No Sign Of Recovery- March 5, 2009

After a positive opening, shortly the benchmark indices are surrounded by pessimistic bearish bias as cut in interest rates by RBI have failed to erase economic worries. Mounting fears over financial institutions, news about the ICICI Bank''s on Russian exposure have fuelled the negative sentiments over the market. However, bank has later admitted that there are no losses in Russia. Besides, the selling interest has emerged in Consumer Durable, Oil & Gas and Power stocks whereas buying is seen in Metal, Realty and FMCG sectors. In addition, BSE Consumer Durable and Oil & Gas indices are leading the laggards list with the dip of 1.05% and 0.76% respectively, while the BSE Metal and Realty are among the gainers with the gains of 1.05% and 0.76% respectively. Overall the market breadth is negative as 898 stocks are trading in red while 882 stocks are in green territory.

At 11.30 AM, the BSE Sensex is down by 93.71 points at 8,352.77 whereas NSE Nifty declined by 27.34 points at 2,617.85. The BSE Mid Cap trading up by 3.36 points at 2,651.73 whereas BSE Small cap down by 2.77 points at 2,987.39 respectively.

Losers from the BSE Sensex Pack are Ranbaxy down by (4.05%) to Rs. 152.7, along with Tata Power by (3.23%) to Rs. 652.55, Bharti Airtel Ltd by (2.31%) at Rs. 586.75, ITC Ltd by (2.01%) at Rs. 170.2, Jaiprakash Asso by (1.91%) at Rs. 64.2 and NTPC by (1.67%) at Rs. 176.8.

Losers from the NSE Nifty Pack are Ranbaxy down by (4.06%) to Rs.152.6, along with Tata power by (3.02%) to Rs. 652.5, ITC Ltd by (2.25%) at Rs. 169.8, Bharti Airtel by (2.17%) at Rs. 587.6, BPCL by (2.13%) at Rs. 378.9 and HUL by (2.12%) at Rs. 235.75.

BSE Realty is trading on positive notes with the hike of (1.90%) or 26.04 points at 1,396.46. The top gainers in the index are Orbit Co up by (3.83%) to Rs. 46.10 along with Mahindra Life by (3.12%) to Rs.92.65, Indiabul Real by (2.50%) by Rs. 92.40, Housing Dev by (2.06%) to Rs. 71.95, Parsavnath by (1.98%) at Rs.33.50. followed by Phoenix Mill by (1.96%) to Rs. 49.50.

BSE Power is trading lower by (1.20%) or 19.98 points at 1,649.92. The major losers are Tata Power trading down (3.23%) to Rs. 652.55, along with NTPC by (1.67%) at Rs. 176.8, BHEL by (1.54%) at Rs.1312.15, Crompton Greaves by (1.53%) at Rs. 119, followed by Siemens Ltd by (0.87%) to Rs.204.

Govt to Float Special Bonds For SBI Rights

NEW DELHI: The government will issue special securities worth Rs 10,000 crore to subscribe to the rights issue of the State Bank of India (SBI). The bonds will reflect in the ways and means advances of the government. The dividend from SBI to the government will accrue to a self-liquidating fund, a source said.

“The special securities will be issued by March 18,” a government source said. As a part of the capital infusion plan for SBI, the government, that holds 59% in SBI, will subscribe to an equal amount of shares in the rights issue.

“The government will have to show that Rs 10,000 crore have to be infused into SBI. This it will do by issuing special securities. A fund will be created, which will start accruing dividends from SBI to the government,” a source said. The government meets temporary mismatches between receipts and expenditure through ways and means advances provided by the Reserve Bank of India (RBI).

Earlier, the government had planned to give the securities SLR status, but it will now issue special marketable bonds. SBI would have used the bonds to meet its statutory liquidity ratio (SLR), which is 25% of the total deposits. SLR is the amount a bank has to maintain in cash, gold or government securities. Last week, the bank informed the Bombay Stock Exchange the change in the status of the securities. The government decided on this following RBI advise.

“The government, in a letter dated February 14, informed SBI that the matter was revisited by the government in the light of suggestions received by it from RBI and it was decided that the subscription by the government to the rights issue would be through issuance of special marketable government securities,” the bank said in a statement to the stock exchange.

SBI is offering one share for every five held in the rights offer which will close on March 3. The bank will raise Rs 16,700 crore through the issue priced at Rs 1,590 a share with a face value Rs 10 each. This is the first rights issue by a public sector bank. The government holds 59.73% in SBI and retail investors hold 5.96%.

Rights issue allows shareholders to acquire additional shares at a price that is normally lower than the market price of the old shares. The SBI scrip closed at Rs 2,263.65 on the BSE on Tuesday.

The bank needs to raise resources to comply with additional capital requirements under Basel II norms, which are guidelines for banks to measure risk. The funds are also being raised for additional provisioning required under the revised accounting norms for employees’ retirement benefits known as accounting standard-15 (AS-15).

Mixed Effect Of RBI Policy On Autos, Banks, Realty

MUMBAI: The Indian stock market was more or less steady a day after the third quarter monetary policy review. In fact, equities opened higher despite mixed cues from Asian markets. But have since eased.

Reserve Bank of India's decision to hold its key rates, citing inflationary concerns, has had a mixed impact on rate sensitive sectors. Banking shares were steady early in the trade and realty shares higher, but automobile stocks were found flagging.

The indices--benchmark and sector--have since retreated further. The BSE Bankex Index was down 0.59 per cent at 11,054.29 and Realty Index weaker by 0.72 per cent at 10,326.11, while the BSE Auto Index down 1.82 per cent at 4,834.21.

In the banking sphere, the losses have been muted, maximum being 2.4 per cent on Bank of Baroda, while others were down in the range of 1.40-0.14 per cent. The second largest public sector, BoB is scheduled to announce its third quarter results today. Other losers comprised Axis Bank (down 1.40%), Kotak Mahindra Bank (1.26%), ICICI Bank (1.17%), Andhra Bank (1.13%), Bank of India and Karnataka Bank (both down 0.85%), Centurion Bank of Punjab (0.78%), Indian Overseas Bank (0.70%), Federal Bank (0.14%).

The Bankex had touched a high of 11,179.98 earlier in the day, while the low so far was 10,981.13.

Among automobile shares, Bajaj Auto led declines, down 3.94 per cent at Rs 2,285. Mahindra & Mahindra was weaker by 2.44 per cent, followed by Maruti Suzuki down 2.32 per cent, while Escorts, Tata Motors and TVS Motors were down nearly 2 per cent. Hero Honda and MRF lower by 1.4-0.90 per cent.

The BSE Auto Index had made a high of 4,944.25 before sliding to 4,816.32 earlier in the day.

In the realty space, barring Mahindra Lifespaces and India Bulls Realty, all others were down 2-1 per cent. Mahindra Lifespaces and Inddia Bulls Realty were down 3.14 per cent each.

The high for the Realty Index was 10,527.89, while the low 10,279.41.

Sensex up ahead of RBI meet

Mumbai (PTI): The Bombay Stock Exchange benchmark Sensex rose 314 points in early trade following revival of buying at existing lower levels on expectations that the RBI may cut interest rates in its policy review meeting Tuesday.

The 30-share index, Sensex, which lost 209 points Monday, moved up by 314.29 points to 18,467.07 in the first five minutes of trade.

The National Stock Exchange's index, Nifty, increased by 102.70 points to 5,376.80 as most of the heavy-weight stocks gained fresh ground.

Buying activity picked up on expectations that the apex bank may slash interest rates in its policy review meeting later Tuesday, following the footsteps of US counterpart, marketmen said.

The US Federal Reserve had last week cut interest rates by 75 basis points.

They added firm global trend also boosted the market sentiment.

Rupee May Head Back To High, Watching RBI

MUMBAI: The rupee is seen up on Friday as gains in global stock markets may lift foreign buying of local shares, a key driver for the currency last year, but RBI intervention is expected to block sharp gains.

The partially convertible rupee ended at 39.285/295 per dollar on Thursday, a shade softer than Wednesday's close of 39.28/29 but within striking distance of a decade-high of 39.16 hit in November.

Reliance Power is set to raise up to $3 billion in an initial public offer next week, which would be India's biggest-ever IPO, and dealers expect a net of about $1 billion to flow in from foreign funds, which should boost the rupee.

US stocks continued to recover from a poor start to the year on Thursday, helped by assurances of further interest rate cuts by the Federal Reserve.