The Global FinCrisis: Article from BT

Cover Story
The global financial crisis
Puja Mehra
The green signal for a $700-billion bailout of US banks wasn’t enough to turn the tide in global financial markets. Even six of the world’s central banks coming together to release hundreds of billions into the system couldn’t stem the panic. It has to get worse before it gets better. Puja Mehra reports.
So, where is the money?
Bear hug
Sense of rumour
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Also read:
So, where is the money?
Panic grips Dalal Street
Is something wrong with ICICI Bank?
When bad loans are sown in good times
The Rs 60,000-crore time bomb
When exotic turns toxic
Economy in eclipse
Wall street woes, India’s opportunity
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Last fortnight, the US financial disaster- as expected-blew into a full-fledged global crisis. First stop: Nearly all of Western Europe. Just like the US legislation for the over $700-billion rescue package, governments and central banks across the Atlantic, too, launched into bailout mode. Next stop: Asia, with some real estate lenders in Japan getting wiped out; and Singapore's economy, which plunged into recession.
The International Monetary Fund (IMF) revised upwards its projection of the losses of the US banking system to $1.4 trillion. At which point, the financial tornado hit the west coast of India. For a whole week, it had Indian stock, currency and money markets in high panic. The Sensex lost nearly 2,000 points in a week, overnight inter-bank lending rates shot up to 22 per cent (from single-digit rates), the rupee slumped to Rs 48.72 to a dollar and scared investors in debt schemes of mutual funds pressed the redemption trigger. Within days, money and confidence in the Indian economy vanished into thin air. The Reserve Bank of India (RBI) stepped in swiftly with liquidity-releasing steps. Finance Minister P. Chidambaram proclaimed the Indian banks' strong credentials and low vulnerability of the system to the growing global financial mess. The Government cancelled its scheduled borrowing for Rs 10,000 crore from the money market. Chidambaram set up a group of who's who from the financial world to suggest, within a week, ways to ease the liquidity crunch. On October 13, Chidambaram guaranteed liquidity yet again before the opening bell at the stock markets.
Finally, sanity returned when the Asian stock markets posted relief rallies. But that may have just been temporary relief. The ghost of Wall Street is still out there. BT takes a look at the toll in India so far and what to expect next.
Worldwide woes
The financial crisis has spread way beyond its epicentre in the US and has engulfed most of Western Europe. Here's a country-by-country status and assessment.

UNITED KINGDOM
Has lined up a $850-billion rescue plan, May nationalise Royal Bank of Scotland
Will recapitalise banks by up to $88 billion. Abbey, Barclays, HSBC, Llyods, Standard Chartered, HBOS and Nationwide Building Society can draw from an aggregate of $44 billion to boost their Tier 1 capital
Bank of England will infuse liquidity of $351 billion through loans
The government will guarantee $439 billion worth of short-and-medium term debt
Britain has seized control of mortgage lender Bradford & Bingley
Earlier this year nationalised Northern Rock
Alarm: The total liabilities of Barclays of £1,300 billion (leverage ratio of over 60), surpass Britain's GDP

BELGIUM
The government took partial control of the struggling Fortis Bank
France, Belgium and Luxembourg stumped up $93 billion to recapitalise Dexia, a French-Belgian lender that ran up huge losses in its US operations
Alarm: Fortis Bank's liabilities are several times larger than the GDP of Belgium (leverage ratio of 33)

ICELAND
The government has nationalised three of Iceland's biggest banks
Accounts in these banks stand frozen

IRELAND
Has guaranteed all bank deposits

SPAIN
Will spend 50 billion euros ($68 billion) to buy bank assets, almost a third of the proposed 2009 central government budget

UNITED STATES
May pick up ownership in failing US banks (Morgan Stanley is reported to be one)
Fed ready to lend directly to stressed companies

GERMANY
Has guaranteed all bank deposits
Has organised a credit lifeline of euros 35 billion for blue-chip commercial real estate lender Hypo Real Estate Holding
Alarm: The total liabilities of Deutsche Bank (leveraging ratio of over 50) amount to 2,000-billion euro, which is more than 80 per cent of the GDP of Germany

JAPAN
Yamato Life Insurance failed with $2.7 billion in debt
The government may revive a bank-rescue law of the 1990s banking crisis
Tokyo may set up a $100-billion fund to prop up smaller lenders
Alarm: Real estate companies are folding up, forcing regional banks to raise reserves against bad loans
SINGAPORE
Eased monetary policy for the first time since 2003 after sinking into its first recession in six years, hit by the meltdown in financial markets
The government revised its 2008 growth forecast to around 3 per cent from an earlier estimate of 4 to 5
ITALY
UniCredit Bank has announced plans to raise its capital ratio by spinning of property assets

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Source: BusinessToday

Stock,Sector Views from Deadpresident

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Punj Lloyd Limited
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FII Portfolio - Top 40 Stocks
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Nestle Ltd
India Cements Ltd
HPCL Ltd
Job cuts galore...

Hindalco Industries Ltd
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Britannia Ltd

BPCL Ltd
Bharti Airtel Ltd
Apar Industries
Kingfisher Airlines faces rough weather

FMCG Sector Result Review
RIL shares tumble on plant closure reports
Auto Sector Result Review
IT Sector Result Review

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Source:Deadpresident blogs

Sensex,Nifty outlook for the week

Index Outlook



Sensex (9964.2)
Even as the world raised a toast to United States of America that voted for a new order in which racial hierarchy ceases to matter, stock markets reversed downwards. It was probably President-elect, Barack Obama’s grim reminder about the “worst financial crisis in a century” that brought the six-day-old party in equity markets to an abrupt end.
Indian markets moved in tandem with the rest of the global markets, rallying merrily up to Tuesday and reversing sharply lower on Wednesday. Volumes were high in the first half of the week but it petered off towards the weekend. Light open interest in the derivative segment implies that trades are unwilling to take bets on the market’s next move, given the high volatility.
Sensex declined 63 per cent from its January peak when it hit the low at 7697 on October 27. This fall exceeds the other declines witnessed in the Indian stock markets over the last three decades. The decline following the dot-com bubble was 57 per cent from the peak while that in 1992-93 was 56 per cent. The correction in 1986-88 was a milder 40 per cent. As per Elliott wave analysis, corrections can be deemed complete if they fulfil either the time or the price criteria. This decline has already met the price criteria and deep corrections generally consume lesser time.
Can we then infer that the market has formed a long-term bottom at 7697? The answer is, no. This decline is akin to nothing that we have seen before and the rule-books of technical analysis would have to be rewritten once this down-trend is through. It is therefore best not to jump to premature conclusions and to let the market show us the way forward.
The 10-day rate of change oscillator is moving in to the positive zone and the 14-day relative strength index too has moved up from over-sold area and is placed at 43. The implication is that the short-term outlook is mildly positive. There are however no buy signals yet in the weekly oscillator charts. A spinning top candlestick pattern was formed in the weekly chart denoting indecision; that is, a move in either direction is possible next week.
Our medium-term view too is ambivalent. Sensex reversed from the peak at 10945 on Wednesday. Our medium-term trend deciding level at 10,700 was breached only fleetingly on that day. This remains an important resistance level and penetration of this level will pave the way for a rally to 11630 or 12879. It is however difficult to envisage a move beyond the second target just yet.
The short-term trend in Sensex is positive. If it holds above last week’s trough at 9600, there can be a surprise rally to 10945 or even 11630. Immediate supports for the index are at 9320 and 8930. The index needs to close below the second support to negate this view and re-kindle the gloom and doom scenario.



Nifty (2973)

Nifty reversed from the peak at 3240 on Wednesday and closed the week with an 87 points gain. Our medium-term resistance level was tested very fleetingly and it remains the key level to watch out for. However, the fact that the index is holding above the 2860 in the recent pull-back is a positive for the short-term and if this level holds, Nifty can rally once more to 3240 or even 3471. Support below 2860 would be at 2628. The near-term view will turn overtly negative only on a penetration of this level.
Though the short-term view is positive, the medium-term view is neutral. The zone between 3175 and 3250 will try to thwart any up-move. However, if this level is surpassed, there can be a surge to 3470 or 3740. Global Cues
Global markets rallied in the first half of the week but reversed sharply from Wednesday. However, most of these markets are well-above the lows recorded in the last week of October. The CBOE volatility index declined to 44 on Tuesday, but it rebounded sharply to end the week at 56. Dow Jones Industrial Average recorded an intra-week peak at 9653, below the medium-term resistance at 10,400, indicated last week. The sideways move between 8000 and 10000 appears likely to extend for a few more weeks in this index.
Asian equities put up a relatively stronger performance last week. The Shanghai Composite is the only index that is unable to make headway and is close to its October lows. Commodities gave up most of the gains recorded in the previous week. CRB index that tracks commodity prices declined 2 per cent for the week.



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Nifty future may see sideways movement



Thanks to sharp gains on Friday, the spot Nifty and the Nifty futures were able to end the week on positive notes. Short-covering coupled with additions of fresh long positions, particularly on Thursday and Friday, helped the Nifty future fetch a premium to the spot. It ended the week at 2989.1 points, gaining over 3.7 per cent over its previous week’s close. Long positions were added even in select stock futures such as Reliance Industries, SBI, Suzlon Energy and Bharti Airtel.



Follow-up
Last week we had presented strategies based on two scenarios 1) if the market opened with a huge positive gap, we had advised traders to go short, with a stop at 3250; going short was also recommended if the market opened flat. Last week, the market did open with a big upside gap on Monday. Though the Nifty future did go on to touch a low of 2883, traders who went short may have borne losses as the Nifty future hit the stop level of 3250 during the pull back rally.



Outlook
As mentioned in this column, the Nifty future has a crucial support at 2600-2550 level and a strong resistance at 3250 level. The possibility of Nifty future touching 1880-1950 levels will loom large only if it breaches below 2550 level. On the other hand, any move above the resistance can lift the Nifty future to 3550 levels. That said, one can turn bullish only if the Nifty future moves past its crucial resistance level of 4350.



Recommendation:
Despite sharp pull back on Friday, India VIX or Volatility Index, which gauges the likely near-term volatility in the market, still remains high at 67.22. This suggests that the Nifty may be set for another bout of heightened volatility and may even see a sharp slide. However, the accumulation of long positions, both on index and on select front line futures may provide comfort.
Traders with a high-risk appetite can consider the following strategies.
In the coming week, Nifty is likely to move in a narrow band of 2750-3250. And since, we expect it to open on a calm note, traders can consider going long on Nifty future, with a stop-loss pegged at 2750 (this is suggested only if market has a soft opening).
The other strategy that traders can consider is a short straddle. This can be initiated by selling 3200 call and put that ended on Friday at Rs 140 and Rs 255. This strategy can be held for slightly longer period. The only fallout of this strategy is the hefty margin requirement as traders will be required to write options to execute a short straddle.Stock futures
Reliance Industries (1220): After falling heavily from its peak, the stock made a smart turnaround from lower levels. It is now crucially placed; it faces resistance at 1310 and has a strong support at Rs 1,150. Any move above its resistance can lift the stock to 1440-1450 level; on the other hand, a dip below the support can take it to a low of 1020. We expect the latter to happen. Traders can consider going short on the stock future, with a stop-loss at 1350.FIIs trend
The cumulative FII positions as a percentage of total gross market position on the derivative segment as on November 6 decreased to 38.73 per cent. Foreign institutional investors turned net sellers during the later part of the week. They now hold index futures worth Rs 9,136.92 crore (Rs 7,840.38 crore) and stock futures worth Rs 10,731.46 (Rs 8,984.74 crore).Their holding in index options also increased to Rs 13,588.96 crore (Rs 10,004.98 crore), according to latest NSE data.

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Wkly Tech Analysis: Nifty resistance likely at 3,200



The Sensex ended higher for the second straight week on Friday on the back of selective buying. The index began the week with a bang and touched a high of 10,945, before paring gains and slipping to a low of 9,632. The Sensex finally ended the week with a gain of 176 points at 9,964.



Whether or not the recent low of 7,697, is a bottom or not can be confirmed only if the index moves up above the 12,100-mark. Since we are closer to the year-end, we will only look at the short-term picture. As long as the Sensex stays above 8,980, the recent low can be assumed to be a bottom. However, a break of this level could see the index retesting its recent low and it may even drift lower towards the 7,000-mark.
On the upside, the 12,100-mark would be a key resistance. As and when the index breaks this mark, it may see a strong upmove towards the 15,000-mark. This week, the index may face resistance in the 10,730-11,000 zone. On the downside, the index is likely to find support around the 9,100-level.




KEY LEVELS

Sensex Nifty
S3 9150 2735
S2 9300 2785
S1 9460 2830
Close 9964 2973
R1 10465 3120
R2 10620 3165
R3 10780 3210
S-Support level

R-Resistance level


The Nifty, the NSE index, moved in a range of 380 points. From a high of 3,241, the index dropped to a low of 2,860 and then rebounded and finished with a gain of 87 points at 2,973. The Nifty chart looks better when compared to the Sensex. It suggests that the bottom is probably in place, for this year at least. In case of a downturn, the index is likely to find support around the 2,500-mark.



The Nifty, the NSE index, moved in a range of 380 points. From a high of 3,241, the index dropped to a low of 2,860 and then rebounded and finished with a gain of 87 points at 2,973. The Nifty chart looks better when compared to the Sensex. It suggests that the bottom is probably in place, for this year at least. In case of a downturn, the index is likely to find support around the 2,500-mark.
On the upside, as long as the index stays above 2,930, it has potential to rally up to 3,500 in the short term.
The bollinger bands suggest a wide trading range of 2,500-3,580. The short-term (20-day) daily moving average (DMA) is at 3,038. Once the index closes above this level, it can then test its mid-term (50-day) DMA, which is placed at 3,696. This week, the index is likely to face resistance around 3,120-3,200, while support on the downside is around 2,830-2,740.

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STOCKS: Mahindra and Mahindra: BuyThe Mahindra and Mahindra (M&M) stock has shed over 30 per cent since our earlier recommendation in end-September. While a large part of the fall can be attributed to broader market volatility, a fall in profits in the second ...

STOCKS: YES Bank: BuyInvestors can consider accumulating the YES Bank stock at the current market price (CMP) of Rs 81.9. The stock has gained 49 per cent from its all-time low of Rs 55 on October 27, but remains a good investment option for investors with ...

STOCKS: IRB Infrastructure Developers: BuyWe reiterate a buy on the stock of IRB Infrastructure Developers. The stock had taken a sharp hit over the last few months on concerns of high interest rates affecting project internal rate of returns (IRRs). Signals of a softening interest ...


BANKING: The long-term outlook for bank stocksDespite concerns about tight liquidity at present, credit growth for Indian banks is likely to remain quite strong over the next few years, helped by corporate demand for credit. To cite an example, infrastructure spending in the Eleventh ...


TECHNICAL ANALYSIS: InfosysThis stock reversed from the peak at Rs 1,457 on Monday and closed the week with an 8 per cent decline. If we consider the movement of the stock over the last four weeks, it is moving in a band between Rs 1,100 and Rs 1,400. The short-term ...

TECHNICAL ANALYSIS: Maruti SuzukiMUL built on the gains made in the previous week and went on to an intra-week peak at Rs 635. Though it retracted a little from this level, the short-term view on this stock stays ...

TECHNICAL ANALYSIS: Tata SteelIt was another disappointing show by Tata Steel. The sharp decline from the peak at Rs 250 shows that bears have a stranglehold on this counter. It is currently hovering around the key short-term support at Rs 180. If this level holds, the ...

TECHNICAL ANALYSIS: Reliance IndRIL reversed downward with a giant engulfing candle formation in the daily chart. The high volumes recorded on this day make it a key ...

TECHNICAL ANALYSIS: ONGCONGC rose to Rs 808 by Wednesday and spent the rest of the week moving sideways. The short term trend in the stock continues to be up. Near-term supports for the stock are at Rs 700 and then Rs 640. Short-term traders can hold their trading ...

TECHNICAL ANALYSIS: SBIThe stellar rally in SBI in the first half of last week was stalled at the resistance at Rs ...



Source: Business Standard,BusinessLine

Inflation spooks market; Nifty ends below 2900

Inflation spooks market; Nifty ends below 2900

Equities retraced intraday gains and ended sharply lower for the second straight session Thursday as a higher-than-expected inflation rate weighed on investor sentiments. Metals and oil & gas stocks took a hit while realty and healthcare ended flat. Domestic inflation rate for the week ended Oct 25 was 10.72 per cent against 10.68 per cent a week ago. The figure disappointed traders who expected it to come in single digit. Stocks opened gap-down following correction in global markets on fears of recession, which came to the fore after the US elections were over. Shares of Tata group companies Tata Steel and Tata Motors were under tremendous pressure. Investors also continued to exit Reliance Industries.

Bombay Stock Exchange’s 30-share Sensex closed the day at 9,734.22, down 385.79 points or 3.81 per cent from the previous close. The Index touched a high of 10,109.45 and low of 9,635.22. National Stock Exchange’s Nifty ended at 2,892.65, down 102.30 points or 3.42 per cent. The 50-share index touched an intra-day low of 2,860.25 and high of 3,007.80.

BSE Midcap Index was down 2.24 per cent and BSE Smallcap Index closed 2.13 per cent down. “We are in normal correction after a phenomenal rise and may retrace below today’s low to 2746 and 2560, which forms a strong support base for the Nifty. For a higher bottom formation, Nifty has to turn from any of these above levels and should close above 3240 for two consecutive days, which would raise possibility of a 700-800 points rally on the Nifty. If market doesn’t breach low of 2860 on Friday then the levels of 3008, 3051 and 3122 will act as sell area. Close above 3122 will be positive for the market. Short term averages are trending flat and long term 200 DMA and 30 DMA are downwards,” said Bharat Gala, head technical analyst, Ventura Securities.

Tata Steel (-13.67%), Tata Motors (-12.17%), Sterlite Industries (-11.33%), Reliance Industries (-7.71%) and Hindalco (-7.50%) were the top Sensex losers.

Among stocks, Tata Motors has decided to shut production at its Jamshedpur facility for medium and heavy vehicles for three days beginning Thursday to tide over plummeting demand which had an impact on the auto company's share price. Tata Steel extended losses for the second straight day after ArcelorMittal's guidance for the current quarter painted a bleaker picture than expected and market participants forecast dismal Corus earnings for the quarter to Sep 30, 2008. Selling in Reliance Industries continued on reports that company was shutting five polyester plans at Patalganga, and a research report by securities firm ABN Amro downgrading the stock price to Rs 1,150. Jaiprakah Associates (4.10%), Ranbaxy Laboratories (3.72%), Hindustan Unilever (3.05%) and DLF (2.46%) were the top gainers. Fall in global commodities prices on concerns of demand slowdown took its toll on metal stocks. BSE Metal Index ended 8.41 per cent lower. Banking shares extended losses on worries over liquidity to meet the credit demand, although many public sector banks announced lending rate cuts and leading private sector banks are likely to follow next week. The BSE Bankex ended down 3.41 per cent at 5,442. Bank of India was worst hit and ended the session 6.11 per cent lower at Rs 259.50, followed by SBI and PNB, down nearly 4.5 per cent to Rs 1215 and Rs 470, respectively. ICICI Bank shed 4 per cent to close at Rs 434, while HDFC Bank was down by 3.10 per cent to Rs 1060.55. Market breadth was negative on the BSE with 1,633 declines and 869 advances.

Sensex sheds 386pts amid high volatility
Sensex ends 386 pts down on weak global cues
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Inflation rises to 10.72% / Inflation rises marginally to 10.72%
US stocks opens lower as economic woes mount
BoE, ECB slash key rates as EU economy slows
Obama can't overlook Indian outsourcing industry
Indices end sharply lower as inflation rises

Cognizant Q3 revenue surges; sees project delays
Reliance denies shutdown of polyester units
Inflation rises to 10.72%
Real inflation: Get the numbers right
Alkali Metals shares ends at 68% premium

Source:ET,BS,Sify etc

Sensex plunges 511 pts; RIL, Tata Steel suffer big losses

Sensex plunges 511 pts; RIL, Tata Steel suffer big losses

Tracking gains on Wall Street and in major Asian markets, equities opened on a rousing note on the major Indian bourses this morning. But then, the market went tumbling down soon thereafter as several blue chip stocks, led by index heavyweight Reliance Industries crashed sharply on a severe bout of selling pressure.
Global meltdown and stock market
Information technology, bank, pharma and select capital goods and power stocks did bounce back and pulled the market from lower levels in early afternoon trade, but another round of selling - this time the pressure was extremely severe - saw the benchmark indices Sensex and Nifty plunging far deeper into the red. And the market never really recovered from the setback as selling continued right till the end as a weak trend on the European bourses and the fall of US index futures aided the bears in their pursuit.
Stockometer
The Sensex, which very nearly breached the 11,000 mark in early trade today - it shot up to a high of 10,945.41 - but nosedived to 10,051.52 during the fag end of the session, settled at 10,120.01 with a huge loss of 511.11 points or 4.81%.
Top gainers
The Nifty closed at 2994.95, near a day's low of 2971, with a loss of 147.15 points or 4.68%. Earlier, after opening at 3155.75, it had spurted to a high of 3240.55 in opening trade.
Worst losers
A marked downgrade in ratings and the company's decision to shut five of its polyester and petrochemical units took the wind out of heavyweight stock Reliance Industries today. The index major ended the session with a huge loss of 12.75% at Rs 1269.45. Tata Steel and Jaiprakash Associates lost over 10% today.
Reliance Communications, DLF, HDFC, Grasim Industries, Sterlite Industries, ACC, Tata Motors, Larsen & Toubro and Mahindra & Mahindra drifted down by 6% - 9.5%.
Bharti Airtel, Hindalco, Reliance Infrastructure, State Bank of India, Hindustan Unilever, BHEL, NTPC, ICICI Bank and HDFC Bank also finished with sharp losses.
Infosys Technologies, ITC, ONGC, Ranbaxy Laboratories, Tata Consultancy Services and Tata Power failed to hold gains and ended in the negative territory.
Wipro bucked the trend and posted a sharp gain of 2.75%. Satyam Computer Services gained a little over a quarter per cent. Maruti Suzuki closed with a small gain.
GAIL India went down by over 15%. SAIL lost 12.4%. Unitech ended with a loss of 11.55%. Reliance Petroleum, Ambuja Cements, HCL Technologies, ABB, Reliance Power, Idea Cellular, Tata Communications, Power Grid Corporation, Nalco, Zee Entertainment, BPCL and Cairn India also closed with sharp losses.
Sun Pharmaceuticals shot up by nearly 10.5%. Suzlon Energy gained 5.9%. Punjab National Bank and Hero Honda ended with handsome gains.
As midcap and smallcap stocks also tumbled on pressure, the market breadth turned quite negative this afternoon. Out of 2638 stocks traded on the BSE, 1565 stocks closed in the negative territory. 1,000 stocks posted gains and 73 stocks ended flat.

Sensex bucks global trend, sheds 511pts, RIL weighs

Sensex ends in red

Source:Sify,BS,BL etc

Sensex plunges 511 pts; RIL, Tata Steel suffer big losses

Barack Obama elected 44th US president

Barack Obama elected 44th US president

To view election results for each state, click here: Votes.

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Democrat Barack Obama today scripted history capturing the White House in a landslide trouncing Republican John McCain to become the first Black President of the United States.

After an extraordinary nearly two-year election campaign, the 47-year-old Illinois Senator, born to a Kenyan father and White American mother, secured 338 electoral college votes against 155 of McCain, according to CNN projections.72-year-old McCain conceded defeat and urged all Americans to join him in congratulating his rival.

In his concession statement in Phoenix, he said Obama had his goodwill and he believed that the victor would make necessary compromises to bridge differences and defend the security of the country in the "dangerous world."

Obama will be sworn in as the 44th US President on January 20 next year, replacing Republican incumbent George W Bush at the end of his eight-year rule and marking a new milestone in American history 45 years after the peak of civil rights movement of Martin Luther King.
The charismatic Democrat, who had defeated Hillary Clinton in the primaries to clinch the party nomination, led a landslide expanding his party's majorities in both chambers of the US Congress -- House of Representatives and Senate, rejecting Bush's leadership.

The Democratic winner immediately faces huge challenges in the form of worsening US economy and the mess he inherits from Bush in the American war in Iraq.

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Obama creates history
WASHINGTON: Democrat Mr Barack Obama on Tuesday scripted history capturing the White House in a landslide trouncing Republican John McCain to become the first Black President of the United States.
After an extraordinary nearly two-year election campaign, the 47-year-old Illinois Senator, born to a Kenyan father and White American mother, secured 338 electoral college votes against 155 of McCain, according to CNN projections.
The 72-year-old Mr McCain conceded defeat and urged all Americans to join him in congratulating his rival. In his concession statement in Phoenix, he said Mr Obama had his goodwill and he believed that the victor would make necessary compromises to bridg e differences and defend the security of the country in the “dangerous world.”
Mr Obama will be sworn in as the 44th US President on January 20 next year, replacing Republican incumbent Mr George W Bush at the end of his eight-year rule and marking a new milestone in American history 45 years after the peak of civil rights movement of Martin Luther King.
The charismatic Democrat, who had defeated Hillary Clinton in the primaries to clinch the party nomination, led a landslide expanding his party's majorities in both chambers of the US Congress - House of Representatives and Senate, rejecting Bush's leade rship.
The Democratic winner immediately faces huge challenges in the form of worsening US economy and the mess he inherits from Mr Bush in the American war in Iraq. - PTI

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Barack Obama's victory: Three lessons for businessObama built his decisive win on three leadership principles: a clear vision, clean execution, and friends in high places.
Obama's life and times Obama's leap of faith fired by Gandhi
US elections special Meet First Lady Michelle Obama

Election of Obama as US President "historic": CPI
Obama's victory path includes Western states
Obama's Kenyan relatives cheer win
Highlights of Obama's life and times
Analysis: Next up after Obama win, governing
Obama -- From a low-paid community worker to President

Economic plans of Obama / World looks forward to new era with US

Barack Obama wins presidential election

Obama says 'change has come for America'
Obama for strategic ties with India, not outsourcing

Obama's leap of faith fired by Mahatma Gandhi
Repercussions of Obama's win on Asia
Obama victory signals shift in US race relations
Analysis: Next up after Obama win, governing
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Video: Obama becomes the 44th US PresidentVideo: Obama becomes the 44th US President RussiaToday
Barack Obama elected next president of United States Bizjournals.comHouston Chronicle - Los Angeles Times - Council on Foreign Relationsall 1,416 news articles »

Africans elated by first black US president

US Presidential Election 2008:Electoral MapThe Business Line website features a U.S.Election Graphic from the New York Times News Service. During election night (from about 5.30 a.m. Indian Standard Time, November 5), the map will be continually updated while the votes are tallied state by state. (Map opens in a new window/tab)

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Barack Obama rode a wave of voter discontent to a historic White House victory, promising change, but now faces intense pressure to deliver on his campaign promises. Full Article Full Coverage

Obama elected

Source: All webs from the Net

Sensex ends 293 points higher

Sensex ends 293 points higher
Re posts biggest single-day gain since 1998



Indian equities extended the pull-back rally on Tuesday, outperforming Asian peers, as sentiments turned bullish in realty, infrastructure a nd banking sectors after public sector banks agreed on cut in interest rates. In a meeting with the chiefs of state-owned banks, Finance Minister P Chidambaram hinted that after RBI’s initiative to cut rates it was their turn to reciprocate to keep the realty and infrastructure growth ticking. In the meeting, PSU banks reached a consensus to cut interest rates on advances by 75 basis points and on deposits by 50 bps. The banks that announced reduction in benchmark prime lending rates by 50 basis points include the country's third largest lender, Punjab National Bank, and others like UCO Bank, IDBI Bank and Union Bank of India. State Bank of India is likely to follow suit by next week. This had a positive impact on the markets, which had turned volatile after a weak opening, and surged sharply in the last hour of trade. “Domestic liquidity crunch has been obstructing the pace of Indian economy for the past few months. Though the credit growth was high, it was not directed to the productive sectors. The problem was not only the higher cost of borrowings, but also the availability of the same. Banks with sufficient funds were also not lending to because fear of default. After today’s meeting between the finance minister and PSU banks, banks are likely to soon start cutting their PLR rates by 50-75 bps and private sectors banks are expected to follow suit. We also expect banks to cut their deposits rates simultaneously,” said Krupesh Thakker, analyst-economy, at India Capital Market. “The direct beneficiaries will be highly leveraged sectors like infrastructure, capital & engineering companies as their borrowing cost would come down. However, the SME segment would benefit the most because they lacked any alternate source of funds. We further expect the interest rate sensitive industries to witness rise in demand as the retail segment lending rates will too come down,” Thakker added. BSE Realty Index closed 12.14 per cent higher, BSE Bankex ended up 6.56 per cent and BSE Power Index climbed 5.66 per cent up. However, BSE IT Index ended 4.33 per cent lower ahead of presidential elections in the US.



Bombay Stock Exchange’s Sensex closed at 10,631.12, up 293.44 points or 2.84 per cent. The index touched a high of 10,668 and low of 10,116.22. National Stock
Exchange’s Nifty ended at 3142.10, up 98.25 points or 3.23 per cent. The broader index touched an intra-day high of 3,152.30 and low of 2,985.



BSE Midcap Index was up 2.70 per cent and BSE Smallcap Index moved 2.75 per cent higher. DLF (17.13%), Jaiprakash Associates (9.58%), Ranbaxy Laboratories (9.27%), Tata Power (8.47%) and ITC (8.45%) were the top Sensex gainers. Satyam Computers (-7.41%), TCS (-7.38%), Wipro (-4.80%), Infosys Technologies (-3.32%) and Sterlite Industries (-2%) were the losers. Market breadth was positive on the BSE, with 1,806 advances and 782 declines. Shares of Suzlon Energy surged 20.57 per cent after the company and Martifer said they were negotiating a schedule for the wind energy major to buy 22.48 per cent stake of Matifier in Germany's REpower. Airline stocks ended higher after state-owned refiners reportedly reduced ATF price by 4.5 per cent responding to government’s decision to exempt jet fuel from customs duty. Jet Airways closed 6.23 per cent up, Kingfisher Airlines ended 3.55 per cent higher and SpiceJet closed 4.83 per cent up. Meanwhile, relief rally in the global markets seems to be far from over. European markets rallied FTSE 100 was up 1.78 per cent, CAC was up 2.17 per cent and DAX gained 2.02 per cent. As the US wakes up to choose the next president, Wall Street showed signs of positive open. Dow Jones futures were up 1.96 per cent, Nasdaq futures were 2.42 per cent higher and S&P 500 futures moved 2.11 per cent up.

----------------------------------------------------
Sensex recoups from early losses to end higher by 293 points
Cabinet to consider easing FDI in defence production
India to have near 0% inflation in H2 of '09
Americans vote in historic election
World hopes for a less arrogant America

India to ease FDI rules: Kamal Nath
Economy not so bleak,needs balance
Trade deficit up by 53% in Apr-Sept

Sensex gains 293pts; DLF zooms 15%, tech stocks tumble

FM assures industry on rate cut
Suzlon, Martifer talking on REpower stake sale date
Export growth slips to 10.4% in Sept
October turns worst for world bourses; Indian markets lose $62 bn

















Source:ET

Some bright spots amid gloom, Result analyis of BL

Some bright spots amid gloom

The 30 per cent rise in sales and 12 per cent profit growth managed by leading Indian companies (320 of the BSE 500) for the September quarter may only reaffirm the gloomy earnings picture that the market is factoring into stock prices today.
In a bear market, such as the present one, while negative news is magnified by the lens of pessimism, positive aspects are often ignored. That a good 152 of the 320 companies recorded earnings growth of over 15 per cent could possibly come as a surprise for those who expected a sweeping profit slump.

This article discusses the divergence in performance of companies and sectors in the September quarter and highlights the possible reasons for such variations. A compact universe of companies from the BSE-500 (that represent 93 per cent of the exchange market cap) was chosen to analyse various drivers of costs and income for Corporate India. The set consists of stocks with a market capitalisation range of Rs 100 crore to Rs 1,90,000 crore. Also in focus are key sectors and companies that are conspicuous for their exceptionally good, or particularly poor, performance. Sales zoom, but margins pressured

Before moving to specifics, here’s a look at what the averages suggest. Sales, possibly ignited by an inflationary environment, clocked a far higher growth rate of 30 per cent (year on year) than the 19 per cent growth seen in September 2007.

However, the same inflationary trend, reflected in raw material costs ensured that operating profit growth halved to a moderate 15 per cent. Drastic reduction in ‘other income’ and losses on extraordinary items (as against profits from this segment in the previous year) dragged net profit growth down to 12 per cent.

A study of the key cost components suggests that the impact of the commodity price meltdown is yet to trickle down to corporate margins. Raw material costs were up by 43 per cent in the September 2008 quarter over a year ago. The similar increase in September 2007 was a mere 8 per cent.

However, raw materials as a percentage of sales (leaving out companies in the services space, with no raw material costs), was a whopping 56 per cent — 5 per cent over last year. The comparable number in September 2006 was 55 per cent, only 100 basis points lower than the latest figures.
In other words, the current proportion of cost to sales is not too different from 2006 levels, suggesting that selling prices may have offset input cost hikes. The operating profit margin too, at 27 per cent, was similar to the 2006 levels.

Earnings quality improves

Employee expenses as a percentage of sales declined marginally to about 8.2 per cent for the latest quarter, on the back of sedate hiring activity in the service sectors. However, for public sector companies such as BHEL, Bharat Electronics or SAIL, the pressure on profitability following implementation of the Sixth Pay Commission’s recommendations was discernible.
Despite rising interest rates and tightening liquidity, interest cost as a percentage of sales saw a mild dip to about 14 per cent, the ratio helped mainly by the cash-rich or low-debt companies in the universe. However, specific sectors, discussed later, have shown a steep increase in interest costs.

Windfall ‘other income’, primarily driven by forex gains (arising from revenue as well as borrowing transactions) in September 2007, gave way to extraordinary losses, either from forex hedging or the lack of it in the past quarter. Net profits, adjusted for such losses, nevertheless, grew at a modest 12 per cent. While the above averages provide some cues on India Inc’s growth trajectory, they only offer a sketchy picture. A break-up into sector and stock-specific trends makes things clearer.

Revenue growth remained robust in most sectors, barring interest-sensitive segments such as auto and auto ancillaries or sectors with weakening demand and price, such as cement. While the former took a mild dip in operating profits in the latest quarter, compared to a year ago numbers, cement companies bore a sharp 9 per cent fall in operating profits. Most of the companies in this universe, located in the Northern region, have been witnessing sharp declines in cement prices, compared to early 2008.

Metal margins slide: Manufacturers of another key commodity, steel, had a different story to recount. While volumes could have remained robust, as suggested by a 40 per cent increase in revenues, the average operating profit margins dipped sharply to 29 per cent from 35 per cent a year ago. With steel prices coming off sharply in recent months, the coming quarters may pose a real challenge for these companies.

Banking, IT stable: Sectors such as banking and IT have turned in far more stable results than expected, despite being boxed in by concerns. While banks faced a liquidity crunch, escalating costs and concerns about lower credit off-take on the back of high interest rates, the software sector was engulfed by its share of concerns arising from the global turmoil.
Both sectors have shown more moderate revenue and net profit growth, though profit margins did not throw up negative surprises.

Surprise from infrastructure: Interestingly, infrastructure, among the most beaten-down sectors in the recent fall, put up a respectable show, with a 39 per cent growth in sales and a 62 per cent growth in net profits.
Stocks from these sectors were beaten down on the back of concerns about high raw material and borrowing costs and an order-book slowdown.

However, price escalation clauses in most projects have allowed these companies to partly cope with rising costs. Order inflows, too, have been robust, especially for the larger infrastructure companies.

Less fortunate: The engineering and capital goods sector was, however, less fortunate as both operating and net profits grew at a noticeably slower pace. Neither infrastructure nor engineering was spared a sharp spike in borrowing costs, which rose by over 50 per cent.Beating expectations: Overall, banking and infrastructure sectors featured several companies that demonstrated better results than the market expected. Software, aided by a sliding rupee, too registered comfortable growth. These sectors, with their respective average earnings growth at over 20 per cent, have clearly done better than market expectations (the BSE-500 price earnings multiple is at about 11 times).


Stand-out performers
A few other trends, not specific to sectors, also emerged from the analysis. For instance, among the companies that notched up higher sales and net profits, 105, or one-third of the universe, saw net profits grow at a faster pace than sales. Were these companies supported by ‘other income’ outside of operations? Not really, as the other income declined in this universe as well.
The average operating profit margins for these companies jumped 300 basis points to a whopping 40 per cent in the latest quarter compared to a year ago, suggesting that volumes, pricing power and cost management could have been the key factors for superior performance, rather than any freak “other income.” See Table ‘ Strong show’ for a few such companies.
Interest costs, although stable, forms about a fifth of sales for these companies — far higher than the ratio of 13-14 per cent of sales for the whole universe. This suggests that these could be highly leveraged companies, starting to reap the benefits of expansion.
To balance the above with some negative trends, about 18 companies in the universe reported a decline in sales on a year-on-year basis.
About 11 of them also skidded into losses in the recent quarter, from net profits a year ago. These companies account for 3-5 per cent of our universe of 320.
Interestingly, both the above categories were part of the under-Rs 2,500 crore market capitalisation segment, once again reiterating the ability of larger companies to manage tough times better.

Source:BL