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Wednesday, December 28, 2011

Metal, banking pull Sensex 146 points lower

Selling in metal, banking & oil & gas stocks led to a major decline in today’s trade. Sensex slipped 146 points and the Nifty fell 45 points

Major headlines

Tata Power plans to buy BP's 51% stake

GTL Infra board to meet tomorrow for debt revamp

RIL KG-D6 block gas output dips to new low

Rel Power commissions another 300-MW unit at Rosa

Market hits one-week low on Indo-Mauritius tax treaty ‎revision concerns

Key benchmark indices fell for the second straight day to reach their lowest closing level in one week on reports Indian and Mauritian tax officials have begun talks on revising the double taxation avoidance pact between the two countries. Index heavyweight Reliance Industries (RIL) fell nearly 2%. The barometer index, the BSE Sensex, lost 146.10 points or 0.92%, off about 160 points from the day's high and up close to 60 points from the day's low. The market breadth was weak. BSE Small-Cap and Mid-Cap indices fell more than 1% each.

Interest rate sensitive banking stocks declined on fears of increase in bad loans in a slowing economy. Realty stocks were mixed. Metal stocks fell as hedge funds reduced bets on higher global commodity prices to the lowest level since 2009 in the week ended 20 December 2011. Some power stocks bucked weak market. Interest rate sensitive auto stocks fell on concerns higher interest rates could crimp sales of automobiles.

Daily News Roundup - Dec 28 2011

SBI’s proposed JV with Bharti Airtel has fallen through after RBI expressed apprehensions over letting a telecom player into banking space through equity participation. (BS)

L&T, Mitsubishi to sign a licensing and technological collaboration agreement. (BS)

Infosys BPO to expand in China. (BS)

Tata Power to buy BP’s 51% stake in Tata BP Solar India. (ET)

Petroleum Ministry to refund $120mn to Cairn and Ravva Oil. (ET)

Sensex slips in sluggish session…Nifty @ 4750

The topsy-turvy ride of the Indian market continued even as MPs traded barbs in Parliament on the New Lokpal Bill and Anna Hazare kicked off his three-day stir. Traded volumes remained light, notwithstanding the fact that the F&O expiry is just two days away. Essentially, the main indices never got going like they did on Monday amid lack of broad-based participation. The BSE Sensex and the NSE Nifty lacked sense of direction. The broader market too was more or less subdued.

The undercurrent was cautious as a strong report on the infrastructure output was countered by concerns about the Government’s fiscal profligacy and tight liquidity. The fact that most global markets are in festival mood hasn’t helped matters either. Most market participants are on ‘wait-and-watch’ mode right now amid lingering worries about the worsening domestic economic situation and problems plaguing the world economy.

Testing times continue

Enduring setbacks while maintaining the ability to show others the way to go forward is a true test of leadership. - Nitin Nohria.

Leadership deficit has been one of the major issues plaguing the world in what has been a tumultuous year. India has been one of the victims of this disturbing trend. UPA II has failed to capitalise on its resounding electoral success. If anything, things have got worse and there are no signs of improvement as yet. Hopefully, Dr. Manmohan Singh & Co. will deliver better returns in 2012.

Market may start lower on weak Asian stocks

The market may start lower tracking weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 36 points at the opening bell. High volatility is expected on the bourses this week as traders roll over positions in futures & options (F&O) segment from the near-month December 2011 series to January 2012 series. The near-month December 2011 F&O contracts expire on Thursday, 29 December 2011.

Key benchmark reversed direction after hitting 1-1/2-week highs in mid-morning trade on Tuesday, 27 December 2011 on concerns about upcoming Q3 December 2011 corporate earnings. The BSE Sensex shed 96.80 points or 0.61% to settle at 15,873.95, its lowest closing level since 23 December 2011.

Markets may open on a subdued note

The start looks quiet on the back of mixed global cues. Many market players may stay away for year-end holidays.

Headlines for the day

Tata Power to acquire BP's 51% stake in solar joint venture

Jet Airways chief Goyal denies tax evasion

SBI-Airtel JV for financial services falls through

Hero MotoCorp to launch its own bikes ahead of schedule

Adani Power puts 6,500 MW expansion plan on hold

Infosys BPO to expand in China

India Inc to go slow on hiring in 2012

Big jump in crude price at Nymex

Crude prices rise for sixth straight day

Crude prices ended higher for sixth straight day on Tuesday, 27 December 2011 at Nymex. Prices rose substantially as news hit the wires from Iran state news agency were saying that oil flow will stop from Strait of Hormuz if its sanction issues by European Union over nuclear programme continued. Partially offsetting that threat, however, were reports that Saudi Arabia said it stood ready to replace Iranian oil if supplies to Europe were halted. Nymex oil price also gained ground following a better than expected consumer confidence data at Wall Street.

Bullions turn pale

Prices drop as consumer confidence data reduces their appeal

Precious metals ended lower on Tuesday, 27 December 2011 at Comex. Prices dropped despite a weak dollar. A better than expected consumer confidence data dulled the appeal of bullions as a safe haven for alternate investment. Comex trading was closed on Monday in observance of the Christmas holiday.

Gold for February delivery ended lower by $10.5 or 0.7%, to end at $1,595.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. Last week, the yellow metal rose 0.5%.

SGX Nifty Live Update - Dec 28 2011

4739.25 -33.25 (-0.70%)