26November2008

Sensex Performance
Sensex opened firm up at 9160.5 gaining 2.89% over previous close of 8903.12 in reports of federal bailout of citi group. Market were steady intra day reaching high of 9182.8. But as happening for quite some time markets open up, then FIIs who are seeking opportunity to bank on every rally, began selling and the market dips towards the end. Finally Sensex closed at 8695.53, down 2.33% from yesterday's close before reaching intra day low of 8649.4. Biggest index movers were Reliance Industries and State Bank of India which contributed 111.6 points drop of the 207.6 points drop of sensex.

Fuel price cut in India
There is some good news for Indians burdened by the inflation. Government has announced Fuel prices cut, but cant execute it before elections in states get over. Opposition, namely BJP and Left are crying it foul as it can please the voters and breach the election code of conduct. This would come as a big relief as announcement is for Rs. 5 per liter petrol, Rs. 2 per liter diesel and Rs. 50 per cylinder of LPG. This was highly predicted as crude is already at $50 per barrel and government has raised fuel prices on 4th June when it was at $120-$130 per barrel and Indian oil companies were struggling hard for survival. Since then crude raised to its high of $145.29 a barrel on 3rd July but since then declined steadily and broke $100 barrier on 15th September (The date which divided world in two parts, pre 15th Sep and post 15th Sep) Crude broke the barrier of $50 on 20th November and hence it was getting very much hopeful by the government to cut prices.

Citigroup
This has been a very happening week for Citigroup. Citi, which never sleeps (by the virtue of its presence in vast geography) was on the brink of death. Few days after citi announced laying off 50000 odd employees, the boss, CEO Vikram Pandit himself was finding it tough to hold ground.
Citi shares lost ~58% in a week from 17th-21st November and pressure was constantly building on it. On 24 November U.S. government announced a huge bailout of Citigroup to rescue the company from bankruptcy. Treasury will provide $20 billion in troubled asset relief fund in addition to $25 billion given in October. Government also guarenteed $300 billion in assets. In return the bank will give to government $27 billion of preferred shares and warrants to acquire stock. Preferred share will pay 8% annual return. The government will obtain wide powers over banking operations. Executive salaries, dividends will be capped. Citi gained 57.82%, on 24th November as single day movement.