Wednesday, 8 October 2008

Buy Satyam, target of Rs 350: Karvy

We are in the midst of a huge amount of turmoil and newsflow for global markets. At one point, we were down 8% in the trading day, then we recovered and closed about 350 points down. After markets closed today, we got news that central banks across the world are acting in concert to cut rates. That was not unexpected after what Ben Bernanke said yesterday and today he has followed that up with a 50 bps cut in the Fed rate. Same has been picked up by the European Central Bank, by Bank of England, banks in Sweden, Switzerland, and in many other parts of the world like China.

So, many central banks are making a concerted effort to try and lift the pall of gloom across global markets, which itself were extremely volatile. Asia sold off. Europe started weak, but recovered after the rate cuts came in. That was after our markets closed for trade. Of course, the Dow Futures was all over the place around the time of news breaking. But this is a significant move and it may well see that relief rally that the market has been looking for after being terribly oversold.

Source: Moneycontrol

HCL Technologies an underperformer: Karvy

Karvy Stock Broking has recommended an underperformer rating on HCL Technologies with a target of Rs 160 in its October 8, 2008 research report. "HCL Technologies for Q1FY09 is likely to report a sequential revenue growth of 6.5% (to Rs 23.09 billion), with rupee aiding the growth to the tune of 6%, and we expect the volume growth to improve by a meek 0.5%. We expect its effective tax rate to increase and consequently, the twin effects is likely to pull down the net profit by 28.6%. We recommend the stock as a underperformer, with a price target of Rs 160," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Accumulate Rico Auto, target of Rs 18: Angel

Angel Broking has upgraded its rating on Rico Auto from neutral to accumulate with a target of Rs 18 in its October 3, 2008 research report. "At current levels, Rico is reasonably valued compared to its peers. Rico's appetite for organic growth appears high, but the pace may be slower than expected due to slow down in the Automobile sector and overseas market. Nonetheless, news flow on growth initiatives and fair valuations, makes us positive on the stock. We assign a Target multiple of 2.5x FY2010E EV/EBITDA and 6x FY2010E consolidated Earnings to the stock. We upgrade the stock to Accumulate from Neutral, with a Target Price of Rs 18," says Angel Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

Buy Balrampur Chini, target of Rs 126: HDFC Securities

HDFC Securities has maintained its buy rating on Balrampur Chini Mills with a target of Rs 126 in its October 8, 2008 research report. "We have valued the stock on 7x EV / EBIDTA for CY10E (9.6x CY09E), with a target price of Rs 126, an upside of 90% over the CMP. Our bull case target is Rs 188 (upside of 184%) and bear case target price is Rs 77 (upside of 16% from current levels). We have based our valuation on a) Uptrend in sugar cycle resulting in higher realisation for sugar and by products b) Lower interest and deprecation burden c) Strong EPS growth of Rs 4.7 to Rs 9.8 from CY08E to CY10E at a CAGR of 44%. We maintain our Buy rating and target price of Rs 126 on the stock," says HDFC Securities' research report.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: Moneycontrol

A Dalal positive on Ranbaxy

Amit Dalal of Amit Nalin Securities is positive on Ranbaxy Laboratories.

Dalal told CNBC-TV18, "I am positive on Ranbaxy and I said this last week also that assuming that the Daiichi takeover goes through and perhaps the news is in that regard looks positive with the share price movement we are seeing today; companies like Daiichi don’t make such big mistakes that they value something at Rs 22,000 crore for 55% of the stake and the market cap is Rs 9,500 crore. Markets usually give some respect to that and some adjustment in valuation. So once the shareholders get back their money and there will be some comfort to the extent that the deal is going through, I think there will be an upside on that stock to perhaps some extent from here."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

HDFC Bank safe to invest: A Dalal

Amit Dalal of Amit Nalin Securities is of the view that in the private sector space HDFC Bank remains the only safe haven for someone to invest in.

Dalal told CNBC-TV18, "In the private banking space HDFC Bank remains the only safe haven for someone to invest in. There are too many concerns with the rest of the private banking space sector right now. Liquidity remains a problem for the PSU banks. I don’t know how RBI plans to look at it but with these outflows that are taking place, it is practically no money left in the system for lending and cost of funds is going up for banks. So it is not a very happy place to be for banks right now."

Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.

Source: Moneycontrol

Balrampur Chini an buying Opportunity: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that if one is having appetite for risk and spare money then Balrampur Chini Mills would be a buying opportunity.

Sukhani told CNBC-TV18, "Midcap stocks are falling like ninepins, there is no support, there are no levels you just have to wait for them to stop falling. I don’t think there is any reason either I am not saying they are justified at higher prices, I am saying that they are just falling because everything is falling."

He further added, "Balrampur Chini has a better chart this is relative to Bajaj Hindusthan. I would say that if you are having that appetite for risk and if you have spare money then a Balrampur would be a buying opportunity."

Disclosure: It is safe to assume that analyst & his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

SAIL looks good: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that Steel Authority of India, SAIL is certainly a better opportunity.

Sukhani told CNBC-TV18, "Ranbaxy Laboratories had a very big gain in the middle of the day, so I am assuming that must be on the back of some news or some information may be. There is no justification for that gain, if some good news has come for the company things will change, if not I suspect the decline will resume again."

He further added, "SAIL is certainly a better opportunity, if we are going to see a relief rally then it is worth looking at in the steel sector that is a big."

Disclosure: It is safe to assume that analyst & his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Prefer PSU banks says Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that one should prefer PSU banks in general. HDFC is a better opportunity than ICICI Bank in non-PSU banks, he added.

Sukhani told CNBC-TV18, "Reliance and Nifty are more or less doing the same thing Reliance is breaking down, Nifty is breaking down. Reliance has broken down some support level and Nifty has done that and like the Nifty; Reliance will stop wherever it wants or wherever it stops. Earlier also I have said Reliance is not a stock that you go short on and now if the Nifty stabilizes then Reliance is a stock at Rs 1,600 or so that you actually want to go and buy even for a short-term trade that would be my view on Reliance."

He further added, "I am upbeat on banks. HDFC is one of the better outperformers in some ways, so if at all you want to buy a non-PSU bank then HDFC is a better opportunity than ICICI Bank. But I would prefer to go for PSU banks in general."

Disclosure: It is safe to assume that analyst & his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

Buy Punj Lloyd on dips: Sukhani

Technical Analyst, Sudarshan Sukhani is of the view that one can buy Punj Lloyd on dips.

Sukhani told CNBC-TV18, "Punj Lloyd actually is in a bull market of its own, the charts are so goods so this is a dip and it has filled today’s mornings gap also and that is what a good stock should do. So I would say if you are looking for an investment any dip like this any panic like this is a worth while opportunity to buy Punj Lloyd."

He further added, "Cairn India has also gone down, so the rally today is not significant it has gone down much more and while natural resources remains a very big favorite for me may be we want Cairn to bottom out build a base before you start buying."

Disclosure: It is safe to assume that analyst & his clients may have an investment interest in the stocks/sectors discussed.

Source: Moneycontrol

No danger of Indian banks collapsing: Montek Singh

Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, said Indian banks are not under danger of financial collapse like the one that the rest of the world has seen.

Here is a verbatim transcript of the exclusive interview with Montek Singh Ahluwalia on CNBC-TV18.

Q: The Prime Minister has already said that India can’t expect to be insulated by the financial crisis effecting America and Europe but how vulnerable is the country?
A: Let’s make a distinction between the financial crisis and what happens to the economy as far as the financial sector in India is concerned. A lot of studies done by the finance ministry and the RBI show that the Indian Financial system is not burdened with any of the toxic assets which have created a problem in the world financial system and that maybe because we have been very open. So from that point of view, Indian Financial system is sounder than people think.

Q: You are suggesting that the lack of openness or the slowness of opening the financial system is actually a measure of security for us today?
A: It has proved to insulate us from the worst effects of what has happened in the rest of the world. Had we been more open but prudential then we would have still been secure but as it happens, we are less open and therefore we didn’t have such an integration of our balance sheets with the kind of assets that have created problems. So, this has been an advantage.

Source: Moneycontrol

Post Market Report - October 8, 2008

Late buying trims losses

A late round of buying helped the market pare most of the losses and Sensex shed 367 points at the close.

The Sensex bucked the major downtrend across the Asian markets and trimmed 580 points of losses on late buying in heavyweights. The market was once again hit

by a substantial selling pressure and both Sensex and Nifty tumbled by above 8% amid a choppy trading session. Taking cue from weak global markets, Sensex opened on a negative note at 11,316 and fell sharply to touch an intra-day low of 10,741. While the market witnessed a fluctuating trend for a while, the afternoon trades saw sudden buying interest in frontline stocks and Sensex chopped off most of its losses to close at 11,328, down 367 points or 3.14%. Nifty, too, bounced back sharply and closed at 3,514, down 93 points.

The market breadth was negative. Of the 2,652 stocks traded on the BSE, 2,165 stocks declined whereas only 441 stocks advanced. Fourty six stocks ended unchanged. All the 13 sectoral indices were largely weak. The BSE CD index lost 6.75%, BSE FMCG index declined by 5.18% and BSE IT shed 4.90%. The remaining indices lost 1-4%.

Among the 30 Sensex stocks, 24 ended in the red. Among the major losers JP Associates tanked by 9.91% at Rs90.95, Wipro tumbled by 7.91% at Rs282.35, Sterlite Industries declined by 6.85% at Rs292.55, ICICI Bank plunged by 6.53% at Rs453.50, State Bank of India dropped 6.10% at Rs1322.15, Tata Steel crumbled by 5.36% at Rs338.20, Satyam Computer Services slumped 5.14% at Rs264.70, ITC fell by 5.13% at Rs165.60 and Tata Consultancy Services declined by 5.07% at Rs546.60. However, Ranbaxy Laboratories advanced 9.08% at Rs279.25, Tata Power jumped 4.79% at Rs804.60, Mahindra & Mahindra surged 2.75% at Rs486 and DLF gained 1.95% at Rs308.80, while Reliance Communications closed with marginal gains.

Over 2.23 crore JP Associates shares changed hands on the BSE followed by Reliance Natural Resources (1.25 crore shares), GVK Power and Infrastructure (1.22 crore shares), Chambal Fertilizers & Chemicals (0.78 crore shares) and IFCI (0.70 crore shares).

Reliance Industries was the most actively traded counter on the BSE and registered a turnover of Rs434 crore followed by Reliance Capital (Rs287 crore), ICICI Bank (Rs251 crore), JP Associates (Rs209 crore) and the State Bank of India (Rs152 crore).

Source: Sharekhan

Economy is strong: FM

The government swung into action on Wednesday to soothe frayed nerves even as the stock market saw another bout of volatility and central
banks in the US, UK, Canada and Europe cut interest rates to tackle the liquidity crisis. After a specially convened late evening Cabinet meeting, the government promised to “respond swiftly” to the spreading credit crisis and infuse more liquidity if needed. The government also assured that banks have strong balance sheets and that there was no need to worry about the safety of deposits.

Finance minister P Chidambaram came mid-way from the meeting to give a statement on behalf of the Cabinet “to assure the people that the economy has the capacity and resilience to weather the storm that is blowing across the world”. “We are conscious of the fact that liquidity conditions in India too have tightened. Our authorities have responded to the situation. RBI has taken steps to infuse more liquidity. We will watch the situation carefully and continuously, and respond swiftly to the needs of the market. Steps will be taken to infuse more liquidity, if needed.”

It is because of this liquidity crisis that many financial institutions in the US and Europe suffered a meltdown and had to be bailed out by their governments and central banks, he added.

The Indian economy, on the other hand, is strong as evident from the first quarter gross domestic product (GDP) growth of 7.9%. “On current trends, we expect that the growth rate for the whole year will be close to 8%,” Mr Chidambaram read out from the statement. Investors should take informed decisions and not panic, he added.

The other indicators—trade data, foreign direct investment (FDI) flows—underlines the sound fundamentals of the economy, the Cabinet said. During April-August, exports rose 35.1% in dollar terms and imports 37.7%. “There is ample evidence that cumulative investments in the pipeline continue to be high. Huge capacities are being added in a number of sectors, including power, steel, oil and automobiles. While there has been a negative trend in portfolio investments, foreign direct investment during April-August, 2008 has been robust. India attracted FDI of $ 14.8 billion, up by 114% compared to the corresponding period of last year,” Mr Chidambaram said.

Sorce: EconomicTimes

India not immune from crisis; GDP may slip to 6.9 pc: IMF

India's economic growth rate may slip further and decline to 6.9 per cent in 2009, as countries in emerging Asia are not totally immune to the financial crisis in the US and its subsequent fallout, the International Monetary Fund (IMF) said today.

India's Gross Domestic Product (GDP) is likely to slowdown to 7.9 per cent in 2008 and slide further to 6.9 per cent in the next year, said the IMF's World Economic Outlook (WEO) released here ahead of the annual meetings of the IMF and the World Bank.

According to the IMF data, India recorded a GDP growth of 9.8 per cent in 2006 and 9.3 per cent in 2007.

"In India, growth in the second quarter came down to about 8 per cent, on the back of weakening investment", the report said, adding private consumption and export, however, continued to do well.

For Asia as a whole, the report said, economic growth rate was likely to slip to 7.7 per cent in 2008 and 7.1 per cent the next year in 2009.

The report further said that financial markets have weakened in recent months, driven by increasing concerns about the global outlook and declining investor risk appetite, particularly in the context of the September market turbulence.

Sorce: EconomicTimes

Britain unveils $875 billion bank rescue amid market panic

Britain rushed out a package worth up to 875 billion dollars Wednesday to head off a banking collapse as markets went into freefall over fears the worst financial crisis in decades has still not hit a peak.

Panic selling set hit key European and Asian stock exchanges and a drop of nearly 10 percent in Tokyo prompted Japanese Prime Minister Taro Aso to voice "huge fears" for the future of the world's second biggest economy.

Central bank moves to increase the amount of available credit did little to calm the frenzy.

Unveiling a package which will see Britain's eight main banks part-nationalised, Prime Minister Gordon Brown said "extraordinary times call for... bold and far-reaching solutions."

The government said it would use 50 billion pounds (64 billion euros, 87 billion dollars) to buy major stakes in HSBC, Royal Bank of Scotland, Barclays, HBOS, Lloyds TSB, Standard Chartered, Abbey and Nationwide Building Society.

It would also make available 200 billion pounds in short-term loans and issue 250 billion pounds to guarantee loans between banks.

The government hopes the measures will overcome bank reluctance to lend to each other -- the root of the financial crisis.

Brown called for "European-wide funding plan" to help ease the global financial crisis and said proposals had been made to other nations.

Britain's rescue initiative followed desperate efforts by other governments and institutions.

The European Central Bank said it would pump 70 billion dollars (95 billion euros) into interbank money markets in one-day loans Wednesday, raising the daily amount by 20 billion dollars.

Sorce: EconomicTimes

Heard on the Street - October 9, 2008

The sharp rebound in benchmark indices off lows on Thursday has many speculating that the market may have found its bottom, at least in the near term. Such conviction is not without a reason. Some of the biggest bears on Indian equities, including a derivatives trader — whose views are often taken as gospel truth by many — from a US-headquartered bank and Old Fox, are believed to have covered a significant chunk of their short positions around the 3,500-3,600-mark over the past couple of days.

The derivatives trader, who handles an India-dedicated proprietary book, has been bearish on Indian equities for a long time now. It is another matter that he too was wrong footed when the market bounced back sharply during the early part of this year. Old Fox is rumoured to have initiated long positions in some of the mid-cap stocks. He is also said to be building long positions in Ranbaxy.

Though traders do not rule out further downside in the indices, there is a feeling that the worst could more or less be over. But they add that the market is not ready for the next bout of bull rally, as it would take a while for foreign institutions to set their houses in order in the aftermath of the credit crisis.

Sorce: EconomicTimes

Asian markets rebound after global rate cuts

Asian markets bounced back modestly on Thursday after major central banks around the world slashed interest rates to ease the global credit
crunch, although fears of further turmoil kept investors jittery.

South Korea, Hong Kong and Taiwan lowered their interest rates, joining a series of cuts Wednesday in the US, Europe and China aimed at stabilizing global markets that have plunged sharply this week.

Japan's benchmark Nikkei 225 index was up 2.1 per cent to 9,397, a day after it plummeted 9.4 per cent in its biggest one-day drop since the 1987 market crash.

Hong Kong's Hang Seng Index jumped nearly 3 per cent to 15,871 after the territory cut interest rates for a second day. And a surprise rate cut in South Korea also cheered investors, who lifted the Kospi index 1.8 per cent.

Mainland China's main index was up 0.6 per cent after its central bank lowered rates Wednesday evening.

China's move came as six other central banks, including the US Federal Reserve and European Central Bank, joined to lower rates to contain the spreading financial crisis. Japan's central bank, constrained by already-low rates, said it backed the moves.

``Investors bought back shares as sentiment slightly improved on measures including coordinated rate cuts,'' said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co Ltd in Tokyo.

Investor reaction in Asia to the string of moves was more positive than in the US and Europe, where an initial perk in markets soon dissipated amid severe stresses in lending markets and worries about a global recession.

Sorce: EconomicTimes

Web traffic jam as people search for financial news

The financial crisis has people flocking to the Internet for the latest money news along with tips on how to salvage investments and s
ave on the routine costs of living.

Visits to websites such as the business-centric Wall Street Journal and economy-focused Yahoo Finance set new records as the US Congress grappled with a 700 billion dollar plan to stop credit markets from imploding.

Internet tracker comScore says visits to, which steers drivers to stations featuring low fuel prices, are up nearly 30 percent and it expects to report spikes in traffic to finance and bargain-hunter websites when September statistics are calculated later this week.

"Investment pages are just red hot right now with people wanting to know what is going on with stocks," Yahoo Finance general manager Mark Interrante told media. "We have been impressed by the traffic. People are not just diving down into stocks but asking what is going on, how it affects them and where it is all going."

Activity is up 40 percent at Yahoo Finance message boards where people chat virtually about cash, finance and other personal money matters and the website's Tech Ticker video news program is getting millions of daily visitors.

"The editorial team at Tech Ticker is working around the clock to find the right stories for people to understand the crisis," Interrante said. "This is going to be a record month for us."

Yahoo Finance stock quotes and other features popular in the United States began being rolled out Tuesday at the California firm's websites in France, Germany, Spain, Italy and Britain.

"We prelaunched a couple of pages in France and got very positive customer feedback and moved forward with the rest of Europe," Interrante said. "You will see a lot more stuff rolling out in Europe in the next six weeks."

Google queries regarding "stocks" nearly tripled in September, according to data posted this week at the Internet search king's website that tracks trends in what people seek online.

US-based Akamai Technologies, which handles online traffic for major news outlets such as NBC and the BBC, reports visits to the websites surged to record levels as dramatic events played out in money markets.

The Wall Street Journal recently reported an unprecedented two million visitors in a single day.

Sorce: EconomicTimes

Iceland close to bankruptcy on meltdown fears

This volcanic island near the Arctic Circle is on the brink of becoming the first "national bankruptcy" of the global financial meltdown.

Home to just 320,000 people on a territory the size of Kentucky, Iceland has formidable international reach because of an outsized banking sector that set out with Viking confidence to conquer swaths of the British economy - from fashion retailers to top soccer teams.

The strategy gave Icelanders one of the world's highest per capita incomes. But now they are watching helplessly as their economy implodes - their currency losing almost half its value, and their heavily exposed banks collapsing under the weight of debts incurred by lending in the boom times.

"Everything is closed. We couldn't sell our stock or take money from the bank," said Johann Sigurdsson as he left a branch of Landsbanki in downtown Reykjavik.

The government had earlier announced it had nationalized the bank under emergency laws enacted to deal with the crisis.

"We have been forced to take decisive action to save the country," Prime Minister Geir H. Haarde said of those sweeping new powers that allow the government to take over companies, limit the authority of boards, and call shareholder meetings.

A full-blown collapse of Iceland's financial system would send shock waves across Europe, given the heavy investment by Icelandic banks and companies across the continent.

Sorce: EconomicTimes

BOE, SNB offer $20bn in ready cash

The Bank of England and the Swiss National Bank continued to provide ready liquidity to markets Wednesday, offering U$20 bn in overnight m
oney to the financial sector.

Bidder and rate information is released later in the day. The Bank of England, the Swiss National Bank and other central banks have steadily offered money to banks this week and in past weeks in an effort to prop up lending between them.

Source: EconomicTimes

Britain unveils 50 bn pound bank rescue package

Britain unveiled a multibillion pound rescue package for British banks on Wednesday that included plans to inject up to 50 billion pounds of
government money into the country's biggest operators.

Finance Minister Alistair Darling said in a statement the plan would:

• offer banks short-term liquidity;
• make new capital available to banks;
• give the banking system enough funds to maintain lending in the medium-term.

The decision follows days of crippling pressure on high street banks, some of which have lost nearly half their value on the stock market amid investor fears they could collapse if they are not handed a massive liquidity lifeline.

Darling and Prime Minister Gordon Brown will hold a press conference later on Wednesday in which Brown is expected to say bold and far-reaching action is needed to tackle the global financial crisis.

Darling and Brown met the heads of the Bank of England and Financial Services Authority (FSA) on Tuesday for what the government said were talks on stabilising the banking system.

"We have been working closely with the governor of the Bank of England, the FSA and the financial institutions to put the banks on a longer-term sound footing," Darling said in a televised statement following that meeting.

As well as the statement in the morning, Darling said he would later address parliament on the plan.

Governments around the globe, from Iceland to South Korea, are fighting to unfreeze lending and borrowing brought to a halt by fears of hidden losses in financial institutions.

Pressure mounted on the British government to take swift action after shares in its major banks plunged on Monday and Tuesday. That followed reports that one of the options being considered by Britain was a massive injection of capital into the banks, which could dilute current investors' holdings.

HBOS shares lost more than 40 per cent on Tuesday and Royal Bank of Scotland dropped 39 per cent.

It was unclear whether Britain's rescue plan, which follows the U.S. decision to provide more than $700 billion in a bailout of banks and financial institutions, would be enough to restore market confidence following days of near panic.

"Barring the announcement of a particularly radical and fast-acting package, the market is unlikely to find much short-term stimulus from any unilateral plan," said Martin Slaney, head of derivatives at GFT Global Markets, in a research note.

Source: EconomicTimes

Gulf shares continue freefall

Stock markets in Gulf region tumbled at the opening on Wednesday for the fourth day running, with Dubai leading the way with a plunge of
almost 10 per cent.

The Dubai Financial Market slumped by 9.6 per cent to 3,046 points on concerns about the impact of the global financial crisis on the oil-rich region, before recovering slighly to 3,085.01 points.

The Dubai exchange was again dragged down by heavyweight real estate developer Emaar, which shed 10 percent. The real estate sector as whole was also down 10 percent, while the financial and investment sector shed about 14 per cent.

The index had already dropped 7.6 per cent on Monday and 5.14 per cent on Tuesday to 3,369.15 points, its lowest level in more than two years.

The Abu Dhabi Securities Exchange shed 2.7 per cent at opening, while the Kuwait Stock Exchange, the second largest Arab bourse, dropped 1.1 percent.

The Central Bank of Kuwait on Wednesday cut the discount rate by 1.25 per centage points to 4.5 per cent after local banks complained of lack of liquidity, the KUNA news agency reported.

The Saudi bourse, the largest in the Middle East, which shed almost 16 percent in the past two days, starts trading at at 0800 GMT.

Source: EconomicTimes

Nikkei tumbles 9.4 pc in biggest 1-day fall since 1987

The Nikkei average plunged 9.4 per cent on Wednesday, its biggest one-day drop since the 1987 stock market crash, as fear spread of a global
recession, fueled by expectations of a slide in profits at Toyota Motor Corp and a firmer yen.

Panic over the fast-spreading financial crisis dragged down markets across Asia, with Japanese steelmakers such as Nippon Steel Corp sliding, as the Nikkei set another five-year closing low. "The deteriorating outlook for the economy and the deepening financial crisis are pushing fear to its limit," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Investors want to dump shares as their willingness to take risks has shrunk, but no one wants to buy even if stocks are valued cheaply." The yen climbed to a six-month high against the tumbling US dollar, as investors stampeded away from stocks and risky positions.

Source: EconomicTimes

Slowdown no dampener, 6 cos refile IPO prospectuses

A piece of Chaplinesque wisdom: ‘A tramp, a gentleman, a poet, a dreamer, a lonely fellow, always hopeful of romance and adventure’. The com
edian, had he been alive today, would not have hesitated to add merchant bankers to the list of “perennial hopefuls”.

Expecting a market turnaround in coming months, six companies have re-filed IPO prospectuses with the regulator since June.

Companies like Alkali Metals - currently open for subscription - and Persistent Systems, which had earlier deferred their public issue plans after the market crash in January, are now willing to take a chance in a choppy market.

According to Prime Database, Gini & Jony, Globus Spirits, Mahindra Holidays & Resorts, MBL Infrastructure and MCX are other companies that have re-filed draft red herring prospectuses with the regulator.

“There is no doubt, markets are very challenging in these times. We’ve considered a few possibilities; we'll come out with our issue at the appropriate time. If the market is not favourable for the issue, we might just drop the idea on the whole,” said Enam Financial Consultants merchant banking head S Subramaniam.

According to Kotak Mahindra Capital’s investment banking head S Ramesh, it will be difficult to get a unidirectional movement in equities under current circumstances.

“Issues will have to be launched in phases or 'windows' when the market is less volatile. Current market condition is not favourable for launching issues,” Mr Ramesh added.

Source: EconomicTimes

Australian shares close down 5.0 per cent

Australian shares closed down 5.0 per cent on Wednesday amid fears for the global economy and despite a bigger than expected interest rate cu
t by the central bank the previous day.

The benchmark S&P/ASX 200 dropped 230.6 points to 4388.1, while the broader All Ordinaries was down 228.1 points at 4369.8.

Source: EconomicTimes

London stocks fall 1.64 per cent at open

London's FTSE 100 index of top shares fell 1.64 per cent to 4,529.64 points at the start of trading on Wednesday after Britain announced the
part-nationalisation of eight British banks.

Ahead of the opening, Britain's government Wednesday announced a plan to purchase stakes worth up to 50 bn pounds (64 bn euros, 87 bn dollars) in leading local banks amid an escalating global financial crisis.

Source: EconomicTimes

Rupee falls past 48.58/dlr to six-year low

The rupee tumbled by 54 paise to nearly six-year low of 48.47 against the greenback in morning trading on Wednesday on fears of more capital
outflows due to turmoil in equity markets.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency started weak at 48.22/24 a dollar from its previous close of 47.93/94 a dollar. It later touched a low of 48.47 before being quoted at 48.42/43 a dollar in late morning deals.

Dealers said oil refiners made fresh dollar buying as the Indian unit continued its slide amid unabated capital outflows and absence of dollar selling.

Foreign Institutional Investors continued to pull out funds despite removal of restrictions on Participatory Notes.

Indian benchmark Sensex plunged by 680 points or nearly 6 per cent in the initial fifteen minutes of trading. Asian indices too were down by about four per cent in early trade.

Source: EconomicTimes

Markets shows signs of pull-back, Sensex above 11K

A brief halt of trade in market due to sun-outage brought some relief for the markets as benchmarks recovered from day’s low after witnessing
frenzy of liquidating positions.

At 12:31 pm, Bombay Stock Exchange’s Sensex was at 11,004.07, down 691.17 points or 5.91 per cent. The index recovered over 263 points from lows of 10740.76.

National Stock Exchange’s Nifty was at 3415.55, down 191.05 points or 5.30 per cent after touching an intra-day low of 3329.45.

However, investors continued to off-load second rung stocks. BSE Midcap Index plunged 9.11 per cent and BSE Smallcap Index fell 8.23 per cent.

Among frontline stocks, Sterlite Industries (-15.44%), Satyam Computer (-14.62%), Wipro (-12.33%), Jaiprakash Associates (-12.23%) and ICICI Bank (-12.22%) were under severe pressure.

BSE Metal Index was down 9.54 per cent, BSE Realty Index was down 8.82 per cent and BSE IT Index was 8.59 per cent lower.

There were no gainers in the 30-share index.

Market breadth worsened with 2081 declines against 179 advances on BSE.

Source: EconomicTimes

Frontline banking stocks battered

Frontline banking stocks including HDFC Bank, ICICI Bank and State Bank of India were battered badly on Wednesday, following the severe downt
rend in early trade.

Despite efforts by Reserve Bank of India to improve liquidity in banking system early this week, HDFC Bank and ICICI Bank plunged nearly 10 per cent, while SBI fell 5.5 per cent mid-morning, on heavy selling pressure triggered by worries over worsening financial condition across the globe.

However, HDFC bank and SBI were still trading above their respective 52-week lows, while ICICI Bank has hit a fresh 52-week low.

Selling emerged due to threat of economic recession. Private sector banks were hit badly on expectation that their growth would be hit due to their exposure to unsecured loans, technical analysts said.

At 11:25 am, HDFC Bank was down by11.5 per cent at Rs 998, ICICI Bank weaker by 9.83 per cent at Rs 437.5 and State Bank of India lost 5.79 per cent at Rs 1326.50 on BSE.

Source: EconomicTimes

IT stocks at fresh 52 week lows

IT stocks continued to languish and traded at fresh 52 week lows in the first hour of Wednesday's trade.

Infosys Technologies touched a 52-week low of Rs 1196, while TCS touched a 52-week low of Rs 516.95.

Clearly, with the American economy close to recession, investors are exiting IT stocks ahead of their quarterly results declaration shortly.

Source: EconomicTimes

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.