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Monday, November 13, 2006

Indian shares seen slipping on weaker Asia


Indian shares are likely to ease on Monday, tracking weaker Asian markets and as investors consolidate their positions after a record run the previous week.

But the downside is likely to be limited by strong foreign fund flows, which have topped $7 billion so far this year.

Tokyo stocks fell to their lowest level in 1- months on Monday, while weakness in major miners dragged Australian shares lower.

In India, cautious retail investors could depress shares.

"The indices have closed at the upper end of the intraday band and the market breadth and traded volumes indicate strength in the undertone," said Vijay Bhambwani, chief executive of BSPLindia.com.

"But a large portion of the retail segment lacks clarity and conviction in the markets."

India's benchmark BSE index <.BSESN> climbed to a new record close on Friday, off a new peak of 13,303.85 points. The index gained 1.2 percent last week and is up 41 percent so far this year, making it the best-performing index in Asia-Pacific.

Templeton Asset Management's Mark Mobius says the Indian stock market looks expensive in comparison to others, but there are still some bargains to be had for long-term investors. For details, double-click on [ID:nBOM35965].

STOCKS TO WATCH

* Usha Martin Ltd., after the wire rope maker said its joint venture with Germany's Gustav Wolf will start manufacturing tyre beads and expand its steel cord capacity.

* Grasim Industries Ltd., after its plans to invest 12 billion rupees to set up a cement plant with a capacity of 3.5 million tonnes a year in the eastern state of Orissa. For details, double-click on [ID:nBOM150736].

* Binani Industries Ltd., after it said its subsidiary Binani Cement Ltd. has filed initial papers with the securities market regulator for a public offer of shares.

* Suit and apparel maker Raymond Ltd. , after said it would form a 500 million rupee joint venture with Grotto S.p.A. to sell the Italian firm's "Gas" brand in India. For details, double-click on [ID:nBOM133625].

FACTORS TO WATCH

* Indian federal bond report [IN/]
* Indian rupee report [INR/]
* FOREX-Dollar falls again on forex diversification talk [FRX/]
* Oil slips towards $59, traders look to winter,

* GLOBAL MARKETS-Asian stocks, dollar, oil pressured