India Strategy - Election Results
Friday, May 15, 2009
Domestic market rebounded sharply from yesterday’s losses to close near day''s high backed by the outcome of general election result scheduled tomorrow. On Saturday, 16 May 2009, the counting of votes will occur. In addition, firm cues from Asian markets and rise in European stocks contributed to the upswing in key benchmark indices. Meanwhile, All India Consumer Price Index Number for Industrial Workers (CPI-IW) for the month of March, 2009 remained stationery at 148. Consumer Price Index for the month, which stood at 8.03 % lower than 9.63% of February, 2009, also added to rally.
The market opened considerably higher mirroring positive cues from the global markets. Thursday, the US stock markets closed in positive. However, a batch of economic reports that missed expectations led the markets to shed some of its early gains. Further, benchmark indices moved up and continued to trade in positive zone on significant buying across the board. Market reported sharp rise during final trading hours to end with decent gains. Drop in consumer price index to 8.03% for March, 2009, also contributed to the positive sentiments. From the sectoral front, most of the indices ended in green. Among those, mainly Bank, Consumer Durables, Capital Goods, Teck, IT, Reality, power and Metal stocks contributed to the upward movement. Mid Cap and Small Cap stocks were also on buyer''s radar. However, FMCG stocks remained out of favor during the trading session.
Among the Sensex pack 25 stocks ended in green territory and 5 in red. The market breadth indicating the overall health of the market remained positive as 1472 stocks closed in green while 1068 stocks closed in red and 102 stocks remained unchanged in BSE.
The BSE Sensex closed higher by 300.51 points at 12,173.42 and NSE Nifty ended up by 78.20 points at 3,671.65. BSE Mid Caps and Small Caps closed with gains of 50.14 and 35.15 points at 3,807.07 and 4,269.94 respectively. The BSE Sensex touched intraday high of 12,219.54 and intraday low of 11,948.70.
Gainers from the BSE Sensex pack are Ranbaxy Lab (8.59%), ICICI Bank (7.03%), Grasim Industries (4.96%), Bharti Airtel (4.68%), L&T Ltd (4.32%), TCS Ltd (4.36%), HDFC (3.75%), Wipro Ltd (3.68%), DLF Ltd (3.59%), SBI (3.50%), ACC Ltd (3.44%), RCom (3.36%), JP Associates (3.00%) and Tata Steel (2.85%).
Losers from the BSE Sensex pack are ONGC Ltd (2.27%), NTPC Ltd (0.56%), Grasim ITC Ltd (0.51%), Hindalco (0.49%) and HUL (0.09%).
On the global markets front the Asian markets which opened before the Indian market, ended in green as Sony''s better-than-expected estimate and the slowing down of the fall in Japan''s machinery orders that raised hope of relief. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended higher by 3.58, 249.01, 171.29, 17.67 and 10.78 points at 2,645.26, 16,790.70, 9,265.02, 2,139.78 and 1,391.73 respectively.
European markets which opened after the Indian market are trading higher. In Frankfurt the DAX index is trading up by 13.16 points at 4,751.63 and in London FTSE 100 is trading higher by 29.62 points at 4,392.20.
The BSE Bank index gained (3.86%) or 237.03 points at 6,375.65 on hopes that falling interest rates will boost lending growth. Scrips that gained are Oriental Bank (7.74%), ICICI Bank (7.03%), Bank of India (4.72%), Federal Bank (3.88%) and SBI (3.50%).
The BSE Capital Goods stocks increased by (3.57%) or 298.98 points to close at 8,676.35 after Larsen & Toubro said it expects a strong order flow in the year ending March 2010. Major gainers are Usha Martin (6.04%), ABB Ltd (5.85%), RNRL Praj Industries (4.73%), Thermax Ltd (4.50%) and Crompton Greaves (4.40%).
The BSE Consumer Durables ended up by (3.18%) or 61.95 points at 2,007.22. Gainers are Blue Star (19.99%), Titan Ind (1.64%) and Videocon Ind (0.58%).
The BSE Teck index advanced by (3.05%) or 68.54 points to close at 2,316.65. Main gainers are Patni Computers (14.46%), Tel Eighteen (9.63%), Idea Cell (7.62%), Bharti Airtel (4.68%) and Mphasis Ltd (4.63%).
The BSE IT index also ended higher by (2.47%) or 68.82 points at 2,850.73 on discussions that the worst may be over for the US economy. Patni Computers (14.46%), Mphasis Ltd (4.63%), TCS Ltd (4.16%), HCL Tech (3.77%) and Wipro Ltd (3.68%) ended in positive territory.
The BSE Realty index gained (2.14%) or 50.31 points to close at 2,404.87 on hopes that lower rates will spur housing demand. Gainers are DLF Ltd (3.59%), Unitech Ltd (3.45%), anant Raj (2.92%), Anant Raj (1.04%) and Akruti City (1.03%).
GTL Ltd gained 0.53%. The company has bagged multiple contracts valued approximately at Rs 324 Crore from Maharashtra State Electricity Distribution Company Limited (MSEDCL). The Turnkey contract includes construction, erection, testing and commissioning of sub-transmission lines, distribution lines, power transformers, renovation and modernization works in the State of Maharashtra.
Maruti Suzuki advanced by 1.63%. The company unveiled the much-awaited Ritz here today. The car is available in both, petrol and diesel engine options. With the Ritz, Maruti Suzuki consolidates its leadership in the highly competitive compact car segment. The Ritz comes with the BS-IV and OBD-I compliance much ahead of the regulation being enforced in the country.
Bajaj Auto ended up by 0.01 The company has bagged the patent for its invention- multi-spring vehicle shock absorber, used in its motorcycles by the Indian Patent Office. The patent was granted for its "SNS" invention with patent no. 234044 on May 1, 2009.
Piramal Healthcare advanced by 3.88%. On Thursday, the company launched a pain management product- BioElectronic''s ActiPatch. "ActiPatch is a medical device that utilizes pulsed electro-magnetic frequency (PEMF) to accelerate healing of soft tissue injuries.
Wipro Ltd gained 3.68%. The India and Middle East information technology services wing of Wipro, Wipro Infotech, has bagged an IT outsourcing deal from Life Insurance Corporation (LIC). The deal, worth around Rs 200 crore and will be for a time period of five years.
Axis Bank ended higher by 3.45%. The bank has reduced its benchmark prime lending rate (BPLR) by 50 basis points (bps), for the second time in one and a half months, bringing it to 14.75%.
Eveready Industries India Ltd ended up by 5.91% after an announcement of acquisition of France’s rechargeable battery maker Uniross from CG Holding for consideration of approximately Rs 60 crore.
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
15/5/2009 523204 ABAN OFFSHO GENUINE STOCK BROKERS PVT. LTD. B 307225 594.92
15/5/2009 523204 ABAN OFFSHO EXCEL FINCOM B 208905 590.94
15/5/2009 523204 ABAN OFFSHO MATRIX EQUITRADE PVT. LTD. B 195816 576.68
15/5/2009 523204 ABAN OFFSHO CHANDARANA INTERMIDIARY BROKERS PVT LTD B 222754 580.17
15/5/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD B 1076979 585.25
15/5/2009 523204 ABAN OFFSHO RUSSELL INVST CO PLC THE PACIFIC BASIN EQUITY FUND LEGG MASO B 350000 560.22
15/5/2009 523204 ABAN OFFSHO GENUINE STOCK BROKERS PVT. LTD. S 307225 595.38
15/5/2009 523204 ABAN OFFSHO EXCEL FINCOM S 208905 590.65
15/5/2009 523204 ABAN OFFSHO MATRIX EQUITRADE PVT. LTD. S 195816 577.04
15/5/2009 523204 ABAN OFFSHO CHANDARANA INTERMIDIARY BROKERS PVT LTD S 222754 581.11
15/5/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD S 1076979 585.63
15/5/2009 532919 ALLIED COMP VICKY RAJESH JHAVERI S 1138100 0.56
15/5/2009 532989 BAFNA PHARMA VISTAR FINANCIERS PRIVATE LIMITED B 100200 29.77
15/5/2009 511696 CHAR CAP INV MAHESHBHAIMOHANLALPATEL B 20800 33.70
15/5/2009 511696 CHAR CAP INV DHARMESHBHOLABHAIPATEL S 20800 33.70
15/5/2009 504008 EMCO LTD SARLA SHANTILAL MUTHA B 508712 55.97
15/5/2009 504008 EMCO LTD SAMEER SHANTILAL MUTHA S 500000 56.00
15/5/2009 532022 FILAT FASH MAHENDRAKUMAR J RAWAL B 42061 89.88
15/5/2009 531863 GEEKAY FINAN AMIT BUSINESS PVT LTD B 90000 104.36
15/5/2009 530655 GOOD LUCK ST MANOJGUPTA S 83000 130.67
15/5/2009 516078 JUMBO BAG LT NIKHILSSHAH S 73750 25.93
15/5/2009 532081 K SERA SERA EDELWEISS ESTATES P LTD B 500000 11.55
15/5/2009 532081 K SERA SERA S V ENTERPRISES B 1553540 11.47
15/5/2009 532081 K SERA SERA S V ENTERPRISES S 1548207 11.32
15/5/2009 511131 KAMAN HSG NISHA SUMANJAIN B 73855 26.92
15/5/2009 531413 KIRAN PRIN P SAPATRISHI PROPERTIES PVT LTD B 36648 10.24
15/5/2009 531413 KIRAN PRIN P ROHYL CONSULTANCY PRIVATE LIMITED S 36648 10.24
15/5/2009 590004 LOTTE I CORP GLOBE CAPITAL MARKET LIMITED B 23003 534.73
15/5/2009 590004 LOTTE I CORP RAJASTHAN GLOBAL SEC LTD B 42057 534.25
15/5/2009 503162 REL CHEMO IN SETU SECURITIES PVT LTD S 19432 25.97
15/5/2009 531898 SANGUINE MD SUNIL RAMESHBHAI RUPANI S 126482 2.08
15/5/2009 531874 VENUS VENT VIJAY VELJIBHAI PADHARIA B 26800 29.79
15/5/2009 531874 VENUS VENT HIRENKIRITGANDHI B 30000 29.25
15/5/2009 531874 VENUS VENT CHANDRA SHEKHAR SUNIL BHATT S 48493 29.44
15/5/2009 532360 VINTAGE CARD BDS SHARE BROKERS PVT LTD B 3250 18.31
15/5/2009 531249 WELL PACK PA SAGAR TEX CREATION PVT.LTD S 25000 141.85
* B - Buy, S - Sell
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
15-MAY-2009,ABAN,Aban Offshore Ltd.,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,263740,587.84,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,766102,593.29,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,420049,598.04,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,HARBUX SINGH SIDHU,BUY,306877,590.36,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,KALASH SHARES & SECURITIES PRIVATE LIMITED,BUY,384073,595.76,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,MANIPUT INVESTMENTS PVT. LTD.,BUY,503074,595.76,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,PARWATI CAPITAL MARKET PRIVATE LIMITED,BUY,225065,578.92,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,BUY,371164,580.55,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,RUSSELL INVST CO PLC THE PACIFIC BASIN EQUITY FUND LEGG MAS,BUY,965000,555.09,-
15-MAY-2009,ABGSHIP,ABG Shipyard Limited,SETU SECURITIES LTD,BUY,278385,160.79,-
15-MAY-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,BUY,234169,224.79,-
15-MAY-2009,CYBERMEDIA,Cyber Media (India) Limit,SAL REAL ESTATES (P) LTD,BUY,85000,38.97,-
15-MAY-2009,DCB,Development Credit Bank L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,1241540,27.78,-
15-MAY-2009,ECEIND,ECE Industries Limited,DIPLOMAT LIMITED,BUY,50000,133.00,-
15-MAY-2009,ITI,ITI Ltd.,SARAVANA STOCKS PRIVATE LIMITED,BUY,150000,25.17,-
15-MAY-2009,MCDHOLDING,McDowell Holdings Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,871500,47.00,-
15-MAY-2009,MIC,MIC Electronics Limited,JMP SECURITIES PVT LTD,BUY,554348,27.50,-
15-MAY-2009,ZYLOG,Zylog Systems Limited,ALKA SECURITIESLIMITED,BUY,24781,144.49,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,280540,581.86,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,766102,593.71,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,420049,598.20,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,HARBUX SINGH SIDHU,SELL,306877,590.26,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,KALASH SHARES & SECURITIES PRIVATE LIMITED,SELL,384073,595.85,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,MANIPUT INVESTMENTS PVT. LTD.,SELL,503075,596.13,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,PARWATI CAPITAL MARKET PRIVATE LIMITED,SELL,225065,572.92,-
15-MAY-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,SELL,371164,580.29,-
15-MAY-2009,ABGSHIP,ABG Shipyard Limited,SETU SECURITIES LTD,SELL,71604,158.15,-
15-MAY-2009,BOMDYEING,Bombay Dyeing & Mfg Co.,SUNEET LAL,SELL,232369,225.31,-
15-MAY-2009,CYBERMEDIA,Cyber Media (India) Limit,ANOOP JAIN HUF,SELL,75000,39.00,-
15-MAY-2009,DCB,Development Credit Bank L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,1287540,27.77,-
15-MAY-2009,ECEIND,ECE Industries Limited,DIPLOMAT LIMITED,SELL,56,133.89,-
15-MAY-2009,ECEIND,ECE Industries Limited,JYOTI VARDHAN SONTHALIA,SELL,50000,133.00,-
15-MAY-2009,MCDHOLDING,McDowell Holdings Limited,DB INTERNATIONAL ASIA LIMITED,SELL,871500,47.00,-
15-MAY-2009,MIC,MIC Electronics Limited,JMP SECURITIES PVT LTD,SELL,395000,27.50,-
15-MAY-2009,ZYLOG,Zylog Systems Limited,ALKA SECURITIESLIMITED,SELL,84964,140.46,-
Volatility ruled the roost on the bourses ahead of the outcome of the elections for the recently concluded parliamentary elections. The market sentiment was firm as foreign funds made heavy purchases. Blue chips witnessed intermittent rally and select non-Sensex stocks surged on hopes of a recovery in the second in the second half of the fiscal year ending March 2010.
Investors are bracing for wild swings on the bourses in the near term after the exit polls indicated a fractured mandate in the just concluded parliamentary election
The 30-share BSE Sensex jumped 296.99 points or 2.5% to 12,173.42 in the week ended 15 May 2009. The barometer index rose for the 10th week in a row, the longest winning streak in almost three years
The BSE Mid-cap index rose 36.65 or 0.97% in the week. The BSE Small-cap index was almost unchanged for the week.
Trading for the week began on a weak note. The key benchmark indices extended losses for the second straight day on Monday, 11 May 2009, as profit taking emerged on weak global stocks and on political uncertainty. The barometer index fell 193.44 points or 1.63%. Banking, metal, IT and capital goods stocks led the fall. Index heavyweight Reliance Industries (RIL) also edged lower.
The unemployment rate in the US jumped to 8.9%, the highest level since 1983, data on 8 May 2009 showed. Earlier, the Federal Reserve stress result announced on Thursday 7 May 2009 determined that 10 US banks need to raise a total of $74.6 billion in capital, a finding that Chairman Ben S. Bernanke said should reassure investors about the soundness of the financial system.
Speculation that the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) was gaining momentum in the parliamentary elections triggered a solid surge on the domestic bourses on Tuesday, 12 May 2009. Firm global stocks and buying by foreign funds supported the rally. The BSE 30-share Sensex jumped 475.04 points or 4.07%. Index heavyweight RIL galloped. Banking, IT, capital goods and realty stocks surged.
Data showing a strong growth in consumer durables production in March 2009 reinforced expectations of a recovery of the economy. Production of consumer durables jumped 8.3% in March 2009 as compared to a 2% decline in March 2008. Overall, India's industrial output fell a steeper-than-expected 2.3% in March 2009 over March 2008, its third fall in four months, data released by the government during trading hours on Tuesday showed. The manufacturing segment shrank by 3.3%. Mining rose by a modest 0.4% and electricity output climbed by a decent 6.3%.
The industrial production figure for February 2009 was revised to a 0.7% drop from a preliminary estimate of a 1.2% decline. Industrial output rose 2.4% the 2008/09 fiscal year (April-March), down from a revised 8.5% in 2007/08.
Fears of a fractured mandate in the parliamentary election pulled the market lower on Wednesday, 13 May 2009, in what was a highly volatile trading session. Volatility in index heavyweight Reliance Industries and banking and IT stocks caused volatility in the key benchmark indices. The BSE 30-share Sensex lost 138.38 points or 1.14%.
The key benchmark indices fell for the second straight day on Thursday, 14 May 2009, after the exit polls indicated a fractured mandate in the just concluded parliamentary election. Rating agency Fitch's warning that the government needs to cut fiscal deficit to avoid having its credit rating lowered also weighed on sentiment.
While current economic conditions are prompting many governments to undertake counter-cyclical stimulus measures, the recent deterioration in India's fiscal position accentuates underlying structural weaknesses in public finances that, if unaddressed, could undermine sovereign creditworthiness, Fitch said in a statement during trading hours on Thursday. Fitch, currently has a BBB- rating on India, its lowest investment grade rating.
The market surged on Friday, 15 May 2008, on positive global cues. Telecom, IT and banking stocks led the rally. The Sensex jumped 300.51 points or 2.5%. Data showing fall in consumer price index in March 2009, also aided the rally. The market shrugged off a reduction in India's weight in the Morgan Stanley Capital International (MSCI) index.
Following changes to its indices as a part of a semi annual review by MSCI, India's country weight in the MSCI EM (emerging markets) Index will come down marginally from 6.47% to 6.36%. The change is effective from 29 May 2009.
India's consumer price index rose 8.03 % in March 2009 from a year earlier, lower than February 2009's annual rise of 9.63%, government data showed during trading hours on Friday, 15 May 2009. The consumer price index, which is published monthly, for industrial workers, remained steady at 148. The wholesale price index is more closely watched in India because it covers a higher number of products and is released weekly. Government data showed on Thursday 14 May 2009 the wholesale price index rose 0.48 % in the 12 months to 2 May 2009, below the previous week's annual rise of 0.7%.
Bank stocks jumped on hopes falling interest rates will boost lending growth. Bank interest rates are falling in India after the central bank began slashing interest rates last October to lift a slowing economy. The BSE's banking sector index Banked surged 6.1% in the week ended 15 May 2009.
State Bank of India announced a reduction interest rates on deposits by up to 50 basis points effective Monday, 18 May 2009.
India's biggest dedicated housing finance firm by operating income HDFC jumped 11.2% in the week on reports it is likely to cut deposit rates and follow it with a cut in lending rates.
India's biggest ready firm by market capitalization DLF rose 7.3% in the week after Macquarie Group raised the rating on the stock to 'neutral' from 'underperform', saying a large bulk deal by the founders has eased liquidity concerns. Founders of DLF raised Rs 3,860 crore by selling a 9.9% stake in realty major DLF to institutional investors on 13 May 2009.
India's biggest small-car maker in terms of market shares, Maruti Suzuki rose 2.1% in the week. The company on Friday, 15 May 2009, launched its premium compact car Ritz.
Two-wheeler major Bajaj Auto soared after the scrip was added to the MSCI India index as a part of a semi annual review by MSCI. The stock galloped 16.5% in the week
are bracing for wild swings on the bourses in the near term after most exit polls predicted a badly fractured mandate in the just concluded parliamentary election. In the case of a fractured mandate, the government formation will take time causing volatility in share prices.
The counting of votes takes place on Saturday, 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.
A coalition led either by the Congress or the BJP will be seen as a positive because they can both provide the impetus to boost sagging grow. Mutual funds which are sitting on a large cash pile are likely to step up buying if a coalition led either by the Congress or the BJP forms the next government at the Centre.
Nomura Holdings Inc. said last month that India's next government would offer better prospects for economic reforms without relying on Communist allies for support. Communist are opposed to economic reforms. Reforms virtually came to a halt in the past five years of the Congress-led alliance government at the centre, when the Communists provided support to the government from outside for a large part of the five-year term.
Coalition governments, which have been the order of the day for the last ten years, will be the case this time as well. What is important is a stable government. Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable.
Once the government is formed, the focus of the market will shift to expectations from the Union Budget 2009-2010. Focus on infrastructure development will continue unabated irrespective of the political coalition that forms the next government at the Centre.
Rating agency Fitch on Thursday, 14 May 2009, said the government needs to cut fiscal deficit to avoid having its credit rating lowered. While current economic conditions are prompting many governments to undertake counter-cyclical stimulus measures, the recent deterioration in India's fiscal position accentuates underlying structural weaknesses in public finances that, if unaddressed, could undermine sovereign creditworthiness, Fitch said. Fitch, currently has a BBB- rating on India, its lowest investment grade rating.
Investors in India will also continue to take cues from global markets. A thaw in credit markets augurs well for global equities. The London interbank offered rate, or Libor, decreased almost two basis points to 0.83% today, 15 May 2009. Libor, used to set borrowing costs on about $360 trillion of financial products globally, has dropped as the US government and the Federal Reserve committed $12.8 trillion to stem the longest recession since the 1930s and central banks around the world cut interest rates to near zero.
On the flip side, a string of weak GDP data out of various central and eastern European countries has stoked pessimism that the global economy is a long way from being out of the woods just yet.
The key benchmark indices surged after Congress party's Kamal Nath said in an interview to a news agency on Thursday, 14 May 2009, the alliance led by the Congress party is confident of retaining power at the Centre. Banking, IT, capital goods stocks and index heavyweight Reliance Industries (RIL), surged. The BSE 30-share Sensex jumped 300.51 points or 2.53%.
Firm global markets and data showing fall in consumer price index in March 2009, aided the rally. The Sensex attained its highest closing in more than seven months. The market today snapped last two days' losses, with the barometer index BSE Sensex regaining the psychological 12,000 level.
But volatility was high. After a surge in morning trade, the market pared gains. It firmed up again later in early afternoon trade. It pared gains in afternoon trade. The market surged in mid-afternoon trade with the Sensex hitting fresh intraday high. The market pared gains later before recovering from lower level.
India's consumer price index rose 8.03% in March 2009 from a year earlier, lower than February 2009's annual rise of 9.63%, government data showed today. The consumer price index, which is published monthly, for industrial workers, remained steady at 148. The wholesale price index is more closely watched in India because it covers a higher number of products and is released weekly. Government data showed on Thursday 14 May 2009 the wholesale price index rose 0.48 % in the 12 months to 2 May 2009, below the previous week's annual rise of 0.7%.
The stock market shrugged off a reduction in India's weight in the Morgan Stanley Capital International (MSCI) index. Morgan Stanley has announced changes to the MSCI India Index under its May 2009 Semi Annual Index Review (SAIR). Based on these changes, India's country weight in the MSCI EM (emerging markets) Index will come down marginally from 6.47% to 6.36%. The change is effective from 29 May 2009
European shares turned negative in mid-session on Friday, having risen as much as 1% earlier. That was after the Indian markets had closed. Key benchmark indices in France and UK were down by between 0.42% to 0.68%.
Germany's DAX fell 0.69% in a choppy trade after a dismal economic data. Slumping exports pushed German gross domestic product (GDP) down 3.8% in the first quarter of 2009, a far steeper drop than economists had forecast and the economy's worst performance since reunification in 1990.
Asian stocks climbed today after Sony Corp. forecast a smaller loss than analysts expected and bank borrowing costs plunged. Key benchmark indices in China, Hong Kong, Singapore, South Korea, Taiwan, Japan rose by between 0.2% to 1.96%.
China's electricity production fell 3.9% in early May 2009 from a year earlier, the China Securities Journal reported today, citing unidentified sources at China State Grip Corp
Hong Kong's economy shrank by the most since at least 1990 as exports tumbled and unemployment climbed, prompting the government to forecast a full-year contraction of as much as 6.5%. Gross domestic product shrank a seasonally adjusted 4.3% in the first quarter of 2009 from the previous three months, the government said today at a press briefing, after dropping a revised 1.9% in the fourth quarter.
Trading in US index futures indicated the Dow could fall 30 points at the opening bell on Friday, 15 May 2009.
US markets snapped a two-day losing streak on Thursday 14 May 2009 as banks rebounded and tech stocks gained. However, a pair of economic reports that missed expectations curbed gains. Initial jobless claims rose by 32,000 last week to 6.37 lakh, well above the 6.10 lakh expectation. Continuing jobless claims rose to a new record at 6.56 million. The Dow gained 46.43 points, or 0.6%, to 8,331.32. The S&P 500 index rose 9.15 points, or 1%, to 893.07, and the Nasdaq added 25.02 points, or 1.5%, to 1,689.21.
Volatility on the bourses may remain high in the near futures ahead of the formation of the next government at the Centre. The counting of votes will take place on Saturday, 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.
Indian stocks had declined for the second straight day on Thursday, 14 May 2009 after the exit polls indicated a fractured mandate in the just concluded parliamentary election. The Sensex lost 285.12 points or 2.4% to 11,872.91 on 14 May 2009 from 12,158.03 on 12 May 2009.
The exit polls commissioned by various news channels to get a sense of the shape of the next government at the centre predicted a badly fractured mandate, with the Congress-led UPA shown holding a slight edge over the BJP-led NDA. Neither the UPA nor NDA were shown anywhere close to the halfway mark, making it clear that they'll have to do business with parties bracketed with the Third Front and the Fourth Front.
Six television networks forecast UPA - the ruling alliance led by Congress may emerge just ahead of its chief rival headed by the Bharatiya Janata Party. CNN-IBN predicted Congress and its allies will get as many as 205 seats compared with a maximum 185 for the opposing coalition. Star News-Nielsen and News X gave the Congress-led bloc 199 seats to 191 for the BJP grouping.
Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable.
Even before the election results are out, the two main political parties the Congress and the BJP have started wooing regional parties in their bid to stake claim to form the next government at the Centre. In anticipation of getting the first invite from President Pratibha Patil after the poll results are out on Saturday, 16 May 2009, the Congress party has moved in swiftly to mop up support and has invited Samajwadi Party (SP) to join a government led by it.
Spurred by its estimate that SP's numbers won't be very different from BSP's and plagued by a nagging suspicion that Mayawati may not be averse to going over to BJP led National Democratic Alliance (NDA), Congress conveyed its invitation to SP through senior leader Pranab Mukherjee when he met SP general secretary Amar Singh late on Wednesday, 13 May 2009, reports suggest.
Reports also suggest that SP may demand some key portfolio as a part of the proposed power-sharing arrangement.
As part of the gameplan to stake claim to form the government, Sonia Gandhi has also reached out to Lalu Prasad Yadav, Ramvilas Paswan and Sharad Pawar in the last 24 hours, reports suggest. The party is also confident of roping in PMK, which while being part of the AIADMK-led combine, has promised to switch over to Congress at the right time, reports suggest
Meanwhile, LJP party chief Ram Vilas Paswan today told a news agency that the party will not support BJP at any cost to form a government and that he will make all efforts to ensure that a secular government is formed. Paswan said that not only LJP, but even SP and RJD would jointly chalk out plans on forming a secular government.
Paswan said if the UPA does not get majority, LJP, SP and RJD who have formed the Fourth Front, would jointly take a decision on the methodology of forming a secular government.
BJP on Thursday, 14 May 2009, claimed that it would be the biggest party with 160-plus seats and said NDA would emerge as the most credible pre-poll alliance. Reports suggest that BJP is likely to see support from the regional parties in the south viz. J Jayalalithaa's AIADMK and N Chandrababu Naidu's TDP, as the first option to take numbers to the majority mark. Gujarat Chief Minister Narendra Modi is BJP's assigned negotiator with Jayalalithaa, reports suggest.
TDP's Naidu has stressed that he will not go with BJP though there has been contact between him and emissaries from the saffron camp, reports suggest.
BJP spokesperson Ravi Shankar Prasad claimed that if secularism was the glue for parties to consolidate against BJP, anti-Congressism of some parties would push them towards the NDA camp. Prasad said internal surveys showed the BJP winning 166 seats and NDA emerging victorious in 218 constituencies. Prasad said the survey conducted by BJP showed Congress gaining only in Kerala, Punjab and Rajasthan and faring badly in Tamil Nadu and Andhra Pradesh. BJP is expected to gain in Madhya Pradesh, Chhattisgarh, Gujarat, Orissa and Karnataka, he said, adding that the party was looking forward to some very dramatic results in its favour in Uttar Pradesh.
Meanwhile, it what could be a blow for the BJP-led National Democratic Alliance (NDA), Bihar chief minister and Janata Dal (United) leader Nitish Kumar today, 15 May 2009, made it clear that special status for Bihar is a deciding factor on who to support for the next government in the Centre. At a book release function this morning in Patna, the JD(U) leader said Manmohan Singh had refused to give Bihar special status. He said he was keeping his options open and his eye on the Prime Minister's post.
Samajwadi Party (SP) general secretary Amar Singh today said SP would not align with the BJP as long as the Ram temple remained BJP's core issue.
Away from politics and back to economics, rating agency Fitch on Thursday, 14 May 2009, said the government needs to cut fiscal deficit to avoid having its credit rating lowered. While current economic conditions are prompting many governments to undertake counter-cyclical stimulus measures, the recent deterioration in India's fiscal position accentuates underlying structural weaknesses in public finances that, if unaddressed, could undermine sovereign creditworthiness, Fitch said in a statement during trading hours on Thursday. Fitch, currently has a BBB- rating on India, its lowest investment grade rating.
Indian market has risen sharply in the past two months on hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has jumped 4,013.02 points or 49.17% to 12,173.42 on 15 May 2009. The BSE Sensex has risen 2,526.11 points or 26.18% in calendar year 2009.
Foreign funds have turned sellers after recent aggressive buying of Indian stocks. Foreign institutional investors (FIIs) sold shares worth a net Rs 345.70 crore on 14 May 2009. FII inflow in May 2009 totaled Rs 9270.40 crore (till 14 May 2009) while their inflow in calendar year 2009 totaled Rs 9627 crore.
The BSE 30-share Sensex jumped 300.51 points or 2.53% to 12,173.42, its highest closing since 3 October 2008. The Sensex rose 346.63 points at the day's high of 12,219.54 in mid-afternoon trade. At the day's low of 11,948.70, the Sensex rose 75.79 points in early trade.
BSE clocked a turnover of Rs 5,091 crore, higher than Rs 4,564.43 crore on Thursday 14 May 2009.
The S&P CNX Nifty was up 81 points or 2.25% to 3,674.45. Nifty May 2009 futures were at 3684.95, at a premium of 13.3 points over the spot closing of 3671.65. Turnover in NSE's futures & options (F&O) segment rose to Rs 52853 crore from Rs 50988.41 crore on Thursday, 14 May 2009.
The BSE Mid-Cap index rose 1.33% and the BSE Small-Cap index rose 0.84%. However, both these indices underperformed the Sensex.
The BSE Bankex (up 3.86%), the BSE Capital Goods index (up 3.57%), the BSE Consumer Durables index (up 3.18%), the BSE TECk index (up 3.05%), outperformed the Sensex.
The BSE FMCG index (down 0.24%), the BSE PSU index (up 0.13%), the BSE Auto index (up 1.11%), the BSE Oil & Gas index (up 1.21%), the BSE Healthcare index (up 1.49%), the BSE Metal index (up 1.76%), the BSE Power index (up 1.88%), the BSE Realty index (up 2.14%), the BSE IT index (up 2.47%), underperfomed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,480 shares rose as compared with 1,085 that fell. A total of 56 shares remained unchanged.
From the 30 share Sensex pack, 25 stocks rose while rest fell.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.08% to Rs 1,948.25. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
Late last week, Ratnagiri Gas & Power, which supplies electricity to the western Indian state of Maharashtra, agreed to buy natural gas from an offshore field operated by Reliance Industries.
India's largest oil exploration firm by revenue ONGC fell 2.27% on reports the company's net profit may fall in 2008-09 as the government is planning to ask the company to pay more compensation to PSU OMCs.
PSU OMCs fell as crude prices rose. HPCL and Indian Oil Corporation, fell by between 1.44% to 1.46%. BPCL rose 1.46%. Crude oil for June delivery traded at $58.74 a barrel, up 12 cents, on the New York Mercantile Exchange. Oil reached $60.08 on 12 May 2009, the highest intraday price since 11 November 2008.
Some healthcare stocks rose as most of the healthcare firms reported better than expected Q4 March 2009 result. Piramal HealthCare, Lupin, Glenmark Pharmaceuticlas, Biocon, Sun Pharmaceuticals Industries, Cipla rose by between 0.33% to 4.3%.
India's largest drugmaker by sales Ranbaxy Laboratories rose 8.59% on reports that the company sees an upside in the strengthening of the rupee, and even hopes to trim its losses during the second quarter with the appreciation in the rupee. Rupee is currently hovering at around 50 a dollar. The stock was the major gainer form the Sensex pack.
Banking stocks rose on hopes falling interest rates will boost lending growth. Bank interest rates are falling in India after the central bank began slashing interest rates last October to lift a slowing economy.
India's largest private sector bank by net profit ICICI Bank rose 7.03% as its ADR rose 6.19% on Thursday.
India's second largest private sector bank by operating income HDFC Bank was up 1.71% as its ADR rose 3.95% overnight.
India's biggest bank in terms of branch network State Bank of India was up 3.5%. State Bank of India has cut interest rates on deposits by up to 50 basis points effective Monday, 18 May 2009.
Other PSU banks, Bank of India, Indian Overseas Bank, Bank of Baroda, Bank of Baroda rose by between 1.32% to 4.72%.
India's biggest dedicated housing finance firm by operating income HDFC rose 3.75% on reports it is likely to cut deposit rates and follow it with a cut in lending rates
Capital goods stocks rose after India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T), last month, said it expects a strong order flow in the year ending March 2010 (FY 2010). L&T rose 4.32%. Thermax, Punj Lloyd, Praj Industries, Siemens, BEML rose by between 1.23% to 7.1%. L&T on 16 April 2009 said the company expects its order inflow to grow by 25-35% in FY 2010.
India's largest electric equipment maker by sales Bharat Heavy Electricals rose 2.67% on reports the company has bagged an order worth Rs 1,475 crore for a 600 megawatt thermal power plant in Chattisgarh.
Outsourcing focussed IT stocks rose on talks the worst may be over for the US economy and the US banking system. US is the biggest market for Indian IT firms. India's second largest software services exporter by sales Infosys rose 1.8% after its American depository receipt (ADR) rose 3.69% on Thursday 14 May 2009.
India's largest software services exporter by sales TCS rose 4.16%. TCS said on Wednesday 13 May 2009 it has been selected for a five-year IT services contract for auto maker Volkswagen group's operations in the United Kingdom.
India's third largest software services exporter by sales Wipro rose 3.68% after its ADR rose 2.77% on Thursday.
Meanwhile, analysts feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. On 4 May 2009, US president Barack Obama announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.
Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to dis-incentivise US companies from retaining profits abroad.
Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations." Infosys said.
Metal stocks gained on a solid surge in copper price this year. Tata Steel, Steel Authority of India, Sterlite Industries, Hindustan Zinc, National Aluminum Company, rose by between 0.9% to 6.14%.
Copper for delivery in three months on the London Metal Exchange has jumped 45% this year.
Telecom stocks rose on strong growth in new subscribers addition in April 2009. Idea Cellular, Bharti Airtel and Reliance Communications, rose by between 3.36% to 7.62%.
FMCG stocks rose triggered by expectations of a surge in sales due to forecast of a good monsoon this year. Britannia Industries, Marico, United Spirits and Tata Tea rose by between 0.96% to 2.32%. FMCG firms derive a substantial revenue from rural markets.
Auto stocks gained on improved sales in April 2009. Tata Motors Hero Honda Motors and Mahindra & Mahindra, rose by between 0.91% to 1.9%.
India's largest car maker by sales Maruti Suzuki India rose 1.63%. The company today launched its premium compact car Ritz.
Realty stocks rose on recent reports banks have stepped up lending to real estate firms. According to Reserve Bank of India (RBI) data, loans to the real estate sector grew 61% with Rs 90,765 crore outstanding during the year upto 27 February 2009 over the same period previous year. DLF, Unitech, Akruti City, Anant Raj Industries, Omaxe rose by between 1.04% to 3.59%.
Sugar stocks rose as sugar prices are set to remain firm due to an estimated drop in the country's output. Balrampur Chini, Shree Renuka Sugars, Bajaj Hindustan, Ghampur Sugar rose by between 0.14% to 5%.
Shipping shares rose after the Baltic dry index, a measure of shipping costs for commodities, jumped 4.28% to 2,432 yesterday, 14 May 2009, its highest level in calendar year 2009. Essar Shipping, Mercator Lines, SEAMEC, Shreyas Shipping, ABG Shipyard, Shipping Corporation of India rose by between 0.05% to 5.73%.
Baltic Dry Freight Index (BDI), which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser across the world, hit a new 2009 high driven by continued demand for goods by China.
Cals Refineries clocked the highest volume of 3.67 crore shares on BSE. Cairn India (1.95 crore shares), Unitech (1.71 crore shares), Suzlon Energy (1.14 crore shares) and Reliance Natural Resources (80.85 lakh shares) were the other volume toppers in that order.
Aban Offshore clocked the highest turnover of Rs 430.04 crore on BSE. Cairn India (Rs 382.70 crore), ICICI Bank (Rs 214.69 crore), DLF (Rs 185.20 crore) and Reliance Industries (Rs 173.89 crore) were the other turnover toppers in that order.
Prices rise as economic data checks in weaker than expected
Precious metals ended higher on Thursday, 14 May, 2009 at Comex. Prices rose today as dollar gave up earlier gains and initial claims data checked in worse than expected increasing the appeal of bullion metals as an alternate source of investment.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Thursday, Comex Gold for June delivery gained $2.8 (0.3%) to close at $928.4 an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 3%. Year to date, gold prices are higher by 5%.
For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.
On Thursday, Comex silver futures for July delivery gained 2 cents (0.4%) at $14.04 an ounce. Year to date, silver has climbed 18.5% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the greenback pared early gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended little lower.
Among economic reports for the day, the Labor Department reported on Thursday, 14 May, 2009, that initial jobless claims rose 32,000 to a seasonally adjusted 637,000 in the week ended 9 May, 2009. This put the number at the highest level since mid-April. As per the report, there was no sign of improvement in the U.S. labor market in the latest week as workers from Chrysler joined the ranks of the unemployed. The report also detailed that the four-week average of new claims rose by 6,000 to 630,500, also the highest level since 18 April, 2009.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.
Prior to 2008, gold had 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. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.
At the MCX, gold prices for June delivery closed lower by Rs 64 (0.42%) at Rs 14,833 per 10 grams. Prices rose to a high of Rs 14,900 per 10 grams and fell to a low of Rs 14,775 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 114 (0.5%) lower at Rs 22,827/Kg. Prices opened at Rs 22,910/kg and fell to a low of Rs 22,535/Kg during the day's trading.
We recommend a buy in Aban Offshore stock from a short-term trading perspective. It is evident from the charts of Aban Offshore that after taking support around Rs 230 in early March, it bounced up and began to trend upwards. A medium term uptrend developed from this trough. The stock is trading well above its 21 and 50-day moving averages. On May 14, the stock conclusively broke through a key resistance around Rs 490 by gaining 7 per cent. Moreover, we notice high volume during the advance days of the uptrend. The daily relative strength index has entered in the bullish zone from the neutral region. The weekly RSI has entered in the neutral region from the bearish zone, with prolonged positive divergence supporting the trend reversal. Considering that the medium-term up trendline is intact we are positive on the stock from a short-term horizon. We expect it to move up until it hits our price target of Rs 560 the forthcoming trading session. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 482.