Surge Continued..... Celebration on Dalal Street....
Indian market continued its journey towards north for the third consecutive day. we can say it was a belated celebration for our markets today as we were closed yesterday when other Global markets were partying. The Sensex ended the day with a gain of 743.55 points, or 8.22% at 9,788.06 after touching a high of 9,870.42 and a low of 9,361.66. The broad-based NSE Nifty gained 188.55 points, or 6.99% at 2,885.60 after hitting a high of 2,921.35 and a low of 2,696.30. BSE Midcap and Smallcap index fell 3.41% and 2.46% respectively.
For the week Sensex and Nifty gained 12.5% and 11.7% respectively, thereby breaking a 5-week losing streak. Sectorally, BSE Metal and Oil & Gas indices were the star performers, gaining 22% and 20% week-on-week, while Healthcare and FMCG were the only indices which closed in red, down 1.2% and 1% respectively. Bank of Japan announced a rate cut of 20 bps against the expectation of 25 bps. US stock futures were trading down nearly 2%.
All the BSE sectoral indices closed in green. Metal and Oil & Gas indices were the top gainers, up 10.20% to 5,367 and 9.11% to 6,195 respectively. M & M and HDFC were the top sensex gainers, surging 23.09% Rs372.35 and 17.48% Rs1,764 respectively, while Ranbaxy and TCS were the sole losers, down 1.97% to Rs169.45 and 0.93% to Rs537.45 respectively.
Positive sentiment prevailed on the bourses today mirroring spurt in global stocks triggered by a rate cut by the US Federal Reserve.
Arcelor Mittal : The world's largest steel maker, said on Thursday it will shut down its blast furnace number six at Seraing in Belgium until at least the end of February, Belgian media reported.
Public broadcaster RTBF said the move, which comes only eight months after the furnace was reopened, was due to the financial crisis and a decrease in demand for steel.
A spokesman for ArcelorMittal in London said he was unable to comment immediately on the report, which said ArcelorMittal had already taken similar steps at seven units in Europe.
RTBF said the firm preferred to decrease production in the face of a fall in the global demand for steel rather than reduce prices. It said the closure of the blast furnace would lead to layoffs, but not dismissals.
ArcelorMittal said earlier it was reviewing its expansion programme due to the economic downturn.
"ArcelorMittal's growth strategy remains unchanged," a spokesman said in a statement, adding, "However, the current market situation is prompting us to check the order of priority to be assigned to our different growth projects. We are currently reassessing these priorities."
Further details could follow when ArcelorMittal reports third-quarter results on Nov. 5.
Thursday's Financial Times reported that the company's eight-year $35 billion expansion plan was under review, including its $20 billion project for two new plants in India, on which work could be put back to 2012-2015.
The ArcelorMittal spokesman declined to quantify the size of the company's expansion plans.
Chairman Lakshmi Mittal said in September that the cost of the India project was running beyond $20 billion because of delays in securing regulatory approvals.
ArcelorMittal weathered the initial phase of the financial crisis as steel demand and prices were strong, but the company's shares have dropped 72 percent since their peak on June 6 as the commodity boom ended.
The company has already announced a 15 percent cut in European output as its main customers — the construction and the car industries — see sales slip.
Trade union representatives in France said management at the Fos-sur-Mer plant had told workers that it would reduce output and asked workers to take vacations of up to 16 days from November 1 and December 31. One furnace will cease work until the end of January, said Alain Nougue, a delegate from the CGT.
Another steel plant at Florange in eastern France would also stop output for the month of December, Jean-Marc Verin of the CFDT union said.
In Belgium, local press said workers had been told that ArcelorMittal plants at Genk and Chatelet would cease production for four weeks at the end of the year while facilities at Seraing and Ghent would decrease output levels.
French newspaper Le Figaro quoted French trade union officials as saying 13 European plants would temporarily stop work — including three in Germany. ArcelorMittal refused to comment on the reports.
European steelmakers warned Monday they are facing a difficult market climate as demand dries up and rival steel imports from China rise.
The Eurofer association which counts ArcelorMittal as a member said the market was oversupplied and might only rebound at the end of 2009.
Business and consumer confidence in the 15-nation area slipped to a 15-year low on Thursday as companies worried about falling sales and said they expected to employ fewer people.
The government is unlikely to meet the 3.1 per cent fiscal deficit target set for this fiscal due to excess borrowings to meet contingencies, Planning Commission deputy chairman Montek Singh Ahluwalia said here Thursday.
"Fiscal deficit this year is likely to be more than the budgeted 3.1 per cent (Rs.1.3 trillion) due to over-exposure in terms of borrowings. In view of the exceptional circumstances and global factors, the government had to also raise oil bonds and fertiliser bonds, which are considered off-budget," Ahluwalia told reporters on the sidelines of a function.
As per the Fiscal Responsibility and Budget Management (FRBM) Act 2003, the fiscal deficit is required to be reduced to 3 per cent of the GDP (gross domestic product) by 2008-09 - at the rate of 0.3 per cent of GDP every year from 2004-05.
"The FRBM Act is effective and adoptable under normal circumstances. To make it a rigid prescription will be a complete misreading of the Act," Ahluwalia said.
Fiscal deficit is a measure of borrowings by the government in a financial year. In budgetary arithmetic, fiscal deficit is the total expenditure minus the sum of revenue receipts, recoveries of loans and other receipts such as proceeds from disinvestment.
The government raises resources to fund its expenditure through tax collections and borrowings from the Reserve Bank of India (RBI), from the public by floating bonds, financial institutions, banks and foreign institutions.
"Even in developed countries (the US and Europe), fiscal deficits are set to go off targets this year following re-capitalisation of banks and infusion of billions of dollars and euros in their troubled financial systems," Ahluwalia asserted.
In the wake of dramatic rise in commodity and fuel prices, followed by global slowdown and financial meltdown, economies of the developing and developed countries are facing their worst-ever crisis in recent memory.
"In India, however, we have been taking proactive fiscal and monetary measures to minimise the impact of these global factors on our resilient economy. The centre has also insulated the states to a large extent by not passing off the burden of steep rise in fuel and fertiliser subsidies," Ahluwalia said.
Ahluwalia was in the tech city to receive a report on "technology enabled transformation of power distribution", prepared by IT bellwether Infosys Technologies in association with the Centre for Study of Science, Technology and Policy (CSTEP), Bangalore, a non-profit research organisation.
Indian Market opened lower about 101 points on sensex around 8600 levels taking negative clues from Asian markets on economy slowdown concern it widen its losses during the course of day. Intense selling was seen across board and the Sensex plummeted further as the day proceeded. The aggressive selling pressure broke the 8,000 mark and Sensex tumbled to a low of 7,697. Sensex was down over 62% from January`s highs and has corrected over 38% in October till date, whereas Nifty slipped below 2,300 mark. But indices staged a smart comeback in the later half of the trading session and closed with much lower damage on the penultimate day of the derivative expiry of the October series.
The Sensex ended the day with a loss of 191.51 points, or 2.20% at 8,509.56 after touching a high of 8,739.48 and a low of 7,697.39. The broad-based NSE Nifty declined 59.80 points, or 2.31% at 2,524.20 after hitting a high of 2,585.30 and a low of 2,252.75. Short covering of derivative positions ahead of the expiry on Wednesday, 29 October 2008 triggered a sharp intra-day pullback in second half of the days trading session after Indices plunging to over 3-year low in the first half spooked by weak global equities. Some buying seen in realty and energy stocks which helped the index to make a smart recovery. BSE Midcap and Smallcap index plunged 4.18% and 5% respectively.
Other Asian markets closed with much larger cuts. European markets were trading with average cut of 4% while US stock futures were down by around 2%. Rupee touched a fresh all time low of 50.27 against the dollar, finally closing at 49.88. Nymex crude fell to a 19 month low of $ 61.30/bbl.
BSE Consumer Durable and Auto indices were down the most among the sectoral indices, losing 6% each, while Realty and Teck indices gained 4.2% and 1% respectively. Bharti and Reliance were the top gainers among the sensex stocks, up 5.99% & 5.83% repectively, while Tata Motors and M & M were down the most, losing 14% each.
This Friday will be remeber for its terrible nature in Indian Stock Market. Market faced a really really big pressure due to institutional and FII concern over global economy slowdown. It was a blood bath in equity markets across the world as almost all of them saw double digit or near double digit percentage fall. Sensex saw a whooping 11% fall in todays trade and closed at 8701, the lowest close since Nov. 24, 2005. Markets extended its losses soon after the Reserve Bank of India`s half yearly credit policy review was out. Indian stock market started the day on a negative note after a fall of 3.92% on the previous working day. The 30-share index, BSE Sensex opened with a loss of 236.29 points, at 9,535.41 on Friday. The Reserve Bank of India (RBI) has kept the Bank Rate unchanged at 6% in its mid-term review of the monetary policy for the year 2008-09. Key short term lending rate which is known as repo rate, was also kept steady at 8%, to gauge the impact of a hefty, surprise cut earlier this week to soften the economy from the global financial crisis. Repo rate is the rate at which RBI lends money to the other banks. The Sensex ended the day with a loss of 1,070.63 points, or 10.96% at 8,701.07 after touching a high of 9,570.71 and a low of 8,566.82. The broad-based NSE Nifty fell 359.15 points, or 12.20% at 2,584.00 after hitting a high of 2,936.25 and a low of 2,525.05. The levels on Nifty was the lowest close since Nov. 24, 2005. On weekly basis Nifty has lost 16%, which is the highest ever weekly fall, while Sensex is down 12.8% week on week.
Sectoral : All the BSE sectoral indices ended in red. Realty index plummeted by 24%, while Oil & Gas index plunged by 15%. DLF and Ranbaxy were the top losers among sensex stocks, down 24% and 18% while none of the sensex stocks managed to close in green.
Asian & European Market : Asian Market get the heat as time spares... Nikkei closed 811.90 points down at 7649.08 , Hang Seng closed down about 1142.11 points at 12618.38 , Shanghai shuts its day for 35.94 points on south at 1839.62, Straits Times closed at 1600.28 down about 145.39 points. All of Asian Market is trading to their 3 - 5 years lows.
European Market was get the fuel to burn their market from Asian Market, all of major exchange indices closed in deep red with a cut of 8 - 11 percent (%), FTSE closed down 343.57 in south at 3744.26 , DAX ended the sorrow with 10% at 4104.19 down about 415.51 points, CAC closed its day down by sheding 282.14 points at 3028.73.
There was no place to hide from this carnage acroos globe. Market was reacting like it poised to sell off.
Currencies & Energy : Rupee touched a fresh all time low of 50.05 against the dollar. UK GDP declined 0.5% quarter-on-quarter, which is the first contraction since 1992. Euro made a 2-year low against the dollar. Nymex Crude fell to a 17 month low of $ 63.05/bbl. Dow and S & P 500 futures hit limit down indicating a sharply lower opening. Global equities rout on worries about a sharp global economic slowdown caused hoax on the domestic bourses, which fell to their lowest level in nearly three years.
Indian Market opened lower inline with other Asian and US market. Stiff fall in US market last night made a ground of fall for Indian Markets. It was down on concern over Economy. Today when Indian and other Asian market when opened, it was expected a deep fall, market plunged 4% on opening trade. After a massive correction from top of 6300 on Nifty it touched a 2 year low( 24th July 2006) of 2920 in today trade. In noon trade, government issued a statement on short positon and the news is personally given by Finance Minister, P. Chidambarams, He stated , on short positions could not help the market and indices continued their southern journey on the back of negative global cues. A sharp but short-lived recovery was seen after the FMs statement that SEBI has asked FIIs to reverse short positions on borrowed shares. Sensex closed at 9,771.70, down 398.20 points or 3.92%, after touching a high of 10,260.55 and a low of 9,681.28 making the lowest close since 16th June 2006. The broad-based NSE Nifty declined 122.00 points, or 3.98% at 2,943.15 after hitting a high of 3,085.10 and a low of 2,917.15, the lowest close since 24th July 2006. BSE Midcap and Smallcap index shed 3.20% and 3.55% respectively
Inflation for the week ended Oct. 11 stood at 11.07% versus 11.44% in earlier week. Rupee touched a fresh all time low of 49.86 against the dollar.
All BSE sectoral indices ended in red except Consumer Durable and Capital Goods indices, which gained 1% and 0.2% respectively. Metal and Auto indices were the worst hit, down 11% and 7.2% respectively. Grasim and BHEL were the top gainers among the sensex stocks, up 4.7% and 2.7% respectively while Tata Steel and Tata Motors were down the most, losing 14.8% and 14.6% respectively.
Indian market today faced across the board selling. Yesterdays rally proved short blip as our markets sold off along with other Asian and European markets. The sentiment remained bearish on the back of liquidity squeeze in the domestic market and a sharp fall in the Asian indices. Indian stock market opened the day on a negative note after a rise of 4.50% on the previous working day. The benchmark share index, BSE Sensex opened with a loss of 228.16 points, at 10,455.23 . SEBI today reaffirmed its disapproval to overseas lending and borrowing by FIIs and asked them not to take fresh overseas lending and borrowing. Sensex ended the day with a loss of 513.49 points, or 4.81% at 10,169.90 after touching a high of 10,484.85 and a low of 10,128.22. The broad-based NSE Nifty fell 169.75 points, or 5.25% at 3,065.15 after hitting a high of 3,235.75 and a low of 3,051.80. Nifty level was lowest after 26th July, 2006.
Rating & Currencies : Rating agency Moodys downgraded the Tata Steel outlook from stable to negative. The stock plummeted by 12% today. In the currency segment, Euro and Pound tumbled on the expectation of rate cuts in Europe and UK. The Euro fell below 1.28 to a dollar for the first time since November 2006 while the Pound tumbled to a 5 year low. Rupee touched an all time low of 49.49 against the dollar in todays trade.
Sectoral : All sectoral indices finished in red except FMCG index, which managed to gain 0.6%. Metal and Realty indices were down the most, losing 7.9% and 7.6% respectively. ITC and HUL were the sole sensex gainers, up 1.04% and 0.5% respectively, while Tata Steel and Sterlite plunged by 12.04% and 10.04% respectively. BSE Midcap and Smallcap index dropped 2.70% and 2.02% respectively.
World Market : The major Asian indices like Hang Seng (Hong Kong), Kospi (South Korea), Straits Times (Singapore) and Nikkei (Japan) shed over 5-6% each. Among European exchange all were in Deep red, selling was visible across the board. Europe Key exchange FTSE down about 189.21 points at 4040.52 , DAX down about 239.72 at 4544.69 , CAC closed in red with 177.22 points at 3298.18 .
Today it was hell for shorters in Indian Stock Market. Market behaved like it was pause for a big ticket move. It was fresh spell of buying by funds and retail investors and encouraging global cues. Intense buying was seen across board. Indian markets outperformed its Asian peers as both the benchmark indices surged nearly 4% in todays trade. The Sensex ended the day with a gain of 460.30 points, or 4.50% at 10,683.39 after touching a high of 10,750.20 and a low of 10,250.23. The broad-based NSE Nifty gained 112.10 points, or 3.59% at 3,234.90 after hitting a high of 3,254.85 and a low of 3,117.35. BSE Midcap and Smallcap index rose over 2% each.
Hang Seng and Shanghai, in fact closed in red. European markets were trading with average gains of one percent. US stock futures however, were down by same magnitude. French government said it would buy subordinated debt issued by the countrys six biggest banks. Stocks extended gains as money market rates declined in London.
All the BSE sectoral indices closed in green. Consumer Durable and Realty indices gained the most, up 9% and 8.3% respectively. JP Associate and TCS were the top gainers among sensex stocks, surging 16% and 13% respectively, while M & M and Hindalco were the sole sensex losers, down 2% and 1.7% respectively.
Intense selling pressure by funds and worries on economic slowdown also weigh down the sentiment Some selling pressure where seen from traders side, rumours was floating in market that NSE will revise lot size, this impact directly to retail traders and after this news, unwinding of long position seen. This Impacted the dalal street and let market to close below 10000 lelvls for the first time after 20th June 2006. The Sensex ended the day with a loss of 606.14 points, or 5.73% at 9,975.35 after touching a high of 10,786.93 and a low of 9,911.32. The broad-based NSE Nifty fell 194.95 points, or 5.96% at 3,074.35 after hitting a high of 3,335.95 and a low of 3,046.60. The benchmarks touched their new 2008 lows today. However Indian market managed to open in Green 181.85 points or 2.11%, at 10,763.34 taking strong signals form U.S and asian market but intense selling made all things wrongs and market went in negative zone and fall below 10000. Both Sensex and Nifty touched lows of 9,911.32 and 3,046.60 respectively. All sectors traded weak. Indian markets were down the most among all the Asian markets. Persistent selling by foreign investors has been a major concern for the markets. BSE Midcap and Smallcap index shed 3.07% and 2.76% respectively.
Sectoral : All the BSE sectoral indices closed in red. Realty and Power indices saw the deepest cut, losing 10.25% and 8.09% respectively. All 30 sensex stocks were down with Reliance Infra and JP Associate being hammered the most, down 11.96% and 10.7% respectively.
Weekly : On weekly basis, sensex is down 5.25% while Nifty has lost 6.27%, making it a fourth consecutive negative week. Among the sectoral indices, BSE Metal and Oil & Gas indices are down the most on weekly basis, losing 11.3% and 11% respectively, while Bankex and Realty indices managed to closed in green, gaining 4.3% and 0.07% respectively. Currencies : The rupee was at 48.89/48.90 per dollar, off a high of 48.57, as the local share market tumbled over 5 per cent, raising more concerns about capital outflows. It closed at 48.82/83 on Thursday.
Asian Market : Asian markets ended mixed Friday, with Japanese shares rebounding as they found bargain buyers a day after being mauled, while the rest of the region finished mostly lower on concerns the financial crisis might evolve into a full-blown recession in the U.S. and Europe. Hang Seng was down about 676 points, Shanghai closes on green for 1% @ 1930.65 on buying in large caps , Straits Times closed in red for more than 4% @ 1878.51 on economy woose. South Korea's Kospi, which tumbled 9.4% in the previous session, dropped another 2.7% to 1,180.67. India Key index fall more than 6% on economy concern and possible recession in U.S and economy slowdown in European countries.
On account of weak global cues the Indian market open at a lower today. The Sensex was 524 points down at 10,285 on the opening bell and remained subdued, as investors remain caution and booked profits after the recent gains. Intense selling in blue-chip stocks dragged the Sensex to a new low of 10,017. While the market fluctuated sharply thereafter, firm bullish sentiment and strong buying in heavyweights and realty stocks in late trades helped the Sensex erase most of its losses. The Sensex finally ended the session by shedding 2.11% or 228 points at 10,581. The broad-based NSE Nifty declined 69.10 points, or 2.07% at 3,269.30 after hitting a high of 3,333.85 and a low of 3,099.90. However, the Sensex saw some selling pressure towards the close.
Sectoral: Some sectoral index ended in red. BSE Oil & Gas index dropped 5.57% at 6,827 followed by BSE CG (down 5.23% at 7,665), BSE IT (down 3.99% at 2,669) and BSE Auto (down 3.43% at 3,196). However, BSE Realty gained 5.15% at 2,813 and BSE FMCG was up 1.73% at 1,903. But Heavyweight stocks continued to fall, Hindalco was leading the pack with a southwards direction of 12.15% at Rs69.75 followed by TATA Motors by 11.17% at Rs250.55 . On the meanwhile some stocks tops the Sensex and helped market to recovers RCOM was leading them with jumped of 9.80% at Rs258.90 from previous close followed by DLF gained 8.25% at Rs324.90 and Hind Unilever.
Result:
Biocon , registered a sharp fall of 53.64% in the consolidated net profit in the quarter ended September 2008. During the quarter, the profit of the company climbed 32.25% to Rs 250.20 million from Rs 539.70 million in the same quarter previous year.
HDFC Bank , one of India`s largest bank reported a substantial rise in standalone net profit for the quarter ended September 2008. During the quarter, the profit of the bank rose to Rs 5,279.80 million, beating analyst estimates. Interest earned for the quarter rose to Rs 39,912.10 million above analyst expectation of 22,713 million , while total income for the quarter rose to Rs 46,343.20 million. The results for the quarter and half ended September 30, 2008 includes operations of erstwhile Centurion Bank of Punjab (eCBoP) for the same period, on amalgamation of eCBoP with HDFC Bank with effect from the appointed date of Apr. 01, 2008 as per the Scheme of Amalgamation (Scheme). Hence the results for the quarter and half-year ended Sep. 30, 2008 are not comparable with that of the corresponding period of the previous year.
Shares of the bank declined Rs 47.1, or 4.15%, to settle at Rs 1,087.
GTL Q2 consolidated net up 40.26%, GTL, a network services provider offering network engineering and infrastructure management services, registered a 40.26% growth in consolidated net profit on year-on-year (Y-o-Y) basis for the second quarter ended Sep. 30, 2008. The net profit for the quarter stood at Rs 423.60 million as against Rs 302 million (post adjustment for discontinued businesses net profit) for the corresponding quarter in the previous year.
Indian Market saw a huge declined due to selling pressure from HNI's and Retails Investors who are on cautions on the possible recession on world economy. Market opned on downside on the mixed global cues later it overwhelmed by the bears and as the day progressed it turned from bad to worse. Todays mayhem came as dampener for those who believed that two-day rally would continue. The 30-share index, BSE Sensex opened with a loss of 238.13 points, at 11,245.27. After breaking 11000 mark and touching the day's low of 10,760, the market moved within a range with a negative bias At the end of the day sensex had plunged by 674.28 points, or 5.87% at 10,809.12 after touching a high of 11,257.15 and a low of 10,760.33 while the broad-based NSE Nifty declined 180.25 points, or 5.12% at 3,338.40 after hitting a high of 3,518.50 and a low of 3,324.55. BSE Midcap and Smallcap index plunged over 4% each
Sectoral : All the 13 sectoral indices finished in red. BSE capital goods and consumer durables saw the sharpest fall down 8.8% each, while BSE Metal ( 7.82% ) , BSE Teck , BSE Power ( 6% ) , BSE IT ( 5.43% ) , BSE Oil & Gas ( 5.15% ) were down over 5-7% each. Not even a single sensex stock managed to close in the green, While JP Associate and R comm. Were the top losers, down 14% and 12% respectively.
Results : During the Market hours Engineering & Construction major Larsen & Toubro (L&T) , announces its quarterly result for FY2008-2009 Q2 Sept08, registered a substantial rise in its standalone net profit, but failed to meet analysts expectation. During the quarter, the profit of the company climbed 32.25% to Rs 4,602.60 million from Rs 3,480.20 million in the same quarter, previous year.
HCL Technologies reported a small decline in its standalone net profit for the first quarter ended September 2008. During the quarter, the profit of the company declined 3.93% to Rs 2,537.90 million from Rs 2,641.70 million in the same quarter, previous year. Net sales for the quarter rose 6.61% to Rs 11,758.00 million, while total income for the quarter rose 6.94% to Rs 12,256.60 million, when compared with the prior year period. The company posted earnings of Rs 3.80 a share during the quarter, registering 4.52% decline over previous year period.
The Reserve Bank of India on Wednesday cut the Cash Reserve Ratio (CRR) further by 100 basis points to 6.5 per cent of NDTL with effect from the current reporting fortnight that began on October 11, 2008. This measure will release additional liquidity into the system of the order of Rs.40,000 crore.
After a spectacular rally in U.S. market yesterday our indian market also withnessed a gap up opening of 472 points on sensex. Funds and retails buying happening in heavyweights, information technology, health care and tech stocks in the afternoon surged the Sensex touch the day's high of 11,870, but the bulls could not keep the party going on for longs as the markets lost steam and kept on sliding as the trading session progressed. Once it was assumed that it is heading towards the negative zone but late buying in some selective stocks confirms to Sensex to closed almost 174.31 points higher, while the NSE Nifty closed 27.95 points higher at 3518.65 and sensex closed at 11483.40 moved up by 174.31 points on closing basis. BSE Midcap and Smallcap index rose 1.60% and 2.25% respectively
Sectorial:- IT stocks shined the whole day.. while the index of IT flared by wooping 5.36% becaming the biggest gainer over all sectors. BSE HC ( Health Care) was the second biggest gainer on percantage terms, it gained 4.66% and closed at 3405. Stocks from the software, pharma and realty sectors gained investors' intrest; stocks from PSU and metal sectors remained at the receiving end. Worst performing sector was Metal , PSU and Consumer Durables all ended on RED. Hindalco was down by 4.10% while RCOM shed its gain and closed 4.8% lower.
As a direct fallout of the still-unfolding global financial crisis, India's economic reforms have lost political will. Political parties across the spectrum are developing cold feet to go ahead with any reform measure in the financial sector.
While the UPA government is unlikely to push any pending bills aimed at reforms in the financial sector --- banking, insurance and pension --- for Parliament approval before the general elections, the BJP underlined that "this is not the right time for reforms" in the wake of the global developments.
Once the 14th Lok Sabha is dissolved next year, all pending bills in Parliament would automatically lapse. This means that the same bills would have to be re-introduced, if at all there is political will, after the new Parliament is formed post the Lok Sabha poll. "This is a time when we are grappling with the (global economic) situation and we have to allow this to blow over," a senior BJP member said, adding that reforms in the financial sector must wait.
Though Congress insiders said that the UPA would want to wait and watch before taking any step towards reforms, party spokesman Abhishek Manu Singhvi said that "not reforming can never be good or desirable." However he added that "reforms would have to be tailored to the context and must take a good fit between the problem, panacea and the objective." He also pointed out that Parliament's meeting time from now to the general elections is only a few weeks and it may not be possible for the UPA to take up the crucial bills. However, he added that although it will be "utilised for maximum legislation, time consideration will be there."
In other words, any Bill requiring Parliamentary approval will be shelved.
Country's largest private sector lender ICICI Bank filed a complaint against some brokers and websites that were creating panic among depositors and shareholders by spreading rumours about the financial health of the bank.
The complaint filed before Additional Commissioner of Police Economic Offense wing of Mumbai Police said that certain people were acting in concert to spread ‘malicious rumours’ through various media to gain financial benefits by hurting the bank reputation.
Battered by rumours casting doubts about its financial health, ICICI Bank on Sunday received a shot in the arm with global rating agencies Moody's and S&P giving it a thumbs up saying its overseas arms have no significant sub-prime risks.
"ICICI Bank's UK subsidiary has no high risk sub-prime securities and enjoys robust asset quality and liquidity," Moody's said in its latest credit report.
Separately, another leading rating agency Moody's said that the Indian lender's credit fundamentals remain sound and any mark-to-market loss would not have any significant impact on its credit profile.
These ratings assume importance in the wake of reports that it was over-exposed to risk caused by the global meltdown and that the bank's loan profile was not fully secured and credible.
Interestingly, Morgan Stanley in one of its recent reports had said that among Asian banks, ICICI Bank has the largest exposure to weak global markets.
Moody's reaffirmed its rating on ICICI Bank UK Plc with a "stable outlook" in its latest credit opinion, which was released after a sharp plunge of about 20 percent in ICICI Bank's share price on Indian bourses.
Moody's also said that ICICI continues to have highest rating for senior debt among Indian banks and it has "no high risk sub-prime securities in ICICI Bank UK investment book." At the same time, S&P's senior director, financial institutions ratings, Asia, Ritesh Maheshwari, said that "credit fundamentals of ICICI Bank continue to remain sound despite the reports on its exposure to Lehman Brothers or the Bakerie group."
"These have to be seen in the context of the USD 10 billion capitalisation of the bank and USD one billion of profits, Maheshwari said.
He added that while the overseas investment portfolio might be subject to mark-to-market valuation loss but it should not be significant enough to hurt ICICI Bank's credit profile.
Moody's retained its ICICI Bank UK rating at 'Baa1' for senior debt, which is higher than the foreign currency senior debt rating of any Indian bank.
The rating reflects the bank's improving core banking activities and robust asset quality, as well as the developing franchise within the UK, Moody's said, adding that the corporate banking business is centred on providing services to Indian corporates which are in the UK, including merger and acquisition advice, forex business and syndicating Indian paper.
"It has robust asset quality ratios with no loans classified as impaired. It has also stated that ICICI Bank UK maintains a rather conservative investment policy and does not hold any sub-prime assets, nor does it have exposure to CDOs, SIV/SIV Lites and leveraged loans.
"The mark-to-market impact in its investment book is not associated with any structured or high-risk sub-prime related securities but is due to the general widening of the credit spreads due to the global market conditions," the agency said.
It further asserted that ICICI Bank UK has a robust liquidity position and that ICICI UK has a relatively high level of capitalisation, with total capital adequacy at 19 percent at March 31, 2008 and ICICI UK has a strong backing from its parent ICICI Bank Limited.
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Carnage in world equity market continued on Friday also as almost all of them witnessed sharp cuts in today's trading session. The downward journey of the domestic stock market continued for the fifth straight session, as rate cuts by the seven central banks and cash injections by various governments failed to stem the fall in global indices. The benchmark index Sensex opned its day on bearish note by a gap down of 696 points at 10632. Till noon, the index extended its losses by more than 1,050 points on across-the-board selling to touch the day's low of 10,240, people was thinking for a lower circut but it bounced back from that level. Lower circut level was set for Sensex @ 10196. The index however managed to erase its losses a bit and trade above 10,500 at the end of the session. After registering losses of 1,726 points in the last four sessions, Sensex plunged by 800 points or 7.07% and closed at 10527 while Nifty smashed 234 points or 6.65% to close at 3279. On weekly basis, Nifty is down 14.1%, which is the highest everfall, while Sensex is down 15.96%, second highest fall ever since December 1990. BSE Midcap and Smallcap index plunged 8.34% and 7.31% respectively
Sectoral : All the BSE sectoral indices hamared badly and finished in red. BSE Realty and Consumer Durables indcies saw the sharpest fall, down over 11% and 10.11% respectively. Only Ranbaxy (4.71%) and SBI (2.27%) were the sole gainer among the sensex stocks, while RCOM (21.02%) and ICICI Bank (19.71%) took the hardest hit and among the top losers.Remaning 28 stocks also take the hit of this raining fall. Overall market breadth was extremely negative. Out of the total 2,619 stocks traded at BSE, 382 advanced, 2,189 declined while 48 remained unchanged.
Currencies & Crude : Rupee touched an all time low of 49.17 against the dollar and closed at 48.47 . Crude Oil touched a 12 month low of $81.1 in today's trade.
Earnings & Economy : Tech boys Infosys announced its Q2 results today, which were is line with market expectation. However, company cut it's full year revenue and EPS guidance by 5% in dollar terms. On a review of the evolving liquidity situation in the context of global and domestic developments, the RBI, today decided to reduce the Cash Reserve Ratio (CRR) by 150 basis points to 7.5% of NDTL with effect from the fortnight beginning Oct. 11, 2008 instead of the 50 basis points reduction announced on Oct. 6, 2008. The step will inject about Rs 600 billion in the system (instead of the injection of Rs 200 billion announced earlier). Index for Industrial Production (IIP) plunged for the month of August 2008 to stand at meagerly 1.3% as compared to 7.1% on m-o-m basis. IIP figures stood at 10.9% a year ago i.e. August 2007. Inflation for the week ended sep 27 came at 11.80% against the expectation of 12% and 11.99% seen in previous week.
Asian Markets : The BSE index, among the worst performer in Asia, fell as much as 9.6 per cent at one stage to more than half below its record high of 21,206.77 hit in January, before trimming losses on domestic institutional buying. Hang Sang down about 1146.77 points at 14796.87 . Japan Key index Nikkei 225 avarage smashed 881 points at 8276.43 , South Korea KOSPI closed at 53.42 points. Taiwan @ 5130.71 down about 75.69 points. Karachi's 100-share index was little changed at 9,181.35 on extremely thin volume. Colombo's All-share index closed down 4.39 per cent at 1,924.69. Taiwan was the outperformer among all asian market. Down only odd 1.5%. Asian stocks tumbled, driving Japan`s Nikkei 225 Stock Average to its biggest weekly decline on record, on concern the deepening credit crisis will push the global economy into a recession. The Karachi Stock Exchange board will meet on Monday to review how long to keep an artificial floor under the share market and consider establishing an exit mechanism for foreign investors.
Yesterday Indian Market witnessed sharpest fall of recent days during the first half of trading time. Market reacted to the news of US Federal reserve Chief Ben Bernanke's comments of " Central bank`s record loans to unblock credit markets were insufficient to prevent a deeper economic downturn".
The index after a weak start touched a day`s low of 10,740, down 575 points from the day`s open shedding more than 850 points. However, the index after sunoutage break made a smart recovery on the back of renewed buying interest in select beaten down stocks.Sensex finally closed negative with 366 points at 11328 compared from last trading day closing , while NIFTY ended the day on Red at 3513 down about 92 points from its last day closing. Consumer durables, metals, banking, IT, realty, FMCG and power stocks led the declines.
All BSE sectorail indices ended on red, but some sectors deepns the problem having cut more from index level. Consumer Durables and FMGC take the worst hit down about 6.8% and 5.2% respectively. Some stocks shined the street irrelevant to fall like Ranbaxy and Tata Power both were the leading gainer of Sensex, gaining by 9% and 4.8% respectively. Ranbaxy was a star performer due to the news on market that US Department of Justice has withdrawn motion against the company, being probed against allegedly bringing adulterated and misbranded medicines into U.S. On the loosing side JP Asso and Wipro were the worst performer till the end of day, both sheds 10% and 8% respectively.
In Evening ( according to IST ), 3 central bank -ECB ( European Central Bank ) , BOE ( Bank of England ) & US Federal Reserve in a co-ordinated move cuts Interest rates by 50bps. In a move to handle situation in China , China's central bank also reduced Interst rates by 27 bps and reduced reserve requirment by 50 bps.
Asian Markets - All Asian market closed in deep red . Japan stock exchange key index Nikkei 225 closed down by more than 9% this is the worst fall of Nikkei 225 of last 21 year.
European Market - All Eurpean market recovred on the news of Interest rate cuts but closed in red having a minimum cut of 5% in Eupore's key stock exchange. Dow Future also traded on positive having a gain of 2% in evening.. but finally ended on red falling about 190 points.
Currencies & Energies- Rupee touched a new low of 6 years, it depriciated towards the level of 48.81 against dollar and fiannly recovred 75 paisa after the rate cuts annouuncement across globe and finally closes at 48.00 / US Dollar. Crude - Take the hit on the news of economy slowdown on global scale, it formed a new 10 months low at $86.05/barrel and fianally closed at 90.70 as dow recovred.
Indian Market closed on lower note despite the early gains seen on back of easing P-Notes restriction and 50 BPS cut in CRR ( Cash Reserve Ratio ) the proportion of deposit that banks must keep with RBI as a security measure to 8.5% from current 9%. This step will pump Rs20000 crores in system and is sufficient to liquidate the system for some month. The Benchmark index BSE 30 share SENSEX closed in RED at 11,695.24 shedding 106.46 points or 0.90% while the broader exchange NSE Nifty shuts its shop on positive side with a modest gain of 4.25 points or 0.12% at 3606.60 after hitting a high of 3732.65 and low of 3537.00. BSE Midcap and Smallcap index fell over 2% each in day session. Asian stocks fell on concern surging credit costs will deepen a global slowdown. Shares pared losses after an Australian interest-rate cut spurred speculation more central banks will follow.European Market were closed mixed. London and Paris stock exchange closed on Positive Side. Currencies - Rupee touched a new 70 month low of 48.15 / USD and finally closed at 47.92 against dollar.
There was a mixed bag on BSE Sectorial index, Oil & Gas and PSU sector index gained 1.3% and 0.8% respectively, while Capital Goods and IT index was on downwards with lossing 4% and 3% respectively. It was ONGC who was holding Nifty and with its help it finanlly managed to close on Positive side. Sensex laggerds were LT and TCS both were down about 7% and Sparking stock on Sensex was Ranbaxy and NTPC both were up by 3.9% and 4.3% respectively.
After a long wait Reserve Bank of India ( RBI ) finally slashed the CRR. On Monday , after market hours RBI breifed a meeting and announces 50bps down in Cash Reserve Ratio (CRR) to 8.50% from currently 9%. The change will come into effect from the fortnight beginning Oct. 11, 2008. As a result of this reduction in the CRR, an amount of about Rs 200 billion or 20000crores would be released into the system.
This measure is ad hoc, temporary in nature and will be reviewed on a continuous basis in the light of the evolving liquidity conditions, a government notification said. It may be recalled that on Sep. 16, 2008, the RBI announced several measures to ease the pressures on domestic financial markets brought on by external developments in response to the bankruptcy/sell-out/restructuring of some of the world`s largest financial institutions. Since then, there has been a sharp deterioration in the global financial environment with the number of troubled financial institutions rising, stock markets weakening and money markets strained. Central banks across the world have stepped up their liquidity operations, including coordinated actions, and some have banned/limited short selling of financial stocks.
These new developments have impacted domestic money and forex markets with a marked increase in volatility and a sharp squeeze on market liquidity as reflected in the movements in overnight interest rates and the high recourse to the liquidity adjustment facility (LAF). Active liquidity management is a key element of the current monetary policy stance.
The Reserve Bank will continue with its policy of active demand management of liquidity through appropriate use of the CRR stipulations and open market operations (OMO) including the MSS and the LAF, using all the policy instruments at its disposal flexibly, as and when the situation warrants, it added.
SEBI removes ban on issuance of P-Notes
Market regulator, Securities & Exchange of India (SEBI) has decided to lift curbs on the issuance of the Participatory Notes (P-Notes) by the Foreign Institutional Investors (FIIs) in a bid to revive the stock markets troubled by the global financial meltdown. SEBI Chairman C. B. Bhave after the Board meeting in Mumbai said that the regulator will remove the 40% restriction for issuance of Particpatory Notes for both cash and derivative segments.
SEBI has also decided to undertake a comprehensive review of FII framework in the backdrop of global developments triggered by ongoing global turmoil. The regulator had imposed the restrictions on the P-Notes in October last year amid excessive speculation.
