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Thursday, September 11, 2008

Market View

Market View

Energy and Metals Update - Sep 11 2008

Energy and Metals Update - Sep 11 2008



New Lows for Sensex

New Lows for Sensex

Suzlon Energy

Suzlon Energy

Bajaj Hindustan, Balrampur Chini, Triveni Engineering

Bajaj Hindustan, Balrampur Chini, Triveni Engineering

Maruti Suzuki

Maruti Suzuki

Coal Mining

Coal Mining

Sesa Goa

Sesa Goa



India Real Estate

India Real Estate

Sterlite Industries Ltd.

Sterlite Industries Ltd.



Reliance Industries, RPL

Reliance Industries, RPL

Tata Power

Tata Power

“Big Bang” In Asian Markets

Hang Seng, Shanghai Lead The Regional Fall

The stock markets across the Asian region closed sharply lower, led by financial stocks, after Lehman Brothers reported larger-than-expected loss for its third quarter and said that it intends to sell a majority stake in its coveted investment management division, including its Neuberger Berman business. On Wall Street, the major averages pared some of their gains in the final hour of trading, but they still closed firmly in positive territory. The Dow closed up 38.19 points or 0.3% at 11,268.92, the Nasdaq closed up 18.89 points or 0.9% at 2,228.70. The S&P 500 rose 1.6% with one hour left in the session, but settled with a gain of 7.53 points or 0.6% at 1,232.04 following a late surge in broad-based selling interest.

Oil futures traded lower, as The New York Times reported that Saudi Arabia has given private signals that it won't honor the production quota drop agreed in Vienna. Crude fell 75 cents to $101.83 a barrel

On the currency front, the U.S. dollar traded in the mid 107-yen levels in late Tokyo deals. The dollar was quoted at 107.34-107.36 yen, up 0.17 yen from Wednesday's close of 107.17-18 yen in Tokyo. The dollar strengthened following the recent fall in oil prices and a rise in the U.S. stock market, though it initially faced selling pressure, as the earnings projection of major U.S. investment bank Lehman Brothers Holdings was worse than market expected.

In South Korea, the dollar opened weaker at 1,090.5 won, but bounced back to finish the session at 1,109.5 won after the central bank froze its key interest rate for September. The dollar closed Wednesday's session at 1,095.5 won.

The Australian dollar closed below the US$0.80 mark for the first time in more than a year as a surprise drop in the jobless rate failed to give the currency a sustained boost. A bigger than expected interest rate cut in New Zealand also dented sentiment. The Aussie closed the local session at US$0.7954-0.7957, down from Wednesday's close of US$0.8075-0.8079, marking the third successive weaker finish.

The New Zealand dollar plunged against the U.S. dollar after the central bank cut its interest rate by 50 basis points. In late local trades, the kiwi was buying US$0.6515, down from US$0.6650 in early trade and US$0.6695 late Wednesday.

Coming back in equities, the Japanese stock market closed sharply lower, extending losses for a third consecutive trading session. The benchmark Nikkei 225 index closed down 1.98% at 12,102.50, a six-month low, and the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 2.49% to finish at 1,162.72.

On the economic front, the Japan Machine Tool Builders Association or JMTBA said that Japan's core machinery orders were down a seasonally adjusted 3.9% in July, falling for the second straight month. However, the decline was slightly better than analysts' expectations for a monthly decline of 4.0%. In June, core machinery orders fell 2.6%. On an annual basis, core machinery orders fell 4.7%.

The Chinese stock market closed sharply lower, led by financial stocks, ending a two-day winning streak. Investor sentiment was dented after U.S. investment bank Lehman Brothers unveiled a restructuring plan following a $3.9 billion loss in the third quarter. Developers also fell sharply and resource stocks struggled on worries over slowing demand. The benchmark Shanghai Composite Index fell 3.34% to close at a 21-month low of 2,078.98. The Shenzhen composite index plunged by 2.21% to 575.32.

The Hang Seng Index recently dropped 3.4% to 19,321.60, taking losses into a third session. Earlier in the day, the index dropped as low as 19,282.54, a level it hasn't seen since March 2007. The Hang Seng China Enterprises Index tumbled 5.5% to 9,912.99, dropping below the psychologically important 10,000-point level for the first time since May.

The Australian stock market closed sharply lower, extending losses for a third consecutive trading session. The benchmark S&P/ASX 200 index closed down 1.9% at 4,814.3 and the broader All Ordinaries index lost 1.8% to finish at 4,871.5.

On the economic front, the employment picture in Australia improved in August. Data released by the Australian Bureau of Statistics showed the total number of employed Australians increased by 14,600 in August to 10,734,900. Meanwhile, the unemployment rate decreased 0.2% to 4.1%. The number of unemployed Australians decreased by 22,900 in the month, to 457,300.

The Westpac/Melbourne Institute consumer inflation expectation index declined 4.4% in September. The consumer inflation expectation reading for August was 4.9%. Australia's official annual inflation rate was 4.5% in the second quarter.

The New Zealand stock market closed lower for the second straight trading session. After trading in positive territory for the most part of the session, following the Reserve Bank of New Zealand's decision to cut its key interest rate by a larger than expected half a percentage point, the market lost ground in late trading due to the weakness in other markets in the region. The benchmark NZX 50 index closed down 0.31% to 3,333.54 and the broader NZX All Capital index lost 0.23% to finish at 3,367.50.

The Reserve Bank of New Zealand reduced its Official Cash Rate by a greater-than-expected 50 basis points to 7.50% from 8.0% on Thursday in an effort to stimulate a struggling economy. While trimming the rate by 25 basis points in its July 23 meeting the bank had signaled that additional rate cuts were coming. The bank said it sees the threat of inflation as diminishing in the foreseeable future, warranting the looser monetary policy.

On the economic front, food prices in New Zealand rose at the fastest rate in nearly twenty years last month. Statistics New Zealand reported that the August Food Price Index increased 2.7%, the largest one-month jump since July 1989. Higher prices for fruits and vegetables were the biggest contributor, although increases were seen in all five sub-groups. For the full year to August 2008, food prices were up 10.6%, the largest annualized increase since the year to May 1990.

Meanwhile, manufacturing activity in New Zealand contracted in August to its lowest level in two-and-a-half years. The Bank of New Zealand /Business New Zealand Performance of Manufacturing Index declined 3.1 points last month to a reading of 48.8. The August reading was the fourth straight result below the 50.0 mark, the worst performance period for the manufacturing sector in nearly three years. A reading below 50.0 indicates contraction in the sector.

The South Korean market closed lower after a volatile trading session. The central bank's decision to leave its key interest rate for September unchanged at 5.25% did not impact the market much, but investors dumped most blue chips on concerns over fluctuations due to the expiration of futures and options contracts. The benchmark Korea Composite Stock Price Index or Kospi closed down 1.48% at 1,443.24 after rebounding yesterday to finish 0.7% higher at 1,464.98.

The Bank of Korea froze the benchmark 7-day repurchase agreement rate at a nearly 8-year high of 5.25%, as widely expected. The central bank raised the key rate by a quarter percentage point in August to control spiraling inflation, the first increase in a year.

In India, the bearish sentiment prevailed on the bourses, on weak global markets. The BSE 30-share Sensex provisionally ended down 334.88 points. The market extended losses for the third day in a row. The BSE 30-share Sensex provisionally ended down 334.88 points or 2.28% to 14,327.73. At the day’s low of 14,265.38 hit in late trade, the Sensex fell 397.23 points. At the day’s high of 14,557.33 hit in early trade, the Sensex fell 105.28 points. The S&P CNX Nifty slipped 112.3 points or 2.55% to 4,287.95 as per the provisional figures.

Elsewhere, Taiwan's Taiex closed down 3.2% at 6,251; Singapore's Strait Times fell 3.1% to 2,541.15; Indonesia's Jakarta Composite index shed 0.79% to 1,870.13; Malaysia's KLCI closed down 2.01% at 1,041.07.

In the other part of the world, European shares traded flat-to-lower, with another downbeat performance from financial stocks keeping gains for oil producers and miners in check

Of national indexes, the German DAX 30 index declined 0.2% to 6,169.97, and the French CAC-40 index dipped 0.1% to 4,280.35. The U.K. FTSE 100 index edged up by 0.2% to 5,375.30. At 12.23 GMT all this national indices continued with their negative positions as U.K. FTSE 100 index was down by 0.88% to 5,319. The German DAX 30 index was down by 1.16% to 6,138.02, while the French CAC-40 index was up by 0.85% to 4,247.28.

On the economic front, Spanish annual inflation in August eased back from a 15-year high in July as international oil prices fell. According to Spain's National Statistics Institute, or INE, August annual inflation stood at 4.9%, down from 5.3% in July. On a monthly basis, August consumer price inflation fell by 0.2% after a 0.5% fall in July.

The same trend was seen in Hungary as annual headline consumer price inflation decelerated from a month earlier in August, as a decline in food and fuel prices offset the impact of higher household energy prices. Headline consumer prices fell 0.3% on the month and were up 6.5% on the year in August. Inflation accelerated to 6.8% in the first eight months of 2008 from a year earlier. Annual core inflation, an indicator watched closely by the central bank to assess underlying inflationary pressures, remained unchanged at 5.8% in August from July.

In Sweden, the unemployment rate fell to 5.2% in August from 5.8% the previous month. The SCB said total employment fell to 4.685 million people from 4.798 million the previous month. The number of hours averaged 114.8 million per week, down 4.2 percent from a year earlier.

Looking ahead the economic calendar is scheduled to release weekly data of Jobless claims from US which will be followed by the import price index. From Canada we will analyze a data on international merchandise trade balance for the month of July, which will be accompanied by new housing price index for the month of July. At the same time US will release its data on trade balance. In the late evening we have retail sales data from Canada while Japan will release its second quarter economic growth rate.

NSE Bulk Deals to Watch - Sep 11 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
11-SEP-2008,ADVANTA,Advanta India Limited,RUANE CUNNIFF & CO INC,BUY,400000,770.00,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,BUY,298459,241.99,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,ASIT C MEHTA INVESTMENT INTERRMEDIATES LTD,BUY,183412,239.61,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,DINESH MUNJAL,BUY,170926,240.24,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,PRASHANT JAYANTILAL PATEL,BUY,201664,241.72,-
11-SEP-2008,NUTEK,Nu Tek India Limited,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,BUY,94358,181.58,-
11-SEP-2008,NUTEK,Nu Tek India Limited,MANSUKH SECURITIES & FINANCE LTD,BUY,119979,178.42,-
11-SEP-2008,NUTEK,Nu Tek India Limited,PRASHANT JAYANTILAL PATEL,BUY,151729,180.27,-
11-SEP-2008,NUTEK,Nu Tek India Limited,TRANSGLOBAL SECURITIES LTD.,BUY,160783,177.75,-
11-SEP-2008,NUTEK,Nu Tek India Limited,VIRESH PRAVIN SHAH,BUY,110000,183.44,-
11-SEP-2008,OCTAV,Octav Investments Limited,TARUNA SUBHASH SHARMA,BUY,18177,41.13,-
11-SEP-2008,RAJTV,Raj Television Network Li,SMC GLOBAL SECURITIES LTD.,BUY,55035,110.15,-
11-SEP-2008,RAJTV,Raj Television Network Li,SURENDER SINGH,BUY,74505,110.46,-
11-SEP-2008,TULSI,Tulsi Extrusions Limited,ANKITA VISHAL SHAH,BUY,107531,36.07,-
11-SEP-2008,ADVANTA,Advanta India Limited,CARLSON FUND EQUITY-ASIAN SMALL CAP,SELL,295324,770.00,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,AMBIT SECURITIES BROKING PVT. LTD.,SELL,298459,242.07,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,DINESH MUNJAL,SELL,170926,240.34,-
11-SEP-2008,AUSTRAL,Austral Coke & Projects L,PRASHANT JAYANTILAL PATEL,SELL,201664,241.59,-
11-SEP-2008,MANGLMCEM,Mangalam Cement Ltd,SMIFS CAPITAL MARKETS LTD.,SELL,227000,88.20,-
11-SEP-2008,NUTEK,Nu Tek India Limited,KAUSHIK SHAH SHARES & SECURITIES PVT LTD,SELL,94358,182.01,-
11-SEP-2008,NUTEK,Nu Tek India Limited,MANSUKH SECURITIES & FINANCE LTD,SELL,119979,178.48,-
11-SEP-2008,NUTEK,Nu Tek India Limited,PRASHANT JAYANTILAL PATEL,SELL,151729,180.24,-
11-SEP-2008,NUTEK,Nu Tek India Limited,TRANSGLOBAL SECURITIES LTD.,SELL,161095,178.13,-
11-SEP-2008,NUTEK,Nu Tek India Limited,VIRESH PRAVIN SHAH,SELL,22000,178.24,-
11-SEP-2008,OCTAV,Octav Investments Limited,TARUNA SUBHASH SHARMA,SELL,18177,41.67,-
11-SEP-2008,RAJTV,Raj Television Network Li,SMC GLOBAL SECURITIES LTD.,SELL,72225,110.94,-
11-SEP-2008,RAJTV,Raj Television Network Li,SURENDER SINGH,SELL,74505,108.95,-
11-SEP-2008,TULSI,Tulsi Extrusions Limited,ANKITA VISHAL SHAH,SELL,87602,36.44,-

Inflation may go up on pay hikes

Brace up for higher inflation and cost of consumer goods. This will be the scenario when thousands of crores will be pumped into the market in the next few months as more than 50 lakh government employees take home hefty pay packets.

The pay hikes, announced by the government costing the exchequer more than Rs 21,000 crore, are not factored in in the Union budget and the government is not yet clear from where it will raise the money to reimburse the increments.

"The Union budget is already in deficit and on top of that the finance minister failed to make a provision for the pay hike," says R K Nahata, a senior chartered accountant and an expert on securities and taxation.

"The expenditure on account of additional payments will have to be met either by increasing taxes or cutting down on subsidies or by deferring some planned and non-planned expenditure," he said, adding that in all such scenarios inflation is bound to go up.

Supporting his arguments, a senior finance ministry official said the non-plan and out-of-budget expenditure is contrary to the measures taken by the RBI to bring down inflation. The apex bank had in the last few months squeezed monetary supply in the market to contain rising prices.

Fears are being expressed of inflation crossing the 14% mark after implementation of the 6th pay commission award. Even as inflation rose to 12.44% on Thursday, the finance ministry said "the rise has come as a disappointment" while refusing to hazard a guess on the future trend.

via Times of India

Post Session Commentary - Sep 11 2008

Domestic markets closed the day with heavy losses as bears dominated the bulls since the initial bell. Stocks remained under pressure for the third straight day as heavyweights had dragged the benchmark indices lower ahead of IIP data for the month of July 2008, along inflation number for the week ended 30th August 2008. Markets opened on downbeat note and plunged further tracking weak cues from Asian markets. Further markets continued to trade sharply lower and completely smashed during last trade to close in extremely negative zone. NSE Nifty ended below 4,300 mark and BSE Sensex around 14,300 level. Mid cap and Small cap stocks also remained out of favors as lost more than 1%. From the sectoral front, all indices ended in red terrain and Oil & Gas stocks closed with loss of more than 3%. Apart form that Capital Goods, Metal, Reality, Bank and Power stocks were actual perpetrators of today’s fall. The market breadth was negative as 1786 stocks closed in red while 853 stocks closed in green and 75 stocks remained unchanged.

The BSE Sensex closed lower by 338.32 points at 14,321.29 and NSE Nifty ended down by 109.95 points at 4,290.30. The BSE Mid Caps and Small Caps closed with cut of 61.73 points at 5,647.20 and by 84.49 points at 6,818.93. The BSE Sensex touched intraday high of 14,557.33 and intraday low of 14,265.38.

The core sector data released two days before the IIP data for the month of July with indication of better industrial growth than previous months. The index of six core-industries grew at its fastest speed in July of current fiscal at 4.3%, backed by higher coal production and electricity generation. However, the index number for infrastructure output was much below than the 7.2% growth rate during the same month last year.

Losers from the BSE are Bharti Airtel (4.40%), Reliance Infra (4.15%), Reliance (4.13%), ONGC Ltd (3.82%), Tata Power (3.53%), DLF Ltd (3.28%), JP Associates (3.25%), M&M Ltd (3.00%), BHEL (2.71%) and NTPC Ltd (2.61%).

The BSE Oil & Gas index closed lower by 327.64 points at 9,339.74 as Reliance (4.13%), ONGC Ltd (3.82%), IOC Ltd (2.77%), Cairn India (2.05%), Reliance Natural Resources (2.04%) and Reliance Pet (1.95%) ended in negative territory.

The BSE Capital Goods index ended down by 292.80 points at 11,941.00. Major losers are Usha Martin (10.03%), Suzlon Energy (6.64%), Thermax Ltd (3.33%), Elecon Eng C (3.13%), Punj Lloyd (3.06%) and BHEL (2.71%).

The BSE Metal index lost 162.21 points to close at 11,991.79. Major losers are Jai Corp Ltd (4.35%), Sesa Goa Ltd (3.73%), Steel Authority (3.18%), Hindalco (1.97%), Welspan Gujarat Sr (1.96%) and Ispat Indus (1.68%).

The BSE Reality index plunged 124.16 points to close at 4,875.83. As Ansal Infra (6.35%), Indiabull Real (4.63%), Anant Raj In (4.09%), Akruti City (4.38%), Parsvnath (2.76%) and Omaxe Ltd (2.48%) closed in negative territory.

The BSE Bank index closed lower by 114.69 points at 7,210.66. Losers are Yes Bank (5.11%), ICICI Bank Ltd (2.01%), HDFC Bank Ltd (1.90%), Federal bank (1.76%), SBI (1.70%) and Union Bank (1.62%).

The BSE Power index dropped by 78.82 points to close at 2,576.42. As Suzlon Energy (6.64%), Reliance Infra (4.15%), Torrent Power (3.64%), Tata Power (3.53%) and Neyvelli LIG (3.24%) closed in negative territory.

Global cues weigh on market

The market continued its downward journey for the third straight session, as a slump in the global indices made the investors jittery, triggering a major sell-off. The Sensex resumed today’s session on a bearish note at 9665, about 106 points below its previous close of 14663. By mid-morning, pervasive selling caused it to touch the day's low of 14,265, about 398 points below the previous close. Although the index managed to erase some losses and trade around 14400 for a while in the afternoon, fresh selling dragged it below the 14400 level towards the close. After registering losses of 238 points in the last two sessions, the Sensex was 338 points or 2.28% points down for the day at 14324. The Nifty ended at 4290, which is 110 points lower than its previous close of 4400.

All the 13 sectoral indices of the BSE were mauled down by 1-3%. The BSE Oil & Gas index was the major loser and crashed by 3.39% followed by the BSE Power (-2.97%), the BSE Realty index (-2.48%), the BSE CG index (-2.39%), the BSE PSU index (-2.15%) and the BSE CD index (-1.80%). The BSE second-rung benchmark indices the BSE mid-cap index and the BSE small-cap index tanked by over 1% each.

The breadth of the market was heavily skewed in favour of losing stocks. Of the 2,714 stocks traded on the BSE, 66% shares (1,788 stocks) declined, while only 31% stocks (852 stocks) advanced. About 3% stocks (74 stocks) ended unchanged. Of the 30 stocks that make the Sensex, only two advanced for the day. Among the major losers Bharti Airtel crashed by 4.40% at Rs776.20, Reliance Infrastructure plunged by 4.15% at Rs992, Reliance Industries slumped by 4.13% at Rs1,997.60, ONGC crumbled by 3.82% at Rs1,035.45, Tata Power plummeted by 3.53% at Rs1,012.10, DLF dropped 3.28% at Rs485.55, JP Associates shed 3.25% at Rs162.35 and Mahindra & Mahindra tanked 3% at Rs560.15. The other heavyweights also came under sustained selling pressure and lost 1-2% each.

Over 1.52 crore IFCI shares changed hands on the BSE followed by Tata Teleservices (1 crore shares), Reliance Natural Resources (86.99 lakh shares), Austral Coke & Projects (67.31 lakh shares) and Reliance Petroleum (67.20 lakh shares).

Sensex slumps 621 points in three trading sessions

Bears ruled the roost for the third day in a row today, pulling the Sensex down 338 points. The barometer index has tanked 621 points in the last three trading sessions. Weak global markets triggered fall on the domestic bourses today. The market remained weak throughout the trading session.

Banking stocks declined ahead of the weekly inflation data. Power stocks fell Index heavyweight Reliance Industries (RIL), Reliance Infrastructure fell more than 4% each. Tata Power Company and ONGC fell more than 3.5% each. The market breadth was weak.

Asian markets ended down on continued worries about the credit crisis after Lehman Brothers failed to announce any firm deals to raise desperately needed capital after posting record quarterly loss on Wednesday, 10 September 2008. US markets ended with modest gains on Wednesday, 10 September 2008.

The BSE 30-share Sensex lost 338.32 points or 2.31% to 14,324.29. At the day’s low of 14,265.38 hit in late trade, the Sensex fell 397.23 points. At the day’s high of 14,557.33 hit in early trade, the Sensex fell 105.28 points.

The S&P CNX Nifty slipped 109.95 points or 2.5% to 4,290.30.

The BSE Sensex has shed 620.68 points in the past three trading sessions from a recent high of 14,944.97 on 8 September 2008. The barometer index is down 5,962.7 points or 29.39% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6,882.48 points or 32.45% away from its all-time high of 21,206.77 struck on 10 January 2008.

Nifty September 2008 futures were at 4300.35, at a premium of 10.05 points as compared to spot closing of 4290.30.

BSE clocked a turnover of Rs 4776 crore, compared to Wednesday's Rs 5,185.84 crore. NSE's futures & options (F&O) segment turnover was Rs 50,366.39 crore, which was lower than Rs 52,717.79 crore on Wednesday, 10 September 2008.

The market breadth was weak on BSE with 1,786 shares declining as compared to 853 that advanced. 75 remained unchanged.

Among the 30-member Sensex pack, 28 declined while the rest gained.

The BSE Mid-Cap index was down 1.08% to 5,647.41 and BSE Small-Cap index fell 1.22% to 6,818.93.

BSE Oil & Gas index (down 3.39% to 9,339.74), BSE Power index (down 2.97% to 2,576.42), BSE Realty index (down 2.48% to 4,875.83), BSE Capital Goods index (down 2.39% to 11,941) underperformed Sensex.

BSE IT index (down 0.91% to 3,990.44), BSE Auto index (down 0.97% to 3,961.44), BSE FMCG index (down 1.19% to 2,211.48), BSE HealthCare index (down 1.4% to 4,182.23), BSE Metal index (down 1.45% to 10,991.79), BSE Bankex (down 1.57% to 7,210.66), BSE Teck index (down 1.71% to 3,045.40), BSE Consumer Durables index (down 1.8% to 3,622.46) and BSE PSU index (down 2.15% to 6,740.25) outperformed Sensex.

India’s largest private sector firm in terms of market capitalization and oil refiner Reliance Industries fell 4.13% to Rs 1,997.60 extending losses for the second straight day, spooked by reports the Prime Minister’s Office may recommend levy of export tax or ban petroleum exports from its refineries in Jamnagar.

Banking pivotals fell ahead of inflation data to be announced by the government after market hours today, 11 September 2008. ICICI Bank (down 2.01% to Rs 686.45), State Bank of India (down 1.7% to Rs 1,538.45) and HDFC Bank (down 1.9% to Rs 1,252.70) edged lower.

Annual inflation rose 12.34% in the year through 23 August 2008, lower than previous week’s 12.40% rise, data released by the government after trading hours on Thursday, 4 September 2008 showed.

Reliance Infrastructure (down 4.15% to Rs 992), Tata Power Company (down 3.53% to Rs 1,012.10), Reliance Power (down 0.68% to Rs 168.60) edged lower.

National Thermal Power Corporation fell 2.67% to Rs 173.45. The company today, 11 September 2008, said it has formed a joint venture company with Bihar State Electricity Board under the name Nabinagar Power Generating Company for setting-up of a coal based power project having capacity of 1980 megawatt.

ONGC (down 3.82% to Rs 1,035.45), DLF (down 3.28% to Rs 485.55), Jaiprakash Associates (down 3.25% to Rs 162.35), Mahindrs & Mahindra (down 3% to Rs 560.15) edged lower from the Sensex pack.

Tata Consultancy Services, India's top software services exporter fell 1.77% to Rs 836.10. The company said on Wednesday it will partner with Swedish defence and aerospace group Saab for an aeronautical design and development centre.

Bharti Airtel, India's biggest cellular services provider in terms of market capitalisation, fell 4.4% to Rs 776.20. Bharti Airtel launched a venture fund today with an initial Rs 200 crore ($44 million) to promote content and technology development.

Sterlite Industries fell 1.01% to Rs 502.75. From a recent high of Rs 622.35 on 8 September 2008 the stock had plunged 18.38% to Rs 507.90 on 10 September 2008 after the Vedanta group on Tuesday, 9 September 2008 announced a restructuring to simplify its corporate structure into three commodity-focused groups: copper and zinc-lead, aluminium-energy and iron ore.

IFCI clocked the highest volume of 1.52 crore shares on BSE. Tata Teleservices (Maharashtra) (1 crore shares), Reliance Natural Resources (86.99 lakh shares), Austral Coke Projects (67.31 lakh shares) and Reliance Petroleum (67.2 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 478.91 crore on BSE. Reliance Capital (Rs 240.70 crore), ICICI Bank (Rs 165.73 crore), Austral Coke Projects (Rs 162.14 crore) and Larsen & Toubro (Rs 145.88 crore) were the other turnover toppers in that order.

European markets edged lower today, 11 September 2008. France’s CAC 40, Germany’s DAX and UK’s FTSE 100 were down by between 0.78% to 1.15%.

Asian markets were trading lower today, 11 September 2008. China's Shanghai Composite, Japan's Nikkei, Hong Kong's Hang Seng, Taiwan's Taiwan Weighted, Singapore's Straits Times, and South Korea's Seoul Composite were down between 1.48% to 3.34%.

US markets finished with modest gains on Wednesday, 10 September 2008 after rallying earlier on a drop in oil prices. The nervousness was due to investor worries about financial shares like Lehman Brothers. The Dow Jones industrial average gained 38.19 points, or 0.34%, to 11,268.92. The S&P 500 index advanced 7.53 points, or 0.61%, to 1,232.04, and the Nasdaq Composite index added 18.89 points, or 0.85%, to 2,228.70.

Daily Call - Sep 11 2008

Daily Call - Sep 11 2008

Global cues see markets open low

Weakness in global indices may weigh on the sentiment. Action today is likely to be stock-specific. However, the mood of the market is expected to remain negative after yesterday's loss and moving down FII inflows in domestic equities may help the local indices decline further. Among the key indices, the Nifty is likely target 4450 in near term and on breaching this level it is likely to target 4500, while the index has a key support at 4375. The Sensex has a likely support at 14500 and may face resistance at 14750.

On Wednesday the US markets manage a modest gain as investors scooped up shares battered in the previous session's selloff and sorted through Lehman Brothers' steep quarterly loss and restructuring plans. While Dow Jones gained 38 points at 11269 and the Nasdaq raise about 19 points at 2229.

Majority of the Indian floats ended in the green. Rediff was the biggest gainer and gain over 5.09% followed by ICICI Bank which was up 3.08%. Patni Computer, Infosys, Satyam, HDFC Bank, MTNL and VSNL were up 2-0.50% each. However, Dr Reddy moved down over 1.74% and Wipro lost over 0.18%.

Crude oil prices slipped marginally, with the Nymex light crude oil for September delivery slipped 68 cents to close at $102.58 a barrel. In the commodity segment, the Comex gold for December series moved down by $29.50 to settle at $762.50 an ounce.

Pre Market Watch - Sep 11 2008

The Indian Market is expected to have negative opening as Asian markets are trading lower. On Tuesday, domestic markets closed in red zone for second consecutive day due to the profit booking. Markets opened sharply lower as investors were afraid to take fresh positions on weak global cues and concern for inflation number along with IIP data due to be released today. Further market continued to trade weak and slipped sharply during last trading hours to end the day with losses. Weak European markets along with rise in black gold in Asian trade to $104.03 a barrel also fueled to the negative sentiment. NSE Nifty ended around 4,400 mark and BSE Sensex below14,700 level. Mid cap and Small cap stocks also showed weakness. From the sectoral front, all indices closed in red and Metal stocks were major sufferer of negative sentiment as closed with deep cut of more than 5% on reports that the steel ministry has recommended an additional 5% duty on iron ore exports over the present level of 15% in a bid to tame domestic prices of steel. Along with that, Oil & Gas, Capital Goods, Reality, Power and Bank stocks also contributed to the gloomy situation. The BSE Sensex closed lower by 238.15 points at 14,662.61 and NSE Nifty ended down by 68.45 points at 4,400.25. The BSE Mid Caps and Small Caps closed with loss of 69.27 points at 5,708.93 and by 61.19 points at 6,903.42.

We expect that market may remain volatile during the trading session ahead of inflation number for the week ended 30th August 2008 and IIP data.

The core sector data released two days before the IIP data for the month of July with indication of better industrial growth than previous months. The index of six core-industries grew at its fastest speed in July of current fiscal at 4.3%, backed by higher coal production and electricity generation. However, the index number for infrastructure output was much below than the 7.2% growth rate during the same month last year.

On Wednesday, the US market closed with marginal gains after rallying earlier on a drop in oil prices. Investor’s uneasiness was on worries about financial shares like Lehman Brothers. Crude slipped to settle at $102.58 per barrel on the NYMEX. Lehman reported a third quarter loss of $3.9 billion, and is cutting its common stock annual dividend to $0.05 per share from $0.68.

The Dow Jones Industrial Average (DJIA) closed higher by 38.19 points to close at 11,268.92 followed by the NASDAQ index ended up by 18.89 points to close at 2,228.70 and the S&P 500 (SPX) gained 7.53 points to close at 1,232.04.

Indian ADRs ended mixed. In technology sector, Patni Computers ended higher by (2.57%) followed by Satyam advanced by (1.92%), Infosys ended up by (1.13%), while Wipro lost (0.18%). In banking sector ICICI Bank and HDFC Bank gained (3.08%) and (1.98%). In telecommunication sector, MTNL and Tata Communication rose (0.69%) and (0.57%). However, Sterlite industries decreased by (1.34%).

Today the major stock markets in Asia are trading lower. Hang Seng index is trading weaker by 324.37 points at 19,675.41 along with Japan’s Nikkei trading down by 149.74 points at 12,196.89, Taiwan Weighted plunged 114.66 points at 6,343.35 and Singapore''s Straits Times declined 36.91 points at 2,585.50.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. Gross equity purchased stood at Rs2,023.10 Crore and gross debt purchased stood at Rs271.70 Crore while the gross equity sold stood at Rs2,209.20 Crore and gross debt sold stood at Rs119.10 Crore. Therefore, the net investment of equity reported was (Rs186.20) Crore and net debt was Rs152.60 Crore.

The Indian rupee on Wednesday weakened and crossed the level of Rs45 per dollar for the first time since November 2006 due to the strong dollar demand from foreign banks and stock market losses that raised expectations of more foreign fund outflows. The partially convertible rupee ended at 45.10/11 per dollar, 0.62% weaker than Tuesday''s close of 44.84/85.

Today, Nifty has support at 4,302 and resistance at 4,491 and BSE Sensex has support at 14,350 and resistance at 14,993.

Daily Reports - Sep 11 2008

Daily Reports - Sep 11 2008

Morning Call - Sep 11 2008

Market Grape Wine :

In House:

Nifty at a support of 4352 and 4305 with resistance at 4440 and 4487.

Cash: Sell RELIANCE below target 2050 with S/L 2098.

Cash: Sell ICICI BANK target 680 with S/L 710.

Future: Sell TATA POWER below 1057 target 1000 with S/L 1075.

Future: Sell HDIL below 299 target 280with S/L 309.

Out House:

Markets at a support of 14454 & 14591 and resistance at 14786 & 14991 levels .

Buy : RIL

Buy : Corerproject at dips

Buy : RPower at dips

Buy : Bharti & TataCom

Buy : Jayshreetea & Mcleodrussel

Buy : SBIN

Buy : IBulls

Buy : LNT & Bhel

Dark Horse : SesaGoa , Sbin , Kohinoor , Bhel , RComm & Aban

Gold Futures At 11 Month Low, Dollar At 11 Month High

Bottom Fishing Likely In Today's Session

Gold futures ended at their lowest level in nearly 11 months Wednesday as the U.S. dollar strengthened, losing ground for an eighth straight session and tying a seven-year record for a string of losses. Gold for December delivery fell $29.50, or 3.7%, to $762.50 an ounce on COMEX, the lowest closing level since Oct. 24, 2007.

MCX benchmark Gold contract also crushed hard in the intra day session and went on to touch a low of 11306 and closed the session at Rs 11343 per 10 grams down Rs 211. After the last session carnage Gold is likely to take a tick upwards, as traders will look for the opportunities of bottom fishing. The prices can see levels of 11426 in today’s session with Supports at 11300 and 11220 levels.

The dollar touched a fresh 11-month high against the euro just above the 1.40-level and held steady near 2 ½-year highs versus the pound at 1.7540. The greenback continues to remain favored amid burgeoning fears of rapidly deteriorating economic fundamentals, which consequently sent crude oil to an intra-day low at $101.43 per barrel. Also propping the dollar higher was the announcement from Lehman Brothers to sell off parts of its business to shore up its balance sheet, thereby tempering market jitters in the interim.

Traders will look ahead to US economic reports slated for release today, consisting of the July trade deficit, weekly jobless claims and the August Federal Budget. Consensus estimates expect the trade deficit to edge higher to $58 billion in July, versus a $56.77 billion deficit from the previous month. Weekly jobless claims are seen little changed at 440k versus 444k from the prior week. Meanwhile, the Federal Budget is forecasted to shrink to $106.2 billion for August, compared with $117.0 billion a month earlier.

Market Outlook - Sep 11 2008

Market Outlook - Sep 11 2008

Engineering, Infrastructure, Autos

Engineering, Infrastructure, Autos

Today's Pick - Cummins India

We recommend a sell in Cummins India from a short-term point of view. We notice in the charts of Cummins India that the stock has commenced a medium-term up move following the reversal from the support at Rs 225 in early July. However, this up trend started losing momentum in late August.

This was reflected by the negative divergence in the relative strength index (RSI). Moreover, the stock encountered resistance at Rs 325 (200-day moving average coincides with this level) and began declining. On September 10, the stock fell by 3 per cent, breaching the 21-day moving average conclusively. The daily and weekly RSI are heading towards the bearish zone.

The moving average convergence and divergence indicator also has signalled a sell and is declining. We are bearish on the stock from a short-term perspective. We expect the stock’s decline to prolong until it hits our price target of Rs 270 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 312.

Trading Calls - Sep 11 2008

Nifty (4400) Support 4340 Resistance 4445

Buy Glenmark (672) SL 666
Target 684, 688

Buy GAIL (430) SL 425
Target 439, 442

Buy Voltas (134) SL 131
Target 140,141

Sell IVRCL Infra (301) SL 306 Target 291, 289

Sell SBI (1567) SL 1582
Target 1545, 1540

Falling inflation may give bulls direction

You cannot change your destination overnight, but you can change your direction overnight.

The weather has turned pretty hazy in Mumbai over the past few days, with isolated showers lashing the financial capital. The weather pattern in a way reflects the goings-on in the stock market of late. Most players are clueless about the near-term direction of the market amid mixed fundamentals. At the same time, there have been days when the bulls have managed to ward off the threat from the bears on positive newsflow. The yo-yo pattern is likely to continue for a while. Among the other worries is the relentless outflows by FIIs, which in turn is partly responsible for the fall in the rupee

Talking of macro-economic factors, inflation data will be released after the markets close today. It is likely to dip a bit from 12.34%. Some see it falling below 12% shortly, and if oil prices continue to slide, it may soon be in single digits again. The Government will also release IIP numbers for July tomorrow. Industrial output had grown by 5.4% in June. Data released by the Government yesterday showed that core sector growth for July slipped to 4.3% from 7.2% last year.

We expect the market to open in the red again. On the whole, the key indices will remain choppy while the broader market will continue to languish. Interest rate sensitives may see some spurt especially towards the end of the day in anticipation of a fall in inflation.

Keep an eye on Indian Hotels, as the company is likely to make a big announcement later today.

US stocks rose marginally on Wednesday, as investors snapped up the recently battered energy and technology shares, even as worries about the fate of Lehman Brothers and other financials kept a lid on the advance.

The S&P 500 advanced 7.53 points, or 0.6%, to 1,232.04. The Dow Jones Industrial Average added 38.19, or 0.3%, to 11,268.92, and the Nasdaq Composite Index climbed 18.89, or 0.9%, to 2,228.7.

Market breadth was positive. More than two stocks rose for each that dropped on the New York Stock Exchange.

The US market had found early solace in Lehman's restructuring efforts but shares of the Wall Street securities firm fell sharply late in the session, extending a 45% sell-off on Tuesday, after rating agency Moody's said it may downgrade its debt. S&P Ratings too expressed concerns about Lehman's earnings potential.

An acquisition of Lehman may be more likely in the wake of the brokerage firm's latest quarterly loss and steps it's taking to sell assets, according to some analysts. Moody's said it will probably downgrade Lehman if the firm doesn't do a deal soon.

Strong earnings forecasts from FedEx and Texas Instruments, a firmer dollar, and lower oil and gold prices lent some support to the US stocks. But lingering worries about the financial sector limited gains for the blue chips.

Lehman reported a nearly $4bn third-quarter loss, its biggest quarterly loss since it went public in 1994. The company also said it will spin off part of its commercial real estate assets and slash its dividend. Additionally, Lehman plans to sell a 55% stake in its investment management division.

Lehman shares were choppy on the news, ending lower after rising nearly 10% in the morning and almost 30% in pre-market trading.

While the Federal Reserve is widely expected to once again hold a key interest rate at 2% when it meets on Tuesday, there is a growing sense that the Fed may have to cut rates by the end of the year.

If the Fed does so, it would mark a dramatic change in the central bank's assessment of the economy. As recently as the Fed's last meeting in August, Fed members indicated that their next move would be to hike rates to fight inflation.

The Fed has left rates unchanged at its past two meetings and started to indicate that it was growing more worried about rising commodity prices, particularly oil. However, the US economy, which once seemed on track for a recovery in the second-half, has recently shown signs of weakening further.

Oil prices declined as the US government indicated weaker demand for gasoline, even as supplies of crude and gas dipped more than expected last week. US light crude oil for October delivery fell 68 cents to settle at $102.58 a barrel on the New York Mercantile Exchange, the lowest close since April 1.

Gasoline prices rose overnight, breaking a nine-day losing streak, according to a national survey of credit-card activity.

In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.63% from 3.57% late on Tuesday. The dollar rallied versus the euro and yen. COMEX gold for December delivery fell $29.50 to $762.50 an ounce.

European shares fell on Wednesday, with financials such as Royal Bank of Scotland leading the fall after Lehman's failure to secure a capital injection from Korea Development Bank and a hefty third-quarter loss. The pan-European Dow Jones Stoxx 600 index lost 0.8% to 277.35. UK's FTSE 100 closed down 0.9% at 5,366.20, while Germany's DAX 30 shed 0.4% to 6,210.32 and the French CAC-40 declined 0.2% to 4,283.66.

In the emerging markets, Russian equities fell sharply for a second session, as investors continued to exit the market amid pressure to meet margin calls. In Moscow, the dollar-denominated RTS index fell 4.4% to end at 1,334. It is down 42% year-to-date. The RTS index has fallen 19% only this month.

Brazil's Bovespa rallied 2.5% to 49,633. Brazil's central bank has lifted its key interest rate by 75 basis points to 13.75%. Mexico's IPC index ended virtually unchanged at 25,622. The ISE National-30 index in Turkey was down 2.5% at 48,787.

Market to remain sluggish

Bulls banged the bears on Monday after India pulled off a historic triumph at the NSG. But their joy, as expected was short-lived as the euphoria lost steam and markets ended lower for second straight trading session.

Scientists at CERN began a huge particle-smashing machine, intending to re-enact the conditions of the "Big Bang" that created the universe.

The Large Hadron Collider (LHC) is the biggest and most complex machine ever made and the platform, the largest scientific experiment in human history.

However, it was not a big bang day for Indian markets as weak global cues again dragged the sentiments on Dalal Street. The US stocks slumped overnight. Asian markets too ended lower by 1-2%. The metal, oil & gas and power stocks witnessed offloading.

Among the 30 components of the Sensex 24 stocks ended in the red and only 6 stocks ended in positive terrain. Index heavyweights like Reliance Industries, Sterlite Industries and Bharti Airtel were among the major laggards. On the other hand, Infosys, ITC and SI were among the major gainers.

Finally, the BSE benchmark Sensex closed at 14,662 losing 238 points and the BSE Nifty index slipped 68 points to close at 4,400.

In the overall market, 932 stocks advanced and 1,720 stocks declined. Whereas, 78 stocks were unchanged.

The IT stocks were in momentum after rupee weakened past the Rs45/US$ mark for the first time since November 20, 2006. The currency declined for a second day as the dollar rose against 14 of the 16 most-active currencies, according to reports.

Mphasis, Infosys and Financial Technologies were among the major gainers.

Shares of Usher Agro surged by over 12% to Rs191 after the company announced that it entered in MoU with Satake Corporation, Japan for expansion of Rice Milling Capacity by another 1 million ton.

Satake will be providing the plant & machinery for the interest free credit period of three years. The MoU provides that the Company will be extended with the technical know-how of the better use and production of bye products of rice, for exclusive right of use this technology in India for a specified period. The scrip touched an intra-day high of Rs192 and a low of Rs172 and recorded volumes of over 41,00,000 shares on BSE.

Shares of Sterlite Industries declined for second straight trading session on reorganization plans, the stock fell by over 12% to Rs507. The stock further took a hit after Macquarie Group cut share-price target by 28% on concern the company's reorganization plan would increase its capital and lower EPS.

The scrip touched an intra-day high of Rs559 and a low of Rs505 and recorded volumes of over 40,00,000 shares on BSE.

Hydro S&S Industries, an Indian maker of polypropylene and plastic products was locked at 20% upper circuit at Rs41.45 after the board of directors of the company announced that they would meet on September 16, 2008 to consider buyback of equity shares. The scrip touched an intra-day high of Rs41.45 and a low of Rs39.1 and recorded volumes of over 16,000 shares on BSE.

Adani Enterprise surged by over 7% to Rs657 after Adani Power secured SEBI approval for IPO. The scrip touched an intra-day high of Rs705 and a low of Rs607 and recorded volumes of over 4,00,000 shares on BSE.

The government is planning to transfer the power management functions of Power Grid Corp of India into a new entity. (Mint)
Dr. Reddy’s is revamping its business model to focus on niche services; combining its custom pharmaceutical services (CPS) and API divisions. (Mint)
Bajaj Auto plans four new passenger and cargo vehicles. (Mint)
Saab AB, the Swedish maker of Gripen fighter plane, intends to establish an aerospace development centre in India with TCS. (Mint)
Educomp Solutions buys 50% in Eurokids for Rs390mn. (Mint)
Siemens Healthcare to pay Rs451mn on buyout of a diagonistic firm. (Mint)
IL&FS to pick up 50% stake in NTPC-Bhel venture. (Mint)
Temasek keen on part of Suuti stake in Axis Bank. (Mint)
Unitech in talks to sell stake in wireless unit. (Mint)
TCS, Infosys expect more delays in orders from US market. (Mint)
HCL Enterprise plans to form a venture capital arm. (BS)
Government restarts efforts to sell IFCI stake. (BS)
Electrotherm India signs a JV with Grasim for captive mining of coal block in Chattisgarh. (BS)
Gujarat NRE Coke plans rights issue. (BS)
L&T gets %160mn order from Petrobras. (BS)
Vodafone fears Essar may further dilute BPL stake. (BS)
A shareholder of GHCL has filed a petition to seek adjournment of the AGM on fears of destabilization of existing management. (BS)
Kingfisher Airlines plans to raise $400mn. (BS)
The research arm of Orchid Chemicals is planning public issue by June 2009. (BS)
Dewan Housing arm lines up $250mn real estate fund. (BS)
Japanese spirits giant, Suntory is looking to acquire 10-15% stake in United Sprits. (ET)
Reliance Industries incorporates two wholly owned subsidiaries for London and Singapore market. (BL)
Bharti promoters acquire additional 0.5% stake in Bharti Airtel for Rs8.3bn. (ET)
Nokia, Ericsson, Siemens, Alcatel, Huewai and ZTE submit bids for US$9bn BSNL tender. (ET)
Gammon India acquires 50% stake in Italy-based power company Sofinter. (ET)
Israel’s SC stops Sun Pharma from closing Taro open offer. (ET)
Awaita properties acquire controlling stake in JPT Securities. (ET)
NHPC plans a follow on offer after its proposed IPO in October. (ET)
NTT DoCoMo in talks to pick up stake in Tata Teleservices. (ET)
Usher Agro enters in to MoU with Satake Corp, Japan for expansion of rice milling capacity. (ET)
Bank of Rajasthan enters into MoU with ICRA. (FE)
United Breweries, Heineken in discussion to resolve Asia-Pacific issue. (BL)
JSW Steel, Ispat Industries cut prices by Rs2,000 per ton effective from September 1. (BL)
Sel Manufacturing to set up textile park for an investment of Rs5bn. (BL)
Era Infrastructure secures order worth Rs1.29bn from AAI. (BL)
GVK Power & NPCIL plans to buy reactors from GE Westinghouse. (BL)
BPCL-Kochi refinery to set up bottoms upgradation project. (BL)
Reliance Industries evaluating development plans for D6 satellite fields. (BL)
Sobha Developers to construct 40 premium villas in Kerala for Rs1bn. (BL)
DLF secures SEBI approval to buy back shares worth Rs11.10bn at a price not exceeding Rs600/share. (BL)

Economy Front page

Shipping companies plan fixed rates for long term deals. (Mint)
Banks have three months left for complying with a directive by RBI to treat advances given to equity-oriented mutual funds as capital market exposure. (Mint)
India’s ranking falls two notches to 122 in a global list that ranks the ease of doing business in 181 economies. (BS)
Core infrastructure growth slows to 4.3% in July from 7.2% in the corresponding period last year. (ET)
Rupee hits two-year low, breaches 45 against the dollar. (FE)
Finance Ministry seeks DoT to consult on the fees to be paid by telecom operators to extend license for 10 more years. (ET)
DTH service providers in talks with media planners and brands to sell space for advertisement. (ET)
Railways record 9% increase in freight traffic during April-August 2008. (ET)
Government to consider proposal to enable banks and financial institutions to fund acquisition of farm land overseas. (ET)
Private companies may be allowed to run, operate and own metro rail networks. (ET)
Central Drug Standard Control Organisation set to simplify regulatory norms for Pharmaceutical industry. (ET)
Government to consider TRAI proposal to hike FDI in news channels. (BL)

Daily Technicals - Sep 11 2008

Daily Technicals - Sep 11 2008