Indian Markets Friday Wrap-Up: Sensex Ends Week With 4% Gain

Intense volatility was witnessed in today’s trading session as the BSE Sensex crossed the dotted line numerous times since the start of the day. The Sensex closed higher by around 25 points while the Nifty closed higher by 10 points. Stocks from the mid-cap and small-cap indices also ended in the positive territory. Realty and consumer durable stocks led the pack of gainers on the bourses today. Rupee closed at 47.22 against the US dollar. While most Asian markets also closed in the red, the European indices are currently trading below their yesterdays closing levels.

As per a leading business daily, the union steel ministry has asked the state government of Jharkhand to fulfill the iron ore requirement of SAIL from the Chiria mines in Jharkhand before any of its portion is given out to private steel manufacturers. It may be noted that the Chiria mines have 4 bn tonnes of iron ore reserves in a total of 10 iron ore mines. Currently SAIL has been allocated only 1 mine at Chiria. SAIL has plans to double its capacity to 24 mtpa by 2010 and will need to ensure better raw material security for itself.

Almost a month after the terror attacks, The Trident and Taj Mahal Palace and Tower (new wing) hotels are reopening on December 21. As per newspaper reports, these hotels have already been flooded with requests for reservations. Both these hotels have well known F&B outlets and account for more than half their respective companies’ revenues. Occupancy levels of 25% to 30% are expected on the reopening day. Both Taj and Trident are also offering discounts on room tariffs in an effort to attract guests. Both these properties are the prime locations for EIH and Indian Hotels (IHCL) and their opening will bring some cheer to the troubled Indian hotel sector. As per the management of IHCL, though the loss is not yet known, the Taj Mahal Palace and Tower is fully insured for the damage caused and loss of business profit. While the new wing is opening this month, the heritage wing is expected to open by mid 2009. Further, while the current quarter is expected to be dull, going forward, the management expects the occupancy levels to rise. The stocks of EIH and IHCL closed firmly in the green.

The yield on the 10 year GSec bill (8.2%) dropped by 0.8% to 5.4% today. Ten-year yields have dropped by 4.6% from a seven-year high of 9.55% reached in July 2008. This incidentally is the first decline of such magnitude since 2003. Banks are expected to make handsome mark-to-market (MTM) profits on their GSec investments with the drop in treasury yields.

OPEC’s desperate attempts to prop up oil prices have been rendered useless as a deepening global recession weakened demand. Crude oil prices are headed for the 2nd biggest weekly decline in more than five years. Oil prices fell below US$ 37 a barrel yesterday, reaching levels not seen since June 2004. The fall in oil prices, along with a recovery in the dollar has meant a second straight day of decline in the prices of gold. As per Bloomberg, gold prices fell by 0.9% to touch US$ 845.5 an ounce.

Comments

[Rating agen...:]

OPEC unable to influence oil prices.

2008 Dec 20 10:58 PM