Tuesday, August 19, 2008
Trading volume in Hong Kong was relatively thin, suggesting the market could see more downside, analysts said.
Chinese commodity producers were also hit, with China Coal dropping 4.33 per cent and Angang Steel falling 3.77 per cent.
In China, the key Shanghai Composite Index fell 5.3 per cent to 2,319.87 - its lowest close in 20 months - amid a sweeping sell-off of large-capitalized airlines, refiners and other financial shares. Analysts said the sell-down reflected disappointment over a lack of new market support from the government.
Online comments seen Monday that summarized a weekend discussion between government regulators and reporters for state-run media suggested the authorities ``would not take any move to save the market,'' said Zhai Peng, an analyst at Guotai Junan Securities in Shanghai.
``Obviously, the market was very disappointed with this,'' Zhai said. ``This is far below investors' expectations.''
Airlines, which reported falling passenger traffic last month partly due to visa restrictions related to the Olympics, were among the biggest decliners. China Southern Airlines dropped 9.9 per cent, while rivals Air China and China Eastern Airlines both plunged by the 10 per cent daily limit.
Shanghai's biggest listed share, PetroChina, dropped 4 per cent and Petroleum & Chemical Corp., or Sinopec, slumped 6 per cent.
The market has also suffered from liquidity pressure as billions of newly tradable shares have begun trading this month. The strain was seen in the relatively modest performance by China Southern Locomotive, whose 3 billion shares began trading Monday in Shanghai after an initial public offering that, along with a dual listing in Hong Kong, raised nearly US$1.5 billion.
China Southern Locomotive's shares peaked at 83 per cent above their IPO price of 2.18 yuan in early trading but later fell back, closing at 3.45 yuan - or 58 percent higher than the IPO value.
Elsewhere, Taiwan's benchmark lost 2.7 per cent, South Korea's Kospi slipped 0.3 per cent and India's Sensex index was 0.5 per cent lower.
In currencies, the dollar stayed steady against the yen Monday, trading at 110.24 yen in the afternoon from 110.49 yen late Friday. The euro bought US$1.4719 compared with US$1.4687.
SHANGHAI-CHINA: Asian markets were mostly lower Monday, as mainland Chinese shares sank to a 20-month low on heavy selling by investors disappointed over a lack of new market-boosting measures.
That, along with a rebound in oil prices, help to drag down stocks in Hong Kong, Taiwan, South Korea and Singapore.
However in Tokyo, the region's biggest market, the benchmark Nikkei 225 index added 1.1 per cent to close at 13,165.45, as real estate and bank issues climbed.
Mitsubishi UFJ Financial Group gained 3.3 per cent. Sumitomo Mitsui Financial Group added 2.49 per cent. After the markets closed, MUFG said UnionBanCal had agreed to a share price of US$73.50 for the 35 per cent of the US bank that Mitsubishi UFJ doesn't own. The deal is worth about US$3.5 billion.
Major bank stocks had lost ground last week, sapped by lethargic earnings and rising credit costs following recent bankruptcies among midsize real estate firms.
A relatively strong dollar against the yen boosted most major exporters, including Toyota Motor Corp., Sony Corp. and Canon Inc.
Top property developer Mitsui Fudosan Co. rose 2.2 per cent. The benchmark index in Australia was the only other major stock measure to gain, eking out a rise of less than 0.1 per cent.
Throughout most of the region worries over the global economic outlook and a rebound in oil prices helped pull share prices lower.
Hong Kong's blue chip Hang Seng Index fell 1.1 percent to close at 20,930.67 in weak trading. ``We're trying to find the bottom,'' said Alex Tang, head of research at Core Pacific-Yamaichi. ``How far it will go is anybody's guess.''
Most sectors suffered losses. Foxconn International Holdings, the leading contract mobile phone maker, plunged 24.06 percent after issuing a profit warning last week.
Retail goods and textile exporter Li & Fung lost 0.21 per cent on worries about slumping demand overseas. Upstream producer CNOOC was down 1.87 per cent and Cheung Kong dropped 1.5 per cent.
That, along with a rebound in oil prices, help to drag down stocks in Hong Kong, Taiwan, South Korea and Singapore.
However in Tokyo, the region's biggest market, the benchmark Nikkei 225 index added 1.1 per cent to close at 13,165.45, as real estate and bank issues climbed.
Mitsubishi UFJ Financial Group gained 3.3 per cent. Sumitomo Mitsui Financial Group added 2.49 per cent. After the markets closed, MUFG said UnionBanCal had agreed to a share price of US$73.50 for the 35 per cent of the US bank that Mitsubishi UFJ doesn't own. The deal is worth about US$3.5 billion.
Major bank stocks had lost ground last week, sapped by lethargic earnings and rising credit costs following recent bankruptcies among midsize real estate firms.
A relatively strong dollar against the yen boosted most major exporters, including Toyota Motor Corp., Sony Corp. and Canon Inc.
Top property developer Mitsui Fudosan Co. rose 2.2 per cent. The benchmark index in Australia was the only other major stock measure to gain, eking out a rise of less than 0.1 per cent.
Throughout most of the region worries over the global economic outlook and a rebound in oil prices helped pull share prices lower.
Hong Kong's blue chip Hang Seng Index fell 1.1 percent to close at 20,930.67 in weak trading. ``We're trying to find the bottom,'' said Alex Tang, head of research at Core Pacific-Yamaichi. ``How far it will go is anybody's guess.''
Most sectors suffered losses. Foxconn International Holdings, the leading contract mobile phone maker, plunged 24.06 percent after issuing a profit warning last week.
Retail goods and textile exporter Li & Fung lost 0.21 per cent on worries about slumping demand overseas. Upstream producer CNOOC was down 1.87 per cent and Cheung Kong dropped 1.5 per cent.
Market breadth turns negative
India's rupee fell for a fifth day, the longest losing streak in more than eight months, on speculation refiners stepped up purchases of crude oil. The rupee weakened 0.5% to 43.29 per dollar.
Grasim Industries (down 4.96% to Rs 1,954.45), Ambuja Cements (down 2.72% to Rs 82.40), ACC (down 1.98% to Rs 597.70), Sterlite Industries (down 1.75% to Rs 609.35) edged lower from the Sensex pack.
Hindustan Unilever (up 1.63% to Rs 242.80), Bharat Heavy Electricals (up 1.21% to Rs 1,729.50), Larsen & Toubro (up 1.19% to Rs 2,692), Jaiprakash Associates (up 0.61% to Rs 173.35) edged higher from the Sensex pack.
India’s largest aluminum producer by sales Hindalco Industries fell 2.95% to Rs 131.80. The company has fixed the price of its rights issue at Rs 96 per share, at a premium of Rs 95 per share. The equity shares are of a face value of Rs 1 per share. The board of directors of the company at its meeting on Thursday fixed the ratio of rights entitlement at three equity shares for every seven equity shares held by the shareholders. The record date for the rights issue has been fixed as 5 September 2008, a company release said.
India’s second largest telecom services provider by sales Reliance Communications was down 1.45% to Rs 417.95. The company added 1.75 million wireless users in July 2008, taking its total user base to 52.5 million, the company said on Thursday, 14 August 2008.
Bartronics India rose 2.35% to Rs 180.45 after company won a contract worth over Rs 400 crore from the Employees State Insurance Corporation for providing smart cards
Inflation is expected to accelerate further after the Prime Minister Manmohan Singh's cabinet on 14 August 2008 approved an average 21% salary increase for about 50 lakh government employees. The higher wages will cost the government Rs 3.38 lakh crore this year.
The Prime Minister added that various steps are being taken to bring inflation under reasonable control. He blamed the surge in prices to a 16-year high this month to higher global costs of fuel and food.
Meanwhile the Finance Ministry allowing private sector managed provident fund and superannuation trusts to have greater exposure in the stock markets, may boost the market sentiment. They can invest up to 15% of their investible funds in shares on which derivatives are available in the BSE or NSE.
Asian markets were trading lower today, 18 August 2008. China's Shanghai Composite, Hong Kong's Hang Seng, Taiwan's Taiwan Weighted, Singapore's Straits Times, South Korea's Seoul Composite were down by between 0.28% to 4.06%. However, Japan's Nikkei rose 1.12%.
US markets ended mixed on Friday, 15 August 2008. The Dow Jones Industrial Average advanced 43.97 points, or 0.38%, to 11,659.90. The S&P 500 index gained 5.26 points, or 0.41%, to 1,298.20. However the Nasdaq Composite index declined 1.15 points, or 0.05%, to 2,452.52.
India's rupee fell for a fifth day, the longest losing streak in more than eight months, on speculation refiners stepped up purchases of crude oil. The rupee weakened 0.5% to 43.29 per dollar.
Grasim Industries (down 4.96% to Rs 1,954.45), Ambuja Cements (down 2.72% to Rs 82.40), ACC (down 1.98% to Rs 597.70), Sterlite Industries (down 1.75% to Rs 609.35) edged lower from the Sensex pack.
Hindustan Unilever (up 1.63% to Rs 242.80), Bharat Heavy Electricals (up 1.21% to Rs 1,729.50), Larsen & Toubro (up 1.19% to Rs 2,692), Jaiprakash Associates (up 0.61% to Rs 173.35) edged higher from the Sensex pack.
India’s largest aluminum producer by sales Hindalco Industries fell 2.95% to Rs 131.80. The company has fixed the price of its rights issue at Rs 96 per share, at a premium of Rs 95 per share. The equity shares are of a face value of Rs 1 per share. The board of directors of the company at its meeting on Thursday fixed the ratio of rights entitlement at three equity shares for every seven equity shares held by the shareholders. The record date for the rights issue has been fixed as 5 September 2008, a company release said.
India’s second largest telecom services provider by sales Reliance Communications was down 1.45% to Rs 417.95. The company added 1.75 million wireless users in July 2008, taking its total user base to 52.5 million, the company said on Thursday, 14 August 2008.
Bartronics India rose 2.35% to Rs 180.45 after company won a contract worth over Rs 400 crore from the Employees State Insurance Corporation for providing smart cards
Inflation is expected to accelerate further after the Prime Minister Manmohan Singh's cabinet on 14 August 2008 approved an average 21% salary increase for about 50 lakh government employees. The higher wages will cost the government Rs 3.38 lakh crore this year.
The Prime Minister added that various steps are being taken to bring inflation under reasonable control. He blamed the surge in prices to a 16-year high this month to higher global costs of fuel and food.
Meanwhile the Finance Ministry allowing private sector managed provident fund and superannuation trusts to have greater exposure in the stock markets, may boost the market sentiment. They can invest up to 15% of their investible funds in shares on which derivatives are available in the BSE or NSE.
Asian markets were trading lower today, 18 August 2008. China's Shanghai Composite, Hong Kong's Hang Seng, Taiwan's Taiwan Weighted, Singapore's Straits Times, South Korea's Seoul Composite were down by between 0.28% to 4.06%. However, Japan's Nikkei rose 1.12%.
US markets ended mixed on Friday, 15 August 2008. The Dow Jones Industrial Average advanced 43.97 points, or 0.38%, to 11,659.90. The S&P 500 index gained 5.26 points, or 0.41%, to 1,298.20. However the Nasdaq Composite index declined 1.15 points, or 0.05%, to 2,452.52.
Market breadth turns negative
The key benchmark indices are trading flat in the afternoon trade of Monday. The market breadth has turned negative from positive. IT stocks have gained. Public sector oil marketing companies fell as the crude oil price recovered. Reliance Industries extended losses. Grasim Industries fell almost 5%. Asian markets which opened before Indian market were mostly in the red.
Oil rose over $1 to near $115 a barrel as investors eyed a potential supply threat from Tropical storm Fay to oil and gas production in the Gulf of Mexico.
At 12:24 IST, the BSE 30-share Sensex was down 1.85 points or 0.01% to 14,722.33. The key benchmark indices had recovered after opening weak dampened by latest economic data which showed India’s wholesale price index rose to a 16-year high. At day’s high of 14,824.92 hit during the mid-morning trade, the index gained 100.74 points. At the day’s low of 14,602.12, the Sensex lost 122.06 in early trade.
The S&P CNX Nifty was down 15.85 points or 0.36% to 4,414.85.
The BSE Mid-Cap index was down 0.12% to 5,816.52 and the BSE Small-Cap index was down 0.06% at 7,106.
The market breadth turned negative on BSE with 1,122 shares advancing as compared to 1,145 that declined. 98 shares remained unchanged.
India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 2.47% at Rs 2,219.70.
Great Offshore (up 4.31% to Rs 454.10), Gujarat NRE Coke (up 3.75% to Rs 108), Sun Pharmaceuticals (up 3.61% to Rs 1,500), Indian Bank (up 3.39% to Rs 114.40) edged higher from BSE's A group shares.
India Infoline (down 4.64% to Rs 147), Sintex Industries (down 3.41% to Rs 313), Pantaloon Retail (down 2.97% to Rs 367.10) and Hindustan Construction Company (down 2.93% to Rs 96.10) edged lower from A group stocks.
Reliance Natural Resources clocked the highest volume of 59.76 lakh shares on BSE. Kaashyap Technologies (30.68 lakh shares), Vishal Information Technologies ( 28.86 lakh shares), IFCI (22.39 lakh shares) and Ispat Industries (20.75 lakh shares) were the other volume toppers in that order.
Public sector oil marketing fell as crude oil price bounced back from a recent low. BPCL (down 2.69% to Rs 307.65), Indian Oil Corporation (down 1.27% to Rs 434.95) and HPCL (down 2.29% to Rs 218) edged lower.
How Long to hold on the shares?
Historically, it has been demonstrated that investments in equities offer the best long term returns and hence the highest opportunity to enhance your capital. Thus, the longer you stay invested in the equity markets, the better will be your returns.
However, this holds true for the equity market as a whole, and not necessarily for shares of individual companies. The value of shares of specific companies are subject to various pulls and pressures which could cause a share that is highly valued one day, to drop its value overnight, as a result of unpredictable factors ranging from Government policy to acts of omission and commission by the management of the company.
It is advisable that you periodically, at least once in a year, evaluate your holdings and decide whether to continue with them or change them.
However, one very important thumb rule which the professionals offer is, never to get emotional about a share. In other words, do not hold on to the share of a company whose value is declining, just because its history has been very good!
Are investment in shares safe?
Any investment is prone to a certain degree of risk. Shares, as a class of investment have the highest element of risk. The only services riskier than shares are lotteries and other games of chance.
These risks arise as a result of factors described earlier.
However, today there is strong legislation, procedures and a regulatory authority - Securities Exchange Board of India (SEBI), which to a large extent prevents risk as a result of misleading the investing public.
NOTE:- There is no risk involved if you follow our calls and then invest as our tips are very useful.
Historically, it has been demonstrated that investments in equities offer the best long term returns and hence the highest opportunity to enhance your capital. Thus, the longer you stay invested in the equity markets, the better will be your returns.
However, this holds true for the equity market as a whole, and not necessarily for shares of individual companies. The value of shares of specific companies are subject to various pulls and pressures which could cause a share that is highly valued one day, to drop its value overnight, as a result of unpredictable factors ranging from Government policy to acts of omission and commission by the management of the company.
It is advisable that you periodically, at least once in a year, evaluate your holdings and decide whether to continue with them or change them.
However, one very important thumb rule which the professionals offer is, never to get emotional about a share. In other words, do not hold on to the share of a company whose value is declining, just because its history has been very good!
Are investment in shares safe?
Any investment is prone to a certain degree of risk. Shares, as a class of investment have the highest element of risk. The only services riskier than shares are lotteries and other games of chance.
These risks arise as a result of factors described earlier.
However, today there is strong legislation, procedures and a regulatory authority - Securities Exchange Board of India (SEBI), which to a large extent prevents risk as a result of misleading the investing public.
NOTE:- There is no risk involved if you follow our calls and then invest as our tips are very useful.
| What is equity trading? |
| It is simply buying and selling of equities. However, unlike other commodities, equities are not traded everywhere, and are traded only in special market places called exchanges. |
| What is an exchange? |
| An exchange is a mechanism through which buyers and sellers of equities are brought together. These days, this is largely electronic and done with computers. Investors cannot, however, participate directly in the exchange and can participate only through members of the exchange, popularly referred to as brokers. |
| How does the exchange works? |
| An exchange has pre-specified timings. During that time, all the members of the exchange link up to a central computer through their remote terminals. The members then place bids to buy equities, or make offers to sell equities. Other members who can match the bid or the offer confirm their acceptance, and the transaction is completed. Members of stock exchanges place bids and offers on behalf of their clients, who are the investors. |
| Why are brokers required? |
| Investing in equities is quite risky. The broker is a professional, who knows the risk and can advise the investor accordingly. Secondly, an exchange will become an unwieldy mechanism if the entire universe of investors were to go and start making bids and offers. Reducing the number of individuals is a way of keeping control. Third, equity trading can also be abused. To prevent these abuses, exchanges as well as the Government has a number of regulations in place. Restricting activity to the members of the exchange will enable the regulations to be followed, preventing abuse of the system. |
| How are shares traded? |
| Like in any other buying or selling, once the broker confirms the trade, if you are buying the share, you pay the broker the value of the shares and take delivery of the shares. If you are selling the shares, you hand over the equities to the broker and the broker will pay you for your shares. |
When settlement does happen? |
| Each exchange has its own settlement period within which the entire process of delivery and purchase should be completed. Typically, the process is completed in a week to ten days time. |
| Which shares to Buy and sell? |
| An index is an indicator of how the stock market is doing on the whole. An index comprises a basket of stocks. The collective value of these stocks on a given date is taken and given a score of 100. From that day onwards, the value of these stocks is tracked and its score relative to 100 is computed. The stocks selected are based upon a number of parameters that the creators of the index decide. Equally, the valuation is also done using complex mathematical principles. Periodically, the list of shares used for computing the index also undergoes a change. These changes are decided by the index creators based on the parameters they have set for the stocks for inclusion. An index shows whether the stock market, on the whole, is appreciating in value or declining in value. The movement of the index itself is no indicator for individual shares. You may find that a particular share may be increasing in its price even when the index is down and vice versa. The index is only an indicator of the general trend The common indexes in Indian stock markets are the SENSEX, the index for stocks listed on the Bombay Stock Exchange and Nifty, the index for stocks listed on the National Stock Exchange. |
| What is an index? |
| Buying and selling shares involve a fair amount of research. These involve assessing how well the company is managed, how the company is performing compared to others in the industry, how the industry itself is doing, the financial performance of the company, the interest of the lay public in the company, etc. It is best that you consult an expert in such analysis, before you decided to buy or sell a particular share. Such investment advice is also provided by your share brokers. |
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