The key benchmark indices extended losses in mid-afternoon trade as
trading in US index futures suggested the Dow would fall 143 points
at the opening bell. The BSE Sensex tumbled more than 400 points or
3.88% at day's low. The market had witnessed bout of volatility
earlier in the day. An initial surge boosted by reports government
was considering several measures to raise domestic institutional
participation in the equities, proved short-lived.
Realty and power stocks nosedived. Index heavyweight Reliance
Industries (RIL) dipped more than 3.5%. Reliance Infrastructure,
Reliance Communications and Jaiprakash Assoociates fell more than
8.5% each. ICICI Bank fell close to 8%. However, BSE Mid-Cap and
Small-cap indices outperformed the Sensex.
The government has reportedly sought data from the Reserve Bank of
India to consider a proposal to enhance the investment limit for
bank exposure to equity markets. This will be part of several
measures to boost domestic institutional participation in the
markets at a time when foreign institutional investors (FIIs) are
exiting. At present, a bank can invest up to 20% of net worth in a
single company and up to 40% of net worth in a group.
The domestic markets have declined sharply in the past few days
despite Reserve Bank of India' several attempts to infuse liquidity
in at a time when global recession worries have marred investor
sentiment.
Asian markets were mostly lower as worries about a slowing global
economy kept investors on the sidelines.
At 14:22 IST, the BSE 30-share Sensex was down 410.65 points or
3.88% to 10,173.81. The index fell 414.98 points at the day's low
of 10,166.51 in mid-afternoon trade. The Sensex rose 205.44 points
at day's high of 10,786.93, at the onset of the trading session.
The S&P CNX Nifty was down 132.05 points or 4.04% to 3,137.25.
The BSE Mid-Cap index was down 1.69% at 3,595.32 and The BSE
Small-Cap index was down 1.21% at 4,234.70. Both the indices
outperformed the Sensex.
The market breadth was weak. On BSE, 905 shares advanced as
compared to 1,571 that declined. 64 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 3.67% to Rs 1,345 off day's
high of Rs 1,438. The Bombay High Court on Thursday, 16 October
2008, questioned the government about its locus standi in the legal
tussle between Reliance Industries and Reliance Natural Resources
over supply of gas from the former's Krishna Godavari basin to the
latter's proposed power plant at Dadri in Uttar Pradesh. This came
after the government sought to be a party to the case. The
government counsel will present his case on Friday, 17October 2008.
Reliance Infrastructure (down 8.58% to Rs 507.25), Reliance
Communications (down 8.85% to Rs 236.25), Jaiprakash Associates
(down 8.09% to Rs 68.75) were the major losers from the Sensex
pack.
Realty stocks slumped in mid-afternoon trade despite possibility of
home loan rate cuts by lenders due to fall in inflation and cut in
the cash reserve ratio cut by Reserve Bank of India three times in
last ten days. BSE Realty index fell 6.17% and was the major loser
from the sectoral indices on BSE. Realty majors, Indiabulls Real
Estate, DLF and Unitech fell between 6.73% to 9.72%. Housing
Development & Infrastructure, bucked the trend, surging 6.47%. Fall
in lending rates may spur demand for residential properties.
Power stocks dropped, with the BSE Power index falling 5.54%. It
was the second major loser from the sectoral indices. All the
stocks from the index were in red. NTPC, Reliance Infrastructure,
Tata Power Company Power Grid Corporation of India and Reliance
Power slip between 1.29% to 7.25%.
Metal stocks fell on falling metal prices on mounting fears a
global economic slowdown will hit demand. Hindalco Industries,
Sterlite Industries, Hindustan Zinc, National Aluminum Company),
Steel Authority of India fell between 1.22% to 9.08%.
India's largest steel maker by sales Tata Steel fell 3% after its
UK unit Corus decided to cut crude steel production by up to 20% or
1 million tonnes over the next three months due to slowing demand
caused by the global financial crises. There would be no material
change in production for its operations outside Europe, Tata Steel
said.
Major lenders slipped further in red despite India's second largest
private sector bank by net profit, HDFC Bank's robust Q2 results.
HDFC Bank fell 1.42% to Rs 1072.05 even as it reported 43.2% rise
in net profit to Rs 527.98 crore on 62.8% growth in total income to
Rs 4,634.32 crore in Q2 September 2008 over Q2 September 2007. The
stock had fallen 4.15% yesterday, 16 October 2008, ahead of the
results which hit the market after trading hours.
Other banking majors extended fell. ICICI Bank and State Bank of
India fell between 4.2% to 7.92%.
India's largest home loan lender by sales HDFC fell 0.9% even as it
reported 32.5% growth in net profit to Rs 534 crore in Q2 September
2008 over Q2 September 2007. The results hit the market during
trading hours
India's third largest IT services provider by sales Satyam Computer
Services fell 1.3% to Rs 270.25, off day's high of Rs 185. The
stock had held firm for a better part of the trading sessions after
the company raised its earnings per share forecast in rupee terms
for year ending March 2009 at the time of announcing Q2 September
2008 results today.
European markets which opened after Indian markets were strong.
France's CAC 40, Germany's DAX and UK's FTSE 100 rose between 2.38%
to 3.85%.
Asian markets were mostly lower. South Korea's Seoul Composite,
Singapore's Straits Times, and Taiwan's Taiwan Weighted, Hong
Kong's Hang Seng, fell between 1.52% to 2.73%. China's Shanghai
Composite index and Japan's Nikkei, rose between 1.08% to 2.78%.
US markets staged a comeback in a late-day rally in highly volatile
trade on Thursday, 16 October 2008, as investors snapped up
beaten-down shares a day after Wall Street's worst day since the
1987 crash. The Dow Industrials surged 401.35 points, or 4.68%, to
8,979.26. The S&P 500 index advanced 38.59 points, or 4.25%, to
946.43, and the Nasdaq composite index added 89.38 points, or
5.49%, to 1,717.71.
Friday, October 17, 2008
Post Market Report:16/10/2008
The key benchmark indices provisionally ended lower in choppy late
trading sessions. Sensex provisionally ended down 270.95 points or
2.51%. The market made a strong rebound from a sharp intraday fall
as European stocks cut initial steep losses. Banking stocks bounced
back on softening inflation.
Index stocks, Sterlite Industries, Reliance communications, HDFC,
Bharti Airtel, and Tata Steel recovered sharply from their lows.
European markets were down between 3.14% to 3.91%, after having
fallen as much as 5.6% earlier on global recession worries. Trading
in US index futures suggested the Dow would fall 14 points at the
opening bell.
As per the provisional figures, the BSE 30-share Sensex lost 270.95
points or 2.51% to 10,538.17. The index declined 791.32 points at
the day's low of 10,017.80 hit in early afternoon trade, its lowest
level since 24 July 2006. The Sensex fell 22 points at day's high
of 11,787.20 in mid-afternoon trade.
The S&P CNX Nifty ended down 83.10 points or 2.49% to 3,255.30 as
per the provisional figures. It hit a low of 3,099.90, its lowest
level since 26 July 2006.
BSE clocked a turnover of Rs 4540 crore today as compared to a
turnover of Rs 3,581.21 crore on 15 October 2008.
The BSE Mid-Cap index was down 1.77% at 3,654.81 and The BSE
Small-Cap index was down 2.54% at 4,282.08. Both the indices
outperformed the Sensex.
The market breadth was weak. On BSE, 827 shares advanced as
compared to 1,734 that declined. 60 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 8.7% to Rs 1,387. The stock
came off from a 52-week low of Rs 1,327. The stock declined for the
second day in a row today on fears the company may report fall in
its gross refining margins in Q2 September 2008 over Q2 September
2007 largely due to sluggish demand for petroleum products in key
Western markets. The stock had slumped 6.2% yesterday, 15 October
2008.
Reliance Communications (up 7.59% to Rs 253.70), Jaiprakash
Associates (up 5.91% to Rs 77), DLF (up 5.16% to Rs 315.70),
Sterlite Industries (up 1.32% to Rs 296) and Reliance
Infrastructure (up 0.95% to Rs 561) were the major gainers from the
Sensex pack.
Among the major losers from the Sensex pack were Hindalco
Industries (down 13.35% to Rs 68.80), Tata Motors (down 11.29% to
Rs 250.20), Mahindra & Mahindra (down 6.71% to Rs 451.50), Larsen &
Toubro (down 7.55% to Rs 825.75).
Softening of inflation triggered recovery in bank stocks from an
initial slump. India's largest private sector bank by net profit
ICICI Bank rose 0.19% to Rs 415 off the session's low of Rs 376.25.
ICICI Bank ADR slumped 14.19% in US on 15 October 2008.
India's largest private sector bank by net profit HDFC Bank dipped
4.15% to Rs 1,087.35, off the day's low of Rs 1,041. HDFC Bank ADR
fell 13.21% in US on 15 October 2008. The bank will announce Q2
September 2008 result today, 16 October 2008. State Bank of India,
India's biggest commercial bank, was up 3.13% to Rs 1,543.90 off
day's low of Rs 1,420.55.
India's largest home loan lender by sales HDFC rose 6.27% to Rs
1,820, off the day's low of Rs 1,600.
IndusInd Bank surged 3.91%, as net profit jumped 50.67% to Rs 33.66
crore in Q2 September 2008 over Q2 September 2007.
Lower inflation may trigger cut in interest rate by the Reserve
Bank of India (RBI) which may spur lending. Inflation based on the
whole price index rose 11.44% in year through 4 October 2008, lower
than previous week's 11.8% rise, data released by the government
today, 16 October 2008, showed.
Indai's largest steel maker by sales Tata Steel fell 1.28% bouncing
back from 52-week low after its UK unit signed pact for procuring
iron ore, a key raw material.
The market regulator Securities & Exchange Board of India (Sebi)
has tightened margins in the derivatives segment to ward defaults
and curb volatility. The exposure margin for gross open positions
in single stock futures and gross open positions in stock options
will now be higher of 10% or 1.5 times the standard deviation in
the notional value of the positions.
Reserve Bank of India (RBI) on Wednesday, 15 October 2008, cut the
cash reserve ratio (CRR) by a 100 basis points to 6.5% The CRR cut
would release Rs 40000 crore into the banking system. The CRR cut
takes effect from the current two-weekly reporting period for
banks, which began on 11 October 2008.
With a view to ease the liquidity in the banking system, the
central bank has also allowed banks to borrow an additional 0.5% of
their net demand and time liabilities using their SLR (statutory
liquidity ratio) holdings as collateral under the LAF (liquidity
adjustment facility) to meet liquidity requirements of mutual
funds. SLR is the amount of deposits banks have to invest in
government debt. The RBI will also release the first installment of
Rs 25,000 crore under the agricultural debt waiver and debt relief
scheme to banks immediately, at the government's behest.
A warning of tough times ahead by Federal Reserve Chairman Ben
Bernanke sent Asian markets sharply lower, as investors brace for
looming recession. Key benchmark indices in China, Hong Kong,
Japan, South Korea, Singapore and Taiwan were down by between 3.25%
to 11.41%.
Shrugging off recent optimism about massive government efforts to
prop up the global financial system Wall Street , yesterday, 15
October 2008, suffered its worst one-day percentage decline since
the stock market crash of 1987.
Crude oil for November delivery fell as much as $1.58, or 2.1%, to
$72.96 a barrel on the New York Mercantile Exchange on 15 October
2008, the lowest since 30 August, 2007.
trading sessions. Sensex provisionally ended down 270.95 points or
2.51%. The market made a strong rebound from a sharp intraday fall
as European stocks cut initial steep losses. Banking stocks bounced
back on softening inflation.
Index stocks, Sterlite Industries, Reliance communications, HDFC,
Bharti Airtel, and Tata Steel recovered sharply from their lows.
European markets were down between 3.14% to 3.91%, after having
fallen as much as 5.6% earlier on global recession worries. Trading
in US index futures suggested the Dow would fall 14 points at the
opening bell.
As per the provisional figures, the BSE 30-share Sensex lost 270.95
points or 2.51% to 10,538.17. The index declined 791.32 points at
the day's low of 10,017.80 hit in early afternoon trade, its lowest
level since 24 July 2006. The Sensex fell 22 points at day's high
of 11,787.20 in mid-afternoon trade.
The S&P CNX Nifty ended down 83.10 points or 2.49% to 3,255.30 as
per the provisional figures. It hit a low of 3,099.90, its lowest
level since 26 July 2006.
BSE clocked a turnover of Rs 4540 crore today as compared to a
turnover of Rs 3,581.21 crore on 15 October 2008.
The BSE Mid-Cap index was down 1.77% at 3,654.81 and The BSE
Small-Cap index was down 2.54% at 4,282.08. Both the indices
outperformed the Sensex.
The market breadth was weak. On BSE, 827 shares advanced as
compared to 1,734 that declined. 60 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 8.7% to Rs 1,387. The stock
came off from a 52-week low of Rs 1,327. The stock declined for the
second day in a row today on fears the company may report fall in
its gross refining margins in Q2 September 2008 over Q2 September
2007 largely due to sluggish demand for petroleum products in key
Western markets. The stock had slumped 6.2% yesterday, 15 October
2008.
Reliance Communications (up 7.59% to Rs 253.70), Jaiprakash
Associates (up 5.91% to Rs 77), DLF (up 5.16% to Rs 315.70),
Sterlite Industries (up 1.32% to Rs 296) and Reliance
Infrastructure (up 0.95% to Rs 561) were the major gainers from the
Sensex pack.
Among the major losers from the Sensex pack were Hindalco
Industries (down 13.35% to Rs 68.80), Tata Motors (down 11.29% to
Rs 250.20), Mahindra & Mahindra (down 6.71% to Rs 451.50), Larsen &
Toubro (down 7.55% to Rs 825.75).
Softening of inflation triggered recovery in bank stocks from an
initial slump. India's largest private sector bank by net profit
ICICI Bank rose 0.19% to Rs 415 off the session's low of Rs 376.25.
ICICI Bank ADR slumped 14.19% in US on 15 October 2008.
India's largest private sector bank by net profit HDFC Bank dipped
4.15% to Rs 1,087.35, off the day's low of Rs 1,041. HDFC Bank ADR
fell 13.21% in US on 15 October 2008. The bank will announce Q2
September 2008 result today, 16 October 2008. State Bank of India,
India's biggest commercial bank, was up 3.13% to Rs 1,543.90 off
day's low of Rs 1,420.55.
India's largest home loan lender by sales HDFC rose 6.27% to Rs
1,820, off the day's low of Rs 1,600.
IndusInd Bank surged 3.91%, as net profit jumped 50.67% to Rs 33.66
crore in Q2 September 2008 over Q2 September 2007.
Lower inflation may trigger cut in interest rate by the Reserve
Bank of India (RBI) which may spur lending. Inflation based on the
whole price index rose 11.44% in year through 4 October 2008, lower
than previous week's 11.8% rise, data released by the government
today, 16 October 2008, showed.
Indai's largest steel maker by sales Tata Steel fell 1.28% bouncing
back from 52-week low after its UK unit signed pact for procuring
iron ore, a key raw material.
The market regulator Securities & Exchange Board of India (Sebi)
has tightened margins in the derivatives segment to ward defaults
and curb volatility. The exposure margin for gross open positions
in single stock futures and gross open positions in stock options
will now be higher of 10% or 1.5 times the standard deviation in
the notional value of the positions.
Reserve Bank of India (RBI) on Wednesday, 15 October 2008, cut the
cash reserve ratio (CRR) by a 100 basis points to 6.5% The CRR cut
would release Rs 40000 crore into the banking system. The CRR cut
takes effect from the current two-weekly reporting period for
banks, which began on 11 October 2008.
With a view to ease the liquidity in the banking system, the
central bank has also allowed banks to borrow an additional 0.5% of
their net demand and time liabilities using their SLR (statutory
liquidity ratio) holdings as collateral under the LAF (liquidity
adjustment facility) to meet liquidity requirements of mutual
funds. SLR is the amount of deposits banks have to invest in
government debt. The RBI will also release the first installment of
Rs 25,000 crore under the agricultural debt waiver and debt relief
scheme to banks immediately, at the government's behest.
A warning of tough times ahead by Federal Reserve Chairman Ben
Bernanke sent Asian markets sharply lower, as investors brace for
looming recession. Key benchmark indices in China, Hong Kong,
Japan, South Korea, Singapore and Taiwan were down by between 3.25%
to 11.41%.
Shrugging off recent optimism about massive government efforts to
prop up the global financial system Wall Street , yesterday, 15
October 2008, suffered its worst one-day percentage decline since
the stock market crash of 1987.
Crude oil for November delivery fell as much as $1.58, or 2.1%, to
$72.96 a barrel on the New York Mercantile Exchange on 15 October
2008, the lowest since 30 August, 2007.
Thursday, October 16, 2008
Pre Market Report 16/10/2008
Key benchmark indices are likely to open weak mirroring global peers which witnessed a huge sell-off on renewed worries over a prolonged global economic recession, thereby ignoring the Reserve Bank of India's 1% cash reserve requirement cut on late evening Wednesday, 15 October 2008 in a bid to boost liquidity. The SGX October 2008 Nifty futures were down 227.5 points.
Back home, the Reserve Bank of India (RBI) slashed its cash reserve requirement (CRR) for banks by 100 basis points to 6.5% with effect from 11 October 2008, whichwill release Rs 40,000 crore into the banking system to boost liquidity. CRR is the amount that banks park with the central bank. Among the other measures announced were the release of Rs 25000 crore to banks for a farm loan waiver scheme, doubling the cap on foreign investment in corporate debt to $6 billion from $3 billion as authorities sought to get money flowing through squeezed markets.
On 10 October 2008, RBI had cut CRR, by 150 basis points to 7.5% to infuse liquidity into the system. This included a 50 bps CRR cut on 6 October 2008.The cut injected liquidity to the tune of Rs 60,000 crore into the system.
Among frontline companies, HDFC Bank will declare their September quarterly results today, 16 October 2008.
US stocks plunged the most on Wednesday, 15 October 2008, since the crash of 1987 after the Federal Reserve Chairman Ben Bernanke said economic activity weakened across the United States in September 2008 as businesses rethought capital investments, and consumers curtailed spending. Fed Chairman acknowledged the US economy faced a significant threat and global efforts to unlock credit markets would not prevent recession.
The Dow Jones Industrial Average slumped 733.08 or 7.9% to 8,577.91, its second-biggest point drop ever. The Nasdaq Composite Index lost 150.68, or 8.5%, to 1,628.33 and the Standard & Poor's 500 Index sank 90.17 points, or 9%, to 907.84.
Asian markets declined sharply today, 16 October 2008 on global recession concerns. China's Shanghai Composite slipped 3.62% or 72.19 points at 1,922.47, Hong Kong's Hang Seng tumbled 5.77% or 923.24 points at 15,075.06, Japan's Nikkei plunged 9.55% or 911.91 points at 8,635.56, Singapore's Straits Times dropped 5.48% or112.78 points at 1,946.61, South Korea's Seoul Composite fell 6.81% or 91.26 points at 1,249.02 and Taiwan's Taiwan Weighted lost 3.11% or 163.30 points at 5,082.96
Back home, the BSE 30-share Sensex ended 674.28 points or 5.87% lower at 10,809.12 and the S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40 on Wednesday, 15 October 2008 on worries over liquidity conditions in the financial system and weak global markets.
Foreign institutional investors (FIIs) were net sellers worth Rs 1030.79 crore while mutual funds bought shares worth Rs 669.96 crore on Wednesday, 15 October 2008, according to provisional data on NSE.
Back home, the Reserve Bank of India (RBI) slashed its cash reserve requirement (CRR) for banks by 100 basis points to 6.5% with effect from 11 October 2008, whichwill release Rs 40,000 crore into the banking system to boost liquidity. CRR is the amount that banks park with the central bank. Among the other measures announced were the release of Rs 25000 crore to banks for a farm loan waiver scheme, doubling the cap on foreign investment in corporate debt to $6 billion from $3 billion as authorities sought to get money flowing through squeezed markets.
On 10 October 2008, RBI had cut CRR, by 150 basis points to 7.5% to infuse liquidity into the system. This included a 50 bps CRR cut on 6 October 2008.The cut injected liquidity to the tune of Rs 60,000 crore into the system.
Among frontline companies, HDFC Bank will declare their September quarterly results today, 16 October 2008.
US stocks plunged the most on Wednesday, 15 October 2008, since the crash of 1987 after the Federal Reserve Chairman Ben Bernanke said economic activity weakened across the United States in September 2008 as businesses rethought capital investments, and consumers curtailed spending. Fed Chairman acknowledged the US economy faced a significant threat and global efforts to unlock credit markets would not prevent recession.
The Dow Jones Industrial Average slumped 733.08 or 7.9% to 8,577.91, its second-biggest point drop ever. The Nasdaq Composite Index lost 150.68, or 8.5%, to 1,628.33 and the Standard & Poor's 500 Index sank 90.17 points, or 9%, to 907.84.
Asian markets declined sharply today, 16 October 2008 on global recession concerns. China's Shanghai Composite slipped 3.62% or 72.19 points at 1,922.47, Hong Kong's Hang Seng tumbled 5.77% or 923.24 points at 15,075.06, Japan's Nikkei plunged 9.55% or 911.91 points at 8,635.56, Singapore's Straits Times dropped 5.48% or112.78 points at 1,946.61, South Korea's Seoul Composite fell 6.81% or 91.26 points at 1,249.02 and Taiwan's Taiwan Weighted lost 3.11% or 163.30 points at 5,082.96
Back home, the BSE 30-share Sensex ended 674.28 points or 5.87% lower at 10,809.12 and the S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40 on Wednesday, 15 October 2008 on worries over liquidity conditions in the financial system and weak global markets.
Foreign institutional investors (FIIs) were net sellers worth Rs 1030.79 crore while mutual funds bought shares worth Rs 669.96 crore on Wednesday, 15 October 2008, according to provisional data on NSE.
Post Market Report:15/10/2008
the financial system and weak
global markets pulled the domestic bourses sharply lower today. The
BSE Sensex which opened about 240 points lower on weak global cues
extended the losses and showed no sign of recovery to end 674.28
points or 5.87%. At the day's low Sensex was down 725 points.
Reliance Industries slumped. The Indian market vastly
underperformed Asian and European stocks which fell between 0.8% to
3.7%.
US, euro zone and Japanese economies are all widely expected to
slip into recessions, threatening growth in emerging markets.
Recession fears returned to centre stage today after trillions of
dollars pledged for bank bailouts from Europe to Asia helped allay
fears of an imminent financial meltdown. Trading in US index
futures suggested the Dow would fall 142 points at the opening
bell.
The Reserve Bank of India's extension of banks' special short-term
lending (repo) facility to mutual funds, which have been witnessing
redemption pressure, failed to avert the slide on the bourses.
Larsen & Toubro fell more than 11% after it announced its Q2
September 2008 results. Reliance Communications and Reliance
Infrastructure fell more than 12 % each. Jaiprakash Associates fell
14.47%. The market breadth was weak as selling was witnessed across
the board. Capital goods and Consumer durables stocks plummeted.
The BSE 30-share Sensex ended 674.28 points or 5.87% lower at
10,809.12. The index declined 723.07 points at the day's low of
10,760.33 hit in late trade. The Sensex fell 226.35 points at day's
high of 11,257.15, in early trade.
The S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40.
BSE clocked a turnover of Rs 3,372 crore today as compared to a
turnover of Rs 4,252.13 crore on 14 October 2008.
Nifty October 2008 futures were near spot price at 3339.10, as
compared to spot closing of 3338.40. NSE's futures & options (F&O)
segment turnover was Rs 43,996.07 crore, which was lower than Rs
47,278.06 crore on Tuesday, 14 October 2008.
The barometer index BSE Sensex is down 9,477.87 points or 46.71% in
the calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 10,397.67 points or 49.02% below its all-time
high of 21,206.77 struck on 10 January 2008.
The BSE Mid-Cap index was down 4.41% at 3,720.48 and the BSE
Small-Cap index was down 4.82% at 4,393.45. Both the indices
outperformed the Sensex.
BSE Capital Goods index (down 8.88% to 8,088.01), BSE Consumer
Durables index (down 8.79% to 2,125.85), BSE Metal index (down
7.82% to 6,315.85), BSE Teck index (down 6.03% to 2,230.60), BSE
Power index (down 6.02% to 1,905.72) underperformed the Sensex.
BSE HealthCare index (down 2.24% to 3,328.35), BSE Bankex (down
3.25% to 5,841.60), BSE Auto index (down 3.48% to 3,309.46), BSE
PSU index (down 3.53% to 5,555.49), BSE FMCG index (down 3.65% to
1,870.08), BSE Realty index (down 4.61% to 2,675.48), BSE Oil & Gas
index (down 5.15% to 7,230.87) and BSE IT index (down 5.43% to
2,780.19), outperformed the Sensex.
The market breadth was weak. On BSE, 499 shares advanced as
compared to 2,117 that declined. 39 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was down 6.2% to Rs 1,519.25 on
fears the company may report fall in its gross refining margins in
Q2 September 2008 over Q2 September 2007 largely due to sluggish
demand for petroleum products in key Western markets.
All the 30 Sensex constituents were in the red. Reliance
Communications (down 12.24% to Rs 235.80), Sterlite Industries
(down 10.11% to Rs 292.15), Jaiprakash Associates (down 14.47% to
Rs 72.70) and Tata Steel (down 10.35% to Rs 273.25) were the major
losers from the Sensex pack.
India's largest engineering and construction firm Larsen & Toubro
declined 11.01% on profit taking after it announced Q2 results. The
company's net profit rose 32.25% to Rs 460.26 crore on 41.98% to Rs
7,842.26 crore in Q2 September 2008 over Q2 September 2007. The
firm announced the result today during the market hours.
Bharat Heavy Electricals and Suzlon Energy fell between 6.28% to
7.56%.
Consumer durables stocks tumbled on fears the credit crunch and the
stock market crash might hit sales this festive season. Titan
Industries, Videocon Industries and Gitanjali Gems fell between
5.4% to 14.05%.
India's top mobile operator by market share Bharti Airtel was down
5.95%. The company today said it had tied up with Infosys
Technologies, India's second largest IT services provider by sales
Infosys, to deliver its direct-to-home (DTH) television service.
Infosys plunged 5.72%. As part of the agreement, Infosys will
provide technology products that will help Bharti to offer digital
and interactive applications on its DTH TV service.
Reliance Infrastructure was down 12.11%. Reliance Infrastructure
reportedly plans to raise Rs 2500 crore as loan this fiscal and is
in talks with banks including IDBI, Axis Bank and IIFCL for raising
the funds.
India's largest realty player by market capitalization DLF fell
3.38% to Rs 300.15. The company said on Tuesday, 14 October 2008,
its share buyback for about Rs 1100 crore will open on Friday, 17
October 2008, after complying with regulatory requirements. The
buyback of up to 2.2 crore shares at a maximum of Rs 600 each was
set to open today, but was rescheduled following clarifications
sought by the Securities and Exchange Board of India (Sebi).
Sanwaria Agro Oils rose 5.41%, as net profit jumped 56.02% to Rs
22.07 crore in Q2 September 2008 over Q2 September 2007.
Hindustan Construction Company plunged 11.7%, even after the
company said that Bank of India has invested Rs 150 crore in its
subsidiary Lavasa Corporation, in the form of convertible
debentures.
Moser Baer India plunged 15.34%, even as the company said on
Wednesday, 15 October 2008, it has set up a state-of-the-art
digital video processing facility in Chennai, Tamil Nadu.
Koffee Break Pictures rose 2.7%, after the company said on Tuesday,
14 October 2008, its board will meet on 16 October 2008 to consider
a 10-for-1 stock split.
New Delhi Television tumbled 17.34% after net loss rose to Rs 13.04
crore in Q2 September 2008, from Rs 3.95 crore in Q2 September
2007.
Honeywell Automation India surged 5.36% after the company reported
58.20% spurt in net profit to Rs 28.95 crore on 4.89% rise in net
sales to Rs 238.21 crore in Q3 September 2008 over Q3 September
2007.
Gemini Communication fell 1.88%, after the company said on Tuesday,
14 October 2008, its board will meet on 22 October 2008 to consider
buyback of equity shares.
JSW Steel plunged 11.22% on reports the company may cut product
prices by end-October 2008 in line with a fall in metal prices
globally.
Britannia Industries fell 3.08% on reports the Nusli Wadia Group
will acquire the foreign joint venture firm Groupe Danone's entire
stake in the company with a committed $200 million funding from
ICICI Bank.
GMR Infrastructure declined 5.91%, after the company said on
Tuesday, 14 October 2008, it has acquired 50% stake in InterGen
N.V, a global power generation company, for $954 million.
Chettinad Cement Corporation gained 2.11%, after the company said
its board will meet on 16 October 2008 to consider issue of equity
shares on rights basis.
ICI India galloped 7.68%, after the company said on Wednesday, 15
October 2008, its board will meet on 23 October 2008 to consider
buyback of equity shares at a price not exceeding Rs 575 a share.
Omaxe slipped 7.67% after credit rating firm Fitch downgraded the
company's long-term debt rating also revised the outlook to
negative from stable.
Core Projects & Infrastructure clocked the highest volume of 1.05
crore shares on BSE. Reliance Natural Resources (92.39 lakh
shares), Cals Refineries (76.22 lakh shares), IFCI (58.2 lakh
shares) and JAiprakash Associates (44.87 lakh shares) were the
other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 230.68 crore on
BSE. Reliance Industries (Rs 217.84 crore), Larsen & Toubro (Rs
205.60 crore), ICICI Bank (Rs 147.92 crore) and State Bank of India
(Rs 143.43 crore) were the other turnover toppers in that order.
European markets which opened after Indian market were trading
lower. France's CAC 40, Germany's DAX and UK's FTSE 100 were down
by between 2.17% to 3.27%.
Asian markets were trading lower today, 15 October 2008 on concern
the massive bank rescue of global would come at a huge economic
cost and do little to repair the damage already done by a 14-month
credit crunch. China's Shanghai Composite, Hong Kong's Hang Seng,
Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul
Composite and Taiwan's Taiwan Weighted fell between 0.86% to 3.72%.
The partially convertible rupee was at 48.40 per dollar today 15
October 2008, compared with Tuesday's close of 48.04/06.
global markets pulled the domestic bourses sharply lower today. The
BSE Sensex which opened about 240 points lower on weak global cues
extended the losses and showed no sign of recovery to end 674.28
points or 5.87%. At the day's low Sensex was down 725 points.
Reliance Industries slumped. The Indian market vastly
underperformed Asian and European stocks which fell between 0.8% to
3.7%.
US, euro zone and Japanese economies are all widely expected to
slip into recessions, threatening growth in emerging markets.
Recession fears returned to centre stage today after trillions of
dollars pledged for bank bailouts from Europe to Asia helped allay
fears of an imminent financial meltdown. Trading in US index
futures suggested the Dow would fall 142 points at the opening
bell.
The Reserve Bank of India's extension of banks' special short-term
lending (repo) facility to mutual funds, which have been witnessing
redemption pressure, failed to avert the slide on the bourses.
Larsen & Toubro fell more than 11% after it announced its Q2
September 2008 results. Reliance Communications and Reliance
Infrastructure fell more than 12 % each. Jaiprakash Associates fell
14.47%. The market breadth was weak as selling was witnessed across
the board. Capital goods and Consumer durables stocks plummeted.
The BSE 30-share Sensex ended 674.28 points or 5.87% lower at
10,809.12. The index declined 723.07 points at the day's low of
10,760.33 hit in late trade. The Sensex fell 226.35 points at day's
high of 11,257.15, in early trade.
The S&P CNX Nifty ended down 180.25 points or 5.12% to 3,338.40.
BSE clocked a turnover of Rs 3,372 crore today as compared to a
turnover of Rs 4,252.13 crore on 14 October 2008.
Nifty October 2008 futures were near spot price at 3339.10, as
compared to spot closing of 3338.40. NSE's futures & options (F&O)
segment turnover was Rs 43,996.07 crore, which was lower than Rs
47,278.06 crore on Tuesday, 14 October 2008.
The barometer index BSE Sensex is down 9,477.87 points or 46.71% in
the calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 10,397.67 points or 49.02% below its all-time
high of 21,206.77 struck on 10 January 2008.
The BSE Mid-Cap index was down 4.41% at 3,720.48 and the BSE
Small-Cap index was down 4.82% at 4,393.45. Both the indices
outperformed the Sensex.
BSE Capital Goods index (down 8.88% to 8,088.01), BSE Consumer
Durables index (down 8.79% to 2,125.85), BSE Metal index (down
7.82% to 6,315.85), BSE Teck index (down 6.03% to 2,230.60), BSE
Power index (down 6.02% to 1,905.72) underperformed the Sensex.
BSE HealthCare index (down 2.24% to 3,328.35), BSE Bankex (down
3.25% to 5,841.60), BSE Auto index (down 3.48% to 3,309.46), BSE
PSU index (down 3.53% to 5,555.49), BSE FMCG index (down 3.65% to
1,870.08), BSE Realty index (down 4.61% to 2,675.48), BSE Oil & Gas
index (down 5.15% to 7,230.87) and BSE IT index (down 5.43% to
2,780.19), outperformed the Sensex.
The market breadth was weak. On BSE, 499 shares advanced as
compared to 2,117 that declined. 39 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was down 6.2% to Rs 1,519.25 on
fears the company may report fall in its gross refining margins in
Q2 September 2008 over Q2 September 2007 largely due to sluggish
demand for petroleum products in key Western markets.
All the 30 Sensex constituents were in the red. Reliance
Communications (down 12.24% to Rs 235.80), Sterlite Industries
(down 10.11% to Rs 292.15), Jaiprakash Associates (down 14.47% to
Rs 72.70) and Tata Steel (down 10.35% to Rs 273.25) were the major
losers from the Sensex pack.
India's largest engineering and construction firm Larsen & Toubro
declined 11.01% on profit taking after it announced Q2 results. The
company's net profit rose 32.25% to Rs 460.26 crore on 41.98% to Rs
7,842.26 crore in Q2 September 2008 over Q2 September 2007. The
firm announced the result today during the market hours.
Bharat Heavy Electricals and Suzlon Energy fell between 6.28% to
7.56%.
Consumer durables stocks tumbled on fears the credit crunch and the
stock market crash might hit sales this festive season. Titan
Industries, Videocon Industries and Gitanjali Gems fell between
5.4% to 14.05%.
India's top mobile operator by market share Bharti Airtel was down
5.95%. The company today said it had tied up with Infosys
Technologies, India's second largest IT services provider by sales
Infosys, to deliver its direct-to-home (DTH) television service.
Infosys plunged 5.72%. As part of the agreement, Infosys will
provide technology products that will help Bharti to offer digital
and interactive applications on its DTH TV service.
Reliance Infrastructure was down 12.11%. Reliance Infrastructure
reportedly plans to raise Rs 2500 crore as loan this fiscal and is
in talks with banks including IDBI, Axis Bank and IIFCL for raising
the funds.
India's largest realty player by market capitalization DLF fell
3.38% to Rs 300.15. The company said on Tuesday, 14 October 2008,
its share buyback for about Rs 1100 crore will open on Friday, 17
October 2008, after complying with regulatory requirements. The
buyback of up to 2.2 crore shares at a maximum of Rs 600 each was
set to open today, but was rescheduled following clarifications
sought by the Securities and Exchange Board of India (Sebi).
Sanwaria Agro Oils rose 5.41%, as net profit jumped 56.02% to Rs
22.07 crore in Q2 September 2008 over Q2 September 2007.
Hindustan Construction Company plunged 11.7%, even after the
company said that Bank of India has invested Rs 150 crore in its
subsidiary Lavasa Corporation, in the form of convertible
debentures.
Moser Baer India plunged 15.34%, even as the company said on
Wednesday, 15 October 2008, it has set up a state-of-the-art
digital video processing facility in Chennai, Tamil Nadu.
Koffee Break Pictures rose 2.7%, after the company said on Tuesday,
14 October 2008, its board will meet on 16 October 2008 to consider
a 10-for-1 stock split.
New Delhi Television tumbled 17.34% after net loss rose to Rs 13.04
crore in Q2 September 2008, from Rs 3.95 crore in Q2 September
2007.
Honeywell Automation India surged 5.36% after the company reported
58.20% spurt in net profit to Rs 28.95 crore on 4.89% rise in net
sales to Rs 238.21 crore in Q3 September 2008 over Q3 September
2007.
Gemini Communication fell 1.88%, after the company said on Tuesday,
14 October 2008, its board will meet on 22 October 2008 to consider
buyback of equity shares.
JSW Steel plunged 11.22% on reports the company may cut product
prices by end-October 2008 in line with a fall in metal prices
globally.
Britannia Industries fell 3.08% on reports the Nusli Wadia Group
will acquire the foreign joint venture firm Groupe Danone's entire
stake in the company with a committed $200 million funding from
ICICI Bank.
GMR Infrastructure declined 5.91%, after the company said on
Tuesday, 14 October 2008, it has acquired 50% stake in InterGen
N.V, a global power generation company, for $954 million.
Chettinad Cement Corporation gained 2.11%, after the company said
its board will meet on 16 October 2008 to consider issue of equity
shares on rights basis.
ICI India galloped 7.68%, after the company said on Wednesday, 15
October 2008, its board will meet on 23 October 2008 to consider
buyback of equity shares at a price not exceeding Rs 575 a share.
Omaxe slipped 7.67% after credit rating firm Fitch downgraded the
company's long-term debt rating also revised the outlook to
negative from stable.
Core Projects & Infrastructure clocked the highest volume of 1.05
crore shares on BSE. Reliance Natural Resources (92.39 lakh
shares), Cals Refineries (76.22 lakh shares), IFCI (58.2 lakh
shares) and JAiprakash Associates (44.87 lakh shares) were the
other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 230.68 crore on
BSE. Reliance Industries (Rs 217.84 crore), Larsen & Toubro (Rs
205.60 crore), ICICI Bank (Rs 147.92 crore) and State Bank of India
(Rs 143.43 crore) were the other turnover toppers in that order.
European markets which opened after Indian market were trading
lower. France's CAC 40, Germany's DAX and UK's FTSE 100 were down
by between 2.17% to 3.27%.
Asian markets were trading lower today, 15 October 2008 on concern
the massive bank rescue of global would come at a huge economic
cost and do little to repair the damage already done by a 14-month
credit crunch. China's Shanghai Composite, Hong Kong's Hang Seng,
Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul
Composite and Taiwan's Taiwan Weighted fell between 0.86% to 3.72%.
The partially convertible rupee was at 48.40 per dollar today 15
October 2008, compared with Tuesday's close of 48.04/06.
Wednesday, October 15, 2008
Market opens lower on weak global cues
Weak global markets pulled the domestic bourses lower at the onset
of the trading session. Down 344.07 points, the BSE Sensex was at
the day's low. IT and metal stocks plunged in the early trade. Tata
Steel and Sterlite Industries fell more than 7% each. The market
breadth was weak as selling was witnessed across the board.
Asian stocks declined as concern earnings will deteriorate
overshadowed a $2 trillion global bank rescue.
At 10:20 IST, the BSE 30-share Sensex was down 344.07 points or 3%
to 11,139.33. The index declined 358.29 points at the day's low of
11,125.11 at the onset of the trading session. The Sensex fell
226.35 points at day's high of 11,257.15, in early trade.
The S&P CNX Nifty was down 92.55 points or 2.63% to 3,426.10.
The BSE Mid-Cap index was down 2.38% at 3,799.50 and The BSE
Small-Cap index was down 1.83% at 4,531.50. Both the indices
outperformed the Sensex.
The market breadth was weak. On BSE, 345 shares advanced as
compared to 968 that declined. 28 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was down 2.56% to Rs 1,577.20.
Reliance Industries has reportedly tied up with three foreign firms
for its plans to set up an integrated coal mining, a coal-to-liquid
plant, and a 1,000 megawatt power plant and fly-ash utilisation
unit.
27 stocks from the Sensex pack of 30 stocks were in red. Reliance
Communications (down 6.22% to Rs 252), Jaiprakash Associates (down
4.47% to Rs 81.20) and Bharat Heavy Electricals (down 3.81% to Rs
1,431) were among major losers from the Sensex pack.
Ranbaxy Laboratories (up 1.07% t o Rs 283.55), HDFC Bank (up 0.02%
to Rs 1,139) and Tata Motors (up 0.33% to Rs 299.25) were the
gainers from the Sensex pack.
Metal stocks plunged in early trade with BSE Metasl index falling
4.13% and was the major loser from the sectoral indices on BSE.
Hindalco Industries, Sterlite Industries, Hindustan Zinc, National
Aluminum Company, Steel Authority of India and Tata Steel fell
between 1.45% to 5.53%.
As per reports, Q2 September 2008 might not bring much cheer, as
anticipated previously, to the metal companies. Correction in metal
prices, a slowdown in global economy and higher input cost would
adversely impact second quarter results for metal producers in
India. Unlike previous quarters, this time, both ferrous and
non-ferrous metal companies would be hit, the report said.
IT stocks fell with BSE IT index falling 4.29% and was the second
major loser from the sectoral indices on BSE. Satyam Computer
Services, Tata Consultancy Services, Infosys and Wipro fell between
2.74% to 4.5%.
India's largest engineering and construction firm Larsen & Toubro
fell 3/49% ahead of Q2 September 2008 result to be announced today.
Reliance Infrastructure fell 2.85%. Reliance Infrastructure
reportedly plans to raise Rs 2500 crore as loan this fiscal and is
in talks with banks including IDBI, Axis Bank and IIFCL for raising
the funds.
India's largest realty player by market capitalization DLF fell
2.35% to Rs 303.30. The company said on Tuesday, 14 October 2008
its share buyback for about Rs 1100 crore will open on Friday, 17
October 2008 after complying with regulatory requirements. The
buyback of up to 2.2 crore shares at a maximum of Rs 600 each was
set to open today, but was rescheduled following clarifications
sought by the Securities and Exchange Board of India (Sebi).
Jet Airways fell 1.52% while Kingfisher Airlines declined 3.25%.
The alliance between Jet Airways and Kingfisher Airlines could
reportedly result in a combined annual savings of Rs 800 crore and
a lay-off of 1,500 employees, or 5% of their combined workforce.
Meanwhile, Jet Airways and Kingfisher Airlines are reportedly open
to include state-owned Air India in their recently formed
operational alliance. The alliance would have a 72% market share if
Air India were to join, the reports added.
Britannia Industries fell 2%. Nusli Wadia Group is reportedly set
to acquire Groupe Danone's stake in Britannia Industries with a
committed $200 million funding from ICICI Bank.
Gemini Communication rose 4.94% after company said on Tuesday, 14
October 2008 its board will meet on 22 October 2008 to consider a
share buyback.
Hindustan Construction Company fell 2.28% to Rs 51.35. The company
said on Tuesday, 14 October 2008 that Bank of India has invested Rs
150 crore in its subsidiary Lavasa Corporation, in the form of
convertible debentures. This transaction would reconfirm the equity
valuation of Lavasa at Rs 10000 crore, it said in a statement.
Jubilant Organosys declined 1.61%. The company reported net loss of
Rs 24.39 crore in Q2 September 2008 as against net profit of Rs
111.72 crore in Q2 September 2007. Sales rose 37.72% to Rs 679
crore in Q2 September 2008 over Q2 September 2007.
New Delhi Television (NDTV) fell 4.43% to Rs 149.95. The company
reported a net loss of Rs 13.04 crore in Q2 September 2008 as
against net loss of Rs 3.95 crore in Q2 September 2007. Sales rose
9.06% to Rs 73.91 crore Q2 September 2008 over Q2 September 2007.
The Prime Minister Manmohan Singh met Finance Minister P
Chidambaram and Reserve Bank of India (RBI) Governor Duvvuri
Subbarao late Tuesday, 14 October 2008 to discuss the economic
crisis. Without divulging details of the meeting, Chidambaram said
that India economy was stable. A meeting of high-level bankers and
experts group led by Finance Secretary Arun Ramanathan is scheduled
today, 15 October 2008.
Among frontline companies, Larsen & Toubro and HCL Technologies
will declare their September quarterly results today, 15 October
2008.
The US government on Tuesday, 14 October 2008 said it will inject
$250 billion into the nation's banking system, with about half of
it going to nine major institutions. In return, the government will
receive equity stakes in the participating institutions. The
proposed cash injection is part of a $700 billion rescue plan,
which was approved by the US Congress earlier this month.
The beneficiaries of this effort include Citigroup, Goldman Sachs,
Wells Fargo, JPMorgan Chase, Bank of America, Merrill Lynch, Morgan
Stanley, State Street, and the Bank of New York Mellon. This move
follows pledges of more than $1.3 trillion by the governments of
Britain, Germany, France, and other European countries in an effort
to bolster their banks.
Asian markets were trading lower today, 15 October 2008 on concern
the rescue would come at a huge economic cost and do little to
repair the damage already done by a 14-month credit crunch. China's
Shanghai Composite, Hong Kong's Hang Seng, Japan's Nikkei,
Singapore's Straits Times, South Korea's Seoul Composite and
Taiwan's Taiwan Weighted fell between 1.6% to 2.92%.
of the trading session. Down 344.07 points, the BSE Sensex was at
the day's low. IT and metal stocks plunged in the early trade. Tata
Steel and Sterlite Industries fell more than 7% each. The market
breadth was weak as selling was witnessed across the board.
Asian stocks declined as concern earnings will deteriorate
overshadowed a $2 trillion global bank rescue.
At 10:20 IST, the BSE 30-share Sensex was down 344.07 points or 3%
to 11,139.33. The index declined 358.29 points at the day's low of
11,125.11 at the onset of the trading session. The Sensex fell
226.35 points at day's high of 11,257.15, in early trade.
The S&P CNX Nifty was down 92.55 points or 2.63% to 3,426.10.
The BSE Mid-Cap index was down 2.38% at 3,799.50 and The BSE
Small-Cap index was down 1.83% at 4,531.50. Both the indices
outperformed the Sensex.
The market breadth was weak. On BSE, 345 shares advanced as
compared to 968 that declined. 28 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was down 2.56% to Rs 1,577.20.
Reliance Industries has reportedly tied up with three foreign firms
for its plans to set up an integrated coal mining, a coal-to-liquid
plant, and a 1,000 megawatt power plant and fly-ash utilisation
unit.
27 stocks from the Sensex pack of 30 stocks were in red. Reliance
Communications (down 6.22% to Rs 252), Jaiprakash Associates (down
4.47% to Rs 81.20) and Bharat Heavy Electricals (down 3.81% to Rs
1,431) were among major losers from the Sensex pack.
Ranbaxy Laboratories (up 1.07% t o Rs 283.55), HDFC Bank (up 0.02%
to Rs 1,139) and Tata Motors (up 0.33% to Rs 299.25) were the
gainers from the Sensex pack.
Metal stocks plunged in early trade with BSE Metasl index falling
4.13% and was the major loser from the sectoral indices on BSE.
Hindalco Industries, Sterlite Industries, Hindustan Zinc, National
Aluminum Company, Steel Authority of India and Tata Steel fell
between 1.45% to 5.53%.
As per reports, Q2 September 2008 might not bring much cheer, as
anticipated previously, to the metal companies. Correction in metal
prices, a slowdown in global economy and higher input cost would
adversely impact second quarter results for metal producers in
India. Unlike previous quarters, this time, both ferrous and
non-ferrous metal companies would be hit, the report said.
IT stocks fell with BSE IT index falling 4.29% and was the second
major loser from the sectoral indices on BSE. Satyam Computer
Services, Tata Consultancy Services, Infosys and Wipro fell between
2.74% to 4.5%.
India's largest engineering and construction firm Larsen & Toubro
fell 3/49% ahead of Q2 September 2008 result to be announced today.
Reliance Infrastructure fell 2.85%. Reliance Infrastructure
reportedly plans to raise Rs 2500 crore as loan this fiscal and is
in talks with banks including IDBI, Axis Bank and IIFCL for raising
the funds.
India's largest realty player by market capitalization DLF fell
2.35% to Rs 303.30. The company said on Tuesday, 14 October 2008
its share buyback for about Rs 1100 crore will open on Friday, 17
October 2008 after complying with regulatory requirements. The
buyback of up to 2.2 crore shares at a maximum of Rs 600 each was
set to open today, but was rescheduled following clarifications
sought by the Securities and Exchange Board of India (Sebi).
Jet Airways fell 1.52% while Kingfisher Airlines declined 3.25%.
The alliance between Jet Airways and Kingfisher Airlines could
reportedly result in a combined annual savings of Rs 800 crore and
a lay-off of 1,500 employees, or 5% of their combined workforce.
Meanwhile, Jet Airways and Kingfisher Airlines are reportedly open
to include state-owned Air India in their recently formed
operational alliance. The alliance would have a 72% market share if
Air India were to join, the reports added.
Britannia Industries fell 2%. Nusli Wadia Group is reportedly set
to acquire Groupe Danone's stake in Britannia Industries with a
committed $200 million funding from ICICI Bank.
Gemini Communication rose 4.94% after company said on Tuesday, 14
October 2008 its board will meet on 22 October 2008 to consider a
share buyback.
Hindustan Construction Company fell 2.28% to Rs 51.35. The company
said on Tuesday, 14 October 2008 that Bank of India has invested Rs
150 crore in its subsidiary Lavasa Corporation, in the form of
convertible debentures. This transaction would reconfirm the equity
valuation of Lavasa at Rs 10000 crore, it said in a statement.
Jubilant Organosys declined 1.61%. The company reported net loss of
Rs 24.39 crore in Q2 September 2008 as against net profit of Rs
111.72 crore in Q2 September 2007. Sales rose 37.72% to Rs 679
crore in Q2 September 2008 over Q2 September 2007.
New Delhi Television (NDTV) fell 4.43% to Rs 149.95. The company
reported a net loss of Rs 13.04 crore in Q2 September 2008 as
against net loss of Rs 3.95 crore in Q2 September 2007. Sales rose
9.06% to Rs 73.91 crore Q2 September 2008 over Q2 September 2007.
The Prime Minister Manmohan Singh met Finance Minister P
Chidambaram and Reserve Bank of India (RBI) Governor Duvvuri
Subbarao late Tuesday, 14 October 2008 to discuss the economic
crisis. Without divulging details of the meeting, Chidambaram said
that India economy was stable. A meeting of high-level bankers and
experts group led by Finance Secretary Arun Ramanathan is scheduled
today, 15 October 2008.
Among frontline companies, Larsen & Toubro and HCL Technologies
will declare their September quarterly results today, 15 October
2008.
The US government on Tuesday, 14 October 2008 said it will inject
$250 billion into the nation's banking system, with about half of
it going to nine major institutions. In return, the government will
receive equity stakes in the participating institutions. The
proposed cash injection is part of a $700 billion rescue plan,
which was approved by the US Congress earlier this month.
The beneficiaries of this effort include Citigroup, Goldman Sachs,
Wells Fargo, JPMorgan Chase, Bank of America, Merrill Lynch, Morgan
Stanley, State Street, and the Bank of New York Mellon. This move
follows pledges of more than $1.3 trillion by the governments of
Britain, Germany, France, and other European countries in an effort
to bolster their banks.
Asian markets were trading lower today, 15 October 2008 on concern
the rescue would come at a huge economic cost and do little to
repair the damage already done by a 14-month credit crunch. China's
Shanghai Composite, Hong Kong's Hang Seng, Japan's Nikkei,
Singapore's Straits Times, South Korea's Seoul Composite and
Taiwan's Taiwan Weighted fell between 1.6% to 2.92%.
Pre Market Report 15/10/2008
Key benchmark indices are likely to see lower start today, 15 October 2008 tracking weak global cues as worries about the slowdown in the global economy resurfaced.
Among frontline companies, Larsen & Toubro and HCL Technologies will declare their September quarterly results today, 15 October 2008.
Asian markets were trading lower today, 15 October 2008 on concern the rescue would come at a huge economic cost and do little to repair the damage already done by a 14-month credit crunch. China's Shanghai Composite was down 1.29% or 26.03 points at 1,991.31, Hong Kong's Hang Seng plunged 2.41% or 405.05 points at 16,427.83, Japan's Nikkei fell 1.44% or 136.35 points at 9,311.22, Singapore's Straits Times tumbled 2.12% or 45.11 points at 2,083.20, South Korea's Seoul Composite declined 2.52% or 34.5 points at 1,333.19 and Taiwan's Taiwan Weighted slipped 1.58% or 83.48 points at 5,208.08.
US markets ended lower on Tuesday, 14 October 2008 as the enthusiasm about the government's plan to buy stakes in the nation's largest financial institutions died down and worries about earnings crept in. The Dow Jones slipped 76.62 points, or 0.82%, to 9,310.99. The S&P 500 index was down 5.34 points, or 0.53%, to 998.01 and the Nasdaq plunged 65.24 points, or 3.54%, to 1,779.01.
The U.S. saw its budget deficit balloon to a record for the 2008 fiscal year. As per the Treasury Department, the shortfall for the year ending September 2008 hit $455 billion. The deficit represented 3.2% of America's gross domestic product, up from last year's 1.2%. The largest-ever percentage of deficit to GDP occurred in 2004, when it hit 3.6%.
Back home, the key benchmark indices logged decent gains boosted by the Reserve Bank of India's announcement to infuse more liquidity coupled with strong global markets. The BSE 30-share Sensex rose 174.31 points or 1.54% to 11,483.40 and the S&P CNX Nifty rose 27.95 points or 0.8% to 3,518.65, on that day.
Foreign institutional investors (FIIs) were net equity buyers worth Rs 898.25 crore while mutual funds sold shares worth Rs 252.37 crore on Tuesday, 14 October 2008, according to provisional data on NSE. FIIs were net buyers of Rs 1,747.68 crore in the futures & options segment on that day.
U.S crude fell 53 cents to $78.10 a barrel, while London Brent crude slipped 23 cents to $74.30 today, 15 October 2008 on fears as a global recession just about outweighed optimism for an economic recovery spurred by bank rescue schemes.
Among frontline companies, Larsen & Toubro and HCL Technologies will declare their September quarterly results today, 15 October 2008.
Asian markets were trading lower today, 15 October 2008 on concern the rescue would come at a huge economic cost and do little to repair the damage already done by a 14-month credit crunch. China's Shanghai Composite was down 1.29% or 26.03 points at 1,991.31, Hong Kong's Hang Seng plunged 2.41% or 405.05 points at 16,427.83, Japan's Nikkei fell 1.44% or 136.35 points at 9,311.22, Singapore's Straits Times tumbled 2.12% or 45.11 points at 2,083.20, South Korea's Seoul Composite declined 2.52% or 34.5 points at 1,333.19 and Taiwan's Taiwan Weighted slipped 1.58% or 83.48 points at 5,208.08.
US markets ended lower on Tuesday, 14 October 2008 as the enthusiasm about the government's plan to buy stakes in the nation's largest financial institutions died down and worries about earnings crept in. The Dow Jones slipped 76.62 points, or 0.82%, to 9,310.99. The S&P 500 index was down 5.34 points, or 0.53%, to 998.01 and the Nasdaq plunged 65.24 points, or 3.54%, to 1,779.01.
The U.S. saw its budget deficit balloon to a record for the 2008 fiscal year. As per the Treasury Department, the shortfall for the year ending September 2008 hit $455 billion. The deficit represented 3.2% of America's gross domestic product, up from last year's 1.2%. The largest-ever percentage of deficit to GDP occurred in 2004, when it hit 3.6%.
Back home, the key benchmark indices logged decent gains boosted by the Reserve Bank of India's announcement to infuse more liquidity coupled with strong global markets. The BSE 30-share Sensex rose 174.31 points or 1.54% to 11,483.40 and the S&P CNX Nifty rose 27.95 points or 0.8% to 3,518.65, on that day.
Foreign institutional investors (FIIs) were net equity buyers worth Rs 898.25 crore while mutual funds sold shares worth Rs 252.37 crore on Tuesday, 14 October 2008, according to provisional data on NSE. FIIs were net buyers of Rs 1,747.68 crore in the futures & options segment on that day.
U.S crude fell 53 cents to $78.10 a barrel, while London Brent crude slipped 23 cents to $74.30 today, 15 October 2008 on fears as a global recession just about outweighed optimism for an economic recovery spurred by bank rescue schemes.
Asian Markets in Negative
Nikkei 225 9,348.47 -99.10 -1.05%
Hang Seng 16,401.26 -431.62 -2.56%
Straits Times 2,087.49 -40.82 -1.92%
Hang Seng 16,401.26 -431.62 -2.56%
Straits Times 2,087.49 -40.82 -1.92%
Intel 3Q profit narrowly beats estimates, but 4Q outlook cloudy
SAN JOSE, Calif. (AP) -- Intel Corp.'s third-quarter profit rose 12 percent, edging past Wall Street's estimates, but the chip maker cautioned that the pall the financial crisis has cast over the technology sector makes it hard to predict its results for the current period.
The company reported after the market closed Tuesday that its profit for the three months ended Sept. 27 was $2.01 billion, or 35 cents per share. That compares with the $1.79 billion, or 30 cents per share, from the year-ago period.
Analysts surveyed by Thomson Reuters expected 34 cents per share in profit.
Sales were $10.22 billion, just a 1 percent increase over last year, but Intel said the figure was a record for the third quarter. Analysts expected $10.26 billion.
The Santa Clara-based company, the world's No. 1 maker of PC microprocessors, said that it still expects healthy and relatively unchanged profit margins for the October-December quarter. Sales for that period could fall below the range of estimates offered by Wall Street analysts, however.
Stacy Smith, Intel's chief financial officer, said because of the economic turbulence, Intel plans to update investors in early December, ahead of the formal fourth-quarter report, about the company's finances.
"We have a high degree of uncertainty around demand in the fourth quarter, but our execution is good," he said in an interview.
Because Intel's processors are used in around 80 percent of the world's PCs and servers built with PC chips, its financial results are seen as a valuable gauge of the health of the broader technology sector.
A big reason Intel is able to wring out more profits despite only incrementally higher sales is because it's getting cheaper for the company to make each of its chips. Technological advances allow the company to squeeze more transistors onto the same slice of silicon while lowering the expense of making those chips.
Intel's most advanced chips are currently built with parts whose average width is only 45 nanometers, or 45 billionths of a meter.
Those advances help Intel increase its profit margins even in tough times. The company's gross profit margin -- the amount of money it makes on each dollar of revenue once manufacturing costs are stripped out -- rose 3.5 percentage points from 55.4 percent in the second quarter to 58.9 percent in the third quarter.
Intel attributes the increase to lower manufacturing costs and higher revenues.
Sales of mobile microprocessors jumped 20 percent over last year to $3.39 billion, while sales of microprocessors for desktop computers and corporate servers fell 1 percent to $4.07 billion.
While Intel is thriving, however, its smaller rival, Advanced Micro Devices Inc., is planning to spin off its chip-making factories in a cost-cutting move. AMD announced last week that it plans to partner with the Persian Gulf state of Abu Dhabi in the joint venture. The move is an acknowledgment that AMD can't compete alone against Intel in the very expensive chore of semiconductor manufacturing.
AMD reports its third-quarter results on Thursday. Analysts are expecting a loss of 40 cents per share on $1.48 billion in sales.
One area of concern about Intel, however, is that it's plunging into the budding market for small computers called "netbooks" and "nettops" that are used primarily for surfing the Internet.
Sales of the chips that go into those machines are booming, hitting $200 million in the third quarter. But the chips themselves are cheaper and carry lower profit margins, which threatens Intel's overall profitability.
Excluding those chips, the average selling price for Intel's microprocessors was flat during the third quarter.
Intel Chief Executive Paul Otellini warned in a statement that it's "hard to know" what impact the financial crisis will have on demand for Intel's chips in the fourth quarter. Still, Otellini said he expects Intel to "outpace peer companies" during the period because of its sales momentum and strong products and balance sheet.
Intel predicted a gross profit margin of 59 percent of revenues, plus or minus a couple of percentage points in the fourth quarter.
Sales, however, could come in below the range of estimates offered by Wall Street analysts. Intel expects sales of between $10.1 billion and $10.9 billion. Analysts were expecting sales in the range of $10.4 billion and $11.3 billion.
Intel shares, which lost $1.06, 6.2 percent, to close at $15.93 during the regular session, regained some of the lost ground in after-hours trading, adding 71 cents, or 4.5 percent, to $16.64.
The company reported after the market closed Tuesday that its profit for the three months ended Sept. 27 was $2.01 billion, or 35 cents per share. That compares with the $1.79 billion, or 30 cents per share, from the year-ago period.
Analysts surveyed by Thomson Reuters expected 34 cents per share in profit.
Sales were $10.22 billion, just a 1 percent increase over last year, but Intel said the figure was a record for the third quarter. Analysts expected $10.26 billion.
The Santa Clara-based company, the world's No. 1 maker of PC microprocessors, said that it still expects healthy and relatively unchanged profit margins for the October-December quarter. Sales for that period could fall below the range of estimates offered by Wall Street analysts, however.
Stacy Smith, Intel's chief financial officer, said because of the economic turbulence, Intel plans to update investors in early December, ahead of the formal fourth-quarter report, about the company's finances.
"We have a high degree of uncertainty around demand in the fourth quarter, but our execution is good," he said in an interview.
Because Intel's processors are used in around 80 percent of the world's PCs and servers built with PC chips, its financial results are seen as a valuable gauge of the health of the broader technology sector.
A big reason Intel is able to wring out more profits despite only incrementally higher sales is because it's getting cheaper for the company to make each of its chips. Technological advances allow the company to squeeze more transistors onto the same slice of silicon while lowering the expense of making those chips.
Intel's most advanced chips are currently built with parts whose average width is only 45 nanometers, or 45 billionths of a meter.
Those advances help Intel increase its profit margins even in tough times. The company's gross profit margin -- the amount of money it makes on each dollar of revenue once manufacturing costs are stripped out -- rose 3.5 percentage points from 55.4 percent in the second quarter to 58.9 percent in the third quarter.
Intel attributes the increase to lower manufacturing costs and higher revenues.
Sales of mobile microprocessors jumped 20 percent over last year to $3.39 billion, while sales of microprocessors for desktop computers and corporate servers fell 1 percent to $4.07 billion.
While Intel is thriving, however, its smaller rival, Advanced Micro Devices Inc., is planning to spin off its chip-making factories in a cost-cutting move. AMD announced last week that it plans to partner with the Persian Gulf state of Abu Dhabi in the joint venture. The move is an acknowledgment that AMD can't compete alone against Intel in the very expensive chore of semiconductor manufacturing.
AMD reports its third-quarter results on Thursday. Analysts are expecting a loss of 40 cents per share on $1.48 billion in sales.
One area of concern about Intel, however, is that it's plunging into the budding market for small computers called "netbooks" and "nettops" that are used primarily for surfing the Internet.
Sales of the chips that go into those machines are booming, hitting $200 million in the third quarter. But the chips themselves are cheaper and carry lower profit margins, which threatens Intel's overall profitability.
Excluding those chips, the average selling price for Intel's microprocessors was flat during the third quarter.
Intel Chief Executive Paul Otellini warned in a statement that it's "hard to know" what impact the financial crisis will have on demand for Intel's chips in the fourth quarter. Still, Otellini said he expects Intel to "outpace peer companies" during the period because of its sales momentum and strong products and balance sheet.
Intel predicted a gross profit margin of 59 percent of revenues, plus or minus a couple of percentage points in the fourth quarter.
Sales, however, could come in below the range of estimates offered by Wall Street analysts. Intel expects sales of between $10.1 billion and $10.9 billion. Analysts were expecting sales in the range of $10.4 billion and $11.3 billion.
Intel shares, which lost $1.06, 6.2 percent, to close at $15.93 during the regular session, regained some of the lost ground in after-hours trading, adding 71 cents, or 4.5 percent, to $16.64.
Intel forecast of steady 4Q profits in uncertain economy helps buoy stock
SAN JOSE, Calif. (AP) -- Intel Corp. has provided some insight into the state of global PC demand, telling Wall Street that while technology spending may be slumping, the chip maker fully expects its profits to hold steady.
The Santa Clara-based company, the world's largest maker of PC microprocessors, said Tuesday that its third-quarter profit rose 12 percent, beating analysts' estimates by a penny per share.
The increase was driven in large part by technological advances that lower Intel's cost of making each chip, which helps the company wring out more profits even in tough economic times.
Sales, in fact, rose just 1 percent, helped by a 20 percent jump in revenues from laptop microprocessors, but were held down overall by lower sales of desktop and server microprocessors. Intel missed the consensus revenue estimate by about $40 million.
Wall Street was already expecting that Intel's third-quarter results would be in line with analyst forecasts, since a spending freeze by many corporate information technology departments didn't fully emerge until late in the quarter, when the financial crisis worsened dramatically.
As the first major tech company to report earnings for the July-September period, investors were looking to Intel for signs about the health of the overall sector heading into the holiday season and 2009.
Intel's processors are used in around 80 percent of the world's PCs and servers built with PCs, so swings in demand for those chips are valuable indicators about order volumes for the rest of the PC industry.
Intel cautioned that economic turbulence makes it hard to reliably predict fourth-quarter results. But the company still forecast healthy and relatively unchanged profit margins.
That was seen as a sign things might not get as bad as some market-watchers fear.
Intel shares climbed 65 cents, 4.1 percent, to $16.58 in after-hours trading. They had closed down $1.06, 6.2 percent, at $15.93 during the regular session before Intel reported its results.
Intel's net income for the three months ended Sept. 27 was $2.01 billion, or 35 cents per share. That compares with $1.79 billion, or 30 cents per share, from the year-ago period.
Analysts surveyed by Thomson Reuters expected 34 cents per share in profit.
Sales were $10.22 billion, just a 1 percent increase over last year, but Intel said the figure was a record for the third quarter. Analysts expected $10.26 billion.
Stacy Smith, Intel's chief financial officer, said because of the economic uncertainty, Intel plans to update investors in early December, ahead of the formal fourth-quarter report, about the company's finances.
"We have a high degree of uncertainty around demand in the fourth quarter, but our execution is good," he said in an interview.
Lower manufacturing costs helped Intel increase its gross profit margin by 3.5 percentage points from 55.4 percent of revenues in the second quarter to 58.9 percent of revenues in the third. Gross margin measures how much money a company makes on each dollar of revenue once manufacturing costs are stripped out.
While Intel is thriving, its smaller rival, Advanced Micro Devices Inc., is planning to spin off its chip-making factories to cut costs. AMD announced last week that it's partnering with the Persian Gulf state of Abu Dhabi in the joint venture.
The deal is an acknowledgment that AMD can't compete alone against Intel in the very expensive chore of semiconductor manufacturing.
AMD reports its third-quarter results on Thursday. Analysts are expecting a loss of 40 cents per share on $1.48 billion in sales.
Intel Chief Executive Paul Otellini warned that it's "hard to know" what impact the financial crisis will have on demand for Intel's chips in the fourth quarter. Still, Otellini said he expects Intel to "outpace peer companies" during the period because of its sales momentum and strong products and balance sheet.
Intel predicted a gross profit margin of 59 percent of revenues, plus or minus a couple of percentage points in the fourth quarter.
Sales, however, could come in below the range of estimates offered by Wall Street analysts. Intel expects sales of between $10.1 billion and $10.9 billion. Analysts were expecting sales in the range of $10.4 billion and $11.3 billion.
The Santa Clara-based company, the world's largest maker of PC microprocessors, said Tuesday that its third-quarter profit rose 12 percent, beating analysts' estimates by a penny per share.
The increase was driven in large part by technological advances that lower Intel's cost of making each chip, which helps the company wring out more profits even in tough economic times.
Sales, in fact, rose just 1 percent, helped by a 20 percent jump in revenues from laptop microprocessors, but were held down overall by lower sales of desktop and server microprocessors. Intel missed the consensus revenue estimate by about $40 million.
Wall Street was already expecting that Intel's third-quarter results would be in line with analyst forecasts, since a spending freeze by many corporate information technology departments didn't fully emerge until late in the quarter, when the financial crisis worsened dramatically.
As the first major tech company to report earnings for the July-September period, investors were looking to Intel for signs about the health of the overall sector heading into the holiday season and 2009.
Intel's processors are used in around 80 percent of the world's PCs and servers built with PCs, so swings in demand for those chips are valuable indicators about order volumes for the rest of the PC industry.
Intel cautioned that economic turbulence makes it hard to reliably predict fourth-quarter results. But the company still forecast healthy and relatively unchanged profit margins.
That was seen as a sign things might not get as bad as some market-watchers fear.
Intel shares climbed 65 cents, 4.1 percent, to $16.58 in after-hours trading. They had closed down $1.06, 6.2 percent, at $15.93 during the regular session before Intel reported its results.
Intel's net income for the three months ended Sept. 27 was $2.01 billion, or 35 cents per share. That compares with $1.79 billion, or 30 cents per share, from the year-ago period.
Analysts surveyed by Thomson Reuters expected 34 cents per share in profit.
Sales were $10.22 billion, just a 1 percent increase over last year, but Intel said the figure was a record for the third quarter. Analysts expected $10.26 billion.
Stacy Smith, Intel's chief financial officer, said because of the economic uncertainty, Intel plans to update investors in early December, ahead of the formal fourth-quarter report, about the company's finances.
"We have a high degree of uncertainty around demand in the fourth quarter, but our execution is good," he said in an interview.
Lower manufacturing costs helped Intel increase its gross profit margin by 3.5 percentage points from 55.4 percent of revenues in the second quarter to 58.9 percent of revenues in the third. Gross margin measures how much money a company makes on each dollar of revenue once manufacturing costs are stripped out.
While Intel is thriving, its smaller rival, Advanced Micro Devices Inc., is planning to spin off its chip-making factories to cut costs. AMD announced last week that it's partnering with the Persian Gulf state of Abu Dhabi in the joint venture.
The deal is an acknowledgment that AMD can't compete alone against Intel in the very expensive chore of semiconductor manufacturing.
AMD reports its third-quarter results on Thursday. Analysts are expecting a loss of 40 cents per share on $1.48 billion in sales.
Intel Chief Executive Paul Otellini warned that it's "hard to know" what impact the financial crisis will have on demand for Intel's chips in the fourth quarter. Still, Otellini said he expects Intel to "outpace peer companies" during the period because of its sales momentum and strong products and balance sheet.
Intel predicted a gross profit margin of 59 percent of revenues, plus or minus a couple of percentage points in the fourth quarter.
Sales, however, could come in below the range of estimates offered by Wall Street analysts. Intel expects sales of between $10.1 billion and $10.9 billion. Analysts were expecting sales in the range of $10.4 billion and $11.3 billion.
Government's $250 billion move into banking won't lead to quick economic recovery
WASHINGTON (AP) -- With any luck, the government's quarter-trillion dollar cash infusion in banks will get them lending again, but the radical move won't quickly turn around the tottering economy.
The pain will almost certainly drag on as vanishing jobs, shrinking paychecks and nest eggs, and slumping home values continue to force millions of Americans to pull back.
Sales at the nation's retailers are expected to drop in September even as they get a break from record-high energy prices. Uncertainty about the economy -- and their own financial fortunes -- probably will force consumers and businesses alike to hunker down further, spelling more problems for the already troubled economy.
Anxiety about the economy is the No. 1 concern of voters. With the presidential election just weeks away, Democrat Barack Obama and Republican rival John McCain are working furiously to convince people that each is the best choice to steer the economy through these perilous times.
In addition to September retail sales numbers, other economic data out Wednesday is expected to show that even though the recent retreat in energy prices calmed inflation at the wholesale level bit, costs are still high and are squeezing businesses.
Many economists believe the country is on the edge of -- or already in -- its first recession since 2001.
If the government's new plan works -- it will merely cushion the blow. Democrats on Capitol Hill are pushing for another round of stimulus that could cost as much as $150 billion, an effort to provide additional relief and lift the country out of the doldrums.
Federal Reserve Chairman Ben Bernanke will provide an up-to-date assessment of the country's economic and financial challenges in a speech in New York on Wednesday.
Big banks started falling in line Tuesday behind the rejiggered bailout plan that will have the government forking over as much as $250 billion in exchange for partial ownership -- putting the world's bastion of capitalism and free markets squarely in the banking business.
Some early signs were hopeful for the latest in a flurry of radical efforts to save the nation's financial system: Credit was a bit easier to come by. And stocks were down but not alarmingly so after Monday's stratospheric leap.
The new plan, President Bush declared, is "not intended to take over the free market but to preserve it."
It's all about cash and confidence and persuading banks to lend money more freely again. Those are all critical ingredients to getting financial markets to function more normally and reviving the economy.
The big question: Will it work?
There was a mix of hope and skepticism on that front. Unprecedented steps recently taken -- including hefty interest rate reductions by the Federal Reserve and other major central banks in a coordinated assault just last week -- have failed to break through the credit clog and the panicky mind-set gripping investors on Wall Street and around the globe.
The Dow Jones industrials declined 77 points on Tuesday after piling up their biggest point gain in history on Monday on news of Europe's rescue plan and in anticipation of the United States' new measures.
Initially the U.S. government will pour $125 billion into nine major banks with the hope that they will use the money to rebuild their reserves and to increase lending to consumers and businesses. Another $125 billion will be made available this year to other banks -- if they need it -- for cash infusions.
In return, the government will get ownership stakes in the financial institutions. Banks, meanwhile, will have to accept limitations on executives' compensation.
"Government owning a stake in any private U.S. company is objectionable to most Americans -- me included," Treasury Secretary Henry Paulson said in announcing the initiative. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable."
Whether the $250 billion will be sufficient to encourage banks to lend again is hard to tell, said Anil Kashyap, professor of economics and finance at the University of Chicago's Graduate School of Business. The Treasury Department arrived at the $250 billion figure after consulting with banking regulators.
"This plan will work if we wind up with everybody pretty well capitalized," Kashyap said. "But if it doesn't reach that point, we'll be back in soup down the road."
The government is counting on banks not to just clutch onto the cash, which aggravated the credit crisis to begin with.
"The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it," Paulson said.
Treasury switched gears, deciding to first use a chunk of the $700 billion from the recently enacted financial bailout package to pay for taking partial ownership stakes in banks, rather than using the money to buy rotten debts from financial institutions. The government said it still intends to buy the bad mortgages and other toxic assets, another move aimed at getting credit flowing again.
Besides the $250 billion this year on the stock purchases, Bush said Tuesday that an additional $100 billion would be needed in connection with covering bad assets. That would leave $350 billion of the $700 billion program, presumably to be spent by the next president.
Economists as well as both Democratic and Republican lawmakers on Capitol Hill had urged Treasury to first move forward on the capital injection plan, arguing that was a more effective way to battle the financial crisis.
The first bank to take advantage of the program was Bank of New York Mellon which announced it would sell $3 billion in preferred shares to the Treasury. Other banks initially participating include Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase, Bank of America Corp., including the soon-to-acquired Merrill Lynch, Citigroup Inc., Wells Fargo & Co., and State Street Corp.
The government's cash infusions are attractive to banks because they are having trouble getting money from elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have rather than lending it to each other or customers.
Two other initiatives also were unveiled to stem the credit crisis: The Federal Deposit Insurance Corp. launched an insurance fund to temporarily guarantee new issues of bank debt -- fully protecting the money even if the institution fails.
And, the FDIC will start providing unlimited deposit insurance for non-interest bearing accounts, which are mainly used by businesses to cover payrolls and other expenses. Frequently these accounts exceed the current $250,000 insurance limit, so the expanded insurance should discourage nervous companies from pulling their money out. Both of these efforts would be financed by fees charged to participating financial institutions -- not money from the bailout package.
Even if the new plan works, economists caution that it could take years before locked up lending returns to normal.
The pain will almost certainly drag on as vanishing jobs, shrinking paychecks and nest eggs, and slumping home values continue to force millions of Americans to pull back.
Sales at the nation's retailers are expected to drop in September even as they get a break from record-high energy prices. Uncertainty about the economy -- and their own financial fortunes -- probably will force consumers and businesses alike to hunker down further, spelling more problems for the already troubled economy.
Anxiety about the economy is the No. 1 concern of voters. With the presidential election just weeks away, Democrat Barack Obama and Republican rival John McCain are working furiously to convince people that each is the best choice to steer the economy through these perilous times.
In addition to September retail sales numbers, other economic data out Wednesday is expected to show that even though the recent retreat in energy prices calmed inflation at the wholesale level bit, costs are still high and are squeezing businesses.
Many economists believe the country is on the edge of -- or already in -- its first recession since 2001.
If the government's new plan works -- it will merely cushion the blow. Democrats on Capitol Hill are pushing for another round of stimulus that could cost as much as $150 billion, an effort to provide additional relief and lift the country out of the doldrums.
Federal Reserve Chairman Ben Bernanke will provide an up-to-date assessment of the country's economic and financial challenges in a speech in New York on Wednesday.
Big banks started falling in line Tuesday behind the rejiggered bailout plan that will have the government forking over as much as $250 billion in exchange for partial ownership -- putting the world's bastion of capitalism and free markets squarely in the banking business.
Some early signs were hopeful for the latest in a flurry of radical efforts to save the nation's financial system: Credit was a bit easier to come by. And stocks were down but not alarmingly so after Monday's stratospheric leap.
The new plan, President Bush declared, is "not intended to take over the free market but to preserve it."
It's all about cash and confidence and persuading banks to lend money more freely again. Those are all critical ingredients to getting financial markets to function more normally and reviving the economy.
The big question: Will it work?
There was a mix of hope and skepticism on that front. Unprecedented steps recently taken -- including hefty interest rate reductions by the Federal Reserve and other major central banks in a coordinated assault just last week -- have failed to break through the credit clog and the panicky mind-set gripping investors on Wall Street and around the globe.
The Dow Jones industrials declined 77 points on Tuesday after piling up their biggest point gain in history on Monday on news of Europe's rescue plan and in anticipation of the United States' new measures.
Initially the U.S. government will pour $125 billion into nine major banks with the hope that they will use the money to rebuild their reserves and to increase lending to consumers and businesses. Another $125 billion will be made available this year to other banks -- if they need it -- for cash infusions.
In return, the government will get ownership stakes in the financial institutions. Banks, meanwhile, will have to accept limitations on executives' compensation.
"Government owning a stake in any private U.S. company is objectionable to most Americans -- me included," Treasury Secretary Henry Paulson said in announcing the initiative. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable."
Whether the $250 billion will be sufficient to encourage banks to lend again is hard to tell, said Anil Kashyap, professor of economics and finance at the University of Chicago's Graduate School of Business. The Treasury Department arrived at the $250 billion figure after consulting with banking regulators.
"This plan will work if we wind up with everybody pretty well capitalized," Kashyap said. "But if it doesn't reach that point, we'll be back in soup down the road."
The government is counting on banks not to just clutch onto the cash, which aggravated the credit crisis to begin with.
"The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it," Paulson said.
Treasury switched gears, deciding to first use a chunk of the $700 billion from the recently enacted financial bailout package to pay for taking partial ownership stakes in banks, rather than using the money to buy rotten debts from financial institutions. The government said it still intends to buy the bad mortgages and other toxic assets, another move aimed at getting credit flowing again.
Besides the $250 billion this year on the stock purchases, Bush said Tuesday that an additional $100 billion would be needed in connection with covering bad assets. That would leave $350 billion of the $700 billion program, presumably to be spent by the next president.
Economists as well as both Democratic and Republican lawmakers on Capitol Hill had urged Treasury to first move forward on the capital injection plan, arguing that was a more effective way to battle the financial crisis.
The first bank to take advantage of the program was Bank of New York Mellon which announced it would sell $3 billion in preferred shares to the Treasury. Other banks initially participating include Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase, Bank of America Corp., including the soon-to-acquired Merrill Lynch, Citigroup Inc., Wells Fargo & Co., and State Street Corp.
The government's cash infusions are attractive to banks because they are having trouble getting money from elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have rather than lending it to each other or customers.
Two other initiatives also were unveiled to stem the credit crisis: The Federal Deposit Insurance Corp. launched an insurance fund to temporarily guarantee new issues of bank debt -- fully protecting the money even if the institution fails.
And, the FDIC will start providing unlimited deposit insurance for non-interest bearing accounts, which are mainly used by businesses to cover payrolls and other expenses. Frequently these accounts exceed the current $250,000 insurance limit, so the expanded insurance should discourage nervous companies from pulling their money out. Both of these efforts would be financed by fees charged to participating financial institutions -- not money from the bailout package.
Even if the new plan works, economists caution that it could take years before locked up lending returns to normal.
Tuesday, October 14, 2008
Post Market Report:14/10/2008
The Key benchmark indices lost most of the earlier strong gains in
late trade after the chief Election Commissioner (EC) announced
dates for assembly elections in five states today afternoon. Though
the BSE Sensex provisionally rose 78.26 points, it lost nearly 500
points from the day's high. Reliance Communications fell more than
5%. Hindalco Industries and ONGC were the other major losers from
the Sensex pack.
The fall on the bourses from higher level materialised soon after a
sharp surge. The Reserve Bank of India's announcement before start
of trading to infuse more liquidity and strong global markets had
boosted the Sensex more than 550 points early afternoon
Mid-cap and small-cap indices also pared gains after an initial
spurt. The market breadth was strong.
India's central bank today said it would allow Indian commercial
banks to accept as collateral certificate of deposits (CDs) held by
mutual funds for the next 15 days. The move followed the earlier
announcement of a 14-day repo auction to enable banks to meet the
liquidity requirements of mutual funds, which had met with
redemption pressures.
As per the provisional figures, the BSE 30-share Sensex rose 78.26
points or 0.69% to 11,410.49 which was also the day's low. The
Sensex surged 561.13 points at day's high of 11,870.22, in early
afternoon trade.
The S&P CNX Nifty rose 7.70 points or 0.22% to 3,498.40 as per the
provisional figures.
BSE clocked a turnover of Rs 4,237 crore today as compare to a
turnover of Rs 3,966.25 crore on 13 October 2008.
The BSE Mid-Cap index was up 1.46% at 3,886.68 and The BSE
Small-Cap index was up 2.27% at 4,616.73. Both the indices
outperformed Sensex
The market breadth was strong. On BSE, 1,645 shares advanced as
compared to 974 that declined. 62 shares remained unchanged.
Jaiprakash Associates (up 5.94% to Rs 85.60), Tata Power Company
(up 5.04% to Rs 830) and Reliance Infrastructure (up 5.29% to Rs
633.50) were major gainers from the sensex pack.
Hindalco Industries (down 4.11% to Rs 85.10), HDFC Bank (down 3.47%
to Rs 1,138.45) and NTPC (down 2.7% to Rs 174.45) were major losers
from the Sensex pack.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was up 3.14% to Rs 1,619.70 off
day's high of Rs 1,668.
IT stocks rose. India's largest IT exporter by sales Tata
Consultancy Services rose 2.84%. The Ministry of External Affairs
on 13 October 2008 awarded Passport Seva Project valued over Rs
1000 crore, to the company.
India's second largest IT exporter by sales Infosys rose 5.87% to
Rs 1,397.05. Infosys ADR galloped 23.42% to $29.51 on 13 October
2008. On Friday, 10 October 2008, the company revised downwards its
earnings and revenue guidance in dollar terms at the time of
announcing Q1 June 2008 results.
Wipro jumped more than 3% after its ADR advanced 39.67% on 13
October 2008 overnight. Satyam Computer Services rose 7.38%. ICSA
(India) surged close to 42%.
India's second largest bank by net profit ICICI Bank rose 5.18% to
Rs 458.25 off day's high of Rs 447.10. ICICI Bank's ADR jumped
29.96% to $18 overnight. The stock had spurted 16.75% on 13 October
2008 after the bank's chief executive K.V. Kamath said deposits
with the bank are safe, and that the bank had a cushion to take
domestic and overseas shocks. His statements came amid concerns
about ICICI Bank's exposure to the global financial crisis, which
has send the stock crashing on the bourses. The stock had fallen
19.7% on Friday, 10 October 2008, recording a sharpest single day
fall.
India's largest tractor maker by sales Mahindra & Mahindra fell
2.55% to Rs 507.25. Mahindra Systech, the auto component arm of
Mahindra & Mahindra, is reportedly looking to more than double its
revenues by diversifying its clientele to power plants, railways,
defence, aerospace and oil refineries. This comes as dipping
automobile sales in the US, Europe and many of the emerging markets
are forcing auto component companies to explore options to de-risk
their businesses.
India's largest engineering and construction firm by sales Larsen &
Toubro moved up 1.15% to Rs 1,003.65, ahead of its Q2 September
2008 results on Wednesday, 15 October 2008.
India's largest oil exploration firm by revenue ONGC lost 3.81% to
Rs 880.70 after Goldman Sachs Group reduced its rating on stock
citing concerns about lower oil price forecasts and poor production
growth. The stock came off from session's high of Rs 950.
India's second largest telecom services provider by sales Reliance
Communications fell 4.83% to Rs 268.70 off day's high of Rs 303.
The company added 1.76 million mobile subscribers in September
2008, taking its total mobile user base to more than 56 million,
the company said in a statement on Monday, 13 October 2008.
India's largest commercial vehicle maker by sales Tata Motors fell
0.12% to Rs 298.90 after commpany said its UK subsidiary, Tata
Motors European Technical Centre Plc., has bought 50.3% of
Norwegian electric vehicle firm Miljoe Grenland/Innovasjon for Rs
9.40 crore ($2 million).
Kingfisher Airlines rose 0.97% while Jet Airways fell 5.58%. Both
the stocks came sharply off from an initial surge after the two
carriers on Monday, 13 October 2008, decided to team up to share
some facilities to reduce costs as the country's airline industry
heads for its worst loss on record. The two airlines will jointly
manage fuel expenses, share some pilots and allow cross-selling of
tickets in each other's network, the Mumbai-based carriers said in
a statement yesterday.
Cadila Healthcare slipped 0.58% to Rs 284.20, even as the company
said on Tuesday, 14 October 2008, it has received approval from
World Heath Organization for Lyssavae N, a new drug which is used
for the treatment of rabies.
Bank of India rose 5.83% on reports it has raised Rs 500 crore
through a private placement of bonds with state-run insurer, Life
Insurance Corp of India.
India's central bank said it would conduct a special 14-day repo
auction, at which it infuses liquidity into the banking system, for
Rs 20000 crore ($4.2 billion) on Tuesday, 14 October 2008. The
auction was announced to enable banks to meet the liquidity
requirements of mutual funds, the central bank said.
EC today said Chattisgarh will go to vote in two phases on 14
November 2008 and 20 November 2008. The other four states - Madhya
Pradesh, Mizoram, Delhi and Rajasthan - will have a single-phase
election. While Madhya Pradesh will vote on 25 November 2008,
Mizoram and Delhi will vote on 29 November 2008. Rajasthan will go
to polls on 4 December 2008. The counting of votes in all states on
will take place 8 December 2008.
Asian stocks surged after governments around the world readied
plans to take stakes in banks to keep the global financial system
from collapsing. Japan's Nikkei, Hong Kong's Hang Seng, China's
Shanghai Composite, Singapore's Straits Times, South Korea's Seoul
Composite, and Taiwan's Taiwan Weighted jumped 3.49% to 14.15%.
China's Shanghai Composite fell 0.25%.
Trading in US index futures suggested the Dow would rise 42 points
at the opening bell.
European markets were firm. France's CAC 40, Germany's DAX and UK's
FTSE 100 rose between 3.21% to 5.17%.
Crude oil for November delivery rose as much as $2.26 to $83.45 a
barrel on the New York Mercantile Exchange.
The rupee climbed in opening deals today. The partially convertible
rupee was at 47.80 per dollar, 0.94 % above Monday's close of
48.25/27.
late trade after the chief Election Commissioner (EC) announced
dates for assembly elections in five states today afternoon. Though
the BSE Sensex provisionally rose 78.26 points, it lost nearly 500
points from the day's high. Reliance Communications fell more than
5%. Hindalco Industries and ONGC were the other major losers from
the Sensex pack.
The fall on the bourses from higher level materialised soon after a
sharp surge. The Reserve Bank of India's announcement before start
of trading to infuse more liquidity and strong global markets had
boosted the Sensex more than 550 points early afternoon
Mid-cap and small-cap indices also pared gains after an initial
spurt. The market breadth was strong.
India's central bank today said it would allow Indian commercial
banks to accept as collateral certificate of deposits (CDs) held by
mutual funds for the next 15 days. The move followed the earlier
announcement of a 14-day repo auction to enable banks to meet the
liquidity requirements of mutual funds, which had met with
redemption pressures.
As per the provisional figures, the BSE 30-share Sensex rose 78.26
points or 0.69% to 11,410.49 which was also the day's low. The
Sensex surged 561.13 points at day's high of 11,870.22, in early
afternoon trade.
The S&P CNX Nifty rose 7.70 points or 0.22% to 3,498.40 as per the
provisional figures.
BSE clocked a turnover of Rs 4,237 crore today as compare to a
turnover of Rs 3,966.25 crore on 13 October 2008.
The BSE Mid-Cap index was up 1.46% at 3,886.68 and The BSE
Small-Cap index was up 2.27% at 4,616.73. Both the indices
outperformed Sensex
The market breadth was strong. On BSE, 1,645 shares advanced as
compared to 974 that declined. 62 shares remained unchanged.
Jaiprakash Associates (up 5.94% to Rs 85.60), Tata Power Company
(up 5.04% to Rs 830) and Reliance Infrastructure (up 5.29% to Rs
633.50) were major gainers from the sensex pack.
Hindalco Industries (down 4.11% to Rs 85.10), HDFC Bank (down 3.47%
to Rs 1,138.45) and NTPC (down 2.7% to Rs 174.45) were major losers
from the Sensex pack.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries was up 3.14% to Rs 1,619.70 off
day's high of Rs 1,668.
IT stocks rose. India's largest IT exporter by sales Tata
Consultancy Services rose 2.84%. The Ministry of External Affairs
on 13 October 2008 awarded Passport Seva Project valued over Rs
1000 crore, to the company.
India's second largest IT exporter by sales Infosys rose 5.87% to
Rs 1,397.05. Infosys ADR galloped 23.42% to $29.51 on 13 October
2008. On Friday, 10 October 2008, the company revised downwards its
earnings and revenue guidance in dollar terms at the time of
announcing Q1 June 2008 results.
Wipro jumped more than 3% after its ADR advanced 39.67% on 13
October 2008 overnight. Satyam Computer Services rose 7.38%. ICSA
(India) surged close to 42%.
India's second largest bank by net profit ICICI Bank rose 5.18% to
Rs 458.25 off day's high of Rs 447.10. ICICI Bank's ADR jumped
29.96% to $18 overnight. The stock had spurted 16.75% on 13 October
2008 after the bank's chief executive K.V. Kamath said deposits
with the bank are safe, and that the bank had a cushion to take
domestic and overseas shocks. His statements came amid concerns
about ICICI Bank's exposure to the global financial crisis, which
has send the stock crashing on the bourses. The stock had fallen
19.7% on Friday, 10 October 2008, recording a sharpest single day
fall.
India's largest tractor maker by sales Mahindra & Mahindra fell
2.55% to Rs 507.25. Mahindra Systech, the auto component arm of
Mahindra & Mahindra, is reportedly looking to more than double its
revenues by diversifying its clientele to power plants, railways,
defence, aerospace and oil refineries. This comes as dipping
automobile sales in the US, Europe and many of the emerging markets
are forcing auto component companies to explore options to de-risk
their businesses.
India's largest engineering and construction firm by sales Larsen &
Toubro moved up 1.15% to Rs 1,003.65, ahead of its Q2 September
2008 results on Wednesday, 15 October 2008.
India's largest oil exploration firm by revenue ONGC lost 3.81% to
Rs 880.70 after Goldman Sachs Group reduced its rating on stock
citing concerns about lower oil price forecasts and poor production
growth. The stock came off from session's high of Rs 950.
India's second largest telecom services provider by sales Reliance
Communications fell 4.83% to Rs 268.70 off day's high of Rs 303.
The company added 1.76 million mobile subscribers in September
2008, taking its total mobile user base to more than 56 million,
the company said in a statement on Monday, 13 October 2008.
India's largest commercial vehicle maker by sales Tata Motors fell
0.12% to Rs 298.90 after commpany said its UK subsidiary, Tata
Motors European Technical Centre Plc., has bought 50.3% of
Norwegian electric vehicle firm Miljoe Grenland/Innovasjon for Rs
9.40 crore ($2 million).
Kingfisher Airlines rose 0.97% while Jet Airways fell 5.58%. Both
the stocks came sharply off from an initial surge after the two
carriers on Monday, 13 October 2008, decided to team up to share
some facilities to reduce costs as the country's airline industry
heads for its worst loss on record. The two airlines will jointly
manage fuel expenses, share some pilots and allow cross-selling of
tickets in each other's network, the Mumbai-based carriers said in
a statement yesterday.
Cadila Healthcare slipped 0.58% to Rs 284.20, even as the company
said on Tuesday, 14 October 2008, it has received approval from
World Heath Organization for Lyssavae N, a new drug which is used
for the treatment of rabies.
Bank of India rose 5.83% on reports it has raised Rs 500 crore
through a private placement of bonds with state-run insurer, Life
Insurance Corp of India.
India's central bank said it would conduct a special 14-day repo
auction, at which it infuses liquidity into the banking system, for
Rs 20000 crore ($4.2 billion) on Tuesday, 14 October 2008. The
auction was announced to enable banks to meet the liquidity
requirements of mutual funds, the central bank said.
EC today said Chattisgarh will go to vote in two phases on 14
November 2008 and 20 November 2008. The other four states - Madhya
Pradesh, Mizoram, Delhi and Rajasthan - will have a single-phase
election. While Madhya Pradesh will vote on 25 November 2008,
Mizoram and Delhi will vote on 29 November 2008. Rajasthan will go
to polls on 4 December 2008. The counting of votes in all states on
will take place 8 December 2008.
Asian stocks surged after governments around the world readied
plans to take stakes in banks to keep the global financial system
from collapsing. Japan's Nikkei, Hong Kong's Hang Seng, China's
Shanghai Composite, Singapore's Straits Times, South Korea's Seoul
Composite, and Taiwan's Taiwan Weighted jumped 3.49% to 14.15%.
China's Shanghai Composite fell 0.25%.
Trading in US index futures suggested the Dow would rise 42 points
at the opening bell.
European markets were firm. France's CAC 40, Germany's DAX and UK's
FTSE 100 rose between 3.21% to 5.17%.
Crude oil for November delivery rose as much as $2.26 to $83.45 a
barrel on the New York Mercantile Exchange.
The rupee climbed in opening deals today. The partially convertible
rupee was at 47.80 per dollar, 0.94 % above Monday's close of
48.25/27.
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