What we know about the global financial crisis is that we don't know very much.
A weak end this weekend is the last things bulls expected. The credit market turmoil in the US is spreading across the world like wild fire. Banks and financial firms from different regions are waking up to the nightmare caused by the US contagion. The latest rumblings in the global markets are courtesy French bank BNP Paribas' announcement that it was suspending redemptions in three of its funds due to lack of liquidity. US insurance giant AIG has also issued a warning about the wider fallout of the sub-prime woes. The central banks in Europe, US and Japan have injected cash into their respective banking systems to tide over the crisis in the credit markets.
Wall Street, which had risen in the previous three days, crashed. Markets in Latin America, Europe and Asia (this morning) have followed suit. And, though India doesn't have any direct exposure to the American sub-prime market, the rising globalisation (read FII inflows) puts it at risk to any untoward development in any part of the world. All Indian ADRs have taken a beating in the US. A gap down opening is in store and any gains of the week are likely to be wiped out today. As me mentioned yesterday, forget the indices and headlines and stick to fundamentally sound counters and ride through the turmoil. Weak hearts can take an extended weekend and skip trading for today. Any bounce back (bear trap) should be used to further lighten positions for the time being.
US stocks crumbled under the weight of the nagging concerns linked to the subprime mortgage contagion and hedge fund losses. Financial companies like banks and brokerages suffered their worst fall since 2002.
Citigroup, JPMorgan Chase and Goldman Sachs led the declines after BNP Paribas stopped withdrawals from three funds with exposure to US subprime loans. The Dow Jones Industrial Average fell 387 points and the S&P 500 slid 3%, their worst declines since a Feb. 27 drop.
The S&P 500 slumped 44 points to 1453.09, while the Dow sank 2.8% to 13,270.68. The Nasdaq Composite Index dived 56.49 points, or 2.2%, to 2556.49. An index of stock market volatility rose to a four-year high.
Seeking to calm credit worries, the European Central Bank (ECB) and the Federal Reserve added cash to money markets. However, the move had an opposite impact, with investors resorting to panic selling.
Bond prices rose as jittery investors dumped stocks in favor of the so-called safer haven of Treasurys. Treasury prices surged, sending the yield on the benchmark 10-year note down to 4.77% from 4.88% late on Wednesday.
In currency trading, the dollar surged versus the euro and slumped versus the yen.
Oil prices fell, with US light crude for September delivery slipping 56 cents to settle at $71.59 a barrel on the New York Mercantile Exchange.
Commodity prices slumped across the board, with gold, silver, platinum and copper all losing ground. Metal and mining stocks slipped in tandem.
European shares fell sharply as fears mounted that fallout from US subprime loans could prove to be more serious than initially thought. The pan-European Dow Jones Stoxx 600 index slumped 1.7% to 374.43, following two straight days of gains. Echoing this, the French CAC-40 closed down 2.2% at 5,624.78, the UK's FTSE 100 dropped 1.9% to 6,271.20 and the German DAX declined 2% to 7,453.59.
Latin American markets too slid. Brazil's Bovespa fell 3.3% to close at 53,430.84. Meanwhile, Mexico's IPC fell 2.5% to finish at 29,883.96. Chile's IPSA lost 1.6% to 3,235.36. Argentina's Merval index tumbled 3.3% to 2,087.68.
In other emerging markets, the RTS index in Russia shed 2.4% to 1939 while the ISE National 30 index in Istanbul, Turkey tanked 4.25% to 62,387.
All Asian markets were down sharply this morning, dragging a key regional index to a two-month low, on concern that losses linked to subprime mortgages will spread to other regions of the world.
Macquarie Bank led financial companies lower after the announcement from BNP Paribas. Exporters such as Toyota and Samsung Electronics dropped on concern that mortgage losses will lead to tighter lending conditions and slower global growth.
The Nikkei in Tokyo was down 429 points to 16,740 while the Hang Seng in Hong Kong plunged 681 points to 21,758. The Kospi in Seoul slid 77 points to 1831 while the Straits Times in Singapore was down 113 points to 3300 and the Taiex in Taiwan tumbled 277 points to 8905.
The Australian and New Zealand dollars fell for a second day as investors dumped their high-yielding assets bought with money borrowed in Japanese yen.
What we know about the global financial crisis is that we don't know very much.
A weak end this weekend is the last things bulls expected. The credit market turmoil in the US is spreading across the world like wild fire. Banks and financial firms from different regions are waking up to the nightmare caused by the US contagion. The latest rumblings in the global markets are courtesy French bank BNP Paribas' announcement that it was suspending redemptions in three of its funds due to lack of liquidity. US insurance giant AIG has also issued a warning about the wider fallout of the sub-prime woes. The central banks in Europe, US and Japan have injected cash into their respective banking systems to tide over the crisis in the credit markets.
Wall Street, which had risen in the previous three days, crashed. Markets in Latin America, Europe and Asia (this morning) have followed suit. And, though India doesn't have any direct exposure to the American sub-prime market, the rising globalisation (read FII inflows) puts it at risk to any untoward development in any part of the world. All Indian ADRs have taken a beating in the US. A gap down opening is in store and any gains of the week are likely to be wiped out today. As me mentioned yesterday, forget the indices and headlines and stick to fundamentally sound counters and ride through the turmoil. Weak hearts can take an extended weekend and skip trading for today. Any bounce back (bear trap) should be used to further lighten positions for the time being.
US stocks crumbled under the weight of the nagging concerns linked to the subprime mortgage contagion and hedge fund losses. Financial companies like banks and brokerages suffered their worst fall since 2002.
Citigroup, JPMorgan Chase and Goldman Sachs led the declines after BNP Paribas stopped withdrawals from three funds with exposure to US subprime loans. The Dow Jones Industrial Average fell 387 points and the S&P 500 slid 3%, their worst declines since a Feb. 27 drop.
The S&P 500 slumped 44 points to 1453.09, while the Dow sank 2.8% to 13,270.68. The Nasdaq Composite Index dived 56.49 points, or 2.2%, to 2556.49. An index of stock market volatility rose to a four-year high.
Seeking to calm credit worries, the European Central Bank (ECB) and the Federal Reserve added cash to money markets. However, the move had an opposite impact, with investors resorting to panic selling.
Bond prices rose as jittery investors dumped stocks in favor of the so-called safer haven of Treasurys. Treasury prices surged, sending the yield on the benchmark 10-year note down to 4.77% from 4.88% late on Wednesday.
In currency trading, the dollar surged versus the euro and slumped versus the yen.
Oil prices fell, with US light crude for September delivery slipping 56 cents to settle at $71.59 a barrel on the New York Mercantile Exchange.
Commodity prices slumped across the board, with gold, silver, platinum and copper all losing ground. Metal and mining stocks slipped in tandem.
European shares fell sharply as fears mounted that fallout from US subprime loans could prove to be more serious than initially thought. The pan-European Dow Jones Stoxx 600 index slumped 1.7% to 374.43, following two straight days of gains. Echoing this, the French CAC-40 closed down 2.2% at 5,624.78, the UK's FTSE 100 dropped 1.9% to 6,271.20 and the German DAX declined 2% to 7,453.59.
Latin American markets too slid. Brazil's Bovespa fell 3.3% to close at 53,430.84. Meanwhile, Mexico's IPC fell 2.5% to finish at 29,883.96. Chile's IPSA lost 1.6% to 3,235.36. Argentina's Merval index tumbled 3.3% to 2,087.68.
In other emerging markets, the RTS index in Russia shed 2.4% to 1939 while the ISE National 30 index in Istanbul, Turkey tanked 4.25% to 62,387.
All Asian markets were down sharply this morning, dragging a key regional index to a two-month low, on concern that losses linked to subprime mortgages will spread to other regions of the world.
Macquarie Bank led financial companies lower after the announcement from BNP Paribas. Exporters such as Toyota and Samsung Electronics dropped on concern that mortgage losses will lead to tighter lending conditions and slower global growth.
The Nikkei in Tokyo was down 429 points to 16,740 while the Hang Seng in Hong Kong plunged 681 points to 21,758. The Kospi in Seoul slid 77 points to 1831 while the Straits Times in Singapore was down 113 points to 3300 and the Taiex in Taiwan tumbled 277 points to 8905.
The Australian and New Zealand dollars fell for a second day as investors dumped their high-yielding assets bought with money borrowed in Japanese yen.
Markets wiped off all its gains as BNP Paribas, France's biggest bank, said that it had temporarily suspended redemptions in three of its funds due to the current turmoil linked to the US subprime mortgages. Earlier, after opening on a strong note bulls were unable to hold on to their gains as weakness in the European markets and selling in the index heavyweights like SBI, L&T and Reliance Industries dragged the benchmark Sensex to hit a low of 15062, finally to close at 15100 losing 208points and NSE Nifty dropped 59 point to close at 4403.
All key sectoral indices ended in red with Consumer Durable and Oil & Gas index losing the most. Even the Mid-Cap and the Small Cap indexes fell over 1% each.
Shares of Omaxe started trading at Rs395 on NSE and ended up by 12% to Rs349. The scrip touched an intra-day high of Rs448 and a low of Rs341 and recorded volumes of over 2,00,00,000 shares on NSE. The company's IPO was subscribed 68 times and had fixed issue price at Rs310.
Aban Offshore declined 2% to Rs2905. The company announced that it has received an order worth US$80mn from E&P Company in South Asia for deployment of the new built jack up Rig "Deep Driller 4". The scrip touched an intra-day high of Rs2999 and a low of Rs2890 and recorded volumes of over 90,000 shares on NSE.
Reliance Industries dropped 2% to Rs1841. According to reports the company may set up or buy a refinery in Guatemala before starting fuel sales to the U.S. The scrip touched an intra-day high of Rs1912 and a low of Rs1835 and recorded volumes of over 13,00,000 shares on NSE.
Tata Tea edged lower 0.3% to Rs713. Reports stated that the company was eyeing US-based beverage firm Arizona for a likely $2bn. The scrip touched an intra-day high of Rs738 and a low of Rs710 and recorded volumes of over 5,00,000 shares on NSE.
Apollo Hospitals slipped by 2% to Rs499. Nation's biggest health-care company announced that it would finalize its purchase of a medical business process outsourcing company in the U.S. to expand its presence in that business. The scrip touched an intra-day high of Rs528 and a low of Rs495 and recorded volumes of over 46,000 shares on NSE.
MTNL was down by 0.7% to Rs145. The company announced that it would construct an industrial park on the outskirts of the capital New Delhi. The scrip touched an intra-day high of Rs149 and a low of Rs143 and recorded volumes of over 9,00,000 shares on NSE.
Maruti slipped by 1.8% to Rs826. The maker of half of all cars sold in India increased its export target by 10%. The company also announced its plans to export 200,000 vehicles in 2009-10. The scrip touched an intra-day high of Rs869 and a low of Rs817 and recorded volumes of over 8,00,000 shares on NSE.
Select Steel stocks managed to hold on to their gains. Report stated that the Railways would not impose the 15% peak season surcharge on freight cost. SAIL spurred by over 1.5% to Rs150 and Tata Steel was up 0.6% to Rs654. However, JSW Steel was down 3.6%to Rs631, Hindalco lost 3.5% to Rs156 and National Aluminum edged lower 0.9% to Rs259
Public sector banks also ended on the receiving end. Reports stated that the government could allow them to go for stock split. Bank of India fell up by 3% to Rs254, Bank of Baroda lost 5.5% to Rs296 and PNB declined 1.7%to Rs512.
FMCG stocks also ended with losses. Colgate was down by 2.5% to Rs395, ITC, declined by 2% to Rs163, Nirma slipped by 1.3% to Rs166 and Hindustan Unilever dropped 1.1% to Rs201
Realty stocks also witnessed profit booking led by Parsvnath as the scrip fell over 2%t o Rs336, Sobha was down by 1.8% to Rs836, Akruti dropped over 2.5% to Rs507 and DLF slipped 1% to Rs595.
Selling pressure also dragged the Oil & Gas lower. HPCL slipped by 2.5% to Rs252, IOC was down by 2.5% to Rs399, Reliance Petroleum lost 2.2% to Rs112 and BPCL slipped by 1.2% to Rs320. Even the Oil exploration stocks ended lower Reliance Industries was down by 1.6%t o Rs1845 and ONGC lost over 2.5% to Rs865.
Fund Activity:
FIIs were net buyers of Rs272.3mn (provisional) in the cash segment yesterday. While the local institutions pumped in Rs721.4mn. In the F&O segment, FIIs were net buyers at Rs14.61bn. On Wednesday, foreign funds were net buyers of Rs1.9bn in the cash segment. Mutual Funds were net buyers at Rs3.77bn on the same day.
Major Bulk Deals:
Reliance Capital has bought Etc Networks; Goldman Sachs has picked up Freshtrop Fruits; Macquarie Bank has purchased GTL Infra; Morgan Stanley and Goldman Sachs have sold HFCL; Ubs Securities has bought ICSA; Goldman Sachs has purchased Ion Exchange; Templeton Asset Management has picked up Kirloskar Electric; Abn Amro Bank has sold Nagarjuna Fertilizers; Indiabulls Capital has bought Omaxe; Ubs Securities Pioneer Embroideries; Lotus Capital has sold Prudential Pharma.
Insider Trades:
Bhagwati Banquets and Hotels Limited: Narendra G. Somani, Director has purchased from open market 200000 equity shares of the company on 6th August, 2007
Vishal Exports Overseas Limited: Punjab National Bank has sold in open market 1050000 equity shares of the company on 31st July and 2nd August, 2007
Prithvi Information Solutions Limited: Mr. V Satish Kumar, Managing Director has purchased from open market 50000 equity shares of the company on 2nd August, 2007
Lower Circuit:
Tanla, Kothari Products, IID Forgings, Anant Raj Industries, Bank of Rajasthan, Bag Films, Murli Industries, Marathon Nextgen and BF Utilities.
Upper Circuit:
Balasore Alloys, Atlanta, HOV Services, Jai Corp and Vakran Software.
Delivery Delight (Rising Price & Rising Delivery):
Cipla, Dr. Reddy's, Mphasis, Nagarjuna Construction, NIIT and Wipro.
Abnormal Delivery:
Pfizer, Pratibha Industries, GSFC, CESC, PTC, AIA Engineering, Adlabs, Titan, Nicholas Piramal, Opto Circuits and Corporation Bank.
Major News & Announcements:
Aban Offshore gets order worth $80mn
Ahluwalia Contracts gets Rs6.88bn project
Jai Corp has announced 1: bonus share issue
NTPC gets approval for new coal field
BHEL gets contract worth Rs29bn
Ambuja Cements suspends operations at Ambujanagar due to floods
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