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Tuesday, April 24, 2007

Citigroup - India Banks, India Economics, India Wireless, Rupee Forecast

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Anand Rathi - Arvind Products

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Rediff - Without quota, every caste would be a forward caste

To rule India -- with her huge size and population -- the British hit upon a simple yet brilliant idea: divide and rule, with the State playing the crucial role of an arbitrator between various warring groups.

The government of Independent India is largely a remnant of the British Raj with one crucial addition: the ruling elite, comprising Marxists and pseudo-Marxists, largely understands the collective psyche of Indians far better than our colonial oppressors. After all, poverty of ideas invariably leads to politics of poverty.

Accordingly, subsequent governments in India have first ensured shortages, and then played Santa by rationing the insufficient. Quotas fall in this genre.

OBCs: No discussion, please

Having adopted this paradigm of governance, it was necessary for the Government of India to turn the majority against the minority, Muslims and Christians were to be pitched against Hindus, the 'higher' castes against 'lower' castes, the OBCs against the MBCs (Most Backward Classes), the BCs against the Dalits, the Hindi-speaking against the non-Hindi speaking and so on and so forth.

Else, a system that was predominantly modelled on the lines of the British style of governance -- highly centralised, with little accountability -- would be unworkable in India. And given this broad idea of dividing Indians, the caste system in India was an obvious candidate.

It may be noted that by the early twentieth century the British had already begun dividing the nation on these lines -- forwards and backwards. The governments in independent India merely carried the British agenda forward.

One of the popular assumptions built by the British and nurtured subsequently by Marxists about castes is that it is hierarchical and creates a rigid and vertical social structure. And that justified reservations, first for the Dalits (who are not the subject matter of this discussion) and subsequently extended to the backward castes -- OBCs.

The nature of competitive populism in contemporary politics makes it extremely difficult even for a cursory discussion on backward castes, their composition and genesis of their backwardness. On the contrary, every government aided and abetted by a pliable media, biased intellectuals and an indifferent public have repeatedly suppressed, distorted or de-legitimised scholarly studies about OBCs.

The truth needs to be told, facts debated and our assumptions re-calibrated.

Backward castes: What's that?

Whether caste is associated with vertical hierarchy or not has been the subject of great study by many historians, analysts and sociologists. 'Interrogating Castes,' a study of Dipankar Gupta, an eminent scholar and historian of great repute, shows that no caste considers itself to be lower in status, when compared with other castes.

In his essay, Gupta recalls an encounter with 'low caste' women who claimed that her caste was really Rajput -- a higher caste -- and was turned into a lower caste after a defeat in war.

Gupta further adds, "This encounter nearly twenty years ago led me to wonder how many low castes have elevated opinions about their caste origins. A new world was revealed to me as I read account after account of those who are customarily called low castes denying their lowly pedigree. Sometimes they said that were Brahmins of a certain kind, on many occasions they claimed Kshatriya status."

Stumped? Read on.

Arun Shourie, in his latest book -- Falling Over Backwards -- reveals something sensational. He quotes two Census Superintendents of the 1931 census who state, 'The feature of interest is that the claim is always for a more dignified title, for admission to a higher caste or exclusion from a caste which is considered low in the social scale.' Shourie further goes on enumerate repeatedly all through this book as to how Sainis and Malis wanted to be classified as Saini Rajputs, Gabits as Marathas, Bedas as Naiks, Blacksmiths as Panch Brahmans, Barias as Kshatriyas, Talpadas as Padhiar Rajputs, Devalis and Bhavins as Naik Marathas. . . the list seems endless, and Shourie's scholarly attempt is replete with such examples of the so-called lower castes seeking a higher caste appellation.

Surprised? Read on.

Lower castes or elite of the ruling class?

The late Gandhian, Dharampalji through a painstaking study spread over several decades in India, England and Germany established that before the British rule in India, over two-thirds -- yes, two-thirds! -- of the Indian rulers belonged to what is today known as the OBCs and conclusively proved that it was the British and not the upper castes who robbed the OBCs of their power, wealth and status.

Dharampalji also exploded the popularly held belief that most of those attending schools must have belonged to the upper castes and again with reference to the British records, proved that the truth was other way round. For instance, during 1822-25 the share of the Brahmin students in indigenous schools in Tamil-speaking areas accounted for 13 per cent in South Arcot to some 23 per cent in Madras, while the OBCs accounted for 70 per cent in Salem and Tirunelveli and 84 per cent in South Arcot.

Shocked? Another study by Christophe Jaffrelot, a French scholar -- India's silent revolution: the Rise of the Low Castes in North Indian Politics -- corroborates the findings of late Dharampalji.

While the subject of the book may be out of context to the discussion on hand, the matter of interest to the extant debate is the historical perspective provided on the status of OBCs in nineteenth and early twentieth century. Some of the important factors highlighted in the book with respect to OBCs are:

All available historical evidence shows that almost none of the OBCs considered themselves to be backward, in any sense of the term, at least till the beginning of the 20th century.

Most of the rulers, both at the local as well as larger regional levels in different regions of India during 16-18th centuries, seem to have come from these OBCs.

Further, most of the professions that sustained the vibrant economy of India, which was considered a great agricultural and industrial nation till early 19th century, were peopled and managed mostly by these communities.

The de-industrialisation of India by the British and the subsequent suspension of all local support systems led to widespread deprivation among all sections of Indian society, notably the OBCs.

Four scholars, perhaps with differing ideologies have arrived at similar conclusions. Yet, look at the specious arguments that have fashioned our debate on this issue.

Look what have we done to ourselves.

The net impact of the above is that we have turned OBCs -- the supplicants in the eighteenth and nineteenth centuries -- into applicants for posts of clerks in government offices, thanks to the reservation policy.

This would be perhaps true of earlier historical periods also. And most of them -- from Lord Rama to Krishna, from Maharana Ranjit Singh to Chhatrapati Shivaji to Veerapandia Kattabomman -- would in the scheme of our government invariably fall in one of the two categories: OBCs or MBCs!

Due to a conspiracy of coincidences, OBCs seem to have forgotten their glorious past. What else would explain their behaviour of being on all fours before successive governments -- and to curry favours? Today they are so used to the standard arguments of being exploited by forward castes (FCs), leave alone OBCs, even the FCs are loathe to buy contrary arguments.

The net result is that OBCs on the one hand are overwhelmed with an inferiority complex and thus find psychological comfort only in reservations. On the other hand, the upper castes, tutored through tortured history, live constantly in a guilt complex of having wronged their OBC brethren.

In short, our population comprises people who live either on guilt or on an inferiority complex -- what a wonderful combination to challenge the world!

Significantly, this is a perfect setting for our politicians, especially the Marxists, to exploit.

If there were 1,000 IIMs, IITs and AIIMS. . .

All these are pointers to a crucial issue -- the manner in which we are governed and the sinister idea of dividing Indians to rule Indians continue in the same manner as the British did to us till Independence.

The Indian politician perfectly understands the system and the Indian psyche. Leveraging the power of the government, our politicians prefer rationing a few thousand seats by constricting demand rather than considering the grand idea of increasing its supply.

For sixty years since Independence, we have one AIIMS, seven IITs and six IIMs for a billion-plus population. Even that tiny speck in the Indian Ocean called Singapore would have more educational institutions for its 4 million population.

Obviously, the idea is to constrict supply and play on the pent up demand. And in the process if history has to be distorted, so be it.

It may be noted that the Marxists would be at hand to lend credibility to any such distortions of history -- our silence would be their next ally. Needless to emphasise, it is these distortions of history that rationalise reservations, not the 'historical backwardness' of any castes. But if supply were increased as suggested here, what would our politicians -- Marxists and pseudo Marxists -- do? They would simply be jobless, as it would mean end of their brand of politics!

And precisely for these reasons, the current policy of reservations and with it dividing people through castes would continue.

Moral of the story: Without the powerful incentive of reservation every caste in India would be a forward caste.

Credit Policy: Industry bodies give thumbs up

Leading industry associations welcomed the annual monetary and credit policy of the Reserve Bank of India (RBI). While initiatives like pre-payment of extra commercial borrowing (ECBs) without prior RBI approvals with a limit of $400 million, enhancing the overseas investment limit for Indian companies from 200 to 300% of their net worth were applauded, the associations felt that there was a need to adjust the recent hike in bank rate, reverse repo rate and repo rate.

The industry chambers have praised RBI for setting realistic target of controlling inflation rate at 4-5% and maintaining Gross Domestic Product (GDP) at 8.5%.


With no upward increase in key rates and announcement that SMEs would be permitted to book forward contracts without underlying exposures or past records of exports and imports through authorized dealers with whom the SMEs have credit facilities, RBI could not have announced a more appropriate monetary policy, R Seshasayee, president, Confederation of Indian Industries (CII) said. CII was particularly appreciative of the measures, which indicate that RBI is keenly following the effect of rupee appreciation on exports.

Commenting on the macroeconomic targets set by the central bank, the forecast of 8.5% GDP growth for 2007-08 was welcomed. In this context, the increase in the target money supply to 17-17.5% is welcome, said Seshasayee. However, CII expressed concern about the compatibility of 4-5% inflation rate with high growth rate trajectory over the medium term, which India needs to aspire for. "We need to move to a system by which a more disaggregated approach is adopted for inflation monitoring and management."


Apart form applauding the RBI on targeting controlled inflation rate upto 5 per cent, enhancing the overseas investment limit for Indian companies from 200 to 300 per cent of their net worth and limiting prepayment for ECBs, the Federation of Indian Chambers of Commerce and Industry (FICCI), has stated that his is in line with the recommendations of the Tarapore Committee on Capital Account Convertibility (CAC) and Percy Committee on IFC and clearly shows RBI’s willingness to move towards the CAC in a calibrated manner.

"RBI has finally taken cognizance of the needs of the middle class willing to buy their own homes by reducing risk weightage marginally on loans up to Rs 20 lakh", said Habil Khorakiwala, President, FICCI. The industry chamber hopes that the RBI will not take harsh measures as it had done in the past to hit credit growth, adversely impacting credit growth rate.


Associated Chambers of Commerce and Industry of India (ASSOCHAM) has appreciated RBIs decisions of pre-payment of ECBs without prior RBI approvals with a limit of $ 400 million, increasing capital account transaction from $ 50,000 to $ 10,000 per financial year, and setting up of working group to tackle issues relating to interest rates, derivatives and facilitate the development of interest rate futures markets.

The industry lobby welcomed the realistic GDP target of 8.5% for 2007-08. The emphasis on price stability and aiming to contain the rate of inflation at 5% in the current fiscal, too, is welcoming. However the recent increase in bank rate, reverse repo rate and repo rate that leads to increase in the cost of money and cost of borrowing, are problematic according to the chamber.


The PHD Chamber of Commerce (PHDCCI) welcomed RBI’s decision of no further change in the bank rate, reverse repo rate, repo rate and CRR. "Once the inflation rate is within manageable limits, RBI should take measures to soften the interest rate structure in the country", said Sanjay Bhatia, president, PHDCCI. The industry chamber also welcomed the overall instance of the monetary policy to maintain appropriate liquidity in the system to meet the legitimate credit requirements consistent with price and financial stability.

Reduction in the risk rate on residential housing loans to individuals for loans upto Rs 20 lakhs and increase in benchmark prime lending rates by 2-2.5% are applaudable decisions of the apex regulatory bank. Measures like flexibility for pre-payment of external commercial borrowing, enhancing the current or capital transaction limit for individuals by $50,000, increasing the limit of overseas investments by mutual funds are steps in the right direction to achieve the goal of full capital account convertibility, stated the chamber.


The Indo-American Chamber of Commerce (IACC) welcomed RBI's annual monetary and credit policy and said that "the steps contemplated in the policy will adequately address the inflationary pressure without adversely affecting growth impulses on the one hand and hardening of rupee on the other."

No increase in the repo rate, reverse repo rate, and bank rate is a great relief to the industry. However, increase in the scheduled banks can suck liquidity from the system making credit more costly. IACC believes that RBI has rightly reduced the money supply to a manageable level of over 17% which is critical to abate inflation.

Good Evening - Apr 24 2007

Key indices were up nearly 1% early today on buying in steel shares and light short covering ahead of the futures and options contract expiry Thursday. Sentiment remained buoyant as Asian markets were up on robust corporate profits and rally in exporters. At 10:27AM, Sensex was 13993.41, up 96.00 points or 0.7%. Nifty was at 4110.20, up 26.65 points or 0.6%. CNX Midcap Index was up 0.4% and S&P CNX 500 Index up 0.6%. On the BSE, there were 1,702 advances and 895 declines in the morning .The biggest Nifty gainers were Tata Steel, up 3% at Rs 549, SAIL, up 1.8% at Rs 137, and Rcom, up 1.7% at Rs 464. Steelmakers rose on hopes of strong Jan-Mar earnings due to a sharp rise in steel prices over the quarter and speculation steel prices will be hiked soon. The biggest sectoral gainer was BSE Metal Index, up 1.3%. Zee Entertainment Enterprises rose nearly 3% after the company Saturday reported March quarter net profit at Rs 699.2 mn, up 32.6% on year. Among losers, GACL was Rs 113, down 1.7%, and HDFC Bank was Rs 985, down 1%. Sun Pharmaceutical Industries was down 14.4% at Rs 1,014, ahead of the demerger of its research and development division on Apr 30. Siemens India was up 1% at Rs 1,078 ahead of its Jan-Mar earnings due later today. The company is seen reporting second quarter net profit at Rs 1.5 bn, up 26% on year. In the mid trading session, markets were trading with caution ahead of the monetary policy to be unveiled tomorrow. At around 1.30PM, Sensex was up 42 points at 13942 levels. Nifty was trading at 4092 levels, up 8 points. Market breadth for overall markets was stable at 0.9:1. Though, breadth weakened in heavyweights as the A: D ratio declined at 1:1 for Sensex and Nifty. Tata Power surged 5.2% at Rs 572. The company has acquired Coastal Gujarat Power, an SPV for Mundra-UMPP. Spicejet was up 3% at Rs 46. Spicejet board will meet tomorrow to consider Boeing plane order. The airline expects to make profit in ’09.

Maruti was down 0.5% at Rs 775.As per a market report, Govt may invite bids for 10.2% residual stake sale in Maruti in May. Airline stocks were trading strong on the news that Govt is looking at reviewing policy that will allow international airlines hold stakes in Indian carriers. This will improve the operating efficiency of low cost airlines. Jet Air (+ 8.5%), Air Deccan (+ 2%) and Spicejet (+ 1.4%) were all up. Indian Bank was up 0.8% at Rs 97.40. The bank reported good Q4 result. Net Profit was at Rs 235 cr whereas NII stood at Rs 573 cr. In FY07, Net Profit jumped to Rs 759.7 cr Vs Rs 504.5 cr last year. Other income stood at Rs 344 cr. Oudh Sugar showed very bad Q3 result. It reported Net loss of Rs 41 lakh Vs profit of Rs 19.95 cr y-o-y. Revenue stood at Rs 101 cr Vs Rs 136 cr. The stock was down 3.5% at Rs 60. Punj Lloyd was up 1.5% at Rs 188.50. The company secured Rs 180 cr order from Reliance Gas Transportation Infrastructure. No. of Scrips Value (Crs.) Advances 444 4735 Declines 594 2809 Unchanged 29 3 Total 1067 7547 Key indices ended marginally up today after shedding early gains on profit sales. Sensex ended at 13928.33, up 30.92 points, or 0.22%. Nifty was at 4085.10, up 1.6 points, or 0.04%. Steel shares were the day's key gainers as analysts expect robust quarterly earnings from the sector because of a sharp rise in metal prices. Most information technology shares weakened because of the rising rupee. The sector was up Friday as quarterly earnings of Satyam Computer Services and Wipro beat street expectations. Today, Satyam Computer was up 1%. Volatility in banking shares persists ahead of RBI's monetary policy due Tuesday. The BSE Bank index ended down 0.5%. The Nifty's top gainer was Jet Airways, up 5%. Sun Pharmaceuticals, the biggest Nifty loser, ended down 11%, as the company entered no-delivery period ahead of the demerger of its research arm. Tech stocks ended up with exception. Satyam was up at Rs 480.10 with volumes of Rs 208.08 crs, Infosys was up at Rs 2069.25 with volumes of Rs 160.55 crs, Rolta was up at Rs 384.55 with volumes of Rs 87.87 crs, and TCS closed down at Rs 1247.80 with volumes of Rs 71.02 crs. Pharma stocks ended in mixed trend. Sun Pharma was down at Rs 1047.80 with volumes of Rs 98.34 crs, Ranbaxy closed down at Rs 343.50 with volumes of Rs 26.54 crs, Glenmark was up at Rs 684.90 with volumes of Rs 16.36 crs, and Dr Reddy closed up at Rs 717.50 with volumes of Rs 16 crs. Banking stocks ended negative with exception. In the Public Sector banks SBI closed down at Rs 1060.30 with volumes Rs 104.94 crs & Bank of India closed down at Rs 183.75 with volumes Rs 63.43 crs. In the private sector ICICI Bank closed up at Rs 917.55 with volume of Rs 58.07 crs & HDFC Bank closed down at Rs 986.80 with volumes of Rs 33.59 crs. Auto Stocks showed negativity with exception. Tata Motors closed down at Rs 718.15 with volumes of Rs.73.43 crs & M&M closed down at Rs 731.30 with volumes of Rs 58.44 crs. While in the 2 wheeler segment stocks, Baja Auto closed down at Rs 2402.90 with volumes of Rs 30.51 crs & Hero Honda closed up at Rs 655.60 with volumes of Rs 14.10 crs. Cement Stocks witnessed mixed trend. GACL closed down at Rs 115.05 with volumes of Rs 89.71 crs, ACC closed up at Rs 796.05 with volumes of Rs 74.90 crs, India Cement closed marginally down at Rs 169.45 with volumes of Rs 31.31 crs and Birla Jute closed up at Rs 231.60 with volumes of Rs 4.07 crs. Nifty ended at 4085 up by 2 points

Close: Markets cheer no rate hike !

All eyes were on RBI's Monetary Policy which kept Investors cautious till mid session. The Governor Mr. Y.N. Reddy announced No change in all key rates and the markets were up with a bang. The key rates: CRR, Reverse Repo and Repo rate were kept unchanged. The markets rallied over 14k levels with no looking back. Banking Majors SBI, ICICI along with other banks helped the rally. Adding to the rally were gains the interest rate senstive issues such as the Auto, real estate stocks. Telecom stocks moved up in the cheer with RCOM, Bharti moving up smartly,

Techies like Infosys, TCS, Wipro, Satyam felt the pinch as the Rupee steadly appreciated to reach 9- years high of Rs 41.04 per Dollar then recovered to trade at Rs41.17 at time of close. Tyre stocks as we mention in the our Outlook rallied on the back of healthy Quarter numbers for the Month ended 31st March,2007 on a weaker rubber scenario. However there was bad news from crude which is up at $68 and that had Asian indices downbiased while the Europe witnessed selling pressure.

The Rupee is the big story. It is up about 6 percent for the year . Interestingly it is the best performing Asian currency against the dollar. The next best performer is the Thai baht, with a rise of about 3.6 percent. The rupee has risen by 4 percent this month. It is up 13 percent above a three-year low of 47.04 hit last July.

Sensex ended up by 208 points at 14136.72 helped by gains in SBI (1132.9,+7 percent), Bharti Tele (873.7,+4 percent), TISCO (579.1,+4 percent), Guj Ambuja (119.35,+4 percent) and ICICI Bk (950.25,+4 percent). Restricting the gains were Wipro (554.35,-2 percent), BHEL (2493.8999,-2 percent), TCS (1225.8,-2 percent), Satyam (474.95,-1 percent) and Grasim (2380.3,-1 percent).

Auto major Maruti announced the Q4 numbers. The top line for the full year grew by 22% at Rs.15,252 cr against Rs. 12,481 cr. The bottom line jumped by 25% at Rs. 1,562 cr vs Rs. 1248 cr. The EBIDTA margin for the Full year was at 8%. The top line for the March ended quarter surged by 20% on yearly comparison at Rs. 4,430 cr. The EBIDTA margins for the quarter were at 12%. The bottom line for the quarter was at Rs. 461 cr against Rs. 361 cr in the same quarter previous year showing a growth of 28% on yearly comparison. Exports surged by 13%. Higher power and fuel cost hit by Rs. 20 cr on gas shortage. The company passed on higher input prices. The new Manisar plant posted a loss and that muted the overall numbers. Manisar plant is where the Swift is manufactured. Increasing advertising spend and lower margins is what one could expect going ahead. Maruti ended 4% higher.

The telecom stocks closed in mixed. MTNL's Q4 results were at par but failed to impress. MTNL reported profit of Rs 206 cr compared to Rs 140 cr on yearly comparison, up by 45%. The Net Revenues were Rs 1200 cr vs Rs 1,445 cr for the quarter. Stock closed down by 6.7%.

Technically Speaking: We have almost reached our target of 14275. Support is at 14050 and 13885. Resistance is at 14275 and 14355. Advance and Declines were in ratio 1:1. Sensex made an intra day high of 14,198 and low of 13,850. The trading day churned out good volume of Rs. 5,104 cr. Sensex has been moving in the direction we have been advising since 13000 levels.

Markets celebrate unchanged credit policy

Tracking negative Asian cues the Sensex opened weak at 13894, down 34 points over the previous close, and slipped further to touch the day's low of 13850. The market remained subdued ahead of the Reserve Bank India's (RBI) annual credit policy announcement. The Sensex gained momentum closer to the credit policy announcement and zoomed on reports that the RBI has kept all the key rates unchanged in its annual monetary and credit policy. The Sensex jumped to touch the day's high of 14197, gaining 269 points from its previous close on the back of hectic buying in banking stocks. The market shed some gains towards the close on profit bookings in Sensex heavyweights and information technology stocks. The Sensex finally ended the session with gains of 208 points at 14137 while the Nifty added 57 points to close at 4142.

The breadth of the market was neutral. Of the 2,627 stocks traded on the BSE 1,279 stocks declined, 1,273 stocks advanced and 75 stocks ended unchanged. Among the sectoral indices the BSE Bankex flared up by 4.06% and the BSE Auto Index gained 1.65%. The other sectoral indices were up around 1% each while the BSE IT index ended in negative territory.

The rally in the market was led by Ramco Systems, which shot up by 19.98% to Rs160. Among the major gainers, SBI advanced by 6.88% to Rs1,133, Bharti Airtel moved up by 3.88% to Rs874, Tata Steel added 3.86% to Rs579, Gujarat Ambuja Cement scaled up by 3.74% to Rs119 and ICICI Bank jumped 3.65% to Rs850. Select index stocks witnessed selling pressure. Wipro was the major loser and dropped 2.23% to Rs554. BHEL fell by 1.75% to Rs2494, TCS declined by 1.63% to Rs1226, Satyam Computer slipped by 1.19% to Rs475 and Dr Reddy's was down 1.11% at Rs712. Grasim, NTPC and Infosys also ended in the red.

Banking stocks witnessed sharp buying support. Canara Bank vaulted by 9.52% to Rs221, Oriental Bank advanced 8.37% to Rs208, Bank of India flared up by 7.40% to Rs197 and Punjab National Bank gained 6.83% at Rs506. Bank of Baroda, Allahabad Bank, Indian Overseas Bank, Andhra Bank and Union Bank were up 3-6% each.

Over 95.53 lakh Reliance Natural Resources shares changed hands on the BSE followed by IFCI (78.05 lakh shares), Indiabulls Real Estate (70.48 lakh shares), GV Films (65.22 lakh shares) and Germach Infrastructure Equipment (51.02 lakh shares).

Tata Steel was the most actively traded counter on the BSE and registered a turnover of Rs241 crore followed by Indiabulls Real Estate (Rs226 crore), SBI (Rs176 crore), Unitech (Rs156 crore) and HDFC Bank (Rs130 crore).

Bourses laud RBI's decision on rates

The Reserve Bank of India (RBI)’s decision to keep all policy rates - the CRR, repo, reverse repo and bank rates -- unchanged brought cheer on the bourses today. The benchmark Sensex surged to a two-month high, and the barometer index settled above the psychologically important 14,000 mark. Speculative buying, as well as short-covering in the derivatives aided the surge, especially in banking shares.

PSU banks vaulted as the RBI's decision to hold rates steady allayed fears of a squeeze on their profitability. Stocks from other interest rate sensitive sectors, namely, auto, housing finance and real estate looked up. Reliance Industries (RIL) and Bharti Airtel struck all-time highs. But IT shares slipped as the rupee rose to a fresh nine-year high against the dollar, soon after the central bank opted to hold short-term rates steady.

The 30-share BSE Sensex jumped 208.39 points (1.5%), to finish at 14,136.72, its highest closing in two months since 21 February 2007. The Sensex had struck 14,000 in intra-day trade on Monday (23 April) but failed to settle above that level.

The S&P CNX Nifty advanced 56.70 points (1.39%), to 4,141.80. The Nifty April futures were at 4,142.90 and the Nifty May futures at 4,139.

As per provisional data, FIIs were net buyers to the tune of Rs 340 crore today. Domestic institutional investors were net buyers to the tune of Rs 184 crore today.

The BSE clocked a turnover of Rs 5104 crore compared to Monday’s Rs 4098 crore. Turnover on NSE’s futures & options segment surged to Rs 50866.94 crore from Monday’s Rs 33404.76 crore as rollover gathered steam ahead of Thursday (26 April)’s expiry of April 2007 derivative contracts.

Barring the BSE IT Index, the other sectoral indices on BSE ended in the green. The top-gainer in percentage terms was the banking sector index, the BSE Bankex. The Bankex surged 279.56 points (4.06%), to settle at 7,161.40. The next major gainer was the Auto index. It rose 79.12 points (1.65%), to 4,882.03. The Metal Index rose 147.03 points (1.49%), to 10,043.87, due to a surge in Tata Steel.

On the back of gains in Reliance Industries (RIL) and ONGC, the BSE Oil & Gas Index advanced 100.75 points (1.42%), to settle at 7,203.64. The IT Index lost 35.57 points (0.7%), to finish at 5,027.29.

The market-breadth was almost even. Against 1,274 scrips that rose on BSE, 1,279 declined. Also, 75 stocks were unchanged.

Small-cap and mid-cap indices nudged higher. The BSE Small-Cap Index rose 32.71 points (0.47%), to settle at 7,003.63. The BSE Mid-Cap Index gained 42.90 points (0.75%), at 5,745.34.

In its monetary policy announced today, the RBI reduced interest rate ceilings on non-resident deposits and proposed allowing companies to repay more foreign borrowings ahead of schedule. The central bank proposed increasing the aggregate ceiling for overseas investment by mutual funds to $4 billion from $3 billion and increased the foreign portfolio investment limit for listed firms.

The central bank forecast that annual wholesale price inflation, which was running just above 6% in early April 2007, will be close to 5% at the end of March 2008. The RBI forecast GDP growth at 8.5% in the fiscal year ending March 2008, lower than the 9.2% expected for 2006/07.

The apex bank Governor Dr Y V Reddy also took a number of initiatives toward capital account convertibility and encouraged hedging of price risk on global commodity exchanges. He also put in place measures to develop the corporate bond market, futures contract, establishment of credit information companies and a number of steps to help distressed farmers and micro-finance.

Finance Minister P Chidambaram said on Tuesday the central bank's monetary policy would help moderate inflation without hurting growth. He said controlling inflation below 5% was an "aggressive task".

Asian stocks were mixed on Tuesday. Key benchmark indices in Hong Kong, China, South Korea and Taiwan rose between 0.08% to 0.8%. Key benchmark indices in Japan, and Singapore dropped between 0.02- 0.41%.

US stocks fell on Monday after oil prices rose and a General Motors executive said the crisis in US mortgage lending hurt US auto sales this month, stirring concerns of an even wider economic impact. The Dow Jones industrial average was down 42.58 points, or 0.33%, at 12,919.40. The Standard & Poor's 500 Index was down 3.42 points, or 0.23%, at 1,480.93. The Nasdaq Composite Index was down 2.72 points, or 0.11%, at 2,523.67. Earlier during the day, the Dow industrials hit an intraday record high of 12,983.92.

Corporate results for Q4 March 2007 announced so far have been strong, which along with strong FY 2008 guidance by IT bigwigs Infosys and Satyam Computer, firm global bourses and continued FII-buying have boosted the bourses this month. The Sensex had tanked 617 points in a single trading session on 2 April 2007, following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007. From a low of 12,455.37 on 2 April 2007, the Sensex has collected 1,681.35 points (13.4%) in a short while.

The Sensex’s all-time peak is of 14,723.88, which had been reached on 9 February 2007. Its all-time closing high is 14,652.09 of 8 February 2007.

FIIs have stepped up buying after Infosys gave strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their inflow for April 2007, till Monday (23 April 2007), aggregated Rs 5051.20 crore.

In today’s trade, PSU banks spurted on the RBI's decision to hold rates steady. State Bank of India (SBI) gained 7% to Rs 1135, Indian Bank jumped 11% to Rs 106.25, Canara Bank rose 10.6% to Rs 223.75, Bank of India gained 8% to Rs 198.90, Oriental Bank of Commerce (OBC) rose 7.6% to Rs 207, Punjab National Bank (PNB) gained nearly 7% to Rs 506 and Bank of Baroda advanced 6% to Rs 239.

Among private sector banks, ICICI Bank rose 3% to Rs 947, and HDFC Bank gained 2.4% to Rs 1011.90. After trading hours, HDFC Bank reported 31% growth in net profit in March 2007 quarter at Rs 344 crore (Rs 263 crore).

Housing finance firms advanced after the central bank lowered a risk weightage on housing loans up to 20 lakh from 75% to 50%. RBI said the reduction was a temporary measure. HDFC gained 2.6% to Rs 1714.90.

Car major Maruti Udyog gained amid volatility in afternoon trade, when it announced Q4 March 2007 results. The stock surged 4.3% to Rs 801. Maruti Udyog (MUL) today reported 24% growth in net profit in Q4 March 2007, at Rs 449 crore against Rs 361 crore in the corresponding quarter a year ago.

Other rate sensitive auto shares too nudged higher. Tata Motors gained 3.9% to Rs 746, Mahindra & Mahindra gained 1.7% to Rs 744, and Bajaj Auto advanced 1.6% to Rs 2449.

Bharti Airtel gained 4% to Rs 875. It struck a high of Rs 882, which is a lifetime high for the scrip. The company on Monday announced the pan-India launch of comprehensive telecom and networking solutions for small and medium businesses.

Reliance Industries rose nearly 2% to Rs 1583. The stock struck a high of Rs 1588, which is a record high for the scrip. Oil exploration major, ONGC, gained 1.7% to Rs 949.65, tracking firm global crude oil prices.

IT shares slipped due to worries over a rising rupee against the US dollar. Wipro lost nearly 2% to Rs 556, TCS shed 1.2% to Rs 1230, Satyam Computer shed 0.8% to Rs 476.50 and Infosys shed 0.4% to Rs 2058. A stronger rupee directly impacts the revenue and profits of IT firms as they derive a lion’s share of revenue from exports.

The Indian rupee soared more than 1% against the dollar on Tuesday to a fresh nine-year high, with the market undeterred by central bank steps to try and ease upward pressure on the currency. The rupee climbed as far as 41.15 per dollar, its highest level since May 1998.

Tata Steel extended its gains, as investors shrugged off equity dilution concerns and instead focused on the attractive price of its rights issue. The stock was up nearly 4% to Rs 578.80. The company, last week, announced a 1:5 rights issue at Rs 300 per share.

Gujarat Ambuja Cements gained nearly 4% to Rs 119.40 and ACC rose 2.4% to Rs 816. Holcim, the world's second-biggest cement maker, has raised its stake in Gujarat Ambuja Cements (GACL) to nearly 30% in a deal worth approximately Rs 322 crore. Around 27.96 million GACL shares, constituting roughly 1.8% of its equity, was traded in a block deal on the Bombay Stock Exchange at Rs 115 per share on Monday (23 April 2007). Holcim owns nearly 28% in Ambuja Cements and this stake will rise to nearly 30% after the latest deal.

Tanla Solutions extended its gains post results. The stock was up by its 2% daily limit at Rs 416.80. During trading hours on 19 April 2007, Tanla Solutions reported 48% sequential rise in consolidated net profit in Q4 March 2007 to Rs 34.04 crore from Rs 23.04 crore in Q3 December 2006. Sales rose 38% to Rs 78.04 crore from Rs 56.73 crore in Q3 December 2006.

Supreme Petrochem rose 0.4% to Rs 21.60. The company today reported a 5.9% fall in net profit in the March 2007 quarter, at Rs 9.16 crore from Rs 9.73 crore.

Sesa Goa dropped 3% to Rs 1690.10. Vedanta Resources has bought Mitsui's 51% stake in Sesa Goa for nearly $981 million. The offer price works out to Rs 2036 per share. The winning bid is at a premium of nearly 17% to the last traded price of Rs 1742 of Sesa Goa.

Zensar Technologies ended flat at Rs 272. The company today reported 3.5% year-on-year fall in net profit in the March 2007 quarter to Rs 12.53 crore (Rs 12.99 crore).

ABB rose 1.8% to Rs 3979.80, extending its pre-results' rally. ABB unveils Q1 results on 26 April 2007. Six brokerages expect 26.8 - 50.7% growth in ABB’s Q1 net profit, between 65 crore and Rs 77.30 crore, compared to a net profit of Rs 51.30 crore in Q1 March 2006. Sales are seen rising 25 - 49.2%, between Rs 1003.60 crore and Rs 1198.20 crore from Rs 802.91 crore in the March 2006 quarter.

CEAT jumped 11% to Rs 152.45, on expectation that the spin-off of its investment business will unlock value for members. The stock rose on a volume of 19.9 lakh shares on BSE. As per the plans for a spin-off, CEAT shareholders will get 75 shares in CEAT and 25 shares in the investment firm for every 100 shares held in CEAT. CEAT had also on Monday (23 April) reported a sharp jump in net profit in the January-March 2007 quarter to Rs 23.41 crore.

MTNL dropped almost 7% to Rs 151. The company today reported 47% growth in net profit in the March 2007 quarter at Rs 206.32 crore (Rs 140.27 crore). Net sales declined 16.9% to Rs 1199.97 crore from Rs 1445.28 crore.

Parsvnath Developers jumped 8.5% to Rs 322, after the company said it had secured a project for a shopping mall and metro station at the Commonwealth Games Village complex near New Delhi at a cost of about Rs 160 crore.

Eicher Motors jumped 10% to Rs 250, after two block deals for a total of 16.7 lakh shares (5.94% equity) were executed on BSE. The deals were struck at Rs 234 and Rs 235 per share. Details of buyers and sellers were not known immediately.

Indiabulls Financial Services was down 3% at Rs 472.15, on concerns of equity dilution after the firm said it planned to raise additional capital through an issue of global depositary receipts (GDRs). The firm did not specify the quantum of funds it planned to raise through the issue.

Interest rate sensitive real estate shares surged. Unitech jumped 10% to Rs 439.05, Ansal Infrastructure gained 5% to Rs 270.80, Mahindra Gesco Developers rose 7.6% to Rs 657, Indiabulls Real Estate gained 6.7% to Rs 324.65, Sobha Developers gained 5.9% to Rs 864 and Akruti Nirman rose 4.6% to Rs 397.45.

Sun TV lost 1.4% to Rs 1625. The company’s board today approved a liberal 1:1 bonus issue.

Kale Consultants gained 0.8% to Rs 106.35. It has bagged a deal from Sweden-based SAS Cargo, to implement its CSP-AMBER cargo revenue accounting solution.

Siemens jumped nearly 6% to Rs 1124.90. It came off an early low of Rs 1020. After trading hours on Monday, Siemens reported 8.5% drop in net profit in Q2 March 2007 at Rs 108 crore. The drop in net profit is due to lower other income and also due to a fall in operating margins. Sales jumped 91% to Rs 2129 crore.

Siemens’ outstanding order-book, at the end of March 2007, stood at Rs 10800 crore. During the quarter, new orders rose 22% to Rs 1950 crore. Siemens has also signed a share purchase agreement to acquire 77% of Chennai-based iMetrex Technologies, an electronic security and buildings automation company.

KEC International dropped 4.3% to Rs 545.25, even as it reported strong Q4 March 2007 results. KEC International reported a surge in net profit in the March 2007 quarter at Rs 30.18 crore (Rs 16.04 crore). Net sales rose 33.9% to Rs 640.92 crore (Rs 478.38 crore).

Hinduja TMT plunged to Rs 599.35, following resumption of trading in the scrip. The stock exchanges had set Rs 901 as the base price for the scrip. Since derivative products are available in this counter, it will have no daily price band. A temporary 20% price band was applied at Rs 720.85, when the stock plunged soon after relisting. The price band was shortly removed and the stock fell further.

Suprajit Engineering gained 0.5% to Rs 162.60, after the company said Tuesday it had signed a technical collaboration agreement with Korea's Michang Cable Company to manufacture gear shifters and cables.

Grindwell Norton surged 4% to Rs 128. The company reported 33.6% growth in net profit in the March 2007 quarter at Rs 14.30 crore (Rs 10.70 crore). Net sales rose 24.9% to Rs 103.20 crore from Rs 82.60 crore.

West Coast Paper surged nearly 6% to Rs 388. West Coast Paper Mills posted a 44% jump in January-March 2007 quarter net profit to Rs 17.50 crore due to improved volumes and cost savings.

Rolta India jumped 10.3% to Rs 424.40 after the company reported 26.5% rise in net profit in the March 2007 quarter at Rs 46.94 crore (Rs 37.11 crore). Total income rose to Rs 153.04 crore from Rs 118.44 crore.

The major Q4 results scheduled tomorrow are Infrastructure Development Finance Company, National Aluminium Company, Grasim Industries, and Reliance Energy.

SSKI - Sasken's Q4FY07 results (Outperformer): Disappointing quarter; Outlook on product business intact

Sasken (CMP: Rs526)

Mkt Cap: Rs15bn; US$361m

Sasken's Q4FY07 results were disappointing. Revenues grew 3.3% qoq (+5.7% in $ terms) to Rs1.35bn lower than our expectation of Rs1.43bn. Services revenues (93.6% of total) remained broadly flat at Rs1.27bn (+2.1% qoq in $ terms) – we expected 6.1% qoq growth – while recently acquired Botnia (~25% of services revenues) witnessed 18% qoq growth in $ terms, revenues ex Botnia declined sequentially. The margins in services business declined sharply by 220bp to 20.7% due to rupee appreciation, lower utilization and higher proportion of revenues from Botnia, having lower margins. The company expects slower growth in network infrastructure business (40-50% of services revenues), while Botnia and terminal devices business are witnessing good growth. During FY07 services business reported a strong organic growth of 33.5%yoy in $ terms. Products revenues at Rs87m were in line with our expectations, but the royalty component was below street expectations. Developments on product side during the quarter include two new Design Ins (Lenovo being one of them) and launch of new handsets by NTT DoCoMo carrying Sasken's Multimedia Solution. We have downgraded both revenue and earning estimates for FY08 and FY09 by ~10% to account for rupee appreciation and slower growth in services business. The stock price has gone up by ~10% in April 07 till date. We expect stock to Outperform over 12-18 month horizon as the outlook on growth potential in product business remain intact - Outperformer.

SSKI - Sasken's Q4FY07 results (Outperformer): Disappointing quarter; Outlook on product business intact

Sharekhan Highnoon dated April 24, 2007

Sharekhan Highnoon dated April 24, 2007

Edelweiss - Update: Sesa Goa Open Offer by Vedanta

Edelweiss - Update: Sesa Goa Open Offer by Vedanta

RBI Credit Policy

RBI Credit Policy

LMSPL - Tulip IT Services

LMSPL - Tulip IT Services

Kotak - Derivatives: 24 Apr 2007, Kotak - Daily Morning Brief - 24 Apr 2007 + Siemens (Buy)

Kotak - Daily Morning Brief - 24 Apr 2007 + Siemens (Buy)

Kotak - Derivatives: 24 Apr 2007

PowerYourTrade Trading Calls

Ashwani Gujral
Buy Maharashtra Seamless with stop loss of Rs 520 for a target of Rs 640
Buy Aban Offshore with stop loss of Rs 2250 for a target of Rs 2620

Deepak Mohoni
Short Sell Bajaj Hindustan above Rs 163 with stop loss at Rs 166. This is a day-trading recommendation.
Buy VSNL below Rs 449 with stop loss at Rs 443. This is a day-trading recommendation.

Rajat K Bose
Sell Bajaj Hindustan with stop loss above Rs 171 for a target of Rs 158, 155 and 152. This is a day-trading recommendation.

Sell GMR Infrastructure with stop loss above Rs 410 for a target of Rs 383 and Rs 378. This is a day-trading recommendation

Kotak - Market Morning - 24 Apr 2007

Kotak - Market Morning - 24 Apr 2007

ENAM - Titan Industries, Bank of India, Siemens, Jindal Steel & Power

Titan Industries

Bank of India


Jindal Steel & Power

Kotak - Siemens, PFC, Indian Overseas Bank, Indian Bank, Monnet Ispat, Economy



Indian Overseas Bank

Indian Bank

Monnet Ispat


HSBC - Credit Policy Preview

HSBC - Credit Policy Preview

Anand Rathi - Market Briefing - Apr 24, Anand Rathi - Daily Fundamental Snippets - Apr 24

Anand Rathi - Market Briefing - Apr 24

Anand Rathi - Daily Fundamental Snippets - Apr 24

Monetary policy woes may weigh

Overnight fall in US and European indices coupled with subdued Asian markets in morning trades may weigh on the local indices in morning trades. Today Reserve Bank of India (RBI) will announce its monetary policy and expectations are that RBI may lower its inflation tolerance limit to 5% and increase the interest rate to curb inflation. The rapid appreciation of rupee against dollar is another cause of concern. However, the prevailing north-bound journey and decent earning numbers reported by number of companies in the past few sessions may add to the market advantage and help the sentiment turn positive. The Nifty could find support at 4030 and once it breaks and sustains below 4030, the Nifty can target 4000-3985 level, while the Sensex has a likely support at 13500 and may face resistance at 14050.

On the result front, HDFC Bank, Hexaweare, MTNL, Maruti Udyog are expected to announce their numbers.

US indices ended weak on Monday, with the Nasdaq sliding by three points to close at 2524 amid selling in technology stocks. Other factors like higher crude oil prices saw the the broader Dow Jones to slip 43 points at 12919.

Indian ADRs had a mixed outing on the US bourses. Tata Motors and Patni Computer gained over 2-3% while ICICI Bank, HDFC Bank, MTNL and VSNL were up around 1% each. However, Infosys, Satyam, Wipro, Dr Reddys and Rediff slipped ended in the red with steady losses.

Crude oil prices in the international market edged higher, with the Nymex light crude oil for June delivery rising by $1.78 at $65.89 a barrel. In the commodity segment, the Comex gold for June series fell $1.60 to settle at $694.20 an ounce.

Weak Asian markets may trigger profit taking

The market is likely to edge lower tracking subdued to weak trend in key Asian markets. Caution is likely to prevail ahead of RBI’s policy review at 12:00 IST. Opinion is divided on whether RBI will raise short-term interest rates. The central bank will also set out its forecasts for the year, including inflation and growth.

The market had got a boost over the past few days on the back of strong Q4 results announced so far and also due to strong guidance for FY 2008 by IT majors Infosys and Satyam Computer. Healthy FII inflow aided the surge. The major Q4 result today is that of car major Maruti Udyog.

Volatility may rise in the near term ahead of expiry of April 2007 derivative contracts on Thursday (26 April).

UP election is a key political event to watch for in the near term. Monday (23 April) was the fourth of seven stages in the ongoing assembly election in Uttar Pradesh. The UP vote is seen as a barometer of national political trends.

FIIs have stepped up buying after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns about the impact of a slowdown in the US on India's IT sector. Their inflow for April 2007, till Friday (20 April 2007), aggregated Rs 5120 crore.

As per provisional data, FIIs were net sellers to the tune of Rs 142.49 crore on Monday 23 April. Domestic institutional investors were net buyers to the tune of Rs 258 crore on that day.

Asian stocks slipped on Tuesday as surging oil prices and the crisis in US mortgage lending raised fears of slowing spending in the region's top export market, hurting shares in firms dependent on US demand. Key benchmark indices in Hong Kong, Japan and Singapore were down by between 0.25% to 0.85%. Key benchmark indices in China, Taiwan and South Korea were up by between 0.14% to 0.39%.

US stocks fell on Monday after oil prices rose and a General Motors executive said the crisis in US mortgage lending hurt US auto sales this month, stirring concerns of an even wider economic impact. The Dow Jones industrial average was down 42.58 points, or 0.33 percent, at 12,919.40. The Standard & Poor's 500 Index was down 3.42 points, or 0.23 percent, at 1,480.93. The Nasdaq Composite Index was down 2.72 points, or 0.11 percent, at 2,523.67. Earlier during the day, the Dow industrials hit an intraday record high of 12,983.92.

The dollar sat not far from a two-year low against the euro, staying under pressure as traders awaited US housing data, due later in the day, which could offer clues on the direction of Federal Reserve interest rate policy.

Oil paused after leaping around 3 percent on Monday amid fears of disruption to Nigerian supplies after a weekend presidential election was condemned by monitors. London Brent crude currently seen as a better benchmark for world oil prices than US crude, fell 22 cents to $67.93 a barrel, after jumping $1.66 on Monday.

Intra-day Stock Ideas

NIFTY (4085) SUP 4061 RES 4101

SL 322 T 336, 339

BUY VSNL (448.95)
SL 442 T 458, 461

@ 141 SL 145 T 130, 128

@ 264 SL 268 T 252, 250

@ 256 SL 260 T 244, 241


Blame it on Reddy

Things that are done, it is needless to speak about...things that are past, it is needless to blame.

The bulls and bears will have one man to 'blame.' As we mentioned yesterday RBI Governor Dr. Y.V. Reddy will hold sway over the markets this week, particularly today . That may have sounded alarm bells ringing for some on the street. But, the good news is that Dr. Reddy is most likely to hold key short-term rates steady having already unleashed a slew of tightening steps in the past few months. The central bank is expected to examine its latest set of measures - the hike in repo rate as well as the CRR in March - to take full effect before deciding on its next move. In any case, Dr. Reddy has announced rate hikes and CRR increases in between the scheduled meetings. So, the RBI is likely to treat the scheduled policy meetings more for its communication to the markets and the banks rather than unveiling any revision in rates.

Though the RBI may decided to take a breather for a while, there is one certainty that the tone of its remarks will remain hawkish. There will be no let up in the efforts by the Government and the central bank in curbing prices even if it comes about at the cost of lower GDP growth. One of the offshoots of this strategy has been the recent spike in the rupee, which touched a nine-year peak against the dollar on Monday. There is a growing view that the Government and the RBI are working in tandem to let the currency appreciate to take some of the pressure off in containing inflation and the high credit growth. Exporters like the IT and Textile firms may not be happy, but that won't deter the 'powers that be' from adopting a pro-rupee stance.

In news just coming in Vedanta is to buy Mitsui's 51% stake in Sesa Goa at a 17% premium to the current market price.

Coming to today's session, things are looking a bit weak, with markets in the US and Asia in the red and crude oil crossing the $65 per barrel mark. But, the bulls need not despair as the quarterly results have been pretty strong, barring an odd surprise like Siemens yesterday. FII inflows have been strong as well. FIIs poured in Rs7.49bn on Friday, taking their net investment this month close to the billion dollar mark. Overall fund flows into the emerging markets too have been good over the past four weeks. In the third week of April, emerging markets equity funds saw net inflows to the tune of $1.1bn, according to the Emerging Portfolio Funds Research (EPFR). The F&O expiry on Thursday is also likely to pass off smoothly.

On Wall Street overnight, the Dow Jones Industrial Average slipped on Monday after closing at record highs the last three sessions, as remained cautious amid higher oil prices, weakness in GM and anxiety over this week's economic and earnings news. Stocks also declined after Moody's increased its loss estimates on sub-prime mortgages.

The Dow posted its first drop in eight days, slipping 42.58 points, or 0.3%, to 12,919.40. The blue chip benchmark had earlier risen within 17 points of reaching 13,000 for the first time. The S&P 500 fell by 3.42 points, or 0.2%, to 1480.93. The Nasdaq Composite Index dropped 2.72 points, or 0.1%, to 2523.67.

Barclays said it will buy ABN Amro for $91bn. As part of the deal, ABN would sell its US unit LaSalle Bank to Bank of America for $21bn in cash. However, ABN said it will hear a counter bid from a group led by Royal Bank of Scotland.

Separately, AstraZeneca said it will buy US biotech firm MedImmune for $15.6bn all-cash deal.

US light crude oil for June delivery rose $1.78 to settle at $65.89 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 15 cents lower at $65.74 a barrel.

COMEX gold for June delivery fell $1.60 to $694.20 an ounce on reports of violence in oil-exporting Nigeria. Treasury prices rose, lowering the yield on the 10-year note to 4.65% from 4.67% late on Friday. In currency trading, the dollar rose versus the euro and inched lower versus the yen.

European shares hovered near six-and-a-half-year highs. The pan-European Dow Jones Stoxx 600 index fell 0.1% to 389.00, after hitting a high not seen since November 2000 of 390.18 early in the session. The German DAX Xetra 30 shed 0.1% to 7,335.62, while the UK's FTSE 100 dipped 0.1% to 6,479.70.

Asian stocks fell for the first time in three days on Tuesday. The Nikkei in Tokyo was down 140 points at 17,315 while the Hang Seng in Hong Kong was down 69 points at 20,486. The Kospi in Seoul was flat at 1544 and the Straits Times in Singapore declined 18 points to 3369.


RBI holds the key

Markets witnessed a flattish end as announcement of the Credit Policy tomorrow kept the bulls on guard. BSE Benchmark Sensex after breaching the 14kmark and NSE Nifty crossing the 4100 mark the key indices pared its early gains as profit booking emerged on the bourses in the later half of the trading session dragging the key indices from its days high. The mid-Cap and the small cap stocks also ended on the receiving end on back of selling pressure. Finally, the 30-share benchmark Sensex gained 31 points to close at 13928. NSE Nifty was flat at 4085.

Era Construction dropped by over 3% to Rs352. The Company secured orders worth Rs1.89bn from NTPC. The scrip touched an intra-day high of Rs375 and a low of Rs349 and recorded volumes of over 4,00,000 shares on NSE.

Bharati Shipyard slipped 1% to Rs403. The Company announced that they have has signed a contract with UP OFFSHORE (BAHAMAS) LTD, for construction and supply of two Platform Supply Vessels. The Contract is value approximately at Rs.1.8bn. The scrip touched an intra-day high of Rs425 and a low of Rs396 and recorded volumes of over 24,000 shares on NSE.

Wockhardt Pharma edged lower by 0.4% to Rs419. The company announced that they have signed its first in-licensing agreement in the anti-wrinkle arena with Milan-based Syrio Pharma S.P.A. to market their B-Lift range of dermatology products. The scrip touched an intra-day high of Rs422 and a low of Rs399 and recorded volumes of over 54,000 shares on NSE.

Sun Pharmaceutical declined by over 11% to Rs1047. The company announced that it has separated its research division. The scrip touched an intra-day high of Rs1111 and a low of Rs985 and recorded volumes of over 9,00,000 shares on NSE.

Bank of India fell 2.3% to Rs183. The company announced its Q4 result with net profit at Rs4.47bn (up 75.9%) and declared to pay Rs1.5 per share as Final Dividend. The scrip touched an intra-day high of Rs191 and a low of Rs182 and recorded volumes of over 33,00,000 shares on NSE.

Auto stocks were on the receiving end. Bajaj Auto fell 1.5% to Rs2402, Maruti was down 1.6% to Rs766, M&M dropped 1.7% to Rs731 and Tata Motors edged lower 0.7% to Rs718. However, Hero Honda gained by 1% to Rs655.

FMCG stocks slipped the most as the stocks witnessed profit booking. Index heavy weight ITC dropped by 3% to Rs156, HLL was down by 1.7% to Rs202 and Colgate slipped 0.9% to Rs342 and Dabur edged lower 0.6% to Rs96.

Pharma stocks were in bad health. Cipla edged lower by 0.5% to Rs234, Ranbaxy was down by 0.2% to Rs343 and Cadila dropped 1% to Rs327.

Technology stocks were a mixed bag. Mid-Cap stocks were the major losers, Mphasis BFL fell over 4% to Rs306, i-Flex was down by 2.1% to Rs2362 and Polaris dropped 2.2% to Rs198. However, heavy weight Infosys and Satyam Computer gained over 0.5% each

Market Volumes:

The turnover on NSE was down by 13% to Rs76.95bn. BSE Capital Good index was the major loser and lost 2.36%. BSE FMCG index (down 1.62%), BSE Pharma index (down 1.40%) and BSE auto index (down 0.59%) were among the other major losers. However, BSE Metal index gained 2.01%.

Volume Toppers:

RNRL, TTML, SAIL, FSL, Tata Steel, PFC, R Com, Ashok Leyland, Unitech, Satyam Computer, IDFC, GTL, Bank of India, Hanung Toys, Dish TV and Voltas.

Upper Circuit:

Sujana Metal, Shree Precoated, Ansal Infrastructure, Tele data Informatics, Atlanta, Tanla, Nirlon and BF Utilities.

Results Today:

All Cargo, Bajaj Hindusthan, Essar Oil, HDFC Bank, Hexaware, MTNL, Maruti and Sun TV.

Delivery Delight:

Century Textiles, CESC, EXIDE Industries, Hero Honda Motors, HCC, Nagarjuna Construction, Reliance Industries, Tata Power, TVS Motor and VSNL.

Abnormal Delivery:

Balrampur Chini Mills Ltd, India Cements, Gujarat Ambuja Cements, Raymond, Corporation Bank, Tata Chemicals, Bharat Forge and Ranbaxy Laboratories.

Stock Futures with Largest Increases in OI:

M&M, Crompton Greaves, IDFC, Jindal Stainless, J&K Bank, Indian Bank, Tata Chem, Hero Honda and Patni.

Stock Futures with Largest Decreases in OI:

Sun Pharma, Aban Offshore, Alok Industries, Indian Hotels, IFCI, Amtek Auto, ACC, Nagarjuna Const and Triveni Eng & Ind.

Results Corner:

Rolta Q3 profit at Rs469.4mn (up 42%), total income at Rs1.53bn (up 29%)

PFC Q4 profit at Rs3.68bn (up 71%), revenue at Rs11.32bn (up 44.9%)

Indian Bank Q4 profit at Rs2.35bn (up 69%) and total income at Rs15.64bn (up 43%)

Bank of India Q4 profit at Rs4.47bn (up 75.9%) and to pay Rs1.5 per share as Final Dividend

Brokers Recommendation:

REL – Overweight from Morgan Stanley with target 609

Zee Telefilms – Buy from CLSA with target of Rs309.

Long Term investment:


Major News

FIPB refuses to take call on Vodafone-Hutch deal

Siemens to acquire 77% stake in iMetrex Technologies

CEAT board approves plan to separate Finance Business and to pay Rs1.8 per share as dividend

Punj Lloyd gets Contract by Reliance Gas Transportation Infra Ltd

Era Const gets Rs1.89bn from NTPC

JSW Steel to consider expansion, Fund raising plan on 30th April

OrbitCorp buys land from Ambuja Cements for Rs3.33bn

Tata Power buys Coastal Gujarat Power Ltd

Kale Consultants gets contract from SAS Group

ACC to buy 14.5mn shares of Shiva Cement at Rs11 apiece

IB Real Estate board to consider dividend on 30th April.

Anagram - Daily Call, Emkay Morning Notes, Kirloskar Oil Engines, ACC

Anagram - Daily Call - Apr 24

Emkay Morning Notes, Kirloskar Oil Engines, ACC

Religare - Daily Market Outlook, Futures & Technicals & Anand Rathi Technical Note & Strategist

Religare - Daily Market Outlook, Futures & Technicals - Apr 24

Nifty and Sensex have exhibited a narrow candlestick with a longer upper shadow.

Technically, one may use the level of 3995 (Nifty) and 13675 (Sensex) as the stop loss level.

Nifty faces resistance at 4125 and Sensex at 14050.

BSE Smallcap exhibited a bearish candlestick and BSE Midcap exhibited a narrow candlestick.

CNX IT has lost ground.

In the Punter's zone we have a BUY in G.E.Shipping & SELL in Tata Steel and Suzlon.

In the Technical call section, we have a BUY in Exide Industries , D.C.B. & Lyka Labs.

Anand Rathi - Daily Technical Note - Apr 24

The NIFTY futures saw a rise in OI to the tune 1.53% with prices coming down and closed almost flat indicating selling pressure emerging at higher levels indicating short positions being built up at higher levels. The FIIs sold index futures to the tune of 66.45 crs and buyers in index options to the tune of 129.74 crs indicating hedged positions built by them. The PCR has come up from 1.24 to 1.28 indicates that some buying support may emerge in the market. The volatility has come up from 23.20 to 28.50 levels indicating volatile trading sessions ahead.

Among the Big guns, ONGC saw 0.60% rise in OI with prices coming up 1.57% indicating that the counter saw buying support emerging at lower levels indicating strength in the counter. Whereas RELIANCE saw 4.74% drop in OI with prices rising marginally indicating that both bulls and bears liquidated their positions as market showed selling pressure at higher levels.

In the TECH front, INOFSYSTCH, WIPRO & SATYAMCOMP saw liquidation of positions by both bulls and bears indicating uncertainty expected by participants of market movement .TCS saw built up in OI to the tune of 1.42 % with fall in prices to the tune of 0.79% indicating short positions being built up in the counter indicating weakness in the counter.

In the BANKING counters, SBIN saw drop in OI to the tune of 5.59% with drop in prices to the tune of 1.28% indicating lack of confidence in the participants as both bulls and bears liquidated their positions whereas ICICIBANK saw RISE in OI to the tune of 6.46% with prices almost flat indicating buying emerging at lower levels in the counter indicating further strength in the counter .HDFCBANK saw rise in OI to the tune of 5.77% with price negative indicating short positions being built up in the counter indicating weakness in the counter.

In the metal pack TATASTEEL saw drop in OI to the tune of 3.10% with price up significantly indicating heavy short covering in the counter as counter crossed its resistance levels which may result in further strength in the counter whereas SAIL saw marginal OI with rise in prices indicating short covering seen in the counter and built up of fresh long positions indicating further strength in the counter.HINDALCO saw drop in OI with prices rising indicating short covering seen in the counter whereas STER saw liquidation of positions by both bulls and bears.

Considering the overall scenario and the markets behavior, market showing volatility as selling pressure emerging at higher levels and profit booking seen in the market. If market doesn't sustains after credit policy announcement we may see liquidation of long positions and bears building fresh short positions. Traders are advised not to go aggressively short on the market unless important support level of 3990 is breached and any position taken should be with strict stop losses to be adhered too.

Anand Rathi - Daily Strategist - Apr 24

Anagram - Weekly Watch & Sharekhan Daring Derivatives for April 24, 2007

Anagram - Weekly Watch

Sharekhan Daring Derivatives for April 24, 2007

Merrill Lynch - UTI Bank, Indiabulls Fin, Matrix Labs, Infotech Enterprises

Merrill Lynch - Infotech Enterprises

Merrill Lynch - Indiabulls Financial

Merrill Lynch - Matrix Labs

Merrill Lynch - UTI Bank

Harry Potter and the Amazing Investor

The other day I met someone who claimed to have doubled his investments every month for more than a year now. If I do the maths it turns out that this man must have multiplied his money to more than 4,000 times what it was. That's 4,000 times, not 4,000 per cent. The interesting part is that not only do such people expect to be believed, there are those who believe them. If you ask a random collection of people whether they think it possible that somewhere in the world there exist investors who can go on doubling money every month, then you'll get a surprising number of yeses. It's like believing in Harry Potter.

No one who invests in the stock markets ever loses any money. Or at least, that's what I will have to believe if I take at face value whatever someone says about their personal performance in managing their investments. I'm serious. Because of my profession, a lot of people talk to me about their investments and I can hardly remember anyone saying for months now that they lost money. It's amazing, actually. The markets fall. Dubious stocks shoot up and people keep buying them and then when the markets fall and stagnate no one admits to having lost any actual money.
To be fair, there are some who admit to holding investments that are way under water from their purchase price, but claim that this is not a loss but a temporary dip.

That's a point of view, I suppose. Not only does this undying faith in the existence of supernatural rates of return persists, it does a lot of real harm.

The refusal to admit to wrong investing decisions means that we miss the opportunity to learn from them. I know this sounds like a slogan from one of those motivational posters that are sold on footpaths, but failure really is a very good teacher. Provided one makes the effort to learn from it.

And at least in the case of investments, it isn't all that difficult to learn from bad investments.

What one has to do is to honestly think of the reasons why one bought that investment and then resolve not to repeat that reason without any further refinements.

Let me illustrate with a couple of examples.

Let's say you put a chunk of money into a new mutual fund because the fund salesman said other funds of that fund company had a great track record. Now that this new fund has done worse than the older ones, you only need to think back carefully at your reasons for the investment and the cure is self-evident.

Of course there's a danger in not making this analysis general enough. Let's say the brother-in-law of your boss recommends a stock and you buy it without any further inquiry and then the stock price collapses. Surely, the lesson is not that you shouldn't buy a stock on the recommendation of the bosses' brother-in-law or even brothers-in-law in general but that you shouldn't make investments you do not understand. Chance and luck may have played a role in a big success that someone may have had. It isn't very wise to mistake that for magic and imagine that it's repeatable by waving a wand.