Data showing a disappointing Q3 December 2008 gross domestic
product (GDP) growth pulled the key benchmark indices sharply lower
in mid-morning trade. Selling was witnessed in IT, auto, banking,
realty stocks and index heavyweight Reliance Industries (RIL). The
BSE 30-share Sensex was down 192.36 points, or 2.15% and was near
the day's low. Weak rupee and dismal global economic data also
weighted on the sentiment.
India's GDP grew a slower-than-expected 5.3% in Q3 December 2008 as
the global economic crisis cut demand and exports. The figure is
sharply lower from 7.6% in Q2 September 2008. The manufacturing
sector fell 0.2% in in Q3 December 2008 from a year earlier, while
the farm sector contracted an annual 2.2%, government data showed
on Friday, 27 February 2009. India's economy grew 7.6% in the
September 2008 quarter and 7.9% in the June 2008 quarter. India has
estimated the economy to grow 7.1% in 2008/09, slowing from the 9%
in the previous year.
Meanwhile, a sharp slide in rupee which hit a record low against
the dollar heightened worries that some foreign funds may refrain
from buying stocks. The rupee today hit a record low against the
dollar. A fall in rupee reduces the valuation of the portfolio of
foreign funds to that extent. The impact can be mitigated by
hedging. Currently, foreign funds are dependent on the relatively
less transparent over-the-counter markets. Foreign funds are not
allowed to trade in currency futures market in India.
In fact, foreign funds are in selling mode in Indian stocks, having
dumped shares worth Rs 6431.90 crore in calender year 2009 (till 25
February 2009).
Concerns about rising borrowing costs for Indian corporates linger
in the minds of investors as fears of a downgrade of India's
sovereign rating by global rating agencies loom large. Rating
agency S&P on Tuesday, 24 February 2009, cut its outlook on India's
long-term sovereign credit rating to negative from stable citing
worsening government finances, which could raise Indian firms'
overseas borrowing costs and weaken the rupee. Moody's Economy.com
on Wednesday, 25 February 2009, said India's wider fiscal deficit
will boost funding costs and weaken investor confidence.
Meanwhile, global economic data continued to paint a worsening
picture of the global economy. Data on Thursday showed US jobless
claims hit a 26-year high, while Japanese data early Friday
confirmed the bleak outlook for the world's second biggest economy,
with industrial output falling 10.0% in January 2009 and shipments
down 11.4%, the biggest on-month falls on record.
Asian markets were trading mixed today, 27 February 2009, as
technology companies gained on brokerage upgrades and commodity
shares advanced on higher metal prices. Key benchmark indices in
Hong Kong, Taiwan, Singapore, and Japan were up by between 0.17%
and 1.24%. Indices in China and South Korea were down 0.21% and
1.42%.
US markets ended lower on Thursday, 26 February 2009, in volatile
trade as a spate of sour economic data and worries that President
Obama's budget proposal will strangle profits forced investors to
sell off stocks across the board. The Obama administration sees the
FY09 deficit at $1.75 trillion.
The Dow Jones industrial average declined 88.81 points, or 1.2%, to
7,182.08. The S&P 500 index slipped 12.07 points, or 1.6%, to
752.83 and the Nasdaq Composite index lost 33.96 points, or 2.4%,
to 1,391.47.
Obama proposed almost $1 trillion in higher taxes over the next
decade on the highest-earning Americans, Wall Street financiers,
US-based multinational corporations and oil companies to pay for
permanent tax breaks for lower earners.
At 11:26 IST, the BSE 30-share Sensex was down 192.36 points, or
2.15%, to 8,757. At the day's low of 8,750.34 the Sensex lost
204.52 points in mid-morning trade. At the day's high of 8,944.11
Sensex fell 10.75 points in early trade.
The S&P CNX Nifty was down 64.05 points, or 2.3%, to 2,721.60.
The market breadth, indicating the overall health of the market,
turned weak on BSE with 769 shares advancing as compared with 1,114
that declined. A total of 80 shares remained unchanged. The bread
was positive in early trade before the GDP data
From the 30 share Sensex pack 28 stocks fell while rest rose. ACC,
Reliance Communications, Bharti Airtel fell by between 3.19% to
5.12%.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) fell 2.24% to Rs 1,261 on
fears a worsening global economy will hit demand for
petrochemicals.
India's largest drugmaker by sales Ranbaxy Laboratories fell 1.06%
extending fall after the US Food and Drug Administration (US FDA)
on Wednesday, 25 February 2009, said Ranbaxy falsified data of over
two dozen drugs made in Poanta Sahib plant in India and it will
halt approval of pending and new drugs from the plant. The
allegation sent the Ranbaxy stock tumbling 18% in a single trading
session on Thursday.
Meanwhile, Daiichi Sankyo, the new owner of India's largest
drugmaker Ranbaxy Laboratories, said it has formed a team to solve
the ongoing issues with the US drug regulator.
Outsourcing focussed IT firms extended fall on fears a weak global
economy would cut the amount firms spent on technology and on fall
in ADRs overnight. India's third largest software services
exporter, Wipro fell 2.99% as its ADR fell 1.82% overnight. India's
second largest software services exporter Infosys Technologies
slipped 2.2% as its ADR fell 1.71% overnight. However India's
largest software services exporter by sales TCS fell 2.47%.
IT firms derive a lion's share of revenue from exports to US. There
have been concerns of cut back in technology spend by global firms
amid a recession in the US economy and due to the global financial
sector crisis.
IT stocks fell despite rupee hitting a record low against the
dollar. The rupee weakened to an all-time low past 50.65 against
the dollar early on Friday, weighed down by heavy dollar demand
from importers to meet month-end commitments. The partially
convertible rupee was at 50.75 and weaker than its Thursday's close
of 50.45/47. A weak rupee boosts revenues of IT firms in rupee
terms as IT companies earn a lion's share of revenue from exports.
India's largest steel maker by sales Tata Steel fell 0.8% to Rs
161.80 off the day's high of Rs 165.20 ahead of the announcement of
Q3 December 2008 consolidated result of the company today. The
steel maker is seen reporting a hefty consolidated loss.
Other metal stocks, Hindalco Industries, National Aluminum Company,
Steel Authority of India and Sterlite Industries, fell by between
0.64% to 5.51%.
India's largest commercial vehicle maker by sales Tata Motors
gained 0.67% extending gains for the second straight day after
company said bookings for its Rs 1-lakh car Naco will commence from
the second week of April 2009. The stock had jumped 7.26%
yesterday, 26 February 2009 boosted by the announcement during
trading hours
But other auto stocks fell on profit taking after recent strong
gains. Mahindra & Mahindra, Maruti Suzuki India and Hero Honda
Motor fell by between 1.03% to 4.93%.
Banking stocks fell as fears of rising defaults in a weakening
economy and on fall in American Depository Receipts (ADRs) offset
hopes a further fall in interest rates may boost lending growth.
India's largest private sector bank by net profit ICICI Bank fell
2.71% to Rs 315.75 off the day's high of Rs 328.50 as its American
Depository Receipts (ADR) slipped 5.17% on Thursday, 26 February
2009. Recently, Life Insurance Corporation of India hiked its stake
in ICICI Bank by 2.04% to 9.38%.
India's largest bank in terms of assets and branch network State
Bank of India fell 0.61% to Rs 1,017.60 off the day's high of Rs
1,037.80. The Indian government on Tuesday 24 February 2009
introduced a bill in Parliament which will enable it to increase
the capital base of State Bank of India's subsidiaries and issue
preference and bonus shares of these entities. However, India's
second largest private sector bank by net profit HDFC Bank slipped
3.33% as its ADR fell 1.93% on Thursday.
As per the latest data by the Reserve Bank of India, the banking
sector lent over Rs 10000 crore in the fortnight ended 13 February
2009. Food credit rose Rs 547.82 crore, while non-food credit rose
went up by Rs 9124.95 crore. This is the highest fortnightly growth
in bank loans since November 2007.
Despite a steep cut in policy rates in India since October 2008,
there has not been a commensurate reduction in lending rates by
banks as fears of rising bad loans have made banks cautious in
increasing advances.
Rate sensitive realty stocks fell on recent reports falling
interest rates have failed to revive housing demand. DLF, Unitech
and Indiabulls Real Estate fell by between 1.97% to 2.94%. Most of
the realty deals including sale of commercial property and housing
sales are driven by finance.
Meanwhile, the Cabinet Committee on Economic Affairs (CCEA) on
Thursday, 26 February 2009, approved a scheme to encourage states
to increase the supply of land and construct 10 lakh affordable
houses. The Centre will provide finance assistance of Rs 5000 crore
over the next four years for the affordable housing projects.
Construction and development is envisaged in public-private
partnership (PPP) mode. Private Sector developers and builders as
well as state housing boards are expected to be partners to the
government and construct and develop projects with funding from
institutional sources. Real estate developers looking to affordable
housing during the downturn will now have an opportunity to take up
projects where demand for housing is still high, a release by the
government after the CCEA meeting said. The urban housing shortage
is estimated at 24.7 million, largely for the weaker and low income
households.
KNR Constructions jumped 5% after a joint venture of the company
bagged an order worth Rs 576.38 crore from Hyderabad Growth
Corridor for a road project in Hyderabad.
Friday, February 27, 2009
Thursday, February 26, 2009
Ranbaxy slumps 13%
The BSE 30-share Sensex was down 75.55 points, or 0.89% and was
near the day's low.
The weekly inflation data due later in the day may influence the
trend on the bourses during the course of the day, with market
expecting a rate cut by the Reserve Bank of India (RBI) to support
faltering economic growth.
However, volatility is also likely to remain high ahead of the
February series F&O expiry today, 26 February 2009. As per reports,
rollover of Nifty positions from February 2009 series to March 2009
series stood at 62% while marketwide rollover of positions was 57%,
as on Wednesday, 25 February 2009.
There are expectations that the Reserve Bank of India (RBI) will
cut interest rates further to support faltering growth. A sharp
fall in inflation to 13-month low in the week ended 7 February
2009, raised speculation of the central bank having more room to
cut rates. As per reports, RBI governor D Subbarao will meet select
heads of banks on Friday, 27 February 2009, to hold discussions on
issues like credit flow and liquidity conditions.
The global financial sector crisis and recession in key global
economies have pushed economic growth in India down to a six-year
low. The Central Statistical Organisation (CSO) has pegged India's
projected GDP growth for the year ending March 2009 at 7.1%, the
slowest in six years and below the previous year's 9% rise.
Asian shares rose Thursday, cuing off a late run higher on Wall
Street on Wednesday, but markets faded in and out of positive
territory in early trade suggesting a lack of clear direction in
the near-term. Key benchmark indices in Taiwan, Japan and Singapore
were up by between 0.24% and 0.53%. However, indices in China,
South korea and Hong Kong fell by between 0.19% to 0.8%.
The Dow Jones Industrial Average, which had been off nearly 200
points earlier in the session, ended the day down 80.05 points, or
1.09%, at 7270.89. US bank stocks rose after US officials unveiled
details of the Treasury's plan to convert stakes to common stock,
although the wider index remained anchored by a bleak housing
report from The National Association of Realtors.
At 10:24 IST, the BSE 30-share Sensex was down 75.55 points, or
0.89%, to 8,823.71. At the day's high of 8,905.56 Sensex gained 3
points in early trade. At the day's low of 8,820.89 the Sensex lost
81.67 points in early trade.
The S&P CNX Nifty was down 17.65 points, or 0.64%, to 2,744.85.
The market breadth, indicating the overall health of the market,
was weak on BSE with 687 shares advancing as compared with 820 that
declined. A total of 75 shares remained unchanged.
From the 30 share Sensex pack 20 stocks fell while rest rose. HDFC,
Bharat Heavy Electricals and Sterlite Industries fell by between
0.57% to 3.05%.
near the day's low.
The weekly inflation data due later in the day may influence the
trend on the bourses during the course of the day, with market
expecting a rate cut by the Reserve Bank of India (RBI) to support
faltering economic growth.
However, volatility is also likely to remain high ahead of the
February series F&O expiry today, 26 February 2009. As per reports,
rollover of Nifty positions from February 2009 series to March 2009
series stood at 62% while marketwide rollover of positions was 57%,
as on Wednesday, 25 February 2009.
There are expectations that the Reserve Bank of India (RBI) will
cut interest rates further to support faltering growth. A sharp
fall in inflation to 13-month low in the week ended 7 February
2009, raised speculation of the central bank having more room to
cut rates. As per reports, RBI governor D Subbarao will meet select
heads of banks on Friday, 27 February 2009, to hold discussions on
issues like credit flow and liquidity conditions.
The global financial sector crisis and recession in key global
economies have pushed economic growth in India down to a six-year
low. The Central Statistical Organisation (CSO) has pegged India's
projected GDP growth for the year ending March 2009 at 7.1%, the
slowest in six years and below the previous year's 9% rise.
Asian shares rose Thursday, cuing off a late run higher on Wall
Street on Wednesday, but markets faded in and out of positive
territory in early trade suggesting a lack of clear direction in
the near-term. Key benchmark indices in Taiwan, Japan and Singapore
were up by between 0.24% and 0.53%. However, indices in China,
South korea and Hong Kong fell by between 0.19% to 0.8%.
The Dow Jones Industrial Average, which had been off nearly 200
points earlier in the session, ended the day down 80.05 points, or
1.09%, at 7270.89. US bank stocks rose after US officials unveiled
details of the Treasury's plan to convert stakes to common stock,
although the wider index remained anchored by a bleak housing
report from The National Association of Realtors.
At 10:24 IST, the BSE 30-share Sensex was down 75.55 points, or
0.89%, to 8,823.71. At the day's high of 8,905.56 Sensex gained 3
points in early trade. At the day's low of 8,820.89 the Sensex lost
81.67 points in early trade.
The S&P CNX Nifty was down 17.65 points, or 0.64%, to 2,744.85.
The market breadth, indicating the overall health of the market,
was weak on BSE with 687 shares advancing as compared with 820 that
declined. A total of 75 shares remained unchanged.
From the 30 share Sensex pack 20 stocks fell while rest rose. HDFC,
Bharat Heavy Electricals and Sterlite Industries fell by between
0.57% to 3.05%.
Wednesday, February 25, 2009
S&P cuts India outlook to negative, cites fiscal weakness
Standard & Poor's cut its outlook on India's long-term sovereign credit rating to negative from stable on Tuesday, citing an "unsustainable" deterioration in the country's fiscal position.
"The outlook revision reflects our view that India's fiscal position has deteriorated to a level that is unsustainable in the medium term," said S&P in the statement.
S&P will retain its BBB-minus long-term sovereign rating for India and its A-3 short-term rating.
S&P said it expects the general government deficit, which includes off-budget items such as oil and fertiliser bonds, to increase to 11.4 percent in the fiscal year ending in March, up from 5.7 percent in the previous fiscal year.
The ratings agency said it expects a fiscal deficit of 11.1 percent in the fiscal year ended in March 2010.
S&P cited debt relief for farmers and the first pay hike for government employees in 11 years, along with broader factors such as the weakening global economy, as reasons for the worsening finances in the country.
The ratings agency called India's weak fiscal position "the single-largest negative factor for the sovereign ratings."
Fitch last week also called the country's fiscal position its main concern for India. It currently has BBB-minus ratings, with a negative outlook on the local currency rating and a stable outlook on the foreign currency.
Moody's has an equivalent Baa3 rating with a stable outlook.
"The outlook revision reflects our view that India's fiscal position has deteriorated to a level that is unsustainable in the medium term," said S&P in the statement.
S&P will retain its BBB-minus long-term sovereign rating for India and its A-3 short-term rating.
S&P said it expects the general government deficit, which includes off-budget items such as oil and fertiliser bonds, to increase to 11.4 percent in the fiscal year ending in March, up from 5.7 percent in the previous fiscal year.
The ratings agency said it expects a fiscal deficit of 11.1 percent in the fiscal year ended in March 2010.
S&P cited debt relief for farmers and the first pay hike for government employees in 11 years, along with broader factors such as the weakening global economy, as reasons for the worsening finances in the country.
The ratings agency called India's weak fiscal position "the single-largest negative factor for the sovereign ratings."
Fitch last week also called the country's fiscal position its main concern for India. It currently has BBB-minus ratings, with a negative outlook on the local currency rating and a stable outlook on the foreign currency.
Moody's has an equivalent Baa3 rating with a stable outlook.
Citigroup may sell Japan investment bank - media
Citigroup Inc is considering selling its Japanese investment banking unit, Nikko Citigroup, in addition to the brokerage unit that has already been put up for sale, the Mainichi newspaper reported.
Earlier this month Citigroup formally began the process of selling the brokerage unit, Nikko Cordial Securities, as part of its efforts to shed non-core assets globally and survive the deepening financial crisis.
Citigroup, which originally did not plan to part with Nikko Citigroup, is considering selling it and Nikko Cordial as a set to maximise the sale price, the Mainichi reported on its website without citing sources.
A spokeswoman for Citigroup in Japan declined to comment.
Citigroup is concerned that selling Nikko Cordial on its own would lead to a drop in corporate value as it would not allow the buyer to fully benefit from cooperation between the brokerage and investment banking operations, the Mainichi said.
Japan's top three banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have all shown interest in buying Nikko Cordial, sources have told Reuters.
The report comes as Citigroup talks with federal regulators on a plan for the government to increase its stake in the third-biggest U.S. bank in terms of assets, a person familiar with the matter has told Reuters.
Earlier this month Citigroup formally began the process of selling the brokerage unit, Nikko Cordial Securities, as part of its efforts to shed non-core assets globally and survive the deepening financial crisis.
Citigroup, which originally did not plan to part with Nikko Citigroup, is considering selling it and Nikko Cordial as a set to maximise the sale price, the Mainichi reported on its website without citing sources.
A spokeswoman for Citigroup in Japan declined to comment.
Citigroup is concerned that selling Nikko Cordial on its own would lead to a drop in corporate value as it would not allow the buyer to fully benefit from cooperation between the brokerage and investment banking operations, the Mainichi said.
Japan's top three banks, Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have all shown interest in buying Nikko Cordial, sources have told Reuters.
The report comes as Citigroup talks with federal regulators on a plan for the government to increase its stake in the third-biggest U.S. bank in terms of assets, a person familiar with the matter has told Reuters.
Oil jumps on stock market bounce, OPEC compliance
Oil prices rose 4 percent on Tuesday, tracking a bounce on Wall Street, after U.S. Federal Reserve Chairman Ben Bernanke said he was committed to protecting the troubled banking sector.
Figures showing higher-than-expected compliance by the Organization of Petroleum Exporting Countries to its agreed production cuts encouraged the gains, dealers said.
U.S. crude oil rose $1.52 to settle at $39.96 a barrel, while London Brent crude rose $1.51 to $42.50 a barrel.
The gains came as U.S. stocks jumped about 3 percent, bouncing off of 12-year lows hit Monday, after Bernanke told U.S. lawmakers that he was committed to ensuring the economic viability of banks.
Uncertainty about the future of the U.S. banking system has raised concerns that the economic crisis could worsen, darkening an already gloomy outlook for U.S. energy demand.
Buying in the oil markets was encouraged by figures showing stronger-than-expected OPEC compliance with its production cuts.
Energy consultant Petrologistics said this week that OPEC producers were likely to pump less oil in February than January and a Reuters calculation based on the figures showed the cartel's compliance to its supply cut agreements was 89 percent.
"The OPEC compliance was bigger than expected," said Oliver Jakob of Petromatrix.
OPEC members are scheduled to meet March 15 in Vienna and are expected to consider deepening their output cuts.
Oil prices have dropped nearly $110 a barrel from their peak in July as the economic crisis cuts into demand.
Traders were awaiting U.S. oil inventory data on Wednesday that was expected to show a 1-million-barrel increase in crude stocks last week, a Reuters poll of analysts showed.
Figures showing higher-than-expected compliance by the Organization of Petroleum Exporting Countries to its agreed production cuts encouraged the gains, dealers said.
U.S. crude oil rose $1.52 to settle at $39.96 a barrel, while London Brent crude rose $1.51 to $42.50 a barrel.
The gains came as U.S. stocks jumped about 3 percent, bouncing off of 12-year lows hit Monday, after Bernanke told U.S. lawmakers that he was committed to ensuring the economic viability of banks.
Uncertainty about the future of the U.S. banking system has raised concerns that the economic crisis could worsen, darkening an already gloomy outlook for U.S. energy demand.
Buying in the oil markets was encouraged by figures showing stronger-than-expected OPEC compliance with its production cuts.
Energy consultant Petrologistics said this week that OPEC producers were likely to pump less oil in February than January and a Reuters calculation based on the figures showed the cartel's compliance to its supply cut agreements was 89 percent.
"The OPEC compliance was bigger than expected," said Oliver Jakob of Petromatrix.
OPEC members are scheduled to meet March 15 in Vienna and are expected to consider deepening their output cuts.
Oil prices have dropped nearly $110 a barrel from their peak in July as the economic crisis cuts into demand.
Traders were awaiting U.S. oil inventory data on Wednesday that was expected to show a 1-million-barrel increase in crude stocks last week, a Reuters poll of analysts showed.
Gold prices near Rs 16,000; spurs scrap sale
India's gold prices hovered near the psychological Rs 16,000-mark, attracting more scrap sales on Tuesday as consumers chose to cash in on the rally in the yellow metal, while imports continued to slacken.
"There are sellers exchanging for marriage purpose," said Daman Prakash, director, Chennai-based wholesaler, MNC Bullion, adding, "People are seen exchanging their old gold for new designs."
"Around 40 people have lined up outside my shop to sell," said Jitendra Kantilal Jain, partner at Mumbai's Jugraj Kantilal and Co, which buys scrap gold. Kantilal said that he had already collected around 100 kg of gold in scrap last week.
The benchmark April gold contract was 0.37% lower at Rs 15,829 per 10 gm at 1.40 pm on profit-taking, after hitting a record high of Rs 16,040 last week. But a weaker rupee limited the downside. The rupee impacts gold prices as most of the metal is imported in India and paid for in US currency. However analysts are still bullish in the short-term on a contracting US economy and expectations of a weak rupee. "Consumers, who are interested in selling, may wait as prices are expected to harden further," Prakash added.
Domestic gold demand was slack as buyers were deterred from fresh purchases with prices near record levels, traders said. The inflow of scrap has curtailed demand for new imported gold bars, buyers said. "It's almost three months now and there have been no buyers," Prakash added. Traders said that local gold was available cheaper by 1.5% than bank gold, signifying profit-taking by traders on their old stock. "If gold crosses $1,000 (an ounce), then the discount may rise to 3.5%-4%."
"No gold has been imported into India so far in February because prices are at record highs in rupee terms," the head of Bombay Bullion Association (BBA) said on Friday.
"There are sellers exchanging for marriage purpose," said Daman Prakash, director, Chennai-based wholesaler, MNC Bullion, adding, "People are seen exchanging their old gold for new designs."
"Around 40 people have lined up outside my shop to sell," said Jitendra Kantilal Jain, partner at Mumbai's Jugraj Kantilal and Co, which buys scrap gold. Kantilal said that he had already collected around 100 kg of gold in scrap last week.
The benchmark April gold contract was 0.37% lower at Rs 15,829 per 10 gm at 1.40 pm on profit-taking, after hitting a record high of Rs 16,040 last week. But a weaker rupee limited the downside. The rupee impacts gold prices as most of the metal is imported in India and paid for in US currency. However analysts are still bullish in the short-term on a contracting US economy and expectations of a weak rupee. "Consumers, who are interested in selling, may wait as prices are expected to harden further," Prakash added.
Domestic gold demand was slack as buyers were deterred from fresh purchases with prices near record levels, traders said. The inflow of scrap has curtailed demand for new imported gold bars, buyers said. "It's almost three months now and there have been no buyers," Prakash added. Traders said that local gold was available cheaper by 1.5% than bank gold, signifying profit-taking by traders on their old stock. "If gold crosses $1,000 (an ounce), then the discount may rise to 3.5%-4%."
"No gold has been imported into India so far in February because prices are at record highs in rupee terms," the head of Bombay Bullion Association (BBA) said on Friday.
SBI in talks to raise 20 bln rupees - sources
Bank of India is in talks with state-owned insurer Life Insurance Corp of India (LIC) to raise 20 billion rupees in ($401 million) in upper Tier 2 bonds, banking sources with direct knowledge of the deal said.
"There is a dialogue on with LIC currently. They are willing to invest at least 20 billion rupees. The final amount will depend on what they decide," one source at SBI, India's largest commercial bank, said on Tuesday.
The official could not be named because he was not authorised to speak to the media.
Another banking source said SBI Capital Markets was the arranger to the transaction.
Market sources said they expected SBI to raise up to 30 billion rupees through Tier 2 bonds by March 31, the end of 2008/09 financial year.
"These will be upper Tier 2 bonds with 15-year maturity and a call option at the end of the 10th year," the SBI said.
LIC officials were not available for comment
"There is a dialogue on with LIC currently. They are willing to invest at least 20 billion rupees. The final amount will depend on what they decide," one source at SBI, India's largest commercial bank, said on Tuesday.
The official could not be named because he was not authorised to speak to the media.
Another banking source said SBI Capital Markets was the arranger to the transaction.
Market sources said they expected SBI to raise up to 30 billion rupees through Tier 2 bonds by March 31, the end of 2008/09 financial year.
"These will be upper Tier 2 bonds with 15-year maturity and a call option at the end of the 10th year," the SBI said.
LIC officials were not available for comment
Nikkei rises 1.6 pct on yen, govt stock buy hopes
TOKYO, Feb 25 (Reuters) - Japan's Nikkei average gained 1.6 percent on Wednesday, after nearing a 26-year low the previous day, buoyed by exporters on a softer yen and after a media report that the Japanese government may buy stocks from the market.
The benchmark Nikkei .N225 added 115.35 points to 7,383.91, while the broader Topix rose 1 percent to 737.86.
On Tuesday, the Nikkei booked its lowest close since Oct. 27, after briefly touching 7,155.16 -- not far from a 26-year low just under 7,000. The Topix posted its lowest close since December 1983
The benchmark Nikkei .N225 added 115.35 points to 7,383.91, while the broader Topix rose 1 percent to 737.86.
On Tuesday, the Nikkei booked its lowest close since Oct. 27, after briefly touching 7,155.16 -- not far from a 26-year low just under 7,000. The Topix posted its lowest close since December 1983
Dollar rises above Y97 for first time in 3 months
The dollar rose above 97 yen for the first time in three months on Wednesday as speculators unwound long yen positions built up over the last few months.
The dollar rose as high as 97.20 yen on trading platform EBS, its highest since late November and up 0.6 percent on the day.
Traders said there were rumours of option barriers at 97 yen that could have helped push the dollar higher.
The dollar rose as high as 97.20 yen
Traders said there were rumours of option barriers at 97 yen that could have helped push the dollar higher.
Stocks up on Bernanke remarks
Federal Reserve Chairman Ben Bernanke gave Wall Street a double dose of reassurance. Now it's President Barack Obama's turn.
Bernanke told Congress on Tuesday the recession might end this year, and that regulators aren't planning to nationalize banks. The news alleviated some of investors' worries about the economy and the banking industry, and lifted the Dow Jones industrial average and Standard & Poor's 500 index off their lowest levels since 1997.
And investors are hopeful that Tuesday night, Obama will provide specifics about his plans to stabilize the financial system and further stimulate the economy. Anticipation of his remarks helped drive beaten-down financial shares up sharply.
"There's growing optimism that Obama can deliver the details that the market is so desperately looking for in his speech," said Ryan Larson, senior equity trader at Voyageur Asset Management. If it gets those details, Larson added, the market's upward momentum could continue.
Stocks remain on shaky ground, however. Bernanke may have helped stem the market's slide Tuesday, but the market also found stability from temporary technical factors: bargain-hunting, the unwinding of short bets, and selling exhaustion after six straight down days for the S&P 500.
And though it appears the government is trying to quash the notion of bank nationalization, the Obama administration still has not demonstrated how exactly it will repair the banking system. The nation's financial system remains "zombie-like," said Nick Kalivas, vice president of financial research at the brokerage MF Global.
"We had an up day today, but nothing has really changed on that front," Kalivas said. "If nothing is articulated on that tonight, we're moving to the downside again."
The continued focus on the stability of the financial system comes a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.
The Dow rose 236.16, or 3.3 percent, to 7,350.94. On Monday, the major indexes tumbled more than 3 percent, including the Dow, which fell 251 points and hit its lowest close since May 7, 1997.
Broader stock indicators also rebounded Tuesday. The S&P 500 index rose 29.81, or 4 percent, to 773.14. On Monday, it logged its lowest finish since April 11, 1997.
The Nasdaq composite index rose 54.11, or 3.9 percent, Tuesday to 1,441.83, while the Russell 2000 index of smaller companies rose 17.90, or 4.5 percent, to 412.48.
Advancing issues outnumbered decliners by about 6 to 1 on the New York Stock Exchange, where consolidated volume came to 7.09 billion shares, compared with Monday's 6.35 billion.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009, but that "there is a reasonable prospect" the recession will end this year.
He warned that a recovery will require getting credit and financial markets to operate normally, and that the government must continue working with ailing banks to bring them back to profitability. To the market's relief, though, the Fed chief said formally nationalizing the banks "just isn't necessary."
Traders were encouraged that the S&P 500 index has so far managed to stayed above its Nov. 21 trading low of 741.02. Investors searching for a recovery look for signs that market can test its lows from the worst of the credit crisis and then bounce higher.
Still, many analysts expect the market to remain volatile for the foreseeable future.
Rich Hughes, co-president of Portfolio Management Consultants in Los Angeles, said the market's rallies are likely to be based on hope or on rebounds from selloffs. He contends Wall Street still hasn't seen the wrenching decline that is often needed to scare investors from the market and set the ground for a lasting recovery.
"The underlying fundamentals just aren't there to support anything that's sustainable right now," Hughes said. "We haven't seen the capitulation that you'd want to see before you'd get thoroughly enthused."
The market's slide has been tough on long-term investors. A person who in 1997 put $50,000 in a fund that tracks the S&P 500 would now only have about $46,256.
Bond prices fell Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.80 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.29 percent.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose $1.52 to $39.96 per barrel on the New York Mercantile Exchange.
Home Depot posted a loss but the nation's largest home improvement retailer's results topped expectations when excluding costs for shutting four home-improvement brands. The stock rose $1.96, or 10.5 percent, to $20.67.
Target Corp. and Macy's Inc. said fiscal fourth-quarter earnings fell sharply as shoppers cut back on purchases. Office Depot Inc. posted a loss for the quarter. Target fell 60 cents to $27.83, while Macy's rose 89 cents, or 12 percent, to $8.29.
Two big drags on the Dow this year -- Citigroup and Bank of America Corp. -- regained ground Tuesday. Citigroup rose 46 cents, or 22 percent, to $2.60, and BofA rose 82 cents, or 21 percent, to $4.73.
Another bank in the Dow, JPMorgan Chase & Co., rose $1.51, or 7.74 percent, to $21.02 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to save $5 billion a year.
The only loser in the Dow Tuesday was Microsoft Corp., which dipped 4 cents to $17.17 after it reiterated its belief that the economic crisis will persist at least into the second half of 2009.
Stocks fell in Asia and Europe following Monday's drop on Wall Street. Japan's Nikkei stock average fell 1.5 percent, Britain's FTSE 100 fell 0.78 percent, Germany's DAX index fell 0.73 percent, and France's CAC-40 fell 0.73 percent.
Bernanke told Congress on Tuesday the recession might end this year, and that regulators aren't planning to nationalize banks. The news alleviated some of investors' worries about the economy and the banking industry, and lifted the Dow Jones industrial average and Standard & Poor's 500 index off their lowest levels since 1997.
And investors are hopeful that Tuesday night, Obama will provide specifics about his plans to stabilize the financial system and further stimulate the economy. Anticipation of his remarks helped drive beaten-down financial shares up sharply.
"There's growing optimism that Obama can deliver the details that the market is so desperately looking for in his speech," said Ryan Larson, senior equity trader at Voyageur Asset Management. If it gets those details, Larson added, the market's upward momentum could continue.
Stocks remain on shaky ground, however. Bernanke may have helped stem the market's slide Tuesday, but the market also found stability from temporary technical factors: bargain-hunting, the unwinding of short bets, and selling exhaustion after six straight down days for the S&P 500.
And though it appears the government is trying to quash the notion of bank nationalization, the Obama administration still has not demonstrated how exactly it will repair the banking system. The nation's financial system remains "zombie-like," said Nick Kalivas, vice president of financial research at the brokerage MF Global.
"We had an up day today, but nothing has really changed on that front," Kalivas said. "If nothing is articulated on that tonight, we're moving to the downside again."
The continued focus on the stability of the financial system comes a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.
The Dow rose 236.16, or 3.3 percent, to 7,350.94. On Monday, the major indexes tumbled more than 3 percent, including the Dow, which fell 251 points and hit its lowest close since May 7, 1997.
Broader stock indicators also rebounded Tuesday. The S&P 500 index rose 29.81, or 4 percent, to 773.14. On Monday, it logged its lowest finish since April 11, 1997.
The Nasdaq composite index rose 54.11, or 3.9 percent, Tuesday to 1,441.83, while the Russell 2000 index of smaller companies rose 17.90, or 4.5 percent, to 412.48.
Advancing issues outnumbered decliners by about 6 to 1 on the New York Stock Exchange, where consolidated volume came to 7.09 billion shares, compared with Monday's 6.35 billion.
In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009, but that "there is a reasonable prospect" the recession will end this year.
He warned that a recovery will require getting credit and financial markets to operate normally, and that the government must continue working with ailing banks to bring them back to profitability. To the market's relief, though, the Fed chief said formally nationalizing the banks "just isn't necessary."
Traders were encouraged that the S&P 500 index has so far managed to stayed above its Nov. 21 trading low of 741.02. Investors searching for a recovery look for signs that market can test its lows from the worst of the credit crisis and then bounce higher.
Still, many analysts expect the market to remain volatile for the foreseeable future.
Rich Hughes, co-president of Portfolio Management Consultants in Los Angeles, said the market's rallies are likely to be based on hope or on rebounds from selloffs. He contends Wall Street still hasn't seen the wrenching decline that is often needed to scare investors from the market and set the ground for a lasting recovery.
"The underlying fundamentals just aren't there to support anything that's sustainable right now," Hughes said. "We haven't seen the capitulation that you'd want to see before you'd get thoroughly enthused."
The market's slide has been tough on long-term investors. A person who in 1997 put $50,000 in a fund that tracks the S&P 500 would now only have about $46,256.
Bond prices fell Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.80 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.29 percent.
The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude rose $1.52 to $39.96 per barrel on the New York Mercantile Exchange.
Home Depot posted a loss but the nation's largest home improvement retailer's results topped expectations when excluding costs for shutting four home-improvement brands. The stock rose $1.96, or 10.5 percent, to $20.67.
Target Corp. and Macy's Inc. said fiscal fourth-quarter earnings fell sharply as shoppers cut back on purchases. Office Depot Inc. posted a loss for the quarter. Target fell 60 cents to $27.83, while Macy's rose 89 cents, or 12 percent, to $8.29.
Two big drags on the Dow this year -- Citigroup and Bank of America Corp. -- regained ground Tuesday. Citigroup rose 46 cents, or 22 percent, to $2.60, and BofA rose 82 cents, or 21 percent, to $4.73.
Another bank in the Dow, JPMorgan Chase & Co., rose $1.51, or 7.74 percent, to $21.02 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to save $5 billion a year.
The only loser in the Dow Tuesday was Microsoft Corp., which dipped 4 cents to $17.17 after it reiterated its belief that the economic crisis will persist at least into the second half of 2009.
Stocks fell in Asia and Europe following Monday's drop on Wall Street. Japan's Nikkei stock average fell 1.5 percent, Britain's FTSE 100 fell 0.78 percent, Germany's DAX index fell 0.73 percent, and France's CAC-40 fell 0.73 percent.
Market cuts early losses as govt lowers indirect taxes
Key benchmark indices jumped to trade in green for a brief period
and provisionally settled with small losses after the Indian
government on cut excise duties further and lowered service tax
rates in a move to protect the economy from the impact of the
global economic crisis. The BSE 30-share Sensex was provisionally
down 14.49 points, or 0.16%, recovering close to 210 points from
the day's low.
A bout of volatility was witnessed in the later part of the trading
session. The market slipped in mid-afternoon trade after the global
rating agency Standard & Poor's revised the outlook on the
long-term sovereign credit rating on India to negative from stable.
Just before the news of S&P cutting the outlook which hit the
market in mid-afternoon trade, a solid recovery was witnessed on
the domestic bourses
The BSE Sensex plunged as much as 2.53% in early trade on setback
in Asian stocks. The sharp sharp slide took it to the lowest level
in more than 2-1/2 months. It wiped out almost the entire losses at
about 13:50 IST just before the news of the S&P cutting the
outlook.
Government' announcement of the reductions in indirect taxes hit
the market in late trade and took the Sensex in green. However, the
barometer index slipped into the red again later
Finance Minister Pranab Mukherjee in his reply to a debate on the
2009/10 interim budget cut excise duty across the board to 8% from
10 %, and reduced the service tax rate to 10% from 12% on all
taxable services. Mukherjee also said excise duty cuts of 4%
unveiled earlier as part of a government stimulus package would be
extended into the new fiscal year. He also reduced the excise duty
on bulk cement to 8% and extended the exemption on customs cut on
naphtha beyond 31 March 2009.
Higher US index futures also supported domestic bourses. Trading in
the US index futures showed Dow could rise 24 points at the opening
bell on Tuesday, 24 February 2009. But sustained selling by foreign
institutional investors kept market sentiment edgy.
Meanwhile, S&P said the revision in rating outlook of India was due
to deterioration of the fiscal positions of the government to level
that is unsustainable in the medium term. S&P expects government
deficit, including off-budget measures such as oil and fertilizer
bonds, to increase to 11.4% in the fiscal year ending 31 March,
2009, from 5.7% in the previous fiscal year.
Standard & Poor's has, nonetheless, affirmed its 'BBB-' long-term
and 'A-3' short-term sovereign credit ratings on India.
Volatility is likely to remain high in the near term ahead of the
expiry of futures & options contracts for February 2009 series on
Thursday, 26 February 2009. As per reports, rollover of Nifty
positions from February 2009 series to March 2009 series stood at
40% while marketwide rollover of positions was 29%, as on Friday,
20 February 2009.
Heavy sales by foreign funds this year has hit market sentiment.
Foreign funds were sellers through most of last week. FII outflow
in February 2009 totaled Rs 1,180.70 crore (till 19 February 2009).
FII outflow in calendar year 2009 totaled Rs 5,425.90 crore (till
19 February 2009).
European stocks slipped on Tuesday, echoing sharp losses on Wall
Street and in Asia as lingering fears over the stability of the
banking sector rattled investors. The key benchmark indices in
France, Germany and UK fell by between 1.15% to 2.6%.
Asian shares slumped on Tuesday, some to multiyear lows, after a
broad sell-off on Wall Street left the Dow Jones Industrial Average
at levels not seen since 1997. Key benchmark indices in China,
Singapore, Taiwan, South Korea, Hong Kong fell by between 1.06% to
4.56%.
Japan's Nikkei stock average fell 1.46% dragged lower by exporters
such as Canon Inc.
Led by industrials and materials stocks, the US market fell on
recessionary fears and heightened risk aversion, which also drove
investors to the dollar. The Dow Jones industrial average dropped
250.89 points, or 3.41%, to 7,114.78, its lowest close since 7 May
1997. The Standard & Poor`s 500 index fell 26.72 points, or 3.47%,
to 743.33, lowest finish since 11 April 1997. The technology-laden
Nasdaq Composite index lost 53.51 points, or 3.71%, to 1,387.72.
Although US financial stocks actually rose on hopes that the
government will move soon to secure its most troubled banks, the
wider issue of the fragility of the US banking system remains to
the fore.
As per the provisional figures, the BSE 30-share Sensex was down
14.49 points, or 0.16%, to 8,828.72. At the day's high of 8,856.52
Sensex gained 13.31 points in late trade. At the day's low of
8,619.22, the Sensex lost 223.99 points in early trade and was the
lowest level for the Sensex since 3 December 2008.
The S&P CNX Nifty was down 5.10 points, or 0.19%, to 2,731.10.
The market breadth, indicating the overall health of the market,
was weak on BSE with 1,626 shares declining as compared with 818
that advanced. A total of 66 shares remained unchanged.
The BSE clocked a turnover of Rs 2,448 crore, lower than Rs
2,615.54 crore on Friday, 20 February 2009.
From the 30 share Sensex pack 17 stocks fell while rest gained.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) fell 0.02% to Rs 1,253.30 on
fears a worsening global economy will hit demand for
petrochemicals. Nevertheless, the stock came off the day's low of
Rs 1,201.10.
India's largest oil exploration firm by revenue ONGC rose 1.17% to
Rs 680.60 off day's low of Rs 656.25 on reports the company has
discovered oil in the hydrocarbon rich Krishna Godavari basin.
Auto stocks were mixed after the government cut excise duty
further. India's largest tractor maker by sales Mahindra & Mahindra
rose 4.92%. India's largest car maker by sales Maruti Suzuki India
rose 1.39%. But Tata Motors and Hero Honda Motor fell by between
1.23% to 2.02%.
Cement makers turned positive after the government cut excise duty
on bulk cement to 8% from 10%. ACC, Ultratech Cement, Grasim
Industries, Ambuja Cement rose by between 0.91% to 3.01%.
Banking stocks cut intraday losses on hopes the central bank would
cut rates to support faltering growth as inflation fell to its
lowest in more than 13 months in early February, dropping below 4%.
Bank stocks had slumped earlier in the day on fears of rising
defaults in a weakening economy and on overnight fall in American
Depository Receipts (ADRs). India's second largest private sector
bank by net profit HDFC Bank lost 1.16% to Rs 856.90, off the day's
low of Rs 835.10. Its ADR fell 4.31% on Monday, 23 February 2009.
India's largest private sector bank by net profit ICICI Bank
slipped 0.13% to Rs 335.50, off day's low of Rs 318.35. Life
Insurance Corporation of India has hiked its stake in ICICI Bank by
2.04% to 9.38%
India's largest bank in terms of assets and branch network State
Bank of India fell 1.75% to Rs 1,028.25, off the day's low of Rs
1,015.05. State Bank of India (SBI) on Friday, 20 February 2009,
capped interest rates on new auto loans at 10% for a year, sharply
down from the current 11.50%. Early this month, in a similar move,
SBI cut its home loan rate to 8% for a year. SBI will freeze
interest rates on new car loans taken between 23 February 2009 and
31 May 2009 for one year.
PSU bank stocks, Indian Overseas Bank, Union Bank of India, Bank of
Baroda, Bank of India fell by between 2.54% to 6.27%.
There are expectations that the Reserve Bank of India (RBI) will
cut interest rates further to support faltering growth. A sharp
fall in inflation has provided room for the central bank to cut
rates. The global financial sector crisis and recession in key
global economies have pushed economic growth in India down to a
six-year low. The Central Statistical Organisation (CSO) has pegged
India's projected GDP growth for the year ending March 2009 at
7.1%, the slowest in six years and below the previous year's 9%
rise.
Despite a steep cut in policy rates in India since October 2008,
there has not been a commensurate reduction in lending rates by
banks as fears of rising bad loans have made banks cautious in
increasing advances.
Metal stocks fell on worries a weakening domestic and global
economy will hit demand for metals. Tata Steel, Hindalco
Industries, Sterlite Indusries, Steel Authority of India fell by
between 0.64% to 4.46%.
IT pivotals recovered as lower rupee offset fears a weak global
economy would cut the amount firms spent on technology. India's
third largest software services exporter, Wipro slipped 1.44% to Rs
212.20 off the day's low of Rs 208.50. Its ADR fell 2.92% on
Monday, 23 February 2009. India's second largest software services
exporter Infosys Technologies rose 0.48% to Rs 1,184.10 off the
day's low of Rs 1,146.40. Its ADR fell 1.99% on Monday. India's
largest software services exporter by sales TCS slipped 1.57% to Rs
466.50 off the day's low of Rs 460.90.
The rupee fell on Tuesday as sharp falls in the global stock
markets raised concerns of more capital outflows from local shares.
The partially convertible rupee was at 49.89 per dollar weaker
compared to a closing of 49.72/74 per dollar on Friday. A weak
rupee boosts revenues of IT firms in rupee terms as IT companies
earn a lion's share of revenue from exports.
India's largest electric equipment maker by sales Bharat Heavy
Electricals was down 0.27% to Rs 1361.20, having recovered from the
session's low of Rs 1335, on bagging an order worth Rs 3150 crore.
and provisionally settled with small losses after the Indian
government on cut excise duties further and lowered service tax
rates in a move to protect the economy from the impact of the
global economic crisis. The BSE 30-share Sensex was provisionally
down 14.49 points, or 0.16%, recovering close to 210 points from
the day's low.
A bout of volatility was witnessed in the later part of the trading
session. The market slipped in mid-afternoon trade after the global
rating agency Standard & Poor's revised the outlook on the
long-term sovereign credit rating on India to negative from stable.
Just before the news of S&P cutting the outlook which hit the
market in mid-afternoon trade, a solid recovery was witnessed on
the domestic bourses
The BSE Sensex plunged as much as 2.53% in early trade on setback
in Asian stocks. The sharp sharp slide took it to the lowest level
in more than 2-1/2 months. It wiped out almost the entire losses at
about 13:50 IST just before the news of the S&P cutting the
outlook.
Government' announcement of the reductions in indirect taxes hit
the market in late trade and took the Sensex in green. However, the
barometer index slipped into the red again later
Finance Minister Pranab Mukherjee in his reply to a debate on the
2009/10 interim budget cut excise duty across the board to 8% from
10 %, and reduced the service tax rate to 10% from 12% on all
taxable services. Mukherjee also said excise duty cuts of 4%
unveiled earlier as part of a government stimulus package would be
extended into the new fiscal year. He also reduced the excise duty
on bulk cement to 8% and extended the exemption on customs cut on
naphtha beyond 31 March 2009.
Higher US index futures also supported domestic bourses. Trading in
the US index futures showed Dow could rise 24 points at the opening
bell on Tuesday, 24 February 2009. But sustained selling by foreign
institutional investors kept market sentiment edgy.
Meanwhile, S&P said the revision in rating outlook of India was due
to deterioration of the fiscal positions of the government to level
that is unsustainable in the medium term. S&P expects government
deficit, including off-budget measures such as oil and fertilizer
bonds, to increase to 11.4% in the fiscal year ending 31 March,
2009, from 5.7% in the previous fiscal year.
Standard & Poor's has, nonetheless, affirmed its 'BBB-' long-term
and 'A-3' short-term sovereign credit ratings on India.
Volatility is likely to remain high in the near term ahead of the
expiry of futures & options contracts for February 2009 series on
Thursday, 26 February 2009. As per reports, rollover of Nifty
positions from February 2009 series to March 2009 series stood at
40% while marketwide rollover of positions was 29%, as on Friday,
20 February 2009.
Heavy sales by foreign funds this year has hit market sentiment.
Foreign funds were sellers through most of last week. FII outflow
in February 2009 totaled Rs 1,180.70 crore (till 19 February 2009).
FII outflow in calendar year 2009 totaled Rs 5,425.90 crore (till
19 February 2009).
European stocks slipped on Tuesday, echoing sharp losses on Wall
Street and in Asia as lingering fears over the stability of the
banking sector rattled investors. The key benchmark indices in
France, Germany and UK fell by between 1.15% to 2.6%.
Asian shares slumped on Tuesday, some to multiyear lows, after a
broad sell-off on Wall Street left the Dow Jones Industrial Average
at levels not seen since 1997. Key benchmark indices in China,
Singapore, Taiwan, South Korea, Hong Kong fell by between 1.06% to
4.56%.
Japan's Nikkei stock average fell 1.46% dragged lower by exporters
such as Canon Inc.
Led by industrials and materials stocks, the US market fell on
recessionary fears and heightened risk aversion, which also drove
investors to the dollar. The Dow Jones industrial average dropped
250.89 points, or 3.41%, to 7,114.78, its lowest close since 7 May
1997. The Standard & Poor`s 500 index fell 26.72 points, or 3.47%,
to 743.33, lowest finish since 11 April 1997. The technology-laden
Nasdaq Composite index lost 53.51 points, or 3.71%, to 1,387.72.
Although US financial stocks actually rose on hopes that the
government will move soon to secure its most troubled banks, the
wider issue of the fragility of the US banking system remains to
the fore.
As per the provisional figures, the BSE 30-share Sensex was down
14.49 points, or 0.16%, to 8,828.72. At the day's high of 8,856.52
Sensex gained 13.31 points in late trade. At the day's low of
8,619.22, the Sensex lost 223.99 points in early trade and was the
lowest level for the Sensex since 3 December 2008.
The S&P CNX Nifty was down 5.10 points, or 0.19%, to 2,731.10.
The market breadth, indicating the overall health of the market,
was weak on BSE with 1,626 shares declining as compared with 818
that advanced. A total of 66 shares remained unchanged.
The BSE clocked a turnover of Rs 2,448 crore, lower than Rs
2,615.54 crore on Friday, 20 February 2009.
From the 30 share Sensex pack 17 stocks fell while rest gained.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) fell 0.02% to Rs 1,253.30 on
fears a worsening global economy will hit demand for
petrochemicals. Nevertheless, the stock came off the day's low of
Rs 1,201.10.
India's largest oil exploration firm by revenue ONGC rose 1.17% to
Rs 680.60 off day's low of Rs 656.25 on reports the company has
discovered oil in the hydrocarbon rich Krishna Godavari basin.
Auto stocks were mixed after the government cut excise duty
further. India's largest tractor maker by sales Mahindra & Mahindra
rose 4.92%. India's largest car maker by sales Maruti Suzuki India
rose 1.39%. But Tata Motors and Hero Honda Motor fell by between
1.23% to 2.02%.
Cement makers turned positive after the government cut excise duty
on bulk cement to 8% from 10%. ACC, Ultratech Cement, Grasim
Industries, Ambuja Cement rose by between 0.91% to 3.01%.
Banking stocks cut intraday losses on hopes the central bank would
cut rates to support faltering growth as inflation fell to its
lowest in more than 13 months in early February, dropping below 4%.
Bank stocks had slumped earlier in the day on fears of rising
defaults in a weakening economy and on overnight fall in American
Depository Receipts (ADRs). India's second largest private sector
bank by net profit HDFC Bank lost 1.16% to Rs 856.90, off the day's
low of Rs 835.10. Its ADR fell 4.31% on Monday, 23 February 2009.
India's largest private sector bank by net profit ICICI Bank
slipped 0.13% to Rs 335.50, off day's low of Rs 318.35. Life
Insurance Corporation of India has hiked its stake in ICICI Bank by
2.04% to 9.38%
India's largest bank in terms of assets and branch network State
Bank of India fell 1.75% to Rs 1,028.25, off the day's low of Rs
1,015.05. State Bank of India (SBI) on Friday, 20 February 2009,
capped interest rates on new auto loans at 10% for a year, sharply
down from the current 11.50%. Early this month, in a similar move,
SBI cut its home loan rate to 8% for a year. SBI will freeze
interest rates on new car loans taken between 23 February 2009 and
31 May 2009 for one year.
PSU bank stocks, Indian Overseas Bank, Union Bank of India, Bank of
Baroda, Bank of India fell by between 2.54% to 6.27%.
There are expectations that the Reserve Bank of India (RBI) will
cut interest rates further to support faltering growth. A sharp
fall in inflation has provided room for the central bank to cut
rates. The global financial sector crisis and recession in key
global economies have pushed economic growth in India down to a
six-year low. The Central Statistical Organisation (CSO) has pegged
India's projected GDP growth for the year ending March 2009 at
7.1%, the slowest in six years and below the previous year's 9%
rise.
Despite a steep cut in policy rates in India since October 2008,
there has not been a commensurate reduction in lending rates by
banks as fears of rising bad loans have made banks cautious in
increasing advances.
Metal stocks fell on worries a weakening domestic and global
economy will hit demand for metals. Tata Steel, Hindalco
Industries, Sterlite Indusries, Steel Authority of India fell by
between 0.64% to 4.46%.
IT pivotals recovered as lower rupee offset fears a weak global
economy would cut the amount firms spent on technology. India's
third largest software services exporter, Wipro slipped 1.44% to Rs
212.20 off the day's low of Rs 208.50. Its ADR fell 2.92% on
Monday, 23 February 2009. India's second largest software services
exporter Infosys Technologies rose 0.48% to Rs 1,184.10 off the
day's low of Rs 1,146.40. Its ADR fell 1.99% on Monday. India's
largest software services exporter by sales TCS slipped 1.57% to Rs
466.50 off the day's low of Rs 460.90.
The rupee fell on Tuesday as sharp falls in the global stock
markets raised concerns of more capital outflows from local shares.
The partially convertible rupee was at 49.89 per dollar weaker
compared to a closing of 49.72/74 per dollar on Friday. A weak
rupee boosts revenues of IT firms in rupee terms as IT companies
earn a lion's share of revenue from exports.
India's largest electric equipment maker by sales Bharat Heavy
Electricals was down 0.27% to Rs 1361.20, having recovered from the
session's low of Rs 1335, on bagging an order worth Rs 3150 crore.
Monday, February 23, 2009
Sensex falls below 9,000 on weak global stocks
Weak global markets pulled the domestic bourses lower with the
barometer index BSE Sensex falling below the psychologically
important 9,000 level. Nevertheless, a late recovery helped cut the
market cut steep intraday losses. The Sensex lost 199.42 points, or
2.21% at 8,843.21, off 80.13 points from the day's low.
Weak European bourses, lower US index futures and sustained selling
pressure by foreign institutional investors (FIIs), whose outflow
in calendar year 2009 has totaled Rs 5094.30 crore (till 18
February 2009), weighed on the sentiment. According to provisional
data on NSE, FIIs were net sellers worth Rs 363.48 crore while
mutual funds bought shares worth Rs 108.44 crore on Thursday, 19
February 2009.
The market opened on a weak note on weak global markets. An
intermittent recovery from lower level was witnessed during the
day. The recovery from lower level in early afternoon trade was
triggered by Finance Minister Pranab Mukherjee's comments that the
government will provide additional resources to stimulate demand
and provide more help to key sectors such as housing,
infrastructure and real estate. However, the intraday recovery
proved short-lived as the market came off the higher level later.
A sell-off gripped the market in mid-afternoon trade as European
markets, which opened after Indian markets, declined sharply in
early trade. At the day's low of 8763.08, the Sensex shed 3.09% in
mid-afternoon trade. After the sharp slide, the market immediately
witnessed a rebound from lower level as the finance minister's
statement raised hopes for more measures from the government for
the economy. Rate cut hopes also aided the intraday rebound in late
trade.
The government has so far announced two stimulus packages including
tax cuts and the capital injections for banks to shield the
domestic economy from the impact of the global financial sector
crisis and recession in key global economies.
Meanwhile Commerce minister Kamal Nath is likely to announce an
export booster package later this month which would address some of
the crucial concerns of the exporters. The sops under consideration
include simplification of rules for service tax refund, extension
of time given to exporters to meet export obligation and an
increase in rates of input duty reimbursement schemes like drawback
and DEPB for some sectors.
Global cues were weak. Trading in US index futures showed the Dow
could fall 130 points at the opening bell on Friday, 20 February
2009. European shares fell sharply on Friday, 20 February 2009,
with banks the worst performers, as investors continued to fret
about the outlook for the global economy. Key benchmark indices in
UK, Germany and France were down by between 2.38% and 3.08%.
Asian markets declined today, 20 February 2009, after Wall Street
tumbled to six-year low on Thursday, 19 February 2009, as a gloomy
US unemployment data reinforced fears the world's largest economy
is in a severe slump. Key benchmark indices in Hong Kong, Japan,
Singapore, South Korea and Taiwan were down by between 2.03% and
3.72%. However, China's Shanghai Composite rose 1.54%.
US markets tumbled on Thursday, 19 February 2009 on mounting
concerns about the fate of major banks and signs that the recession
is deepening, pushing the Dow to its lowest level in more than six
years. The Dow Jones industrial average lost 89.68 points, or
1.19%, at 7,465.95. The Standard & Poor's 500 Index fell 9.48
points, or 1.2%, at 778.94. The Nasdaq Composite index shed 25.15
points, or 1.71%, at 1,442.82.
US government data showed a record number of continuing
unemployment claims, at nearly 5 million, and a surprisingly sharp
drop in manufacturing in the mid-Atlantic states.
The BSE 30-share Sensex lost down 199.42 points or 2.21% at
8,843.21. The Sensex opened 98.85 points lower at 8,943.78, also
its day's high. At the day's low of 8,763.08, the Sensex lost
279.55 points in mid-afternoon trade.
The S&P CNX Nifty lost 52.90 points or 1.9% to 2736.45. Nifty
February 2009 futures were at 2722, a discount of 14.45 points as
compared to the spot closing.
The barometer index BSE Sensex is down 804.10 points or 8.33% in
calendar 2009 from its close of 9,647.31 on 31 December 2008. The
Sensex currently trades at a PE multiple of 10.19 based on
projected earnings per share (EPS) of about Rs 867 for the
30-Sensex firms in the year ending March 2010.
The market breadth, indicating the overall health of the market,
was weak on BSE with 1631 shares declining as compared with 793
that advanced. A total of 88 shares remained unchanged.
BSE clocked a turnover of Rs 2591 crore, lower than Rs 2,428.97
crore on Thursday, 19 February 2009. Turnover in NSE's futures &
options jumped to Rs 43149.65 crore compared with Rs 30637.67 crore
on Thursday, 19 February 2009.
All the sectoral indices on BSE were in the red. The BSE Power
index (down 1.41%), the BSE Auto index (down 1.11%), the BSE PSU
index (down 1.56%), BSE Consumer Durables index (down 1.09%), BSE
Realty index (down 1.93%), the BSE Capital Goods index (down
1.95%), and the FMCG index (down 0.28%), BSE Healthcare index (down
1.12%), BSE Oil & Gas index (down 2.17%), outperfomed the Sensex.
The BSE TECk index fell 2.21%, in line with Sensex's fall.
The BSE IT index (down 2.69%), BSE Bankex (down 3.49%), and BSE
Metal index (down 2.67%), underperformed the Sensex.
Among the 30-share Sensex pack 26 declined while only 4 of them
managed gains. DLF (up 0.74%), ACC (up 0.66%), and Maruti Suzuki
India (up 0.55%), gained from the Sensex pack.
Banking stocks were hard hit as fears of rising defaults in a
weakening economy and overnight fall in American Depository
Receipts (ADRs), offset hopes of rate cuts from the Reserve Bank of
India (RBI). India's largest private sector bank by net profit
ICICI Bank plunged 7.03% to Rs 336.10 on a 1.36% fall in its ADR on
Thursday, 19 February 2009. It was the top loser from the Sensex
pack.
India's second largest private sector bank by net profit HDFC Bank
lost 2.12% to Rs 866.10 as its ADR fell 0.26% on Thursday, 19
February 2009. After market hours on 19 February 2009, the bank on
a private placement basis issued unsecured, non-convertible,
redeemable subordinated bonds in the nature of debentures towards
tier - II capital as with upper tier - II bonds for an amount
aggregating Rs 200 crore and lower tier - II bonds for an amount
aggregating Rs 150 crore.
India's largest bank in terms of assets and branch network State
Bank of India shed 0.73% to Rs 1051.80
India's largest dedicated housing finance company by total income
Housing Development Finance Corporation dropped 2.35% to Rs 1359.90
as the company expects 2009/10 loan growth at about 20%, slightly
lower than the previous year's rise, as property demand falls.
Inflation rose at the lowest level in 13-months at 3.92% in the
year through 7 February 2009, much lower than previous week's
annual rise of 4.39%, data released by the government on Thursday,
19 February 2009, showed. Falling inflation provides room for the
Reserve Bank of India (RBI) to cut interest rates further to shield
the domestic economy from the global financial sector crisis and
recession in key global economies.
Only on Wednesday, 18 February 2009, the Reserve Bank of India
Governor D Subbarao said that there is room to cut interest rates
further. The statement comes at a time when the market is expecting
further action from the central bank.
Market men see a bigger role for RBI to shield the domestic economy
from the global financial sector crisis and recession in key global
economies in the coming months as election code will be in force by
the end of the month which means that there cannon be any policy
action from the government.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) shed 2.99% to Rs 1255 on
fears a worsening global economy will hit demand for
petrochemicals. Nevertheless the stock recovered from day's low of
Rs 1241.30.
India's second largest cellular services provider by sales Reliance
Communications (RCom) slumped 4.36% to Rs 155.60 on reports the
government on Thursday, 19 February 2009 reportedly informed the
Parliament that it will do a special audit on the books of RCom and
its subsidiaries over allegations that the telecommunications
company had diverted revenues earned from its mobile services to a
subsidiary to bring down the total amount it had to pay to the
government as licence fee and spectrum charge.
India's largest private sector power generation firm by sales
Reliance Infrastructure slipped 3.04% to Rs 493.05. The finance
ministry late evening on 18 February 2009 reportedly told
Parliament that companies Reliance Infrastructure and Reliance
Petroleum were being investigated for alleged violation of norms
governing insider trading and overseas borrowings, respectively.
Reliance Petroleum fell 2.01% to Rs 78.10
IT shares declined after research firm Gartner warned of an
unprecedented deceleration in IT spending across markets and
geographic regions in 2009, after its annual global survey of Chief
information officer (CIOs).
India's third largest software services exporter, Wipro slipped
2.16% to Rs 215.60 despite a 1.12% rise in ADR on Thursday, 19
February 2009. India's second largest software services exporter
Infosys Technologies lost 2.33% to Rs 1180 as its ADR fell 1.71% on
Thursday, 19 February 2009. India's largest software services
exporter by sales TCS slipped 3.01% to Rs 475 and India's fifth
largest IT exporter by sales HCL Technologies declined 5.08% to Rs
103.60.
Shares of computer hardware firms HCL Infosystems (down 2.50%),
Moser Baer India (down 5.08%), CMC (down 1.07%), Tata Elxsi (down
1.85%), declined.
Overall, the total IT market globally is expected to grow by only
0.5% in 2009, the Gartner report added.
Educomp Solutions tumbled 11.86% to Rs 1776.60 on reports the
market regulator Securities & Exchange Board of India (Sebi) is
probing the dealings in the shares of education software firm on
bourses.
IT shares fell despite a weak rupee. Indian rupee slipped today on
concerns of capital outflows following decline in global markets.
The partially convertible rupee was at 49.86/88 per dollar against
previous close of 49.62. A weaker rupee boosts operating margins of
IT firms which earn a lion's share of revenue from exports.
Rate sensitive real estate shares rebounded in late trade on hopes
lower rates will spur housing demand. India's largest realty
developer by market capitalisation DLF rose 0.74% to Rs 157.50, off
day's low of Rs 147.50. Foreign brokerage Goldman Sachs in its
recent research report lowered DLF's 12-month target price to Rs
124 post weak Q3 December 2008 results.
Unitech (down 1.40% to Rs 28.20, from day's low of Rs 27.60), HDIL
(down 2.15% to Rs 77.60 after touching day's low of Rs76.50), and
Indiabulls Real Estate (down 3.97% to Rs 93.20 after hitting day's
low of Rs 92.50), fell.
India's largest engineering and construction firm by sales Larsen &
Toubro fell 2.47% to Rs 624.80 after its chief A M Naik said it
will decide on Satyam deal after evaluating the Company Law Board's
order on the bidding process for the fraud-hit IT firm. L&T is the
single largest shareholder in Satyam with a 12% stake.
India's largest power equipment maker by sales Bharat Heavy
Electrical (Bhel) fell 0.58% to Rs 1374.25, off sharply from day's
low of Rs 1347.10. The early fall came on reports quoting Chairman
K. Ravi Kumar said the company expects profit growth to slow to 10%
in the year ending March 2009 on higher raw material costs and
wages, compared with 18% in March 2008.
ABB rose 1.82% to Rs 400.35 after the company reported higher than
expected net profit in the year ended December 2008. ABB's net
profit rose 11.3% to Rs 547.41 crore on a 16.1% increase in total
income to Rs 6967.45 crore in the year ended December 2008 over
December 2007. The company has recommended a dividend of Rs 2.20
per share of face value Rs 2 each for the year ended on December
2008.
Metal stocks fell on worries a weakening domestic and global
economy will hit demand for metals. India's largest copper maker by
sales Sterlite Industries India (down 3.02% to Rs 248.75), Sail
(down 2.50%), Sesa Goa (down 6.22%), Nalco (down 2.02%), declined.
India's largest private sector steel maker by sales Tata Steel
dropped 2.44%
India's largest private sector aluminium maker by sales Hindalco
Industries fell 1.50% to Rs 39.50. As per recent reports, the
company plans to raise Rs 25000 crore by pledging assets and future
earnings of its units.
Auto stocks fell on profit booking after a recent rise. The BSE
Auto index was down 1.11% to 2,544.47 today, 20 February 2009. The
BSE Auto index rose 2.15% in one month to 19 February 2009.
Tata Motors (down 0.45%), Mahindra & Mahindra (down 3.62%), Hero
Honda Motors (down 1.81%) declined. However Bajaj Auto (up 0.76%)
and Maruti Suzuki India (up 0.55%), rebounded from day's low.
FMCG shares were mixed, outperforming the Sensex, on defensive
buying. Hindustan Unilever (down 0.22%), Britannia Industries (down
0.28%), ITC (down 0.03%), United Spirits (down 1.38%), and Nestle
India (down 0.26%), declined. Some FMCG shares Dabur India (up
0.11%), Tata Tea (up 4.36%) and Marico Industries (up 0.60%) rose
Educomp Solutions was the top traded counter on BSE with turnover
of Rs 293.70 crore followed by Reliance Industries (Rs 170.30
crore), United Spirits (Rs 153.30 crore), ICICI Bank (Rs 127 crore)
and State Bank of India (Rs 92 crore).
Satyam Computer Services topped volumes chart on BSE clocking
volumes of 1.44 crore shares followed by Firstsource Solutions
(80.20 lakh shares), Wire & Wireless India (76.67 lakh shares),
Unitech (74.40 lakh shares) and Spice Communications (65.67 lakh
shares).
Great Eastern Shipping Company climbed 2.56% to Rs 172.05 as Baltic
Exchange's chief sea freight index Baltic Dry Index which tracks
rates to ship dry commodities, hit a four-month high on Thursday,
19 February 2009.
barometer index BSE Sensex falling below the psychologically
important 9,000 level. Nevertheless, a late recovery helped cut the
market cut steep intraday losses. The Sensex lost 199.42 points, or
2.21% at 8,843.21, off 80.13 points from the day's low.
Weak European bourses, lower US index futures and sustained selling
pressure by foreign institutional investors (FIIs), whose outflow
in calendar year 2009 has totaled Rs 5094.30 crore (till 18
February 2009), weighed on the sentiment. According to provisional
data on NSE, FIIs were net sellers worth Rs 363.48 crore while
mutual funds bought shares worth Rs 108.44 crore on Thursday, 19
February 2009.
The market opened on a weak note on weak global markets. An
intermittent recovery from lower level was witnessed during the
day. The recovery from lower level in early afternoon trade was
triggered by Finance Minister Pranab Mukherjee's comments that the
government will provide additional resources to stimulate demand
and provide more help to key sectors such as housing,
infrastructure and real estate. However, the intraday recovery
proved short-lived as the market came off the higher level later.
A sell-off gripped the market in mid-afternoon trade as European
markets, which opened after Indian markets, declined sharply in
early trade. At the day's low of 8763.08, the Sensex shed 3.09% in
mid-afternoon trade. After the sharp slide, the market immediately
witnessed a rebound from lower level as the finance minister's
statement raised hopes for more measures from the government for
the economy. Rate cut hopes also aided the intraday rebound in late
trade.
The government has so far announced two stimulus packages including
tax cuts and the capital injections for banks to shield the
domestic economy from the impact of the global financial sector
crisis and recession in key global economies.
Meanwhile Commerce minister Kamal Nath is likely to announce an
export booster package later this month which would address some of
the crucial concerns of the exporters. The sops under consideration
include simplification of rules for service tax refund, extension
of time given to exporters to meet export obligation and an
increase in rates of input duty reimbursement schemes like drawback
and DEPB for some sectors.
Global cues were weak. Trading in US index futures showed the Dow
could fall 130 points at the opening bell on Friday, 20 February
2009. European shares fell sharply on Friday, 20 February 2009,
with banks the worst performers, as investors continued to fret
about the outlook for the global economy. Key benchmark indices in
UK, Germany and France were down by between 2.38% and 3.08%.
Asian markets declined today, 20 February 2009, after Wall Street
tumbled to six-year low on Thursday, 19 February 2009, as a gloomy
US unemployment data reinforced fears the world's largest economy
is in a severe slump. Key benchmark indices in Hong Kong, Japan,
Singapore, South Korea and Taiwan were down by between 2.03% and
3.72%. However, China's Shanghai Composite rose 1.54%.
US markets tumbled on Thursday, 19 February 2009 on mounting
concerns about the fate of major banks and signs that the recession
is deepening, pushing the Dow to its lowest level in more than six
years. The Dow Jones industrial average lost 89.68 points, or
1.19%, at 7,465.95. The Standard & Poor's 500 Index fell 9.48
points, or 1.2%, at 778.94. The Nasdaq Composite index shed 25.15
points, or 1.71%, at 1,442.82.
US government data showed a record number of continuing
unemployment claims, at nearly 5 million, and a surprisingly sharp
drop in manufacturing in the mid-Atlantic states.
The BSE 30-share Sensex lost down 199.42 points or 2.21% at
8,843.21. The Sensex opened 98.85 points lower at 8,943.78, also
its day's high. At the day's low of 8,763.08, the Sensex lost
279.55 points in mid-afternoon trade.
The S&P CNX Nifty lost 52.90 points or 1.9% to 2736.45. Nifty
February 2009 futures were at 2722, a discount of 14.45 points as
compared to the spot closing.
The barometer index BSE Sensex is down 804.10 points or 8.33% in
calendar 2009 from its close of 9,647.31 on 31 December 2008. The
Sensex currently trades at a PE multiple of 10.19 based on
projected earnings per share (EPS) of about Rs 867 for the
30-Sensex firms in the year ending March 2010.
The market breadth, indicating the overall health of the market,
was weak on BSE with 1631 shares declining as compared with 793
that advanced. A total of 88 shares remained unchanged.
BSE clocked a turnover of Rs 2591 crore, lower than Rs 2,428.97
crore on Thursday, 19 February 2009. Turnover in NSE's futures &
options jumped to Rs 43149.65 crore compared with Rs 30637.67 crore
on Thursday, 19 February 2009.
All the sectoral indices on BSE were in the red. The BSE Power
index (down 1.41%), the BSE Auto index (down 1.11%), the BSE PSU
index (down 1.56%), BSE Consumer Durables index (down 1.09%), BSE
Realty index (down 1.93%), the BSE Capital Goods index (down
1.95%), and the FMCG index (down 0.28%), BSE Healthcare index (down
1.12%), BSE Oil & Gas index (down 2.17%), outperfomed the Sensex.
The BSE TECk index fell 2.21%, in line with Sensex's fall.
The BSE IT index (down 2.69%), BSE Bankex (down 3.49%), and BSE
Metal index (down 2.67%), underperformed the Sensex.
Among the 30-share Sensex pack 26 declined while only 4 of them
managed gains. DLF (up 0.74%), ACC (up 0.66%), and Maruti Suzuki
India (up 0.55%), gained from the Sensex pack.
Banking stocks were hard hit as fears of rising defaults in a
weakening economy and overnight fall in American Depository
Receipts (ADRs), offset hopes of rate cuts from the Reserve Bank of
India (RBI). India's largest private sector bank by net profit
ICICI Bank plunged 7.03% to Rs 336.10 on a 1.36% fall in its ADR on
Thursday, 19 February 2009. It was the top loser from the Sensex
pack.
India's second largest private sector bank by net profit HDFC Bank
lost 2.12% to Rs 866.10 as its ADR fell 0.26% on Thursday, 19
February 2009. After market hours on 19 February 2009, the bank on
a private placement basis issued unsecured, non-convertible,
redeemable subordinated bonds in the nature of debentures towards
tier - II capital as with upper tier - II bonds for an amount
aggregating Rs 200 crore and lower tier - II bonds for an amount
aggregating Rs 150 crore.
India's largest bank in terms of assets and branch network State
Bank of India shed 0.73% to Rs 1051.80
India's largest dedicated housing finance company by total income
Housing Development Finance Corporation dropped 2.35% to Rs 1359.90
as the company expects 2009/10 loan growth at about 20%, slightly
lower than the previous year's rise, as property demand falls.
Inflation rose at the lowest level in 13-months at 3.92% in the
year through 7 February 2009, much lower than previous week's
annual rise of 4.39%, data released by the government on Thursday,
19 February 2009, showed. Falling inflation provides room for the
Reserve Bank of India (RBI) to cut interest rates further to shield
the domestic economy from the global financial sector crisis and
recession in key global economies.
Only on Wednesday, 18 February 2009, the Reserve Bank of India
Governor D Subbarao said that there is room to cut interest rates
further. The statement comes at a time when the market is expecting
further action from the central bank.
Market men see a bigger role for RBI to shield the domestic economy
from the global financial sector crisis and recession in key global
economies in the coming months as election code will be in force by
the end of the month which means that there cannon be any policy
action from the government.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) shed 2.99% to Rs 1255 on
fears a worsening global economy will hit demand for
petrochemicals. Nevertheless the stock recovered from day's low of
Rs 1241.30.
India's second largest cellular services provider by sales Reliance
Communications (RCom) slumped 4.36% to Rs 155.60 on reports the
government on Thursday, 19 February 2009 reportedly informed the
Parliament that it will do a special audit on the books of RCom and
its subsidiaries over allegations that the telecommunications
company had diverted revenues earned from its mobile services to a
subsidiary to bring down the total amount it had to pay to the
government as licence fee and spectrum charge.
India's largest private sector power generation firm by sales
Reliance Infrastructure slipped 3.04% to Rs 493.05. The finance
ministry late evening on 18 February 2009 reportedly told
Parliament that companies Reliance Infrastructure and Reliance
Petroleum were being investigated for alleged violation of norms
governing insider trading and overseas borrowings, respectively.
Reliance Petroleum fell 2.01% to Rs 78.10
IT shares declined after research firm Gartner warned of an
unprecedented deceleration in IT spending across markets and
geographic regions in 2009, after its annual global survey of Chief
information officer (CIOs).
India's third largest software services exporter, Wipro slipped
2.16% to Rs 215.60 despite a 1.12% rise in ADR on Thursday, 19
February 2009. India's second largest software services exporter
Infosys Technologies lost 2.33% to Rs 1180 as its ADR fell 1.71% on
Thursday, 19 February 2009. India's largest software services
exporter by sales TCS slipped 3.01% to Rs 475 and India's fifth
largest IT exporter by sales HCL Technologies declined 5.08% to Rs
103.60.
Shares of computer hardware firms HCL Infosystems (down 2.50%),
Moser Baer India (down 5.08%), CMC (down 1.07%), Tata Elxsi (down
1.85%), declined.
Overall, the total IT market globally is expected to grow by only
0.5% in 2009, the Gartner report added.
Educomp Solutions tumbled 11.86% to Rs 1776.60 on reports the
market regulator Securities & Exchange Board of India (Sebi) is
probing the dealings in the shares of education software firm on
bourses.
IT shares fell despite a weak rupee. Indian rupee slipped today on
concerns of capital outflows following decline in global markets.
The partially convertible rupee was at 49.86/88 per dollar against
previous close of 49.62. A weaker rupee boosts operating margins of
IT firms which earn a lion's share of revenue from exports.
Rate sensitive real estate shares rebounded in late trade on hopes
lower rates will spur housing demand. India's largest realty
developer by market capitalisation DLF rose 0.74% to Rs 157.50, off
day's low of Rs 147.50. Foreign brokerage Goldman Sachs in its
recent research report lowered DLF's 12-month target price to Rs
124 post weak Q3 December 2008 results.
Unitech (down 1.40% to Rs 28.20, from day's low of Rs 27.60), HDIL
(down 2.15% to Rs 77.60 after touching day's low of Rs76.50), and
Indiabulls Real Estate (down 3.97% to Rs 93.20 after hitting day's
low of Rs 92.50), fell.
India's largest engineering and construction firm by sales Larsen &
Toubro fell 2.47% to Rs 624.80 after its chief A M Naik said it
will decide on Satyam deal after evaluating the Company Law Board's
order on the bidding process for the fraud-hit IT firm. L&T is the
single largest shareholder in Satyam with a 12% stake.
India's largest power equipment maker by sales Bharat Heavy
Electrical (Bhel) fell 0.58% to Rs 1374.25, off sharply from day's
low of Rs 1347.10. The early fall came on reports quoting Chairman
K. Ravi Kumar said the company expects profit growth to slow to 10%
in the year ending March 2009 on higher raw material costs and
wages, compared with 18% in March 2008.
ABB rose 1.82% to Rs 400.35 after the company reported higher than
expected net profit in the year ended December 2008. ABB's net
profit rose 11.3% to Rs 547.41 crore on a 16.1% increase in total
income to Rs 6967.45 crore in the year ended December 2008 over
December 2007. The company has recommended a dividend of Rs 2.20
per share of face value Rs 2 each for the year ended on December
2008.
Metal stocks fell on worries a weakening domestic and global
economy will hit demand for metals. India's largest copper maker by
sales Sterlite Industries India (down 3.02% to Rs 248.75), Sail
(down 2.50%), Sesa Goa (down 6.22%), Nalco (down 2.02%), declined.
India's largest private sector steel maker by sales Tata Steel
dropped 2.44%
India's largest private sector aluminium maker by sales Hindalco
Industries fell 1.50% to Rs 39.50. As per recent reports, the
company plans to raise Rs 25000 crore by pledging assets and future
earnings of its units.
Auto stocks fell on profit booking after a recent rise. The BSE
Auto index was down 1.11% to 2,544.47 today, 20 February 2009. The
BSE Auto index rose 2.15% in one month to 19 February 2009.
Tata Motors (down 0.45%), Mahindra & Mahindra (down 3.62%), Hero
Honda Motors (down 1.81%) declined. However Bajaj Auto (up 0.76%)
and Maruti Suzuki India (up 0.55%), rebounded from day's low.
FMCG shares were mixed, outperforming the Sensex, on defensive
buying. Hindustan Unilever (down 0.22%), Britannia Industries (down
0.28%), ITC (down 0.03%), United Spirits (down 1.38%), and Nestle
India (down 0.26%), declined. Some FMCG shares Dabur India (up
0.11%), Tata Tea (up 4.36%) and Marico Industries (up 0.60%) rose
Educomp Solutions was the top traded counter on BSE with turnover
of Rs 293.70 crore followed by Reliance Industries (Rs 170.30
crore), United Spirits (Rs 153.30 crore), ICICI Bank (Rs 127 crore)
and State Bank of India (Rs 92 crore).
Satyam Computer Services topped volumes chart on BSE clocking
volumes of 1.44 crore shares followed by Firstsource Solutions
(80.20 lakh shares), Wire & Wireless India (76.67 lakh shares),
Unitech (74.40 lakh shares) and Spice Communications (65.67 lakh
shares).
Great Eastern Shipping Company climbed 2.56% to Rs 172.05 as Baltic
Exchange's chief sea freight index Baltic Dry Index which tracks
rates to ship dry commodities, hit a four-month high on Thursday,
19 February 2009.
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