Prime Minister Dr Manmohan Singh today, 21 July 2008, morning moved the confidence motion in Lok Sabha. Earlier, Dr Singh asserted that his government will win the vote of confidence
The 30-share BSE Sensex gained 214.64 points or 1.57% at 13,850.04. At day's high of 13,878.88, the index gained 243.48 points in the mid-afternoon trade. The index shed 54.21 points at the day's low of 13,581.19, it hit in the early trade.
The broader based S&P CNX Nifty advanced 67.25 points or 1.64% at 4159.50. Nifty July 2008 futures were at 4164, at a premium of 4.5 points as compared to spot closing.
As per provisional data released by the stock exchanges after trading hours, foreign funds today, 21 July 2008, sold shares worth a net Rs 62.22 crore. Domestic funds sold shares worth a net Rs 230.96 crore.
The BSE Mid-Cap index was up 0.34% at 5,256.99, while the BSE Small-Cap index was down 0.28% at 6,437.98. Both these indices underperformed the Sensex.
The market breadth was weak on BSE with 1169 shares advancing as compared to 1362 that declined. 85 remained unchanged.
The BSE clocked a turnover of Rs 4387 crore as against Rs 5,330.45 on Friday, 18 July 2008. NSE's futures & options (F&O) segment turnover was Rs 43942.21 crore, which was lower than Rs 52794.98 crore on Friday, 18 July 2008.
Sensex has risen 1274.24 points or 10.1% in last three trading sessions from its close of 12575.80 on 16 July 2008. Sensex is down 6436.95 points or 31.72% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 7356.73 points or 34.69% away from its all-time high of 21,206.77 struck on 10 January 2008.
Coming back to today's trade, the top gainers from the Sensex were Cipla (up 5.20% at Rs 226.45), HDFC Bank (up 4.78% at Rs 1082.95), Ranbaxy Laboratories (up 4.74% at Rs 458.20), NTPC (up 4.70% at Rs 181.45), and Maruti Suzuki (up 3.92% at Rs 648.20).
Top Sensex losers were, Satyam Computer (down 4.14% at Rs 367.10), Ambuja Cements (down 2.17% at Rs 81), Bharat Heavy Electricals (down 1.56% at Rs 1506.45), Larsen & Toubro (down 1.26% at Rs 2513.05), Bharti Airtel (down 0.44% at Rs 798.45).
India's second largest listed telecom services provider by sales Reliance Communication rose 2.62% to Rs 446.60, after it called off tie-up talks with South Africa's MTN Group, Africa's biggest mobile phone group, citing legal issues.
India's largest private sector firm by market capitalization and oil refiner Reliance Industries rose 1.92% to Rs 2,153.30.
India's second largest software exporter by sales Infosys Techologies rose 0.88% to Rs 1,561.80.
Banking shares were in demand. Bank of Baroda (up 6.95% at Rs 230.95), Union Bank of India (up 6.16% at Rs 122.30), Punjab National Bank (up 4.57% at Rs 460.60), State Bank of India (down 3.67% at Rs 1,347.45), and Axis Bank (up 1.57% at Rs 697.60), rose. The BSE Bankex outperformed the Sensex, rising 3.88% at 6,428.71.
India's largest private sector bank by assets ICICI Bank rose 4.29% to Rs 644.10.
Capital goods shares declined. Kirloskar Brothers (down 7.69% at Rs 154.85), Bharat Electricals (donw 2.53% at Rs 1,025.80), Cromton Greaves (down 1.86% at Rs 224.50), and Thermax (down 1.01% at Rs 382.70), declined. The BSE Capital Goods index underperformed the Sensex, falling 0.75% to 11,062.86.
Infrastructure Development Finance Company (IDFC) slumped 14.81% to Rs 93.45 on a huge volume of 1.33 crore shares on BSE. The stock slumped on concerns it may have to raise additional capital of $250 millionl. A central bank requirement for finance firms to increase capital to 15% of assets, from 10%, will force IDFC to sell stock, Morgan Stanley said in a note. As per reports, ratings companies have asked IDFC to maintain its leverage ratio at five times its capital if it wants to keep its triple A credit rating.
Smart cards maker Bartronics India spurted 9.95% to Rs 171.90 after posting 220.37% surge in net profit to Rs 15.27 crore on 165.71% increase in total income to Rs 679.32 crore in Q1 June 2008 over Q1 June 2007.
Mortgage lender LIC Housing Finance soared 8.61% to Rs 257.35 after it reported 72.74% growth in net profit to Rs 104.66 crore on 34.68% rise in total income to Rs 622.01 crore in Q1 June 2008 over Q1 June 2007.
Farm vehicles maker Punjab Tractors advanced 10.98% to Rs 221.85 after posting 580% surge in net profit to Rs 22.44 crore in Q1 June 2008 over Q1 June 2007.
Reliance Capital clocked the highest turnover of Rs 245.94 crore on BSE. Reliance Industries (Rs 205.07 crore), Larsen & Toubro (Rs 196.58 crore), Reliance Communication (Rs 139.72 crore), and IDFC (Rs 128.12 crore), were the other turnover toppers on BSE in that order.
IDFC reported a highest volume of 1.33 crore shares on BSE. Reliance natural Resources (88.94 lakh shares), Reliance Petroleum (64.81 lakh shares), IFCI (61.55 lakh shares), and First Winner Industries (59.87 lakh shares), were the other volume toppers on BSE in that order.
European markets, which opened lower, turned positive as the session proceeded. Key benchmark indices in UK, Germany and France were up by between 0.17% to 0.89%.
Asian stocks rose sharply on Monday, 21 July 2008, as concerns about the global impact of a weak US financial sector eased after Citigroup, the largest US bank on Friday, 18 July 2008, reported a second-quarter loss of $2.5 billion, which was smaller than expected. Key benchmark indices in Hong Kong, China, South Korea, Singapore and Taiwan were 2.51% to 3.97%. Markets in Japan were closed for a public holiday.
US stocks finished mixed on Friday, 18 July 2008. Favorable results from No. 1 US bank Citigroup and technology leader IBM drove the Dow Jones Industrial Average higher, but the Nasdaq fell on disappointing results from tech icons Google and Microsoft. The Dow closed up 49.91 points, or 0.44%, at 11,496.57. The Standard & Poor's 500 Index added 0.34 points, or 0.03%, at 1,260.66. The Nasdaq Composite Index fell 29.52 points, or 1.28%, at 2,282.78.
Crude prices edged up on Monday, 21 July 2008 but remained below $130 a barrel as talks between world powers and nuclear ambitious Iran, the fourth largest oil exporter, proved inconclusive.
The government is seeking a vote of confidence in parliament in a special two-day session of the parliament starting today after it was reduced to minority following withdrawal of support of Left parties early this month. Voting will take place tomorrow.
Media reports suggest that the government has wafer-thin edge of winning the trust vote. If the government wins the confidence vote it will continue to be in power. If it the government loses the trust vote, the president could ask the prime minister to continue in power as a caretaker government. The Election Commission of India will then fix a date and mid-term polls will be held.
Another possibility in case the government loses the trust vote is that the opposition may try to form an interim government before the scheduled May 2009 election. However, this is an unlikely scenario given that the Bharatiya Janata Party (BJP) has said it would prefer elections if the government falls
A section of the market reckons that the government may push forward economic reforms if it survives the vote of confidence in parliament. There has been a virtual halt in reforms process in the last four years due to strong opposition to reforms from Left parties. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank
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