Monday, September 15, 2008
Lehman Brothers' move to file for bankruptcy wiped off more than Rs 2,000 crore from the market valuation of those Indian companies in which the US financial major has made equity investments.
Lehman itself recorded a loss of more than Rs 50 crore on its investments in India, which is nearly 10 per cent of its current holding worth an estimated over Rs 500 crore.
The loss would have been much higher if Lehman had not started offloading its equity holding in Indian companies late last month.
In a major selling spree that started on August 21, Lehman has sold shares worth close to Rs 400 crore in nearly 10 companies, including NIIT Ltd, Cranes Software, Amtek Auto, Amtek India, Fedders Llyod, Northgate, Mastek, Triveni Engg and Prajay Engg.
Prior to this sell-off, Lehman's Indian equity portfolio is estimated to have been worth more than Rs 1,000 crore, which has now nearly halved to about Rs 500 crore.
Most of the shares offloaded by Lehman in India, including those in NIIT, Cranes, Amtek Auto, Amtek India and Northgate, has been purchased by Deutsche Bank, according to the bulk and block deal data available with the bourses.
Besides the 10 companies where Lehman has offloaded its shares, Lehman had equity holding in about two dozen firms at the end of June quarter.
These firms include Spice Communications, Spice Mobile, Anant Raj Industries, Edelweiss Cap, IVRCL Infra, Tulip Telecom, Consolidated Construction, PSL, Orbit Corp, Development Credit Bank, Champagne Indage, Godawari Power, KPIT Cummins, West Coast Paper, IOL Netcom, Dhampur Sugar, Prithvi Info, Golden Tobacco, Emkay Global, Vijay Shanti Builders and Pioneer Embroidery
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
15/9/2008 513335 AHMEDNAGAR F WARHOL LIMITED B 2640000 87.00
15/9/2008 513335 AHMEDNAGAR F COPTHALL MAURITIUS INTERNATIONAL LTD S 447258 87.00
15/9/2008 513335 AHMEDNAGAR F CITIGROUP GLOBAL MARKETS MAURITIUS PVT LTD S 2182310 87.00
15/9/2008 531223 ANJANI SYNTH NARENDRA VALLABHJI BAHUVA S 60154 46.01
15/9/2008 506260 ANUH PHARMA L P SHAH HOLDING TRADES PVT LTD B 27000 232.90
15/9/2008 506260 ANUH PHARMA PRAFULLA LALITKUMAR SHAH S 27000 232.90
15/9/2008 519532 ASIAN TEA EX DISHIT DIPAKBHAI SHAH B 55299 65.61
15/9/2008 519532 ASIAN TEA EX VHM IMPEX PRIVATE LTD B 202612 68.92
15/9/2008 519532 ASIAN TEA EX DISHIT DIPAKBHAI SHAH S 55299 71.75
15/9/2008 519532 ASIAN TEA EX VHM IMPEX PRIVATE LTD S 160180 68.95
15/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD B 394733 240.05
15/9/2008 533016 AUSTRAL COKE OPG SECURITIES P LTD S 394733 240.26
15/9/2008 511672 CLARUS MANAK CHAND JAIN B 15200 3.84
15/9/2008 522163 DIAMON CABLE MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. B 125000 259.99
15/9/2008 513059 G.S. AUTO HARDIK M MITHANI B 30000 76.79
15/9/2008 513059 G.S. AUTO SPJSTOCK B 87681 82.98
15/9/2008 513059 G.S. AUTO HARDIK M MITHANI S 30000 84.15
15/9/2008 513059 G.S. AUTO SPJSTOCK S 17681 83.58
15/9/2008 531137 GEMSTONE INV ANKIT RAJENDRA SANCHANIYA S 18300 55.50
15/9/2008 531137 GEMSTONE INV PREM MOHANLAL PARIKH S 20000 55.50
15/9/2008 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA B 227898 111.64
15/9/2008 531439 GOLDSTON TEC HEMANT MADHUSUDAN SHETH B 175000 111.98
15/9/2008 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA S 227898 113.81
15/9/2008 531439 GOLDSTON TEC ANKIT RAJENDRA SANCHANIYA S 140000 117.44
15/9/2008 531439 GOLDSTON TEC HEMANTMADHUSUDANSHETH S 95000 110.50
15/9/2008 507960 GUJ HOTELS L RUSSELL INVESTMENTS LTD B 19197 61.19
15/9/2008 505840 JAIPAN INDUS VHM IMPEX PRIVATE LTD B 64355 139.74
15/9/2008 516078 JUMBO BAG LT DHARMENDRA J MADHANI S 61700 46.94
15/9/2008 526209 K S OILS LTD MORGAN STANLEY MAURITIUS COMPANY LTD B 3830398 60.00
15/9/2008 526209 K S OILS LTD MORGAN STANLEY MAURITIUS COMPANY LTD S 4347873 60.01
15/9/2008 531602 KOFF BR PICT BHARATHI MILIND AGLAVE B 30000 38.32
15/9/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 89037 38.92
15/9/2008 531602 KOFF BR PICT PRAVIN D GALA S 45376 38.13
15/9/2008 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 90000 41.00
15/9/2008 533015 NUTEK INDIA OPG SECURITIES P LTD B 115521 149.76
15/9/2008 533015 NUTEK INDIA OPG SECURITIES P LTD S 115521 149.72
15/9/2008 511607 SHLOKA INFO VHM IMPEX PRIVATE LTD B 19440 62.14
15/9/2008 532311 TUTIS TECH SUMIT J JAIN S 100000 23.21
15/9/2008 530595 VICTORY PROJ JMP SECURITIES PVT. LTD. B 46639 32.12
15/9/2008 530595 VICTORY PROJ JMP SECURITIES PVT. LTD. S 39556 32.07
15/9/2008 531518 VIKAS GRAN R S SHARES AND SECURITIES LTD B 35916 17.99
15/9/2008 517498 WEBEL SL ENE NOVEL APARTMENTS PRIVATE LIMITED B 61274 248.42
15/9/2008 517498 WEBEL SL ENE SOHANLALCAGARWAL S 50000 250.00
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
15-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,205525,239.95,-
15-SEP-2008,GOLDTECH,Goldstone Tech Ltd.,MASUMI OVERSEAS PRIVATE LIMITED,BUY,107671,116.54,-
15-SEP-2008,MCDOWELL-N,United Spirits Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,2875191,1256.55,-
15-SEP-2008,SURYAROSNI,Surya Roshni Ltd,PRAJIN BARTER PRIVATE LIMITED,BUY,176679,52.61,-
15-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,205525,239.81,-
15-SEP-2008,BARTRONICS,Bartronics India Limited,GRANTS INVESTMENTS LTD. A/C GDR,SELL,175777,156.70,-
15-SEP-2008,MCDOWELL-N,United Spirits Limited,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,2705695,1256.76,-
15-SEP-2008,ROLTA,Rolta India Ltd.,FIDELITY FUNDS - EMERGING MARKETS FUND,SELL,974894,300.21,-
15-SEP-2008,SHLAKSHMI,Shri Lakshmi Cotsyn Limit,BHARATKUMAR N. VACHHANI,SELL,96335,103.61,-
Domestic markets continued to face bloodbath today on heavy selling pressures across all the indices to close deep in red on the back of negative global market led by credit crisis in the US financial space. Terror attacks in New Delhi also fueled to the investor’s attitude. BSE Sensex closed below 13,600 level and NSE Nifty ended below 4,100 mark. Indian markets today opened in extremely negative zone and crashed since initial bell on weak global cues. Further markets extended its losses and continued to remain under pressure. Sharp fall in European markets further added to the sentiments. Though some bit of recovery was happened during final hours on the back of news that China''s central bank, has cut benchmark lending rates by 27 basis points to 7.20%, today (15 September 2008) but still market closed with heavy losses. The People''s Bank of China (PBOC) also cut the reserve requirement for all except the country''s five biggest banks and the Postal Savings Bank by 1%. Credit crisis in US financial space played a crucial role in today’s turmoil. From the sectoral front, rate sensitive Reality and IT stocks witnessed huge selling pressure and ended with deep cut of more than 7% and 5% respectively. Followed by, Metal, Oil & Gas, Capital Goods and Bank stocks who took huge beating on the bourses. Mid cap and Small cap stocks also remained unfavorable as lost more than 4%. The market breadth was negative as 2263 stocks closed in red while 359 stocks closed in green and 40 stocks remained unchanged.
On the global front Lehman Brothers filed for bankruptcy protection in US today. Along with that AIG was a bigger concern for the markets as facing liquidity crunch and seeking $40 billion loan from Federal Reserve to raise capital. Further, Bank of America agreed to buy Merill Lynch at a premium $29 per share as compared to the last closing price of $17 per share. Crude oil for October delivery declined $2.28 to $98.90 a barrel on the New York Mercantile Exchange after Hurricane Ike inflicted minimal damage to oil installations on the Texas coast.
The BSE Sensex closed lower by 469.54 points at 13,531.27 and NSE Nifty ended down by 215.55 points at 4,072.90. The BSE Mid Caps and Small Caps closed with losses of 248.55 points at 5,288.59 and by 331.07 points at 6,380.47. The BSE Sensex touched intraday high of 14,433.20 and intraday low of 13,933.87.
Losers from the BSE are Reliance Infra (9.72%), Satyam Comp (9.45%), Ranbaxy Lab (7.60%), DLF Ltd (7.54%), JP Associates (6.51%), ONGC Ltd (6.01%), TCS Ltd (5.74%), Reliance Com Ltd (5.68%), Tata Motors (5.16%) and Hindalco (5.12%).
The BSE Metal index lost 490.58 points to close at 10,390.84. Major losers are NMDC Ltd (9.03%), Welspan Gujarat Sr (8.93%), Ispat Indus (7.64%), Gujarat NRE C (6.79%), Jindal Steel (5.29%) and Hindalco (5.12%).
The BSE Capital Goods index ended down by 469.66 points at 11,836.58. Major losers are Walchand In (10.23%), Praj Indus (9.17%), Reliance Industrial Infra (8.11%), Siemens Ltd (6.53%), Havells India (6.30%) and Reliance Lakshmi Ma W (5.90%).
The BSE Reality index plunged 359.20 points to close at 4,344.52. As Anant Raj (12.76%), Ansal Infra (12.15%), Orbit Co (11.69%), Housing Dev (11.62%), Penland Ltd (10.24%) and Sobha Dev (8.10%) closed in negative territory.
The BSE Oil & Gas index closed lower by 301.98 points at 8,814.46 as Essar Oil Ltd (9.01%), Reliance Natural Resources (7.85%), Cairn India (7.44%), ONGC Ltd (2.50%), Gail India (6.01%) and Reliance Pet (5.06%) ended in negative territory.
The BSE Bank index closed lower by 237.20 points at 6,792.02. Losers are IDBI Bank Ltd (7.55%), Union Bank (6.53%), Karnataka Bank (5.85%), Indus Ind Bank (5.83%), Axis Bank (5.12%) and IOC (4.96%).
The BSE IT index dropped by 209.91 points to close at 3,596.83. As Aptech Ltd (13.15%), Satyam Comp (9.45%), Patni Comp (8.90%), Rolta India (8.47%), Oracle Fin (8.29%) and HCL Tech (6.18%) closed in negative territory.
|Company Name||Holder Type||Holder Name||Holding Date||Percent Shares||No. of Shares|
|Anant Raj Inds. Ltd.||Public Shareholding||Lehman Brother Asia Ltd A/C Gra Finance Corporation Ltd||30-Jun-08||1.82||5362500|
|Champagne Indage Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C||30-Jun-08||1.55||236574|
|Consolidated Construction Consortium Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Fin Corp||30-Jun-08||1.36||503000|
|Development Credit Bank Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Finance Corporation Ltd||30-Jun-08||3.04||5301900|
|Edelweiss Capital Ltd.||Locked-In Shares||Lehman Brothers Netherlands Horions B V||30-Jun-08||1.8||1350000|
|Public Shareholding||Lehman Brothers Netherlands Horions Bv||30-Jun-08||1.8||1350000|
|Emkay Global Financial Services Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Capital||30-Jun-08||4.05||982134|
|Godawari Power & Ispat Ltd.||Public Shareholding||Lehman Brothers Asia Ltd||30-Jun-08||1.47||413832|
|Golden Tobacco Ltd.||Public Shareholding||Lehman Brothers Asia Ltd||30-Jun-08||1.7||300000|
|I O L Netcom Ltd.||Public Shareholding||Lehman Brothers Asia Limited A/C Capital||30-Jun-08||1.46||400000|
|I V R C L Infrastructures & Projects Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/S Gra Finance Corporation Ltd||30-Jun-08||1.2||1600000|
|K P I T Cummins Infosystems Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra||30-Jun-08||1.11||862823|
|Opto Circuits (India) Ltd.||Locked-In Shares||Lehman Brothers Asia Ltd A/C Lb India Holding||30-Jun-08||0.64||600000|
|Orbit Corporation Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Finance Corporation Ltd||30-Jun-08||4.82||1750000|
|Pioneer Embroideries Ltd.||Public Shareholding||Lehman Brothers Intl Europe||30-Jun-08||3.23||394356|
|Prajay Engineers Syndicate Ltd.||Public Shareholding||Lehman Brothers Intl Europe||30-Jun-08||1.15||457701|
|Prithvi Information Solutions Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Finance Corpor||30-Jun-08||2.63||476160|
|Spice Communications Ltd.||Locked-In Shares||Lehman Brothers Opportunity Limited||30-Jun-08||1.33||9203339|
|Public Shareholding||Lehman Brothers Opportunity Ltd||30-Jun-08||1.33||9203339|
|Spice Mobiles Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Financec||30-Jun-08||4.41||3289474|
|West Coast Paper Mills Ltd.||Public Shareholding||Lehman Brothers Asia Ltd A/C Gra Fin||30-Jun-08||4.36||2500065|
The market witnessed heavy selling amid weak sentiments, as the US financial system took a turn for the worse after Lehman Brothers' (the fourth-largest investment bank of the USA,) filed for bankruptcy, troubled insurer American International Group (AIG) sought Federal Reserve’s help to shore up its revenues and as the Bank of America agreed to buy Merrill Lynch.
After resuming 300 points lower at 13,666 extensive corrections in heavyweight, realty, information technology and teck stocks assured that the 30-stock Sensex remains in the negative territory. Fall in Asian markets followed by weak opening in European markets also worsened the fall and dragged the Sensex to the day's low of 13,151, down 850 points from the yesterday's close. Major European indices like FTSE (London Stock Exchange), CAC 40 index (French Stock Exchange) and DAX Times index (Germany Stock Exchange) shed 3-4% each, thereby adding pressure on the domestic indices. The Sensex finally ended the session at 13,531, down 470 points, while the Nifty shed 156 points to close at 4,073.
The market breadth was extremely weak. Of the 2,662 stocks traded on the Bombay Stock Exchange (BSE), 2,262 stocks declined, 360 stocks advanced and 35 stocks ended unchanged. The sectoral indices were largely weak. The BSE Reality index lost 7.65%, the BSE IT index declined by 5.51%, the Teck index fell 4.74%, the BSE Metal index tumbled 4.51% and the BSE Power index shed 4.38%. The remaining indices also closed with losses of 1-3% each.
Several heavyweights took a sharp tumble on late selling pressure. Reliance Infrastructure tanked 9.72% at Rs838.95, Satyam Computer Services fell by 9.45% at Rs368.15, Ranbaxy Laboratories dropped 7.60% at Rs419.45, DLF declined by 7.54% at Rs432.60, JP Associates slumped by 6.51% at Rs147.30, ONGC lost 6.01% at Rs961.30, Tata Consultancy Services slipped by 5.74% at Rs761.80, Reliance Communications dipped 5.68% at Rs368.95, Tata Motors shed 5.16% at Rs390.60 and Hindalco lost 5.12% at Rs114.85. Select counters, however, ended in the green. Maruti Suzuki India surged 2.80% at Rs723.40, HDFC advanced by 1.16% at Rs2204.45 and ACC moved up by 0.61% at Rs594.15.
Over 1.66 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (1.32 crore shares), KS Oils (0.84 crore shares), Reliance Petroleum (0.81 crore shares) and Chambal Fertilisers & Chemicals (0.75 lakh shares).
Valuewise, Reliance Capital registered a turnover of Rs426 crore on the BSE followed by Reliance Industries (Rs354 crore), Reliance Infrastructure (Rs146 crore), ICICI Bank (Rs137 crore) and Larsen &Toubro (Rs134 crore).
Nifty September 2008 futures were at 4093.15, at a premium of 20.25 points as compared to spot closing of 4072.90. NSE's futures & options (F&O) segment turnover was Rs 61,185.99 crore, which was higher than Rs 57,492.96 crore on Friday, 12 September 2008.
Reliance Industries (RIL) September 2008 futures were at premium at 1905 compared to the spot closing of 1886.95.
Reliance Capital September 2008 futures were at premium at 1094.80 compared to the spot closing of 1083.90.
State Bank of India September 2008 futures were at discount at 1488.75 compared to the spot closing of 1490.10.
In the cash market, the S&P CNX Nifty lost 155.55 points or 3.68% at 4072.90.
Sensex, Taipei Lead The Regional Fall As Major Indices Close For Holiday
The stock markets across the Asian region open for trading tumbled after U.S. investment bank Lehman Brothers filed for Chapter 11 bankruptcy protection. Meanwhile, Merrill Lynch agreed to be acquired by Bank of America. Crude oil futures fell sharply in the Asian session as the refineries along the Gulf of Mexico coast escaped major damage from Hurricane Ike.
U.S. crude oil futures for October delivery stood $4.44 down at $96.74 by 5:45 a.m, after the contract for October settlement closed at US$101.18, up 31 cents, on the New York Mercantile Exchange on Friday.
The U.S. dollar fell against the major Asian currencies on weakness in the U.S. financial sector. The Australian dollar finished the session stronger at US$0.8167-0.8171 and the kiwi bought US$0.6686-0.6696 in late local trade compared to US$0.6536-0.6538 at close on Friday.
The financial markets in Japan, Hong Kong, China and South Korea remained closed on account of public holidays.
Of the remaining, the Australian stock market fell sharply, giving away most of Friday's sharp gains. The benchmark S&P/ASX 200 index closed down 86.1 points or 1.8% at 4,817.7 after falling to a five-week low of 4,770.9. The broader All Ordinaries index lost 82.1 points or 1.7% to finish at 4,875.0.
On the economic front, the Australian Bureau of Statistics said that residential building starts plummeted to its lowest level in a year in the second quarter. The total number of houses started in the three months to June stood at 38,348, down a seasonally adjusted 3.7% from the March quarter.
The New Zealand stock market closed sharply lower, reversing Friday's gains. The benchmark NZX 50 index closed down 41.79 points or 1.26% at 3,319.90 after gaining 0.84% on Friday and the broader NZX All Capital index lost 45.03 points or 1.34% to finish at 3,348.11.
On the economic front, manufacturing sales in New Zealand eased slightly in the second quarter of 2008 in terms of both dollar value and volume. Statistics NZ reported that manufacturing sales value for the three months through June were down 0.6% while manufacturing sales volumes decreased 1.0%. When meat and dairy product manufacturing is excluded from the figures, sales rose 3.1% and volumes increased 1.8%. Manufacturing sales rose 3.0% in the preceding quarter.
Meanwhile, services sector activity in New Zealand contracted in August, according to the latest survey from the Bank of NZ and Business NZ. The group's Performance of Services Index fell one point to 47.9, the fifth straight month of decline. A reading below 50.0 indicates that activity in the sector is contracting.
The Taiwanese stock market plunged, with the weighted index closing at near three-year lows. Additionally, Taiwan dollar's fall heightened fears of capital outflow romp the stock market. The Taiex weighted index closed down 258.23 points or 4.09% at 6,052.45, its lowest closing since November 17, 2005 when it ended at 6,020.94.
In Philippines, the stock market ended the day in slumps, extending a massive slide witnessed in the last few weeks as the global markets fretted on worsening situation on the US financials front. The benchmark PSEi index dropped more than 4.2% to end at 2536.16 points - a three week low.
In India, the news that China's central bank has cut interest rates helped the domestic bourses cut steep intra-day losses. Despite the recovery, the market ended the day with heavy losses. The BSE 30-share Sensex was down 517.46 points as per provisional closing. Fears of more foreign fund withdrawals weighed heavily on the Indian bourses today, 15 September 2008, after US investment bank Lehman Brothers filed for bankruptcy protection.
The BSE 30-share Sensex was down 517.46 points or 3.70% to 13,483.35, as per provisional closing. The Sensex opened with a huge downward gap of 408.76 at 13,592.05. At the day’s low of 13,150.81 hit in mid-morning trade, the Sensex lost 850 points. 27 from the 30-member Sensex pack suffered losses. The S&P CNX Nifty was down 167.45 points or 3.96% to 4,061 as per provisional. It had touched an intra-day low of 3,955.40.
Elsewhere, the Singapore stock market plummeted, with the benchmark Straits Times Index closing down 84.12 points or 3.27% at 2,486.55. The Malaysian stock market fell, with the KLCI losing 12.40 points or 1.2% to finish at 1,031.63. Indonesia's Jakarta Composite index tumbled 84.81 points or 4.70% to finish the session at 1,719.25.
In the other part of the world, European shares were on track for their biggest one-day fall since March, after Lehman Brothers filed for bankruptcy protection in a move that eroded confidence in financials around the globe and prompted another concerted central bank intervention in the money markets.
Of national indexes, the German DAX 30 index fell 2.8% to 6,062.55, the French CAC-40 index dropped 3.3% to 4,191.04 and the U.K. FTSE 100 index fell 2.9% to 5,259.00. However the market fall accelerated further fuel by some of the negative economic events. At 11.38 GMT all this national indices continued with their negative positions as U.K. FTSE 100 index was up by 1.1% to 5,374.50. The German DAX 30 index gained by 0.5% to 6,208.63, while the French CAC-40 index was up by 1.1% to 4,295.91.
Wages in the euro zone grew at a much slower pace in the year to the end of June than they did in the 12 months to the end of March. According to data released by European Union statistics agency Euro stat, total labor costs in the euro zone during the three months from April to June were up 2.7% from the second quarter of 2007.
From Italy, the inflation rose to 4.2 % in August, outpacing prices in the euro zone, which have started to fall from a record high. According to the official statistics agency ISTAT the inflation was at it’s highest since January 1997 when the statistical series began, as food and transport prices continued to rise.
Looking ahead the day is scheduled to release data on new motor vehicle sales for Canada. From US we have New York empire state manufacturing index for the month of September, which will be followed by the data on the capacity utilization for the month of August. We will finish the daily calendar with the details on the industrial production of the US.
Bears ruled the roost on the bourses for the fifth consecutive day as key benchmark indices posted substantial losses after US investment bank Lehman Brothers filed for bankruptcy protection, making it the largest and highest-profile casualty of the global credit crisis. Nonetheless, news that China's central bank has cut interest rates helped the domestic bourses cut steep intra-day losses. Despite the recovery, the market ended the day with heavy losses, with the BSE Sensex tumbling 469.54 points.
Fears of more foreign fund withdrawals weighed heavily on the Indian bourses today, 15 September 2008, after US investment bank Lehman Brothers filed for bankruptcy protection. The financial sector upheaval also involved other US institutions. Bank of America has agreed to acquire Merrill Lynch & Co for $50 billion in an all-stock deal that will give the US bank the world's largest brokerage.
Index heavyweight Reliance Industries (RIL) rebounded after touching 52-week low. Maruti Suzuki India staged a sharp recovery from day’s low. Banking pivotals also rebounded from early lows after China's central bank today, 15 September 2008, cut benchmark lending rates by 0.27%. All the BSE sectoral indices declined with stocks from IT and real estate worst hit. Shares of firms with substantial holding by Lehman Brothers as a foreign institutional investor including its holdings in sub-accounts, tumbled.
As per provisional data released by the stock exchanges after trading hours, foreign funds today, 15 September 2008, sold shares worth a net Rs 763.02 crore. Domestic funds bought shares worth a massive Rs 1,328.14 crore.
US stock index futures were down sharply, pointing to a steep fall at the opening on Wall Street. European markets which opened after Indian markets were weak. Key benchmark indices in UK, Germany and France were down by between 4.28% and 5.25%. Asian markets were trading lower today, 15 September 2008. Key benchmark indices in Taiwan and Singapore fell 4.09% and 3.27% respectively. Most major Asian equity markets were closed for public holidays.
The BSE 30-share Sensex lost 469.54 or 3.35% at 13,531.27. The Sensex opened with a downward gap of 334.53 points at 13,666.28, which also remained its day's high. At the day’s low of 13,150.81 hit in mid-morning trade, the Sensex lost 850 points.
The S&P CNX Nifty lost 155.55 points or 3.68%, to settle at 4072.90. It had touched an intra-day low of 3,955.40. Nifty September 2008 futures were at 4093.15, at a premium of 20.25 points as compared to spot closing. NSE's futures & options (F&O) segment turnover was Rs 61,185.99 crore, which was higher than Rs 57,492.96 crore on Friday, 12 September 2008.
Sensex has lost 1,413.70 points or 9.45% in five trading sessions from a recent high of 14,944.97 on 8 September 2008. The barometer index is down 6755.72 points or 33.30% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7657.50 points or 36.19% below its all-time high of 21,206.77 struck on 10 January 2008.
The market breadth was extremely weak on BSE with 2258 shares declining as compared to just 375 that rose. 38 remained unchanged. 27 out of the 30 Sensex stocks suffered losses.
The BSE Mid-Cap index fell 4.49% to 5,288.59 and BSE Small-Cap index lost 4.93% to 6,380.47.
The total turnover on BSE amounted to Rs 4468 crore as compared to Rs 5,103.17 crore on Friday, 12 September 2008.
India’s largest private sector power generation company in terms of sales, Reliance Infrastructure tumbled 9.93% to Rs 837 on 17.35 lakh shares. It was the top loser from Sensex pack.
IT pivotals tumbled due to heavy selling on reports that hedging positions taken by the companies are improper with rupee falling to two-year low against the dollar. India’s fourth largest software services exporter Satyam Computer Services slumped 9.61% to Rs 367.50 and was the worst hit among the IT pivotals.
Other IT stocks Wipro (down 4.47% to Rs 401), Infosys (down 4.08% to Rs 1577), TCS (down 5.94% to Rs 760.15), edged lower.
Banking pivotals rebounded from early lows. India's largest private sector bank in terms of net profit ICICI Bank slipped 4.11% to Rs 626, off day’s low of Rs 595.15. India’s largest state run bank in terms of net assets State Bank of India fell 1.68% to Rs 1486.95 , off day’s low of Rs 1405.25
China's central bank, acting against a background of extreme stress in global financial markets, cut benchmark lending rates by 27 basis points to 7.20% today, 15 September 2008. The People's Bank of China (PBOC) also cut the reserve requirement for all except the country's five biggest banks and the Postal Savings Bank by 1%. The PBOC said the aim of the easing was to maintain fast and stable economic growth.
India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries slumped 2.98% to Rs 1873.80 on 19.05 lakh shares. The stock hit a 52-week low of Rs 1824.10 in intra-day trade. The stock slumped on reports the government may impose a special oil tax on the domestic crude oil production under the New Exploration Licensing Policy.
Other oil & gas stock, Essar Oil (down 9.33% at Rs 168.05), Cairn India (down 7.47% at Rs 205.10), and Oil & Natural Gas Corporation (down 6.74% at Rs 959.90), slumped.
Realty shares cracked on intense selling pressure. DLF (down 7.72% to Rs 431.80), Unitech (down 7.67% to Rs 143.25), Indiabulls Real Estate (down 6.05% to Rs 237.50), Ansal Infrastructure (down 11.81% to Rs 78), Housing Development Infrastructure (down 12.11% to Rs 241), slumped.
Metal shares slipped. Ispat Industries (down 6.99% to Rs 21.30), Jindal Steel & Power (down 5.62% to Rs 1497), Hindalco (down 5% to Rs 115), Sesa Goa (down 4.71% to Rs 129.50), and Tata Steel (down 4.77% to Rs 498.50), slipped.
Ranbaxy Laboratories, India’s top drug maker by sales fell 8.78% to Rs 414.10. The stock has been on sustained downtrend ever since the Japanese drug maker Daiichi Sankyo’s open offer to acquire an additional 20% stake at Rs 737 a share in the company ended on 4 September 2008.
Reliance Communications (down 6.23% to Rs 366.80), Jaiprakash Associates (down 6.51% to Rs 147.30), and Tata Motors (down 5.26% to Rs 390.20), edged lower from Sensex pack.
India’s top small car maker by sales Maruti Suzuki India staged a smart recovery from day’s low of Rs 666. It rose 2.03% to Rs 718 and was the top gainer from Sensex pack. As per reports, the company may sell a million units in the domestic market within the next two years.
HDFC (up 1.33% to Rs 2208), and ACC (up 0.41% to Rs 593), were the other gainers from Sensex pack.
Shares of firms with substantial holding by Lehman Brothers as a foreign institutional investor including its holdings in sub-accounts, tumbled. GTC Industries (down 10.95% to Rs 111), KPIT Cummins Infosystems (down 11.83% to Rs 49.60), Orbit Corporation (down 10.69% to Rs 246), Development Credit Bank (down 11.02% to Rs 42.80), IVRCL Infrastructures (down 7.11% to Rs 257.50), Edelweiss Capital (down 6.67% to Rs 484), Moser Bear (down 5.72% to Rs 100.50), Triveni Engineering (down 7.11% to Rs 80.30), and NIIT (down 4.78% to Rs 75.75), plunged.
Reliance Capital was the top traded counter on BSE with turnover of Rs 426.75 crore followed by Reliance Industries (Rs 354.25 crore), Reliance Infrastructure (Rs 146.20 crore), ICICI Bank (Rs 137.70 crore) and Larsen & Toubro (Rs 134.40 crore) in that order.
Reliance Natural Resources led the volumes chart on BSE notching volumes of 1.67 crore shares followed by IFCI (1.33 crore shares), K S Oils (84.85 lakh shares), Relaince Petroleum (81.45 lakh shares) and Chambal Fertilisers (75.50 lakh shares) in that order.
Emami fell 1.79% to Rs 282.80 after the company said it was more than doubling the open offer price for 20% stake in Zandu Pharmaceutical Works to Rs 15,000 a share, from Rs 7,315 earlier. Shares of Zandu Pharmaceutical Works were down 5% at 16,728 on BSE. The company made the announcement during market hours today, 15 September 2008.
Sun Pharmaceuticals Industries declined 1.17% to Rs 1470.55 even as the company said on Friday, 12 September 2008, it has received US Food and Drug Administration approval for the generic Fosamax, alendronate sodium tablets.
Crompton Greaves lost 1.33% to Rs 248.65 after the company said it has acquired US-based electric power systems contractor, MSE Power Systems, and two of its group firms for an enterprise value of $16 million. The company made this announcement before trading hours today, 15 September 2008.
Titagarh Wagons slipped 6.81% to Rs 662 after the company said on Monday, 15 September 2008, it would acquire the entire ownership and management control of a non-banking financial company. The company made this announcement before trading hours today, 15 September 2008.
US light crude for October 2008 delivery fell $1.52 to $99.66 a barrel today, 15 September 2008 on early signs that Hurricane Ike may have spared key Gulf Coast infrastructure, although traders were cautious on Monday as they awaited status reports on more Texas refineries.
US markets ended mixed on Friday, 12 September 2008, amid uncertainty over the fate of troubled investment bank Lehman Brothers. But shares of natural resource companies and utilities gained as commodity prices rose, offsetting losses among financial and bank shares. The Dow Jones industrial average slipped 11.72 points, or 0.10%, to 11,421.99. The S&P 500 index gained 2.65 points, or 0.21%, to 1,251.70, and the Nasdaq Composite index advanced 3.05 points, or 0.14%, 2,261.27.
KPIT CUMMINS 862823
Anant Raj 5362500
SPIC MOBILE 3289774
West Coast 2500000
Pioneee Emb 394356
SPice Tele 9203000
Philips Carbon 1000000
Moser Bear 2252000
Ruchi Soya 2270000
Fedders LLyod 1505918
Dhampur Sugar 2277272
NorthGate Tech 1454904
Triveni Eng 5873053
United phos 2489609
AMTEK AUTO 2947000
KPIT CUMMINS 5700000
Sealed The Week With Modest Gains
The Wall Street struggled to make headway Friday, ended virtually flat after a two-day winning streak, as an unexpected drop in retail sales and high anxiety over the fate of investment bank Lehman Brothers weighed on investor sentiment. Buyers found little motivation to enter the market as uncertainty continues to shroud the financial sector. Although solid gains were made among beaten-down commodities stocks their influence was too small to lift the broader market in material fashion.
The major averages moved to the upside in late day trading, sending the Nasdaq and the S&P 500 above the unchanged line. While the Dow closed down 11.72 points or 0.1 % at 11,421.99, the Nasdaq closed up 3.05 points or 0.1% at 2,261.27 and the S&P 500 closed up 2.64 points or 0.2% at 1,251.69.
Despite the mixed performance on Friday, the major averages all closed higher for the week. The Dow posted a 1.8% gain for the week, while the Nasdaq and the S&P 500 posted more modest weekly gains of 0.2% and 0.8%, respectively.
Lehman Brothers showed significant weakness over the past week, as lingering concerns over the strength of its balance sheet sent traders out of the stock. Lehman was even forced to report preliminary third quarter results along with a series of initiatives in keeping the investment bank solvent earlier in the week.
On the economic front, investors looked over a wealth of economic data throughout the session as well. Among the data, the Department of Commerce said that retail sales unexpectedly decreased in the month of August, although the drop in sales was partly due to lower gasoline prices. Retail sales fell 0.3% in August over July 2008. Worsening this picture was a downward revision to July retail sales from a 0.1% decline to a 0.5% decline. Core retail sales fell by 0.7%.
However, the Reuters/University of Michigan released its preliminary report on consumer sentiment in the month, showing that sentiment is rebounding in September, with the recent drop in energy prices offsetting concerns about inflation. The report showed that the Reuters/University of Michigan Consumer Sentiment index jumped to 73.1 in September from 63.0 in August. The much bigger than expected increase by the index was partly due to a notable improvement in consumers' expectations, with the expectations index surging up to 70.9 in September from 57.9 in August. The current conditions index edged up to 76.5 from 71.0.
Going in details, index wise, Dow Components pared their losses in the afternoon, the blue chip index still ended the session with a slight loss. Of the 30 stocks that make up the Dow, 15 ended the day down and 15 closed higher.
AIG was the clear loser on the Dow, as investors continued to fret over the health of the insurer. The deterioration of the stock’s value in recent days has prompted a Citi Investment Research analyst to reduce his price target to $25.50 from $40. Shares of the insurer ended the session down by 30.8%, extending its recent downward move. With the decline, the stock set a fifteen-year closing low.
General Electric also saw significant selling pressure. The stock fell 5 percent, reversing the modest gain posted in the previous session. With the decline, GE set a two-month closing low. Late Thursday, the Defense Department said that it has awarded GE a $96 million contract for the procurement of helicopter engines.
Home Depot posted a substantial loss as well following news that the home improvement retailer expects 50 of its stores along the Gulf Coast to be closed by the end of the day as Hurricane Ike gets closer. The stock closed down 2.4 percent, reversing the previous day’s gain.
Financial stocks Citigroup and JP Morgan Chase also closed sharply lower. Citigroup closed down 3.5 percent, while JP Morgan Chase fell 1.2 percent.
Other Dow components that saw weakness include Wal-Mart Stores, Johnson & Johnson and McDonald’s. Wal-Mart closed down 1.2 percent, compared to a 0.8 percent decline by Johnson & Johnson. McDonald’s ended the session lower by 0.8 percent.
On the other hand, Alcoa saw significant buying interest in the afternoon. Shares of the aluminum producer closed up 3.8 percent, adding to a notable gain posted in the previous session.
General Motors also showed considerable strength after a Goldman Sachs analyst said in a client note that it is more likely than not that a federal loan program for automakers will receive at least partial funding before Congress adjourns this fall. Shares of General Motors closed up 2 percent, at their best level since late July.
Strength in the resource sector helped to pare losses in the broader markets in the afternoon. Gold stocks were among some of the best performing stocks within the resource sector, as the price of gold ended its nine-day losing streak. Gold for December delivery closed up $19.00, at $764.50 an ounce.
Oil ended the session modestly higher on Friday after briefly slipping below $100 a barrel. Light sweet crude oil for October delivery closed at $101.18 a barrel, up 31 cents on the session. Despite the modestly higher close, oil still lost another $3.95 a barrel on the week. Overall, crude has been trending lower since briefly topping the $120 a barrel mark on Aug. 28. Oil producers, Exxon Mobil and Chevron closed notably higher as well. Exxon Mobil closed up 2.6%, while Chevron ended the session up 1.7 %.
In other regional markets, stock markets across the Asian region closed mixed after reports indicated that beleaguered U.S. investment bank Lehman Brothers has put itself up for sale. Japan’s Nikkei 225 average closed up 0.9%.
The major European markets ended Friday’s session with notable gains. The French CAC 40 Index and the German DAX Index rose 2% and 0.9%, respectively, while the U.K’s FTSE 100 Index ended the day up 1.9%.
Looking ahead for week, all eyes will be on the Federal Reserve when it concludes its scheduled meeting on Tuesday. There are several economic reports that could affect the markets as well, including reports on industrial production, the consumer prices and housing starts
The market is likely to remain under pressure following an flat close on the US market. The weakness in the Asian markets in ongoing trades and overnight slump in commodities markets coupled with offloading of FIIs in domestic market may add pressure on the investors sentiment. Among the major domestic indices, the Nifty could test 4200 on the downside and breaching upon this level it may test 4150, while it has a resistance in the 4260-4310 band. The Sensex has a likely support at 13900 and test higher levels of 14200.
US indices closed flat on Friday, with the Dow Jones tumbled 12 points at 11422, the Nasdaq gained marginally with 3 points to close at 2261.
Indian ADRs were largely mixed on the US bourses. Rediff & Patni Computer are down 4-5%, while ICICI Bank, Wipro, Dr Reddy and VSNL ended with modest loss. while MTNL, Satyam, Tata Motors and Infosys ended with marginal gains.
Crude oil prices gained on Friday, with the Nymex light crude oil for October delivery advancing 31 cents to close at $101.18 a barrel. In the commodity space, the Comex gold for December delivery raise $19 to settle at $764.50 an ounce.
Key benchmark indices are braced for a subdued start today, 15 September 2008 tracking negative global cues as sentiment remains edgy with the US investment bank Lehman Brothers Holdings prepared to file for bankruptcy as potential buyers abandoned talks. However crude oil prices at 6-month low below the $100 a barrel mark may lift the sentiment.
Asian markets were trading lower today, 15 September 2008. Taiwan's Taiwan Weighted plunged 3.01% or 190.05 points at 6,120.63 and Singapore's Straits Times fell 2.02% or 52.03 points at 2,518.64. Japanese markets were closed for Respect for the Aged Day and Hong Kong markets were shut for the mid-Autumn festival holiday.
US light crude for October 2008 delivery fell $1.52 to $99.66 a barrel today, 15 September 2008 on early signs that Hurricane Ike may have spared key Gulf Coast infrastructure, although traders were cautious on Monday as they awaited status reports on more Texas refineries.
US markets ended mixed on Friday, 12 September 2008, amid volatility as uncertainty over the fate of troubled investment bank Lehman Brothers. But shares of natural resource companies and utilities gained as commodity prices rose, offsetting losses among financial and bank shares. The Dow Jones industrial average slipped 11.72 points, or 0.10%, to 11,421.99. The S&P 500 index gained 2.65 points, or 0.21%, to 1,251.70, and the Nasdaq Composite index advanced 3.05 points, or 0.14%, 2,261.27.
Back home, heavy selling pressure in pivotals pulled the market sharply lower on Friday, 12 September 2008. The BSE 30-share Sensex lost 323.48 points or 2.26% to 14,000.81. and the S&P CNX Nifty was down 61.85 points or 1.44% to 4,228.45, on that day.
Weak global cues pulled the market sharply lower in the week ended Friday, 12 September 2008. The 30-share BSE Sensex shed 483.02 points or 3.33% to 14,000.81 and the S&P CNX Nifty fell 123.85 points or 2.84% to 4228.45, on that day.
Foreign institutional investors (FIIs) were net equity sellers worth Rs 1497.67 crore while mutual funds bought shares worth Rs 695.41 crore on Friday, 12 September 2008, according to provisional data on NSE. FIIs were net sellers of Rs 777.40 crore in the futures & options segment on Friday, 12 September 2008.
The Indian Market is expected to have gap down opening as US markets closed mixed and Asian markets are trading lower. On Friday, domestic markets extended losses for the fourth consecutive day to close in deep red. It was a bad day for the market as BSE Sensex closed around 14,000 level and NSE Nifty ended around 4,200 mark. Markets opened higher tracking positive cues from the global markets. Further market gave up its gains and continued to trade sharply lower. Markets ignored fair IIP number and further slipped during last trading hours to end the day with heavy losses. European markets also contributed to the trailing sentiment. From the sectoral front, all indices declined and among that IT stocks were worst performer as closed with loss of more than 4%. Apart form that, heavy selling was seen in Oil & Gas, Reality, Metal, Bank and Capital Goods stocks. The BSE Sensex closed lower by 323.48 points at 14,000.81 and NSE Nifty ended down by 61.85 points at 4,228.45. The BSE Mid Caps and Small Caps closed with losses of 110.06 points at 5,537.14 and by 107.39 points at 6,711.54. We expect that market may lose some ground during the trading session.
IIP data came in better than expected as it rose 7.1% in July 2008 as against 5.4% in the previous month. IIP growth was 8.3% for the same period last year. Drivers to this growth were Capital Goods up by 21.9% as against 12.3% YoY and Consumer Goods up by 7.3% as compared to 7.1% YoY.
On Friday, the US market closed mixed after struggled to make progress. Traders continue to await clarity related to the fate of Lehman Brothers and Washington Mutual. Crude oil prices exhibited sea-saw movement to close at $101.18 a barrel. Ealier it dipped below $100 a barrel for the first time in 5 months on the New York Mercantile Exchange and also touched high of $102.89 a barrel.
The Dow Jones Industrial Average (DJIA) closed lower by 11.72 points to close at 11,421.99, while the NASDAQ index ended marginally up by 3.05 points to close at 2,261.27 and the S&P 500 (SPX) gained slightly 2.65 points to close at 1,251.70.
Indian ADRs ended mixed. In technology sector, Satyam ended higher by (0.76%) followed by Infosys advanced by (0.16%), while Wipro plunged (0.84%) and Patni Computers lost (4.37%). In banking sector HDFC Bank advanced (0.36%) while ICICI Bank lost (1.39%. In telecommunication sector, MTNL gained (1.61%) and Tata Communication plunged (0.31%). However, Sterlite industries increased by (2.04%).
Today the major stock markets in Asia are trading lower due to uncertainty over the fate of Lehman. Lehman Brothers prepared to file for bankruptcy. Taiwan Weighted is trading weaker by 190.05 points at 6,120.63 along with Singapore''s Straits trading down by 52.03 points at 2,5618.64. Hong Kong stock market is closed today for a public holiday.
The FIIs on Friday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs2,332.90 Crore and gross debt purchased stood at Rs955.50 Crore while the gross equity sold stood at Rs3,743.50 Crore and gross debt sold stood at Rs99.20 Crore. Therefore, the net investment of equity reported was (Rs1410.50) Crore and net debt was Rs856.30 Crore.
Indian rupee ended at 45.74/75 per dollar on Friday from Thursday’s close at 45.56/57 per dollar. It trims losses after IIP data as before that it touched a low of 44.80.
Today, Nifty has support at 4,156 and resistance at 4,292 and BSE Sensex has support at 13,704 and resistance at 14,248.
Sharp Surge In Gold Likely Today
Gold futures rose on Friday, as a steep fall in the dollar encouraged investors to buy the precious metal following nine straight sessions of losses, gold's longest losing streak in eight years, which had shaved off more than $90 of its value. Gold for December delivery rose $19, or 2.5%, to end at $764.50 an ounce on the Comex division of the New York Mercantile Exchange. Early Asian trades are witnessing sharp appreciation in COMEX Gold December expiry which is now at $ 788 per ounce up $ 23.
Domestic markets were not behind the COMEX and Gold futures in MCX spurred by Rs 74 to close the week at Rs 11421 per 10 grams. It will be interesting to see the moves of Gold when the contract starts today’s session, the session is likely to be positive for Gold.
In currency trading, a surprise drop in retail sales on Friday put further pressure on the dollar, with the U.S. currency already under pressure as hopes of a buyout for troubled investment firm Lehman Brothers reduced the need for risk aversion trades.
Market Grape Wine :
Nifty at a support of 4150-4085 with a resistance of 4235-4280
SELL Reliance below 1935 target of 1875 s/l of 1950
SELL Sbi below 1514 target of 1470 with a s/l of 1542
SELL Relcap below 1219 target of 1170 with a s/l of 1245
SELL Sbi below 1514 target of 1460 with a s/l of 1542
Markets at a support of 13636 & 13425 and resistance at 14141 & 14235 levels .
Marekts to open weak , maintain strict stop loss for your trades : Markets to be very volatile .
Buy : RIL at dips
Buy : Corerproject at dips
Buy : RPower at dips
Buy : LNT at dips
Buy : Jayshreetea & Mcleodrussel at dips
Buy : SBIN at dips
Buy : GujNre at dips
Dark Horse : Bhel , Sbin , Kohinoor , LNT , RComm & Aban & Relcap
We recommend a buy in Agro Tech Foods from a short-term perspective. From the charts it is apparent that Agro Tech Foods has been on a medium-term uptrend from its July low of Rs 112. In late July, the stock crossed over its 21- and 50-day moving averages and is currently trading well above the averages. We notice that the volume has been increasing over the past three trading sessions. The daily relative strength index (RSI) is featuring in the bullish zone and weekly RSI is steadily rising in the neutral region. The moving average convergence and divergence is gradually moving upward in the positive territory, reinforcing the bullishness. We expect the stock’s medium-term up trend to prolong until it hits our price target of Rs 157. Traders with short-term perspective can buy the stock with a stop-loss at Rs 135.
Nifty (4228) Sup 4150 Res 4275
Sell ACC (592) SL 597
Target 582, 579
Sell Siemens (520) SL 525
Target 510, 508
Sell HCL Tech (229) SL 233 Target 221, 219
Sell DLF (466) SL 471
Target 456, 452
Buy HUL (249) SL 245
Target 258, 260
Do not follow where the path may lead. Go, instead, where there is no path and leave a trail.
The bulls continue to get blasted from all corners. We are not talking just of the Delhi blasts. We expect a soft opening mainly due to renewed concerns over the health of the financial sector in the US and its worldwide fallout. The trend will hinge on the movement in global markets. The undertone will remain edgy despite crude falling below $100, inflation slipping a bit and better than expected IIP numbers.
Coming to crude, it is now trading below $100 a barrel. Hurricane Ike has inflicted less than expected damage to the oil production facilities. Oil prices fell below $99 a barrel on Sunday in a special early-start session. The market is still waiting for more updates on damage from the Gulf of Mexico. Ike has hurt the demand side for crude more than the supply side, according to some oil market analysts. Oil was recently trading at $99.54 a barrel after falling as low as $98.55 in electronic trading.
Ideally, this should be music to the ears of the bulls, at least in India. However, that doesn't seem to be happening, with markets in Taiwan and Singapore down well over 2% this morning. The growing nervousness is with regard to news that Lehman Brothers is planning to file for bankruptcy as it has failed to find any buyers. Even the US government has refused to lend any support to the beleaguered securities firm. The dollar has tumbled and US stock futures have taken a beating. When reports last came in, Dow futures were down over 300 points.
Markets in China, Hong Kong, Japan and Korea are shut for public holidays. Stock benchmarks in Europe and emerging markets like Brazil also rallied. The main events to watch out for will be the announcement from Lehman Brothers, AIG's restructuring plans, Bank of America's acquisition of Merrill Lynch and the Fed meeting on Tuesday.
On the local front, there aren't too many positive triggers. So, the action will be stock and in some cases even sector specific. One should remain cautious, as there are still a lot of uncertainties, both globally and locally. FIIs have stepped up their selling of late, which is another major cause for worry. And, with the rupee weakening against the dollar, they may not resume their buying spree anytime soon.
FIIs were net sellers of Rs14.98bn (provisional) in the cash segment on Friday while the local institutions pumped in Rs6.95bn. In the F&O segment, the foreign funds were net sellers at Rs7.77bn. On Thursday, FIIs were net sellers of Rs14.1bn in the cash segment.
US stocks closed flat on Friday despite lower crude oil prices, as investors chose to focus more on the financial turmoil. Uncertainty about whether Lehman Brothers and Washington Mutual are likely to find buyers and whether AIG will shed its sour mortgage-related assets took precedence over falling oil prices.
The broad financial sector problems were countered by strength in oil services and other commodity stocks and the automakers. Oil prices seesawed to a higher close as Hurricane Ike headed toward the Texas Gulf Coast.
The Dow Jones Industrial Average lost 12 points, while the Standard & Poor's 500 index and the Nasdaq Composite index both just about managed to close in the positive territory.
All three major stock gauges had been on both sides of unchanged throughout the session.
Market breadth was negative.
The US credit squeeze has brought on a "once-in-a-century" financial crisis that is likely to claim more big firms before it eases, former Federal Reserve chief Alan Greenspan said on Sunday. Greenspan told ABC's "This Week" show that the situation is in the process of outstripping anything he has seen.
He added that the financial contagion is still not resolved and has a way to go. Greenspan predicts that the housing-led malaise would stabilise early next year and says that the odds of a US recession have gone up in recent months.
US insurance giant American International Group (AIG) plans to unveil a restructuring plan as soon as Monday that will include selling off part of its business to raise cash and boost investors' confidence, according to the Wall Street Journal.
Another major development that is likely to change the US financial landscape, Bank of America is expected to announce the acquisition of Merrill Lynch for roughly $44bn. The boards of the two companies approved the deal Sunday evening, according to reports.
Hopes for a buyout of beleaguered Lehman Brothers faded after Bank of America and British bank Barclays, both viewed as potential white knights, pulled out of deal talks, according to reports.
Top Wall Street officials and federal regulators remained in talks in the hope of devising a plan to save Lehman and allay fears that threatened to roil US and global financial markets when trading resumes on Monday.
Meanwhile, the Federal Reserve stepped in late Sunday night to try to calm the markets by announcing that it was expanding its lending to the banking industry.
The week ahead brings quarterly results from Goldman Sachs and Morgan Stanley among others.
On the economic front, the big event of the week is the Federal Reserve policy-setting meeting on Tuesday. The central bank is expected to hold rates steady at 2%, but it could begin lowering rates by the end of the year due to the continued economic slowdown.
Gasoline prices rose overnight, climbing for the third day in a row as Hurricane Ike strengthened, according to a national survey of credit-card activity.
In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.72% from 3.64% late on Thursday. The dollar fell versus the euro and rose against the yen. COMEX gold for December delivery rose $19 to $764.50 an ounce.
European shares snapped a three-session losing streak on Friday on the back of a rebound for commodity stocks. The pan-European Dow Jones Stoxx 600 index rose 1.7% to 280.41 led by shares of hard-hit mineral extractors and oil companies. The French CAC-40 added 2% to 4,332.66, while the UK's FTSE 100 rose 1.8% to 5,416.70 and Germany's DAX 30 gained 0.9% to 6,234.89.
In the emerging markets, the Bovespa in Brazil gained 2.2% at 52,392 while Mexico's IPC index added 0.1% at 25,588. The RTS index in Russia jumped 3.4% to 1341 while the ISE National-30 index in Turkey was down 0.9% at 45,846.
Can the bulls bounce back?
Despite a strong start markets immediately slipped into the red on the back of weakness in the Asian markets. The slide further was boosted after a foreign brokerage said that Infosys might miss the Q2 earnings dragging all the IT stocks.
However, markets staged a come back post announcement of IIP numbers which beat the market estimates. But once again, heavy selling, mainly in the IT and realty stocks, saw the index slide below the 14k levels. Finally, the BSE benchmark Sensex plunged 323 points to close at 14,000 and the NSE Nifty index slipped 62 points to close at 4,228.
Shares of Infosys slid by over 6% to Rs1644 after media reports stated that the company's Q2 earnings might be affected by the dollar's gain versus the UK pound over the past few days. An Infosys executive was quoted as saying that it was too early to revise FY09 US GAAP earnings forecast.
The scrip touched an intra-day high of Rs1753 and a low of Rs1637 and recorded volumes of over 35,00,000 shares on the NSE. Infosys had hit a 52-week high of Rs2141 on October 10, 2007 and 52-week low of Rs1212 on January 22, 2008.
Bharti Airtel was among the few gainers in the Sensex index. The scrip was up by 0.5% after reports stated that the company launched Rs2bn venture fund to promote content and technology development. The scrip has touched an intra-day high of Rs792 and a low of Rs744.
Shares of Greenply Industries rallied by over 5% to Rs154 after media reports stated that the promoters of the company might sell 5% stake via private placement. The scrip touched an intra-day high of Rs172 and a low of Rs138.
Shares of Union Bank of India have advanced by 1.6% to Rs151 after the bank announced that it launched Wealth Management Services to its High Net worth clients at Mumbai. The bank has tied up with Edelweiss Securities Ltd- part of Edelweiss Group, The scrip touched an intra-day high of Rs154 and a low of Rs147.
Recently listed Austral Coke gained by over 6% to Rs252 on the back of huge volumes. The scrip touched an intra-day high of Rs255 and a low of Rs237 and recorded volumes of over 55,00,000 shares on NSE.
Recently listed Resurgere continued to slide lower, the stock slipped below the issue price of Rs270 down 17%. Resurgere declined by over 9% at Rs220 touching an intra-day high of Rs252 and a low of Rs220 and recorded volumes of over 19,00,000 shares on NSE.
Hydro S&S declined by over 7% to Rs42.9 on the back of profit booking. The stock had gained by over 25% in previous two trading session after the board of directors of the company announced that they would meet on September 16, 2008 to consider buyback of equity shares. The scrip touched an intra-day high of Rs48.5 and a low of Rs42 and recorded volumes of over 24,000 shares on NSE.
SAIL surged by over 3.5% to Rs140 on the back of huge volumes. The scrip has touched an intra-day high of Rs142 and a low of Rs136 and has recorded volumes of over 67,00,000 shares on NSE.
Ratnagiri Gas & Power plant at Dabhol to start generating additional 600MW by month end.(BL)
ICICI Venture and US-based PE fund Providence may jointly bid for Firstsource Solutions.(ET)
BT may sell its stake in Tech Mahindra to TCS.(Mint)
Satyam Computers could potentially downsize its workforce by 9%.(TOI)
NTT DoCoMo in advanced stage of talks to buy about 25% in Tata Teleservices.(BS)
Indian Oil Corp. indicates that it could take 2mn tonnes of the crude Cairn India plans to produce at its Barmer oil field in Rajasthan, as long as it is offered at a discount.(BL)
NMDC says it will invest Rs199bn by 2014 to raise its iron ore production and build its first steel plant.(FE)
TPG picks up 49% stake in Shriram Retail Holdings for Rs5.3bn.(BL)
NHPC plans to float its IPO in October to raise Rs17bn for ongoing expansion work.(TOI)
Bajaj Auto is considering launching a sub-brand for its low cost bikes.(Mint)
Indian Hotels Company’s voting power in Orient Express Hotels will increase if shareholders approve reclassification of shares.(BS)
International Tractors plans an IPO by year end.(ET)
Lanco Infratech in talks with European and US based engineering procurement contractors for its foray into nuclear power generation.(BL)
Reliance Infrastructure enters steel EPC business, signs deal with China Metallurgical Group Corporation.(ET)
Overseas arm of Wadia-owned Bombay Burmah Trading Corporation is raising US$200mn from international markets.(ET)
Tata Motors to take a final decision on the location of the ‘Nano’ project by September 15 and would convey this to all its ancillary suppliers.(DNA)
Government is unlikely to allow Reliance Industries to export LPG from its greenfield refinery at Jamnagar SEZ.(ET)
Arvind Ltd is investing Rs6bn in to retail and brand expansion.(Mint)
NHPC plans to enter into the proposed power exchange as a stakeholder.(FE)
Maharashtra government decides to carry out a referendum in 22 villages covered under the Reliance Industries’ SEZ in Navi Mumbai.(BS)
NM Rothschild, on its own, appears to be actively scouting for potential buyers for four divisions of Corus Group, owned by Tata Steel.(Mint)
SEBI clears the open offer from Emami group for Zandu Pharmaceutical Works.(BL)
Jindal Saw to invest Rs10bn to build new steel plant at Mundra, Gujarat.(ET)
Tata Motors’ Nano’s petrol and diesel variants to be launched in a month and a year respectively.(BS)
Power Grid Corp. to buy 26% in IL&FS power SPV.(ET)
Adani Group looking to buy palm oil plantations abroad.(BL)
GSPC may downsize IPO to Rs35bn.(BS)
BSNL to share roaming network with private telecom operators.(Mint)
Ambuja Group plans to invest Rs10bn over the next five years to develop resorts and hotels in West Bengal.(BL)
Maharashtra government approves Ispat Industries’ proposal to set up a Rs15bn captive jetty in Sindhudurg.(ET)
MindTree Consulting draws up plans for engineering services.(BS)
DLF, Gera Developers and Parsvnath plan to develop office-cum-shopping malls in Goa.(ET)
Indian Oil Corp. under-recoveries have nearly halved to Rs2.2bn a day in the first fortnight of September.(BL)
Sahara India Investment Corp. has voluntarily exited the non-banking financial business.(DNA)
Greenply Industries to set up a Rs2.5bn MDF facility in Uttarakhand.(BL)
Tata Chemicals has shown interest in buying stake in Poland’s state owned soda-ash maker.(DNA)
Cargo carriers like Blue Dart and UPS may get ground handling freedom at airports.(BS)
Orient Craft plans Rs21bn textile SEZ.(BS)
JetLite to spend Rs50mn for voluntary separation scheme to 750 employees who have been with the airline for up to one year.(BS)
DoT seeks revenue ministry’s views on auctioning 773 acres of land of VSNL (now Tata Communications) in four cities.(ET)
Bhushan Power threatens to scrap Jharkhand steel project after its surveyors were assaulted by villagers.(BS)
M&M keen on Italian scooter maker Malaguti.(DNA)
Bharti Airtel plans to offer software applications on a pay-per-use model to small and medium businesses and enterprises.(BL)
Power Exchange of India, a JV between NCDEX and NSE, to start trading in October.(BL)
Satluj Jal seeks JV with Nuclear Power Corp. for nuclear foray.(BS)
Tatas move court to block Singur contract release.(BS)
Essar Oil to raise US$5bn from four banks to fund expansion of its refinery in Gujarat.(BL)
Tata Motors’ ‘Nano’ may still roll out from Singur.(BS)
Economy Front page
Forex reserves declined by US$6.5bn in the week ended September 5 to US$288.8bn.(BL)
Union Minister for IT and Communications to seek extension of concessions to Software Technology Parks for one more year.(ET)
Sugar export subsidy to cease.(BS)
DoT ignores finance ministry suggestion to raise the reserve price for 3G spectrum to Rs25bn.(Mint)
Industrial growth touches a 5-month high of 7.1% in July.(DNA)
Petroleum Ministry is looking into a dual pricing policy for diesel that would entail charging bulk users a higher price for the subsidized fuel.(FE)
Government has cut stamp duty on P-notes and debentures.(ET)
DoT decides to allow operators to separate their revenues from 2G and 3G services respectively for calculating the annual spectrum charges.(BL)
RBI has initiated a review of the benchmarking system for pricing floating rate loans.(BS)
Ministry of Power has asked central and state public sector utilities to increase their power output by at least 10%.(BS)
Merchant mining companies seek export duty concession.(Mint)
Maharashtra fixes March 2009 deadline for running Dabhol units at full capacity.(BS)
Voting rights in private banks to equal share holding level.(FE)
Enhanced duty entitlement pass book rate for exporters is likely to continue for another six months.(ET)
Government is planning a bailout package to the tune of Rs45-50bn for all domestic carriers.(ET)
Government's revenue from indirect tax touches Rs 1.1tn by August-end, achieving over 35% of the budget estimates for the current fiscal.(FE)
NELP crude oil may attract special tax.(ET)
DoT eases roll out obligations for WiMax players.(BL)
Government to set up regulatory body to enhance Warehousing Act.(ET)