Fannie Mae (FNM:US) plunged 85 percent to $1.06, and Freddie Mac (FRE:US) tumbled 79 percent to $1.09. The U.S. government seized control of the largest mortgage-financing companies, eliminating common and preferred dividends and getting warrants representing ownership stakes in the firms.
Financial companies rallied on speculation the takeover will help them recover from the subprime-mortgage crisis. Citigroup Inc. (C:US), the biggest U.S. bank, gained 5.9 percent to $20.20. Bank of America Corp. (BAC:US), the second-biggest U.S. bank, jumped 6 percent to $34.15. JPMorgan Chase & Co. (JPM:US), the third-largest, rose 4.1 percent to $41.24. National City Corp. (NCC:US) rose 5.8 percent to $5.10
Strong & Weak futures
This is list of 10 Strong Future:
Great Offshore L, Indin Bank, Orient Bank, Jet Airways (ind), Apetch Training, Moser Baer(I), St. Bk. India, HCL Technologies, Bharat Petro, Yes Bank Limited.
And this is the list of 10 Weak stocks ;
Sesa Goa Ltd. Gnfc Ltd. Triveni Engg. & The Ge Shpg. Ltd, Ranbaxy Labs, Chennai Petroleu, Bongaigaon R, Ndtv Ltd, Guj. Alkalies, Housing Dev & In.
Nifty is in Up Trend.
POSITIONAL TRADERS
THERE IS A RARE CHANCE THAT NIFTY WILL CLOSE ABOVE 4580,ONLY ABOVE 4580,NIFTY WILL BE BULLISH.
CHANCES ARE NIFTY WILL HIT 4380,4350.HOLDING SHORTS MAKES SENSE
NIFTY FUT: If downtrend continues then it will fall up to 4491.35-4493.35 zone. Rallies up to 4533.05 can be used to sell. SL at 4557.65-4559.65 zone.
NIFTY FUT: SL triggered. Short Covering should continue up to 4557.65-4559.65 zone. Corrections up to 4526.80 can be used to buy. SL at 4517.95-4519.95 zone.
Cash Market Intra-Day: RESURGERE (NSE Cash CMP 352.35) going down. Sell with a Stop Loss of 356.35 level
NIFTY FUT: Sell with a Stop Loss of 4550.80 level. Target at 4517.95-4519.95 zone.
POSITIONAL TRADERS
DON'T ADD TO YOUR SHORTS.JUST HOLD YOUR OLD SHORTS AS OF NOW.CHANCES ARE V.HIGH,MARKETS WILL COME DOWN TO SPOT TO 4380,4350 AGAIN IN 1-2 DAYS.
PEOPLE WHO R SHORT IN RELINFRA CAN COVER AND SHORT BANKINDIA INSTEAD OF THAT.
REST HOLD ALL SHORTS/PUTS.
The Indo-US NSG Agreement-Will This Spur FII Sales?
The last weekend was unique in many ways. First, the FIIs sold Rs 1900 crore of stock in the cash segment on Friday-the largest single day sales in the past 15 years, the Nuclear Suppliers Group waived certain Security linked objections to India's access to the available Nuclear Technology, thirdly this writer happened to meet officials of the third largest Mutual Fund in India and what transpired was nothing Rosy.
All this apart, the head of a Dutch Fund called up this writer to inform, that Nifty was trading 175 points higher in the kerb market at Bhuj on Saturday. How ironic, I feel, that a region devastated by a massive Earthquake about 8-9 years ago should be scripting the destiny of a $ 1 trillion market, with a few balding, paunchy, paan eating Marwaris sitting on the kerb in a non-descript town of Gujarat. What future can such a nation have?
The Indo-US NSG agreement
It is highly certain that short covering will force a gap up opening on Monday, with the so called beneficiaries of the Agreement-HCC, LNT and Bhel zooming up. But I think this too shall be an opportunity for FIIs to sell. For there seem to be many around, who do not see any future for India and they will sell in any firmness of the market, when they can sell in weakness. Makes no difference, they simply want to be out.
The MF view
Even though I have no love for Paan eating fund managers, you still bump into many of them at odd times, and simply cant help that they love Betel chewing. This particular CEO I met on Saturday morning manages more than $ 13 bn in Equities and has been on the forefront of the "India Shining" story for nearly a decade now. But compared to the past, this time he appeared shaken and stirred. The reasons: high inflation, high interest rates, an $ 11 bn outflow from equities in 8 months of 2008, weak earnings momentum, slow down in exports, the resource poor nature of India which makes it most dependent upon portfolio flows to fund its trade deficit, a weak Rupee, possible increase in Crude prices again, an indifferent government resting more on past laurels and thinking of just the ensuing elections are not signs in which Bull markets endure and grow.
Absloutely correct I feel. On numbers, very surprisingly the EPS forecast for FY09 is still being maintained at Rs 950-1000 and for FY10 at Rs 1100-1200 for the Sensex as a group. On FY09 forecast EPS the Sensex PE at 15 still remains the highest in the region, and on FY10 earnings forecast it drops down to 12. If we assume that Equities as a riskier class are reflecting slowing earnings growth a true PE for India would be 10 to 12 on FY09 earnings, giving a Sensex target of 10000 to 12000 by March 2009. An aggressive target based on FY10 will still put the Sensex at 15000 by March 2009, either way an investor in Equity will make no money over the next 6 months and should Oil prices rise again, the Sensex will sink even rapidly.
Any hopers around?
The way forth as they say is to go forth. There is a contrived assumption these days that Nations GDP will rise by 1.5 per cent just through the impact of three upcoming projects-the Cairn Barmer Oil find, the RIL 28 mn tonnes refinery in Jamnagar and the KG gas. However, to feed and carry forth more than 1.2 bn people forward nothing short of a radical political exercise needs to be carried out, which would ensure more and more stable FDI flows to replace the Exiting FII flows, more industrialisation that will create jobs, a policy to control population, rehabilitation of displaced persons from acquired lands and a more authoritarian government that lasts for atleast 2 decades from hereon.
If nothing of the sort happens, investors can not only forget the stupendous Equity linked returns of the past 5 years, they would do well to forget about Equity investing as such.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
Arvind Parekh
+ 91 98432 32381
