Market slides on weak global cues

The market opened on a weak note on negative cues from global markes and uncertainty on the political front. All the sectoral indices on BSE were in the red. Realty and banking shares were worst hit in the fall.

The postponement of a key meeting between the government and its communist allies on the proposed nuclear deal between US and India keeps the future of the deal uncertain. Talks were set to take place Wednesday, 18 June 2008, in New Delhi, but Communist leaders say the meeting will now take place on 25 June 2008. The delay comes as Left wing parties’ reffirm their opposition to the agreement, saying it undermines India's independent foreign policy and nuclear weapons program. As per reports, CPM a key left party may be working on a plan to pull out support to the UPA government.

Asian markets, which opened before Indian markets, were trading weak. Key indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 1.62% to 3.37%. The Dow Jones Industrial Average hit its lowest level in three months on Wednesday, 18 June 2008, as worries about a weak US economy compounded by credit sector concerns dragged down shares in banks, autos and transport firms.

At 10:20 IST, the 30-share BSE Sensex was down 199.08 points or 1.29% at 15,223.23. The index shed 231.07 points at the day’s low of 15,191.24 hit in early trade.

The broader based S&P CNX Nifty was down 55.30 points or 1.21% at 4527.10.

The market breadth was weak on BSE with 570 shares advancing as compared to 1035 that declined. 33 remained unchanged.

The BSE Mid-Cap index rose 0.58% to 6,323.11 and BSE Small-Cap index was up 0.56% to 7,731.50.

India's largest drug maker by sales Ranbaxy Laboratories declined 4.15% at Rs 573.40 after the company agreed to keep generic versions of the Pfizer's cholesterol pill Lipitor off the US market for extra 20 months. As per the agreement, Ranbaxy will not sell a generic of Lipitor, the world's best-selling drug, until November 2011. Ranbaxy was the top traded counter on BSE with a turnover of Rs 96.72 crore.

The other major Sensex losers were, Maruti Suzuki (down 3.01% at Rs 742), Larsen & Toubro (down 2.15% at Rs 2691.45), Bharat Heavy Electricals (down 2.25% at Rs 1466), and State Bank of India (down 1.84% at Rs 1326.50).

The top Sensex gainers were, ACC (up 1.37% at Rs 652), Hindalco Industries (up 0.725 at Rs 175.55), Ambuja Cements (up 0.77% at Rs 91.30), and Tata Steel (up 0.33% at Rs 825.40).

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 1.23% at Rs 2255.30. RIL has a highest weightage of 15.72% in BSE Sensex.

India's largest private sector bank by assets ICICI Bank fell 2.21% at Rs 765. ICICI Bank has a third highest weightage of 8.27% in BSE Sensex.

India’s second largest software exporter by sales Infosys Technologies fell 1.32% at Rs 1841. Infosys has a second highest weightage of 8.59% in BSE Sensex.

Light, sweet crude oil jumped $2.67 to $136.68 per barrel on the New York Mercantile on Wednesday, 18 June 2008, after the US Energy Department said the country’s crude oil stockpiles fell less than expected last week but that gasoline supplies had declined.

Back home, market settled lower yesterday, 18 June 2008, led by weak European markets and deferral of a crucial UPA-Left coordination committee meeting on Indo-US nuclear deal scheduled yesterday, 18 June 2008. The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31 and the broader based S&P CNX Nifty was down 70.6 points or 1.52% at 4582.40, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 435 crore while domestic mutual funds bought shares worth a net Rs 193.64 crore yesterday, 18 June 2008.

Foreign institutional investors (FIIs) were net sellers of Rs 192.64 crore in the futures & options segment yesterday, 16 June 2008. They were net sellers of index futures to the tune of Rs 682.33 crore and bought index options worth Rs 359.98 crore. They were net buyers of stock futures to the tune of Rs 133.45 crore and sold stock options worth Rs 3.74 crore.

Jet Airways may see action

Reliance Industries is reportedly in talks with Jet Airways for picking up around 6% to 7% stake in the airline.

JetLite, the low-fare subsidiary of Jet Airways has been reportedly asked to appear before the union government for non-payment of at least Rs 100 crore in service tax.

Maruti Suzuki India reportedly plans to counter Ratan Tata's Nano with a stripped-down version of its Maruti 800.

Reliance Power will reportedly get a $500 million loan from the Asian Development Bank for the 4,000 megawatt ultra mega power project coming up in Andhra Pradesh.

The Al Rostmani Group of the United Arab Emirates is reportedly planning to pick up a majority stake in Gujarat Heavy Chemicals (GHCL) for an estimated Rs 700 crore.

Tata Power Company is reportedly in talks with shipbuilders in South Korea to construct six big ships, which it will use to carry coal from its mines in Indonesia to feed its ultra mega power plant in Gujarat. The company will have to invest between $550 million to $600 million to buy the ships, the reports added.

Aditya Birla Minacs, the back-office arm of Aditya Birla Nuvo is reportedly eyeing acquisition of a knowledge process outsourcing (KPO) firm worth $150 million.

Housing Development and Infrastructure (HDIL) is reportedly eyeing the power sector as part of its diversification strategy.

Dishman Pharmaceuticals and Chemicals has reportedly invested $10 million to set up a facility in China.

British retail tycoon Philip Green-led Arcadia Group is reportedly striking a partnership with realty firm DLF to bring high-street clothing chain Topshop to India.

Transport Corporation of India is reportedly set to dilute promoter holding by about 10% to raise capital for its expansion plans.

Bharat Petroleum Corporation, Cambridge Solutions, IRB Infrastructure, Sical Logistics, Shree Digvijay Cement, Tantia Constructions, Tata Communication, Wire & Wireless India, and Zee News among others will declare their March 2008 ended quarter results today.

Local equities seen range-bound on mixed global cues

Local equities are likely to stay range-bound tracking mixed global cues. The advance tax figures of some leading banks and a few corporates for the April-June quarter of this fiscal provide some room for comfort. State Bank of India recorded a 32% increase in advance tax payment to Rs 663 crore for the Q1 2008 over Q1 2007. Reliance Industries (RIL), reported 15% rise in advance tax paid to Rs 340 crore in Q1 2008 over Q1 2007.

Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.

However crude oil striking record high just under $140 a barrel may dampen sentiment. Light, sweet crude for July delivery fell 25 cents to settle at $134.61 a barrel yesterday, on the New York Mercantile Exchange after earlier soaring to a trading record of $139.89.

Also caution will prevail in the coming day’s on fears that the Reserve Bank of India (RBI), as part of its efforts to contain rising inflation, would resort to more measures to make banks’ lending rates dearer.

Inflation, measured by wholesale price index (WPI), jumped to a 7-year high of 8.75% in the week to 31 May 2008, after rising 8.24% in the previous week. The negative impact of higher lending rates would rub off on the entire economy. Such concerns over slowdown in economic growth are expected to keep the market choppy in the near term.

Also high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth.

Asian markets were trading mixed today, 17 June 2008. Shanghai Composite was up 0.31% or 8.99 points at 2,883.09, Nikkei gained 0.13% or 18.51 points at 14,372.88, Hong Kong's Hang Seng rose 0.19% or 44.39 points at 23,074.08.

However, Taiwan's Taiwan Weighted fell 0.76% or 62.40 points at 8,107.37, Singapore's Straits Times slipped 0.39% or 11.80 points at 3,025.12 and South Korea's Seoul Composite declined 0.87% or 15.31 points at 1,745.51

US markets ended mixed in see-saw trade yesterday, 16 June 2008. A rally was sparked in banking stocks with Lehman Brothers declaring results in line with market expectations.

The Dow Jones industrial average lost 38.27 points, or 0.31%, to 12,269.08. The S&P 500 index gained 0.11 points, or 0.01%, to 1,360.14. The Nasdaq Composite index added 20.28 points, or 0.83%, to 2,474.78.

Earnings downgrades by brokerages amid rising input and interest costs for India Inc and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. A further hike in rates would impact bottomline of Indian companies.

Back home, the market ended on a firm note yesterday, 16 June 2008, on the back of firm global markets. The 30-share BSE Sensex rose 206.20 points or 1.36% at 15,395.82 and the broader based S&P CNX Nifty gained 55.4 points or 1.23% at 4572.50, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 547.84 crore yesterday, 16 June 2008. Domestic funds bought shares worth a net Rs 293.05 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 59.33 crore in the futures & options segment yesterday, 16 June 2008. They were net buyers of index futures to the tune of Rs 180.49 crore and sold index options worth Rs 257.05 crore. They were net buyers of stock futures to the tune of Rs 131.73 crore and bought stock options worth Rs 4.16 crore.

Asian markets trading mixed

Asian markets were trading mixed. China's Shanghai Composite was up 0.31% or 8.99 points at 2,883.09.

Japan's Nikkei gained 0.13% or 18.51 points at 14,372.88.

Hong Kong's Hang Seng rose 0.19% or 44.39 points at 23,074.08.

However, Taiwan's Taiwan Weighted fell 0.76% or 62.40 points at 8,107.37.

Singapore's Straits Times slipped 0.39% or 11.80 points at 3,025.12.

South Korea's Seoul Composite declined 0.87% or 15.31 points at 1,745.51

Somi Conveyor Beltings IPO opens on June 24

Somi Conveyor Beltings will enter the capital market with an initial public offering, IPO of 62,27,860 equity shares of Rs 10 each through 100% book building process on June 24, 2008. The price has been fixed at Rs 35 per equity share. The issue will close for subscription on June 27, 2008.

The issue comprises of contribution by promoters, of 14,99,286 equity shares of Rs 10 each at a price of Rs 35 per equity share for cash aggregating to Rs 5.25 crores, and the net issue to the public of 47,28,574 equity shares of Rs 10 each at a price of Rs 35 per equity share for cash aggregating to Rs 16.55 crores including an allocation of atleast 10% of the net issue to the public to Aualified Institutional Buyers. The net issue to public would constitute 40% of the fully diluted post issue paid up capital of the company. The issue price is 3.5 times of the face value of the equity share.

The shares are proposed to be listed on the BSE.

Ashika Capital is the Lead manager to the issue.

Mondkar Computers is the Registrar to the issue.

Market spurts in opening trade

The market opened on a firm note on positive global cues. Fall in crude oil prices from record high and firm global markets boosted the sentiments. All the sectoral indices on the BSE were in green.

Crude oil for July delivery fell as much as 86 cents to $134 a barrel in after-hours electronic trading on the New York Mercantile Exchange today, 16 June 2008, on speculation Saudi Arabia will increase production, reducing risks to global growth from near-record energy prices.

Asian markets were trading higher today, 16 June 2008, on speculation demand for the region's exports will be sustained as the yen weakened against the dollar and crude oil prices retreated. Japan's Nikkei (up 1.47% at 14,179.62), Hang Seng (up 1.66% at 22,966.30), Taiwan's Taiwan Weighted (up 1.36% at 8,215.54), Singapore's Straits Times (up 1.59% at 3,027.07), South Korea's Seoul Composite (up 0.92% at 1,763.38), China (1.06% at 2,899.153), edged higher.

US markets rallied on Friday, 13 June 2008, led by financial and technology stocks, as a tame core-inflation reading and lower crude prices boosted market. The Dow Jones industrial average jumped 166 points at 12,307. The Nasdaq Composite index surged 50 points up at 2,454.50. The S&P 500 500 index advanced 20.16 points to 1360.03.

At 10:25 IST, the 30-share BSE Sensex was up 313.56 points or 2.06% at 15,503.18. At the day’s high of 15,553.37 Sensex gained 363.75 points in early trade.

The broader based S&P CNX Nifty was up 84.25 points or 1.87% at 4601.35.

The market breadth was strong on BSE with 1495 shares advancing as compared to 364 that declined. 33 remained unchanged. All 30 Sensex stocks were in green

The BSE Mid-Cap index rose 1.66% to 6,331.30 and BSE Small-Cap index up 1.65% to 7,706.99.

Banking shares were in demand after a sharp sell-off in the past few trading sessions. ICICI Bank (up 4.37% at Rs 798.25), HDFC Bank (up 2.98% at Rs 1,156.80), Bank of India (up 2.75% at Rs 276.15), and Axis Bank (up 2.36% at Rs 721), moved up. The BSE Bankex was up 2.91% at 7261.69.

India's top state-run commercial bank State Bank of India (SBI) rose 1.90% to Rs 1359.95. After a review of interest rates on Friday, 13 June 2008, SBI said it will not to raise its prime lending rate even though the Reserve Bank of India (RBI) had raised its key short term lending rate earlier this week.

The top Sensex gainers were, Infosys Technologies (up 3.27% at Rs 1924.55), HDFC Bank (up 3.36% at Rs 1161.10), Housing Development Finance Corporation (up 2.90% at Rs 2195), Bharti Airtel (up 2.98% at Rs 838.25), and Reliance Infrastructure (up 2.27% at Rs 1043.50).

India’s second largest telecom services provider by sales Reliance Communication was up 0.40% at Rs 545.50 after Reliance Industries claimed first right of refusal to buy a controlling stake in it. Reliance Communications, controlled by Anil Ambani, is in exclusive talks with South Africa's MTN about a tie-up that could create a top-10 global telecoms firm. As part of a tie-up, Anil Ambani would likely swap his controlling stake in Reliance Communications to become the largest shareholder in MTN.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries was up 1.82% at Rs 2309.

Back home, the market slipped on Friday, 13 June 2008, as data showed a surge in inflation to a seven-year high and weak European markets. The 30-share BSE Sensex lost 60.58 points or 0.4% at 15,189.62 and the broader based S&P CNX Nifty was down 22.25 points or 0.49% at 4,517.10, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 116.51 crore on Friday, 13 June 2008. Domestic funds bought shares worth a net Rs 457.33 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 625.28 crore in the futures & options segment on Friday, 13 June 2008. They were net buyers of index futures to the tune of Rs 167.32 crore and bought index options worth Rs 173.58 crore. They were net buyers of stock futures to the tune of Rs 224.58 crore and bought stock options worth Rs 59.80 crore.