The Federal Reserve, European
Central Bank and four other central banks announced cut in interest
rates in an unprecedented, emergency coordinated bid to ease the
economic effects of the financial crisis. The Fed cut its benchmark
rate by a half point to 1.5%.
Wednesday, October 8, 2008
Pre Market Report 08/10/2008
A fresh setback in global markets will result in a further fall on the domestic bourses today, 8 October 2008. Investors are unlikely to build large positions as the market remains closed tomorrow, 9 October 2008, on account of Dasara. Some of the equipment makers for the nuclear power plants may rise on reports India and United States are likely to sing the civilian nuclear deal on Friday, 10 October 2008.
US stocks plunged on Tuesday, 7 October 2008, amid escalating worries about credit markets and the financial sector. The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years. Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors.
Key benchmark indices in Asia were down by between 2.9% to 5.7% today, 8 October 2008, even as central banks across Asia stepped up to offer more support to commercial banks on to try to ease painful pressure on funding costs from a vicious global credit squeeze.. The troubles that started with an overheated housing market in the US have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers.
Back home, after Monday's (6 October 2008) heavy slide, the market witnessed highly choppy trade on Tuesday, 7 October 2008. While the 30-share BSE Sensex slid 106.46 points, the S&P CNX Nifty rose 4.25 points.
Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 39159.10 crore in calendar year 2008 (till 6 October 2008).
As per provisional data released by the stock exchanges, foreign funds sold worth a net Rs 680.42 crore on Tuesday, 7 October 2008. Domestic funds bought shares worth a net Rs 548.29 crore.
Meanwhile, with the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India. However, there is no data available on the quantum of hedge funds' investment in India.
The barometer index is down 8,591.75 points or 42.35% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,511.53 points or 44.85% below its all-time high of 21,206.77 struck on 10 January 2008.
Meanwhile, as per reports, United States and India plan to sign a potentially lucrative agreement on Friday, 10 October 2008, to open up nuclear trade between the two countries for the first time in three decades. The pact will provide India with access to US nuclear fuel, reactors and technology, overturning a ban on such trade instituted after India first conducted a nuclear test in 1974.
US stocks plunged on Tuesday, 7 October 2008, amid escalating worries about credit markets and the financial sector. The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years. Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors.
Key benchmark indices in Asia were down by between 2.9% to 5.7% today, 8 October 2008, even as central banks across Asia stepped up to offer more support to commercial banks on to try to ease painful pressure on funding costs from a vicious global credit squeeze.. The troubles that started with an overheated housing market in the US have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers.
Back home, after Monday's (6 October 2008) heavy slide, the market witnessed highly choppy trade on Tuesday, 7 October 2008. While the 30-share BSE Sensex slid 106.46 points, the S&P CNX Nifty rose 4.25 points.
Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 39159.10 crore in calendar year 2008 (till 6 October 2008).
As per provisional data released by the stock exchanges, foreign funds sold worth a net Rs 680.42 crore on Tuesday, 7 October 2008. Domestic funds bought shares worth a net Rs 548.29 crore.
Meanwhile, with the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India. However, there is no data available on the quantum of hedge funds' investment in India.
The barometer index is down 8,591.75 points or 42.35% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,511.53 points or 44.85% below its all-time high of 21,206.77 struck on 10 January 2008.
Meanwhile, as per reports, United States and India plan to sign a potentially lucrative agreement on Friday, 10 October 2008, to open up nuclear trade between the two countries for the first time in three decades. The pact will provide India with access to US nuclear fuel, reactors and technology, overturning a ban on such trade instituted after India first conducted a nuclear test in 1974.
Fed makes emergency move to lend directly to companies; Bernanke hints at rate cuts soon
WASHINGTON (AP) -- Frantically trying to stop the bleeding on Wall Street, the Federal Reserve took a first-time step Tuesday to get cash directly to businesses and hinted that interest rates could come down soon. Stocks continued their free fall anyway and hit new five-year lows.
The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.
The Fed, which has only loaned money to banks before, made the move as the gravest financial crisis in decades wore on and concern spread around the world.
In a speech to the National Association for Business Economics, Fed Chairman Ben Bernanke delivered a strong signal interest rates may need to be cut. And he warned the country could be stuck in the economic doldrums for some time.
"The outlook for economic growth has worsened," Bernanke said. "The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance."
The gloomy assessment appeared to open the door wider to an interest rate cut on or before the Fed convenes again Oct. 28. The Fed's key interest rate now stands at 2 percent.
Wall Street turned its back. The Dow Jones industrials lost 508 points, more than 5 percent, to close at 9,447, the lowest since Sept. 30, 2003. The Standard & Poor's 500, a broader stock index, closed below 1,000 for the first time since that same day.
The economic crisis was a major focus of a second presidential debate Tuesday night between Sens. John McCain and Barack Obama. During sharp exchanges with Obama, McCain called for a far-reaching program to stem foreclosures by requiring the federal government to renegotiate the mortgages of individual homeowners and make them more affordable.
"It's my proposal. It's not Sen. Obama's proposal," McCain, R-Ariz., said at Belmont University in Nashville, Tenn.
Obama charged that the current crisis was the "final verdict on the failed economic policies of the last eight years" that President Bush pursued and were "supported by Sen. McCain."
He contended that Bush, McCain and others had favored deregulation of the financial industry, predicting that would "let markets run wild and prosperity would rain down on all of us. It didn't happen."
Bush again sought to strike a reassuring tone and said the nation would make it through an economy blighted by job losses, record foreclosures and shriveled retirement savings. Congress' top budget analyst estimated Tuesday that Americans' retirement plans have lost as much as $2 trillion in 15 months.
"Have faith, this economy is going to recover over time," the president said in a speech in Virginia. "I wish I could snap my fingers and make what happened stop. But that's not the way it works."
Bush reached out to European leaders earlier Tuesday to urge coordination on efforts to solve the crisis. The White House said Bush was open to the idea of a summit.
The contagion has spread overseas. Britain's chief financial regulator was readying a statement to make before markets opened Wednesday, and the BBC reported that the British government was poised to announce a rescue package for the banking system there.
Concerns are mounting that a global recession is developing, and pressure is growing on the U.S. government to do something beyond the $700 billion financial bailout package that Bush signed into law Friday.
To that end, the Fed announced it would begin buying companies' short-term debt. The powers were bestowed during the Depression as part of the Federal Reserve Act.
The government's bailout package is aimed at thawing lending by buying bad mortgage-related debt off the books of troubled financial institutions. The idea is that the banks would then be in a better position to lend and get the economy moving.
Commercial paper borrowing usually ranges from overnight to less than a week. But in the current climate of mistrust, the market has dried up considerably.
The action makes the Fed a crucial source of credit for nonfinancial businesses in addition to commercial banks and investment firms -- and also exposes it to risk because so much of the debt would not be backed by collateral.
Credit markets, clenched up for weeks now, relaxed somewhat after the Fed's move.
The Fed said it was creating a new entity to buy two types of short-term debt, known as three-month unsecured and asset-backed commercial paper, directly from eligible companies. It hopes to have the program up and running soon, Fed officials said.
Fed officials said they would buy as much of the debt as necessary to get the market functioning again but refused to say how much that might be. They noted that around $1.3 trillion worth of commercial paper would qualify.
The Treasury Department, which worked with the Fed on the program, said the action was "necessary to prevent substantial disruptions to the financial markets and the economy."
The Treasury will provide money to the Federal Reserve Bank of New York to support the new program, the Fed said. The money would be separate from the $700 billion financial bailout package.
The Fed said it planned to stop buying the short-term debt on April 30 but may extend the program.
There was $1.6 trillion in outstanding commercial paper, seasonally adjusted, on the market as of last week, the most recent data from the Fed. The market has shrunk from $2.2 trillion last summer.
Associated Press writers Madlen Read and Tim Paradis in New York and Ben Feller in Washington contributed to this report.
The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.
The Fed, which has only loaned money to banks before, made the move as the gravest financial crisis in decades wore on and concern spread around the world.
In a speech to the National Association for Business Economics, Fed Chairman Ben Bernanke delivered a strong signal interest rates may need to be cut. And he warned the country could be stuck in the economic doldrums for some time.
"The outlook for economic growth has worsened," Bernanke said. "The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance."
The gloomy assessment appeared to open the door wider to an interest rate cut on or before the Fed convenes again Oct. 28. The Fed's key interest rate now stands at 2 percent.
Wall Street turned its back. The Dow Jones industrials lost 508 points, more than 5 percent, to close at 9,447, the lowest since Sept. 30, 2003. The Standard & Poor's 500, a broader stock index, closed below 1,000 for the first time since that same day.
The economic crisis was a major focus of a second presidential debate Tuesday night between Sens. John McCain and Barack Obama. During sharp exchanges with Obama, McCain called for a far-reaching program to stem foreclosures by requiring the federal government to renegotiate the mortgages of individual homeowners and make them more affordable.
"It's my proposal. It's not Sen. Obama's proposal," McCain, R-Ariz., said at Belmont University in Nashville, Tenn.
Obama charged that the current crisis was the "final verdict on the failed economic policies of the last eight years" that President Bush pursued and were "supported by Sen. McCain."
He contended that Bush, McCain and others had favored deregulation of the financial industry, predicting that would "let markets run wild and prosperity would rain down on all of us. It didn't happen."
Bush again sought to strike a reassuring tone and said the nation would make it through an economy blighted by job losses, record foreclosures and shriveled retirement savings. Congress' top budget analyst estimated Tuesday that Americans' retirement plans have lost as much as $2 trillion in 15 months.
"Have faith, this economy is going to recover over time," the president said in a speech in Virginia. "I wish I could snap my fingers and make what happened stop. But that's not the way it works."
Bush reached out to European leaders earlier Tuesday to urge coordination on efforts to solve the crisis. The White House said Bush was open to the idea of a summit.
The contagion has spread overseas. Britain's chief financial regulator was readying a statement to make before markets opened Wednesday, and the BBC reported that the British government was poised to announce a rescue package for the banking system there.
Concerns are mounting that a global recession is developing, and pressure is growing on the U.S. government to do something beyond the $700 billion financial bailout package that Bush signed into law Friday.
To that end, the Fed announced it would begin buying companies' short-term debt. The powers were bestowed during the Depression as part of the Federal Reserve Act.
The government's bailout package is aimed at thawing lending by buying bad mortgage-related debt off the books of troubled financial institutions. The idea is that the banks would then be in a better position to lend and get the economy moving.
Commercial paper borrowing usually ranges from overnight to less than a week. But in the current climate of mistrust, the market has dried up considerably.
The action makes the Fed a crucial source of credit for nonfinancial businesses in addition to commercial banks and investment firms -- and also exposes it to risk because so much of the debt would not be backed by collateral.
Credit markets, clenched up for weeks now, relaxed somewhat after the Fed's move.
The Fed said it was creating a new entity to buy two types of short-term debt, known as three-month unsecured and asset-backed commercial paper, directly from eligible companies. It hopes to have the program up and running soon, Fed officials said.
Fed officials said they would buy as much of the debt as necessary to get the market functioning again but refused to say how much that might be. They noted that around $1.3 trillion worth of commercial paper would qualify.
The Treasury Department, which worked with the Fed on the program, said the action was "necessary to prevent substantial disruptions to the financial markets and the economy."
The Treasury will provide money to the Federal Reserve Bank of New York to support the new program, the Fed said. The money would be separate from the $700 billion financial bailout package.
The Fed said it planned to stop buying the short-term debt on April 30 but may extend the program.
There was $1.6 trillion in outstanding commercial paper, seasonally adjusted, on the market as of last week, the most recent data from the Fed. The market has shrunk from $2.2 trillion last summer.
Associated Press writers Madlen Read and Tim Paradis in New York and Ben Feller in Washington contributed to this report.
Dow sinks more than 500 as concerns about financials overshadow Fed plan to buy corporate debt
NEW YORK (AP) -- The misery worsened on Wall Street Tuesday, with stocks piling on losses late in the session and bringing the two-day decline in the Dow Jones industrials to more than 875 points amid escalating worries about credit markets and the financial sector.
The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years.
Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors. News about financial companies only added to their despondent mood.
"The calls I'm getting -- every money manager I deal with, and every client I talk to -- are just very emotional. This is a very, very emotional time, and most of them are taking steps to shore up their defenses, reducing exposure to stocks just to defend their portfolios," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
The magnitude of the stock market's plunge is reflected in the Dow's grim stats:
-- Tuesday's close was its lowest close in five years, since Sept. 30, 2003.
-- In just five trading days this month, and in the fourth quarter, it is down about 1,400 points, or 13 percent.
-- It has fallen 33.3 percent since its record close of 14,164.53, a year ago Thursday.
-- Through Tuesday, it suffered its largest five-day point decline ever, and its largest five-day percentage drop since the Sept. 11, 2001, terror attacks.
The Dow's percentage loss Tuesday was 5.11 percent, actually a better performance than the 5.74 percent suffered by the S&P, the market indicator most watched by traders and analysts. The Nasdaq composite dropped 5.8 percent.
The market's paper loss for the session came to about $700 billion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks. So far this month, the loss has come to about $2.2 trillion.
Federal Reserve Chairman Ben Bernanke warned in a speech Tuesday that the financial crisis could prolong the difficulty the economy is facing. While his remarks were widely regarded as a sign that an interest rate cut could be in the offing, Wall Street appeared little comforted and focused on his downbeat assessment.
Earlier, the Fed announced plans to buy massive amounts of corporate debt to jump-start lending in the markets where many companies turn for short-term loans called commercial paper. The evaporation of faith that loans will be repaid has lenders weary and is making it more difficult and expensive for businesses and consumers to borrow.
The credit markets did show some slight signs of easing as demand for safe-haven investments decreased, though that offered little comfort to investors highly anxious about the extremely low lending levels and their impact on the economy. The markets seized up last month after Lehman Brothers Holdings Inc. filed for bankruptcy and the government stepped in to rescue insurer American International Group Inc.
The Fed's latest move to lubricate the credit markets stops short of a broad interest rate reduction that some investors say is necessary to restore confidence in the market. Other market watchers argue, however, that more focused steps like Fed's decision to buy commercial paper are what's needed.
Investors remain worried about financial companies like Bank of America Corp., which fell after slashing its dividend and reporting that its third-quarter profit fell 68 percent. The stock fell $8.45, or 26 percent, to $23.77 Tuesday. It was by far the steepest decliner among the 30 stocks that comprise the Dow industrials.
And a rumor that Mitsubishi UFJ Financial Group Inc. was pulling out of a deal to acquire up to 24.9 percent of the voting shares of Morgan Stanley sent the investment bank's stock tumbling $5.85, or 25 percent, to $17.65. The companies denied the rumor, but the Street was panicky enough that it still sent Morgan Stanley and other financials tumbling.
Investors are fearful that financial companies will continue to face cash shortages even with efforts in Washington and by other governments to resuscitate lending.
"It's such a widespread loss of confidence and, to some extent, a race for the exits," Johnson said.
Stocks ended lower for the fifth straight session. The Dow fell 508.39, or 5.11 percent, to 9,447.11. The drop came a day after the blue chips fell below 10,000 for the first time in four years. The Dow skidded as much as 800 points on Monday before finishing with a loss of 370.
Broader indexes also fell. The S&P 500 index declined 60.66, or 5.74 percent, to 996.23, the first close below the 1,000 mark since September 2003. The Nasdaq composite index fell 108.08, or 5.80 percent, to 1,754.88.
The dollar was mostly lower against other major currencies, while gold prices rose.
Oil prices rebounded after plunging Monday to an eight-month low on concerns a global recession will undermine demand for crude. Light, sweet crude rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange.
Concerns about the credit markets still fed demand for the relative safety of government debt, though pressures eased. The yield on the three-month Treasury bill, which moves opposite its price, rebounded to 0.81 percent from 0.50 percent late Monday. Demand for short-term Treasurys remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.
Some investors moved out of longer-term Treasury bonds, which don't draw as much demand as shorter-term debt in times of fear. The yield on the 10-year note rose to 3.51 percent from 3.50 percent late Monday.
Investors are still hoping to see other moves from the Fed to boost confidence. Australia's central bank lowered interest rates by the largest amount since 1992 in a surprise move, and that reignited hopes that others, including the Fed and European Central Bank, might follow suit.
Though not giving the market a rate cut, the Fed has taken other steps to help unclog the credit markets. On Tuesday, policymakers provided more details about when it will make $900 billion in short-term loans available to squeezed banks.
The loans are made available to banks through auctions. The Fed, in coordination with other countries' central banks engaged in similar efforts, laid out dates that it will conduct the auctions through the rest of this year.
But write-downs of bad debt at Bank of America are a reminder to investors that troubles within the financial sector remain, according to Kim Caughey, equity research analyst at Fort Pitt Capital Group.
"I think we have weeks of volatility ahead of us," she said. "We're not overly optimistic but we're not indulging in doom and gloom either."
She said the arrival of quarterly results from corporations has made investors even more jittery, with investors seeking any information about how companies are faring. She said some companies could go under because of the tough economic conditions but that the stronger players would survive.
"You're going to get that Darwinian shakeout process. That's going to happen from the mom and pops all the way up to the big boys," she said.
Minutes from the Fed's last meeting described a U.S. economy that was slowing considerably and credit markets that were deteriorating rapidly. The meeting was held Sept. 16, the day after the failure of Lehman Brothers. The central bank's Open Market Committee found the risks from weaker growth and higher inflation were roughly equal; that was its rationale for leaving rates unchanged. Policymakers, who will meet again at the end of the month, left key interest rate unchanged at 2 percent.
About 2,800 stocks declined on the New York Stock Exchange, while fewer than 400 advanced. Consolidated volume came to 6.84 billion shares, compared with 7.81 billion shares traded Monday.
The Russell 2000 index of smaller companies fell 36.96, or 6.20 percent, to 558.95.
Overseas, Japan's Nikkei stock average fell 3.03 percent. Britain's FTSE 100 rose 0.35 percent, Germany's DAX index fell 1.12 percent, and France's CAC-40 rose 0.55 percent.
The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years.
Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors. News about financial companies only added to their despondent mood.
"The calls I'm getting -- every money manager I deal with, and every client I talk to -- are just very emotional. This is a very, very emotional time, and most of them are taking steps to shore up their defenses, reducing exposure to stocks just to defend their portfolios," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
The magnitude of the stock market's plunge is reflected in the Dow's grim stats:
-- Tuesday's close was its lowest close in five years, since Sept. 30, 2003.
-- In just five trading days this month, and in the fourth quarter, it is down about 1,400 points, or 13 percent.
-- It has fallen 33.3 percent since its record close of 14,164.53, a year ago Thursday.
-- Through Tuesday, it suffered its largest five-day point decline ever, and its largest five-day percentage drop since the Sept. 11, 2001, terror attacks.
The Dow's percentage loss Tuesday was 5.11 percent, actually a better performance than the 5.74 percent suffered by the S&P, the market indicator most watched by traders and analysts. The Nasdaq composite dropped 5.8 percent.
The market's paper loss for the session came to about $700 billion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks. So far this month, the loss has come to about $2.2 trillion.
Federal Reserve Chairman Ben Bernanke warned in a speech Tuesday that the financial crisis could prolong the difficulty the economy is facing. While his remarks were widely regarded as a sign that an interest rate cut could be in the offing, Wall Street appeared little comforted and focused on his downbeat assessment.
Earlier, the Fed announced plans to buy massive amounts of corporate debt to jump-start lending in the markets where many companies turn for short-term loans called commercial paper. The evaporation of faith that loans will be repaid has lenders weary and is making it more difficult and expensive for businesses and consumers to borrow.
The credit markets did show some slight signs of easing as demand for safe-haven investments decreased, though that offered little comfort to investors highly anxious about the extremely low lending levels and their impact on the economy. The markets seized up last month after Lehman Brothers Holdings Inc. filed for bankruptcy and the government stepped in to rescue insurer American International Group Inc.
The Fed's latest move to lubricate the credit markets stops short of a broad interest rate reduction that some investors say is necessary to restore confidence in the market. Other market watchers argue, however, that more focused steps like Fed's decision to buy commercial paper are what's needed.
Investors remain worried about financial companies like Bank of America Corp., which fell after slashing its dividend and reporting that its third-quarter profit fell 68 percent. The stock fell $8.45, or 26 percent, to $23.77 Tuesday. It was by far the steepest decliner among the 30 stocks that comprise the Dow industrials.
And a rumor that Mitsubishi UFJ Financial Group Inc. was pulling out of a deal to acquire up to 24.9 percent of the voting shares of Morgan Stanley sent the investment bank's stock tumbling $5.85, or 25 percent, to $17.65. The companies denied the rumor, but the Street was panicky enough that it still sent Morgan Stanley and other financials tumbling.
Investors are fearful that financial companies will continue to face cash shortages even with efforts in Washington and by other governments to resuscitate lending.
"It's such a widespread loss of confidence and, to some extent, a race for the exits," Johnson said.
Stocks ended lower for the fifth straight session. The Dow fell 508.39, or 5.11 percent, to 9,447.11. The drop came a day after the blue chips fell below 10,000 for the first time in four years. The Dow skidded as much as 800 points on Monday before finishing with a loss of 370.
Broader indexes also fell. The S&P 500 index declined 60.66, or 5.74 percent, to 996.23, the first close below the 1,000 mark since September 2003. The Nasdaq composite index fell 108.08, or 5.80 percent, to 1,754.88.
The dollar was mostly lower against other major currencies, while gold prices rose.
Oil prices rebounded after plunging Monday to an eight-month low on concerns a global recession will undermine demand for crude. Light, sweet crude rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange.
Concerns about the credit markets still fed demand for the relative safety of government debt, though pressures eased. The yield on the three-month Treasury bill, which moves opposite its price, rebounded to 0.81 percent from 0.50 percent late Monday. Demand for short-term Treasurys remains high because of their safety; investors are willing to take extremely low returns just to have their money in a secure place.
Some investors moved out of longer-term Treasury bonds, which don't draw as much demand as shorter-term debt in times of fear. The yield on the 10-year note rose to 3.51 percent from 3.50 percent late Monday.
Investors are still hoping to see other moves from the Fed to boost confidence. Australia's central bank lowered interest rates by the largest amount since 1992 in a surprise move, and that reignited hopes that others, including the Fed and European Central Bank, might follow suit.
Though not giving the market a rate cut, the Fed has taken other steps to help unclog the credit markets. On Tuesday, policymakers provided more details about when it will make $900 billion in short-term loans available to squeezed banks.
The loans are made available to banks through auctions. The Fed, in coordination with other countries' central banks engaged in similar efforts, laid out dates that it will conduct the auctions through the rest of this year.
But write-downs of bad debt at Bank of America are a reminder to investors that troubles within the financial sector remain, according to Kim Caughey, equity research analyst at Fort Pitt Capital Group.
"I think we have weeks of volatility ahead of us," she said. "We're not overly optimistic but we're not indulging in doom and gloom either."
She said the arrival of quarterly results from corporations has made investors even more jittery, with investors seeking any information about how companies are faring. She said some companies could go under because of the tough economic conditions but that the stronger players would survive.
"You're going to get that Darwinian shakeout process. That's going to happen from the mom and pops all the way up to the big boys," she said.
Minutes from the Fed's last meeting described a U.S. economy that was slowing considerably and credit markets that were deteriorating rapidly. The meeting was held Sept. 16, the day after the failure of Lehman Brothers. The central bank's Open Market Committee found the risks from weaker growth and higher inflation were roughly equal; that was its rationale for leaving rates unchanged. Policymakers, who will meet again at the end of the month, left key interest rate unchanged at 2 percent.
About 2,800 stocks declined on the New York Stock Exchange, while fewer than 400 advanced. Consolidated volume came to 6.84 billion shares, compared with 7.81 billion shares traded Monday.
The Russell 2000 index of smaller companies fell 36.96, or 6.20 percent, to 558.95.
Overseas, Japan's Nikkei stock average fell 3.03 percent. Britain's FTSE 100 rose 0.35 percent, Germany's DAX index fell 1.12 percent, and France's CAC-40 rose 0.55 percent.
Post Market Report:07/10/2008
The key benchmark indices ended mixed on a highly volatile day of
trade today. The BSE Sensex lost 106.46 points while Nifty rose
4.25 points. The market swung between positive and negative zone
throughout the day. European stocks were green amid choppy trade
amid reports the UK government may be forced to provide funding for
Royal Bank of Scotland.
The BSE Sensex and the S&P CNX Nifty both hit two-year lows in
mid-afternoon trade today, 7 October 2008. This was in contrast to
an initial surge on the bourses that was triggered by liquidity
boosting measures by Indian financial regulators announced after
trading hours on Monday, 6 October 2008. Reliance Industries
recovered sharply from 52 week low hit today. Bharat Heavy
Electricals came off from the session's lows. The market breadth
was negative
US futures were up. Nasdaq futures were up 19.25 points and Dow
Jones futures were up 33 points.
The BSE 30-share Sensex lost 106.46 points or 0.9% to 11,695.24.
The index fell 299.85 points at the day's low of 11,501.85, hit in
mid-afternoon trade, its lowest level in more than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The barometer index is down 8,591.75 points or 42.35% in the
calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 9,511.53 points or 44.85% below its all-time
high of 21,206.77 struck on 10 January 2008.
The S&P CNX Nifty was up 4.25 points or 0.12% to 3,606.60. Nifty
hit a low of 3,537 in mid-afternoon trade, its lowest level since 5
October 2006.
BSE clocked a turnover of Rs 4,728 crore today as compared to a
turnover of Rs 3,992.08 crore on 6 October 2008.
Nifty October 2008 futures were at 3640.10, at a premium of 33.50
points as compared to spot closing of 3606.60. NSE's futures &
options (F&O) segment turnover was Rs 59,767.70 crore, which was
higher than Rs 46,853.23 crore on Monday, 6 October 2008.
The BSE Mid-Cap index was down 2% at 4,257.16 and the BSE Small-Cap
index was down 2.17% at 4,976.39.
BSE Capital Goods index (down 3.96% to 9,118.52), BSE IT index
(down 3.04% to 2,840.30), BSE Bankex (down 2.15% to 6,039.25), BSE
Realty index (down 1.94% to 2,941.72), BSE FMCG index (down 1.77%
to 2,053.68), BSE HealthCare index (down 1.74% to 3,427.52), BSE
Metal index (down 1.34% to 7,534.03), BSE Teck index (down 1.22% to
2,352.76), underperformed the Sensex.
BSE Oil & Gas index (up 1.3% to 8,012.18), BSE PSU index (up 0.84%
to 5,980.92), BSE Power index (up 0.38% to 2,074.26), BSE Auto
index (down 0.41% to 3,511.96), BSE Consumer Durables index (down
0.67% to 2,552.32), outperformed the Sensex.
The market breadth was weak on BSE with 787 shares advancing as
compared to 1,822 that declined. 74 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 2.04% to Rs 1,675.40. The
stock recovered from a 52 week low of 1615.25 hit today.
Capital goods stocks declined. Larsen & Toubro (down 6.94% to Rs
1,008.10), and Suzlon Energy (down 1.97% to Rs 124.60) edged lower.
However India's largest electric equipment maker by sales Bharat
Heavy Electricals surged 3.26% to Rs 1,496.70. The stock recovered
from session's low of Rs 1,440.10.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 1.07% to Rs 485.20. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 6.17%
to Rs 1,127.70. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India fell
1.81% to Rs 1,408. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Tata Consultancy Services (down 7.02% to Rs 575.08), Sterlite
Industries (down 6.35% to Rs 314.05), Satyam Computer Services
(down 5.18% to Rs 279.09), edged lower from the Sensex pack.
NTPC (up 4.83% to Rs 176.85), Ranbaxy Laboratories (up 5.54% to Rs
260.10), and Bharti Airtel (up 3.6% to Rs 755), edged higher from
the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 1.25% to Rs 992.35. The stock came off from the
session's high of Rs 1,040. The company will shortly tie up with
Uranium Corporation of India for exploring and mining the fissile
material, suggest reports.
Reliance Natural Resources clocked the highest volume of 1.41 crore
shares on BSE. Idea Cellular (1.18 crore shares), Chambal
Fertilisers and Chemicals (1.02 crore shares), Reliance Petroleum
(82.07 lakh shares) and IFCI (77.66 lakh shares) were the other
volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 389.90 crore on
BSE. Reliance Industries (Rs 344.76 crore), Larsen & Toubro (Rs
204.33 crore), State Bank of India (Rs 178.05 crore) and ICICI Bank
(Rs 176.86 crore) were the other turnover toppers in that order.
In Europe, UK's FTSE 100, France's CAC 40 and Germany's DAX were up
between 0.75% to 1.95%. As per reports the UK government may be
forced to provide funding for Royal Bank of Scotland. On Monday,
credit ratings agency S&P cut its rating on RBS, citing earnings
and further writedown risks.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
trade today. The BSE Sensex lost 106.46 points while Nifty rose
4.25 points. The market swung between positive and negative zone
throughout the day. European stocks were green amid choppy trade
amid reports the UK government may be forced to provide funding for
Royal Bank of Scotland.
The BSE Sensex and the S&P CNX Nifty both hit two-year lows in
mid-afternoon trade today, 7 October 2008. This was in contrast to
an initial surge on the bourses that was triggered by liquidity
boosting measures by Indian financial regulators announced after
trading hours on Monday, 6 October 2008. Reliance Industries
recovered sharply from 52 week low hit today. Bharat Heavy
Electricals came off from the session's lows. The market breadth
was negative
US futures were up. Nasdaq futures were up 19.25 points and Dow
Jones futures were up 33 points.
The BSE 30-share Sensex lost 106.46 points or 0.9% to 11,695.24.
The index fell 299.85 points at the day's low of 11,501.85, hit in
mid-afternoon trade, its lowest level in more than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The barometer index is down 8,591.75 points or 42.35% in the
calendar year 2008 so far from its close of 20,286.99 on 31
December 2007. It is 9,511.53 points or 44.85% below its all-time
high of 21,206.77 struck on 10 January 2008.
The S&P CNX Nifty was up 4.25 points or 0.12% to 3,606.60. Nifty
hit a low of 3,537 in mid-afternoon trade, its lowest level since 5
October 2006.
BSE clocked a turnover of Rs 4,728 crore today as compared to a
turnover of Rs 3,992.08 crore on 6 October 2008.
Nifty October 2008 futures were at 3640.10, at a premium of 33.50
points as compared to spot closing of 3606.60. NSE's futures &
options (F&O) segment turnover was Rs 59,767.70 crore, which was
higher than Rs 46,853.23 crore on Monday, 6 October 2008.
The BSE Mid-Cap index was down 2% at 4,257.16 and the BSE Small-Cap
index was down 2.17% at 4,976.39.
BSE Capital Goods index (down 3.96% to 9,118.52), BSE IT index
(down 3.04% to 2,840.30), BSE Bankex (down 2.15% to 6,039.25), BSE
Realty index (down 1.94% to 2,941.72), BSE FMCG index (down 1.77%
to 2,053.68), BSE HealthCare index (down 1.74% to 3,427.52), BSE
Metal index (down 1.34% to 7,534.03), BSE Teck index (down 1.22% to
2,352.76), underperformed the Sensex.
BSE Oil & Gas index (up 1.3% to 8,012.18), BSE PSU index (up 0.84%
to 5,980.92), BSE Power index (up 0.38% to 2,074.26), BSE Auto
index (down 0.41% to 3,511.96), BSE Consumer Durables index (down
0.67% to 2,552.32), outperformed the Sensex.
The market breadth was weak on BSE with 787 shares advancing as
compared to 1,822 that declined. 74 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 2.04% to Rs 1,675.40. The
stock recovered from a 52 week low of 1615.25 hit today.
Capital goods stocks declined. Larsen & Toubro (down 6.94% to Rs
1,008.10), and Suzlon Energy (down 1.97% to Rs 124.60) edged lower.
However India's largest electric equipment maker by sales Bharat
Heavy Electricals surged 3.26% to Rs 1,496.70. The stock recovered
from session's low of Rs 1,440.10.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 1.07% to Rs 485.20. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 6.17%
to Rs 1,127.70. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India fell
1.81% to Rs 1,408. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Tata Consultancy Services (down 7.02% to Rs 575.08), Sterlite
Industries (down 6.35% to Rs 314.05), Satyam Computer Services
(down 5.18% to Rs 279.09), edged lower from the Sensex pack.
NTPC (up 4.83% to Rs 176.85), Ranbaxy Laboratories (up 5.54% to Rs
260.10), and Bharti Airtel (up 3.6% to Rs 755), edged higher from
the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 1.25% to Rs 992.35. The stock came off from the
session's high of Rs 1,040. The company will shortly tie up with
Uranium Corporation of India for exploring and mining the fissile
material, suggest reports.
Reliance Natural Resources clocked the highest volume of 1.41 crore
shares on BSE. Idea Cellular (1.18 crore shares), Chambal
Fertilisers and Chemicals (1.02 crore shares), Reliance Petroleum
(82.07 lakh shares) and IFCI (77.66 lakh shares) were the other
volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 389.90 crore on
BSE. Reliance Industries (Rs 344.76 crore), Larsen & Toubro (Rs
204.33 crore), State Bank of India (Rs 178.05 crore) and ICICI Bank
(Rs 176.86 crore) were the other turnover toppers in that order.
In Europe, UK's FTSE 100, France's CAC 40 and Germany's DAX were up
between 0.75% to 1.95%. As per reports the UK government may be
forced to provide funding for Royal Bank of Scotland. On Monday,
credit ratings agency S&P cut its rating on RBS, citing earnings
and further writedown risks.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
Tuesday, October 7, 2008
Sensex, Nifty hit two-year lows
The key benchmark indices made some recovery after it hit a new
intraday low in mid-afternoon trade. The BSE Sensex was down 142.92
points. The BSE Sensex and the S&P CNX Nifty both hit two-year lows
today, 7 October 2008. This was in contrast to an initial surge
that was triggered by liquidity boosting measures by regulators.
Volatility was high. Sterlite Industries fell close to 10% while
Mahindra & Mahindra, Tata Consultancy Services and Larsen & Toubro
fell more than 6% each. Global financial sector jitteres weighed on
the domestic bourses as European stocks fell on reports the UK
government may be forced to provide funding for Royal Bank of
Scotland.
The domestic market ingnored reports that Finance Minister P
Chidambaram expects 8% GDP growth in the current financial year
notwithstanding the global financial crises.
Reliance Industries edged higher. Capital goods and IT stocks
declined. The market breadth was negative in contrast to a strong
breadth earlier in the day.
US futures were mixed. Nasdaq futures were up 1.5 points and Dow
Jones futures were down 24 points.
At 14:26 IST, the BSE 30-share Sensex was down 142.91 points or
1.16% to 11,664.65. The index fell 299.85 points at the day's low
of 11,501.85, hit in mid-afternoon trade, its lowest level in more
than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The S&P CNX Nifty was down 26.35 points or 0.73% to 3,628.70. Nifty
hit a low of 3,537, its lowest level since 5 October 2006.
The BSE Mid-Cap index was down 2.48% at 4,236.51 and the BSE
Small-Cap index was down 2.59% at 4,955.15.
The market breadth was weak on BSE with 652 shares advancing as
compared to 1,872 that declined. 65 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 0.37% to Rs 1,651. The stock
had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Capital goods stocks declined. Praj Industries (down 8.9% to Rs
84.95), Larsen & Toubro (down 6.57% to Rs 1,014), and Suzlon Energy
(down 3.86% to Rs 122.50) edged lower. While India's largest
electric equipment maker by sales Bharat Heavy Electricals rose 1%
to Rs 1,464.
IT stocks came off from highs. India's third largest IT exporter by
sales Satyam Computer Services declined 5.88% to Rs 277.40. The
stock came off from the session's high of Rs 308.10. India's
largest IT exporter by sales Tata Consultancy Services fell 6.32%
to Rs 580.05. The stock came off from the session's high of Rs 666.
Wipro lost 6.9% to Rs 297.55. The stock came off from the session's
high of Rs 331. India's second largest IT exporter by sales Infosys
fell 2.31% to Rs 1,288. The stock came off from the session's high
of Rs 1,372.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 1.52% to Rs 482.90. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 6.66%
to Rs 1,121.80. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India fell
0.35% to Rs 1,429. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Sterlite Industries (down 9.92% to Rs 302.75), Mahindra & Mahindra
(down 7.44% to Rs 465), Tata Power Company (down 4.43% to Rs
767.80), edged lower from the Sensex pack.
Ranbaxy Laboratories (up 3.88% to Rs 256), NTPC (up 2.58% to Rs
173.05), Grasim Industries (up 2.65% to Rs 1,633) and Bharti Airtel
(up 2.64% to Rs 747.10), edged higher from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 0.7% to Rs 986.20. The stock came off from
session's high of Rs 1,040. The company will shortly tie up with
Uranium Corporation of India for exploring and mining the fissile
material, suggest reports.
GVK Power & Infrastructure fell 9.8% to Rs 17.95. The company said
today that it has divested the entire equity holding in its wholly
owned subsidiary GVK Aviation.
In Europe, France's CAC 40 was up 0.41%. UK's FTSE 100 and
Germany's DAX were down between 1.36% to 1.41%. As per reports the
UK government may be forced to provide funding for Royal Bank of
Scotland. On Monday, credit ratings agency S&P cut its rating on
RBS, citing earnings and further writedown risks.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
Oil prices, down nearly 40% from their peak because of recession
worries, climbed back to over $90 a barrel.
intraday low in mid-afternoon trade. The BSE Sensex was down 142.92
points. The BSE Sensex and the S&P CNX Nifty both hit two-year lows
today, 7 October 2008. This was in contrast to an initial surge
that was triggered by liquidity boosting measures by regulators.
Volatility was high. Sterlite Industries fell close to 10% while
Mahindra & Mahindra, Tata Consultancy Services and Larsen & Toubro
fell more than 6% each. Global financial sector jitteres weighed on
the domestic bourses as European stocks fell on reports the UK
government may be forced to provide funding for Royal Bank of
Scotland.
The domestic market ingnored reports that Finance Minister P
Chidambaram expects 8% GDP growth in the current financial year
notwithstanding the global financial crises.
Reliance Industries edged higher. Capital goods and IT stocks
declined. The market breadth was negative in contrast to a strong
breadth earlier in the day.
US futures were mixed. Nasdaq futures were up 1.5 points and Dow
Jones futures were down 24 points.
At 14:26 IST, the BSE 30-share Sensex was down 142.91 points or
1.16% to 11,664.65. The index fell 299.85 points at the day's low
of 11,501.85, hit in mid-afternoon trade, its lowest level in more
than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The S&P CNX Nifty was down 26.35 points or 0.73% to 3,628.70. Nifty
hit a low of 3,537, its lowest level since 5 October 2006.
The BSE Mid-Cap index was down 2.48% at 4,236.51 and the BSE
Small-Cap index was down 2.59% at 4,955.15.
The market breadth was weak on BSE with 652 shares advancing as
compared to 1,872 that declined. 65 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 0.37% to Rs 1,651. The stock
had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Capital goods stocks declined. Praj Industries (down 8.9% to Rs
84.95), Larsen & Toubro (down 6.57% to Rs 1,014), and Suzlon Energy
(down 3.86% to Rs 122.50) edged lower. While India's largest
electric equipment maker by sales Bharat Heavy Electricals rose 1%
to Rs 1,464.
IT stocks came off from highs. India's third largest IT exporter by
sales Satyam Computer Services declined 5.88% to Rs 277.40. The
stock came off from the session's high of Rs 308.10. India's
largest IT exporter by sales Tata Consultancy Services fell 6.32%
to Rs 580.05. The stock came off from the session's high of Rs 666.
Wipro lost 6.9% to Rs 297.55. The stock came off from the session's
high of Rs 331. India's second largest IT exporter by sales Infosys
fell 2.31% to Rs 1,288. The stock came off from the session's high
of Rs 1,372.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 1.52% to Rs 482.90. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 6.66%
to Rs 1,121.80. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India fell
0.35% to Rs 1,429. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Sterlite Industries (down 9.92% to Rs 302.75), Mahindra & Mahindra
(down 7.44% to Rs 465), Tata Power Company (down 4.43% to Rs
767.80), edged lower from the Sensex pack.
Ranbaxy Laboratories (up 3.88% to Rs 256), NTPC (up 2.58% to Rs
173.05), Grasim Industries (up 2.65% to Rs 1,633) and Bharti Airtel
(up 2.64% to Rs 747.10), edged higher from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 0.7% to Rs 986.20. The stock came off from
session's high of Rs 1,040. The company will shortly tie up with
Uranium Corporation of India for exploring and mining the fissile
material, suggest reports.
GVK Power & Infrastructure fell 9.8% to Rs 17.95. The company said
today that it has divested the entire equity holding in its wholly
owned subsidiary GVK Aviation.
In Europe, France's CAC 40 was up 0.41%. UK's FTSE 100 and
Germany's DAX were down between 1.36% to 1.41%. As per reports the
UK government may be forced to provide funding for Royal Bank of
Scotland. On Monday, credit ratings agency S&P cut its rating on
RBS, citing earnings and further writedown risks.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
Oil prices, down nearly 40% from their peak because of recession
worries, climbed back to over $90 a barrel.
Market remains choppy
Volatility ruled the roost on the bourses in afternoon trade. The
BSE Sensex was up 34.82 points. The market had made a sharp
recovery from its intra-day lows in early afternoon trade. Earlier,
the market had slipped deep into the red with Sensex losing close
to 200 points at intra-day lows soon after trading resumed after
45-minute stoppage for sun outage. The barometer index had hit its
lowest level since 12 September 2006. Nifty hits its lowest level
since 7 March 2007.
Reliance Industries edged higher. Power stocks rose while
healthcare stocks declined. The market breadth was negative in
contrast to a strong breadth earlier in the day. Finance Minister P
Chidambaram expects 8% GDP growth in the current financial year
notwithstanding the global financial crises.
A recovery in Asian stocks following a larger than expected 100
basis points cut in interest rate by Australia's central bank
today, 7 October 2008, and higher US futures supported the domestic
bourses.
US futures were up. Nasdaq was up by 16.50 points and Dow Jones
futures were up 74 points.
In Europe, France's CAC 40 and UK's FTSE 100 were up between 0.3%
to 1.25%. Germany's DAX was down 0.08% .
At 13:29 IST, the BSE 30-share Sensex was up 34.82 points or 0.3%
to 11,836.52. The index fell 210.21 points at the day's low of
11,591.58, hit in early afternoon trade, its lowest level in more
than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The S&P CNX Nifty was up 26.35 points or 0.73% to 3,628.70. Nifty
hit a low of 3577.60, its lowest level since 7 March 2007.
The BSE Mid-Cap index was down 1.52% at 4,278.07 and the BSE
Small-Cap index was down 1.46% at 5,012.75.
The market breadth was weak on BSE with 812 shares advancing as
compared to 1,615 that declined. 79 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 2.13% to Rs 1,676.80. The
stock had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Power stocks rose. PowerGrid Corporation of India (up 5.25% to Rs
92.30), Reliance Power (up 5.2% to Rs 146.60), Reliance
Infrastructure (up 4.69% to Rs 667.90), NTPC (up 3.73% to Rs 175)
edged higher. However, Tata Power Company fell 0.54% to Rs 794.
Healthcare stocks declined. Cipla (down 1.81% to Rs 214.65), Dr
Reddy's Laboratories (down 2.18% to Rs 466.50) edged lower. However
India's largest drug amker by sales Ranbaxy Laboratories rose 5.5%
to Rs 260.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 0.18% to Rs 489.55. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 1.82%
to Rs 1,180. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India rose
1.19% to Rs 1,451. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Larsen & Toubro (down 4.64% to Rs 1,033), ITC (down 4.64% to Rs
171.25), Sterlite Industries (down 2.97% to Rs 325.40), Mahindra &
Mahindra (down 3.62% to Rs 484.15), edged lower from the Sensex
pack.
DLF (up 3.53% to Rs 301), NTPC (up 3.26% to Rs 174.20), Bharat
Heavy Electricals (up 2.23% to Rs 1,481.65), Bharti Airtel (up
1.86% to Rs 743.25), edged higher from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 3.17% to Rs 1,011.20. The company will shortly tie
up with Uranium Corporation of India for exploring and mining the
fissile material, suggest reports.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
Oil prices, down nearly 40% from their peak because of recession
worries, climbed back to over $90 a barrel.
According to Finance Minister P Chidambaram Indian business and
industry have placed India in a situation where the country can
weather the global financial crisis. He counts robust revenues,
exports and investment planned by Indian corporates as major
positive factors which would help India through the global crisis.
The Finance Minister expects 8% GDP growth in the current financial
year and 9% in financial year 2009-10.
BSE Sensex was up 34.82 points. The market had made a sharp
recovery from its intra-day lows in early afternoon trade. Earlier,
the market had slipped deep into the red with Sensex losing close
to 200 points at intra-day lows soon after trading resumed after
45-minute stoppage for sun outage. The barometer index had hit its
lowest level since 12 September 2006. Nifty hits its lowest level
since 7 March 2007.
Reliance Industries edged higher. Power stocks rose while
healthcare stocks declined. The market breadth was negative in
contrast to a strong breadth earlier in the day. Finance Minister P
Chidambaram expects 8% GDP growth in the current financial year
notwithstanding the global financial crises.
A recovery in Asian stocks following a larger than expected 100
basis points cut in interest rate by Australia's central bank
today, 7 October 2008, and higher US futures supported the domestic
bourses.
US futures were up. Nasdaq was up by 16.50 points and Dow Jones
futures were up 74 points.
In Europe, France's CAC 40 and UK's FTSE 100 were up between 0.3%
to 1.25%. Germany's DAX was down 0.08% .
At 13:29 IST, the BSE 30-share Sensex was up 34.82 points or 0.3%
to 11,836.52. The index fell 210.21 points at the day's low of
11,591.58, hit in early afternoon trade, its lowest level in more
than two years.
The Sensex surged 379.73 points at day's high of 12,181.43, in
early trade. The market regulator Securities & Exchange Board of
India (Sebi)'s decision to lift restriction on issue of
participatory notes and the Reserve Bank of India's surprise steep
50 basis cut in the cash reserve ratio had triggered a rebound on
the bourses in early trade after steep losses of the past two
trading sessions. Both the Sebi and RBI announcements were made
after trading hours on Monday, 6 October 2008.
The S&P CNX Nifty was up 26.35 points or 0.73% to 3,628.70. Nifty
hit a low of 3577.60, its lowest level since 7 March 2007.
The BSE Mid-Cap index was down 1.52% at 4,278.07 and the BSE
Small-Cap index was down 1.46% at 5,012.75.
The market breadth was weak on BSE with 812 shares advancing as
compared to 1,615 that declined. 79 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 2.13% to Rs 1,676.80. The
stock had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Power stocks rose. PowerGrid Corporation of India (up 5.25% to Rs
92.30), Reliance Power (up 5.2% to Rs 146.60), Reliance
Infrastructure (up 4.69% to Rs 667.90), NTPC (up 3.73% to Rs 175)
edged higher. However, Tata Power Company fell 0.54% to Rs 794.
Healthcare stocks declined. Cipla (down 1.81% to Rs 214.65), Dr
Reddy's Laboratories (down 2.18% to Rs 466.50) edged lower. However
India's largest drug amker by sales Ranbaxy Laboratories rose 5.5%
to Rs 260.
Bank shares pared gains after firm opening. India's largest private
sector bank by net profit ICICI Bank fell 0.18% to Rs 489.55. The
stock came off from the session's high of Rs 521.70. India's second
largest private sector bank by net profit HDFC Bank declined 1.82%
to Rs 1,180. The stock came off from the session's high of Rs
1,245. India's largest commercial bank State Bank of India rose
1.19% to Rs 1,451. The stock came off from the session's high of Rs
1,503.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Larsen & Toubro (down 4.64% to Rs 1,033), ITC (down 4.64% to Rs
171.25), Sterlite Industries (down 2.97% to Rs 325.40), Mahindra &
Mahindra (down 3.62% to Rs 484.15), edged lower from the Sensex
pack.
DLF (up 3.53% to Rs 301), NTPC (up 3.26% to Rs 174.20), Bharat
Heavy Electricals (up 2.23% to Rs 1,481.65), Bharti Airtel (up
1.86% to Rs 743.25), edged higher from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 3.17% to Rs 1,011.20. The company will shortly tie
up with Uranium Corporation of India for exploring and mining the
fissile material, suggest reports.
European Union finance ministers gathered in Luxembourg on Tuesday,
7 October 2008, to discuss ways of protecting savers' deposits and
counter the market turmoil that saw the region's stock markets
suffer record losses on Monday, 6 October 2008. Australia's central
bank cut its benchmark cash rate by 100 basis points to 6%,
stunning investors with its biggest interest rate cut in 16 years.
Asian stocks outside Japan rose for the first time in four days on
Tuesday, 7 October 2008, after a surprisingly large interest rate
cut by Australia's central bank raised hopes that other
policymakers would follow suit. Taiwan stocks ended up 0.34%,
recouping sharp losses earlier in the day and rebounding from a
more than four-year closing low the previous session as government
funds helped bolster market heavyweights such as TSMC.
South Korea's KOSPI rebounded from a 21-month low and rose 0.54%.
The country's regulator said it was considering steps to reduce
volatility in the equity market, helping to stem some of the day's
losses.
China's stock market fell but ended well off its lows as hopes for
government support helped banks and property shares rebound from a
sharp early slide. The Shanghai Composite Index, which had dropped
as much as 4.64% in the morning, closed down 0.73% at 2,157.839
points. Singapore shares reversed early losses go gain about 2%.
Japan's Nikkei was down 3.03% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Back home, the Sebi decision on lifting of restriction on P-notes
comes at a time when foreign institutional investors (FIIs) have
been pulling out their investments from India and other emerging
markets to shore up resources to beat the global liquidity crunch.
In India, FIIs sold shares worth a net Rs 8278.10 crore last month.
The outflow has reached Rs 38037.30 crore in calendar year 2008
(till 3 October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
Oil prices, down nearly 40% from their peak because of recession
worries, climbed back to over $90 a barrel.
According to Finance Minister P Chidambaram Indian business and
industry have placed India in a situation where the country can
weather the global financial crisis. He counts robust revenues,
exports and investment planned by Indian corporates as major
positive factors which would help India through the global crisis.
The Finance Minister expects 8% GDP growth in the current financial
year and 9% in financial year 2009-10.
Market recovers on concerted action by regulators to ease liquidity, boost capital flows
The market regulator Securities & Exchange Board of India (Sebi)'s
decision to lift restriction on issue of participatory notes and
the Reserve Bank of India's surprise steep 50 basis cut in the cash
reserve ration triggered a rebound on the bourses after steep
losses of the past two trading sessions. The Sensex was up 351.70
points. Both the Sebi and RBI announcements were made after trading
hours on Monday, 6 October 2008.
A recovery in Asian stocks following a larger than expected 100
basis points cut in interest rate by Australia's central bank
today, 7 October 2008, and higher US futures contributed to early
surge on the domestic bourses. Rate sensitive banking and realty
stocks rose. Reliance Industries recovered from 52-week low.
US futures were up. Nasdaq was up by 20 points and Dow Jones
futures were up 121 points.
At 10:21 IST, the BSE 30-share Sensex was up 351.70 points or 2.96%
to 12,151.60. The index rose 253.92 points at the day's low of
12,055.62, hit in early trade,. The Sensex surged 379.73 points at
day's high of 12,181.43, in early trade.
The S&P CNX Nifty was up 117.35 points or 3.26% to 3,719.70.
The BSE Mid-Cap index was up 1.63% at 4,415.10 and the BSE
Small-Cap index was up 1.29% at 5,152.80.
The market breadth was strong on BSE with 992 shares advancing as
compared to 546 that declined. 22 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 3.65% to Rs 1,700. The stock
had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Bank shares rose after the Reserve Bank of India announced a
surprise cut in the cash reserve ratio, the proportion of deposits
that banks must keep with it, by 50 basis points to free up Rs
20000 crore. ICICI Bank (up 5.62% to Rs 518), State Bank of India
(up 3.21% to Rs 1,480) and HDFC Bank (up 2.49% to Rs 1,231.80)
edged higher.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Rate sensitive realty stocks rose. BSE Realty index rose 3.67% to
3,110.21 and was the top gainer from the sectoral indices on BSE.
Indiabulls Real Estate (up 3.69% to Rs 150.60), Unitech (up 5.24%
to Rs 106.25) and DLF (up 3.1% to Rs 309.95) edged higher.
Jaiprakash Associates (up 4.88% to Rs 105.30), Reliance
Communications (up 4.15% to Rs 312.50) and HDFC (up 4.38% to Rs
2,051) edged higher from the Sensex pack.
ITC (down 2.3% to Rs 175.95) and Sterlite Industries (down 1.68% to
Rs 329.70) edged lower from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 4.01% to Rs 1,019.40. The company will shortly tie
up with Uranium Corporation of India for exploring and mining the
fissile material, suggest reports.
Zandu Pharmaceutical Works fell 2.13% to Rs 16,125. The Parikhs,
co-promoters of Zandu Pharmaceutical Works, are reportedly in talks
with Kolkata-based consumer products maker Emami for an
out-of-court settlement. This comes after a long-running legal
battle between the Parikhs and Emami over the control of Zandu.
ACC rose 1.53% to Rs 608. The company is reportedly exploring the
option of starting up a new hydro-power project or acquiring these
projects as part of a strategy to derive power from renewable
sources and cut costs.
The Sebi decision on lifting of restriction on P-notes comes at a
time when foreign institutional investors (FIIs) have been pulling
out their investments from India and other emerging markets to
shore up resources to beat the global liquidity crunch. In India,
FIIs sold shares worth a net Rs 8278.10 crore last month. The
outflow has reached Rs 38037.30 crore in calendar year 2008 (till 3
October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The Indian stock market declined sharply in the past two days as
the global financial crisis deepened. The BSE Sensex plunged
1,253.97 points or 9.6% in two trading sessions to 11,801.70 on 6
October 2008 from its close of 13,055.67 on 1 October 2008.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
US stocks slumped on Monday, 6 October 2008, driving the Dow Jones
industrials Average to its first close below 10,000 level since
2004. The sell-off came despite the $700 billion US government
bailout package for the financial sector, which was signed into law
on Friday, 3 October 2008. At its worst point, the Dow was down
more than 800 points, an intraday record. The stock market rallied
during the final 90 minutes of the trading day, and the Dow
finished down about 370 points at 9,955.50. The tech-laden Nasdaq
Composite index lost 84.43 points or 4.34% at 1,862.96.
Asian stocks were mixed today, 7 October 2008. The key benchmark
indices in Taiwan was down by 0.08%. the key index in South Korea,
rose by 0.33%. Singapore shares reversed early losses go gain about
2.45%
Japan's Nikkei was down 1.68% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Oil bounced above $88 a barrel on Tuesday, 7 October 2008, having
fallen to an eight-month low the previous day on fears the global
economy would slip into recession.
Meanwhile, the uncertainty over the nuclear deal with India
continues as Condoleezza Rice, US secretary of state, left New
Delhi at the weekend without signing the US-India nuclear deal. The
deal is now expected to be signed by US president George Bush on
Wednesday, 8 October 2008. Cautious Indian negotiators have been
keen for Bush to sign the deal into US law and to publish a
presidential statement before signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty
decision to lift restriction on issue of participatory notes and
the Reserve Bank of India's surprise steep 50 basis cut in the cash
reserve ration triggered a rebound on the bourses after steep
losses of the past two trading sessions. The Sensex was up 351.70
points. Both the Sebi and RBI announcements were made after trading
hours on Monday, 6 October 2008.
A recovery in Asian stocks following a larger than expected 100
basis points cut in interest rate by Australia's central bank
today, 7 October 2008, and higher US futures contributed to early
surge on the domestic bourses. Rate sensitive banking and realty
stocks rose. Reliance Industries recovered from 52-week low.
US futures were up. Nasdaq was up by 20 points and Dow Jones
futures were up 121 points.
At 10:21 IST, the BSE 30-share Sensex was up 351.70 points or 2.96%
to 12,151.60. The index rose 253.92 points at the day's low of
12,055.62, hit in early trade,. The Sensex surged 379.73 points at
day's high of 12,181.43, in early trade.
The S&P CNX Nifty was up 117.35 points or 3.26% to 3,719.70.
The BSE Mid-Cap index was up 1.63% at 4,415.10 and the BSE
Small-Cap index was up 1.29% at 5,152.80.
The market breadth was strong on BSE with 992 shares advancing as
compared to 546 that declined. 22 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries rose 3.65% to Rs 1,700. The stock
had hit a 52 week low of 1,632.10 yesterday, 6 October 2008.
Bank shares rose after the Reserve Bank of India announced a
surprise cut in the cash reserve ratio, the proportion of deposits
that banks must keep with it, by 50 basis points to free up Rs
20000 crore. ICICI Bank (up 5.62% to Rs 518), State Bank of India
(up 3.21% to Rs 1,480) and HDFC Bank (up 2.49% to Rs 1,231.80)
edged higher.
The Reserve Bank of India (RBI), after trading hours on Monday, 6
October 2008, announced a 50 basis points cut in the cash reserve
ratio (CRR) to 8.5%, with effective from 11 October 2008. RBI said
the CRR cut is an ad hoc, temporary measure and it will be reviewed
on a continuous basis in the light of the evolving liquidity
conditions. RBI said it will give priority to liquidity management
over the period ahead given the turbulence in international
financial markets. RBI also said the overriding priority for
monetary policy is to eschew any further intensification of
inflationary pressures and to firmly anchor inflation expectations.
Rate sensitive realty stocks rose. BSE Realty index rose 3.67% to
3,110.21 and was the top gainer from the sectoral indices on BSE.
Indiabulls Real Estate (up 3.69% to Rs 150.60), Unitech (up 5.24%
to Rs 106.25) and DLF (up 3.1% to Rs 309.95) edged higher.
Jaiprakash Associates (up 4.88% to Rs 105.30), Reliance
Communications (up 4.15% to Rs 312.50) and HDFC (up 4.38% to Rs
2,051) edged higher from the Sensex pack.
ITC (down 2.3% to Rs 175.95) and Sterlite Industries (down 1.68% to
Rs 329.70) edged lower from the Sensex pack.
India's largest oil exploration firm by revenue Oil and Natural Gas
Corporation rose 4.01% to Rs 1,019.40. The company will shortly tie
up with Uranium Corporation of India for exploring and mining the
fissile material, suggest reports.
Zandu Pharmaceutical Works fell 2.13% to Rs 16,125. The Parikhs,
co-promoters of Zandu Pharmaceutical Works, are reportedly in talks
with Kolkata-based consumer products maker Emami for an
out-of-court settlement. This comes after a long-running legal
battle between the Parikhs and Emami over the control of Zandu.
ACC rose 1.53% to Rs 608. The company is reportedly exploring the
option of starting up a new hydro-power project or acquiring these
projects as part of a strategy to derive power from renewable
sources and cut costs.
The Sebi decision on lifting of restriction on P-notes comes at a
time when foreign institutional investors (FIIs) have been pulling
out their investments from India and other emerging markets to
shore up resources to beat the global liquidity crunch. In India,
FIIs sold shares worth a net Rs 8278.10 crore last month. The
outflow has reached Rs 38037.30 crore in calendar year 2008 (till 3
October 2008).
Exactly a year ago, Securities & Exchange Board of India (Sebi) had
announced stringent restrictions on P-notes, totally banning fresh
issue of P-notes with Indian derivatives as underlying. It had also
mandated unwinding of such positions within 18 months. Sebi had
also restricted issuance of P-notes in the spot segment to 40% of
assets under custody. P-notes are issued by foreign institutional
investors registered in India to unregistered overseas investors.
As per provisional data released by the stock exchanges, foreign
funds sold shares worth a net Rs 1169.33 crore on Monday, 6 October
2008. Domestic funds bought shares worth a net Rs 661 crore.
Meanwhile, with the end of third quarter of the calendar year 2008
on Tuesday, 30 September 2008, hedge fund are bracing for heavy
redemption amid US financial sector crisis which has already spread
to Europe. Investors in hedge funds are usually allowed to exit
funds only on the final day of the financial quarter. Large-scale
investor redemption in hedge funds may trigger further selling by
foreign funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The Indian stock market declined sharply in the past two days as
the global financial crisis deepened. The BSE Sensex plunged
1,253.97 points or 9.6% in two trading sessions to 11,801.70 on 6
October 2008 from its close of 13,055.67 on 1 October 2008.
The troubles that started with an overheated housing market in the
US have infected financial markets around the world, making banks
fearful of lending to other banks, let alone to businesses and
consumers. That has led to worries that economies around the world
might not only sputter but slide into reverse. Recently,
governments across Europe rushed to prop up failing banks, while
the governments of Germany, Ireland and Greece also said they would
guarantee bank deposits.
US stocks slumped on Monday, 6 October 2008, driving the Dow Jones
industrials Average to its first close below 10,000 level since
2004. The sell-off came despite the $700 billion US government
bailout package for the financial sector, which was signed into law
on Friday, 3 October 2008. At its worst point, the Dow was down
more than 800 points, an intraday record. The stock market rallied
during the final 90 minutes of the trading day, and the Dow
finished down about 370 points at 9,955.50. The tech-laden Nasdaq
Composite index lost 84.43 points or 4.34% at 1,862.96.
Asian stocks were mixed today, 7 October 2008. The key benchmark
indices in Taiwan was down by 0.08%. the key index in South Korea,
rose by 0.33%. Singapore shares reversed early losses go gain about
2.45%
Japan's Nikkei was down 1.68% after The Bank of Japan kept interest
rates unchanged at 0.5% on Tuesday, 7 October 2008, and maintained
its assessment on the economy, which it said was sluggish.
Oil bounced above $88 a barrel on Tuesday, 7 October 2008, having
fallen to an eight-month low the previous day on fears the global
economy would slip into recession.
Meanwhile, the uncertainty over the nuclear deal with India
continues as Condoleezza Rice, US secretary of state, left New
Delhi at the weekend without signing the US-India nuclear deal. The
deal is now expected to be signed by US president George Bush on
Wednesday, 8 October 2008. Cautious Indian negotiators have been
keen for Bush to sign the deal into US law and to publish a
presidential statement before signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty
Panic over financial system knocks Asia stocks
Panic about how the U.S. and European governments have not yet found a solution to the plague sweeping through the global financial system hit Asian stocks again on Tuesday and lifted gold prices.
The South Korean won dropped 5.7 percent to the lowest in more than 7 years against the U.S. dollar as investors focused on the country's relatively high level of debts, despite assurances from the government that Asia's fourth-largest economy was not facing a currency crisis.
The $700 billion U.S. rescue fund, ad hoc measures by European governments and massive injections of funds by central banks around the world have not been able to stop confidence in the financial system from evaporating or growing fears the global economy is on path to recession.
On Monday, the Dow Jones industrial average closed at a 4-year low after dipping below 10,000 points for the first time since October 2004.
The fury with which global equity markets have sold off in recent weeks and the worsening condition of the financial system has made the upcoming Group of Seven rich nations meeting even more important. Investors have begun to anticipate some kind of cooperation among countries to solve the morasse.
"The key issue is coordination of policies, since individual country policies aimed at shoring up confidence of domestic institutions can actually exacerbate systemic risk by altering relative risk between countries," said Ashley Davies, currency strategist with UBS in Singapore. "As such, a coordinated global approach by the major financial powers may be critical to containing the destructive aspects of global deleveraging," he said in a note.
The Nikkei was down 2.8 percent after earlier slipping to its lowest since December 2003. Shares of high-profile exporters Canon Inc and Honda Motor Co were among the biggest drags on the index.
Australia's benchmark S&P/ASX 200 index slid 2.1 percent to a 3-year low.
South Korea's KOSPI was down 0.9 percent after closing at the lowest in 21 months on Monday.
The country's regulator said it was considering steps to reduce volatility in the equity market, helping to stem some of the day's losses.
The MSCI All-Country world stocks index closed at a four-year low on Monday, having dropped by a third so far this year.
In other markets, dealers picked up the pieces a day after the Chicago Board Options Exchange Volatility index, better known as the VIX, vaulted to a record high of 58.24 as investors scrambled to buy protection against plummeting global stock markets.
"At this point, all we can do is to wait and see how effective the U.S. financial rescue plan or any other coordinated government efforts will be in thawing global capital markets," said Lee Kyoung-su, a market analyst at Taurus Investment & Securities in Seoul.
The benchmark 10-year U.S. Treasury note yield, which moves in the opposite direction of the price, ticked up to 3.49 percent after dropping to 3.46 percent late on Monday in New York. It was still down sharply from 3.60 percent late last week, reflecting the heavy demand for government debt as a relatively safe haven from market shockwaves.
Japanese 10-year government bond futures were down 0.6 point to 137.90 after rising for three straight days.
Frozen interbank lending markets and bank rescues remained a feature in the United States and Europe. But the bailout of two big European banks and a decision by several European governments to guarantee bank deposits in emergency moves in the last several days have done little to dispel intense waves of fear among investors.
After a massive surge on Monday, the yen edged up against the dollar and the euro but slipped against higher-yielding currencies such as the Australian and New Zealand dollars.
The dollar dipped 0.4 percent against the Japanese currency to 101.44 yen, edging toward a six-month low of 100.22 yen hit on trading platform EBS the previous day.
The European single currency edged up 0.2 percent to $1.3531. The euro struck a 13-month low below $1.3450 on Monday, hit hard by a decision by leaders of Europe's four biggest economies against a coordinated bailout plan.
The euro slipped 0.2 percent to 137.24 yen.
Gold climbed in the spot market, up 0.7 percent to $863.50 an ounce after rocketing nearly 4 percent on Monday on a flight to anything resembling safety.
The South Korean won dropped 5.7 percent to the lowest in more than 7 years against the U.S. dollar as investors focused on the country's relatively high level of debts, despite assurances from the government that Asia's fourth-largest economy was not facing a currency crisis.
The $700 billion U.S. rescue fund, ad hoc measures by European governments and massive injections of funds by central banks around the world have not been able to stop confidence in the financial system from evaporating or growing fears the global economy is on path to recession.
On Monday, the Dow Jones industrial average closed at a 4-year low after dipping below 10,000 points for the first time since October 2004.
The fury with which global equity markets have sold off in recent weeks and the worsening condition of the financial system has made the upcoming Group of Seven rich nations meeting even more important. Investors have begun to anticipate some kind of cooperation among countries to solve the morasse.
"The key issue is coordination of policies, since individual country policies aimed at shoring up confidence of domestic institutions can actually exacerbate systemic risk by altering relative risk between countries," said Ashley Davies, currency strategist with UBS in Singapore. "As such, a coordinated global approach by the major financial powers may be critical to containing the destructive aspects of global deleveraging," he said in a note.
The Nikkei was down 2.8 percent after earlier slipping to its lowest since December 2003. Shares of high-profile exporters Canon Inc and Honda Motor Co were among the biggest drags on the index.
Australia's benchmark S&P/ASX 200 index slid 2.1 percent to a 3-year low.
South Korea's KOSPI was down 0.9 percent after closing at the lowest in 21 months on Monday.
The country's regulator said it was considering steps to reduce volatility in the equity market, helping to stem some of the day's losses.
The MSCI All-Country world stocks index closed at a four-year low on Monday, having dropped by a third so far this year.
In other markets, dealers picked up the pieces a day after the Chicago Board Options Exchange Volatility index, better known as the VIX, vaulted to a record high of 58.24 as investors scrambled to buy protection against plummeting global stock markets.
"At this point, all we can do is to wait and see how effective the U.S. financial rescue plan or any other coordinated government efforts will be in thawing global capital markets," said Lee Kyoung-su, a market analyst at Taurus Investment & Securities in Seoul.
The benchmark 10-year U.S. Treasury note yield, which moves in the opposite direction of the price, ticked up to 3.49 percent after dropping to 3.46 percent late on Monday in New York. It was still down sharply from 3.60 percent late last week, reflecting the heavy demand for government debt as a relatively safe haven from market shockwaves.
Japanese 10-year government bond futures were down 0.6 point to 137.90 after rising for three straight days.
Frozen interbank lending markets and bank rescues remained a feature in the United States and Europe. But the bailout of two big European banks and a decision by several European governments to guarantee bank deposits in emergency moves in the last several days have done little to dispel intense waves of fear among investors.
After a massive surge on Monday, the yen edged up against the dollar and the euro but slipped against higher-yielding currencies such as the Australian and New Zealand dollars.
The dollar dipped 0.4 percent against the Japanese currency to 101.44 yen, edging toward a six-month low of 100.22 yen hit on trading platform EBS the previous day.
The European single currency edged up 0.2 percent to $1.3531. The euro struck a 13-month low below $1.3450 on Monday, hit hard by a decision by leaders of Europe's four biggest economies against a coordinated bailout plan.
The euro slipped 0.2 percent to 137.24 yen.
Gold climbed in the spot market, up 0.7 percent to $863.50 an ounce after rocketing nearly 4 percent on Monday on a flight to anything resembling safety.
Crisis drives Nikkei to 5-year low below 10,000
Fears over the global financial crisis drove Japan's Nikkei stock average down more than 5 percent on Tuesday to a five-year low below 10,000 before bargain hunters picked up issues on the cheap, helping trim the average's loss to 3.1 percent.
The yen, which was holding near a six-month high against the dollar hit on Monday, hurt exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and automakers, whose earnings have been badly undercut by the worsening economy overseas. FXNEWS [FRX/]
"The market has been in a panic situation since last week, and a lot of people are moving into cash," said Koichi Ogawa, chief portfolio manager at Daiwa Asset Management. "It's not really moving on sense, there are a lot of people who may have no choice but to sell."
The benchmark Nikkei .N225 at one point slid as low as 9,916.21, its lowest since December 2003, before ending the morning at 10,148.46 with a loss of 324.63 points. It has lost 7.2 percent since Friday.
The broader Topix was down 2.7 percent at 972.13 after earlier also falling more than 5 percent. U.S. stocks slid for a fourth straight day on Monday, pushing the Dow below 10,000 for the first time in four years, on fears the global economy was hurtling towards recession despite efforts to contain the fast-spreading financial crisis [.N]
Though Japan has remained comparatively unscathed until now, policymakers admitted on Tuesday that the crisis is taking a toll, with Finance Minister Shoichi Nakagawa saying Japan's economy was worsening. [ID:nTKF003044]
Separately, Prime Minister Taro Aso said U.S. financial conditions were very severe, and Tokyo should be prepared for its impact on Japanese exports, which drive its economy.
Individual Japanese investors were fearful.
"There's no way I can predict what's going to happen next," said Tetsuo Kurosaki, a 59-year-old company executive. "The European market is also influenced and I bought products from there so I'm even more worried."
ACTION, FAST
Market participants said something needs to be done, perhaps even before G7 talks in Washington later this week.
"We need some sort of policy response," said Katsuhiko Kodama, senior strategist at Toyo Securities.
"Otherwise, it's hard to know where the fall might stop. The focus of the market is on some sort of joint interest rate cut."
Bargain hunting eventually emerged on a sense the Nikkei had been oversold, tracking moves on the Dow where a record 800-point intraday drop eventually was cut almost in half, though rises were expected to be limited.
"The market must have a reality check against the real economy," said Daiwa Asset's Ogawa.
"Since September it appears the market has been in a panic situation that has worsened the whole credit crisis, especially in the U.S. and Europe."
The yen's surge against the dollar hit exporters, whose products become less competitive overseas when this happens.
Canon shed 4.6 percent to 3,510 yen and Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz), hit by the double punch of the strong yen and a fall in its U.S. peers, lost 3.4 percent to 7,210 yen.
Honda Motor Corp (7267.T: Quote, Profile, Research, Stock Buzz) and Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) slid 5.2 percent and 5.9 percent respectively.
Sharp Corp (6753.T: Quote, Profile, Research, Stock Buzz) tumbled 9.2 percent after the consumer electronics maker cut its annual operating profit outlook by one-third due to sluggish domestic sales of mobile phones, missing market expectations by a wide margin. [ID:nT314929]
Trade was active, with 1.4 billion shares changing hands on the Tokyo Exchange's first section compared with last week's morning average of 910 million. Decliners outpaced advancers by more than 8 to 1.
The yen, which was holding near a six-month high against the dollar hit on Monday, hurt exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) and automakers, whose earnings have been badly undercut by the worsening economy overseas. FXNEWS [FRX/]
"The market has been in a panic situation since last week, and a lot of people are moving into cash," said Koichi Ogawa, chief portfolio manager at Daiwa Asset Management. "It's not really moving on sense, there are a lot of people who may have no choice but to sell."
The benchmark Nikkei .N225 at one point slid as low as 9,916.21, its lowest since December 2003, before ending the morning at 10,148.46 with a loss of 324.63 points. It has lost 7.2 percent since Friday.
The broader Topix was down 2.7 percent at 972.13 after earlier also falling more than 5 percent. U.S. stocks slid for a fourth straight day on Monday, pushing the Dow below 10,000 for the first time in four years, on fears the global economy was hurtling towards recession despite efforts to contain the fast-spreading financial crisis [.N]
Though Japan has remained comparatively unscathed until now, policymakers admitted on Tuesday that the crisis is taking a toll, with Finance Minister Shoichi Nakagawa saying Japan's economy was worsening. [ID:nTKF003044]
Separately, Prime Minister Taro Aso said U.S. financial conditions were very severe, and Tokyo should be prepared for its impact on Japanese exports, which drive its economy.
Individual Japanese investors were fearful.
"There's no way I can predict what's going to happen next," said Tetsuo Kurosaki, a 59-year-old company executive. "The European market is also influenced and I bought products from there so I'm even more worried."
ACTION, FAST
Market participants said something needs to be done, perhaps even before G7 talks in Washington later this week.
"We need some sort of policy response," said Katsuhiko Kodama, senior strategist at Toyo Securities.
"Otherwise, it's hard to know where the fall might stop. The focus of the market is on some sort of joint interest rate cut."
Bargain hunting eventually emerged on a sense the Nikkei had been oversold, tracking moves on the Dow where a record 800-point intraday drop eventually was cut almost in half, though rises were expected to be limited.
"The market must have a reality check against the real economy," said Daiwa Asset's Ogawa.
"Since September it appears the market has been in a panic situation that has worsened the whole credit crisis, especially in the U.S. and Europe."
The yen's surge against the dollar hit exporters, whose products become less competitive overseas when this happens.
Canon shed 4.6 percent to 3,510 yen and Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz), hit by the double punch of the strong yen and a fall in its U.S. peers, lost 3.4 percent to 7,210 yen.
Honda Motor Corp (7267.T: Quote, Profile, Research, Stock Buzz) and Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) slid 5.2 percent and 5.9 percent respectively.
Sharp Corp (6753.T: Quote, Profile, Research, Stock Buzz) tumbled 9.2 percent after the consumer electronics maker cut its annual operating profit outlook by one-third due to sluggish domestic sales of mobile phones, missing market expectations by a wide margin. [ID:nT314929]
Trade was active, with 1.4 billion shares changing hands on the Tokyo Exchange's first section compared with last week's morning average of 910 million. Decliners outpaced advancers by more than 8 to 1.
Dow finishes below 10,000 for first time since '04
NEW YORK (AP) -- Wall Street joined in a worldwide cascade of despair Monday over the financial crisis, driving the Dow Jones industrials to their biggest loss ever during a trading day. Even a big afternoon rally failed to keep the Dow from its first close below 10,000 since 2004.
The sell-off came despite the $700 billion U.S. government bailout package, which was signed into law Friday after two weeks in which traders had appeared to count on the rescue as their only hope to avoid a market meltdown.
At its worst point, the Dow was down more than 800 points, an intraday record. The stock market rallied during the final 90 minutes of the trading day, and the Dow finished down about 370 points at 9,955.50.
The average is down almost 30 percent from its all-time high of 14,164.53, set a year ago Thursday.
Speculation among traders late in the session that the market's pullback had been severe enough to force the Federal Reserve into taking other steps to soothe the markets helped stocks rebound from their lows.
"If you can't say that we're oversold now I don't know what you say. You're at least due for a bounce if nothing else," said Bill Stone, chief investment strategist for PNC Wealth Management.
The global plunge in stocks was under way well before Wall Street ever woke up. In Japan, the Nikkei average lost more than 4 percent. And then the losses spread across Europe -- nearly 6 percent for the FTSE-100 in Britain, 7 percent for the German DAX and more than 9 percent for France's CAC-40.
In the United States, President Bush twice made unscheduled remarks on the economy, saying in Cincinnati that the economy would be "just fine" but that the bailout package needed time to work.
The troubles that started with an overheated housing market in the U.S. have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers. That has led to worries that economies around the world might not only sputter but slide into reverse.
The crush of selling Monday came exactly one week after the Dow lost 778 points, its biggest closing loss in terms of points. On that day, the House voted down an earlier bailout package that had appeared to be a safe bet to pass.
The swings in the Dow on Monday also marked the beginning a fourth week of tumult in the markets. Triple-digit Dow swings have been commonplace since mid-September, when investment house Lehman Brothers went bankrupt and the government stepped in to bail out insurer American International Group.
But even with the bailout package firmly in place -- a plan under which the federal government will buy bad mortgage-related assets off the books of banks -- investors remain worried that banks are too fearful to lend and are cutting off air to the economy.
Over the weekend, governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits. U.S. investors appeared worried the bailout would not be enough to jump-start the economy. Even other steps, including a Federal Reserve decision to expand a loan program to squeezed banks, didn't help much.
The sharp one-day tumbles over the last two Mondays don't come close to the drops that became black marks on the timeline of Wall Street history. Black Monday, in October 1987, and stock drops that preceded the Great Depression were more than 20 percent. Monday's drop, by comparisons, was less than 8 percent at its worst.
For the day, the Dow lost 3.6 percent. The selling was broad: Little more than 200 stocks finished the day higher on the New York Stock Exchange, while about 3,000 finished lower.
At its lowest point Monday, the Dow was down 800.06, at 9,525.32. The benchmark average dipped below 10,000 for the first time since Oct. 29, 2004, and closed there despite the afternoon rally.
The market's paper loss at the day's lows came to $1.1 trillion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks. That compares with a loss of about $1.5 trillion last week; that was the worst weekly return since the week after trading resumed following the Sept. 11, 2001, terror attacks.
As an indication of how fearful investors still are, government-backed debt was in high demand. The yield on the three-month Treasury bill, which moves in the opposite direction as its price, fell to 0.49 percent from late Friday at 0.50 percent. Investors are willing to accept low returns to have their money in a secure place.
Investors also moved into longer-term Treasury bonds as they fled the stock market. The yield on the 10-year note fell to 3.45 percent from 3.60 percent late Friday.
Broader indexes also plunged. The Standard & Poor's 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.
Consolidated volume on the NYSE reflected the frantic pace of the day's trading: 7.81 billion shares changed hands, up from Friday's 6.52 billion.
The market "is displaying one of its worst traits with a herd mentality, and investors have an appetite for feeding on fear," said Anthony Sabino, a professor of law and business at St. John's University.
The sell-off came despite the $700 billion U.S. government bailout package, which was signed into law Friday after two weeks in which traders had appeared to count on the rescue as their only hope to avoid a market meltdown.
At its worst point, the Dow was down more than 800 points, an intraday record. The stock market rallied during the final 90 minutes of the trading day, and the Dow finished down about 370 points at 9,955.50.
The average is down almost 30 percent from its all-time high of 14,164.53, set a year ago Thursday.
Speculation among traders late in the session that the market's pullback had been severe enough to force the Federal Reserve into taking other steps to soothe the markets helped stocks rebound from their lows.
"If you can't say that we're oversold now I don't know what you say. You're at least due for a bounce if nothing else," said Bill Stone, chief investment strategist for PNC Wealth Management.
The global plunge in stocks was under way well before Wall Street ever woke up. In Japan, the Nikkei average lost more than 4 percent. And then the losses spread across Europe -- nearly 6 percent for the FTSE-100 in Britain, 7 percent for the German DAX and more than 9 percent for France's CAC-40.
In the United States, President Bush twice made unscheduled remarks on the economy, saying in Cincinnati that the economy would be "just fine" but that the bailout package needed time to work.
The troubles that started with an overheated housing market in the U.S. have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers. That has led to worries that economies around the world might not only sputter but slide into reverse.
The crush of selling Monday came exactly one week after the Dow lost 778 points, its biggest closing loss in terms of points. On that day, the House voted down an earlier bailout package that had appeared to be a safe bet to pass.
The swings in the Dow on Monday also marked the beginning a fourth week of tumult in the markets. Triple-digit Dow swings have been commonplace since mid-September, when investment house Lehman Brothers went bankrupt and the government stepped in to bail out insurer American International Group.
But even with the bailout package firmly in place -- a plan under which the federal government will buy bad mortgage-related assets off the books of banks -- investors remain worried that banks are too fearful to lend and are cutting off air to the economy.
Over the weekend, governments across Europe rushed to prop up failing banks, while the governments of Germany, Ireland and Greece also said they would guarantee bank deposits. U.S. investors appeared worried the bailout would not be enough to jump-start the economy. Even other steps, including a Federal Reserve decision to expand a loan program to squeezed banks, didn't help much.
The sharp one-day tumbles over the last two Mondays don't come close to the drops that became black marks on the timeline of Wall Street history. Black Monday, in October 1987, and stock drops that preceded the Great Depression were more than 20 percent. Monday's drop, by comparisons, was less than 8 percent at its worst.
For the day, the Dow lost 3.6 percent. The selling was broad: Little more than 200 stocks finished the day higher on the New York Stock Exchange, while about 3,000 finished lower.
At its lowest point Monday, the Dow was down 800.06, at 9,525.32. The benchmark average dipped below 10,000 for the first time since Oct. 29, 2004, and closed there despite the afternoon rally.
The market's paper loss at the day's lows came to $1.1 trillion, as measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks. That compares with a loss of about $1.5 trillion last week; that was the worst weekly return since the week after trading resumed following the Sept. 11, 2001, terror attacks.
As an indication of how fearful investors still are, government-backed debt was in high demand. The yield on the three-month Treasury bill, which moves in the opposite direction as its price, fell to 0.49 percent from late Friday at 0.50 percent. Investors are willing to accept low returns to have their money in a secure place.
Investors also moved into longer-term Treasury bonds as they fled the stock market. The yield on the 10-year note fell to 3.45 percent from 3.60 percent late Friday.
Broader indexes also plunged. The Standard & Poor's 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.
Consolidated volume on the NYSE reflected the frantic pace of the day's trading: 7.81 billion shares changed hands, up from Friday's 6.52 billion.
The market "is displaying one of its worst traits with a herd mentality, and investors have an appetite for feeding on fear," said Anthony Sabino, a professor of law and business at St. John's University.
Post Market Report:06/10/2008
The key benchmark indices extended steep losses of the previous
trading session as stocks fell across the globe as global financial
crisis deepened. A sell-off in index pivotals pulled down Sensex by
724.62 points today, 6 October 2008. US futures were down
indicating of lower opening of US markets. The Sensex hit its
lowest level in more than two years and the S&P CNX Nifty hit 1-½
year low.
In a major development, the market regulator Securities & Exchange
Board of India (Sebi) today, 6 October 2008, announced removal of
restriction on issue of participatory notes (P-notes) by foreign
institutional investors (FIIs) against securities, including
derivatives, as underlying. The announcement was made shortly after
trading hours. P-notes are issued by foreign funds registered in
India to unregistered overseas investors.
Consumer durables and realty stocks plummeted. Sterlite Industries
fell more than 15%. Reliance Infrastrucutre and Jaiprakash
Associates fell more than 13.5% each. Reliance Industries (RIL)
fell more than 6.5% while Infosys fell more than 5%. The market
breadth was weak as selling was witnessed across the board.
The global financial crisis spread further to Europe and doubts
persisted about the effectiveness of the US administration's $700
billion US financial sector bailout plan. Despite weeks of huge
liquidity injection by central banks, money markets remained tight,
reflecting deep-rooted reluctance by banks to lend to each other.
The uncertainty over the nuclear deal with the United States
persisted as Condoleezza Rice, US secretary of state, left New
Delhi at the weekend without signing the US-India nuclear deal. The
domestic bourses ignored fall in inflation and further fall in oil
& commodity prices.
US futures were trading lower. Nasdaq futures were down 30 points
and Dow futures were down 194 points.
The BSE 30-share Sensex lost 724.62 points or 5.78% to 11,801.70.
The index shed 793.75 points at the day's low of 11,732.97, hit in
late trade, its lowest level since 13 September 2006. The Sensex
fell 241.83 points at day's high of 12,284.49, in early trade.
The S&P CNX Nifty was down 215.95 points or 5.66% to 3,602.35.
Nifty hit a low of 3,581.60, its lowest level since 16 March 2007.
The BSE Sensex has lost 1,253.97 points or 9.6% in last two trading
sessions from its close of 13,055.67 on 1 October 2008. The
barometer index is down 8,489.29 points or 41.82% in the calendar
year 2008 so far from its close of 20,286.99 on 31 December 2007.
It is 9,405.07 points or 44.34% below its all-time high of
21,206.77 struck on 10 January 2008.
Nifty October 2008 futures were at 3642, at a premium of 39.65
points as compared to spot closing of 3602.35. NSE's futures &
options (F&O) segment turnover was Rs 46,853.23 crore, which was
higher than Rs 44,983.07 crore on Friday, 3 October 2008.
BSE clocked a turnover Rs 3921 crore today, 6 October 2008 as
compared to a turnover of Rs 4801.25 crore on Friday, 3 October
2008.
The BSE Mid-Cap index was down 7.13% at 4,344.23 and the BSE
Small-Cap index was down 6.92% at 5,086.93.
BSE Consumer Durbles index (down 11.01% to 2,569.60), BSE Realty
index (down 9.91% to 2,999.99), BSE Metal index (down 9.27% to
7,636.65), BSE Capital Goods index (down 7.27% to 9,494.93), BSE
Power index (down 7.24% to 2,066.31), BSE Oil & Gas index (down
6.14% to 7,909.50), BSE IT index (down 5.82% to 2,929.25),
underperformed the Sensex.
BSE Auto index (down 3.5% to 3,526.40), BSE PSU index (down 3.9% to
5,931.10), BSE Bankex (down 4% to 6,172), BSE FMCG index (down
4.11% to 2,090.50), BSE HealthCare index (down 4.79% to 3,488.07),
BSE Teck index (down 5.62% to 2,381.71), outperformed the Sensex.
The market breadth was weak on BSE with 281 shares advancing as
compared to 2,369 that declined. 27 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 6.76% to Rs 1,641.90. The
stock hit a 52-week low of Rs 1,632.10 today. The promoters of
Reliance Industries converted their 12 crore warrants into an equal
number of shares. Post-transaction, the promoter group holds 49%
stake in the company, with 52% voting rights. This involves an
infusion of around Rs 15,142 crore into the company. The shares
have a lock-in period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
India's second largest IT exporter by sales Infosys declined 5.26%
to Rs 1,317.80. It recovered from the session's low of Rs 1,275.15.
Sterlite Industries (down 15.26% to Rs 335.35), Reliance
Infrastructure (down 13.93% to Rs 638), Jaiprakash Associates (down
13.57% to Rs 100.35), Tata Steel (down 11.06% to Rs 350.25), Tata
Power Company (down 10.15% to Rs 798.35), Grasim Industries (down
9.54% to Rs 1,590.80), declined sharply from the Sensex pack.
Realty stocks declined. Indiabulls Real Estate (down 9.89% to Rs
144.85), Unitech (down 9.85% to Rs 101.10) and DLF (down 10.33% to
Rs 301.65) edged lower.
Consumer durables stocks plummeted. Gitanjali Gems (down 16.75% to
Rs 155.85), Blue Star (down 12.3% to Rs 245.70), Titan Industries
(down 11.45% to Rs 953.85) and Videocon Industries (down 9.99% to
Rs 185.60) edged lower.
India's largest electric equipment maker by sales Bharat Heavy
Electricals declined 7.48% to Rs 1,449.40. Bharat Heavy Electricals
and Nuclear Power Corporation of India are reportedly in talks with
foreign firms Siemens, Alstom and GE for a third partner in their
planned joint venture to set up nuclear power projects in India.
IFCI clocked the highest volume of 1.05 crore shares on BSE.
Reliance Natural Resources (1.04 crore shares), Reliance Petroleum
(71.16 lakh shares), Jaiprakash Associates (59.01 lakh shares) and
Ispat Industries (56.97 lakh shares) were the other volume toppers
in that order.
Reliance Industries clocked the highest turnover of Rs 380.80 crore
on BSE. Reliance Capital (Rs 244.10 crore), Axis Bank (Rs 141.14
crore), ICICI Bank (Rs 119.17 crore) and Tata Steel (Rs 117.74
crore) were other turnover toppers in that order.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 4.12%
to 5.23%.
In Europe, France's CAC 40, Germany's DAX and UK's FTSE 100 were
down between 3.06% to 5.63%.
BNP Paribas France's biggest listed bank, today, 6 October 2008,
said it was paying 14.5 billion euros ($20.1 billion) to take
control of European financial group Fortis. Germany gave blanket
bank deposit guarantee on Sunday, 5 October 2008, to prevent panic
as officials clinched deals to rescue Germany's Hypo Real Estate --
after an initial bailout failed -- and recapitalize two other
European banks.
In South Korea, banks were having trouble raising foreign currency
funds and the government pledged to give banks access to the
country's foreign exchange reserves, the world's sixth largest at
nearly $240 billion.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
Last-minute administrative hitches forced Condoleezza Rice, US
secretary of state, to leave New Delhi at the weekend without
signing the US-India nuclear deal to end more than three decades of
isolation for India's nuclear programme. The deal is now expected
to be signed by US president George Bush on Wednesday, 8 October
2008. Cautious Indian negotiators have been keen for Bush to sign
the deal into US law and to publish a presidential statement before
signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty.
Inflation based on the wholesale price index rose 11.99% in 12
months to 20 September 2008, below the previous week's annual rise
of 12.14%, government data released after trading hours on Friday,
3 October 2008, showed. Inflation for the week ended 26 July 2008
was revised upwards to 12.53% from 12.01%.
US light crude fell 3.8% to $90.34 a barrel in Asian trading today,
6 October 2008, as concerns grew the slowing economy would choke
off energy demand.
The BSE 30-share Sensex plunged 529.35 points or 4.05% to
12,526.32, on Friday, 3 October 2008, its lowest closing in 18
months.
trading session as stocks fell across the globe as global financial
crisis deepened. A sell-off in index pivotals pulled down Sensex by
724.62 points today, 6 October 2008. US futures were down
indicating of lower opening of US markets. The Sensex hit its
lowest level in more than two years and the S&P CNX Nifty hit 1-½
year low.
In a major development, the market regulator Securities & Exchange
Board of India (Sebi) today, 6 October 2008, announced removal of
restriction on issue of participatory notes (P-notes) by foreign
institutional investors (FIIs) against securities, including
derivatives, as underlying. The announcement was made shortly after
trading hours. P-notes are issued by foreign funds registered in
India to unregistered overseas investors.
Consumer durables and realty stocks plummeted. Sterlite Industries
fell more than 15%. Reliance Infrastrucutre and Jaiprakash
Associates fell more than 13.5% each. Reliance Industries (RIL)
fell more than 6.5% while Infosys fell more than 5%. The market
breadth was weak as selling was witnessed across the board.
The global financial crisis spread further to Europe and doubts
persisted about the effectiveness of the US administration's $700
billion US financial sector bailout plan. Despite weeks of huge
liquidity injection by central banks, money markets remained tight,
reflecting deep-rooted reluctance by banks to lend to each other.
The uncertainty over the nuclear deal with the United States
persisted as Condoleezza Rice, US secretary of state, left New
Delhi at the weekend without signing the US-India nuclear deal. The
domestic bourses ignored fall in inflation and further fall in oil
& commodity prices.
US futures were trading lower. Nasdaq futures were down 30 points
and Dow futures were down 194 points.
The BSE 30-share Sensex lost 724.62 points or 5.78% to 11,801.70.
The index shed 793.75 points at the day's low of 11,732.97, hit in
late trade, its lowest level since 13 September 2006. The Sensex
fell 241.83 points at day's high of 12,284.49, in early trade.
The S&P CNX Nifty was down 215.95 points or 5.66% to 3,602.35.
Nifty hit a low of 3,581.60, its lowest level since 16 March 2007.
The BSE Sensex has lost 1,253.97 points or 9.6% in last two trading
sessions from its close of 13,055.67 on 1 October 2008. The
barometer index is down 8,489.29 points or 41.82% in the calendar
year 2008 so far from its close of 20,286.99 on 31 December 2007.
It is 9,405.07 points or 44.34% below its all-time high of
21,206.77 struck on 10 January 2008.
Nifty October 2008 futures were at 3642, at a premium of 39.65
points as compared to spot closing of 3602.35. NSE's futures &
options (F&O) segment turnover was Rs 46,853.23 crore, which was
higher than Rs 44,983.07 crore on Friday, 3 October 2008.
BSE clocked a turnover Rs 3921 crore today, 6 October 2008 as
compared to a turnover of Rs 4801.25 crore on Friday, 3 October
2008.
The BSE Mid-Cap index was down 7.13% at 4,344.23 and the BSE
Small-Cap index was down 6.92% at 5,086.93.
BSE Consumer Durbles index (down 11.01% to 2,569.60), BSE Realty
index (down 9.91% to 2,999.99), BSE Metal index (down 9.27% to
7,636.65), BSE Capital Goods index (down 7.27% to 9,494.93), BSE
Power index (down 7.24% to 2,066.31), BSE Oil & Gas index (down
6.14% to 7,909.50), BSE IT index (down 5.82% to 2,929.25),
underperformed the Sensex.
BSE Auto index (down 3.5% to 3,526.40), BSE PSU index (down 3.9% to
5,931.10), BSE Bankex (down 4% to 6,172), BSE FMCG index (down
4.11% to 2,090.50), BSE HealthCare index (down 4.79% to 3,488.07),
BSE Teck index (down 5.62% to 2,381.71), outperformed the Sensex.
The market breadth was weak on BSE with 281 shares advancing as
compared to 2,369 that declined. 27 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 6.76% to Rs 1,641.90. The
stock hit a 52-week low of Rs 1,632.10 today. The promoters of
Reliance Industries converted their 12 crore warrants into an equal
number of shares. Post-transaction, the promoter group holds 49%
stake in the company, with 52% voting rights. This involves an
infusion of around Rs 15,142 crore into the company. The shares
have a lock-in period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
India's second largest IT exporter by sales Infosys declined 5.26%
to Rs 1,317.80. It recovered from the session's low of Rs 1,275.15.
Sterlite Industries (down 15.26% to Rs 335.35), Reliance
Infrastructure (down 13.93% to Rs 638), Jaiprakash Associates (down
13.57% to Rs 100.35), Tata Steel (down 11.06% to Rs 350.25), Tata
Power Company (down 10.15% to Rs 798.35), Grasim Industries (down
9.54% to Rs 1,590.80), declined sharply from the Sensex pack.
Realty stocks declined. Indiabulls Real Estate (down 9.89% to Rs
144.85), Unitech (down 9.85% to Rs 101.10) and DLF (down 10.33% to
Rs 301.65) edged lower.
Consumer durables stocks plummeted. Gitanjali Gems (down 16.75% to
Rs 155.85), Blue Star (down 12.3% to Rs 245.70), Titan Industries
(down 11.45% to Rs 953.85) and Videocon Industries (down 9.99% to
Rs 185.60) edged lower.
India's largest electric equipment maker by sales Bharat Heavy
Electricals declined 7.48% to Rs 1,449.40. Bharat Heavy Electricals
and Nuclear Power Corporation of India are reportedly in talks with
foreign firms Siemens, Alstom and GE for a third partner in their
planned joint venture to set up nuclear power projects in India.
IFCI clocked the highest volume of 1.05 crore shares on BSE.
Reliance Natural Resources (1.04 crore shares), Reliance Petroleum
(71.16 lakh shares), Jaiprakash Associates (59.01 lakh shares) and
Ispat Industries (56.97 lakh shares) were the other volume toppers
in that order.
Reliance Industries clocked the highest turnover of Rs 380.80 crore
on BSE. Reliance Capital (Rs 244.10 crore), Axis Bank (Rs 141.14
crore), ICICI Bank (Rs 119.17 crore) and Tata Steel (Rs 117.74
crore) were other turnover toppers in that order.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 4.12%
to 5.23%.
In Europe, France's CAC 40, Germany's DAX and UK's FTSE 100 were
down between 3.06% to 5.63%.
BNP Paribas France's biggest listed bank, today, 6 October 2008,
said it was paying 14.5 billion euros ($20.1 billion) to take
control of European financial group Fortis. Germany gave blanket
bank deposit guarantee on Sunday, 5 October 2008, to prevent panic
as officials clinched deals to rescue Germany's Hypo Real Estate --
after an initial bailout failed -- and recapitalize two other
European banks.
In South Korea, banks were having trouble raising foreign currency
funds and the government pledged to give banks access to the
country's foreign exchange reserves, the world's sixth largest at
nearly $240 billion.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
Last-minute administrative hitches forced Condoleezza Rice, US
secretary of state, to leave New Delhi at the weekend without
signing the US-India nuclear deal to end more than three decades of
isolation for India's nuclear programme. The deal is now expected
to be signed by US president George Bush on Wednesday, 8 October
2008. Cautious Indian negotiators have been keen for Bush to sign
the deal into US law and to publish a presidential statement before
signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty.
Inflation based on the wholesale price index rose 11.99% in 12
months to 20 September 2008, below the previous week's annual rise
of 12.14%, government data released after trading hours on Friday,
3 October 2008, showed. Inflation for the week ended 26 July 2008
was revised upwards to 12.53% from 12.01%.
US light crude fell 3.8% to $90.34 a barrel in Asian trading today,
6 October 2008, as concerns grew the slowing economy would choke
off energy demand.
The BSE 30-share Sensex plunged 529.35 points or 4.05% to
12,526.32, on Friday, 3 October 2008, its lowest closing in 18
months.
Monday, October 6, 2008
SEBI has removed the 40% limit on P-Notes and has allowed certain institutions to hold 15% stake in exchanges.
Capital market regulator, Securities & Exchange Board of India (SEBI) has announced some major reviews in its policies and new initiatives today. It has announced the removal of restrictions on the FII holding in Participatory Notes. It has also announced policy measure to encourage SME Exchange and has allowed specific institutions to increase their stake in stock exchanges.
Relaxation In P-Notes Norms
In a move aimed at easing foreign fund flow into the Indian stock markets, capital market regulator SEBI has removed the cap on overseas fund flow through offshore derivative instruments. Earlier, in the wake of excessive liquidity in the stock markets, foreign institutional investors (FIIs) were barred from owning more than 40% of their assets in P-notes(which are offshore derivative instruments-- ODIs) and were asked to unwind their holdings in India to comply with the cap within 18 months (which would have expired in March 2009).
P-notes are financial instruments issued by FIIs to unregistered overseas investors who cannot directly invest in equity market. SEBI had imposed the cap one year back and had met with stiff resistance from investors.
The proposal which was disclosed on October 16, 2007 led to a free fall with Sensex losing 1,700 points in early trade on October 17 last year. The markets later recovered on positive statements from the finance minister and went on to hit its all-time high in January 2008.
"A lot has changed since the restrictions on PNs were imposed," said SEBI Chief CB Bhave today. The SEBI chief also added that he will keep a watch on global markets before reviewing norms. He also added that SEBI is not looking at emulating the short sales ban which has been imposed in other markets.
The latest move by SEBI could give a much needed fillip to the Indian stock markets. The benchmark market index Sensex, was down by 724 points and closed at 11,801 today, its lowest level since September 2006.
SEBI has also said that it needs to review the structure of FII norms and unnecessary curbs need to be removed. However, there is a big question mark whether these changes would lead to fresh fund flow from institutions into India. This is because global institutional funds have been pulling out of India and also other emerging markets owing to the global credit crisis which has led to big fund houses declaring bankruptcy or sell-offs.
As per a VCCircle analysis US fund houses have been on a selling spree while the European funds were buying in India. But over the last one week even European banks have started revealing their soft underbelly which could shrink fund flow from Europe as well going forward. In that case the easing of norms related to P-notes may not lead to any major inflows.
Raising Holding Limit In Stock Exchanges
SEBI has allowed certain categories of institutions to increase their holding in stock exchages from the present 5% limit. The SEBI Board has decided to enhance this limit from 5% to 15% in respect of six categories of shareholders, namely, public financial institutions, stock exchanges, depositories, clearing corporations, banks and insurance companies.
The move is likely to increse the competition among the bourses in India and could see foriegn stock exchanges (New York Stock Exchange, Deutsche Borse and Singapore Exchange) who hold stakes in Indian exchanges increase their stakes. It can also lead promotion of new exchanges as the new entities would have much more control in these exchanges and would be much more interested in development of these exchanges.
SME Exchange
SEBI has also moved forward with its intention of forming SME exchange/s. The statement issued by the regulator said that - "In recognition of the need for making finance available to needy small and medium enterprises, the Board decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by SMEs. Multiple exchanges or platforms would provide the necessary competition in this space."
This is a change in stance from SEBI from when Damodaran was heading SEBI. Then SEBI had announced that only a single SME Exchange would be set up in contarast to the recommendation of multiple exchanges now.
SEBI plans to come up with a framework for recognition and supervision of such exchanges/platforms. The statement also added that the enterprises with a post issue paid up capital of upto Rs. 25 crore would be listed on such exchanges / platforms and trading lot would be Rs 1 lakh. The minimum ticket size for transactions on the SME exchange would ensure that only high networth individuals were eligible, so that uninformed investors lose money.
Bombay Stock Exchange had earlier launched a separate trading platform `IndoNext’ for SMEs that did not work so well.
Relaxation In P-Notes Norms
In a move aimed at easing foreign fund flow into the Indian stock markets, capital market regulator SEBI has removed the cap on overseas fund flow through offshore derivative instruments. Earlier, in the wake of excessive liquidity in the stock markets, foreign institutional investors (FIIs) were barred from owning more than 40% of their assets in P-notes(which are offshore derivative instruments-- ODIs) and were asked to unwind their holdings in India to comply with the cap within 18 months (which would have expired in March 2009).
P-notes are financial instruments issued by FIIs to unregistered overseas investors who cannot directly invest in equity market. SEBI had imposed the cap one year back and had met with stiff resistance from investors.
The proposal which was disclosed on October 16, 2007 led to a free fall with Sensex losing 1,700 points in early trade on October 17 last year. The markets later recovered on positive statements from the finance minister and went on to hit its all-time high in January 2008.
"A lot has changed since the restrictions on PNs were imposed," said SEBI Chief CB Bhave today. The SEBI chief also added that he will keep a watch on global markets before reviewing norms. He also added that SEBI is not looking at emulating the short sales ban which has been imposed in other markets.
The latest move by SEBI could give a much needed fillip to the Indian stock markets. The benchmark market index Sensex, was down by 724 points and closed at 11,801 today, its lowest level since September 2006.
SEBI has also said that it needs to review the structure of FII norms and unnecessary curbs need to be removed. However, there is a big question mark whether these changes would lead to fresh fund flow from institutions into India. This is because global institutional funds have been pulling out of India and also other emerging markets owing to the global credit crisis which has led to big fund houses declaring bankruptcy or sell-offs.
As per a VCCircle analysis US fund houses have been on a selling spree while the European funds were buying in India. But over the last one week even European banks have started revealing their soft underbelly which could shrink fund flow from Europe as well going forward. In that case the easing of norms related to P-notes may not lead to any major inflows.
Raising Holding Limit In Stock Exchanges
SEBI has allowed certain categories of institutions to increase their holding in stock exchages from the present 5% limit. The SEBI Board has decided to enhance this limit from 5% to 15% in respect of six categories of shareholders, namely, public financial institutions, stock exchanges, depositories, clearing corporations, banks and insurance companies.
The move is likely to increse the competition among the bourses in India and could see foriegn stock exchanges (New York Stock Exchange, Deutsche Borse and Singapore Exchange) who hold stakes in Indian exchanges increase their stakes. It can also lead promotion of new exchanges as the new entities would have much more control in these exchanges and would be much more interested in development of these exchanges.
SME Exchange
SEBI has also moved forward with its intention of forming SME exchange/s. The statement issued by the regulator said that - "In recognition of the need for making finance available to needy small and medium enterprises, the Board decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by SMEs. Multiple exchanges or platforms would provide the necessary competition in this space."
This is a change in stance from SEBI from when Damodaran was heading SEBI. Then SEBI had announced that only a single SME Exchange would be set up in contarast to the recommendation of multiple exchanges now.
SEBI plans to come up with a framework for recognition and supervision of such exchanges/platforms. The statement also added that the enterprises with a post issue paid up capital of upto Rs. 25 crore would be listed on such exchanges / platforms and trading lot would be Rs 1 lakh. The minimum ticket size for transactions on the SME exchange would ensure that only high networth individuals were eligible, so that uninformed investors lose money.
Bombay Stock Exchange had earlier launched a separate trading platform `IndoNext’ for SMEs that did not work so well.
RBI cuts CRR by 0.5%
The Reserve Bank of India on Monday cut the Cash Reserve Ratio (CRR) rate by 0.5 per cent to 8.5 per cent.
The central bank's move will infuse Rs 20,000 crore (Rs 200 billion) into the markets.
The RBI said in a statement: 'On a review of the current liquidity situation in the context of global and domestic developments, it has been decided to reduce the Cash Reserve Ratio (CRR) by 50 basis points to 8.5 per cent of net demand and time liabilities (NDTL) from its current level of 9.0 per cent of NDTL.'
'The change will come into effect from the fortnight beginning October 11, 2008. As a result of this reduction in the CRR, an amount of about Rs 20,000 crore would be released into the system. This measure is ad hoc, temporary in nature and will be reviewed on a continuous basis in the light of the evolving liquidity conditions,' the statement added.
'It may be recalled that on September 16, 2008, the Reserve Bank announced several measures to alleviate the pressures on domestic financial markets brought on by external developments in response to the bankruptcy/sell-out/restructuring of some of the world's largest financial institutions,' the statement said.
'Since then, there has been a sharp deterioration in the global financial environment with the number of troubled financial institutions rising, stock markets weakening and money markets strained. Central banks across the world have stepped up their liquidity operations, including coordinated actions, and some have banned/limited short selling of financial stocks,' the RBI said.
'These new developments have impacted domestic money and forex markets with a marked increase in volatility and a sharp squeeze on market liquidity as reflected in the movements in overnight interest rates and the high recourse to the LAF,' the RBI statement said.
The Reserve Bank also said that the 'overall stance of monetary policy in 2008-09 accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum, as set out in the Annual Policy Statement and reiterated in the First Quarter Review of July 2008. The overriding priority for monetary policy is to eschew any further intensification of inflationary pressures and to firmly anchor inflation expectations.'
The central bank's move will infuse Rs 20,000 crore (Rs 200 billion) into the markets.
The RBI said in a statement: 'On a review of the current liquidity situation in the context of global and domestic developments, it has been decided to reduce the Cash Reserve Ratio (CRR) by 50 basis points to 8.5 per cent of net demand and time liabilities (NDTL) from its current level of 9.0 per cent of NDTL.'
'The change will come into effect from the fortnight beginning October 11, 2008. As a result of this reduction in the CRR, an amount of about Rs 20,000 crore would be released into the system. This measure is ad hoc, temporary in nature and will be reviewed on a continuous basis in the light of the evolving liquidity conditions,' the statement added.
'It may be recalled that on September 16, 2008, the Reserve Bank announced several measures to alleviate the pressures on domestic financial markets brought on by external developments in response to the bankruptcy/sell-out/restructuring of some of the world's largest financial institutions,' the statement said.
'Since then, there has been a sharp deterioration in the global financial environment with the number of troubled financial institutions rising, stock markets weakening and money markets strained. Central banks across the world have stepped up their liquidity operations, including coordinated actions, and some have banned/limited short selling of financial stocks,' the RBI said.
'These new developments have impacted domestic money and forex markets with a marked increase in volatility and a sharp squeeze on market liquidity as reflected in the movements in overnight interest rates and the high recourse to the LAF,' the RBI statement said.
The Reserve Bank also said that the 'overall stance of monetary policy in 2008-09 accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum, as set out in the Annual Policy Statement and reiterated in the First Quarter Review of July 2008. The overriding priority for monetary policy is to eschew any further intensification of inflationary pressures and to firmly anchor inflation expectations.'
Sensex below 12,000
Key benchmark indices slipped deep into red in early afternoon
trade after trading resumed at 12:10 IST after 45-minutes stoppage
due to sun outage. The 30-share BSE Sensex fell below 12,000 mark
and lost close to 575 points at day's low. Many Asian markets were
down more than 4% each. The Sensex hit its lowest level in more
than two years while the S&P CNX Nifty hit 1-½ year low.
Power and realty stocks plummeted. Jaiprakash Associates lost more
than 12%. Tata Power Company and Sterlite Industries fell more than
10% each. Reliance Industries (RIL) hit 52-week low. The market
breadth was weak as selling was witnessed across the board.
The financial crisis spread further to Europe and doubts persisted
about the effectiveness of the US administration's $700 billion US
financial sector bailout plan. The uncertainty over the nuclear
deal with the United States persisted as Condoleezza Rice, US
secretary of state, left New Delhi at the weekend without signing
the US-India nuclear deal. The domestic bourses also ignored
reports that the market regulator Securities & Exchange Board of
India (Sebi) may relax norms of participatory notes. The market
also ignored fall in inflation and further fall in oil & commodity
prices.
At 12:29 IST, the BSE 30-share Sensex was down 533.15 points or
4.26% to 11,991.42. The index shed 572.23 points at the day's low
of 11,954.09, hit in early-afternoon trade, its lowest level since
20 September 2006. The Sensex fell 241.83 points at day's high of
12,284.49, in early trade.
The S&P CNX Nifty was down 139.40 points or 4.36% to 3,651.95.
Nifty hit a low of 3,643.85, its lowest level since 3 April 2007.
The BSE Mid-Cap index was down 4.91% at 4,448.31 and the BSE
Small-Cap index was down 4.24% at 5,233.64.
The market breadth was weak on BSE with 289 shares advancing as
compared to 1,961 that declined. 38 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 3.63% to Rs 1,697. The stock
hit a 52-week low of Rs 1,692.95. The promoters of Reliance
Industries converted their 12 crore warrants into an equal number
of shares. Post-transaction, the promoter group holds 49% stake in
the company, with 52% voting rights. This involves an infusion of
around Rs 15,142 crore into the company. The shares have a lock-in
period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
Agro Tech Foods (down 14.77% to Rs 90), XL Telecom (down 13.6% to
Rs 110.50), Satra Properties (down 13.13% to Rs 50.95), Religare
Technova (down 12.92% to Rs 49.20), (down 12.92% to Rs 49.20), were
top losers from small-cap space.
Spice Communicatons (down 15.86% to Rs 55.70), Monnet Ispat (down
15.46% to Rs 358), Phoenix Mills (down 13.34% to Rs 119.90), GVK
Power Infrastructure (down 13.22% to Rs 20.35) were top losers from
mid-cap space.
Power stocks fell. Tata Power Company (down 11.65% to Rs 765),
Reliance Infrastructure (down 7.48% to Rs 685.50), Reliance Power
(down 5.45% to Rs 141.30), NTPC (down 2.5% to Rs 167.40), PowerGrid
Corporation of India (down 2.34% to Rs 87.50), edged lower.
Realty stocks declined. Indiabulls Real Estate (down 5.44% to Rs
152), Unitech (down 9.05% to Rs 102) and DLF (down 9.04% to Rs 306)
edged lower.
Jaiprakash Associates (down 12.32% to Rs 101.80), Sterlite
Industries (down 10.31% to Rs 353.50), Tata Steel (down 8.84% to Rs
359.10), Reliance Communications (down 8.91% to Rs 302.95), edged
lower from the Sensex pack.
India's largest electric equipment maker by sales Bharat Heavy
Electricals declined 7.13% to Rs 1,455. Bharat Heavy Electricals
and Nuclear Power Corporation of India are reportedly in talks with
foreign firms Siemens, Alstom and GE for a third partner in their
planned joint venture to set up nuclear power projects in India.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 4.1%
to 4.25%.
Germany gave blanket bank deposit guarantee on Sunday, 5 October
2008, to prevent panic as officials clinched deals to rescue
Germany's Hypo Real Estate -- after an initial bailout failed --
and recapitalize two other European banks.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
The market regulator ----Securities & Exchange Board of India
(Sebi)----- is expected to review restrictions on issue of
participatory notes (P-Notes) at a board meeting today, 6 October
2008. Reports suggest that--- Sebi---- may ease restrictions on
P-Notes. However, the Reserve ---bank--- of India has always been
against allowing investments through P- Notes. P-Notes are
derivative instruments issued by foreign institutional investors
(FIIs) to other overseas investors seeking to invest in Indian
securities, but are not registered with the stock market
regulator---- Securities & Exchange Board of India (Sebi)-----
either out of choice or regulatory issues.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
trade after trading resumed at 12:10 IST after 45-minutes stoppage
due to sun outage. The 30-share BSE Sensex fell below 12,000 mark
and lost close to 575 points at day's low. Many Asian markets were
down more than 4% each. The Sensex hit its lowest level in more
than two years while the S&P CNX Nifty hit 1-½ year low.
Power and realty stocks plummeted. Jaiprakash Associates lost more
than 12%. Tata Power Company and Sterlite Industries fell more than
10% each. Reliance Industries (RIL) hit 52-week low. The market
breadth was weak as selling was witnessed across the board.
The financial crisis spread further to Europe and doubts persisted
about the effectiveness of the US administration's $700 billion US
financial sector bailout plan. The uncertainty over the nuclear
deal with the United States persisted as Condoleezza Rice, US
secretary of state, left New Delhi at the weekend without signing
the US-India nuclear deal. The domestic bourses also ignored
reports that the market regulator Securities & Exchange Board of
India (Sebi) may relax norms of participatory notes. The market
also ignored fall in inflation and further fall in oil & commodity
prices.
At 12:29 IST, the BSE 30-share Sensex was down 533.15 points or
4.26% to 11,991.42. The index shed 572.23 points at the day's low
of 11,954.09, hit in early-afternoon trade, its lowest level since
20 September 2006. The Sensex fell 241.83 points at day's high of
12,284.49, in early trade.
The S&P CNX Nifty was down 139.40 points or 4.36% to 3,651.95.
Nifty hit a low of 3,643.85, its lowest level since 3 April 2007.
The BSE Mid-Cap index was down 4.91% at 4,448.31 and the BSE
Small-Cap index was down 4.24% at 5,233.64.
The market breadth was weak on BSE with 289 shares advancing as
compared to 1,961 that declined. 38 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 3.63% to Rs 1,697. The stock
hit a 52-week low of Rs 1,692.95. The promoters of Reliance
Industries converted their 12 crore warrants into an equal number
of shares. Post-transaction, the promoter group holds 49% stake in
the company, with 52% voting rights. This involves an infusion of
around Rs 15,142 crore into the company. The shares have a lock-in
period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
Agro Tech Foods (down 14.77% to Rs 90), XL Telecom (down 13.6% to
Rs 110.50), Satra Properties (down 13.13% to Rs 50.95), Religare
Technova (down 12.92% to Rs 49.20), (down 12.92% to Rs 49.20), were
top losers from small-cap space.
Spice Communicatons (down 15.86% to Rs 55.70), Monnet Ispat (down
15.46% to Rs 358), Phoenix Mills (down 13.34% to Rs 119.90), GVK
Power Infrastructure (down 13.22% to Rs 20.35) were top losers from
mid-cap space.
Power stocks fell. Tata Power Company (down 11.65% to Rs 765),
Reliance Infrastructure (down 7.48% to Rs 685.50), Reliance Power
(down 5.45% to Rs 141.30), NTPC (down 2.5% to Rs 167.40), PowerGrid
Corporation of India (down 2.34% to Rs 87.50), edged lower.
Realty stocks declined. Indiabulls Real Estate (down 5.44% to Rs
152), Unitech (down 9.05% to Rs 102) and DLF (down 9.04% to Rs 306)
edged lower.
Jaiprakash Associates (down 12.32% to Rs 101.80), Sterlite
Industries (down 10.31% to Rs 353.50), Tata Steel (down 8.84% to Rs
359.10), Reliance Communications (down 8.91% to Rs 302.95), edged
lower from the Sensex pack.
India's largest electric equipment maker by sales Bharat Heavy
Electricals declined 7.13% to Rs 1,455. Bharat Heavy Electricals
and Nuclear Power Corporation of India are reportedly in talks with
foreign firms Siemens, Alstom and GE for a third partner in their
planned joint venture to set up nuclear power projects in India.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 4.1%
to 4.25%.
Germany gave blanket bank deposit guarantee on Sunday, 5 October
2008, to prevent panic as officials clinched deals to rescue
Germany's Hypo Real Estate -- after an initial bailout failed --
and recapitalize two other European banks.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
The market regulator ----Securities & Exchange Board of India
(Sebi)----- is expected to review restrictions on issue of
participatory notes (P-Notes) at a board meeting today, 6 October
2008. Reports suggest that--- Sebi---- may ease restrictions on
P-Notes. However, the Reserve ---bank--- of India has always been
against allowing investments through P- Notes. P-Notes are
derivative instruments issued by foreign institutional investors
(FIIs) to other overseas investors seeking to invest in Indian
securities, but are not registered with the stock market
regulator---- Securities & Exchange Board of India (Sebi)-----
either out of choice or regulatory issues.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
20 Microns Ltd IPO Shares Listing Info
IPO Listing Date: Monday, October 6, 2008
BSE Script Code: 533022
NSE Symbol:
Listing in: B Group Of Securities
ISIN: INE144J01019
Issue Price: Rs 55 Per Equity share
Face Value: Rs 10/- Per Equity Share
BSE Script Code: 533022
NSE Symbol:
Listing in: B Group Of Securities
ISIN: INE144J01019
Issue Price: Rs 55 Per Equity share
Face Value: Rs 10/- Per Equity Share
RIL at 52-week low
Key benchmark indices extended losses in mid-morning trade on weak
Asian stocks. Sensex hit its lowest level in more than two years
while Nifty hits 1-½ year low. Sensex was down 457.83 points.
Consumer durables, capital goods and realty stocks plummeted.
Jaiprakash Associates and Tata Power Company fell more than 10%
each. Sterlite Industries was down close to 10%. Reliance
Industries (RIL) hits 52 week low. The market breadth was weak as
selling was witnessed across the board.
The financial crisis spread further to Europe and doubts persisted
about the effectiveness of the US administration's $700 billion US
financial sector bailout plan. The uncertainty over the nuclear
deal with the United States persisted as Condoleezza Rice, US
secretary of state, left New Delhi at the weekend without signing
the US-India nuclear deal. The domestic bourses also ignored
reports that the market regulator Securities & Exchange Board of
India (Sebi) may relax norms of participatory notes. The market
also ignored fall in inflation and further fall in oil & commodity
prices.
At 11:21 IST, the BSE 30-share Sensex was down 457.83 points or
3.65% to 12,068.95. The index shed 472.93 points at the day's low
of 12,053.39, hit in mid-morning trade, its lowest level since 20
September 2006. The Sensex fell 241.83 points at day's high of
12,284.49, in early trade.
The S&P CNX Nifty was down 139.40 points or 3.65% to 3,678.90.
Nifty hit a low of 3,671.05, its lowest level since 3 April 2007.
The BSE Mid-Cap index was down 3.93% at 4,493.83 and the BSE
Small-Cap index was down 3.59% at 5,269.31.
The market breadth was weak on BSE with 280 shares advancing as
compared to 1,844 that declined. 36 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 2.24% to Rs 1,720.85. The
stock hit a 52-week low of Rs 1,703. The promoters of Reliance
Industries converted their 12 crore warrants into an equal number
of shares. Post-transaction, the promoter group holds 49% stake in
the company, with 52% voting rights. This involves an infusion of
around Rs 15,142 crore into the company. The shares have a lock-in
period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
Spice Communications (down 14.65% to Rs 56.50), GVK Power
Infrastrucutre (down 13.86% to Rs 20.20) and Aban Offshore (down
11.11% to Rs 1,556) were the major losers from BSE's A group.
Consumer durables stocks declined. BSE Consumer Durables index was
down 5.66% to 2,724.47. Gitanjali Gems (down 7.61% to Rs 172.95),
Blue Star (down 7.21% to Rs 259.95) and Videocon Industries (down
5.92% to Rs 194) edged lower.
Capital goods stocks declined. India's largest electric equipment
maker by sales Bharat Heavy Electricals declined 4.76% to Rs 1,492.
Bharat Heavy Electricals and Nuclear Power Corporation of India are
reportedly in talks with foreign firms Siemens, Alstom and GE for a
third partner in their planned joint venture to set up nuclear
power projects in India.
Praj Industries (down 8.23% to Rs 106), Larsen & Toubro (down 4.29%
to Rs 1,108.40), and Suzlon Energy (down 4.68% to Rs 140.55) edged
lower.
Realty stocks declined. Phoenix Mills (down 13.26% to Rs 120),
Indiabulls Real Estate (down 3.58% to Rs 154.80), Unitech (down
7.98% to Rs 103.20) and DLF (down 8.72% to Rs 307.05) edged lower.
Jaiprakash Associates (down 10.77% to Rs 103.60), Tata Power
Company (down 10.41% to Rs 796), Sterlite Industries (down 9.79% to
Rs 357), Tata Steel (down 8.61% to Rs 359.90), Relaince
Communications (down 6.39% to Rs 311.40), edged lower from the
Sensex pack.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 3.35%
to 4.75%.
Germany gave blanket bank deposit guarantee on Sunday, 5 October
2008, to prevent panic as officials clinched deals to rescue
Germany's Hypo Real Estate -- after an initial bailout failed --
and recapitalize two other European banks.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
The market regulator Securities & Exchange Board of India (Sebi) is
expected to review restrictions on issue of participatory notes
(P-Notes) at a board meeting today, 6 October 2008. Reports suggest
that Sebi may ease restrictions on P-Notes. However, the Reserve
bank of India has always been against allowing investments through
P- Notes. P-Notes are derivative instruments issued by foreign
institutional investors (FIIs) to other overseas investors seeking
to invest in Indian securities, but are not registered with the
stock market regulator Securities & Exchange Board of India (Sebi)
either out of choice or regulatory issues.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
Oil prices fell around $2 to just below $92 a barrel dragging down
prices of metals and grains.
Last-minute administrative hitches forced Condoleezza Rice, US
secretary of state, to leave New Delhi at the weekend without
signing the US-India nuclear deal to end more than three decades of
isolation for India's nuclear programme. The deal is now expected
to be signed by US president George Bush on Wednesday, 8 October
2008. Cautious Indian negotiators have been keen for Bush to sign
the deal into US law and to publish a presidential statement before
signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty.
Inflation based on the wholesale price index rose 11.99% in 12
months to 20 September 2008, below the previous week's annual rise
of 12.14%, government data released after trading hours on Friday,
3 October 2008, showed. Inflation for the week ended 26 July 2008
was revised upwards to 12.53% from 12.01%.
Asian stocks. Sensex hit its lowest level in more than two years
while Nifty hits 1-½ year low. Sensex was down 457.83 points.
Consumer durables, capital goods and realty stocks plummeted.
Jaiprakash Associates and Tata Power Company fell more than 10%
each. Sterlite Industries was down close to 10%. Reliance
Industries (RIL) hits 52 week low. The market breadth was weak as
selling was witnessed across the board.
The financial crisis spread further to Europe and doubts persisted
about the effectiveness of the US administration's $700 billion US
financial sector bailout plan. The uncertainty over the nuclear
deal with the United States persisted as Condoleezza Rice, US
secretary of state, left New Delhi at the weekend without signing
the US-India nuclear deal. The domestic bourses also ignored
reports that the market regulator Securities & Exchange Board of
India (Sebi) may relax norms of participatory notes. The market
also ignored fall in inflation and further fall in oil & commodity
prices.
At 11:21 IST, the BSE 30-share Sensex was down 457.83 points or
3.65% to 12,068.95. The index shed 472.93 points at the day's low
of 12,053.39, hit in mid-morning trade, its lowest level since 20
September 2006. The Sensex fell 241.83 points at day's high of
12,284.49, in early trade.
The S&P CNX Nifty was down 139.40 points or 3.65% to 3,678.90.
Nifty hit a low of 3,671.05, its lowest level since 3 April 2007.
The BSE Mid-Cap index was down 3.93% at 4,493.83 and the BSE
Small-Cap index was down 3.59% at 5,269.31.
The market breadth was weak on BSE with 280 shares advancing as
compared to 1,844 that declined. 36 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries fell 2.24% to Rs 1,720.85. The
stock hit a 52-week low of Rs 1,703. The promoters of Reliance
Industries converted their 12 crore warrants into an equal number
of shares. Post-transaction, the promoter group holds 49% stake in
the company, with 52% voting rights. This involves an infusion of
around Rs 15,142 crore into the company. The shares have a lock-in
period of three years.
Reliance Industries is also reportedly mulling the merger of its
different formats -- Reliance Hypermart, Reliance Super and
Reliance Fresh -- to make its retail arm more efficient.
Spice Communications (down 14.65% to Rs 56.50), GVK Power
Infrastrucutre (down 13.86% to Rs 20.20) and Aban Offshore (down
11.11% to Rs 1,556) were the major losers from BSE's A group.
Consumer durables stocks declined. BSE Consumer Durables index was
down 5.66% to 2,724.47. Gitanjali Gems (down 7.61% to Rs 172.95),
Blue Star (down 7.21% to Rs 259.95) and Videocon Industries (down
5.92% to Rs 194) edged lower.
Capital goods stocks declined. India's largest electric equipment
maker by sales Bharat Heavy Electricals declined 4.76% to Rs 1,492.
Bharat Heavy Electricals and Nuclear Power Corporation of India are
reportedly in talks with foreign firms Siemens, Alstom and GE for a
third partner in their planned joint venture to set up nuclear
power projects in India.
Praj Industries (down 8.23% to Rs 106), Larsen & Toubro (down 4.29%
to Rs 1,108.40), and Suzlon Energy (down 4.68% to Rs 140.55) edged
lower.
Realty stocks declined. Phoenix Mills (down 13.26% to Rs 120),
Indiabulls Real Estate (down 3.58% to Rs 154.80), Unitech (down
7.98% to Rs 103.20) and DLF (down 8.72% to Rs 307.05) edged lower.
Jaiprakash Associates (down 10.77% to Rs 103.60), Tata Power
Company (down 10.41% to Rs 796), Sterlite Industries (down 9.79% to
Rs 357), Tata Steel (down 8.61% to Rs 359.90), Relaince
Communications (down 6.39% to Rs 311.40), edged lower from the
Sensex pack.
Asian stocks fell today, 6 October 2008, led by shares of
exporters, after a hectic weekend in Europe as the financial crisis
gathered steam there, knocking the euro to the lowest in a year.
Fears that damage from dysfunctional financial systems in developed
economies would almost certainly push them closer to recessions,
weighed on Asian stocks. Key benchmark indices in Hong Kong, China,
Japan, South Korea, Singapore and Taiwan were down by between 3.35%
to 4.75%.
Germany gave blanket bank deposit guarantee on Sunday, 5 October
2008, to prevent panic as officials clinched deals to rescue
Germany's Hypo Real Estate -- after an initial bailout failed --
and recapitalize two other European banks.
US stocks declined in volatile trade on Friday, 3 October 2008, on
concerns whether the $700 billion rescue plan, which was approved
by the US Congress would be quickly implemented and whether it
would be enough to shore up the economy. The Dow Jones Industrial
Average slid 157.47 points or 1.5% at 10,325.38. The tech laden
Nasdaq Composite index shed 29.33 points or 1.48% at 1,947.39.
The market regulator Securities & Exchange Board of India (Sebi) is
expected to review restrictions on issue of participatory notes
(P-Notes) at a board meeting today, 6 October 2008. Reports suggest
that Sebi may ease restrictions on P-Notes. However, the Reserve
bank of India has always been against allowing investments through
P- Notes. P-Notes are derivative instruments issued by foreign
institutional investors (FIIs) to other overseas investors seeking
to invest in Indian securities, but are not registered with the
stock market regulator Securities & Exchange Board of India (Sebi)
either out of choice or regulatory issues.
With the end of third quarter of the calendar year 2008 on Tuesday,
30 September 2008, hedge fund are bracing for heavy redemption amid
US financial sector crisis which has already spread to Europe.
Investors in hedge funds are usually allowed to exit funds only on
the final day of the financial quarter. Large-scale investor
redemption in hedge funds may trigger further selling by foreign
funds in India. Hedge funds mainly operate through the
participatory notes route in India. However, there is no data
available on the quantum of hedge funds' investment in India.
The next major trigger for the market is Q2 September 2008 results.
IT bellwether Infosys kickstarts the reporting season on 10 October
2008.
Oil prices fell around $2 to just below $92 a barrel dragging down
prices of metals and grains.
Last-minute administrative hitches forced Condoleezza Rice, US
secretary of state, to leave New Delhi at the weekend without
signing the US-India nuclear deal to end more than three decades of
isolation for India's nuclear programme. The deal is now expected
to be signed by US president George Bush on Wednesday, 8 October
2008. Cautious Indian negotiators have been keen for Bush to sign
the deal into US law and to publish a presidential statement before
signing the agreement themselves.
The agreement allows US companies to provide India with technology
for its civilian nuclear programme, ending an embargo in place
since India tested a nuclear weapon in 1974. It also gives India
international status as an acceptable nuclear power, even though it
is not a signatory to the Nuclear Non-proliferation Treaty.
Inflation based on the wholesale price index rose 11.99% in 12
months to 20 September 2008, below the previous week's annual rise
of 12.14%, government data released after trading hours on Friday,
3 October 2008, showed. Inflation for the week ended 26 July 2008
was revised upwards to 12.53% from 12.01%.
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