The market is showing no signs of improving as the Sensex continued its slide for the third day in succession - 118 points down from yesterday's close. Profit bookings remain the major culprit, while hope festers for an improvement in the next earning season starting January 13.
The auto market is perhaps one of the worst hit from the recession. TATA Motors announced their 4th block closure of the year - from December 28th to 31st. This is because they have to match production with demand, and right now most people are postponing purchases due to the financial crunch.
Close on its heels follows Maruti - who had already taken a production cut of around 6% in November. If sales continue to fall as they are right now, Maruti is likely to go in for more production cuts this month-end, somewhere in the range of 5-7%.
The three major oil companies IOC, HPCL and BPCL are getting ready to receive net losses in the third quarter of this fiscal. After a bad first quarter where only IOC netted barely any profit and then huge losses in Q2 (especially where the IOC was badly hit), things are not looking up for the big three in the third quarter either. Even though crude oil prices have fallen to $35 a barrel, the irony is that these companies have the burden of still holding stocks which they had bought at over $100 a barrel, and which are depleting gradually - hopefully by January-end they'll have exhausted those stocks. Even if the fourth quarter does bring some respite, it'll not be enough and they'll have to deal with annual net losses for this fiscal - which will be a new experience for the three oil companies.
On a different note altogether, Reliance Industries Ltd began processing crude oil in a refinery in Jamnagar, Gujarat which will probably become the world's single biggest supplier of fuel - it also has an advantage over other export-oriented rivals in Europe and Asia.
Thursday, December 25, 2008
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment