Still Fear in Market
As gloom and even more gloom continues all around (phew, what was the mood a few weeks ago!), its time to stay firm on sound stocks. Stop taking a day’s or week’s view and losing sleep. Any change in sentiment and you can hope for a good bounce on your counters. The local bulls managed to survive the global carnage yesterday though it was on lower volume. The market breadth was also negative. Still, things are pretty okay this morning, with no great fall in any particular market. In fact, markets in Hong Kong and Taiwan are in the green while that in Tokyo is down slightly.
But, US shares ended down yet again, with the Dow Jones closing under 13,000 for the first time in nearly three months amid mounting worries over the credit market crisis. Most Indian ADRs ended in the red. What is also of some concern for the local bulls is that FII inflows have slowed down considerably. Monday’s provisional data shows net sales worth about Rs12bn in the cash segment and around Rs13bn in the F&O segment. The steep fall in industrial production growth in September is also a worry, though one will have to wait for more data to arrive at a firm conclusion about a slowdown in economic activity. It looks as though interest rates have peaked out in India but what the market and India Inc. are craving for is a reduction in borrowing costs. Whether the RBI will oblige in January only time will tell. Coming to today's session, we expect an improved start than yesterday, but trade will remain rangebound and choppy.
IL&FS Investsmart may be under some pressure after E*Trade shares plunged overnight in the US. The American online brokerage giant is apparently facing write-offs owing to the correction in the housing sector. Unitech is likely to be in action as the RBI has approved the plan to hike the investment ceiling for FIIs. Fortis Healthcare might rise as it is looking at expanding its footprint in South India through another acquisition in Chennai.
Satra Properties India has announced a 2:1 bonus share issue. The company's Board has decided to diversify the business of the company in Retail, Merchandising and Power Generation. Royal Orchid Hotels' subsidiary Icon Hospitality has acquired Bangalore-based Hotel Royal Orchid Central for Rs820mn. The acquired property has 130 deluxe category rooms with two fine dining restaurants includes bar and other facilities.
Nucleus Software Exports has won a contract from Bank M (Tanzania) Ltd. for implementing its Cash@will solution. HCL Technologies has been added as one of Artesia Digital Media Group's select consulting partners and will serve as a systems integrator for the latter's products. Panoramic Universal has made its foray into travel and tourism industry with acquisition of 51% stake in Hi-Flyers Travel Services, which is catering to premium corporate travelers.
Jindal Steel intends to split each equity share of Rs5 each into five shares of Re1 each. Gati could attract some attention as the Hyderabad-based logistics service provider has entered into air cargo segment. Jyoti Ltd. might gain amid reports that it could bag a large irrigation order and is also likely to sell Vadodara property for funding its expansion near Anand.
US stocks extended their losing streak on Monday with the Dow Jones Industrial Average finishing below 13,000 for the first time in about three months despite some strength in the financial sector and lower crude oil prices.
After dropping at the start and then rebounding to a 100-point gain, the Dow closed down 55 points, or 0.4%, at 12,987.50, down 175 points from its high for the day. Aug. 16 was the last time the blue-chip index closed under 13,000.
The broader S&P 500 index slipped 15 points, or 1%, to 1,439.18, while the Nasdaq Composite index declined 44 points, or 1.7%, to 2,584.13.
Fresh concerns emerged over the sub-prime turmoil following reports by both The Wall Street Journal and The Times of London that warned of possible writedowns from British banking giant HSBC.
In addition, shares of the online brokerage E-Trade plunged 59% after the company warned last week that the deteriorating value of its mortgage-backed securities may force it to take significant writedowns in the fourth quarter.
Some battered financials, however, bucked the trend including Citigroup, whose shares gained 1.5% and Goldman Sachs which ended 1.6% higher.
Crude oil fell more than $2 per barrel on reports that OPEC would discuss increasing its output at an upcoming meeting. Light, sweet crude for December fell $1.70 to settle at $94.62 a barrel in afternoon trading on the New York Mercantile Exchange.
The Treasury market was closed for the Veterans Day holiday.
Private equity major Blackstone posted a net loss in the most recent quarter, hurt by compensation charges. Blackstone shares slipped over 8% on the news, even though it reported higher revenue in its core private equity business, helped by higher fees.
IBM announced that it would purchase the business software maker Cognos for about $5bn.
Gold prices tumbled after last week's big run-up, as COMEX gold for December fell $27 to $807.70 an ounce. The dollar rebounded against the euro but was lower versus the yen.
European shares ended higher. The pan-European Dow Jones Stoxx 600 index rose a fraction of a percentage point to end at 367.69. The German DAX 30 fell 0.1% at 7,806.84, while the French CAC-40 rose 0.2% to 5,535.56 and the UK's FTSE 100 gained 0.5% to 6,337.9.
In the emerging markets, the Bovespa in Brazil was down 4.3% at 61,526 while the IPC index in Mexico slid 3.3% to 28,185. The RTS index in Russia dropped 0.8% to 2243 and the ISE National-30 index in Turkey advanced 0.9% to 68,447.
MARKET...
Volatile May
Weak cues from the International markets, selling pressure in the index heavyweights and yen-carry trade unwinding again coming in the limelight dragged the benchmark Sensex to slip over 3% and NSE Nifty dropped over 2.5% in early trades on Monday.
However, buying momentum in the late afternoon trades in the FMCG and select PSU stocks lifted the benchmark Sensex from its low of 18,333 to finally close at 18,737 losing merely 170 points and Nifty closed 46 points lower to close at 5,617.
Among the 30-scrips of Sensex 18 stocks ended lower and only 11 scrips finished in positive terrain.
Among BSE sectoral indices, BSE Realty index was the top loser, (down 3.08%), followed by BSE Oil & gas index (2.28%) and BSE IT index (down 2.78%)
Aurionpro Solutions ended flat at Rs399. The company announced that it has entered into an all cash deal to acquire 100% control in Integro Technologies Pte. Ltd. (Integro) a leading Banking products company headquartered in Singapore.
Integro's product portfolio includes products in the areas of Loan origination, Collateral Management for Basel II Compliance and Internet banking. The scrip has touched an intra-day high of Rs399 and a low of Rs388.
Sterlite optical edged higher by 0.3% to Rs282. The company announced that they expanded Optical fiber capacity to 12m km. The scrip touched an intra-day high of Rs285 and a low of Rs269 and recorded volumes of over 1,00,000 shares on NSE.
Suryachakra Power was locked at 20% upper circuit to Rs33.4 after the company announced that they would set up 1200MW Coal-Based power project. The scrip touched an intra-day high of Rs33.4 and a low of Rs26.5 and recorded volumes of over 68,00,000 shares on NSE.
United Spirits fell 1.6% to Rs1816. According to reports, Diageo Plc is in talks to buy as much as 13% of the company. Diageo may buy the stake in the company for as much as $600mn. The scrip touched an intra-day high of Rs1878 and a low of Rs1800 and recorded volumes of over 38,000 shares on NSE.
Bihar Tubes declined 1% to Rs138. The company announced that they have entered into Contract with BHEL. The scrip touched an intra-day high of Rs138 and a low of Rs129 and recorded volumes of over 54,000 shares on NSE.
After plunging over 7% Jindal Steel recovered over 2% to close at Rs10,714 after reports stated that the Indian steel and power producer's planned iron-ore mine in Bolivia may be delayed as opposition senators seek to change legislation that would create a joint venture between the company and government. The scrip touched an intra-day high of Rs10,878 and a low of Rs9,600 and recorded volumes of over 2,00,000 shares on NSE.
Reliance Industries has slipped 3.6% to Rs2633. According to reports India's most valuable company may partner Jet Airways (India) to develop airports in the western state of Maharashtra The scrip has touched an intra-day high of Rs2675 and a low of Rs2602 and has recorded volumes of over 7,00,000 shares on NSE.
SBI surged over 3.7% to Rs2245 after reports stated India's Cabinet may consider by November 22 the nation's second-biggest lender's plan to raise as much as Rs180bn by selling shares through a rights offer. The Cabinet may consider the share-sale plan either on November 15 or November 22 The scrip touched an intra-day high of Rs2255 and a low of Rs2080 and recorded volumes of over 18,00,000 shares on NSE.
