29 September 2008

Market slumps on global financial instability; Sensex hits 18-month low

Market slumps on global financial instability; Sensex hits 18-month low

Stocks fell across the globe on persistent questions on the effectiveness of the US bailout package and on continued instability in the global banking sector. The domestic market fell for the third consecutive trading session with Sensex declining 1,096.77 points in last three sessions. The barometer index today ended 506.43 points down.

The market recovered after witnessing a sharp intra-day fall. The BSE Sensex recovered close to 200 points from the day's low. The barometer index hit 1-½ year low and the S&P CNX Nifty hit its lowest level in 17 months in mid-afternoon trade.

The market breadth was extremely weak as selling was witnessed across the board. ICICI Bank fell more than 12%.The US lawmakers agreeing on a $700 billion bank-rescue package and the House of Representatives approving the nuclear deal with India over the weekend failed to boost the investor sentiments.

European markets which opened after Indian markets were down. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down between 2.77% to 3.04%. European markets fell as the Belgian, Dutch and Luxembourg governments were forced to rescue financial firm Fortis over the weekend. Stricken UK lender Bradford & Bingley was also nationalised after its branch network and deposit business was sold to Spain's Banco Santander.Most Asian markets were trading lower today, 29 September 2008. Hong Kong's Hang Seng, Japan's Nikkei, Singapore's Straits Times, South Korea's Seoul Composite fell between 1.26% 4.07%.In US, congressional leaders from both parties said they had a tentative agreement on Sunday, 28 September 2008 and lawmakers prepared to vote on Monday, 29 September 2008, on a $700 billion US government fund to buy bad debt. The bailout plan will be introduced in the House of Representatives today, 29 September 2008 and then head to the Senate.Meanwhile, the Indo-US nuclear deal moved into the last lap clearing a major hurdle when the House of Representatives approved a legislation on it that will now go to the Senate before the two countries can implement the civil nuclear agreement.The BSE 30-share Sensex plunged 506.43 points or 3.87% to 12,595.75. The index shed 699.34 points at the day's low of 12,402.82 hit in mid-afternoon trade. The Sensex edged up 11.35 points at day’s high of 13,113.53, hit at the onset of the trading session.The S&P CNX Nifty was down 135.20 points or 3.39% to 3,850.05.The BSE Sensex is down 7,691.24 points or 37.91% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8,611.02 points or 40.6% below its all-time high of 21,206.77 struck on 10 January 2008. The index is down 1,096.77 points from a recent high of 13,692.52 hit on 24 September 2008.BSE clocked a turnover of Rs 4,579 crore today 29 September 2008 as compared to a turnover of Rs 4,850.22 crore on Friday 26 September 2008.Nifty October 2008 futures were at 3880.40, at a premium of 30.35 points as compared to spot closing of 3850.05. NSE's futures & options (F&O) segment turnover was Rs 59,905.71 crore, which was higher than Rs 44,297.14 crore on Friday, 26 September 2008.As per the provisional figures on BSE, the foreign institutional investors (FII)s sold shares worth Rs 476.94 crore while domestic funds bought shares worth Rs 554.82 crore today,29 September 2008.The BSE Mid-Cap index was down 4.13% at 4,736.55 and the BSE Small-Cap index was down 5.12% at 5,561.42.BSE Bankex (down 6.02% to 6,175.10), BSE Consumer Durables index (down 5.68% to 2,872.39), BSE IT index (down 5.47% to 3,057.92), BSE Realty index (down 5.26% to 3407.87), BSE Power index (down 5.22% to 2225.08), BSE TEck index (down 5.13% to 2,490.01), BSE Capital Goods index (down 4.86% to 10,270.60) underperformed Sensex.BSE Metal index (down 3.77% to 9,144.23), BSE HealthCare index (down 3.06% to 3,651.18), BSE Auto index (down 2.95% to 3,624.24), BSE PSU index (down 2.88% to 6,146.61), BSE Oil & Gas index (down 1.72% to 8,925.01) and BSE FMCG index (down 0.44% to 2,179.50) outperformed Sensex.The market breadth was weak on BSE with 357 shares advancing as compared to 2,287 that declined. 41 shares remained unchanged.India’s largest private firm by market capitalization and oil refiner Reliance Industries fell 1.53% to Rs 1,930.95. The stock recovered from the session’s low of Rs 1,881.India’s largest FMCG firm by sales Hindustan Unilever rose 0.79% to Rs 254.50.India’s largest oil exploration firm by revenue ONGC was down 1.14% at Rs 1,023.30. It recovered from the session’s low of Rs 994.India’s fourth largest IT exporter by sales Wipro fell 0.19% to Rs 343.10. It recovered from the session’s low of Rs 330.10.India’s largest private sector bank in terms of net profit ICICI Bank slumped 12.11% to Rs 493.30. The bank clarified today during the market hours that 98% of ICICI Bank UK PLC's non-India investment book is rated investment grade and above. ICICI Bank UK PLC has zero exposure to US subprime-credit, it said.India’s largest real estate player by market capitalization DLF fell 5.12% to Rs 350.60. It recovered from the session’s low of Rs 329.India’s largest electric equipment maker by sales Bharat Heavy Electricals declined 2.65% to Rs 1,509.50. It recovered from the session’s low of Rs 1,441.India’s largest home loan lender HDFC fell 2.68% to Rs 2,032.75. It recovered from the session’s low of Rs 2000.Jaiprakash Associates (down 11.85% to Rs 106.70), Satyam Computer Services (down 9.13% to Rs 292.55), Tata Consultancy Services (down 8.4% to Rs 619.65), edged lower from the Sensex pack.Reliance Natural Resources clocked the highest volume of 1.42 crore shares on BSE. IFCI (89.91 lakh shares), Chambal Fertilisers and Chemicals (71.69 lakh shares), Jaiprakash Associates (63.84 lakh shares) and ICICI Bank (58.37 lakh shares) were the other volume toppers in that order.Reliance Capital clocked the highest turnover of Rs 309.01 crore on BSE. Reliance Industries (Rs 299.81 crore), ICICI Bank (Rs 295.37 crore), Axis Bank (Rs 157.21 crore) and Larsen & Toubro (Rs 134.79 crore) were the other turnover toppers in that order.US light crude for November delivery fell $1.09 to $105.85 a barrel today, 29 September 2008 pressured by gains in the US dollar.US stocks rose on Friday, 26 September 2008. The Dow Jones gained 121.07 points, or 1.10%, to 11,143.13. The S&P 500 index was up 3.83 points, or 0.32%, to 1,213.01, and the Nasdaq composite index was down 3.23 points, or 0.15%, to 2,183.34.Back home, indices tumbled on Friday, 26 September 2008 on uncertainty about the future of the US financial system. The BSE 30-share Sensex fell 445 points or 3.28% to 13,102.18 and the S&P CNX Nifty lost 137.10 points or 3.34% to 3985.25, on that day.Key benchmark indices suffered a severe setback in the week ended Friday, 26 September 2008, mirroring weak global market and amid impasse over the proposed $700 billion bailout deal for the US financial sector. The barometer index BSE Sensex lost 940.14 points or 6.69% to 13,102.18 in and the S&P CNX Nifty shed 260 points or 6.12% at 3985.25, in the week.
-----------------------------------------------
Post Session Commentary - Sep 29 2008

Domestic markets crashed today to trade deep into red and ended with sharp losses. Markets plunged to its lowest since April 2007 tracking the weak cues from the European markets. The ABN Amro takeover partner Fortis was rescued in a three-way Government bailout. The governments of Belgium, the Netherlands and Luxembourg launched an 11.2 billion euro ($16.4 billion) rescue for Fortis late Sunday. The three governments agreed to inject capital to buy 49% interests in Fortis-owned banking subsidiaries operating in each of their jurisdictions.Along with this, Britain nationalized Bradford & Bingley on Monday, making the buy-to-let mortgage lender the second bank to be taken into public ownership this year as a deepening financial crisis. The Treasury would take over B&B''s mortgage portfolio 50 billion pounds ($92 billion) worth and sell its branches and deposits of 20 billion pound savings to Spanish bank Santander. The BSE Sensex had lost more than 3% and slipped below the 12500 mark. The NSE Nifty below the 3850 mark with loss of more than 3%. Markets opened on flat note and suddenly lost its ground due to the selling pressure across the board as weak Asian markets weighted on sentiment. Further, blood bath continued on the market and markets carried on its south journey after 45-minute stoppage on account of sun outage as the rescue bailout plan has not impressed the investors in the market. Finally markets ended with huge losses. From the sectoral front, all stocks ended in red and Bank index under performed the benchmark index as witnessed deep cut of more than 6%. Along with that, huge sell of was also witnessed in Capital Goods, Metal, IT, Oil & Gas, Consumer Durable and Reality stocks. The market breadth was extremely negative as 2287 stocks closed in red while 357 stocks closed in green and 41 stocks remained unchanged.The BSE Sensex closed lower by 506.43 points at 12,595.75 and NSE Nifty ended down by 135.20 points at 3,850.05. The BSE Mid Caps and Small Caps closed with losses of 211.43 points at 4,729.33 and by 308.75 points at 5,553.03. The BSE Sensex touched intraday high of 13,113.53 and intraday low of 12,402.84.Losers from the BSE are ICICI Bank Ltd (12.11%), JP Associates (11.85%), Satyam Computer (9.13%, TCS Ltd (8.40%), Tata Power (6.95%), Reliance Infra (6.56%), Reliance Com Ltd (6.11%), Ranbaxy Lab (6.08%), M&M Ltd (5.36%), DLF Ltd (5.12%) and L&T Ltd (4.98%).Only gainer from BSE is HUL ended higher by (0.79%).The BSE Capital Goods index lost 524.59 points to close at 10,270.60. Major losers are Usha Martin (12.31%), Suzlon Energy (12.19%), Bharat Bijli (9.90%), Walchand In (8.99%), Jyoti Struct (8.27%) and Reliance Industrial Infra (7.83%).The BSE Bank index dropped by 395.44 points to close at 6,175.10. As ICICI Bank Ltd (12.11%), Karnataka Bank (9.61%), OBC (8.11%), IOC (6.48%), Yes Bank (6.42%) and Kotak Bank (4.97%) closed in negative territory.The BSE Metal index plunged 357.86 points to close at 9,144.23. Major losers are JSW SL (11.67%), Jindal Saw (10.08%), Welspan Gujarat Sr (6.97), Hindustan Zinc (5.94%), NMDC Ltd (4.76%) and Jindal Steel (4.63%).The BSE Reality index closed lower by 189.11 points at 3,407.87. Losers are Housing Development (13.72%), Sobha Dev (9.59%), Orbit Co (9.51%), Anant Raj (8.47%), Akruti City (8.42%) and Indiabull Real (7.73%).The IT index lost 177.02 points to close at 3,057.92. As Aptech Ltd (13.11%), NIIT Ltd (10.62%), Moser Bayer (10.60%), Rolta India (10.04%), Satyam Computer (9.13%) and TCS Ltd (8.40%) closed in negative territory.The BSE Consumer Durable index ended down by 172.96 points at 2,872.39 as Rajesh Export (11.42%), Blue Star L (11.24%), Videocon Ind (9.16%), Gitanjali GE (3.03%) and Titan Ind (1.43%) ended in negative territory.
-------------------------------------------------
Market sinks as rising failures likely to undo bailout
Nifty slips below 3900, realty & banking most hit
Rupee drops to 5-year low as stocks slide
Investors lose Rs 5 trillion since Lehman collapse
Markets tumble; Sensex loses 506 pts to 2-month low level
Citigroup to buy Wachovia's banking biz

Mitsubishi UFJ buys 21% stake in Morgan Stanley
Citibank acquires Wachovia
US stocks open sharply lower ahead of bailout vote

Source:ET,BL,Deadpresident blog

Sensex(-506), Nifty(-135) Hits new Year low as Global Fin crisis tumbles....

Mkts close sharply lower; Sensex below 13K

29 Sep, 2008, 1651 hrs IST, ECONOMICTIMES.COM
Nifty ended at 3850.65, down 135.6 points. Sensex closed at 12,595, losing 506 points.

---------------------------------------------

Equities ended on a bleak note Monday, tracking the fall of European financial giants like UK’s Bradford & Bingley Plc, Belgium’s Fortis Financial, and Germany’s Hypo Real Estate Holding AG swept in the wake of the US credit crisis. National Stock Exchange’s Nifty ended at 3869.65, down 115.6 points or 2.90 per cent from Friday’s close. The 50-share index sank to a low of 3777.30 intraday. Bombay Stock Exchange’s Sensex closed at 12,629.60, below the 13K level, losing 472.58 points or 3.61 per cent. It slumped to the day’s low of 12,402.84. All eyes are on the financial market turmoil sweeping across the world. Bear Stearns, Fannie Mae, Freddie Mac, Lehman Bros, AIG, Washington Mutual, Fortis Financial, Bradford & Bingley... and more are expected to join this list of banks and investment firms seeking bailout. In the latest development, the UK government seized the biggest lender to landlords after its failure to get funds and competitors refused to buy mortgage loans gone bad. It is the second British bank after Northern Rock Plc to be nationalised this year. Spain's Banco Santander has agreed to pay 612 million pounds ($1.1 billion) for Bradford & Bingley's 197 branches and 20 billion pounds of deposits. Meanwhile, regulators in Belgium, the Netherlands and Luxembourg injected 11.2 billion euros ($16.3 billion) to save Fortis. In Washington, the House of Republicans authorised spending $700 billion to buy assets impaired by the collapse of the subprime mortgage market. Banks worldwide have reported writedowns and loan losses $554 billion since the crisis started. Back home, the losers were led by ICICI Bank (-12.11%), JP Associates (-11.85%), Satyam Computer (9.13%), TCS (-8.4%), Tata Power (-6.95%), among others. Hindustan Unilever was the only stock standing among the 30 index components. It was up 0.79 per cent. Advances across BSE were 357 against declines of 2,287. Stocks unchanged were 41. (All figures provisional)

---------------------------------------------------

Bush confident bailout bill will stabilize economy
Falling share price sees promoters take to buy backs
Wachovia's shares fall 55%
TCS, Satyam Computer hit 52-week lows intraday

Rupee falls past 47.04 to 5-yearr low

US unveils $700 bn bailout deal
"US crisis will have impact in China"
AIG mulls sale of 15 businesses to repay $85 bn govt loan

------------------------------------------------

Another bearish day: Sensex sheds 4%, ICICI drags

The Sensex opened almost flat at 13,110 - up eight points, touched a high of 13,114, and soon slipped into the negative zone owing to weak global cues.

Asian markets were weak this morning on uncertanaity over the $700 billion US bailout plan. Later on, the European markets, too, opened on a weak note, and US futures also indicated a negative start from Dow and Nasdaq.
Bank home, banking, realty and technology stocks bore the brunt of the selling, as the index tumbled to a new calender year low of 12,403 - down 699 points from the previous close.

However, some buying towards the end helped the Sensex recoup some of its losses, and finally end at 12,596 - down 506 (3.9%) points. In the process, the index has now shed 8% (1,097 points) in the last three trading sessions.
The market breadth was extremely negative - out of 2,684 stocks traded, 2,282 declined, 361 advanced and 41 were unchanged today.
INDEX SHAKERS...
ICICI Bank and Jaiprakash Associates slumped around 12% each to Rs 493 and Rs 107, respectively.
Satyam plunged over 9% to Rs 293, and TCS tumbled 8.4% to Rs 620.
Tata Power shed 7% at Rs 918. Mahindra & Mahindra and Reliance Infrastructure slipped over 6.5% each to Rs 495 and Rs 794, respectively.
Reliance Communications and Ranbaxy declined over 6% each to Rs 326 and Rs 256, respectively.
DLF and Larsen & Toubro dropped around 5% each to Rs 351 and Rs 2,345, respectively.
Tata Motors and NTPC slipped over 4.5% each to Rs 356 and Rs 166, respectively.
Infosys, Bharti Airtel and HDFC Bank were down nearly 4% each to Rs 1,392, Rs 747 and Rs 1,200, respectively.
VALUE & VOLUME TOPPERS
Reliance Capital topped the value chart with a turnover of Rs 309 crore followed by Reliance (Rs 299.80 crore), ICICI Bank (Rs 295.40 crore), Axis Bank (Rs 157.20 crore) and Larsen & Toubro (Rs 134.70 crore).
Reliance Natural Resources led the volume chart with trades of around 1.42 crore shares followed by IFCI (89.90 lakh), Chambal Fertilisers (71.70 lakh), Jaiprakash Associates (63.80 lakh) and ICICI Bank (58.40 lakh).

------------------------------------------------

Sensex ends 506 pts down; Nifty loses 135 pts

Source:Sify,ET,BS

Week Ahead: Market likely to test support at 3,800

Week Ahead: Market likely to test support at 3,800

The market nosedived after a quiet settlement. The Nifty closed at 3,985.25 points for a loss of 6.12 per cent while the Sensex lost 6.69 per cent to close at 13,102. The Defty was down 7 per cent in a week when the rupee slid to 46.4. The FIIs continued to be net sellers while the domestic institutions were marginally negative until the settlement day.

Volumes were low and carryover moderate. Declines far outnumbered advances. Every sector of the market was hard hit. The Junior lost 6.5 per cent while the Midcaps 50 lost 6.9 per cent and the BSE 500 lost 6.09 per cent. The CNXIT lost a disproportionate 12 per cent and the Bank Nifty lost 7.7 per cent.

Outlook: The breach of support at 4,000 means that the support at 3,800 is very likely to be tested again next week. It is quite likely that it will be broken this time. Every indication is that we are in an intermediate downtrend and the combination of low volumes and adverse breadth could be toxic.

Rationale: The market held its ground until settlement because that was a trigger for short-covering. No such trigger exists in a brand-new settlement.
All the other signals are negative and even if the market is over-sold, it could drop further. This seems to be the early stages of an intermediate downtrend and the market trends are in “phase” with both the short-term and long-term trends running negative as well. That means strong downwards pressure.


Counter-view: The weakness is basically due to global cues. If there is a confidence boost in the US, that would contribute to a turnaround in sentiment. There’s support at 3,950 and 3,900 and 3,850. There could be rallies from any of these points. However, even if there are small rallies at those points, a full reversal doesn’t seem likely. There will be powerful upside resistance at 4,050 and beyond that, between 4,150 and 4,180.

Bulls & bears: The advances-declines ratios have been overwhelmingly negative. There are no obviously bullish stocks in the F&O space and stocks outside that universe are mainly negative and also lack liquidity at the moment. The IT, banking and real estate sectors have been amongst the worst hit but every sector has lost ground.

FMCG is a traditional haven in times of trouble and it has been among the better performers with ITC, Dabur, Colgate, HUL all holding their ground. Apart from these, there were a few isolated winners such as Sun Pharma, Sesa Goa, Tata Communications and HCL Infosystems. Keep tight stops if you go long.

The bulk of the market, that is, almost 90 per cent of NSE listings lost ground. In such circumstances, it’s better to stick to extremely liquid stocks while trading and obviously, it makes more sense to stay on the short side. Look for stocks that seem to be still some distance off reliable supports when going for short positions.


MICRO TECHNICALS
Infosys Current Price: Rs 1,446.90Target Price: Rs 1,400
The stock has made a downside breakout and hit a support that probably will not hold. It is likely to slide till Rs 1,400 where it will hit a much stronger support. Keep a stop at Rs 1,460 and go short. Be prepared for wild swings caused by the Axon takeover battle. It has the potential for an upswing till Rs 1,510, so be prepared to trade long if the Rs 1,460 stop is broken.


Reliance Industries Current Price: Rs 1,963Target Price: Rs 1,885
The stock has slid from the Rs 2,100 level. It has some support at Rs 1,940 but it’s likely to break that and slide till it hits a band of support between Rs 1,880-Rs 1,900. Keep a stop at Rs 1,975 and go short. Start covering at Rs 1,900


Sun Pharma Current Price: Rs 1,472.5Target Price: Rs 1,490
Under less bearish market conditions, one would have hoped that the stock had an upside target of Rs 1,520 on its next upmove. That is unlikely but it should have the potential to climb till Rs 1,490. There is good support at Rs 1,460. Keep a stop at Rs 1,460 and go long.


Tata CommunicationsCurrent Price: Rs 470.85 Target Price: Rs 490
The stock has made an upwards breakout on strong volume expansion. It has a likely target of Rs 490 and it may have the strength to go further, till it hits stiff resistance at Rs 500. Keep a stop at Rs 460 and go long..

--------------------------------------------------------
Indiabulls Securities puts 'buy' on Power Grid Corporation29 Sep, 2008, 0443 hrs IST
Indiabulls Securities initiates coverage on Power Grid Corporation with a ‘buy’ rating.


Deutsche Bank has a ‘sell’ rating on Karnataka Bank 29 Sep, 2008, 0442 hrs IST
Deutsche Bank has a ‘sell’ rating on Karnataka Bank with a target price of Rs 115. The ‘sell’ call is based on the following parameters:


HSBC retains ‘overweight’ rating on Bharti Airtel 29 Sep, 2008, 0442 hrs IST
HSBC retains ‘overweight’ rating on Bharti Airtel with a target price of Rs 1,002.


Motilal Oswal downgrades Reliance Capital to ‘neutral’ 29 Sep, 2008, 0441 hrs IST
Motilal Oswal downgrades Reliance Capital to ‘neutral’ with a revised target price of Rs 1,340.


Macquarie initiates coverage on OnMobile Global with an ‘outperform’ rating 29 Sep, 2008, 0440 hrs IST
Macquarie initiates coverage on OnMobile Global with an ‘outperform’ rating and a target price of Rs 650.


Kotak Securities reiterates a ‘buy’ rating on Sesa Goa 29 Sep, 2008, 0440 hrs IST
Kotak Securities reiterates a ‘buy’ rating on Sesa Goa with a target price of Rs 300 per share for an investment horizon of eight months.


HDFC Securities puts 'buy' on Bartronics India 27 Sep, 2008, 0000 hrs IST
HDFC Securities has initiated coverage on the stock with a ‘buy’ rating saying the fast growing AIDC (Automatic Identification and Data Capture) technology in India will further boost the company’s order book and topline.


CLSA Research maintains 'buy' on HDFC 27 Sep, 2008, 0000 hrs IST
CLSA Research has maintained a ‘buy’ rating on the stock saying HDFC has not seen deterioration in asset quality due to rise in rates and its plans to list a couple of subsidiaries in CY09 may act as a catalyst.

------------------------------------------------
Top stories
General Atlantic: The Wealth Effect29 Sep, 2008, 0427 hrs IST, Supriya Verma Mishra
ET caught up with General Atlantic’s managing director, Sunish Sharma , to learn about his future strategies for the Indian market.


Glodyne Technoserve: System Upgrade 29 Sep, 2008, 0424 hrs IST, Santanu Mishra
Glodyne Technoserve’s thrust on inorganic growth and higher offshoring of infrastructure management services make it an attractive bet.


NTPC: A Show Of Strength 29 Sep, 2008, 0421 hrs IST, Ashish Agrawal
NTPC’s existing operations, ongoing expansion plans and high profitability make it an ideal pick for long-term investors.


Aban Offshore: Tapping The Riches 29 Sep, 2008, 0415 hrs IST, Ramkrishna Kashelkar
Aban Offshore looks promising, given its future growth prospects. But its highly leveraged status makes it a better fit for investors with a high risk appetite.


Stocks that have bucked the market trend 29 Sep, 2008, 0354 hrs IST, Karan Sehgal
Even in the current bear market, there are some stocks which have bucked the trend and investors can cash in on this opportunity. Sun Pharma, Lupin, Coromandel Fertilisers and Lakshmi Energy & Foods appear to be the best bets among such stocks.


Gold offers a glimmer of hope 29 Sep, 2008, 0348 hrs IST, Kiran Kabtta & Devangi Joshi
The global credit crisis has left investors feeling drained and devoid of investment options. In such trying times, gold offers a glimmer of hope.


Global equities gains vanish into thin air 29 Sep, 2008, 0343 hrs IST, Shakti Shan Karpatra
The dead cat bounce that global equities had witnessed in the third week of September turned out to be shorter than what even the bears would have liked.


Time to test market bottom again 29 Sep, 2008, 0336 hrs IST, Deepak Mohoni
The market started falling again, with the BSE Sensitive Index finishing the week 6.7% or 940 points lower, and the Nifty ending 6.12% down.



Source:ET,BS.