Sensex up by 153; Nifty gains 46 points

Despite huge volatility, the Sensex managed to end in positive territory

The Sensex gained 153 points from the previous day’s close, ending the day at 16,849 while the Nifty closed at 4,999; 46 points up on the back of strong industrial output data even as volatility ruled the day.

During the day, India’s biggest State-run oil exploration firm Oil & Natural Gas Corporation (ONGC) rose 3% on reports that the oil ministry has proposed a sharp hike in administered gas prices. Meanwhile, the government has allowed ONGC Videsh, the overseas arm of ONGC, to invest an additional Rs322 crore in an oilfield in Brazil. The approval of the Cabinet Committee on Economic Affairs (CCEA) will raise the total investment in the project to Rs1,762 crore.

Tata Steel was up 2% after the company said that it approved a new convertible bonds offer in exchange for an existing $875 million security to reduce costs and ease repayment obligations.

Shipping stocks rose after the Baltic Dry Index jumped 5.5% to 3,954 on Thursday, 12 November 2009 as China’s huge demand for iron ore and coal has intensified ship congestion outside key ports. Mercator Lines, Shipping Corporation of India, Essar Shipping Ports & Logistics, Shreyas Shipping & Logistics, Varun Shipping Company and Great Eastern Shipping Company rose by between 0.4% - 3.49%.

Shoppers Stop lost 4% after the company said its board will meet on Saturday, 14 November 2009, to consider raising funds through various means. JK Paper surged 4% on reports that the company plans to double its Orissa plant capacity to 2.5 lakh metric tonnes per annum at an investment of Rs1,500 crore.

Meanwhile, Asia’s key benchmark indices in Japan, South Korea and Taiwan fell by between 0.05%-0.35% while the key benchmark indices in Singapore, China and Hong Kong rose by between 0.04 %-0.7%.

During the day Fan Jianping, chief economist with the State Information Centre said China’s annual GDP growth rate could reach 10% in the fourth quarter as the economic recovery exceeds expectations, with full-year economic growth expected at about 8.3%. He added that next year’s economic growth would certainly exceed 8% but was unlikely to bring inflation risks, with the consumer price index possibly rising about 2.5%.

China’s central bank vice governor, Zhu Min said China is experiencing a V-shaped economic recovery, but it still faces tough challenges to restructure its economy in the process. He said China will place more emphasis on improving the quality and structure of the economy next year as growth becomes less of a worry.

France’s economy grew 0.3% in the September 2009 quarter. The growth was the same as in the June 2009 quarter, when France’s economy expanded for the first time after four quarters of contraction.

Germany’s September 2009 quarter gross domestic product rose a smaller-than-expected 0.7% compared with the previous quarter, the German Statistics Office reported.

The euro zone economy rose 0.4% quarter-on-quarter after five consecutive quarters of shrinking output, but was 4.1% lower year-on-year.

Meanwhile, on Thursday 13 November 2009, US markets ended in the red. The Dow Jones fell 94 points to 10,197 while the S&P 500 index was down 11 points, and the Nasdaq Composite was down 18 points.

US jobless claims fell for the second straight week. The latest initial jobless claims tally came in at a lower-than-expected 502,000, which is the lowest weekly total since January. Meanwhile, continuing claims came in at 5.63 million, which is the lowest level since March 2009. Mortgage rates declined last week, with the 30-year fixed rate down to 4.91% and home foreclosures slowed for a third consecutive month. In premarket trading, the Dow Jones was trading 11 points higher.
—Swapnil Suvarna [email protected]

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    Sensex sheds 154 points; Nifty down by 59 points

    Strong IIP data, positive US market trends fail to boost Indian markets

    At the end of trading on 12th November, the Sensex closed at 16,693, down by 154 points from the previous day’s close while the Nifty closed at 4,953, down by 59 points, despite industrial production data being strong.

    During the day, Reliance Industries (RIL) remained flat on reports that the company is looking at selling stakes in some overseas exploratory oil and gas blocks. Executive director PMS Prasad indicated that RIL holds 80%-90% participating interests in its overseas blocks and that it plans to bring the stakes down to 40%-50%.

    India’s second largest mobile service provider Reliance Communications was a major gainer among the 30 Sensex stocks. It gained 2%, on reports that the company is in talks with Canadian firm Iseemedia Inc to introduce low-cost
    email services on phones. Bharti Airtel was subdued. It added 27 lakh users in October 2009, taking its total subscriber base to 11.32 crore. The Cellular Operators Association of India (COAI) announced that its members added 1.02 crore users to their GSM networks in October 2009, taking their total subscriber base to 35.52 crore.

    India’s largest real estate player DLF fell 3% on reports that its promoters have reached an agreement with DE Shaw to buy out the hedge fund’s stake in the privately owned DLF Assets. India’s largest power equipment maker Bharat Heavy Electricals was up marginally, on reports that the company secured an overseas order worth Rs91 crore.

    Grasim Industries hit a high of Rs2,300 during the day on reports that the Aditya Birla group may hike its equity stake in the company next financial year to evade any hostile takeover attempt. However the stock closed only 0.66% up. Venus Remedies surged 2.40%, after the company received patent rights for Potentox from Companies and Intellectual Property Registration Office in South Africa.

    Kirloskar Oil was up 6% on reports that it is going to sell its shareholding in its JV company to Kirloskar Systems for Rs250 crore. Steel Strips Wheels was locked at 5% upper circuit, after it bagged €28 million order from Renault.

    Golden Tobacco was locked at 5% upper circuit. Pramod Jain and Pranidhi Holdings have made an open offer for 20% in Golden Tobacco at Rs101 per share. Golden Tobacco is controlled by Sanjay Dalmia. Information and broadcasting minister Ambika Soni said FDI (foreign direct investment) caps in all broadcast sectors would be reviewed and Cabinet note for rationalising FDI across broadcast sectors including DTH was being prepared. Wire and Wireless (India) hit a 20% upper circuit and Dish TV was up 4% after the Cabinet approved guidelines on HITS (Headend In The Sky).

    Industrial output rose 9.1% in September 2009 over September 2008, data released by the government showed. The government revised upwards the industrial production growth for August 2009 to 11% from 10.4%. Consumer durables goods output surged by an annual 22.2% as stimulus measures, festivals and wage back-pay to government staff boosted demand.

    Manufacturing production in India’s economy rose 9.3% in September 2009 from a year earlier, while mining output was up 8.6% and power generation rose 7.9%.
    The food price index was up 13.68% in 12 months to 31 October 2009, the government said. The fuel index was down 1.71%. The government would release monthly data for all commodities for October 2009 on Saturday, 14 November 2009. The data was earlier scheduled to be released today.

    The government on Wednesday said indirect tax receipts fell 21.6% to Rs1,27,000 crore between April 2009 to October 2009. Excise duty receipts, levied at factory gates, were down 18.8% to Rs52,566 crore in the first seven months, while customs collection declined 31.8% to Rs45,412 crore. Service tax collection fell 5.4% to Rs28,926 crore.

    Asia’s key benchmark indices in China, Hong Kong, Japan, Singapore, Taiwan and South Korea fell by between 0.07%-1.39% on profit-taking after recent strong gains. The Taiwanese index remained flat. South Korea’s central bank left its key interest rate at a record low of 2%, as expected, under pressure from domestic and global policymakers not to implement a hasty exit plan despite rapid economic recovery.

    As per media reports, US treasury secretary Timothy Geithner said a strong dollar was important for global stability and Asia was leading the global economic recovery. A strong dollar was important for the United States, which also recognises the important role the currency plays in global economic stability, he added. A strong dollar would bring down Indian equities.

    On Wednesday 11 November, the Dow Jones Industrial Average rose 44 points ending the day at 10,291 while the S&P 500 and Nasdaq Composite were up 6 points and 16 points respectively ending the day at 1,099 and 2,167 respectively. The market sentiments were boosted after Federal Reserve officials reinforced the view that rates will remain low for some time and from the strong Chinese data on factory output and retail sales. In premarket trading, the Dow Jones was trading 14 points lower.
     —Swapnil Suvarna [email protected]

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    Realty Bites Again

    The realty sector was among the worst hit when the global financial crisis led to the market meltdown in 2008. Top developers were desperately lobbying the government for a bailout and pleading for unrealistic interest rate reductions to avoid lowering prices. Finally, residential prices dropped around 30%, but it was hardly enough, given the sharp increase in the previous four years. The...

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