test higher levels of 16470.
US indices ended mixed on Tuesday with the Dow Jones dropped by 45 points to close at 12214, the Nasdaq ended 2 points high at 2260.
Indian floats, too, witnessed selling pressure and largely ended at lower levels. VSNL tumbled over 7.20% at $23.20, ICICI Bank declined 6.70% at $46.91, Rediff down by 2.65% at $8.08, Dr Reddy moved down 2.48% at $2.48, Tata Motors lost 2.33% at $17.19 and Infosys slipped 2.04% at $37.43 while HDFC Bank, Wipro, Satyam, Patni Computers and MTNL lost around 1% each.
Crude oil prices moved up, with the Nymex light crude oil for April 08 delivery declined by $2.93 to close at $99.52 a barrel. In the commodity space, the Comex gold for April 08 series lost $17.90 to settle at $966.30 respectively.
The market may head higher in choppy trade after Finance Minister P Chidambaram on Tuesday evening, 4 March 2008 ruled out a ban on FIIs and said that they were not behind the recent fall in stock markets. He aadded that the recent fall could be attributed to sub-prime crisis, expected recession in the US and firming up of oil prices.
Most Asian markets were trading firm today, 5 March 2008. Hong Kong's Hang Seng (up 0.41% at 23,215.56), Taiwan's Taiwan Weighted (up 0.48% at 8,510.81), Singapore's Straits Times (up 0.22% at 2,926.20), South Korea's Seoul Composite (up 0.31% at 1,681.44), advanced. However, Japan's Nikkei dropped 0.21% at 12,964.41.
US markets closed mixed on Tuesday, 4 March 2008 after taking a beating in early trade. Fed Chairman Ben Bernanke said that defaults and foreclosures in the housing market were likely to continue to increase & urged banks to forgive more late loans.
The Dow Jones industrial average slipped 45.10 points, or 0.37%, to 12,213.80. The Standard & Poor's 500 index declined 4.59 points, or 0.34%, to 1,326.75, while the Nasdaq composite index gained 1.68 points, or 0.07 %, to 2,260.28.
Back home, the key indices drifted lower for a third consecutive session yesterday, 4 March 2008 hit by Budget blues. The 30-share BSE Sensex lost 337.99 points or 2.03% at 16,339.89. The broader CNX S&P Nifty was down 88.75 points or 1.79% at 4864.25 on that day.
As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 512.33 crore on Tuesday, 4 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 170.23 crore on that day.
FIIs were net buyers of Rs 910.40 crore in the futures & options segment on Tuesday, 4 March 2008. They were net buyers of index futures to the tune of Rs 121.85 crore and bought index options worth Rs 221.14 crore. They were net buyers of stock futures to the tune of Rs 560.66 crore and bought stock options worth Rs 6.75 crore.
Meanwhile, the market will remain closed from 11:45 IST to 12:30 IST due to sun outage. Trading time has been extended till 16:15 IST. The changes in timings will be applicable till 18 March 2008.
The Indian Market is likely to have a positive opening, as the Asian markets are trading higher. On Tuesday, The Indian market closed on a disappointing note backed by heavy selling across the sectoral indices scrips. The market opened on firm note tracking the favoring cues from the global market but was unable to sustained at higher levels and fell few minutes after the start of the session. The market got a boost after the mid session to level its initial session but again fell in the final trading hours. The BSE Sensex closed lower by 337.99 at 16,339.89 and NSE Nifty fell by 88.75 points to close at 4,864.25. We expect that the market may remain cautious during the trading session due to the negative sentiments as ICICI Bank, which has suffered marked to market losses of $264.3 million (about Rs 1,056 crore) on account of exposure to overseas credit derivatives and investments in fixed income assets.
On Tuesday, the US market was closed mixed. The Dow Jones Industrial Average (DJIA) closed lower by 45.10 points at 12,213.80 along with S&P closed down by 4.59 points at 1,326.75 while NASDAQ grew by 1.68 points at 2,260.28
Today the major stock markets in Asia are trading in green. Hang Seng is trading higher by 95.69 points at 23,215.56 along with Taiwan Weighted trading up by 40.70 points at 8,510.81 and Singapore Strait Times trading at 2,926.20 up by 6.52 points.
Indian ADRs ended in negative. Infosys fell by (2.04%) along with Wipro by (1.30%) and Satyam by (1.06%). ICICI bank and HDFC bank fell by (6.70%) and (1.61%) respectively.
The FIIs on Tuesday stood as net seller in equity. The gross equity purchased was Rs3,420.30 Crore while the gross equity sold stood at Rs4,103.90 Crore. Therefore, the net investment of equity reported was (Rs683.50) Crore.
Today, Nifty has support at 4,719 and resistance at 5,929 and BSE Sensex has support at 15,806 and resistance at 16,529.
Nifty (4864) Supp 4750 Ress 5103
Buy Hero Honda (772) SL 766 Target 785, 788
Buy Nalco (458) SL 453
Target 468, 471
Buy Hindustan Unilever (229) SL 225 Target 239, 242
Sell HCL Tech (268) SL 273 Target 258, 255
Sell Indian Hotels (118) SL 122 Target 110, 108
If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem
The overriding view that Indian banks are not affected by the subprime mortgage mess in the US proved to be misplaced. The benchmark indices tumbled further yesterday amid news that ICICI Bank has suffered a mark-to-market loss of $264mn on some of its loans and investments. However, ICICI Bank has clarified that it has no material direct or indirect exposure to US subprime credit.
Coming to today's session, we expect another choppy day due to indecisive movement across global markets and owing to the sun outage. Given the holiday for the markets tomorrow, market participants (traders and investors seem missing!) may prefer to remain light because you never know what hits you from which part of the world while you are sleeping.
Bank stocks may continue to be under pressure due to concerns over possible losses on credit market investments. Given the weakness they have witnessed, don’t be surprised if some strong hands lap them up at lower levels. A cautious stock specific approach is the best way to combat the current turmoil.
ICICI Bank says it has a total exposure of US$2.2bn in credit derivatives. According to reports, the combined exposure of public sector banks in overseas credit instruments may total around $1.5bn. Despite the clarification from ICICI Bank, the already fragile market undertone has taken a further hit amid fears that Indian banks are not immune to the subprime crisis in the US, in some way or the other.
The meltdown in the US housing and credit markets continues to be the biggest stumbling block as far as the bulls are concerned. There are reports that Citigroup may announce more losses going ahead and could slash thousands of jobs as well. Fed chairman Ben Bernanke too has reiterated that there is more pain left in the US housing and financial system.
The Friday's US jobs report for the month of February along with many other economic reports will be critical in determining the direction of global equity markets. The Fed policy makers will meet again on March 18 to review its monetary policy. Wall Street is betting on a 75bps rate cut from FOMC to avert a recession in the US. But, the moot point is whether the rate cuts will help the Fed achieve its objective. Only time will tell.
FIIs were net sellers of Rs5.12bn in the cash segment (provisional) on Tuesday. Local institutions were net buyers of Rs1.7bn on the same day. In the F&O segment, FIIs were net buyers of Rs9.1bn yesterday. On Monday, FIIs were net sellers of Rs6.84bn in the cash segment.
Financial Technologies (FT) has clarified that Jignesh Shah is not under any investigation in his personal capacity nor he has received any notice from SEBI in this regard. The company also added that Jignesh Shah has not traded in the shares of FT. There is no other investigation by SEBI, FT said.
Asian markets are trading pretty much mixed this morning following a volatile day on Wall Street overnight.
The Nikkei in Tokyo was down 28 points at 12,964 while the Hang Seng in Hong Kong was nearly flat at 23,127. The Kospi in Seoul added 5 points to 1680 while the Straits Times in Singapore was almost unchanged at 2919.
The Shanghai Composite in China slumped 1.8% to 4258 and the Taiex in Taiwan was up 39 points to 8509.
The MSCI Asia Pacific Index fell 0.3% to 141.82 as of 10:26 a.m. in Tokyo, extending a four-day, 4.9% decline. The benchmark is down 10% this year on concern that the widening credit-market losses and a US slowdown will weigh on global economic growth.
Benchmarks also advanced in Australia and New Zealand.
US shares closed mixed on Tuesday but the broader market cut losses by the close after a tough session overwhelmed by reports of more troubles for Citigroup and Intel's profit forecasts. Fresh grim comments on the US economy from a slew of Fed officials didn't help matters either.
Financial and commodity shares led the decline initially after Fed chief Bernanke urged banks to forgive more late loans and oil, gold and copper prices dropped from record highs.
Citigroup shares tumbled to a nine-year low after Merrill Lynch cut its full-year earnings forecast. Separately, the CEO of Dubai International said Citigroup may need additional funding because of its growing losses.
ConocoPhillips and Freeport-McMoRan Copper & Gold led a retreat in energy and mining shares, the best-performing industries of the past year.
The S &P 500 Index slid 5 points, or 0.3%, to 1,326.75 after earlier falling 1.8%. The Dow Jones Industrial Average lost 45 points, or 0.4%, to 12,213.8, paring a decline of 226 points. The Nasdaq Composite finished flat at 2,260.28.
Five stocks dropped for every three that rose on the New York Stock Exchange.
The S&P 500 briefly dropped below its lowest closing level in 18 months after Bernanke warned that the housing slump may deepen. The benchmark recovered most of its loss following the Ambac rescue report and after Cisco Systems said it plans to do more takeovers.
All three major US indices had fallen more through the mid afternoon, with the Dow at one point down about 200 points. Shares pared declines in the last hour of trading after a television network said a deal to bail out bond insurer Ambac Financial is progressing.
Wednesday will bring a raft of economic reports, including the monthly report on private sector employment from payroll firm ADP, which will be closely watched ahead of Friday's broader jobs report. Also, reports are due on factory orders and the Institute for Supply Management's reading on the services sector.
The fed's periodic beige book review of the economy is also due.
US light crude oil for April delivery fell $2.93 to settle at $99.52 a barrel in New York. The active-month contract had touched a new trading high of $103.05 Monday in electronic trading.
Gold prices retreated after heading closer to the $1,000 an ounce milestone. COMEX gold for April delivery fell $17.90 to settle at $966.30 an ounce.
Treasury prices tanked, raising the yield on the benchmark 10-year note to 3.61% from 3.53% late on Monday. The dollar stood near an all-time low versus the euro. The greenback also slipped against the yen.
European shares fell as worries about credit-market stress and fears of further asset write-downs by leading global financial firms depressed sentiment across the region. The pan-European Dow Jones Stoxx 600 index dipped 1.3% to 310.26, moving back from early gains.
In Germany, the DAX 30 tumbled 2.2% to 6,545.04, while the French CAC-40 slipped 1.4% to 4,675.91 and the UK's FTSE 100 closed down 0.9% at 5,767.70.
Most emerging markets closed in the red. The Bovespa in Brazil was down 1.3% to 63,655 while the IPC index in Mexico slid 265 points to 29,261. The RTS index in Russia dropped 0.7% to 2018 while the ISE National-30 index in Turkey was down 1.2% at 53,039.
No respite likely for bulls
Markets ended with a deeper cut on Tuesday extending its losses to the third straight trading session. Things got worse for markets post sun-outage, in particular for the banking stocks after a television news channel quoted a top Finance Ministry official saying that the country's biggest commercial bank had losses tied to the subprime mortgage crisis in the US. Also a mixed end to the Asian bourses and a weak start in equity markets across Europe further dampened the sentiments.
Finally, the 30-share Sensex closed at 16,339 losing 337 points after hitting an intra-day high of 16,754 and a low of 16,164. The NSE Nifty closed at 4,864 slipping 88 points touching an intra-day high of 4,967 and a low of 4,812.
Overall about 499 stocks advanced, 2,196 stocks declined while 42 stocks remained unchanged. Among the BSE 30 index 11 stocks advanced while 19 stocks declined.
Among the 30-scrips of Sensex, ICICI Bank, RIL, L&T and Infosys were among the major laggards. However, HDFC, Hindalco, Maruti and M&M were among the major gainers.
ICICI Bank fell over 5% to Rs971 after a television news channel quoted a top Finance Ministry official saying that the country's biggest commercial bank had losses tied to the subprime mortgage crisis in the US. The scrip touched an intra-day high of Rs1035 and a low of Rs930 and recorded volumes of over 92,00,000 shares on NSE.
EKC marginally slipped by 0.5% to Rs303. The company announced that it signed asset purchase pact with Reunion. The scrip touched an intra-day high of Rs314 and a low of Rs285 and recorded volumes of over 61,000 shares on NSE.
NTPC gained by 1% to Rs190. The company said that it is in talks to acquire mines overseas. The scrip touched an intra-day high of Rs194 and a low of Rs186 and recorded volumes of over 75,00,000 shares on NSE.
Tata Communication dropped 3.5% to Rs475. The company said that it rolled out Wimax Network with Telsima The scrip touched an intra-day high of Rs499 and a low of Rs465 and recorded volumes of over 2,00,000 shares on NSE.
Tata Power was down by over 5% to Rs1234. The company announced that they would spend Rs170bn to build plant in Mundra Tata Power says Mundra plant would generate 4,000MW The scrip touched an intra-day high of Rs1329 and a low of Rs1151 and recorded volumes of over 7,00,000 shares on NSE.
PBA Infrastructure edges lower by 0.3% to Rs83. The company announced that it secured Rs423mn contract. The scrip touched an intra-day high of Rs85 and a low of Rs78 and recorded volumes of over 25,000 shares on NSE.
Nestle India gained by 2% to Rs1430 after the company announced its Q4 results with net profit at Rs936.10mn (up 50%) and revenue at Rs9.05bn (up 21.6%). The scrip touched an intra-day high of Rs1441 and a low of Rs1378 and recorded volumes of over 39,000 shares on NSE.
Reliance Industries slipped 2.7% to Rs2243. Reports stated that the pipeline to evacuate gas from the company’s block in the KG basin is set to be commissioned in the next three months. The scrip touched an intra-day high of Rs2338 and a low of Rs2210 and recorded volumes of over 45,00,000 shares on NSE.
Exploration deadlines for Reliance Industries and ONGC may be extended on account of delays due to rig shortage. (BL)
Tata Motors may license out manufacturing of its small car Nano. (Mint)
Unitech’s US$1.5bn QIP postponed to first quarter of 2008. (BS)
BSNL plans to spend Rs4bn on CDMA expansion. (Mint)
Oil India to pioneer converting gas into LNG to reduce carbon emission levels. (Mint)
ONGC forecasts US$1.6bn fuel subsidy burden. (Mint)
Decision of allowing Cairn India to recover cost of setting up pipeline from crude oil sales will be taken in two weeks. (Mint)
Union Bank to raise Rs6bn through tier II capital and is set to enter new business. (Mint)
Tata Communications to invest US$500mn in Wimax by 2010. (Mint)
M&M acquires Italian automotive design company G.R. Grafica Ricerca Design for an undisclosed amount. (Mint)
NTPC may need 270MT of coal a year by 2017. (Mint)
Tata Steel still in race for Liberian iron ore deposit project. (BS)
Tata Power plans to spend Rs170bn on Mundra plant. (BS)
Indraprastha Gas cuts CNG prices by 30 paise in Delhi. (BS)
Bajaj Auto cuts prices by up to Rs3,000. (BS)
The DoT permits Tata Tele to operate GSM services in 19 circles. (BS)
Vijay Mallya may dilute 15% in the merged Kingfisher Airlines to raise Rs160bn. (BS)
Bank of Baroda, Andhra Bank and UK’s Legal and General group sign JV for life insurance. (BS)
Reliance Retail ties up with Pearle Europe for launch of optical stores in India. (BL)
Ranbaxy secures USFDA approval to sell generic version of Risperdal. (ET)
PNB to sell 27% stake in subsidiary, PNB Gilts. (ET)
IRB Infrastructure secures a 30 year contract for road development and maintenance in Kolhapur from Maharashtra State Road Development Corporation (MSRDC). (ET)
Gail bids for 5.2% stake in Petronet LNG Ltd for Rs15bn. (FE)
DCB to raise Rs3bn to Rs4bn during next fiscal year for its business growth. (FE)
ONGC plans to set up dual cracker petrochemical complex at Dahej with a capacity to produce 1.1mn ton of ethylene. (FE)
Wipro launches e-business suit solution for service providers and network operators. (FE)
NTPC to enter into a JV with two Indonesian coal firms Persada Investama and Sugico Graha. (FE)
Economic Front Page
Union Chemicals Minister to request the Prime Minister to roll back the budget proposal of imposing 5% customs duty on Naptha. (Mint)
The Finance Minister rules out any rollback of budget proposals. (BL)
Government to consider easing FDI norms. (BS)
Government reduces prices of controlled drugs following the excise duty cut on the pharma sector. (BS)
SEBI board may clear real estate mutual funds. (BS)
Finance bill proposes to allow the revenue department to charge excise duty on any article which could be bought or sold. (ET)
DoT rejects special committee reports that recommended a cut in levies on telecom sector. (ET)
SEBI likely to cut all regulatory charges. (ET)
RBI asks Indian banks to work out a policy on issuing Letters of Comfort (LoCs) to their overseas subsidiaries and branches. (FE)
National Pharmaceutical Pricing Authority (NPAA) asks drug companies to cut prices of formulation packs falling under schedule category of 4.58%. (FE)
Market Grape Wine :
In House :
Nifty at a supp of 4800 and 4748 with resis at 4950 and 5050
Cash: Buy HDFC Ltd above 2630 with a TGT of 2715 and a SL of 2590
Buy Hindalco above 200 with a TGt of 212 and a SL of 195
F&O: Buy Rolta above 301 with a TGT of 315 and a SL of 296
Buy Bajajhind above 249 with a TGT of 263 and a SL of 244
Out House :
Markets at a support of 16061 & 16261 and resistance at 16656 & 16786 levels .
Buy : Tisco and Sail
Buy : RPL
Buy : Hindalco & Sterlite
Buy : RIL & REL at dips
Buy : HLL & ITC
Buy : Titan & Bhel at dips
Buy : HLL & ITC
Dark Horse : ITC , Aban , Sail , Centextile , RPL & HLL
Tata Motors, Ashok Leyland to benefit from reduction in Cenvat for commercial vehicles. Reduction in excise duty for small cars, two- and three-wheelers could result in higher demand for Maruti, Bajaj Auto, TVS Motor and Hero Honda. Subsidies to farmers on old loans and approval for new loans will improve cash flow and push demand for autos and tractors. Reduction in personal taxes to result in up to 15% higher disposable income. This will benefit Maruti and other two-wheeler companies.
Avoidance of double taxation on dividend payments between infrastructure SPV subsidiary and parent would benefit project developers (JP Associates ). Other beneficiaries include L&T , GMR Infra, IVRC and Nagarjuna Constructions. Hike in defence spend is marginally positive for defence contractors such as Bharat Electronics, Tata Power and L&T .
Increase in excise duty on clinker to Rs 450/MT from Rs 350/MT will be neutral, as clinker produced is not sold directly but converted into cement. Excise of Rs 400/MT, or 14% ad-valorem duty, (whichever is higher) on bulk cement will also be neutral as most of the cement sold in India is packaged cement and not bulk cement.
Budget positive for iron ore miners and steelmakers with captive ore mines (Sesa, SAIL, Tata Steel) since export taxes haven’t been imposed. Less than expected hawkishness on steel price control issue is another positive. Reduction in excise duty to 14% from 16% should give some relief to steel consumers and so is a marginal positive. Budget neutral for nonferrous companies.
The 1% NCCD on cellphones would have no major impact since it would increase the cost of handsets only slightly. Duty exemption on specified parts of set-top boxes would make DTH/IPTV connections cheaper. Companies such as Reliance Communications and Bharti Airtel would benefit (though not significantly ) given their planned foray into the DTH/IPTV space.
Increased expenditure on education is positive for Educomp, Everonn, NIIT and Aptech. Enhanced allocation to the department of information technology will be positive for CMC, TCS, Spanco Telesystems, Wipro, HCL Infosystems and 3i Infotech. Increased excise duty on packaged software would increase the cost for companies operating in the domestic market, including 3i Infotech and Nucleus Software. However , the same will be recovered from clients, so impact will be minimal. Similarly, 12% service tax imposed on customised software will increase the cost for companies, including 3i Infotech, Rolta and to some extent TCS (10% domestic revenues) and Wipro. However, the impact will be minimal as it will be recovered from clients.
Increase in textile upgradation provision would benefit Voltas. Reduction in excise duty on refrigeration equipment will also help Voltas as it would boost its cold-chain equipment revenues. Increased thrust on power sector investment will benefit Elecon as also AIA Engineering, which supplies grinding media for thermal projects.
Positive for tractors due to trickle down effect; hence, benefiting tractor finance companies like M&M Finance . Neutral for banks and NBFCs having interest in life insurance business since service tax could be a passthrough to policyholders in line with the practice followed by asset management companies.
Oil & Gas: Positive
Reduction in customs duty on crude is positive for refinery companies like RIL, IOC, HPCL and BPCL. Reduction in duty on unbranded petrol and diesel is positive news for IOC, HPCL and BPCL. Removal of duty exemption on imported naphtha is negative for RIL as it will have to bear the duty burden on imported naphtha for polymer production. Reduction in CST positive for oil marketing companies for petroleum products that attract CST.
Imposition of duty on non-filter cigarettes positive for ITC as it makes filter cigarettes. But the hike would also be negative for the company as it also makes non-filter cigarettes. The reduction in CST positive for the food processing industry.
Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
4/3/2008 531223 ANJANI SYNTH NATRAJ FIANANCIAL AND SERVICES LTD B 227870 58.53
4/3/2008 531223 ANJANI SYNTH NATRAJ FINANCIAL AND SERVICES LTD S 132870 57.68
4/3/2008 531223 ANJANI SYNTH ARVIND MULRAJ UDESHI S 66000 57.17
4/3/2008 532380 BABA ARTS GUARDIAN PORTFOLIO CONSULTANTS PVT LTD S 58226 20.38
4/3/2008 531682 CAT TECHNOL SARFARAZKHAN SARVARKHAN PATHAN B 228700 8.18
4/3/2008 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 200000 8.18
4/3/2008 532184 CIBA INDIA RELIANCE CAPITAL MUTUAL FUND B 388735 235.00
4/3/2008 532184 CIBA INDIA TEMPLETON ASSET MANAGEMENT S 492786 235.02
4/3/2008 531989 DECCAN POLYP RAJASHREE N. MEHTA B 11774 9.82
4/3/2008 531989 DECCAN POLYP NAIMISH J MEHTA HUF S 11774 9.82
4/3/2008 530389 GEEFCEE FINA ACCORD CAPITAL MARKETS LTD B 70835 179.30
4/3/2008 532857 GLORY POLY KETAN RAMBHAI GORANIA S 116724 102.71
4/3/2008 508918 GREYCELLS EN PRIME SECURITIES LTD B 16000 208.34
4/3/2008 532950 MANJUSHREE N.D.NISSAR B 178005 37.84
4/3/2008 532950 MANJUSHREE N.D.NISSAR S 178005 37.99
4/3/2008 532127 MOBILE TELEC ACCORD CAPITAL MARKETS LTD S 118000 9.81
4/3/2008 513446 MONNE ISPAT BSMA LIMITED B 379000 462.20
4/3/2008 526169 MULTIBASE 1 SAK TECHNOLOGIES LTD S 248000 29.40
4/3/2008 524570 PODDAR PIGME VIDIT INTRA PROPERTIES PVT LTD B 68804 49.94
4/3/2008 531219 POONAM PHARM SWARN GANGA TRADING PVT. LTD. B 50000 3.44
4/3/2008 531611 PRRANET INDU MOSS TRADERS PVT LTD B 600000 1.60
4/3/2008 513436 SHAH ALLOY L GUJARATNRE MINERAL RESOURCES LTD B 102000 39.78
4/3/2008 526049 SHRILAKSHMI VASUNDHARA CAPITAL AND SECURITIES LTD B 82852 124.24
4/3/2008 512048 SPLASH MEDIA SUPERLINE TRADING COMPOANY PVT B 8600 105.06
4/3/2008 530155 TONIRA PHARM IPCA LABORATORIES LIMITED B 42599 27.00
4/3/2008 532948 TULSI EXTRU N.D.NISSAR B 112193 107.16
4/3/2008 532948 TULSI EXTRU RAJEEV GUPTA B 98578 105.74
4/3/2008 532948 TULSI EXTRU H.J.SECURITIES PVT.LTD. B 78717 109.06
4/3/2008 532948 TULSI EXTRU N.D.NISSAR S 112193 107.22
4/3/2008 532948 TULSI EXTRU RAJEEV GUPTA S 98578 106.14
4/3/2008 532948 TULSI EXTRU H.J.SECURITIES PVT.LTD. S 78717 108.90
4/3/2008 519602 VMF SOFT TEC PENUMATCHA INDUSTRIES LTD B 100000 3.43
4/3/2008 519602 VMF SOFT TEC KOTHAMASU LAKSHMANA RAO S 45739 3.44
4/3/2008 519602 VMF SOFT TEC SRINIVAS RAJU M S 50000 3.43
4/3/2008 512217 WOOLITE MERC DEEPAK GUPTA HUF S 25930 17.35
We recommend a buy in Colgate Palmolive India from a short-term perspective. We note from the charts that the stock was on a medium-term downtrend from its January high of Rs 521 to February trough of Rs 362 levels. After finding support at around Rs 370 recently, the stock began to move up. On March 4, the stock conclusively broke through the medium-term down trendline by gaining Rs 19 or 5 per cent.
This surge had aided in penetrating the 200-day moving average, which was providing resistance to the stock in the past two weeks.
We also see that there is an increase in volume over the last two trading sessions. The daily momentum indicator took support at 40 levels and moved up towards the bullish zone. The daily moving average convergence divergence has crossed over one another and it is steadily rising towards the positive territory.
We are bullish on the stock in the short-term. We expect the stock’s current up move to continue further to our target price level of Rs 450 in the short-term. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 375.
Price settles below $100 as traders expect another weekly rise in crude inventories
Crude prices fell by almost $3 today, Tuesday, 4 March, 2008 and closed at lower that $100/barrel after staying above the same for four straight days. Prices dropped today as OPEC officials hinted that it will keep production quotas unchanged at its next week’s meeting. Prices also fell as traders speculated that tomorrow’s weekly inventory report by the Energy Department will show a eighth weekly rise in crude inventories.
Crude-oil futures for light sweet crude for April delivery today closed at $99.52/barrel (lower by $2.93/barrel or 2.9%) on the New York Mercantile Exchange. Prices are 65% higher than a year ago. It traded within a range of $103.3 and $98.87 today.
In the currency market today, the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, edged down 0.04% to 73.68.
It was reported today that, Chakib Khelil, president of OPEC, said that the oil cartel likely will not boost production because of the U.S. economic slowdown, political turmoil in the Middle East and expectations of declining global demand for crude in its next meeting scheduled next Wednesday.
Brent crude oil for April settlement today fell $1.8 (2%) to $98.48 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.
Natural gas advances once again
Natural gas in New York advanced after updated forecasts called for lower temperatures, signaling higher demand. Natural gas for April delivery rose 0.7 cent to settle at $9.353 per million British thermal units.
Against this backdrop, April reformulated gasoline lost 15.2 cents to $2.52 a gallon and April heating oil fell 4.9 cents to $2.7918 a gallon.
In a monthly report released earlier this month, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.
Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.
At the MCX, crude oil for March delivery closed at Rs 4,030/barrel, lower by Rs 136 (3.2%) against previous day’s close. Natural gas for March delivery closed at Rs 380.4/mmtbu, lower by Rs 5/mmtbu (1.3%).
Gold and silver prices drop sharply on concerns about a slowdown in US economy
Precious metal prices fell today, Tuesday, 4 March, 2008, a day after reaching all time record highs. Bullion metal prices fell sharply today on renewed concern that a slowing U.S. economy will curb demand for raw materials. Prices also fell as crude prices crawled back too reducing commodities’ appeal against a hedge against inflation. Traders also locked in gains after the metals’ surge in recent days. Silver prices also slipped substantially today.
Since the past few days, the bullion metal prices have been on a roll after the Federal Reserve Chairman, Ben Bernanke hinted that Fed in all possibility will go for another soft landing in its next meeting thereby reducing interest rates by another 50 bps to avoid the US economy in all ways from slipping into a recession. With this, the dollar had slumped sharply against its rival currencies.
Comex Gold for April delivery fell $17.9 (1.8%) to close at $966.3 an ounce on the New York Mercantile Exchange. Prices had touched a record $992/ounce during intra day trading yesterday. This year, gold prices have gained 16% till date. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. Last week, gold gained $27 (2.8%).
Comex Silver futures for May delivery fell by 34 cents (1.7%) to $19.84 an ounce. Silver has gained 28% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years. In January this year itself, prices climbed 14%. In February, it gained another 15%.
The dollar has been dampened since last year, more since start of FY 2008 after interest rates were cut twice in January, 2008. Silver prices also gained substantially today, reaching the highest level in twenty eight years. Gold, as a dollar-denominated commodity, suffers from dollar strength. On the contrary, gold prices rise with falling dollar as inflationary concerns boosts the metal's appeal as an inflation hedge.
The Fed has cut the federal funds rate to 3% this year from 5.25% in mid-September, 2007. January 2008 itself saw two rate cuts in a gap of ten days.
In the energy market today, crude-oil futures fell by more than $2 and closed a little above $100/barrel.
In the currency market today, the Canadian and Australian currencies both fell against the U.S. dollar after divergent policy moves by their respective central banks, though the greenback weakened against most other rivals. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, edged down 0.04% to 73.68.
Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.
Gold witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. The Fed reduced federal funds rate three times in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for April delivery closed lower by Rs 209 (1.6%) at Rs 12,437 per 10 grams. Prices rose to a high of Rs 12,705 per 10 grams and fell to a low of Rs 12,412 per 10 grams during the day’s trading.
At the MCX, silver prices for March delivery closed Rs 686 (2.7%) lower at Rs 24,889/Kg. Prices opened at Rs 26,271/kg and fell to a low of Rs 24,700/Kg during the day’s trading.