Key benchmark indices opened on a weak note as weak global cures played a spoilsport. US stocks fell sharply on Friday, 30 October 2009 and Asian stocks fell on Monday, 2 November 2009. Indian markets were closed on Monday on account of a public holiday. The BSE 30-share Sensex was down 90.96 points or 0.57% to 15,805.32 after hitting a high of 15,887.83 and low of 15,761.73.
The market breadth was negative. Telecom shares extended recent slide after Bharti Airtel announced per second billing plan and Reliance Communications reported poor earnings. However auto stocks gained on the back of robust monthly sales.
Asian markets were trading mixed today, 3 November 2009. Key benchmark indices in Taiwan, China, Singapore were up by between 0.05% and 1.10%. However indices in Hong Kong and South Korea slipped 0.62% and 0.38% respectively.
Australia's central bank on Tuesday raised its key policy rate for a second month in a row, hiking it by a quarter of a percentage point to 3.50%, as expected. The Reserve Bank of Australia also hinted at further rate hikes in the future, with Governor Glenn Stevens saying in a statement that, although inflation should continue to moderate in the near term, it will probably not fall as far as earlier thought.
Japanese markets were closed today, 3 November 2009, for a national holiday.
Asian markets had dropped on Monday, 2 November 2009 following a sharp sell-off in US markets on Friday, 30 October 2009 in which the Dow Jones industrial average had tumbled over 250 points.
But Wall Street edged higher on Monday, 2 November 2009 as manufacturing expanded more than expected last month. The Dow Jones industrial average gained 76.71 points, or 0.8%, to 9,789.44. The S&P 500 index added 6.69 points, or 0.7%, to 1,042.88, and the Nasdaq Composite index rose 4.09 points, or 0.2%, to 2,049.20.
Among the economic data, the ISM reported its gauge of manufacturing activity at 55.7 in October 2009, the third straight month of growth and the highest reading since April 2006. Also pending-home sales rose to their highest level in nearly three years in September 2009, boosted by the first-time homebuyer's tax credit. Also construction spending rose 0.8% in the month of September.
The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian companies, fell to 54.5 in October 2009 from 55 in September 2009. A reading above 50 means activity expanded during the month. Growth in domestic new orders may be beginning to suffer from the impact of a drought, but stronger foreign demand was helping to cushion the blow, HSBC senior Asian economist Robert Prior-Wandesforde said.
Trading in US index futures indicated Dow could rise 16 points at the opening bell today, 3 November 2009.
Back home, the Reserve Bank of India at its monetary policy review on 27 October 2009 left its key rates unchanged, but raised the wholesale price-based inflation projection for end-March 2010 sharply to 6.5% with an upward bias, from 5 % earlier.
The IMF said on 29 October 2009 the economies of India, China and Australia were recovering especially rapidly, suggesting it notices growing pressures for authorities there to tighten monetary policy ahead of others in the region. It called the three economies special cases, while adding a tightening of monetary policy seemed unnecessary elsewhere in the region in the near future.
It also advised Asian central banks not to raise interest rates only to calm asset price growth, saying lifting rates ahead of advanced economies could attract carry trade-type capital inflows and aggravate asset price pressures.
The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.
Unlisted Reliance Infratel announced on 22 September 2009 its intention to raise Rs 5,000 crore from the primary market. Divestment of state-run firms by the government may also increase the supply of paper in the market.
The government recently approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes.
The government has approved a follow-on public offering of 20% of state run Steel Authority of India, the steel minister said on 21 October 2009. The Government of India owns nearly 86% of Sail. Also the government gave its approval for 15% follow on public offer for Rural Electrification Corporation on 29 October 2009.
As per provisional data, foreign funds bought stocks worth a net Rs 576.05 crore on 30 October 2009 whereas domestic funds bought equities worth a net Rs 592.93 crore.
At 10:25 IST, the BSE 30-share Sensex was down 90.96 points or 0.57% to 15,805.32. The Sensex moved in a band of 15,887.83 and 15,761.73 so far in the day.
The S&P CNX Nifty was down 35.30 points or 0.75% to 4676.40
The market had remained closed on Monday, 2 November 2009, on account of Guru Nanak Jayanti.
The market breadth, indicating the overall health of the market was negative. On BSE, 1022 shares declined as compared with 734 that rose. A total of 46 shares remained unchanged.
The total turnover on BSE amounted to Rs 823 crore by 10:25 IST
Among the 30-member Sensex pack, 17 gained while the rest of them rose.
Telecom shares extended recent fall on concerns about price war in the sector has rattled telecom stocks in the past few weeks. The mobile industry in India, the world's fastest-growing major market, is becoming increasingly competitive, with existing players cutting rates to attract subscribers before four new firms start operation this year.
India's second largest telecom company by sales Reliance Communications plunged 6.28% to Rs 164.65 and was the top loser from the Sensex pack. The company reported 51.66% decline in its consolidated profit at Rs 740 crore in Q2 September 2009 over Q2 September 2008. Consolidated revenue increased to Rs 5,703 crore in the quarter under review from Rs 5,645 crore in the year-ago period. The result was declared on 31 October 2009.
India's largest telecom company by sales Bharti Airtel lost 1.08%. The company's net profit rose 43.10% to Rs 2296.94 crore on a 7.5% increase in total income to Rs 8927.10 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.
Singapore Telecommunications has bought additional 1.52% stake in Bharti Airtel and will pay up to Rs 3008.4 crore in three installments ranging over 18 months. In a notice to Singapore Stock Exchange, SingTel said it has entered into a conditional share purchase agreement with Bharti Group entity to buy an additional 7,30,000 issued shares in Bharti Telecom, a promoter company of Bharti Airtel.
Also joining the tariff war, Bharti Airtel on Friday introduced a `pay per second` plan across the country. In this plan, called Freedom Plan, Airtel customers will be charged one paise per second for all local and STD calls to Airtel numbers and 1.20 paise per second for local and STD calls to other networks.
India's largest firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped 1.70% to Rs 1897.05. The company had reported a 6.4% fall in net profit at Rs 3,852 crore despite 6% rise in total income to Rs 47,476 crore in Q2 September 2009 over Q2 September 2008. Refining margins more than halved to $6 a barrel from $13.3 a barrel a year earlier. The results were announced after market hours on Thursday, 29 October 2009
The government on 27 October 2009 allocated additional 50 million cubic metres a day (mmscmd) of gas from Reliance Industries-operated east coast block D6. Power plants and refineries will get the bulk of Reliance Industries' gas from the Krishna-Godavari basin beyond the previously allotted 40 million metric standard cubic metres per day (mmscmd).
The empowered group of ministers (eGoM) also made some allotments for Reliance's petrochemical plants and refineries.
Auto stocks rose after data showed automobile sales rose 29.89% to 154,476 units in October 2009 over October 2008 as softened lending rates and attractive benefits offered by companies pushed the aggregate sales of the industry.
India's largest truck marker by sales Tata Motors rose 1.95% to Rs 576 after total sales grew 18% to 20,011 units last month against 17,014 units in the same period last year. It was the top gainer from the Sensex pack.
India's largest small car marker by sales Maruti Suzuki India rose 0.46% after total sales grew 21% to 71,551 units in October 2009, compared with 59,127 units posted in the same month a year ago.
India's largest tractor maker by sales Mahindra & Mahindra rose 1.31% after its overall sales climbed 32% in October this year to 18,410 units against 13,935 units in the same month last year.
India's largest bank by net profit State Bank of India fell 1.20%. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008.
India's largest FMCG company by sales Hindustan Unilever dropped 4.40% after net profit fell 22% to Rs 429 crore on 5% rise in net sales to Rs 4,228 crore in the quarter ended September 2009 over the quarter ended September 2008.
India's largest private sector power generation firm by sales Reliance Infrastructure slipped 0.69%. The company on Saturday, 31 October 2009, reported 6.2% rise in net profit to Rs 306.90 crore in Q2 September 2009 over Q2 September 2008. Total income rose to Rs 2,812.82 crore from Rs 2,674.86 crore in the same period last year.
India's largest private sector aluminum maker by sales Hindalco Industries slumped 5.49%. The company on Saturday reported a 52% drop in its standalone net profit to Rs 344 crore on 13.4% fall in net sales to Rs 4,917 crore in Q2 September 2009 over Q2 September 2008.
Key benchmark indices extended losses for the fifth consecutive session on Friday, 30 October 2009 following weak global cues. The BSE 30-share Sensex lost 156.44 points or 0.97% to 15,896.28 and the S&P CNX Nifty fell 38.85 points or 0.82% to 4711.70.
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