Bond Yields Weigh on NY Pre-Market Mood

Elena
22 Jun, 2007
New York City

U.S. stock futures moved to the downside Friday, dragged lower by higher bond yields, renewed concerns about the impact of the subprime mortgage market and weaker overseas stocks. Private-equity giant Blackstone Group went public for $31 a share. Bear Stearns is reportedly planning to take out $3.2 billion in loans to stop creditors from seizing assets of its money-losing hedge funds.

[R]9:00AM Market to open lower on higher bond yields.[/R]

U.S. stock futures moved to the downside Friday, dragged lower by higher bond yields, renewed concerns about the impact of the subprime mortgage market and weaker overseas stocks. Private-equity giant Blackstone Group ((BX)) went public for $31 a share. Bear Stearns ((BSC)) is reportedly planning to take out $3.2 billion in loans to stop creditors from seizing assets of its money-losing hedge funds.

EBay ((EBAY)) advanced 1.9% in pre-open trading on speculations that the company will return to the Chinese auction market this summer. Dow futures expiring in September fell 32, or 0.23%, to 13,628, while S&P 500 futures fell 4.80, or 0.31%, to 1,531.00. Nasdaq 100 index futures fell 6.50, or 0.33%, to 1,959.25. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 5.19% from 5.20% late Thursday.


[R]8:00AM The Blackstone Group went public with shares priced at $3.[/R]

The Blackstone Group ((BX)) went public with shares priced at $31, at the top end of the private equity firm''s guidance of between $29 and $31 a share. With 133.3 million shares issued, the IPO is valued at $4.13 billion, standing out as one of the biggest in the financial-services industry and the sixth biggest in U.S. history. Blackstone''s offering represents a 12% stake in the firm. Blackstone shares are expected to start trading Friday on the New York Stock Exchange. AT&T Wireless ((T)) holds the No. 1 slot with $10.6 billion raised in 2000, followed by $8.7 billion for Kraft Foods ((KFT)) IPO in 2001 and $5.5 billion for UPS ((UPS)) in 1999.


[R]7:30AM NY – 6:30PM Mumbai Sensex ends lower in a highly volatile session.[/R]

The Sensex on BSE finished 31.88 points, or 0.22%, lower at 14,467.36.

The market-breadth was almost even as 1,274 stocks advanced, 1,280 declined and 86 were unchanged. Of the 30 stocks in the Sensex, 11 advanced, while all the rest declined. The turnover on BSE was Rs 5,302 crore, almost the same as Rs 5,307 crore on Thursday. On NSE, the turnover was Rs 9,521 crore, lower than Rs 10, 388 crore on Thursday.

Economic news

India’s wholesale inflation rate slowed to a thirteen-month low in the second week of June as the prices of food, fruit, lentils and cereals decreased. Wholesale prices advanced to 4.28% in the week ended June 9 from a year ago but down from 4.8% the previous week lower than estimates for inflation rate of 4.45% for the period.

The widespread interest in the second offering from ICICI Bank kept the rupee on the rise for a second straight week. The rupee also advanced as Indian companies take out loans abroad as the interest rates in dollars are lower than those in rupees. The rupee gained 0.4% to 40.695 against the dollar this week.

The government today approved 36 proposals for special economic zones. Among those which were approved were 3 Navi Mumbai SEZs jointly offered by Reliance India chief Mukesh Ambani and Anand Jain.

The failure of WTO talks among four trading groups representing rich and poor nations failed to resolve differences. The trade talk disputes have hinged on the farm subsidies paid in the rich countries to support small farm communities. There are more than 700 million farmers in Brazil and India living on less than one dollar a day and in the U.S. less than 0.5% of population works as a farmer. India’s two third of population relies on farming and generate less than 30% of its GDP. In the U.S. less than 1% of population rely on farming generating less than 4% of its GDP.

Trading highlights

TCS was the most-active stock with a turnover of Rs 562 crore followed by Time Technoplast and Reliance Industries.

Advancers

Reliance Energy surged 5.3% to Rs 590. The company submitted a bid for the for the 4,000-mega watt Sasan ultra mega power project. The stock was also given a boost by the Bombay High Court decision on gas deliveries by Reliance Industries.

NTPC surged 1.7% to Rs 153 on the Bombay High Court’s decision, that Reliance Industries was not required sell gas produced from one of its major blocks in the Krishna-Godavari basin to any one other than Reliance Natural Resources and NTPC. Hindalco gained nearly 1.9% to Rs 170 on market talk that promoters are raising their stake in the company.

Capital goods large-cap Hindustan Unilever advanced 1.2% to Rs 192 and housing finance company HDFC gained a 1.7% to Rs 1,880.

ICICI Bank was among the most active stocks, but the stock was volatile. It rose 0.4% to Rs 954 after its second offering attracted bids nine times the offer size. The issue closed today.

Decliners

BHEL plunged 2.8% to Rs 1,440, while cement stocks declined on heavy selling pressure. Gujarat Ambuja Cement dipped 2.6% to Rs 116, ACC was off 0.6% to Rs 85 and Grasim lost 0.5% to Rs 2,495.

Index heavy Reliance Industries lost 1.7% to Rs 1,704, on a petition by RNRL to the high court which had ordered yesterday after trading hours that the 81.6 million cubic meters of gas per day could be sold only to RNRL or NTPC.

The rise in the rupee impacted IT stocks negatively. Satyam Computers lost 1.1% to Rs 462, TCS was down 0.4% to Rs 1,140, Infosys declined 0.3% to Rs 1,951, and Wipro dipped 1.3% to Rs 517.

[R]7:30AM NY – 6:30PM Mumbai Sensex ends lower in a highly volatile session.[/R]

The Sensex on BSE finished 31.88 points, or 0.22%, lower at 14,467.36.

The market-breadth was almost even as 1,274 stocks advanced, 1,280 declined and 86 were unchanged. Of the 30 stocks in the Sensex, 11 advanced, while all the rest declined. The turnover on BSE was Rs 5,302 crore, almost the same as Rs 5,307 crore on Thursday. On NSE, the turnover was Rs 9,521 crore, lower than Rs 10, 388 crore on Thursday.

Economic news

India’s wholesale inflation rate slowed to a thirteen-month low in the second week of June as the prices of food and especially fruit lentils and cereals decreased. Wholesale prices advanced 4.28% in the week ended June 9 from a year ago, down from 4.8% the previous week and also lower than estimates for inflation rate of 4.45% for the period.

The great interest in the second offering of shares by ICICI Bank kept the rupee on the rise for a second straight week. The rupee also advanced as Indian companies take out loans abroad as the interest rates in dollars are lower than those in rupees. The rupee gained 0.4% to 40.695 against the dollar this week.

The government today approved 36 proposals for special economic zones. Among those which were approved were 3 Navi Mumbai SEZs jointly offered by Reliance India chief Mukesh Ambani and Anand Jain.

Trading highlights

TCS was the most-active stock with a turnover of Rs 562 crore followed by Time Technoplast and Reliance Industries.

Advancers

Reliance Energy surged 5.3% to Rs 590. The company submitted a bid for the for the 4,000-mega watt Sasan ultra mega power project. The stock was also given a boost by the Bombay High Court decision on gas deliveries by Reliance Industries.

NTPC surged 1.7% to Rs 153 on the Bombay High Court’s decision, that Reliance Industries was not to sell the gas to be produced from one of its major blocks in the Krishna-Godavari basin to any other than Reliance Natural Resources and NTPC. Hindalco gained nearly 1.9% to Rs 170 on market talk that investors are raising their stock in the company.

Capital goods large-cap Hindustan Unilever advanced 1.2% to Rs 192 and housing finance company HDFC gained a 1.7% to Rs 1,880.

ICICI Bank was in great demand today but also saw high volatility. It rose 0.4% to Rs 954 after its second offering of shares attracted bids for more than nine times the offer size. The issue closed today.

Decliners

BHEL plunged 2.8% to Rs 1,440, while cement stocks declined on heavy selling pressure. Gujarat Ambuja Cement dipped 2.6% to Rs 116, ACC was off 0.6% to Rs 85 and Grasim lost 0.5% to Rs 2,495.

Index heavy Reliance Industries lost 1.7% to Rs 1,704, on a petition by RNRL to the high court which had ordered yesterday after trading hours that the 81.6 million cubic meters of gas per day could be sold only to RNRL or NTPC.

The rise in the rupee impacted IT stocks negatively. Satyam Computers lost 1.1% to Rs 462, TCS was down 0.4% to Rs 1,140, Infosys declined 0.3% to Rs 1,951, and Wipro dipped 1.3% to Rs 517.