Indian Stock News by Experts

Cautious guidance hammers US stocks

<DIV>Merck and Yahoo announce layoffs and Apple gives cautious guidance Stocks at Wall Street registered substantial loses for the second consecutive day on Wednesday, 22 October, 2008. The Dow ended the day with a 514 point drop today following yesterday's 237 point drop. Couple of companies that came out with earning reports announced job cuts on Wall Street today. Market had started the day in the red. Earning reports dominated overall market sentiments. While more companies beat expectations, outlooks, however, leaned negative as companies remained uncertain about the economic environment. All ten sectors posted a loss. The Dow Jones Industrial Average ended the day down by 514 points, to 8,519. The Nasdaq Composite Index, finished lower by 80 points at 1,615. S&P 500 finished lower by 58 points at 896.78. All thirty Dow stocks ended in the red led by Aloca. The stocks closed lower by 11%. Among the major companies that reported earnings today, and topped earnings estimates were Apple, McDonald's and Merck. Merck said that it plans to cut 7,200 jobs, or 13% of its workforce. AT&T and Boeing were two of the bigger names that missed earnings estimates. The technology sector witnessed lesser losses due to positive reactions to earnings reports from Apple and Yahoo!. Apple reported better-than-expected quarterly earnings due to strong iPhone sales. The company's outlook for its current quarter, however, was cautious and was well below the market estimates. On the other hand, Yahoo! reported in-line earnings, and the results were better-than-feared. Yahoo said it plans to cut 1,500 jobs, or 10% of its workforce. Crude prices fell today, and closed at the $65/barrel level for the first time in eighteen months. Prices fell due to a strong dollar and also after the Energy Department reported a more than expected build up in crude inventories for the week ended 17 October. Crude-oil futures for light sweet crude for December delivery closed at $66.75/barrel (lower by $5.45 or 7.5%) on the New York Mercantile Exchange. Prices reached a high of $147 on 11 July but have dropped almost 55% since then. On a yearly basis, crude price is lower by 24%. For this year in 2008, crude prices have dropped 34%. In the currency market on Wednesday, the dollar soared against the euro and the British pound pressured by further fund repatriation and expectations that the European Central Bank and the Bank of England will move to aggressively cut interest rates in coming months. But the greenback slipped against the yen. The dollar index, a measure of the greenback against a trade-weighted basket of six major currencies, traded at 85.602, up from 84.434 on late Tuesday. Volume on the New York Stock Exchange topped 1.5 billion, and for every stock on the rise, six fell. On the Nasdaq, 1.1 billion shares traded, and decliners topped advancers, also by a 6-to-1 ratio. Initial jobless claims for the week ending 18 October are due ahead of the opening bell tomorrow. Other than that, earning reports will dominate the day once again. </DIV>

Cautious guidance hammers US stocks

Merck and Yahoo announce layoffs and Apple gives cautious guidanceStocks at Wall Street registered substantial loses for the second consecutive day on Wednesday, 22 October,…

23 Oct 2008

Daily News Roundup - Oct 23 2008

<DIV>Moody's lowers Tata Steel outlook to negative. (ET) NTPC plans to raise US$1bn to fund expansion plans. (ET) TVS Motors to reduce investment by 20% and cut production. (BS) Ashok Leyland to cut its vehicle output in second half of the current financial year. (BS) Jet, Kingfisher likely to reduce flight. (ET) Singapore based PE firm buys into HDIL and Indiabulls Real Estate. (ET) SAIL to set up steel processing units in Himachal Pradesh and Rajasthan. (DNA) DLF emerges as sole bidder for developing Mumbai rail land. (BL) Elder Pharma buys 3 small Bulgarian-based pharma companies. (ET) Areva T&D bags Bhilai Steel order worth Rs2.2bn. (BS) Tata Tele Services to roll-out services in J&K and North East region from November. (FE) JSW Steel and Georgian Steel Holding Group have closed US$28mn debt financing for setting up steel plant in Georgia. (DNA) Crompton Greaves is considering cutting down its capex budget for this year. (DNA) HOV services open facility in North California. (BS) DLF enter into an agreement with Italian apparel brand Alcott and Paris based SIA group to launch them in India. (ET) HDFC Bank opens a branch in Bahrain. (BS) Honda India and Hero Honda ventures to jointly source auto parts. (BL) LIC to launch credit card with Corporation Bank. (FE)Government may pump Rs30bn into 7 public sector banks to shore up their capital adequacy ratio to 12%. (BS) Government may miss FY09 budget targets for fiscal and revenue deficit. (ET) Government allows airlines to clear fuel dues owed to oil companies, totaling about Rs30bn in six EMIs. (ET) Indian Banks ask RBI to ease norms on reserve requirements. (ET) RBI eases norms on overseas borrowing for Indian companies. (ET) DoT faces 3G spectrum crunch in 9 other circles. (ET) Petroleum secretary says government has no immediate plans to cut fuel prices. (ET) SEBI plans to review direct market access facility rules. (ET) Government may import 100mn ton of coal to meet the projected demand in the 11th five year plan. (BS) DoT to meet defence ministry on Oct24 to discuss the issue on spectrum vacation. (DNA) Banks unlikely to extend credit support to airlines. (BL) </DIV>

Daily News Roundup - Oct 23 2008

Moody's lowers Tata Steel outlook to negative. (ET)NTPC plans to raise US$1bn to fund expansion plans. (ET)TVS Motors to reduce investment by 20% and cut production. (BS)As…

23 Oct 2008

Real Crisis for real estate employees

Real Crisis for real estate employees

DLF, Unitech, Omaxe, Parsvnath and BPTP plan to lay off staff in significant numbers soon after DiwaliDevelopers wait for Diwali to get over as they don't want to dampen sen…

23 Oct 2008

Asian markets shattered as wall street sinks deeper

<DIV>Shanghai, Hang Seng extend losses while Nikkei also enters the losers club with 6.7% fall The stock markets across the Asian region closed lower after Wall Street fell overnight on profit taking from recent sharp rises and recession fears following disappointing earnings reported by big name companies such as Dupont, Caterpillar, and Texas Instruments. The Dow Jones Industrial Average ended the day down by 231 points, to 9,033. The Nasdaq Composite Index finished lower by 73 points at 1,696. S&P 500 finished lower by 30 points at 955. Crude oil prices fell for a second day after the U.S. dollar climbed to a 20-month high against the euro, reducing the appeal of commodities as a hedge. Crude oil for December delivery declined as much as $3.28, or 4.5%, to $68.90 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $69.10 a barrel at 2:33 p.m. Singapore time. The November contract expired yesterday, after declining $3.36 to settle at $70.89 a barrel. Prices, which have tumbled 53 percent from the record $147.27 on July 11, are down 21 percent from a year ago. In currency trading, the U.S. dollar fell against the Japanese yen. The U.S. dollar fell to the mid 99-yen levels in late Tokyo deals from the lower 100-yen range in early trade and lower 101-yen levels late Tuesday in Tokyo. The Japanese yen also gained against the euro. The Australian dollar closed down 3.28% as ongoing fears about a global recession dragged commodity prices and high-yielding currencies lower. The Aussie finished the domestic session at US$0.6687-0.6692, down from Tuesday's close of US$0.6914-0.6919. The New Zealand dollar fell against the U.S. dollar ahead of the Reserve Bank of New Zealand's interest rate decision. The central bank is expected to cut the official cash rate by 100 basis points. The kiwi finished the domestic session at US$0.6020, down from US$0.6144 in early trade and US$0.6178 late Tuesday. The South Korean won fell 3.1% against the dollar. The won finished the session at 1,362.0-1,363.1 a dollar, after hitting a low of 1,399.9 a dollar, its weakest since October 10, compared to Tuesday's domestic close of 1,320.1 a dollar. The Philippines peso edged down to a new 18-month low against its US counterpart today morning in Asia. The peso plunged to 48.6650 against the US dollar, compared to yesterday's close of 48.1750. Coming back in equities, the Japanese stock market tumbled nearly 7%, ending its three-day winning streak. Worries about the grim outlook for Japanese firms' earnings and a stronger yen dented investor sentiment. The market opened lower following an overnight retreat on Wall Street, but Japanese stocks widened their losses in the afternoon on a flurry of bad news that aggravated fears about the global slowdown. The benchmark Nikkei 225 Stock Average plunged 631.56 points or 6.79% to end at 8,674.69, posting its biggest loss in a week, and the broader Topix index of all first-section issues lost 67.41 points or 7.05% to 889.23. On economic front, all industry activity index, which captures the monthly change in overall production by all industries of the Japanese economy, fell 1.8%. The indices of all industry activity except agriculture, forestry and fisheries declined 1.8% in August as compared to a 0.8% rise in July. Indices of Industrial Production plunged 4.1%, while indices of building work and indices of tertiary industry activity declined 2.4% and 1.4% respectively in the month of August as against the previous month. In Mainland China, the benchmark index closed sharply lower after some key companies reported weaker-than-expected quarterly earnings, heightening worries about the impact of the global slowdown. In addition to this yesterday, the Ministry of Finance and the State Administration of Taxation said in a joint statement that China will raise export rebates on textiles, toys and apparel and some other products next month to support exporters amid declining external demand. The Shanghai Composite Index finished lower for a second day, down 62.71 points or 3.20% to end at 1,895.82 while the Shenzhen A-share Index fell 8.84 points or 1.62 pct to 536.53. In Hong Kong, the Hang Seng Index struggled for a came back in the positive territory closing the day in negative territory. The benchmark index closed down by 5.15% at 14,266.50, while the Hang Seng China Enterprises Index slumped by 7.79% to 6,700.87. The Australian stock market plunged more than 3% on profit taking after posting sharp gains in the previous two trading sessions. The key S&P/ASX index lost most of the previous session's gains, led by BHP Billiton and Westfield. The benchmark S&P/ASX200 index closed down 146.4 points, or 3.4%, at 4,156.1, its lowest point for the day. The broader All Ordinaries index lost 131.4 points or 3.1% to 4,120.0. On the economic front, Australia's rate of inflation increased by more than expected in the third quarter. The Australian Bureau of Statistics reported that the country's Consumer Price Index for the three months to September increased 1.2% over the previous quarter. Annually, CPI grew to 5.0%. The New Zealand stock market closed sharply lower, ending a three-day winning streak. The benchmark NZX 50 index closed down 52.62 points or 1.78% at 2,899.40 after surging 2.15% on yesterday. The broader NZX All Capital index shed 40.21 points or 1.34% to 2,953.46. On the economic front, Statistics New Zealand reported that visitor arrivals in September dropped 7.0% to 157,700 from the 168,800 reported for September 2007. For the full year to September 2008, there were 2.469 million visitor arrivals, down 6,200 or less than 1% from the previous 12-month period. New Zealand resident departures were down 8.0% compared to September 2007. The South Korean stock market plunged more than 5% to a new three year-low on deepening economic fears, extending its modest losses registered yesterday. The benchmark Korea Composite Stock Price Index or Kospi closed down 61.51 points or 5.14% at 1,134.59 points, its lowest close since September 6, 2005. In intraday trading, the key index fell more than 8% to hit a low of 1,095.56. The Kospi has shed 22% over the month, and is down 40% from the year's high of 1,901 hit in mid-May. In Taiwan, Taiex - the benchmark index continued to remain below the key 5,000 points level breaching the previous five-year low level. The weighted index closed down 80.13 points or 1.62% at 4,862.59 - the lowest level since 11 June 2003 when it ended at 4,804.65 points. The market was distracted by fears that an anti-government demonstration planned by the opposition for Saturday could turn violent. On the economic front, Taiwan's unemployment rate was 4.27% in September, versus 4.14% in August and 3.99% in September 2007, the Directorate General of Budget, Accounting and Statistics (DGBAS) said. In the first nine months of the year, unemployment averaged 3.96%, versus 3.92% a year earlier. On a seasonally adjusted basis, the September unemployment rate was 4.12%, compared with 3.93% in August and 3.89% a year earlier. In Malaysia, the Kula Lumpur composite index was down by 13.88 points or 1.51% at 904.28. On economic front, the international reserves of Bank Negara Malaysia amounted to RM371.8 billion, equivalent to USD107.6 billion as on 15 October 2008, 2% down from RM379.3 billion as recorded on 30 September 2008. The reserves position is sufficient to finance 8.7 months of retained imports and is 4 times the short-term external debt. In India, the weakness prevailed on the regional bourses in mid-afternoon trade on declined in global markets, cautious outlook by IT firm Wipro and sustained selling by foreign funds. At 15.20 IST the BSE Sensex was down 522.16 points or 4.86%. The S&P CNX Nifty was down 5.33% to 3,062.40. Elsewhere, the Philippines stock market tumbled 1.12% or 23.73 points to 2,093.01 while Singapore Strait Times was trading lower by 99.66 points or 5.19% trading at 1,821.13. In other regional markets, European shares fell with commodity-sector firms leading decliners as BHP Billiton added to growing evidence that the global economy continues to deteriorate. The U.K. FTSE 100 index fell 1.9% to 4,150.07, the German DAX 30 index dropped 2.5% to 4,662.77 and the French CAC-40 index slid 2.5% to 3,389.53. </DIV>

Asian markets shattered as wall street sinks deeper

Shanghai, Hang Seng extend losses while Nikkei also enters the losers club with 6.7% fallThe stock markets across the Asian region closed lower after Wall Street fell overni…

23 Oct 2008

Market tumbles as Asian stocks slump on global recession worries

<DIV>The market gave away a large part of the last two days' gains on weak global markets, cautious outlook by IT firm Wipro and sustained selling by foreign funds. The BSE Sensex slumped 513.49 points or 4.81%. Though in the red, both the both the BSE Mid-Cap and Small-Cap indices outperformed the Sensex. Index heavyweight Reliance Industries fell more than 5.5%. Tata Steel fell more than 12% after Moody's Investors Service lowered outlook on corporate family rating to negative from stable. Sterlite Industries fell more than 10%. The market breadth was weak. IT stocks fell on Wipro's cautious outlook at the time of announcing Q2 results before trading hours. Metal stocks declined sharply on weak global metal prices. Banking stocks fell in weak market after recent gains triggered by the central bank's repo rate cut. Down 6.79%, Japanese stocks led decline in Asian equities as poor US corporate results and falling commodity prices fanned worries of a protracted global economic slowdown. Stocks in Hong, China, Singapore, South Korea and Taiwan were down by bewteen 1.62% to 5.07%. European markets which opened after Indian market, fell on global recession worries. Key benchmark indices in France, Germany and UK fell by between 3.51% to 3.69%. Trading in US index futures suggested the Dow would fall 185 points at the opening bell. The BSE 30-share Sensex lost 513.49 points or 4.81% to 10,169.90. The Sensex fell 555.17 points at day's low of 10,128.22 in late trade. The index declined 198.84 points at the day's high of 10,484.85 in early trade. The S&P CNX Nifty was down 169.75 points or 5.25% to 3,065.15. After an earlier steep slide, the Sensex had risen 708.04 points or 7.09% in two trading sessions to 10,683.39 on Tuesday, 21 October 2008, from its close of 9,975.35 on 17 October 2008, boosted by a repo rate cut by the central bank and on short covering on the stock market regulator's warning to foreign funds against overseas lending of shares. There has been a massive erosion in investors' wealth this year. The barometer index is down 10,117.09 points or 49.86% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,036.87 points or 52.04% below its all-time high of 21,206.77 struck on 10 January 2008. BSE clocked a turnover of Rs 3,087 crore today as compared to a turnover of Rs 3,882.49 crore on 21 October 2008. Nifty October 2008 futures were at 3051, at a discount of 14.15 points as compared to spot closing of 3065.15. NSE's futures & options (F&O) segment turnover was Rs 50,046.83 crore, which was higher than Rs 49,845.05 crore on Tuesday, 21 October 2008. The BSE Mid-Cap index was down 2.7% at 3,490.39 and the BSE Small-Cap index was down 2.02% at 4,111.67. Both the indices outperformed the Sensex. BSE Metal index (down 7.9% to 5,619.45), BSE Realty index (down 7.57% to 2,433.70), BSE Bankex (down 5.78% to 5,504.48), BSE Oil & Gas index (down 5.56% to 6,397.58), BSE Teck index (down 5.37% to 2,160.07) underperformed the Sensex. BSE FMCG index (up 0.62% to 1,969.56), BSE HealthCare index (down 3.16 % to 3,199.32), BSE Consumer Durables index (down 3.63% to 2,189.33), BSE IT index (down .4.01% to 2,790.27), BSE PSU index (down 4.22% to 5,046.33), BSE Power index (down 4.27% to 1,676.62), BSE Auto index (down 4.42% to 2,985.16), BSE Capital Goods index (down 4.45% to 7,226.93), underperformed the Sensex. The market breadth was weak. On BSE, 778 shares advanced as compared to 1733 that declined. 77 shares remained unchanged. India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 5.83% to Rs 1,315.55, ahead of Q2 September 2008 result tomorrow, 23 October 2008. The Bombay High Court, on Tuesday, 21 October 2008, allowed the central government to implead itself in the RIL-Reliance Natural Resources (RNRL) case on gas supply after RNRL said it had no problem to the government being a party in the matter. The hearing of the case is now likely to continue after Diwali vacation. Jaiprakash Associates (down 7.88% to Rs 72.50), ACC (down 7.11% to Rs 452.15), Larsen & Toubro (down 5.34% to Rs 815.15) were the major losers from the Sensex pack. Reliance Infrastructure fell 6.56% despite 15.5% rise in net profit to Rs 288.97 crore on 51.11% rise in total income to Rs 2674.86 crore in Q2 September 2008 over Q2 September 2007. Metal stocks declined on slump in metal prices on the London Metal Exchange. The BSE Metal index was down 7.9% and was the major loser from the sectoral indices on BSE. Sterlite Industries, Hindustan Zinc, National Aluminum Company, Steel Authority of India and Tata Steel fell by between 7.13% to 10.04%. India's largest steel maker by sales Tata Steel fell 12.04% after Moody's Investors Service lowered outlook on corporate family rating to negative from stable. The change in outlook reflects the more challenging operating conditions now facing Tata Steel UK as a result of the likely deterioration in demand in Europe and the UK in the next 18 months, with declining steel prices and reduced production volumes. Tata Steel, will declare Q2 September 2008 results on 24 October 2008. India's largest aluminum maker by sales Hindalco Industries skidded 5.67% reports it may sell a part of its Rs 2,081.34-crore stake in group companies, including Grasim Industries, Idea Cellular and Aditya Birla Nuvo, to raise funds to repay a part of the $3-billion bridge loan it obtained to buy Novelis. Telecom stocks fell on reports telecom firms may have to shell out Rs 6,000 crore for failing to verify their customers. India's largest telecom services provider by market share Bharti Airtel fell more than 7.5%. India's second largest telecom services provider by market capitalisation Reliance Communications fell more than 8.5%. The government on Monday, 20 October 2008, announced that it would impose a fine of Rs 1,000 for every unverified subscriber. Banking majors fell after recent gains on hopes lower rates will boost lending. ICICI Bank, HDFC Bank and State Bank of India fell by between 3.64% to 8.04%. The BSE's banking sector index Bankex declined 5.57%. ICICI Bank, State Bank of India and HDFC Bank have a weightage of 24.21%, 22.44% and 20.55%, respectively, in the Bankex. Yes Bank was almost fell 2.92% in an otherwise weak market, as net profit jumped 40.50% to Rs 63.62 crore in Q2 September 2008 over Q2 September 2008. Bank of India declined 6.41% after providing for Rs 108.60 crore on account of exposure to troubled US investment bank Lehman Brothers, in Q2 September 2008. Power Finance Corporation fell 0.09% even on 16.70%rise in net profit to Rs 329.33 crore in Q2 September 2008 over Q2 September 2007. The Reserve Bank of India cut repo rate by 100 basis points to 8% on 20 October 2008. The repo rate is the rate at which the RBI provides funds to banks against the collateral of government bonds for a day to three days. IT stocks slumped on overnight fall in American depository receipts (ADRs) and on cautious outlook by IT major Wipro. Weak rupee which augurs well for the sector did not stem the slide. The BSE IT index fell 4.37%. India's fourth largest IT exporter by sales Wipro fell 5.79% after it said the outlook is cautious in the near term given the extent of strain on the global economy. Wipro ADR fell 2.87% on Tuesday, 21 October 2008, ahead of the results. Wipro reported 56.13% spurt in net profit to Rs 852.50 crore on a 15.48% increase in total income to Rs 5551.60 crore in Q2 September 2008 over Q1 June 2008. India's third largest IT exporter by sales Satyam Computer Services lost 2.93%. Its ADR skidded 1.63% overnight. The company raised its earnings guidance in rupee terms at the time of announcing Q2 September 2008 results on Friday, 17 October 2008. India's second largest IT exporter by sales Infosys fell 3.56%. Infosys ADR lost 5.21% overnight. India's largest IT services provider by sales Tata Consultancy Services lost 2.63%, ahead of Q2 results today. Infosys, Satyam Computer Services, Tata Consultancy Service and Wipro have a weightage of 55.06%, 16.01%, 10.45% and 7.09%, respectively, in the BSE IT index. Tech Mahindra rose 1.3% as net profit rose 16.36% to Rs 295.98 crore in Q2 September 2008 over Q1 June 2008. Compucom Software surged 4.93%, on proposal to consider issue of bonus shares. Geodesic rose 2.93% as net profit jumped 23.54% to Rs 48.95 in Q2 September 2008 over Q1 June 2008. Educomp Solutions tumbled 11.47% on BSE, on profit taking, as net profit soared 51.40% to Rs 25.39 crore in Q2 September 2008 over Q1 June 2008. The rupee weakened to a record low against the dollar on Wednesday as losses in the stock market fuelled concerns more foreigners would likely pare their risk exposure and repatriate investments. At the Interbank foreign exchange (Forex) market, the rupee, which ended steady at 49.00/49.01 yesterday, fell by 25 paise to 49.25 against the greenback. PSU OMCs fell despite crude oil falling nearly $3 to hit a one-week low below $70 a barrel and extending a 4% slide in the previous session, on mounting worries that output cuts by Organisation of Petroleum Exporting Countries (OPEC) will not be enough to offset slackening energy demand. BPCL, HPCL and Indian Oil Corporation fell by between 2.09% to 8.15%. Lower oil prices will reduce underrecoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price Bongaigaon Refinery & Petrochemicals slumped 7.23%, on slipping into the red in Q2 September 2008 Most realty stocks declined today after yesterday's rise despite hopes cut in lending rates will spur demand for residential properties. The BSE Realty index fell 7.57% and was the second major loser from the sectoral indices on BSE. Realty majors, DLF, Indiabulls Real Estate Unitech fell by between 5.05% to 12.75%. BSE FMCG index rose 1.26% and was the only gainer from the sectoral indices on BSE. United Spirits, Hindustan Unilever and REI Agro rose by between 0.05% to 5.08%. India's largest cigarette maker by sales ITC rose 3.05%. The company will announce the Q2 September 2008 result on 24 October 2008. Rate sensitive auto stocks fell despite hopes rate cuts would spur auto demand which is largely driven by finance. Maruti Suzuki India, Mahindra & Mahindra, Hero Honda Motors declined between 1.95% to 7.14%. India's largest commercial vehicle maker by sales Tata Motors declined 4.94% on reports of missing its original Nano rollout deadline of October-December 2008. Ashapura Minechem dropped 19.7% on reports the company faces three lawsuits in New York federal court seeking a total of more than $47 million. Reliance Natural Resources declined 3.43% on BSE on muted growth in net profit in Q2 September 2008. Kirloskar Brothers jumped 7.41% on its consortium winning an order worth Rs 1446 crore, with the company's share pegged at Rs 270 crore. Pantaloon Retail India gained 0.07% as net profit surged 21.90% to Rs 36.18 crore in Q1 September 2008 over Q1 September 2007. Champagne Indage was locked at lower limit of 5%, a 52-week low on plan to raise up to Rs 120 crore. Max India provisionally ended down 6.57% as net profit declined 30.67% to Rs 11.73 crore in Q2 September 2008 over Q2 September 2007. Piramal Healthcare fell 7.57% as net profit fell 14.2% to Rs 69.44 crore on 19.7% rise in total income to Rs 636.9 crore in Q2 September 2008 over Q2 September 2007. Housing Development & Infrastructure clocked the highest volume of 99.89 lakh shares on BSE. Chambal Fertilisers & Chemicals (79.51 lakh shares), IFCI (65.13 lakh shares), Reliance Petroleum (61.34 lakh shares), Reliance Natural Resources (59.23 lakh shares) were the other volume toppers in that order. Reliance Industries clocked the highest turnover of Rs 189.32 crore on BSE. Reliance Capital (Rs 169.53 crore), ICICI Bank (Rs 149.63 crore), Housing Development & Infrastructure (Rs 148.64 crore) and State Bank of India (Rs 135.48 crore) were the other turnover toppers in that order </DIV>

Market tumbles as Asian stocks slump on global recession worries

The market gave away a large part of the last two days' gains on weak global markets, cautious outlook by IT firm Wipro and sustained selling by foreign funds. The BSE Sense…

23 Oct 2008

A Bad year for IPOs

<DIV>Even as late as June this year, investors in initial public offers (IPOs) continued to be better off than those who dabbled in the secondary market. Smaller IPOs continued to deliver good listing gains, even while selecting stocks in the secondary market became a much more difficult proposition. But the vicious downswing in the market over the past three months has well and truly blown the froth off the IPO market. Not just the new ones, but even ones that were listed over the past year have all plunged below their offer price. Seventy-six of the 83 IPOs that listed between March 2007 and March 2008 are now available below their offer price. Here are the lessons from those 83 IPOs (recent ones were excluded as the time window would be insufficient to draw conclusions). Of the total 96 initial public offers in the period, 13 were withdrawn. The remaining 83 IPOs were considered for this analysis. For performance study, price movement from the listing date to October 15 was considered. Should have sold on first day One common lesson for investors from IPOs in this period is that, irrespective of the quality of the issuer, you would have fared better had you booked gains on the listing day. Holding these stocks in expectation of better gains in the secondary market would have resulted in sharp erosion in value. Fifty-two of the 83 stocks that debuted in the period closed in the green on listing day. Of these, 22 listed at a price which clocked a 50 per cent gain over their issue price. However, of the 83 stocks only one (Allied Digital) currently trades at a price higher than its listing price; all others have fallen from their Day One prices. On the other hand, of those that had a bad listing, only three — Koutons Retail, Page Industries and Bang Overseas — made gains in the days following listing. The wait was not worth it for the others. If stocks gave away much of the gains made on listing, a good number of them also plunged below their issue prices. As many as 76 IPO stocks are trading below their offer price now. When it comes to the extent of losses, the quality of the business didn't matter much — IPOs from quality businesses, such as BGR Energy, Transformers and Rectifiers and Edelweiss Capital, were among the worst performers — their prices beaten down by over 70 per cent. The extent of decline in stock prices shows that the pricing for IPOs in a bull market tends to factor in premium valuations and probably assume best scenarios for these businesses, resulting in high downside risk. Better bet than listed peers Would investors have been better off picking stocks from the secondary market as compared to the IPO? The answer is still 'no'. Though IPOs have put up a dismal performance, they have still fared marginally better than peers from the same sector in the secondary market. A study of 30 prominent IPOs in this period suggests that newly listed stocks fared better than their listed peers since their offer date. Of the 30 IPOs, 18 recorded a lower percentage fall than a listed peer from the same sector, from the time of their offer. In fact, select stocks such as Maytas Infra (up 22 per cent) and Religare Enterprises (up 76 per cent) actually delivered hefty gains from their offer price, even as listed companies from the sector fell sharply. Nagarjuna Construction (down 79 per cent) and Geojit Financial Services (down 47 per cent), loosely comparable to the above, declined sharply over the same period. But do note that it is only the listing gains that have ensured better performance from the debutants. Religare Enterprises, a financial services firm focussed on broking services, was sold at Rs 185 in its IPO. But on the day of listing, the stock closed at Rs 525.30, a straight 183 per cent gain. In one year from the month it listed (October 2007), the stock lost nearly 38 per cent, but the gains made on listing are still holding the stock above its issue price. This further supports the logic for selling stocks on the day of listing. Maytas Infra, Power Grid Corporation, Everonn Systems, Allied Digital Services and ICRA are the other stocks that held on to gains over their offer price, thanks to strong listing performance. So, if you were to make a decision on the day of the offer, the IPO would have been the better buy. But if you were to look for secondary market options, an older peer would have been a better buy than a newly listed stock. The subscription figures delude As in the preceding year, overwhelming response to an IPO was no guarantee of the stock's performance. Of the IPOs in this period, Everonn Systems was in the top place, over-subscribed 145.5 times, followed by Future Capital (131.79 times), Mundra Port and SEZ (115.32 times) and BGR Energy (115.13 times). However, from the date of listing to now (October 15), Everonn Systems has fallen by 55 per cent, Future Capital by 77 per cent, Mundra Port and SEZ by 60 per cent and BGR Energy by 81 per cent. The best performing IPO — Allied Digital Services — was subscribed by a little over 59 times and Indian Bank, another good performer, by 32 times. No sector orientation Last year's IPO returns numbers showed a distinct trend, with those from financial services, software and infrastructure faring relatively well. But this year's performance tally shows no sector-specific trend in the returns. In every sector an equal number of IPOs performed better than their listed peers as those that did worse. The stocks that topped the listing gains list were Everonn Systems, Vishal Retail, Religare Enterprises, Nitin Fire and Mundra Port, hailing from diverse sectors. But the common thread that ran through them all was the time of their debut. All these stocks were listed between June and December last year, a period when the Sensex rallied from 14K to 20K levels. And of all the IPOs, only seven are still holding above their issue price — Religare Enterprises, Maytas Infra, Koutons Retail, Everonn Systems, Time Technoplast, ICRA and Page Industries. Again, all of them listed between March and December 2007. The performance of the IPOs was thus a function of market conditions at the time of the offer, more than company-specific or sector-specific factors. Of the 17 stocks that listed in the choppy markets between January and March this year only Bang Overseas is still in the green (up 54 per cent from the issue price). However, at current levels a few of them are really attractive 'buys' — Maytas Infra, Consolidated Construction Consortium, Mundra SEZ, Onmobile Global and MindTree Consultancy. Given the change in the earnings outlook, the ones in the financial sector are better avoided as concerns over the financial turmoil in broader markets persist. Clearly this has been a bad year for greenhorns, whether they were investors or companies seeking to make a debut in the market! </DIV>

A Bad year for IPOs

Even as late as June this year, investors in initial public offers (IPOs) continued to be better off than those who dabbled in the secondary market. Smaller IPOs continued t…

19 Oct 2008

Global markets recover, but worst may not be over

<DIV>Global stock markets were quite volatile this week, and the bias remained negative, as investors continued to be skeptical of the series of measures taken to shore up the banking system and unclog the credit markets. Sure, the money market rates did improve from last week, but still remained much above the levels just before the Lehman Brothers' bankruptcy filing. Also, the logjam in credit markets put several large scale M&A deals in jeopardy. On the whole though, this week was much better after last week's carnage, which was one of the worst ever for the global equity markets. Britain led the way this week's government initiatives to lift troubled banks out of a deep hole, unlock the credit markets and stop the bloodletting in stocks. The UK unveiled a plan partially to nationalise some of its biggest banks. £20bn (US$35bn) of public money will be injected into Royal Bank of Scotland and £17bn into HBOS and Lloyds TSB (which have announced a merger) in return for substantial stakes - around 60% in RBS and 40% in Lloyds TSB-HBOS. The US followed suit by providing US$250bn for bank recapitalisation; half of which will go to nine banks, including Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley. In return, the government will get non-voting preference shares that pay a 5% dividend, rising to 9% after five years. In a sign of growing tensions among policymakers, Sheila Bair, head of the US Federal Deposit Insurance Corporation, criticised the $700bn rescue package for banks for not doing more to help homeowners avoid foreclosure. Germany said it would guarantee bank debt to the tune of €400bn (US$540bn) and supply an extra €100bn to stabilise financial markets; France unveiled a €360bn package of measures, including €40bn of capital funding for banks; and the Netherlands guaranteed €200bn in interbank lending. Austria, Italy, Spain and others also produced proposals. UBS also got a bail-out. The Swiss government took a 9% stake in the bank and created a fund that allows UBS to offload US$60bn in toxic assets. Credit Suisse said that it won't follow compatriot UBS in transferring bad assets to a mostly Swiss National Bank-funded entity. However, it increased its Tier 1 capital base to 13.7% from 10.4% by raising 10 billion Swiss francs of new capital from major investors, including a subsidiary of the Qatar Investment Authority. The Bank of Japan held an emergency meeting and decided to loosen up companies' access to cash. Hong Kong provided a blanket guarantee on all bank deposits. And Australia introduced a stimulus bill to boost the economy, including funding for first-time homebuyers. South Korea's policy makers held an emergency summit, seeking steps to restore confidence after shares plunged to a three-year low and the won declined by the most since the 1997 Asian crisis. The United Arab Emirates (UAE) pledged an extra US$19bn for its banks. Qatar said it would take stakes of up to 20% in banks so that they could continue to fund regional infrastructure projects. Some questioned whether the Gulf states' sovereign-wealth funds still had an appetite to invest abroad, a lifeline to many earlier in the credit crunch. Concerted efforts by governments around the world to unfreeze the short-term credit markets started to bear some fruit. The cost of borrowing dollars in London for three months was headed for a weekly decline, the first one since July, after central banks injected billions of dollars into money markets and governments guaranteed loans. Money-market rates jumped after Lehman Brothers went bankrupt on Sept. 15. The dollar rate will drop about 10 basis points to 4.4% on Friday. It was 4.82% a week ago. Global money market rates fell this week after central banks joined forces to offer lenders an unlimited supply of dollars and the ECB did the same with euros. Still, lending costs among banks remain near record highs relative to the Federal Reserve's benchmark rate of 1.5%. Meanwhile, European leaders called for an overhaul of the global financial system to avert another major crisis. Europe demanded a global summit to discuss the creation of a new form of capitalism, based on moral values, and the effective regulation and supervision of all corners of the financial world, including hedge funds and rating agencies. The proposed global summit has been described as the starting point for a new "Bretton Woods", the 1944 meeting of Western leaders that led to the foundation of the World Bank and the IMF. It would probably happen in November or December. Britain's prime minister, Gordon Brown, said the world needs more transparency, integrity and systems of global governance. He wants to see cross-border colleges of national supervisors to assume oversight of the 30 largest financial institutions in the world, by the end of the year, and to see the IMF become an early warning system for problems looming in the world economy. </DIV>

Global markets recover, but worst may not be over

Global stock markets were quite volatile this week, and the bias remained negative, as investors continued to be skeptical of the series of measures taken to shore up the ba…

19 Oct 2008

Nifty October 2008 futures below 3100

Nifty October 2008 futures below 3100

Turnover dropsNifty October 2008 futures were at 3068, at a discount of 6.35 points as compared to spot closing of 3074.35. NSE's futures & options (F&O) segment turnover wa…

19 Oct 2008

RBI policy review, global markets to dictate trend

<DIV>Concerns about a global recession may continue to weigh on the domestic bourses which have tumbled in a global equities rout in the past few days. Lack of buying support has accentuated the decline on the bourses Foreign institutional investors (FIIs) continue to press sales. They have sold shares worth Rs 46,661.20 crore in the calendar year 2008 so far (till 16 October 2008). Investors now await the mid-term monetary policy review by the Reserve Bank of India (RBI) due on 24 October 2008. Some reports suggest that RBI is set to cut the repo (repurchase) rate by a steep 50 basis points, to signal a strong shift in policy focus to growth from inflation. Repo rate is the rate at which RBI provides funds to banks against the collateral of government bonds for a day to three days. On the inflation front, experts feel that the wholesale price index is expected to move downward, and will eventually come down to single-digit numbers by January 2009. Inflation based on the whole price index rose 11.44% in year through 4 October 2008, lower than previous week's 11.8% rise, data released on 16 October 2008, showed. Index bellwether Reliance Industries (RIL) will declare its Q2 September 2008 results on 23 October 2008. According per media reports, RIL's gross refining margins, or GRMs, are expected to decline significantly in Q2. As per research report published by foreign brokerage houses, RIL may report a 4.3% fall in its gross refining margins (GRM) to $13 per barrel in Q2 September 2008 over Q2 September 2007. The GRM is the difference between the selling price of the finished products and raw material cost. Reliance Industries has 13.64% weightage in Sensex and therefore any sharp fall in the stock may drag the key indices further lower. Other September 2008 quarter results due next week include Jaiprakash Associates, Reliance Natural Resources, Reliance Petroleum, Idea Cellular, Jet Airways (India), MIC Electronics, Chambal Fertilisers & Chemicals, MRF, Pantaloon Retail (India), Federal Bank, Allahabad Bank, Bank of Rajasthan, Rolta India, United Phosphorus, Titan Industries, Ashok Leyland, Chennai Petroleum Corporation, Emami, Finolex Industries, Geodesic, Hero Honda Motors, Hindustan Motors, Hindustan Zinc, Indiabulls Securities, and Marico, among other will declare their September ended quarter results next week. </DIV>

RBI policy review, global markets to dictate trend

Concerns about a global recession may continue to weigh on the domestic bourses which have tumbled in a global equities rout in the past few days. Lack of buying support has…

19 Oct 2008

Inflation coming down slightly

<DIV><TR> <TABLE align='"center"'> <TBODY> <TR> <TD align='"center"'></TD></TR></TBODY></TABLE>India's inflation, based on the wholesale price index (WPI), slowed to a 15-week low towards the end of September, as prices either declined or remained stable, the Government said. The annual point-to-point inflation stood at 11.8% in the week ended September 27 as against 11.99% in the previous week, the Commerce & Industry said in a statement. The rate was below a median forecast of 11.98%. The annual inflation rate was 3.36% during the corresponding week of the previous year. The WPI for 'all commodities' declined by 0.1% to 240.7 from 241.0 in the previous week. Inflation for the week ended Aug. 2 was revised up to 12.91% from a provisional estimate of 12.44% while the WPI for the same period was increased to 241.4 from the preliminary forecast of 240.4. The index for Primary Articles group declined by 0.2% to 250.9 from 251.3 in the preceding week, while the annual point-to-point inflation declined to 11.17% from 11.29% reported in the previous week. The index for Fuel & Power group remained unchanged at its previous week's level of 375.3. The rate of inflation remained unchanged at 16.52% for this commodity group. The index for Manufactured Products declined by 0.1% to 207.2 from 207.5 in the previous week. The rate of inflation declined to 10.33% from 10.55% in the previous week. Inflation for 30 essential commodities increased marginally to 7.74% in the week ending September 27 from 7.7% in the previous week. </TR></DIV>

Inflation coming down slightly

India's inflation, based on the wholesale price index (WPI), slowed to a 15-week low towards the end of September, as prices either declined or remained stable, …

13 Oct 2008

Industrial output plummets in August

Industrial output plummets in August

The turmoil in the global financial markets now seems to have started affecting the Indian economy in a really bad way. India's industrial production plunged to its worst le…

13 Oct 2008

Expect global slowdown - IMF

<DIV>The world economy is decelerating quickly—buffeted by an extraordinary financial shock and by still-high energy and commodity prices—and many advanced economies are close to or moving into recession, the IMF says in its latest World Economic Outlook (WEO). The October 2008 report which was released two days prior to the IMF-World Bank Annual Meetings in Washington, said that growth in emerging economies is also weakening after years of strong growth, though it will still drive global growth. Speaking at the WEO press conference, IMF Chief Economist Olivier Blanchard emphasized the importance of implementing joint financial and macroeconomic policies at this point "to stem the negative momentum on multiple fronts." On the financial side, "this implies the design of comprehensive programs to deal with systemic problems," while on the macroeconomic side, "this implies the use of monetary and fiscal policies to support growth and break negative feedback loops between the financial and real sectors," he said. "With the right macro and financial policies—and these policies are available—we ca </DIV>

Expect global slowdown - IMF

The world economy is decelerating quickly—buffeted by an extraordinary financial shock and by still-high energy and commodity prices—and many advanced economies are close to…

13 Oct 2008

Global markets continue to singe...

<DIV>The mayhem in global markets continued this week, as the financial contagion deepened in Europe, and even spread to Japan later in the week. Equity markets across the globe plunged badly amid mounting fears that the worst financial crisis since the Great Depression would result in a prolonged and painful global recession. The incessant carnage prompted governments and regulators to take more emergency steps to try and stop the bloodshed. But, all the efforts yielded little results, as the MSCI World Index suffered its worst week in more than three decades. The Nikkei in Japan lost a fourth of its value while the Hang Seng dropped 16%. The FTSE 100 in London fell below 4,000 for the first time in more than five years. The Dow Jones Industrial Average sank under 9,000 for the first time since 2003. The Nasdaq fell below 1,700 and the S&P 500 plunged into triple digits. Russian stock exchanges delayed the opening of trading and Indonesia extended a two-day halt. Iceland suspended equity trading until Oct. 13 after the government seized Kaupthing hf, the country's biggest bank. Russia's government said it will start buying stocks of domestic companies next week to help support prices. Consob, Italy's securities-market regulator, banned all short sales on the country's stocks. The cost of borrowing in dollars in London for three months rose as cash injections and interest-rate cuts by 10 major central banks failed to unlock the frozen money markets. The cost to protect corporate bonds from default soared to records around the world on investor concerns that the deepening credit crisis will trigger more failures as companies struggle to finance their businesses. </DIV>

Global markets continue to singe...

The mayhem in global markets continued this week, as the financial contagion deepened in Europe, and even spread to Japan later in the week. Equity markets across the globe …

13 Oct 2008

What if .. ICICI goes bust ?

<DIV>Frequently Asked Questions What will happen to my account ? Will I get my money back ? Is my money INSURED ? Will RBI give the money I have in ICICI ? READ more ... The deposit insurance system in India is subject to the Provisions of Deposit Insurance Act (enacted in 1961). Deposit Insurance and Credit Guarantee Corporation (DICGC) is the body that operates the deposit insurance system. Q1 Which banks are insured by the DICGC? Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. Cooperative Banks: All State, Central and Primary cooperative banks, also called urban cooperative banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State / Union Territory to wind up a cooperative bank or to supersede its committee of management and requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the Reserve Bank are covered under the Deposit Insurance Scheme. At present all co-operative banks other than those from the States of Meghalaya, Mizoram, Nagaland, and the Union Territories of Chandigarh, Lakshadweep and Dadra & Nagar Haveli are covered under the deposit insurance scheme of DICGC. Primary cooperative societies are not insured by the DICGC. Q2 What does the DICGC insure? In the event of a bank failure, DICGC protects bank deposits that are payable in India. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except the following types of deposits (i) Deposits of foreign Governments; (ii) Deposits of Central/State Governments; (iii) Inter-bank deposits; (iv) Deposits of the State Land Development Banks with the State co-operative bank; (v) Any amount due on account of deposit received outside India; (vi) Any amount, which has been specifically exempted by the Corporation with the previous approval of Reserve Bank of India. Q3 What is the maximum deposit amount insured by the DICGC? Presently, deposits of each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him "in the same right and same capacity" as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force. Q4 How will I know whether my bank is insured by the DICGC or not? The DICGC while registering the banks as insured banks furnishes them with printed leaflets for display giving information relating to the protection afforded by the Corporation to the depositors of the insured banks. In case of doubt, depositor should make specific enquiry from the bank's officials in this regard or visit DICGC website on the web address www.dicgc.org.in. What is the ceiling on amount of Insured deposits kept by one person in Q5 different branches of a bank? The deposits kept by one person in different branches of a bank are aggregated for the purpose of insurance cover and presently a maximum amount upto Rupees one lakh is paid. Q6 Does the DICGC insure just the principal deposit amount or both principal and accrued interest? The DICGC insures principal and interest upto a maximum amount of Rs. One lakh. For example, if an individual had deposit(s) with principal amount of Rs.95,000 plus accrued interest of Rs.4,000, the total amount insured by the DICGC would be Rs.99,000. If, however, the principal amount were Rs. One lakh, the accrued interest would not be insured, not because it was interest but because the amount was over the insurance limit. Q7 Can deposit insurance be increased by depositing funds into several different accounts all at the same bank? No. All funds held in the same type of ownership at the same bank are added together before deposit insurance is determined. If the funds are in different types of ownership or are deposited into separate banks they would then be separately insured. Q8 What is a single ownership account? A single (or individual) ownership account is an account owned by one person. Such accounts include those in the owner's name; those established for the benefit of the owner by agents, nominees, guardians, custodians, or conservators; and those established by a business that is a sole proprietorship. Q9 Are deposits in different banks separately insured? Yes. If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank. Q10 If I have deposits at two different banks, and those two banks are closed on the same day, are my funds added together, or insured separately? Your funds from each bank would be insured separately, regardless of the date of closure. Q11 What is the meaning of deposits held in the same right and capacity and different right and capacity? If a person opens in his name more than one account in a bank, for example Mr. K.A.Pandit opens one savings account and one or more fixed deposit accounts, all the accounts are considered in the same right and same capacity and insurance coverage is limited to a maximum of Rupees one lakh. But if Mr. K.A.Pandit opens a joint account, the joint account is considered in a different right and different capacity and insurance coverage is provided separately. Each joint account is insured separately from any deposits individually owned by the joint depositors. Each joint account owned by a combination of different persons is insured upto Rupees one lakh. All joint accounts owned by the combination of same persons are added together and the combined total is insured upto Rupees one lakh. <DIV style="FONT-FAMILY: verdana; TEXT-ALIGN: center"></DIV> <TABLE style="COLOR: rgb(0,0,0)" cellSpacing=1 cellPadding=2 align=center border=1> <TBODY> <TR> <TD style="TEXT-ALIGN: center" vAlign=top colSpan=6> Illustrations </TD></TR> <TR> <TD style="TEXT-ALIGN: left" vAlign=top colSpan=6> Deposits held in different capacities </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Savings </TD> <TD vAlign=top> Current </TD> <TD vAlign=top> FD </TD> <TD vAlign=top> Total </TD> <TD vAlign=top> Deposits </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> A/C </TD> <TD vAlign=top> A/C </TD> <TD vAlign=top> A/C </TD> <TD vAlign=top> Deposits </TD> <TD vAlign=top> Insured </TD></TR> <TR> <TD vAlign=top> Shri S. K. Pandit </TD> <TD vAlign=top> 17,200 </TD> <TD vAlign=top> 22,000 </TD> <TD vAlign=top> 80,000 </TD> <TD vAlign=top> 1,19,200 </TD> <TD vAlign=top> 1,00,000 </TD></TR> <TR> <TD vAlign=top> (Individual) </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD></TR> <TR> <TD vAlign=top> Shri S. K. Pandit </TD> <TD vAlign=top> </TD> <TD vAlign=top> 75,000 </TD> <TD vAlign=top> 50,000 </TD> <TD vAlign=top> 1,25,000 </TD> <TD vAlign=top> 1,00,000 </TD></TR> <TR> <TD vAlign=top colSpan=2> (Partner of ABC & Co.) </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD></TR> <TR> <TD vAlign=top> Shri S. K. Pandit </TD> <TD vAlign=top> 7,800 </TD> <TD vAlign=top> </TD> <TD vAlign=top> 80,000 </TD> <TD vAlign=top> 87,800 </TD> <TD vAlign=top> 87,800 </TD></TR> <TR> <TD vAlign=top colSpan=2> (Guardian for Master Ajit) </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD></TR> <TR> <TD vAlign=top> Shri S. K. Pandit </TD> <TD vAlign=top> </TD> <TD vAlign=top> 2,30,000 </TD> <TD vAlign=top> 45,000 </TD> <TD vAlign=top> 2,75,000 </TD> <TD vAlign=top> 1,00,000 </TD></TR> <TR> <TD vAlign=top colSpan=2> (Director, J.K. Udyog Ltd.) </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD> <TD vAlign=top> </TD></TR></TBODY></TABLE> <TABLE style="COLOR: rgb(0,0,0)" cellSpacing=1 cellPadding=2 align=center border=1> <TBODY> <TR> <TD vAlign=top colSpan=3> Deposits held in joint accounts </TD></TR> <TR> <TD vAlign=top> Account (i) </TD> <TD vAlign=top> First a/c holder- "Shri A. K. Sharma" </TD> <TD vAlign=top> Maximum insured amount upto </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Second a/c holder - "Smt. B. Sharma" </TD> <TD vAlign=top> Rs.1 lakh </TD></TR> <TR> <TD vAlign=top> Account (ii) </TD> <TD vAlign=top> First a/c holder - " Shri A. K. Sharma" </TD> <TD vAlign=top> Maximum insured amount upto </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Second a/c holder - "Shri P. Sharma" </TD> <TD vAlign=top> Rs.1 lakh </TD></TR> <TR> <TD vAlign=top> Account (iii) </TD> <TD vAlign=top> First a/c holder - "Smt. B. Sharma" </TD> <TD vAlign=top> The a/c will be clubbed with the </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Second a/c holder-"Shri A. K. Sharma" </TD> <TD vAlign=top> a/c at (i) </TD></TR> <TR> <TD vAlign=top> Account (iv) </TD> <TD vAlign=top> First a/c holder - "Shri A. K. Sharma" </TD> <TD vAlign=top> Maximum insured amount upto </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Second a/c holder - "Smt. B. Sharma" </TD> <TD vAlign=top> Rs.1 lakh </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Third a/c holder - "Shri P. Sharma" </TD> <TD vAlign=top> </TD></TR> <TR> <TD vAlign=top> Account (v) </TD> <TD vAlign=top> First a/c holder - "Smt. B. Sharma" </TD> <TD vAlign=top> The a/c will be clubbed with the </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Second a/c holder - "Shri P. Sharma" </TD> <TD vAlign=top> a/c at (iv) </TD></TR> <TR> <TD vAlign=top> </TD> <TD vAlign=top> Third a/c holder - "Shri A. K. Sharma" </TD> <TD vAlign=top> </TD></TR></TBODY></TABLE> Q12 Can the bank deduct the amount of dues payable to it by the depositor? Yes. Banks have the right to set off their dues from the amount of deposits. The deposit insurance is available after netting of such dues. Q13 Who pays the cost of deposit insurance? Deposit insurance premium is borne entirely by the insured bank. Q14 When is the DICGC liable to pay? If a bank goes into liquidation: The DICGC is liable to pay to each depositor through the liquidator, the amount of his deposit upto Rupees one lakh within two months from the date of receipt of claim list from the liquidator. If a bank is reconstructed or amalgamated / merged with another bank: Where in respect of an insured bank a scheme of compromise or arrangement or of reconstruction or amalgamation has been sanctioned by any competent authority and the said scheme provides for each depositor being paid or credited with, on the date on which the scheme comes into force, an amount which is less than the original amount and also the specified amount, the Corporation shall be liable to pay to every such depositor in accordance with the provisions of section 18 of DICGC Act an amount equivalent to the difference between the amount so paid or credited and the original amount, or the difference between the amount so paid or credited and the specified amount, whichever is less: Provided that where any such scheme also provides that any payment made to a depositor before the coming into force of the scheme shall be reckoned towards the payment due to him under that scheme, then the scheme shall be deemed to have provided for that payment being made on the date of its coming into force. Q15 Does the DICGC directly deal with the depositors of failed banks? No. In the event of a bank's liquidation, the liquidator prepares depositor wise claim list and sends it to the DICGC. After scrutiny the DICGC pays the money to the liquidator who is liable to pay to the depositors. In the case of amalgamation / merger of banks, the amount due to each depositor is paid to the transferee bank. Q16 Can any insured bank withdraw from the DICGC coverage? No. The deposit insurance scheme is compulsory and no bank can withdraw from it. Q17 Can the DICGC withdraw deposit insurance cover from any bank? The Corporation may cancel the registration of an insured bank if it fails to pay the premium for three consecutive half year periods. In the event of the DICGC withdrawing its cover from any bank for default in the payment of premium the public will be notified through newspapers. Registration of an insured bank stands cancelled if the bank is prohibited from accepting fresh deposits; or its licence is cancelled or a licence is refused to it by the Reserve Bank; or it is wound up either voluntarily or compulsorily; or it ceases to be a banking company or a co-operative bank within the meaning of Section 36A(2) of the Banking Regulation Act, 1949; or it has transferred all its deposit liabilities to any other institution; or it is amalgamated with any other bank or a scheme of compromise or arrangement or of reconstruction has been sanctioned by a competent authority and the said scheme does not permit acceptance of fresh deposits. In the event of the cancellation of registration of a bank, deposits of the bank remain covered by the insurance till the date of the cancellation. Q18 What will be the Corporation's liability on de-registration of banks ? The Corporation has deposit insurance liability on liquidation etc. of "insured banks" i.e. banks which have been de-registered (a) on account of prohibition on acceptance of fresh deposits or (b) on cancellation of license or where it is found that license can not be granted. The liability of the Corporation in these cases is limited to the extent of deposits as on the date of cancellation of registration of bank as an insured bank subject to the monetary ceilings applicable. On liquidation etc. of other de-registered banks i.e. banks which have been de-registered on other grounds such as non payment of premium or their ceasing to be eligible cooperative banks under section 2(gg) of the DICGC Act, 1961, the Corporation has no liability.</DIV>

What if .. ICICI goes bust ?

Frequently Asked QuestionsWhat will happen to my account ?Will I get my money back ?Is my money INSURED ?Will RBI give the money I have in ICICI ?READ more ... The deposit …

13 Oct 2008

Sensex off 48% in calendar 2008

<DIV>There is fear and panic on the stock markets. The bourses suffered heavy losses today on the back of global sell-off and on data showing dismal industrial production growth in August 2008. The BSE 30-share Sensex lost 800.51 points. IT stocks suffered on downward revision in guidance in dollar terms by IT bellwether Infosys Technologies. Banking stocks were volatile reacting to a slew of news such as cut in cash reserve rate, slowdown in industrial production and fall in inflation. Reliance Communications declined 21.02%, Reliance Infrastructure and ICICI Bank lost more than 19% each and Jaiprakash Associates shed 16.27%. Securities & Exchange Board of India (Sebi) chief C B Bhave today said there was no unusual activity in the stock market. He further said there has been no shorting by institutions in cash markets. Inflation based on the whole price index rose 11.8% in 12-months to 27 September 2008, lower than previous week's 11.99% rise, data released by the government during trading hours today, showed. Stocks fell across the globe despite worldwide central bank measures to stave off a crisis. Bank bailouts, liquidity injections and interest rate cuts across the world have failed to quell investor anxiety with Asian stocks tumbling today, following overnight setback in US stocks. Back home, the Reserve Bank of India (RBI) toady cut the cash Reserve Ratio (CRR) second time in the week. The central bank cut CRR by 100 basis points after 50 basis point cut earlier in the week. Trading in US index futures suggested the Dow would fall 227 points at the opening bell. The BSE 30-share Sensex ended down 800.51 points or 7.07% to 10,527.86. The index plunged 1,088.50 points at the day's low of 10,239.76 at the onset of the trading session, its lowest level since 24 July 2006. The Sensex fell 424.33 points at day's high of 10,904.13, in early trade. The S&P CNX Nifty was down 233.70 points or 6.65% to 3,279.95. Nifty hit a low of 3,198.95 in early trade, its lowest level since 9 August 2006. From the recent high of 13,055.67 on 1 October 2008, the Sensex has lost 2,527.81 points or 19.36%. The barometer index is down 9,759.13 points or 48.1% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 10,678.91 points or 50.35% below its all-time high of 21,206.77 struck on 10 January 2008. BSE clocked a turnover of Rs 5,073 crore today as compared to a turnover of Rs 5,135.12 crore on 8 October 2008. Nifty October 2008 futures were at 3295, at a premium of 15.05 points as compared to spot closing of 3279.95. NSE's futures & options (F&O) segment turnover was Rs 48,279.24 crore, which was lower than Rs 57,666.95 crore on Wednesday, 8 October 2008. The BSE Mid-Cap index ended down 8.34% at 3,676. The BSE Small-Cap index was down 7.31% at 4,355.45. Both the indices underperformed the Sensex. The market breadth was extremely weak. On BSE, 382 shares advanced as compared to 2,189 that declined. 48 shares remained unchanged. All the sectoral indices on BSE were in the red. BSE Realty index (down 11.3% to 2,523.07), BSE Consumer Durables index (down 10.11% to 2,139.50), BSE Metal index (down 9.25% to 6,542.27), BSE Capital Goods index (down 9.22% to 7,983.04), BSE Power index (down 8.8% to 1,855.04), BSE Bankex (down 7.84% to 5,319.50) underperformed the Sensex. BSE HealthCare index (down 3.92% to 3,213.28), BSE IT index (down 4.33% to 2,584.25), BSE FMCG index (down 4.46% to 1,860.56), BSE PSU index (down 4.47% to 5,535.99), BSE Auto index (down 5.43% to 3,255.68), BSE Oil & Gas index (down 6.72% to 7,272.31), BSE Teck index (down 6.74% to 2,112.03), outperformed the Sensex. Among the major Sensex losers were, Jaiprakash Associates (down 16.27% to Rs 76.15), Reliance Infrastructure (down 19.25% to Rs 515.30) and Reliance Communications (down 21.02% to Rs 237.40) slumped. India's largest private sector company by market capitalization and oil refiner Reliance Industries slumped 7.43% to Rs 1,527. The stock recovered from the session's low of Rs 1,480. India's largest drug maker by sales Ranbaxy Laboaratories spurted 4.71% to Rs 292.40 after the US government withdrew a motion against Ranbaxy Laboratories after the drugmaker submitted a comprehensive set of audit documents to the authorities. India's biggest private sector bank by net profit ICICI Bank lost 19.71% to Rs 364.10. The stock came off session's low of Rs 326.70. India's second-largest bank, has very small exposure to the global financial crisis and there should be no concerns about liquidity, its joint managing director Chanda Kochhar said. Her comments came after the bank's stock fell as much as 28% today as panic-stricken investors dumped the shares in a weak market. India's second biggest private sector bank by market capitalisation HDFC Bank was down 5.35% at Rs 1,046.35, off the session's low of Rs 975.55. India's largest state-run lender by market capitalisation State Bank of India rose 2.27% to Rs 1,352.16, off a low of Rs 1181.15. IT stocks recovered after earlier fall on Infosys's weak outlook. India's second largest IT exporter by sales Infosys fell 2.2% to Rs 1,226.70. The stock recovered from the session's low of Rs 1,040. Infosys said it has revised the US dollar guidance downwards to reflect the current economic situation and the drastic depreciation of major global currencies against the US dollar. Infosys expects earnings per American depository share at $2.23 for the year ending March 2009, a growth of 12.6%. At the time of Q1 June 2008 results, the company had forecast earnings per American depository share at $2.31 to $2.35 for the year ending March 2009, a growth of 16.7% to 18.7%. Infosys consolidated net profit rose 9.9% to Rs 1432 crore on 11.6% growth in sales to Rs 5418 crore in Q2 September 2008 over Q1 June 2008. The company announced the results before trading hours today, 10 October 2008. Tata Consultancy Services, Wipro and Satyam Computer Services tumbled between 4.32% to 6.69%. The Indian rupee fell to a record low past 49.07 per dollar today as the spreading global financial crisis hurt sentiment in Asian stock markets, leading to concerns of a large outflow of foreign funds from India. IT exporters benefit from the weaker rupee as they derive most of their revenues in dollars. India's largest steel maker by sales Tata Steel slumped 14.49% to Rs 287.50. ArcelorMittal SA and Tata Steel have reportedly shown interest in mining coal in collaboration with Coal India from the latter's 18 abandoned underground mines. India's largest aluminum maker by sales Hindalco Industries slumped 11.18% to Rs 80.65 even as the company said IGH Holdings, a promoter of the company has acquired 8.94 lakh shares or 0.05% of equity capital of the company by way of open markets purchases. Tata Power Company declined 3.72% to Rs 774.70. The company is reportedly exploring the option of raising its stake in Indonesia's Bumi Resources Tbk, the world's second largest coal company, after a sharp erosion in the value of the shares pledged by Bumi's parent firm, Bakrie & Brothers, with various lenders. ICICI Bank clocked the highest volume of 1.16 crore on BSE. Reliance Natural Resources (94.27 lakh shares), Apollo Tyres (85.85 lakh shares), IFCI (85.41 lakh shares) and Jaiprakash Associates (83.93 lakh shares) were the other volume toppers in that order. ICICI Bank clocked the highest turnover of Rs 428.25 crore on BSE. Reliance Industries (Rs 325.90 crore), Bharti Airtel (Rs 283.21 crore), Reliance Capital (Rs 230.99 crore), State Bank of India (Rs 186.57 crore) were other turnover toppers in that order. Sintex Industries dropped 13.85% to Rs 195.70, even as the company reported 62.54% growth in net profit to Rs 68.24 crore in Q2 September 2008 over Q2 September 2007. Era Infra Engineering slipped 7.24% to Rs 75.55, even as the company said its joint venture company has bagged a contract from Airport Authority of India for construction of a new terminal at Devi Ahilya Bai Holkar Airport, Indore Aurobindo Pharma declined 7.56% to Rs 195, even as the company said it has received US Food & Drug Administration approval to manufacture and market Cyclobenzaprine hydrochloride tablets in multiple strengths. Cairn India plunged 11.38% to Rs 151.40, on reports the Rajasthan government is yet to grant the crucial Right of Use (ROU) to Cairn India for the part of the pipeline that will pass through the state. Ashok Leyland tumbled 8.01% to Rs 22.40 at 11:41 IST on BSE, after the company reported 14.57% fall in total sales to 6,186 units in September 2008 over September 2007. JSW Steel rose 1.42% to Rs 296.80, having recovered from a 52-week low of Rs 244, after the company posted 14% growth in net crude steel production to 10.01 lakh tonnes in Q2 September 2008 over Q2 September 2007. Biocon slipped 2.44% to Rs 134.15, even as the company said on Friday, 10 October 2008, its joint venture company NeoBiocon has launched Arbaxane in United Arab Emirates for the treatment of breast cancer. India's industrial production rose at a dismal 1.3% in August 2008 compared to a 10.9% growth in August 2007. Manufacturing grew a poor 1.1% in August 2008 versus 10.7% growth in August 2007. Consumer durables production rose 5.1% in August 2008 verses 6.2% growth in August 2007. Capital goods prodcution rose 2.3% in August 2008 verses 14.7% growth in August 2007. Meanwhile, industrial production growth for July 2008 was revised upwards to 7.4% from 7.1%. European markets which opened after Indian market were sharply lower. France's CAC 40, Germany's DAX and UK's FTSE 100 were down between 7.49% to 8.41%. Overnight, US stocks slumped more than 7% on fears that credit markets would stay frozen, paralysing the world's financial system and slowing economies to a standstill. US light crude for November delivery fell $4.16, or 4.8%, to $82.43 a barrel today, 10 October 2008, just above its earlier low of $82.00, in its biggest two-week decline since the start of the Iraq war in 2003. Oil slipped on fears that market turmoil will send demand for fuel slumping. The Indonesian stock exchange suspended trading for a third day, and exchanges in Bangkok and Vienna halted trading after shares fell more than 10 %, triggering circuit-breaker rules. In Moscow, the Russian Duma, or Parliament, approved a financial sector bailout package valued at more than $80 billion. Trading on Russian stock exchanges was suspended until further notice. </DIV>

Sensex off 48% in calendar 2008

There is fear and panic on the stock markets. The bourses suffered heavy losses today on the back of global sell-off and on data showing dismal industrial production growth …

13 Oct 2008

Domestic bourses to track weak global stocks

<DIV> <TABLE align='"center"'> <TBODY> <TR> <TD align='"center"'></TD></TR></TBODY></TABLE>A fresh setback in global markets will result in a further fall on the domestic bourses today, 8 October 2008. Investors are unlikely to build large positions as the market remains closed tomorrow, 9 October 2008, on account of Dasara. Some of the equipment makers for the nuclear power plants may rise on reports India and United States are likely to sing the civilian nuclear deal on Friday, 10 October 2008. US stocks plunged on Tuesday, 7 October 2008, amid escalating worries about credit markets and the financial sector. The Dow lost more than 500 points and all the major indexes slid more than 5 percent. The Standard & Poor's 500 index saw its first close below 1,000 in five years. Steps by the Federal Reserve to reinvigorate the dormant credit markets ultimately weren't enough to calm nervous investors. Key benchmark indices in Asia were down by between 2.9% to 5.7% today, 8 October 2008, even as central banks across Asia stepped up to offer more support to commercial banks on to try to ease painful pressure on funding costs from a vicious global credit squeeze.. The troubles that started with an overheated housing market in the US have infected financial markets around the world, making banks fearful of lending to other banks, let alone to businesses and consumers. Back home, after Monday's (6 October 2008) heavy slide, the market witnessed highly choppy trade on Tuesday, 7 October 2008. While the 30-share BSE Sensex slid 106.46 points, the S&P CNX Nifty rose 4.25 points. Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 39159.10 crore in calendar year 2008 (till 6 October 2008). As per provisional data released by the stock exchanges, foreign funds sold worth a net Rs 680.42 crore on Tuesday, 7 October 2008. Domestic funds bought shares worth a net Rs 548.29 crore. Meanwhile, with the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India. However, there is no data available on the quantum of hedge funds' investment in India. The barometer index is down 8,591.75 points or 42.35% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 9,511.53 points or 44.85% below its all-time high of 21,206.77 struck on 10 January 2008. Meanwhile, as per reports, United States and India plan to sign a potentially lucrative agreement on Friday, 10 October 2008, to open up nuclear trade between the two countries for the first time in three decades. The pact will provide India with access to US nuclear fuel, reactors and technology, overturning a ban on such trade instituted after India first conducted a nuclear test in 1974. </DIV>

Domestic bourses to track weak global stocks

A fresh setback in global markets will result in a further fall on the domestic bourses today, 8 October 2008. Investors are unlikely to build large positions as…

08 Oct 2008

Daily News Roundup - Oct 8 2008

<DIV>ONGC-Mittal Energy plans to set up its first refinery in Nigeria with an investment of ~US$4bn. (ET) Tata Group to set up Mother Plant of Nano car in Sanand in Gujarat. (DNA) Bharti Airtel to launch its DTH services in 62 cities from October 9, 2008. (FE) RNRL to produce sections of Reliance MoU in High Court today. (BL) Infosys is looking to expand its consulting business through acquisitions. (BL) IOC gets a credit allowance of Rs1.5bn from New Delhi for uninterrupted supply of petroleum products to Kathmandu. (FE) Kumar Mangalam Birla, promoter has increased his stake in Hindalco to 31.59%. (Mint) Tata Sons sells 1% stake in TCS for Rs7.01bn. (ET) IVRCL Infrastructure secures order worth Rs4.99bn from Andhra Pradesh Government. (FE) United Spirits plans to offer 500 shares for each acre to grape growers. (BL) NHPC defers IPO till market conditions improve. (ET) United Phosphorus plans to spin off its fledgling toxic gas detection instrument business. (Mint) ITC's Wills Lifestyle to open 50 more outlets in next two years. (BL) ICICI Bank, Dish TV launches interactive banking service. (Mint) Spanco and Omnia BPO to form 50:50 JV for domestic BPO. (ET) Opto Circuits drops plans to acquire company in Europe. (Mint) Monnet Ispat plans to enter service sector and provide total solution for setting up coal washeries. (BL) Tata Group to set up agri, marine biology research institute. (ET) M&M to bring its car service business in Pune in next 12-15 months. (FE) Everonn Systems has bagged Rs68.5mn project from Nagpur Municipal Corporation. (FE) GVK Power & Infra divests entire stake in GVK Aviation. (FE) Essar Oil signs a product purchase and infrastructure sharing MoU with IOC. (BL) Bajaj Electricals plans to set up lighting unit in Saudi Arabia in next 15-18 months. (FE) Bajaj Electricals secures Rs90mn Bandra Worli Sea-Link order. (BL) Consolidated Construction Consortium is planning to enter into nuclear power projects sector. (ET) Consolidated Construction Consortium secures Rs12.12bn order from Airport Authority of India to expand Chennai airport terminal. (BL) Strides Arcolab gets USFDA approval for its oral dosage manufacturing unit in Bangalore. (DNA) REcap partners LLC to acquire HOV services for ~Rs9.5bn. (BS) Marksans Pharma is looking for more acquisition targets in US and Europe. (BL) Country Club launches new clubbing concept to increase its presence globally. (FE) Essar Group may drop plan to set up wind-turbine JV. (BS) Provogue India plans to foray into food and grocery retailing sector. (BS) Premji Invest picks up 3% stake in NSE for US$100mn. (BS) Economic Front Page The Government asks states to exempt local taxes on coal transfers by JV firms from captive coal blocks. (ET) Exploration, refiners and miners gets permission to raise US$500mn per year from ECBs. (ET) The Ministry of Shipping to propose on the revival of the ship building subsidy to the cabinet in the next week. (FE) GSM based mobile operator's approaches government to seek permission to separate their non-voice revenues. (BL) The Government is considering overseas dollar bond float to ease Indian banks and companies access to liquidities. (BS) </DIV>

Daily News Roundup - Oct 8 2008

ONGC-Mittal Energy plans to set up its first refinery in Nigeria with an investment of ~US$4bn. (ET)Tata Group to set up Mother Plant of Nano car in Sanand in Gujarat. (DNA…

08 Oct 2008

Investor wealth eroded

<DIV>Amid the financial crisis in the US, Indian investors have witnessed an erosion of about Rs 2.3 lakh crore in their wealth in September, says a report. Domestic equity market continued to be battered following negative global cues with the benchmark Nifty registering a fall of about 10 % in the last month. "It is estimated that Rs 2.3 lakh crore of shareholders' wealth eroded in the background of the situation in the US financial markets," Crisil Research said in a report. On the contrary, the fall in the US markets was lower with the S&P 500 and Dow Jones both declining by around nine % and six %, respectively, while emerging markets lost around 18 % during the month. Pessimism in the financial markets following the filing for bankruptcy by Lehman Brothers, Merrill Lynch's sell-off, the bail out of AIG and perceived uncertainty around the US bail-out package added to investor fears. Investor sentiment was also affected on news of the possibility of Fortis filing for bankruptcy, indicating problems in the European financial markets as well, the report added. "The BSE Realty Index and the BSE Metal Index were the most severely affected during the month, dropping by 32 per cent and 25 %, respectively. Concerns over slowing demand in the real estate market due to a liquidity crunch and increased cost of funding weighed in on investor sentiment in the realty sector," Crisil Research Head-Equities Chetan Majithia said. </DIV>

Investor wealth eroded

Amid the financial crisis in the US, Indian investors have witnessed an erosion of about Rs 2.3 lakh crore in their wealth in September, says a report.Domestic equity market…

08 Oct 2008

Bullion metals continue to rise

<DIV>Gold gains more than $50 in the past two days Despite a relatively stronger dollar, bullion metals continued to rise and once again ended higher on Tuesday, 07 October, 2008. The yellow metal gained after the stocks at Wall Street continued to plunge on global economic worries thereby strengthening the yellow metal's demand as a safe haven for investment. Chances of another interest rate cut by Federal Reserve by at least 50 bps to 1.5% also imparted further shine on the yellow metal. Silver prices also gained today. Investors tend to seek safety in gold when the economy falls into turmoil. On Tuesday, Comex Gold for December delivery gained $15.8 (1.8%) to close at $882 an ounce on the New York Mercantile Exchange. In the past two days, gold has gained more than $50. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%. This year, gold prices have gained 5.3% till date. On Tuesday, Comex silver futures for December delivery slightly rose 9.5 cents (0.8%) to $11.38 an ounce. Silver had ended month and quarter of September 2008 with a loss of 10%. It ended August with a loss of 2.4% and July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. Till date, silver has lost 24% this year. The metal also had gained for seven straight years. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa. At the currency markets on Tuesday, the dollar gained against the yen but remained under pressure after the Federal Reserve said it would buy commercial paper in an attempt to revive frozen credit markets and ease overall borrowing costs. The yen rallied against both the dollar and the euro as investors fled to safe-haven currencies on ongoing worries about credit markets and the impact of the financial crisis on institutions in the U.S. and Europe. The dollar index, which measures the U.S. unit against a basket of major currencies, remained under pressure, trading at 81.093, down from 81.300 in morning trade and 81.593 on late Monday. At the crude market on Tuesday, crude-oil futures closed higher to score their first gain in five sessions as prices bounced back after touching an eight-month low. Prices found support as traders looked for fresh indications on global energy demand and digested reports of renewed tension in the Middle East, but crude finished off the day's high as U.S. stocks weakened. Crude for November delivery rose $2.25, or 2.6%, to close at $90.06 a barrel on the New York Mercantile Exchange. Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September. Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%. At the MCX, gold prices for December delivery closed higher by Rs 177 (1.3%) at Rs 13,513 per 10 grams. Prices rose to a high of Rs 13,599 per 10 grams and fell to a low of Rs 13,192 per 10 grams during the day's trading. At the MCX, silver prices for December delivery closed Rs 157 (0.82%) higher at Rs 19,585/Kg. Prices opened at Rs 19,007/kg and rose to a high of Rs 19,585/Kg during the day's trading. </DIV>

Bullion metals continue to rise

Gold gains more than $50 in the past two daysDespite a relatively stronger dollar, bullion metals continued to rise and once again ended higher on Tuesday, 07 October, 2008.…

08 Oct 2008

Crude gains after four sessions of drop

<DIV> <TABLE align='"center"'> <TBODY> <TR> <TD align='"center"'></TD></TR></TBODY></TABLE>Crude prices gain on fresh Middle East tensions After four sessions of drop, crude oil prices rose for the first time today, Tuesday, 07 October, 2008. Prices rose after fresh Middle East tensions resurfaced and investor worries fell a bit as they thought that global energy demand will not drop drastically in the coming months. Crude finished off the day's high as U.S. stocks weakened. Crude-oil futures for light sweet crude for December delivery closed at $90.06/barrel (higher by $2.25 or 2.6%) on the New York Mercantile Exchange. Prices rose to a high of $90.6 during intra day trading. Prices reached a high of $147 on 11 July but have dropped almost 50% since then. Till date this year, prices have dropped by 6.2% till date. As per reports today, Iran claimed that it forced down a Western aircraft on Sunday that accidentally entered its airspace, then allowed it to continue the next day to Afghanistan after questioning the passengers. This perked up crude prices partly today. At the currency markets on Tuesday, the dollar gained against the yen but remained under pressure after the Federal Reserve said it would buy commercial paper in an attempt to revive frozen credit markets and ease overall borrowing costs. The yen rallied against both the dollar and the euro as investors fled to safe-haven currencies on ongoing worries about credit markets and the impact of the financial crisis on institutions in the U.S. and Europe. The dollar index, which measures the U.S. unit against a basket of major currencies, remained under pressure, trading at 81.093, down from 81.300 in morning trade and 81.593 on late Monday. For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%. Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down. Against this background, November reformulated gasoline closed at $2.0628 a gallon, up 0.4 cent, while November heating oil gained 3.2 cents to end at $2.5057 a gallon. Natural gas for November delivery declined by 6.7 cents to finish at $6.768 per million British thermal units. At the MCX, crude oil for October delivery closed at Rs 4,205/barrel, lower by Rs 47 (1.09) against previous day's close. Natural gas for October delivery closed at Rs 328.2/mmbtu, lower by Rs 5.8/mmbtu (1.7%). The U.S. Energy Department's Energy Information Administration will issue a weekly update on petroleum supplies tomorrow. Expectations for the data were mixed. </DIV>

Crude gains after four sessions of drop

Crude prices gain on fresh Middle East tensionsAfter four sessions of drop, crude oil prices rose for the first time today, Tuesday, 07 October, 2008. Prices ros…

08 Oct 2008

Bullion metals register big drop

<DIV>Strong dollar pushes precious metals to lowest levels in two weeks Bullion metals ended lower on Thursday, 02 October, 2008. The yellow metal dropped today after the dollar strengthened once the US Senate passed the revised $700 bailout plan. Silver prices also fell today. On Thursday, Comex Gold for December delivery lost $43 (4.8%) to close at $844.3 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then. Gold prices ended 5.5% higher for month of September, 08. Prior to this, gold had lost 8.8% in August, 2008. In July, 2008, it ended lower by $11 (1.1%). For the year, gold has lost 2.9% till date in FY 2008. For the third quarter, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%. On Thursday, Comex silver futures for December delivery fell $1.65 (12.9%) to $11.12 an ounce. Silver had ended month and quarter of September 2008 with a loss of 10%. It ended August with a loss of 2.4% and July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. Till date, silver has lost 7% this year. The metal also had gained for seven straight years. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa. At the currency markets on Thursday, the dollar strengthened after the Senate approved the revised plan on Wednesday night to stabilize the financial industry, just two days after the House of Representatives rejected the original package. By a vote of 74-25, senators authorized the Treasury Secretary to buy bad assets from companies' books, allowed the Federal Deposit Insurance Corp (FDIC) to raise its deposit-insurance cap to $250,000 from $100,000, extended several tax breaks and required government agencies to modify troubled mortgages. The dollar rose against the euro, and the British pound. The dollar index, which tracks the value of the greenback against other major currencies, rose 1.2%. Among economic news of the day at Wall Street, the Commerce Department at US reported today, Thursday, 02 October, 2008 that demand for U.S. factory goods dropped at the fastest rate in two years in August, 2008. The drop was due to the much lower orders for metals, machinery and vehicles. Factory orders fell 4%, worse than the 3% drop expected. Actual Orders had risen 0.7% in July, revised down from the 1.3% estimate given a month ago. Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September. Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%. </DIV>

Bullion metals register big drop

Strong dollar pushes precious metals to lowest levels in two weeksBullion metals ended lower on Thursday, 02 October, 2008. The yellow metal dropped today after the dollar s…

03 Oct 2008

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