Market Round Up - 19th Feb 2008

Market Round Up - 19th Feb 2008

FIIs in buying mode

Foreign institutional investors (FIIs) bought shares worth net Rs 1147.50 crore on Friday, 15 February 2008, compared to their selling of Rs 1183.10 crore on Thursday, 14 February 2008.

FII inflow of Rs 1147.50 crore on 15 February 2008 was a result of gross purchases Rs 3898 crore and gross sales Rs 2750.50 crore. The 30-share BSE Sensex rose 348.62 points or 1.96% at 18,115.25 on that day.

FII outflow in February 2008 totaled Rs 315.40 crore (till 15 February 2008). FII outflow in calendar year 2008 totaled Rs 13,351.10 crore (till 15 February 2008).

There are a total of 1,290 FIIs registered with the Securities & Exchange Board of India (Sebi).

CRISIL net profit rises 291.74% in the December 2007 quarter

Net profit of CRISIL rose 291.74% to Rs 27.50 crore in the quarter ended December 2007 as against Rs 7.02 crore during the previous quarter ended December 2006. Sales rose 102.54% to Rs 84.68 crore in the quarter ended December 2007 as against Rs 41.81 crore during the previous quarter ended December 2006.

For the full year, net profit rose 89.06% to Rs 70.67 crore in the year ended December 2007 as against Rs 37.38 crore during the previous year ended December 2006. Sales rose 73.99% to Rs 255.32 crore in the year ended December 2007 as against Rs 146.74 crore during the previous year ended December 2006.

PM confident of sustaining 9% economic growth

On 15 February 2008, Prime Minister Manmohan Singh while addresing the annual meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci) in New Delhi, expressed confidence on sustaining a 9% annual economic growth despite a possible global slowdown.

The minister also cautioned India must be aware that it cannot be completely insulated from chilly global winds that may blow in its direction.

He further said keeping the lid on inflation rate was a priority for his government, but controlling the price-line did not mean growth would be sacrificed.

Amid fears that a hike in petrol and diesel prices might fuel inflation, he said the government has taken an important policy stand to keep inflation under check and ensure that growth is more inclusive. The minister termed inflation as iniquitous tax explaining that it hurts the poor more than the rich. Therefore, it is essential to ensure that the poor are not adversely affected by high inflation, particularly that of basic items of consumption.

Inflation down 4.07% in the week ended 2 February 2008

Annual inflation, based on the wholesale price index, moved down 4.07% in the week ended 2 February 2008 compared with 4.11% in the week ended 26 January 2008. Inflation was 6.58% in the corresponding week a year ago.

The market estimate stood at 4.16%.

Prices of fruits and vegetables decreased 3% and those of arhar, masur and condiments and spicesn reduced 1% each. Prices of jet fuel also eased in the week.

Inflation figure for the week ended 8 December 2008 was revised upwards to 3.845 as against 3.65% reported earlier.

An eventful week for US Market

Lots of events dominated the US during the week that ended on Friday, 15 February, 2008. But the best part was that indices registered gains for the week after, each shedding more than 4% last week. Market closed higher in the first three days of the week but slipped in the later two.

The Dow Jones Industrial Average gained 166 points for the week. Tech - heavy Nasdaq gained 17 points. S&P 500 added 18.7 points.

On Monday, 11 February, it was reported that effective 19 February, 2008, Bank of America and Chevron will be added to the Dow Jones Industrial Average in place of Altria Group and Honeywell respectively. But on that very day, another Dow component AIG led to Dows downslide.

AIG was a major drag on the market on Monday after the company clarified its prior disclosures regarding CDOs saying that it has yet to determine the decline in value of its portfolio, and is still accumulating market data to update its valuation. The stock slipped by 12% and Dow would have ended the day higher, if not for AIG.

But the biggest news of the week was on Tuesday, 12 February, when it came to light that Warren Buffett's Berkshire Hathaway has made an offer to several flagging bond insurers. Berkshire Hathaway has sent an offer to reinsure the municipal bond holdings of Ambac, MBIA and FGIC. Berkshire offered to take a liability of $800 billion, adding $5 billion of its resources. Berkshire pledged there would be no distribution or management fees taken for 10 years. Dow ended the day higher by more than 100 points. (Full Story)

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US Markets- 15th Feb 2008

A bad day for US Market - 15 Feb 2008

US stocks ended sharply lower today, Thursday, 14 February, 2008 after Federal Reserve Chairman, Ben Bernanke expressed his worries about the US economy in the near term. Though market opened modestly higher in the morning, sellers took position quite soon after Bernankes testimony. Each of the ten economic sectors finished the session in negative territory. The day's worst performers were in the Tech sector, followed by Financials.

Before market opened today morning, Jobless claims report for the week ended 9 February came in. The figure fell to 348K from the previous reading of 357K. The number was basically in-line with expectations. Separately, the December trade deficit fell to $58.8 billion from $63.1 billion.

Fed Chairman Bernanke and Treasury Secretary Paulson testified before the Senate Banking Committee this afternoon. Bernanke alluded to the possibility the U.S. is nearing a recession and continued to emphasize downside risks to the economy. He clearly indicated that the Fed will likely continue to ease interest rates, if required. The duo also continued to forecast slow growth. The Fed Chairman stated that financial companies will likely face further write-downs.

The Dow Jones industrial Average ended the day with a loss of 175 points at 12,375. The Nasdaq Composite Index, finished lower by 41 points at 2,332. S&P 500 finished lower by 18.3 points at 1,349.

The Fed Chairman today added that the government's stimulus package and lower rates will get the economy moving by the middle of the year. Market saw his comments as a signal the central bank will cut its key federal funds rate to 2.75% or possibly 2.5% at its upcoming 18 March.

Twenty-nine out of thirty Dow stocks ended in the red today. Chipmaker Intel led the group of Dow laggards which was closely followed by other financial stocks. American Express, JP Morgan, AIG and Citigroup all slipped by more than 2%. Exxon Mobil was the Dows sole winner.

Crude prices ended substantially higher today after Energy Department yesterday reported that that crude inventories for last week rose less than expected. Crude-oil futures for light sweet crude for March delivery today closed at $95.46/barrel (higher by $2.19/barrel or 2.1%) on the New York Mercantile Exchange. The price earlier rose to an intraday high of $95.6. Prices are 65% higher than a year ago.

Volume on the New York Stock Exchange came to 1.4 billion shares, and for every stock on the rise, four posted declines. On the Nasdaq, nearly 2.3 billion traded and declines topped advancers by ratios of more than 3 to 1.

Tomorrow will be a day of economic reports. The New York Empire Manufacturing Survey and Import and Export Prices report coupled with the Industrial Production report are due before tomorrows open. After the opening bell, the University of Michigan Consumer Sentiment Survey is scheduled for release.

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US slowdown can have positive spin-offs for India

US slowdown can have positive spin-offs for India: Kamal Nath

Indian economy will attract more global investments benefiting from the US slowdown but the country should not get "psyched" by the bubble burst there, Commerce and Industry Minister Kamal Nath said on Wednesday.

However, on the cautious side a study has been initiated in his Ministry to assess the impact of US slowdown on the Indian economy.

"It will take a fortnight to do an assessment of what it means to India," he told PTI.

Earlier, the US was the most attractive investment destination for funds from the Middle East and Russia. "All this is changing... India is becoming an important parking lot for investments," Nath said, adding gloomier the US outlook, better it was for India from an investment point of view.

"We must ensure we do not get psyched into the sentimentality of the US downturn. It should not psyche India into pessimism or into an economic impact here," Nath said.

He said the fundamentals of the Indian economy remained strong "but a fine calibration is required to ensure that the momentum continues despite the gloomy economic outlook globally".

Nath said the country's GDP would grow by more than nine per cent in 2007-08 when asked whether he shared the optimism of Finance Minister P Chidambaram. "I agree with the Finance Minister. It (GDP growth) could be higher than nine per cent," he said.

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