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Friday, September 28, 2007

Monthly Investment Picks - October 2007

Monthly Investment Picks - October 2007

Dhanus Technologies Allotment Status

This is to inform you that an article was published in a local Tamil magazine - "Junior Vikatan" in its edition dated 29.08.2007 in which it has raised certain allegations against the Company / its promoters and its employees. In this regard, the Company is publishing a public notice in the prominent newspapers on 27.09.2007, giving details of the allegations & the Company's clarifications on the same. The Company is also giving an option to the applicants to withdraw their applications, if they wish to do so, within a period of 10 days from the date of publication of the public notice, viz., 06.10.2007. A separate letter to all the applicants/investors has also been sent in this regard. The further course of action regarding basis of allotment / despatch of refund orders etc., will be organised subsequently.

Download Public Notice here

Letter to Investors

Alston Power, Dabur India, Saamya Biotech, Wipro, Kotak Mahindra, Reliance Communications, Circuit Systems, Maytas Infra, Ambuja Cements

Alston Power, Dabur India, Saamya Biotech, Wipro, Kotak Mahindra, Reliance Communications, Circuit Systems, Maytas Infra, Ambuja Cements

Chidambaram - Outlook positive

"There are of course some risks. Many of them arebeyond our control and, hence, we are compelled to take precautionary measures",says P. Chidambaram

Following is the text of the address of Finance Minister, Shri P. Chidambaram on India: Economic Growth and Outlook delivered at the Peterson Institute for International Economics in Washington, United States:-

1. “I am grateful for the invitation to deliver a talk at the Peterson Institute for International Economics. I understand that one of the objects of the Institute is to promote informed dialogue on international issues. The world is still divided in many ways – developed versus developing, North versus South, and rich versus poor. It is necessary to bridge this divide, and dialogue can do so. Dialogue can promote better appreciation of the issues; dialogue can also anticipate emerging trends.

2. Let me share with you our recent experience in managing the Indian economy and the outlook for the medium term. The India story is now rather well known, but some aspects bear repetition. In the most recent four year period – 2003-04 to 2006-07 – India’s GDP has grown at an average rate of 8.6% a year. In particular, 2006-07 was a splendid year turning out a growth rate of 9.4%. All the indicators are positive. Gross Domestic Capital Formation (GDFC) – that is investment – in relation to GDP is estimated at a little over 35%. Inflation measured by the wholesale price index (WPI) is 3.3%. Foreign exchange reserves stand at over US$230bn. All sectors of the economy are contributing to the growth rate, although we are not entirely satisfied with the performance of the agriculture sector.

3. It is now three years and four months since the present Government assumed office. The Government has brought greater stability and clarity to the policy environment. In many cases, the policy is backed by law or regulation. In key sectors, Government has ceded authority to independent regulatory bodies.

4. Government has also remained steadfast on the path of fiscal prudence and discipline. Within weeks of assuming office and before presenting the first budget, we notified the Fiscal Responsibility and Budget Management Act (the FRBM Act). Despite pressure on resources, we have complied with the obligations under the Act. The fiscal deficit for the current year has been budgeted at 3.3 per cent and the revenue deficit at 1.5 per cent, and we believe we are on course to achieve the targets set by the FRBM Act.

5. What are the factors that are driving economic growth in India?

6. Firstly, it is domestic consumption. The annual growth in real consumption expenditure over the past four years has been, on average, 6.3%. With easy liquidity conditions spurring demand for personal loans, and adequate capacity in the manufacturing sector, there has been a consumption boom.

7. Secondly, rise of investment. The consumption boom that started at the beginning of this decade has triggered an investment boom. Real investment has grown at a robust rate since 2002-03, averaging 17% a year in the past four years. During this period, the contribution of investment to growth has exceeded the contribution of final consumption expenditure. The current investment rate, as a proportion of GDP, is 35.1%, and it is expected to increase in the medium term.

8. Thirdly, increase in employment. The rate of growth in the labour force that was 1.60% in the previous period of six years accelerated to 2.54 per cent during the period 1999-00 to 2004-05. Thankfully, the rate of growth of employment too accelerated from 1.57% in the first period to 2.48% in the second period. We have, therefore, more persons employed and contributing to the national output. Paradoxically, we also have, in absolute number, more persons unemployed.

9. Fourthly, increase in productivity of both capital and labour. Rodrick and Subramanian, in an IMF working paper of 2004, pointed out that India seems to have large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins and Arvind Virmani (2006) has confirmed this. They have concluded that output per worker grew at 1.3% annually during 1960-80 and total factor productivity (TFP) was barely above zero. In contrast, growth in output per worker nearly tripled to 3.8% during 1980-2004, while TFP increased tenfold to 2%.

10. The outlook for the medium term is extremely positive. We believe it is possible to sustain the factors that are driving economic growth and consolidate the gains.

11. There are, of course, some risks. Many of them are beyond our control and, hence, we are compelled to take precautionary measures that will minimise the adverse effects of these risks. The two annual monsoons are always uncertain factors. By and large, the monsoons determine the area under cultivation and the output of food grains and other food articles. As a precautionary measure, we had to import some quantities of wheat last year and again this year. The price of crude oil is an enormous external risk. Since these outrageous prices cannot be fully passed through to the consumers in India, the burden falls largely on the domestic budget and constrains our capacity for investment. The depreciation of the value of the dollar vis-a-vis the rupee has thrown up an unexpected downside risk: it has challenged our exports and our tax revenues, and we may find ourselves in a situation where we need to provide for the consequences of an appreciating currency.

12. Ladies and Gentlemen! Let me not give you the impression that our work is done. Far from the work being completed, the road ahead is long and difficult. Governing India is, at the best of times, a complex task. During a period of high growth, the task does not become easier, as one may be wont to think. While sustaining high growth is one kind of challenge, the more difficult challenge is spreading the benefits of growth and making it more inclusive.

13. Despite a marked reduction in poverty, about 26% of the population of India lives in extreme poverty. A larger proportion of the population is affected because of the inadequacy or absence of many public goods and services such as clean drinking water, sanitation, schools, basic healthcare, electricity and roads. Democracy – especially a vibrant and noisy one – offers many seemingly attractive alternative models for the elimination of poverty. We know that many of those have not worked in the past and we shall not repeat those mistakes. We believe that growth is the best antidote to poverty, provided that the growth is broad based and inclusive.

14. Our government believes that in a developing country growth is an imperative and nothing should be done to affect the process of growth. At the same time, our government believes that it is the duty of the government to provide a measure of economic and social security to the very poor who are, at present, beyond the pale of the market economy. We have, therefore, adopted an ambitious social and economic agenda that extends to matters such as guaranteed wage employment, affirmative action in education, death and disability insurance, health insurance, old age pension, scholarships and education loans, empowerment of women and right to information.

15. I am aware of the oft-repeated criticism that the growth process has benefited only a small section of the people and, therefore, we must change course. I reject that criticism. It is based on a superficial and ill-informed view of the transformation that is taking place in India. More people are discovering that there are opportunities at the bottom of the pyramid and more people at the bottom of the pyramid are demanding their share of the economic opportunities thrown up by the growth process. For instance, in the last three years, banks have more than doubled the amount advanced as farm loans: the volume has increased from Rs844bn in 2003-04 to Rs2050bn in 2006-07. Who gets these loans? It is farmers who have an average land holding of one hectare, and every year over 5mn new borrowers have been added to the portfolio of banks and given farm loans. In 2006-07, 8.35mn new farmers were brought under the bank credit system.

16. Take another example. India runs the largest programme of micro credit – a fact that is not widely known. At the end of March 2007, 2.6mn self help groups – nearly all of them ‘women only’ groups – were credit-linked to the banks. Beginning with consumption credit, an overwhelming majority among them has graduated to production credit. These groups borrow amounts up to Rs200,000 for purposes such as land development, rearing cattle or sheep, poultry, garment making, food processing, manufacture of toys and retail shops. The amount of credit advanced to SHGs at the end of March 2007 was Rs180bn.

17. More than anything else, it is growth that has allowed the Government to increase public expenditure in sectors such as health and education. In 2003-04, the Central government’s budget had allocated Rs70bn for the health sector and Rs70bn for the education sector. In 2007-08, those allocations had grown manifold to Rs143bn for health and Rs286bn for education.

18. However, outlays do not mean outcomes, and this is our prime concern. There is not yet in place a mechanism that will ensure that the deliverables are indeed delivered or that the public goods and services are of acceptable quality and have reached the intended beneficiaries. Some of the problems are due to poor design of the programme. Besides, there is still too much dependence on the government machinery and an unwillingness to experiment with alternative models like food stamps or school vouchers. There is also, regrettably, a considerable degree of waste and pilferage.

19. Our best chance lies in encouraging more openness and more competition. An open society and an open polity will eventually embrace an open economy. A revolutionary change has been wrought in the sectors where monopolies were dismantled and the sector was thrown open to competition. Two examples would suffice: one, telecommunications and the other, aviation. Not too long ago, a customer had to register for a landline telephone and wait for many years to be given one. She would have to “book” a long distance call and hope that she could get through within a few hours. And she would have to pay exorbitant rates depending on the “distance” between the caller and the called person. Mobility was a dream; the telephone itself was a nightmare. Mobile telephony is growing at over 5mn new connections every month, and in August this year 7 million new connections were added .

20. The air transport sector has witnessed a similar revolution. The entry of private airlines has democratised flying. Many second and third tier towns are now connected by air. Domestic passenger traffic has grown, on average, by 30.5% a year over the last two years. Two green field airports are being built. Two metro airports are being modernised and upgraded, and before that task is over, plans are being drawn up for a second airport in these two metros. Two more metro airports and 35 non-metro airports have been taken up for modernisation and expansion.

21. Competition is driving growth in many other sectors: steel, textiles, pharmaceuticals, automobiles, home appliances, packaged food, computer hardware and software, banking and insurance. It is axiomatic that more openness and more competition will benefit the sectors that remain closed or restricted as a matter of policy, and that is the direction in which we would like to move.

22. The competition is not among domestic players alone. India’s manufacturing and services sectors face increasing competition from overseas manufacturers and service providers. Many foreign companies have entered the Indian market through imports or local production. Far from being overawed or vanquished, Indian business has boldly ventured into other countries and has opened offices abroad, acquired factories and established new facilities. Foreign direct investment has become a two way street. In 2006-07, while foreign direct investment flows into India were US$19.5bn, the outflow of capital amounted to US$11.9bn.

23. On August 15, 2007, India turned 60. It is, compared to the United States or many other countries, a young nation. It is also a young nation in another sense. One-third of the population is below the age of 15 years. India is the only large country in the world where the size of the working age population will grow – and will exceed the number of dependent children and old persons -- until 2025, the year up to which projections of population have been made, and perhaps even beyond till 2045. The size of the work force will grow, incomes will grow, savings will grow and investments will also grow. The challenge is to seize the opportunity and turn India into an economic powerhouse.

24. We are happy that the world is taking note of India and other emerging economies. If the developed countries of the world are serious in their intention to achieve the Millennium Development Goals, they must realize that the goals will not be achieved until they are achieved in India and China. We recognize that as we take our place in the world we have to assume our share of responsibility, consistent with our need and capacity, to make the world a better and safer place.

25. In the past – and now too – India has accepted responsibilities. For example, though we are an energy deficient country, we have accepted the principle of common and differentiated responsibilities in the area of climate change. At Heiligendamm, the Prime Minister of India made an important statement when he offered that India’s per capita CHG emissions would never be allowed to exceed the per capita CHG emissions of developed countries. That statement has been strongly endorsed by Chancellor Angela Merkel. That statement opens the way to find a just and fair agreement on the complex issues concerning climate change.

26. In the area of non-proliferation, though we are not a signatory to the NPT, we have put substance over form and maintained an impeccable record of non-proliferation. The India-United States agreement on civil nuclear cooperation is premised on that record.

27. On the economic front, we acknowledge that we share responsibility for ensuring the stability of the global economy. We have maintained fiscal prudence and discipline. We have taken precautionary measures to avoid high-risk financial transactions. We have contained inflation and will always be on alert. We have in place necessary regulations to ensure that capital flows – inward and outward – are orderly.

28. Much of what has been accomplished – or adopted – in India is not unique to India. Many other countries have done the same and, in this behalf, I can cite the cases of Argentina, Brazil, China, Egypt, Mexico and South Africa. As I said at the beginning of my speech, the world is still divided in many ways. A new division (or is it rivalry?) appears to be on the horizon – between the G 7 countries and the fast growing, emerging economies. Just as we are willing to share responsibility with the developed countries, the G 7 countries must also share responsibility with the emerging economies. That, indeed, would be the most wise and prudent course to make the world a better and safer place.”

Weekly Newsletter

Record week for Sensex, Nifty

It's something unpredictable, but in the end it's right.
I hope you had the time of your life.

Good time s just keep rolling for the bulls. All the talk of a possible correction has gone for a six, as relentless inflows from FIIs coupled with firm global markets propelled the key indices into new orbits. The Sensex traveled from 16k to 17k in a matter of just six days, recording the fastest 1000-point run ever. The Nifty too crossed the landmark of 5,000 during the week. Buoyed by huge buying by overseas investors and the aggressive Fed rate cuts has boosted the sentiment. FII inflows have crossed US$2bn in the past seven days, topping the US $11bn mark for the year.

Bulls were in total control during the week led by gains in Reliance stocks, Tata Steel, SBI and HDFC. Some action was also seen in mid-cap and small cap counters. A smooth rollover of positions into the October F&O series also helped the bulls. The cues from the F&O market continue to be encouraging, indicating that shorts have been squared off and fresh longs have been created.

Among the sectors, Auto, Banking, Real Estate, Fertilizers, Capital Goods, Cement and Telecom were the top gainers. The Sensex closed the week at an all time high of 17,291, adding 726 points or 4.4% over the previous week's close. The NSE Nifty recorded impressive gains of 184 points or 3.8% over the week to close at 5021.3.

Reliance Energy was by far the pick of the week. The scrip was the top gainer in the Sensex, adding over 19% to Rs1205, a 52-week high. Reports stated that the company won a Rs16-18bn order and plans to sell shares in its power generating unit. The scrip hit the week’s high Rs1220 and low of Rs1010.

Sugar stocks declined this week amid a grim outlook for the sector. Balrampur Chini dropped 4.5% to Rs75, Sakhti Sugar slipped 3.5% to Rs85 and Bajaj Hindustan lost 2.3% to Rs171. However, Shree Renuka Sugar bucked the trend and added 3% to Rs706.

Metal stocks continued their impressive rally on the back of strong metal prices on the LME and bullish outlook for the sector. JSW Steel rallied over 17% to Rs853, Tata Steel surged by over 15% to Rs850. SAIL rose over 7% to Rs207 and Jindal Stainless added 5.6% to Rs169

For a change, IT stocks had a good week on speculation that recent measures taken by the RBI to increase dollar outflows could help curb the rise in the local currency. Index heavyweights led from the front. Satyam advanced nearly 6% to Rs443, Wipro gained over 4.5% to Rs459. TCS was up by 4.1% at Rs1056 and Infosys added 4% to Rs1896.

Gains were also seen across the banking stocks, as speculation increased about a possible easing of the RBI's monetary policy stance. ICICI Bank rose 10% to Rs1063, HDFC Bank advanced 8.7% to Rs1439 and SBI added 7.8% to Rs1950.

The bulls had an enjoyable time scaling Mount 17K. They seemed to be more or less in control throughout the week. With lower inflation rates and speculation about a cut in interest rates by RBI, the bulls had most things coming their way. However, after such a rally, we expect markets to consolidate at these levels before making a fresh upmove. The advance tax numbers announced so far point towards another robust earnings season. The big worry, however is the valuations, which don't look cheap by any means. Also, the rally may have already factored in the expectations of strong numbers. If the results fail to spring any surprise, we may see market taking a short-term u-turn from here. Hence, it pays to remain alert. A shortened weekend keeps many bulls on the sidelines. Usually loud bullish voices are getting softer. A directionless week is what we could expect.

The primary driver for the M&As has been the outbound cross border deals. In the first 8 months of 2007, there were 237 cross border deals valued at about US$45.95bn

Notwithstanding the slowdown in deals over the past couple of months due to the global market turmoil, the Merger & Acquisition (M&A) and private equity deals in India in the current year to date has been considerable, says the latest data from Grant Thornton. The M&A deals have touched nearly US$50bn and Private Equity (PE) deals have exceeded US$10bn. The primary driver for the M&A deals has been the outbound cross border deals. In the first eight months of 2007, there were 237 cross border M&A deals valued at about US$45.95bn.

The number of acquisitions made by Indian companies abroad (164 outbound deals) has been more than double the number of acquisitions made by international companies in India (73 inbound deals), according to Grant Thornton. The value of outbound acquisitions has been double the inbound acquisition value. "Indian companies are constantly making overseas acquisitions exhibiting their higher risk appetite, ability to acquire and in the process enhancing the foothold in international markets," says Grant Thornton.

Outbound deals have grown from US$9.9bn in 2006 to US$30.8bn plus this year so far. Inbound deals have grown from US$5.4bn in 2006 to US$15.15bn in 2007 year to date. Domestic deals have grown in volume from 214 in 2006 to 223 so far this year. But the deal values have significantly declined, from US$4.5bn (2006) and to US$2.45bn in the first eight months of 2007.

The major acquisitions by Indian companies abroad in the year (January-August 2007) are: Tata Steel’s acquisition of Corus for US $ 12.2bn; Hindalco’s acquisition of Novelis Inc for US $ 6bn; Suzlon Energy’s purchase of 33.85% stake in RE Power for US$1.7bn; Essar Steel's acquisition of Algoma Steel Inc for US$1.58bn; United Spirit’s acquisition of Whyte & Mackay for US$1.11bn; Tata Power acquisition of 30% stake in PT Kaltim Prima Coal for US$1.1bn.

The major acquisitions by foreign companies in India in the year (January-August 2007) are listed below: Vodafone’s acquisition of 67% in Hutchison Essar for US$10.83bn; Vedanta Resources purchase of 51% stake in Sesa Goa for US$0.98bn; Mittal Investment’s acquisition of 49% in Guru Gobind Singh Refineries for US$0.71bn. Vodafone-Hutchison deal accounted for 71% of the total inbound deal value during first eight months of 2007.

There were 121 M&A deals with a total value of about US$4.3bn in July and August 2007. Of these, the number of domestic deals has been 56 with a value of US$0.84bn. The number of inbound cross border deals has been 22 with a value of US$0.64bn and the number of outbound cross border deals was 43 with a value of US$2.82bn.

There have been some significant outbound acquisitions by Indian companies in the last two months, the largest being JSW Steel's acquisition of three USA companies (Jindal United Steel Corp, Saw Pipes and Jindal Enterprises LLC) and Wipro Technology’s acquisition of Infocrossing and its subsidiaries. FirstSource Solution’s acquisition of Medassist Holding and Reliance Communication’s acquisition of Yipes Holding Inc were the other significant outbound deals.

The most significant inbound deal during the last two months have been Holcim’s acquisition of 3.9% stake from Ambuja Cements, Imerys' acquisition of majority stake in Ace Refractories and Novozymes acquisition of Enzymes business of Biocon.

There have been 67 private equity deals during the last two months with an announced value of US$4bn.

Top Stories for week

RBI moves to counter surge in foreign inflows

In order to prevent the strong foreign capital inflows from lifting the rupee further up, the Reserve Bank of India (RBI) announced further relaxation in foreign exchange regulations. However, experts feel that the decision may be too little and too late and may not have the desired effect. Given the positive outlook on the Indian economy and corporate profit growth, foreign capital inflows will continue to pour in. So, the RBI will have to resort to a three-pronged approach suggested by former RBI Governor C. Rangarajan i.e. absorb some inflows, allow the rupee to rise a little and discourage some inflows.

As per the new RBI rules, companies can now spend up to 400% of their net worth to invest abroad, as opposed to 300% till now. They can also pre-pay up to US $500mn of their foreign loans every year, up from US $400mn, and make portfolio investments up to 50% of their net worth, up from 35%. Individuals can now invest up to US$200,000 abroad, double the amount allowed so far, and the aggregate investment limit for Mutual Funds (MF) has been raised from US $4bn to US $5bn.

In addition, the existing facility of investing up to US$1bn in overseas Exchange Traded Funds (ETFs), as may be permitted by SEBI by a limited number of qualified Indian MFs, would continue. Overall, the scope of foreign companies in which Indians can invest has been widened by the removal of the 10% reciprocal shareholding requirement. So far, Indians could only invest in foreign companies that had commitments in India.

Accordingly, capital market regulator SEBI eased investment norms for MFs. It raised the limit for overseas investment for each MF from US$200mn to US$300mn. In addition, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a MF house has been dispensed with. The requirement of 10 years of experience of investing in foreign securities for being eligible to invest in overseas ETFs has also been dispensed with. Now, there is only an overall limit of US$5bn for the overseas investments.

Investors can expect more product offerings from the MFs as the investment options have been increased. The new categories of overseas instruments that has been added include ADRs/GDRs issued by foreign companies, IPO and FPOs for listing at recognised stock exchanges overseas, derivatives for purpose of hedging and portfolio balancing. Investors may even get to indirectly invest in real estate abroad by investing in units that have mandates to invest in Real Estate Investment Trusts (REITs) listed in recognised stock exchanges.

Telecom licenses...the queue gets longer

The list of new companies seeking a slice of India's fast-growing telecom sector just keeps growing. After Parsvnath Developers and Unitech, another real estate player, Indiabulls Real Estate plans to enter this space. The company, part of the Indiabulls Group, applied for licences in 22 circles. Reports also suggested that realty giant DLF is also interested in jumping on to the telecom bandwagon. Meanwhile, white goods giant Videocon Industries applied for telecom licenses for all the 22 circles, except the north-eastern region. A financial daily reported that Videocon was likely to rope in US-based telecom major Verizon Communications as a partner in the proposed telecom venture. The two companies already have a joint venture for national and international long-distance telecom services. The move came just days after the Department of Telecommunications (DoT) said it won't accept new applications for licenses after October 1.

Over the last few weeks, the DoT has received about 160-180 new applications for new universal access service licences and many more could be in the pipeline. However, in view of the paucity of spectrum it may not be possible for the DoT to entertain all the new applicants. Some say the rush for getting new telecom licences is due to telecom regulator TRAI's latest recommendation that the number of players in a circle should not be capped. In addition, TRAI has suggested that the current norm of allocating 2G spectrum based on the number of subscribers should be increased several times before existing players are allocated fresh spectrum. If these recommendations are accepted by the DoT, then several new applicants will be eligible to get spectrum to launch telecom services.

However, another school of though is of the view that the scramble for telecom licences is aimed at making a quick buck by first getting the licences and then selling the same to overseas players at a hefty premium. To get to the bottom of the matter, the DoT is believed to have set up an agency to establish the actual identities of the promoters and shareholders behind the new applications for telecom services. Telecom Minister, A Raja, on Sept. 24, announced that the ministry will prepare a fresh set of guidelines for grant of licences to new applicants. "I have asked DoT secretary, DS Mathur to form a committee to frame guidelines for grant of licence to new applicants," Raja said.

India is expected to be the second-largest telecom market in the world with 800 million users by 2015, according to independent estimates. Currently, Indian telecom companies adds around 8mn new wireless subscribers every month. At the end of August, India had 201.3mn wireless subscribers after adding a record 8.31mn users in the month. The growth exceeded the number of subscriber additions in China.

Weekly Stock Ideas


Buy Grasim

Buy Tech M

Buy ICICI Bank


Where have the bears gone?

The rollover in the F&O segment indicates fresh optimism is in. Shorts have been squared off and fresh longs created. The sentiment is definitely upbeat.
One issue that was on everyone's mind was the whether the credit crisis in the developed economies would affect liquidity inflows into the emerging markets. Once the US-Federal Reserve came to the rescue, that issue was settled. Money has kept pouring in. Overseas investors have already invested around $11 billion this year. The earlier annual record was $10.7 billion in 2005.

There is an increased perception among foreign investors that India is safer than other fast growing economies, as the growth here is more sustainable.

In fact, this was the fastest 1,000 point rally. And even though concerns remain that the market is expensive at current levels, the liquidity factor will sustain these levels, at least in the short term.

In retrospect, one remembers the slowest 1,000 point rally. It took place during 1992 and 1999 when the index crawled from 4,000 to 5,000.

Value goes up
Cashing in on the popularity of Team 20, Dhoni's brand value, which was pegged at Rs 1 crore is now probably Rs 3 crore.

But the euphoria was not restricted to the field. RIL Chairman, Mukesh Ambani, became the richest Indian with a net worth of Rs 2 trillion as the booming stock market pushed the value of his shareholding in various group firms. Ambani's net worth has soared past $50 billion, making him the first Indian and only the fourth person in the world to have a wealth higher than this amount.

RBI blues
Meanwhile, the influx of money has sent the rupee to a 9-year high of Rs 39.62 against the dollar. Exporters are feeling the pinch and certainly not joining the celebrations.

The RBI meanwhile is trying its best to keep the rupee from appreciating further and came out with various measures easing overseas investment and loan repayment.

On the other fronts….
India, the world's fastest growing cell phone market, ended August with 201.3 million wireless users after 8.31 million accounts were added in August. The earlier additions were 7.34 million (June) and 8.06 million (July).

India's fuel consumption grew 3.5% in August and crude imports soared 9.7% as refiners imported more crude to export processed products. Import of petroleum products dipped 5.6% while exports saw a 7.8% growth.

Still needs work on this front
A World Bank report on the ease of doing business in various countries has ranked India higher than earlier. In a ranking of 178 countries, India moved up to 120 (up 12 notches). Among the 10 areas tracked are regulations involved in starting businesses, obtaining licenses, registering property, getting credit, paying taxes and closing businesses. Despite getting a higher ranking than last year, India needs to do better on this front.

On the corruption front, India did not do too well. The Corruption Perception Index (CPI) released globally ranks countries on a scale of 0 (highest level of corruption) to 10 (no corruption). Last year, India scored 3.3 and this year, 3.5.

Guess some things don't change easily, despite India shining on certain fronts

Post Market Commentary

The Sensex opened almost flat at 17,152 - up one point. Unabated buying in the market saw the index rally to a fresh all-time intra-day high of 17,361 - up 210 points from the previous close.

The index finally ended with a gain of 140 points at 17,291.

The market breadth was almost flat - out of 2,838 stocks traded, 1,377 advanced, 1,397 declined and 64 were unchanged today.


Reliance Energy zoomed nearly 8% to Rs 1,206. Tata Steel soared 7% to Rs 850.

Hindalco surged nearly 5% to Rs 172. Tata Motors, Cipla and SBI rallied around 3.5% each to Rs 778, Rs 182 and Rs 1,951, respectively.

Ranbaxy and ICICI Bank gained 3.3% each at Rs 434 and Rs 1,063, respectively.

ITC, Grasim and Maruti moved up around 2.5% each to Rs 190, Rs 3,513 and Rs 1,000, respectively.

HDFC is up over 1% at Rs 2,527.


Bharti Airtel dropped 2% to Rs 941, and ONGC shed 1.4% to Rs 958.

Reliance and Ambuja Cements were down 1% each at Rs 2,296 and Rs 144, respectively.


Sintex Industries topped the value chart with a turnover of Rs 501.50 crore followed by Reliance Energy (Rs 416.70 crore), Reliance Natural Resources (Rs 370 crore), Tata Steel (Rs 273 crore) and Reliance (Rs 215.25 crore).

Reliance Natural Resources led the volume chart with trades of around 4.33 crore followed by IKF Technologies (3.02 crore), Himachal Futuristic (2.92 crore), Nagarjuna Fertilisers (2.80 crore) and Ispat Industries (2.34 crore).

2008 - tough for capital markets

The US sub-prime crisis was on everyone`s mind at the 38th Annual General Meeting of the Indo-American Chamber of Commerce (IACC). At the panel discussion, `Recent Global Developments - Impact on Indian Capital Markets`, industry experts were certain that, the sub-prime crisis will stunt the global economy in the short run, and Indian capital markets had to be watchful. Dr. Rakesh Mohan, Deputy Director of Reserve Bank of India, sounded a note of caution and exhorted Indian capital markets to be on their guard to protect themselves from the recent mortgage crisis.

The panel comprised of renowned entrepreneur, Rakesh Jhunjhunwala - partner, Rare Enterprise, Vallabh Bhansali - chairman, Enam Securities, Andrew Holland- Chief administrative officer, EVP DSP Merrill Lynch, Michael Newbill - Chief of political section, US Consulate. SK Mitra - Executive committee member of IACC chaired the discussion.

Rakesh Jhunjhunwala predicted a slowdown in the Indian software industry and a cut in software spends as a result of slump in the US economy. But the upside, according to him, was a decline in commodity prices in India. He said, ``The US economy was growing at an unsustainable level. The poor are feeding the rich, and the heroin credit supplied to the US consumers has its limit. The world is underestimating the sub-prime crisis. I foresee the problem in the housing market to get worse. The resultant slowdown of the American economy will worsen the crisis.``

However, the panelists were optimistic that the crisis can be tided over as the US enjoys the advantages of sound capital markets, rising wages and low inflation. They said that ``India was on a steady wicket`` and the quality of private enterprise is better than in China. The US elections and the forthcoming Olympic Games in China will also be factors that need to be watched out for, to chart a roadmap for Indian capital markets.

Chief Guest and keynote speaker, Dr. Rakesh Mohan, Deputy Governor, RBI said, ``There has been a sustained attention on the sub-prime crisis in the last two months. We really don`t know what will transpire. Given the speed at which the market corrections are taking place, we have to be watchful. We will need to gather more information and knowledge to see what will actually happen in the future.``

Terming the crisis as a symptom rather than a cause, Dr. Mohan explained the reason behind the phenomenon. He said, ``The accommodative monetary policies resulted in sustained low interest rates, lower inflation levels and volatility encouraging more risk-taking. Many banks set-up Special Investment Vehicles off their balance sheets, and hence had to face liquidity problems when the crisis erupted. But they have to make adjustments now.`` Dr. Mohan emphasised

Michael Owen, Consul General, Consulate General of USA, too, was optimistic that, increasing wages, sustainable inflation and innovative financial and credit instruments will enable the world economy to post strong growth in the long term.
Overall, the Indian as well as global capital markets will see a tough year ahead, but the long-term should see sustained growth.

Rakesh Jhunjhunwala - Markets spring surprises

Stock market experts advice high caution for investors as the bull on the Dalal Street continues its upward move. "Market developments in the near future may take investors by surprise," said big-bull Rakesh Jhunjhunwala, who was speaking at the 38th annual general meeting of the Ando-American Chambers of Commerce (ICC).

Junjunwala said the markets may see some consolidation in the near future. "As there is extreme exicitement in the markets, things will move at an increadible speed. Both the gains as well as the fall would be fast," he said. Recently, the BSE 30-share index, Sensex, registered its fastest 1,000-point gain, which came in a mere six trading sessions.

On the other hand, Vallabh Bhansali, chairman, Enam Securities advised retail investors to be extremely selective in their stock pickings and only invest in stocks which they felt were sound fundamentally.

Weekly Close: Beware! this is a 'Bull' Market !!!

Markets continue to be unstoppable..and an interesting part is that its the FIIs who are buying and domestic Institutions who are sellers. Clearly, there is no insider who knows what is going on.. We mentioned last week that this rally was drven by liquidity. Even we have been overwhelmed by the huge flows witnessed. There are many who say .. " See i told you . Markets will hit 17000 many months ago.. and SBI will do 2000 levels of Reliance will do 2500 and so on so forth".. The fact of the matter remains, that it has happened for the turn of events globally. Its a dynamic system and India is integrated. Clearly the two events consisting of UKs guarantee for Northern Rock was one and the large Fed cut another which set the stage which could offset a recession. Please note that this is what the market is hoping that there will be no recession. The market also prices in the possibility that demand in Asia will be the engine of growth. Thus moneyflows have been strongly flowing into India which along with China is expected to do well. Asia has had it really good this quarter in terms of the market performance. Indian Mutual funds have failed to realise the seriousness of this event in the face of political uncertainty and also the same old stuff of "High crude prices", possible higher inflation and high interest cost eating into growth which will only be disappointing.

Of course there is euphoria as well and there are many who expect a CRR cut / SLR cut. In our earlier note we argued that clearly thats not on cards.. given the flush of liquidity. We however do believe that an excuse is building up for a rate cut and that is in a way to soften the rupee. This we believe will not happen before October 30th. The banks are scaling highs on hopes of rate cuts over the weekend. We would be surprised if they did happen.

It was the FNO expiry week and markets left al the short positions high and dry. it took just 6 trading sessions for the Sensex to cross 17k and with aplomb. Not to be left behind Nifty created its own level and charged upto 5000. The much wanted consolidation leave alone correction is just not coming in.

HDFC cut the interest on home loans and some other banks followed. SBI has not cut rates as ICICI introduced car loan on floating interest rate. Autos did see some recovery for the week.. but more likely to be driven by anticipated good numbers for the month which will be reported next week.

We had Greenply which was a flyer this week. The plywood company has been a 4 bagger since our research on it. The company has been expanding and benefits of that are being seen in the bottomline. Demand for Plywood, Laminates and Vineers is seen 18 months post the housing boom and thats been felt. The company now has a particle board plant. Its best to know more from our research note.. Do read

We had research on Titan on its performance. This company has been on a roll. The companys jewellery business has been doing well . The valuations may not appear attractive.. but we believe that there is more steam in this one. and the brand is unbeatable. The prescription eyewear will add value we believe.

We had another research note on Kesoram. This is a cement and tyre company. Both sectors have been doing well. More clarity on succession has brought in the buyers. We are positive here. Look for more gains in this one though the tyre business is where there could be some pressure with higher rubber and crude prices.

We had new research on Phoenix lamps. a company which we covered much earlier. The company has had a change in ownership. The demand for CFL is exploding and this company is well placed with the largest capacities in that space. Certainly there seems to be value here. However there is lack of clarity on the threat from LED lamps and there are organisations installing those and others who are getting ready to manufacture them.

Apart from our own research we had notes on downgrades and upgrades on Educomp, Colgate, Peronet LNG.. And its all there to read !
Technically Speaking: Sensex seems overbot but important to remember that overbot preiods can last over a long period of time and the momentum may carry it further. Near term consolidation could be there seems to be some level of MACD divergence in the 60 minutes charts. and thats some hope for the bears sitting with short positions. But all in all.. its best to avoid short positions. 16530 will be the stoploss for long positions and thats a bit far. Nearer stoploss is 17030.

Fundamentally Speaking: Fundamentals have been relegated to the background with the huge liquidity flows. We can probably say that Markets are getting into a nrew range of valuations and stocks will start trading there henceforth unless there is a major accident. Clearly this is a Bull Market. There is value in many mid caps and many of them are headed towards becoming large caps. The way ahead is to focus on growth and value.. and stay invested. Many of our stocks are doing well and that you will find in our recommendations of our research. Its not easy to get in when you believe that the run up has happened. The way to address that is get into stocks where there is still value.

Market extends its winning streak

The market extended its winning streak for the ninth consecutive session as firm Asian indices and strong buying in frontline stocks helped the sentiment remain bullish for the better part of the trading session. After accumulating over 1,200 points in the last eight sessions, the Sensex opened marginally above its previous close and rallied sharply to touch the all-time high of 17,361. While, the market remained well above 17,300 mark in the first half, it came off the high as traders booked profits at higher levels. However, resumption of buying at lower levels in banking and metal stocks towards the close saw the Sensex recover from its low. The Sensex finally ended the session with a gain of 141 points at 17,291, while the Nifty added 21 points to close at 5,021.

The market breadth was neutral. Of the 2,838 stocks traded on the BSE, 1,377 stocks advanced, 1,397 stocks declined and 64 stocks ended unchanged. Among the sectoral indices the BSE Metal index jumped 3.28% at 13,945 followed by the BSE Bankex index (up 2.60% at 6,469), the BSE FMCG index (up 1.94% at 2,161) and the BSE HC index (up 1.72% at 3,784).

Most of the heavyweights ended with solid gains, however, select frontline stocks closed with marginal losses. Among the blue chips, Reliance Energy shot up by 7.90% at Rs1,205, Tata Steel soared 7.02% at Rs850, Hindalco surged 4.81% at Rs172 and Tata Motors advanced by 3.68% at Rs778. Cipla added 3.52% at Rs182, SBI moved up 3.43% at Rs1,951, Ranbaxy scaled up 3.33% at Rs434 and ICICI Bank was up 3.29% at Rs1,063. Among the laggards Bharti Airtel dropped 2% at Rs941,ONGC shed 1.42% at Rs958 and Reliance Industries slipped 1.03% at Rs2,296.

Metal stocks shone in today's trades and closed with strong gains. Sesa Goa vaulted 7.13% at Rs2,524, Tata Steel soared 7.02% at Rs850, Hindlalco surged 4.81% at Rs172 and Jindal Stainless advanced by 3.89% at Rs170.

Over 4.33 crore Reliance Natural Resources shares changed hands on the BSE followed by IKF Technology (3.01 crore shares), Himachal Futuristic Communication (2.92 crore shares), Nagarjuna Fertilisers (2.80 crore shares) and Ispat Industries (2.34 crore shares).

Sintex Industries clocked a turnover of Rs501 crore on the BSE followed by Reliance Energy (Rs416 crore), Reliance Natural Resources (Rs369 crore), Tata Steel (Rs273 crore) and Reliance Industries (Rs215 crore).

Sensex soars 727 points on strong FII inflow

The market rallied further last week with the barometer index BSE crossing 17,000 mark and Nifty 5,000 level as investors bet on another cut in interest rate by the US Federal Reserve next month after data showed sluggish housing sales and consumer confidence in the US. Strong foreign institutional investor (FII) buying boosted bourses. Sensex moved up in all the five trading sessions in the week.

BSE Sensex rose 726.87 points or 4.39% to 17,291.10 in the week ended Friday, 28 September 2007. Sensex hit an all time high of 17,361.47 on Friday.

The S&P CNX Nifty rose 183.8 points or 3.79% at 5,021.35 in the week. It hit an all time high of 5,055.80 on Friday.

BSE Mid Cap rose 222.51 or 3.09% to 7,422.43 in the week. The BSE Small Cap index rose 204.63 points or 2.3% to 9,099.93 in the week. Both these indices underperformed the Sensex.

Sensex hit 17,000 on Wednesday, 26 September 2007. It took just 5 trading sessions for the Sensex to reach 17,000 from 16,000 after the barometer index first struck 16,000 on 19 September 2007. The Sensex’s 1,000-point surge was the fastest ever. The previous record for the shortest 1,000-point journey was 19 days when the Sensex soared from 11,000 to 12,000 in March 2006.

Sectoral indices, BSE Realty index (down 0.05% to 9,178.53), BSE Auto Index (up 2.67% at 5,332.26), BSE Capital Goods Index (up 1.1% at 14,679.84), BSE Oil and Gas Index (up 2.38% at 9,561.95), BSE TecK index (up 3.51% to 3,766), BSE Consumer Durables index (up 1.18% to 4,804.24), BSE FMCG Index (up 0.39% at 2,161.35) and BSE Health Care Index (up 3.56% at 3,784.21), underperformed the Sensex.

However BSE Bankex (up 8.35% at 9,469.26) and BSE IT Index (up 4.5% at 4,627.83), BSE PSU index (up 5.41% to 8,202.07), BSE Metal Index (up 8.84% at 13,945.39) outperformed the market in the week.

The BSE Sensex was up 281.60 points or 1.70% to 16,845.83 on Monday, 24 September 2007. The market kept on advancing as the day progressed on steady buying demand for index pivotals throughout the day, except for an hiccup in early trade. Turnover was healthy and it crossed Rs 7,500 crore on BSE. European markets which opened after Indian market, were mixed. Asian markets which opened before Indian market settled higher on that day.

Sensex gained 53.71 points or 0.32% at 16899.54 on Tuesday, 25 September 2007. Though the market ended in the green, the breadth was weak. The market recovered from lower level in late afternoon trade. Earlier, the market had slipped into the red in afternoon trade in contrast to a firm trend in mid-morning trade. European markets, which opened after Indian markets, were weak. Reliance Industries (RIL) hit all-time high in late trade.

The BSE Sensex was up 21.85 points or 0.13% at 16,921.39 on Wednesday, 26 September 2007. The market settled with small gains on selective buying in index pivotals. It opened higher as investors bet on another cut in interest rate by the US Federal Reserve next month after US data showed sluggish housing sales and consumer confidence. Asian and European markets were trading firm while US markets settled mixed overnight. IT, banking and refinery stocks surged whereas realty and oil & gas stocks witnessed selling pressure. Reliance group shares which had surged recently, eased on profit booking.

The Sensex up 229.17 points or 1.35% at 17,150.56 on Thursday, 27 September 2007.Market surged at the fag end of the trading session to touch new all time high, on short-covering ahead of expiry of September 2007 derivatives contracts. Domestic bourses rose as a part of rally across global markets as weak US economic data reinforced expectations for another interest rate cut from the Federal Reserve, following a steep half-point reduction to 4.75% last week.

The Sensex was up 140.54 points or 0.82% at 17,291.10 on Friday, 28 Seeptember 2007. Strong rollover from September 2007 futures to October 2007 futures boosted bourses today.

India’s top private sector utility company in terms of revenue Reliance Energy (REL) surged 19.40% to Rs 1205.50. The stock hit all-time high of Rs 1220 on 28 September 2007. As per reports, the government cleared the two transmission line projects of REL worth Rs 3,500-crore, projects which include the western region system strengthening (WRSS) II and the Parbati-Koldam hydro projects in Himachal Pradesh. These projects were delayed due to issues raised by the public-private partnership appraisal committee (PPAC).

National Thermal Power Corporation, the country’s largest power generation company by net sales jumped 3.17% to Rs 193.45 on 46.18 lakh shares. It replaced Dabur India in the S&P CNX Nifty index from Monday, 24 September 2007

India’s top small-car market by market share, Maruti Suzuki India galloped 7.53% to Rs 999.55. It hit an all time high of 1009 on 26 September 2007. Recently, Foreign Investment Promotion Board (FIPB) cleared Maruti's proposal to form a joint venture for setting up an exhaust parts manufacturing facility in Haryana with Japan's Futaba Industrial Company. Futaba will hold 51% in the venture.

Bharti Airtel, India’s largest listed cellular services provider by market share rose 2.49% to Rs 941.20. As per reports, it has got licence to start Direct-To-Home (DTH) services in the country and announced an investment of Rs 150 crores in the first phase to launch nation-wide operations, a move that would bring in much required competition in the DTH segment. Also another set of reports state that Bharti Airtel may get extra spectrum for Delhi and Mumbai under the existing subscriber-base norms.

India’s largest power equipment maker in terms of revenue Bhel gained 3.38% to Rs 2032.75. It hit lifetime high of Rs 2066. As per recent reports, Bhel it is looking at mergers and acquisition to fuel inorganic growth and it targeting a turnover of Rs 45,000 crore by 2012. Bhel, last week, won a Rs 765 crore turnkey order from Steel Authority of India (SAIL) to set up a 62.2 mega watt captive power plant in Burnpur, West Bengal.

India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.96% to Rs 2296.20. RIL said on Saturday, 22 September 2007 that it has struck oil in the deepwater block KG-D4 located in the Krishna Basin. The commercial viability of the discovery is being evaluated. RIL holds 100% participating interest in this block, which spans over an area of 8100 sq. kms.

IT pivotals advanced after the Reserve Bank of India relaxed the norms for outbound investments by mutual funds and raised the limit for companies to prepay their external loans to tame appreciating rupee. India’s fourth largest software services exporter Satyam Computers soared 5.89% to Rs 443. Other IT pivotals Infosys (up 4.11% to Rs 1896.75), and TCS (up 4.12% to Rs 1056.75), also gained

Wipro, the nation’s third largest software services exporter jumped 4.54% to Rs 459.85 on reports that it has bagged a five-year, $130 million contract from British utility Thames Water. As per the agreement, Wipro will provide integrated IT services encompassing applications support, maintenance and infrastructure management services. It acquired Oki Techno Centre (Singapore) in an all cash deal. Oki Techno Centre (OTCS) is based in Singapore and is focused on wireless design in the areas of RF (radio frequency) and baseband design.

Tata Steel jumped 14.79% to Rs 850.35. It hit a 52 week high of Rs 868.10 on 28 September 2007.

State Bank Of India rose 7.88% to Rs 1950.70. It hit an all time high of 1969.80 on Friday.

ICICI Bank (up 10.15% to Rs 1063.15),Hindalco Industries (up 7.57% to Rs 172) were the other gainers from the Sensex pack.

The total number of telephone subscribers reached 241.02 million at end August 2007 compared with 232.87 million in July 2007. Tele-density, the number of people owning a telephone out of every 100 people, improved 21.2% in August 2007 from 20.52% in July 2007. The wireless segment base expanded by 8.31 million subscribers in August 2007 as against 8.06 million in July 2007. The total wireless subscribers - GSM, CDMA & WLL(F) - base touched 201.29 million end August 2007.

Net direct tax collections surged 40% to Rs 106095 crore from April 2007 to 21 September 2007 compared with Rs 75510 crore in the corresponding period a year ago. Corporation tax collections moved up 42.37% to Rs 67207 crore from April 2007 to 21 September 2007 as against Rs 47207 crore in the corresponding period in FY 2007.

The government is likely to issue oil bonds worth Rs 12000 crore to oil marketing companies by 15 October 2007 according Petroleum Secretary M S Srinivasan. Oil bonds are issued to oil marketing companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - to partly compensate them for selling petrol, diesel, LPG and kerosene at subsidised prices.

The Reserve Bank of India (RBI) on Tuesday (25 September 2007) raised ceilings on overseas investment by Indian companies and mutual funds in order to check the appreciating rupee and move towards fuller convertibility of the rupee in the capital account. As per the measures announced by the RBI, individuals can now remit up to $200000 against $100000 without RBI's permission. Companies are permitted to invest up to 400% of their net worth overseas as against 300% till now.

The Congress party appointed Rahul Gandhi as the general secretary of the All India Congress Committee (AICC) on Monday (24 September 2007) in a reshuffle of the party secretariat. Rahul Gandhi is now responsible of AICC's two youth wings — the National Students’ Union of India (NSUI) and the Youth Congress.

India's consumption of fuel gained 3.5% in August 2007. Demand for petroleum products touched 9.43 million tonne (mt) in August 2007 compared with 9.11 mt in August 2006. Consumption of liquid petroleum gas (LPG), petrol and aviation turbine fuel (ATF) consistently witnessed a double-digit growth. Demand for diesel edged up 5.7% in August 2007.

The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) on Wednesday, 26 September 2007, issued notices to the Telecom Regulatory Authority of India (Trai) and mobile operators Bharti Airtel, Vodafone Essar and Idea over recent tariff increases. TDSAT asked Trai and the three operators to file their replies within a week.

Annual inflation based on the wholesale price index (WPI) has further fallen to 3.23% in the week ended 15 Setember 2007 from 3.32% in the week ended 3.32% in the week ended 8 September 2007. The market estimate stood at 3.47% in the week ended 15 September 2007. Inflation was at 5.27% in the corresponding week last. The fall in inflation is driven by decline in prices of fruits and vegetables, eggs, fish-marine and pulses.

A report realeased by the Confederation of Indian Industry (CII) and Yes Bank on Thursday (27 September 2007) has estimated India's rural retail market to grow 29% to Rs 1.8 trillion by 2010 driven by rising rural incomes and changing consumption patterns. Rural retail includes fast moving consumer goods, durables, agricultural inputs and autos like tractors.

Market rallies for ninth straight trading session

The market continued a winning streak and extended a string of record highs that it had hit over the past few days. Strong rollover from September 2007 futures to October 2007 futures boosted bourses today. Turnover on BSE was high, just under Rs 8,000 crore mark.

Despite the market holding positive zone, market breadth, which indicates overall health of the market, was negative on BSE. With today’s rally, the market has posted gains for ninth consecutive day, boosted by step-up of FII inflows. Metal, banking, FMCG and pharma stocks were in forefornt of today’s rally. However profit booking was witnessed in select oil & gas and IT pivotals.

European markets were weak and Asian markets were mixed today. US markets were steady overnight.

The wholesale price index rose 3.23% in the 12 months to 15 September 2007, lower than previous week's 3.32%, due to a fall in some food prices, government data released at about 12:00 IST today showed.

The 30-shares BSE Sensex was up 140.54 points or 0.82% at 17,291.10. It opened higher at 17,152.31 and advanced further to hit an all-time high of 17,361.47.

At the day’s high of 17,361.47, the Sensex had gained 210.91 points for the day.

From a recent low of 13,989.11 on 21 August 2007, Sensex surged 3,301.99 points or 23.60% in 28 trading sessions to 17,291.10 on 28 September 2007. FII buying boosted the bourses in this period.

The S&P CNX Nifty rose 20.80 points or 0.42% at 5,021.35. It struck an all time high of 5055.80. The Nifty October 2007 futures settled at 5,038, a premium of 16.65 points as compare to spot closing of 5,021.35.

The market had opened on a firm note and extended early gains to hit record high in early afternoon trade as following a healthy rollover of derivatives positions from September 2007 contracts to October 2007 contracts. It had come sharply off higher level in early afternoon trade, before bouncing back again later.

The breadth was slightly negative on BSE. 1392 shares declined as compared to 1362 that advanced on BSE. 58 remained unchanged. It was strong in morning trade. Interestingly in the past six trading days when the market has surged, the market breadth in contrast to the firm trend was negative in five sessions.

The BSE Mid-Cap index was up 1.23% to 7,422.43. The BSE Small-Cap index rose 0.59% to 9,099.93. It hit an all time high of 9,136.32 in intra-day trade.

The total turnover on BSE amounted to Rs 7915 crore as compared to Rs 7,750.07 crore yesterday, 27 September 2007

The NSE F&O turnover was Rs 56,998.5 crore today as compared to a record Rs 86,226.41 crore on Thursday, 27 September 2007

Sectoral indices on BSE displayed mixed trend. BSE Metal Index (up 3.28% at 13,944.83), BSE Health Care Index (up 1.72% at 3,784.21), BSE Auto Index (up 1.17% at 5,332.26), BSE Realty index (up 1.63% to 9,178.53) and BSE FMCG Index (up 1.94% at 2,161.35) outperformed the Sensex.

However BSE Capital Goods Index (down 0.08% at 14,679.84), BSE TecK index (down 0.49% to 3,766.00), BSE IT Index (down 0.34% at 4,627.83), BSE Oil and Gas Index (down 0.81% at 9,561.95), BSE Consumer Durables index (up 0.07% to 4,804.24), BSE PSU index (up 0.77% to 8,202.07), were underperformers.

Among the 30-member Sensex pack, 20 advanced while the rest declined.

India’s second largest power utility company in terms of revenue Reliance Energy (REL) extended early surge. It jumped 8.82% to Rs 1215.80 on 35.31 lakh shares. It hit an all time high of Rs 1220 on BSE in late trade. As per reports REL is believed to be restructuring its businesses under three verticals — utility, infrastructure and real estate. It was the top gainer from Sensex pack.

World’s sixth largest steel manufacturer Tata Steel surged 7% to Rs 850. It hit a 52-week high of Rs 868.10 on BSE today. The stock was boosted after Mr Ratan Tata, Tata Group Chairman at the UK - India conference Said that the group expects to earn nearly 60% of its revenue this year (38% last year) from its overseas operations following the acquisition of Corus Steel in UK.

Tata Motors, the nation’s top truck and bus maker in terms of sales rose 1% to Rs 758. Deutsche Bank is bullish on the stock and has maintained buy rating with target price of Rs 920.

Hindalco (up 4.81% to Rs 172), and Cipla (up 3.95% to Rs 183.15), were the other gainers from Sensex pack

India's largest private sector bank by assets ICICI Bank gained 2.99% to Rs 1060 after it raised $2 billion through a bond issue abroad through a 5-year fixed rate note. The stock struck an all time high of Rs 1070.80 today.

The notes have been priced at 237 basis points (bps) over US Libor or at Libor plus 172 bps. The six-month Libor is currently at 5.14%.

State Bank of India, the country’s largest bank in terms of net profit jumped 4.19% to Rs 1965. The stock hit a record high of Rs 1969.80 today.

Other banking shares - Bank of India (up 7.78% to Rs 280.40), Canara Bank (up 3.38% to Rs 278), Union Bank of India (up 4.45% to Rs 164.25), Kotak Mahindra Bank (up 3.30% to Rs 924.50) and Federal Bank (up 2.77% to Rs 375), edged higher.

India’s largest private sector mortgage financer in terms of market share Housign Development Corporation (HDFC) gained 0.82% to Rs 2517. It hit an all time high of Rs 2544.

Bharat Heavy Electricals (Bhel), the country’s largest power equipment maker by sales was down 0.67% to Rs 2,027, off its all time high of Rs 2089.20. As per recent reports Bhel has won a Rs 765 crore turnkey order from Steel Authority of India (SAIL) to set up a 62.2 mega watt captive power plant in Burnpur, West Bengal.

IT pivotals snapped two-day rally. India’s third largest software services exporter Wipro rose 0.09% to Rs 460.75 off its day’s high of Rs 469. It acquired Oki Techno Centre (Singapore) in an all cash deal over a period of one year. Oki Techno Centre (OTCS) is based in Singapore and is focused on wireless design in the areas of RF (radio frequency) and baseband design.

Other IT pivotals, Infosys (down 1.03% to Rs 1892, off its day’s high of Rs 1950), TCS (down 1.08 % to Rs 1050.25, off its day’s high of Rs 1077), slipped. Satyam Computers (up 0.03% to Rs 442.50), off its day’s high of Rs 452.90 held positive zone.

IT pivotals had started the day firm, but pared gains on selling pressure later.

India’s largest cellular services provider by market capitalistation Bharti Airtel lost 2.33% to Rs 938 on 1.83 lakh shares. It was the top loser from Sensex pack.

Ambuja Cements (down 1.41% to Rs 143.10), and Larsen & Toubro (down 0.67% to Rs 2818), were the other losers from Sensex pack

India’s largest company in terms of market capitalisation and operator of world's third largest refinery at Jamnagar, Gujarat, Reliance Industries (RIL) saw volatile movement. It was now down 0.78% at Rs 2302.25 on 7.55 lakh shares. The stock moved between a high of Rs 2349 and low of Rs 2268. RIL is reportedly laying off 1,000 staff in the country's most populous state of Uttar Pradesh after failed attempts to reopen Western-style supermarkets, which closed after protests from small traders.

Among side counters, Whirlpool India (up 20% to Rs 47.10), Mirza Internatonal (up 20% to Rs 28.50), Dynemic Products (up 20% to Rs 23.10), Braddy & Morris (up 20% to Rs 191.20) and Ashiana Housing (up 20 to Rs 320.60 were the top gainers.

Among stocks with high volumes, Reliance Natural Resources surged 3.30% to Rs 89.55 on 4.32 crore shares. Himachal Futuristic Communications plunged 8.23% to Rs 26.75 on 2.90 crore shares. Ispat Industries rose 1.86% to Rs 27.45 on 2.33 crore shares and Tata Teleservices (Maharashtra) (TTML) slipped 0.11% to Rs 43.45 on 1.94 crore shares.

Fertiliser shares rallied on renewed buying. Chambal Fertilisers & Chemicals (up 7.10% to Rs 58.80), Coromandel Fertilisers (up 13.29% to Rs 122.35), Gujarat State Fertilisers & Chemicals (up 4.97% to Rs 242), National Fertilizers (up 4% to Rs 48), Rashtriya Chemicals & Fertilisers (up 2.17% to Rs 61.30) and Nagarjuna Fertilizers (up 11.19% to Rs 60.60) surged.

India’s largest private sector iron ore exporter in terms of revenue Sesa Goa jumped 8.15% to Rs 2548. It had surged 7.14% to Rs 2388.20 yesterday, 27 September 2007 on reports that Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton, the world's three largest iron-ore exporters, may increase prices by 30% next year as demand driven by steelmakers in China outpaces growth in supply

Watch and jewellery maker Titan Industries rose 1.10% to Rs 1470. The company expects FY 2008 profit to rise by at least 50%. Revenue is expected at Rs 3150 crore as compared with March 2007 revenue of Rs 2140 crore. Titan expects to sell 10 million watches this fiscal year with nine million of them in India

NIIT Technologies gained 5.77% to Rs 353 on reports that the company is in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Promoters currently hold 40% stake in NIIT Technologies.

IFCI soared 7.70% to Rs 99.90 on reports that it has shortlisted eight bidders for the sale of its 26% stake including consortia led by Wilbur L Ross and Shinsei Bank. As many as 10 bidders had applied earlier this month. The identity of the bidders that have been left out of the race is not known.

DLF gained 2.89% to Rs 763. As per reports it will apply for telecom licence by today, 28 September 2007, to become the fourth real estate company to have applied for the same purpose. IndiaBulls Real Estate, Unitech and Parsvnath Developers are the others.

Emkay Share & Stock Brokers jumped 10% to Rs 145.60 after its 100% subsidiary - Emkay Insurance Brokers received licence from the Insurance Regulatory and Development Authority (IRDA) in terms of sub section (1) of Section 42 D of the Insurance Act, 1938 to act as a direct insurance broker. The company made this announcement after market hours on 27 September 2007.

Brady & Morris Engineering Company surged 20% to Rs 191.20 after its board of directors of at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.

WH Brady & Company jumped 10% to Rs 159.70 after is board of directors at its meeting held on 27 September 2007 decided to issue bonus shares in the ratio of 1 bonus share for every 2 shares held. The company made this announcement after market hours on 27 September 2007.

United Breweries was up 0.58% to Rs 382. Its board approved raising upto Rs 425 crore by issuing equity shares to the existing equity shareholders of the company on rights basis. The other terms regarding rights issues will be decided by a committee of directors.

Arvind Mills galloped 5.67% to Rs 61.50 after its board approved issue of 5.06 crore convertible warrants to the founders of the company at Rs 52 per share. Post issue, the shareholding of the promoters in the company will increase to 46.77% from 33.90% at present.

Cairn India rose 3% to Rs 181.40 on reports that it made new oil find in one of its exploration wells in the Ravva field off India's east coast.

Deccan Aviation declined 1.78% to Rs 146 after it announced today, 28 September 2007, that it has reported a net loss for the quarter to June 2007.

State Trading Corporation of India plunged 5% to Rs 341.90. It had lost 5% to Rs 359.85 yesterday, 27 September 2007 after its board of directors at its meeting held on 26 September 2007 deferred recommendation of bonus shares to the next board meeting. The company made this announcement after market hours on 26 September 2007.

Stone India jumped 6.59% to Rs 148 after it executed a technical collaboration agreement for producing 180 kilovolt-amps auxiliary power converter for Indian Railways.

Atlanta galloped 10% at Rs 346.70 after Sebi allowed the firm to restructure its capital to raise funds for expansion. Securities and Exchange Board of India (Sebi) has allowed the company conversion of warrants and listing of shares issued on conversion. Earlier in February 2007, Sebi had asked the promoter group, which comprises 16 entities, of Atlanta, not to deal in Atlanta scrip.

Centurion Bank of Punjab moved up 3.12% to Rs 44.65 after Reserve Bank of India allowed foreign investors to buy further shares in the bank as their holding went below the caution limit.

Virat Crane Industries jumped 10% at Rs 21.85 after its subsidiary Durga Dairy tied-up with Walmart to supply branded ghee to retail stores. So far, Durga Dairy has entered into similar alliances with major retail players like Reliance Retail, Trinetra, Gaint, Spencers, Foodworld, Subhiksha and Metro.

Rallis India surged 5.12% to Rs 415 after it sold 31 acres of land to R R Mega Property Developers.

Hinduja TMT rose 1.60% to Rs 437 after company said it is actively considering to apply for unified telecom license. It is in process of changing its name to Hinduja Ventures

Core Projects & Technologies rose 0.84% to Rs 190.40. Its board approved acquisition of virtual learning of Azzuri Communications, UK. The board has also approved acquisition of 100% equity stake in Hamlet Computer Group, UK. Also the company has decided to sign share purchase agreement for acquisition of 100% equity stake in KC Management Group, US.

Financial Technologies India galloped 6.06% to Rs 2760 after Merrill Lynch and Citigroup acquired a 5% stake each in its unit, Multi Commodity Exchange of India.

As per market data, marketwide rollover from September 2007 derivatives contracts to October 2007 contracts was 84% as compared to rollover of 82.30% from August 2007 contracts to September 2007 contracts. Nifty rollover from stood at 71% as compared to rollover of 70% from August 2007 contracts to September 2007 contracts.

European markets, which opened after Indian market were trading lower today, 28 September 2007. France’s CAC (down 0.39% to 5,711.11), Germany’s DAX (down 0.11% to 7,844.94) and UK’s FTSE 100 (down 0.84% to 6,431.90) edged lower.

Asian markets, which opened before Indian market were trading mixed today, 28 September 2007. South Korea's Seoul Composite (up 0.06% at 1,946.80), Shanghai Composite (up 2.64% to 5,552.30), and Hong Kong's Hang Seng (up 0.29% to 27,142.47) rose.

Singapore's Straits Times (down 0.22% at 3,706.77), Japan's Nikkei (down 0.28% at 16,785.69) and Taiwan's Taiwan Weighted (down 0.02% at 9,411.95) slipped.

US stocks extended their gains yesterday, 27 September 2007 with a moderate advance as investors weighed fresh economic data, including a sharp drop in new home sales, for clues to whether more interest rate cuts are in the offing. The Dow Jones industrial average rose 34.79 points, or 0.25%, to 13,912.94. It is now 87 points below its record close of 14,000.41 set on 19 July 2007. Broader indexes also advanced. The Standard & Poor's 500 index rose 5.96 points, or 0.39%, to 1,531.38, and the technology-heavy Nasdaq Composite index rose 10.56 points, or 0.39%, to 2,709.59.

Crude oil extended gains for a third day on Friday, 28 September 2007 to above $83 a barrel, nearing its record high as a weak dollar and pre-winter supply worries fuelled fund buying. US crude for November delivery rose 30 cents to $83.18 a barrel Oil is recovering from a profit-taking dip earlier this week that pulled prices off their $83.90 peak. London Brent crude rose 30 cents to $80.33 a barrel.

Trading Calls

Buy LIC Housing Finance with stoploss of Rs 200 for target of Rs 270.

Buy Reliance Energy with stoploss of Rs 1013 for target of Rs 1450.

Buy J K Lakshmi Cement with stoploss of Rs 170 for short term target of Rs 225.

Derivatives Rollover for September 28, 2007

Derivatives Rollover for September 28, 2007

Daily Technicals - Sep 28 2007

Daily Technicals - Sep 28 2007

Grey Market - Supreme, Saamya, Maytas, Consolidated Constructions

Power Grid Corporation 44 to 52 23 to 24

Dhanus Tech. 280 to 295 60 to 65

Koutons Retail 370 to 415 85 to 90

Consolidated Construction 460 to 510 170 to 175

Supreme Infra 95 to 108 65 to 70

Saamya Biotech 10 4 to 5

MAYTAS Infra 320 to 370 175 to 180

Circuit Systems (India) Ltd. 35 3 to 4

Kaveri Seeds 150 to 170 20 to 22

India Real Estate

India Real Estate

Stocks In News

her oil prices lifted energy companies' shares, Asian markets were trading mixed.

Reports suggest NIIT Technologies is in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Promoters currently hold 40 per cent stake in the company. According to reports, they may sell anywhere between 25 per cent and 40 per cent in the company. This would trigger an open offer, where investors can buy an additional 20 per cent in NIIT Technologies. The stock closed 0.85 per cent lower at Rs 333.

The Bajaj family feud could see some impact on its group companies’ shares. The tussle took a new twist with Shishir Bajaj strengthening his control over Bajaj Hindusthan. The brothers at war, Rahul and Shishir, had Thursday decided to terminate a family settlement agreement after prolonged peace talks. Bajaj Hindusthan shares closed 10.3 per cent lower at Rs 170.

BHEL has projected that their sales will rise by 20 per cent in this financial year. BHEL expects to win most of the power equipment orders likely to be placed by the government in the Eleventh five year plan (2007-2012). This could augur well for the company’s shares. The stock ended 2.6 per cent higher at Rs 2040.70.



Morning Call

Market Grape Wine :

In House :

Nifty at a supp of 4955 and 4930 with resis at 5030 and 5075

Intra day: Buy Polaris above 125.50 with a TGT of 135 and a SL of 121

Buy Zeetele above 331 with a TGT of 345 and a SL of 325

F&O: Buy Orchidchem above 234 with a TGT of 247 and a Sl of 229

Out House :

Markets at a support of 17017 & 16786 levels with resistance at 17271 & 17371 levels .

Buy : RIL & Tisco

Buy : Relcap & REL

Buy : Bharti & ONGC

Buy : SBIN & Kotak

Buy : MRPL ,RNRL , TTML , IFCI , Nagarfert & JpHydro

Buy : IBullReal s/l of 636 target 692 then 717

Buy : Neyvelli & GMRInfra

Buy : JpAsso

Buy : GMDC & EKC

Dark Horse : RIL , IBullReal , REL , Aban , RelCap , SBIN & IDBI

Bullet for the Day : IBullReal & GMRInfra with stop loss .

TGIF : Thank God Its Friday : Markets at all time high quarterly closing , book profit at closing .

Uptrend may continue

The market may extend uptrend on the back of healthy rollovers. As per market data, marketwide rollover from September 2007 derivatives contracts to October 2007 contracts was 84% as compared to rollover of 82.30% from August 2007 contracts to September 2007 contracts. Nifty rollover from stood at 71% as compared to rollover of 70% from August 2007 contracts to September 2007 contracts

Asian markers were mixed today, 28 September 2007. Japan's Nikkei (down 0.28% at 16,784.65), Singapore's Straits Times (down 0.19% at 3,707.55), South Korea's Seoul Composite (down 0.23% at 1,940.80) declined. However, Taiwan's Taiwan Weighted (up 0.46% at 9,456.86) and Hong Kong's Hang Seng (up 0.09% to 27,088.47) rose.

US stocks extended their gains yesterday, 27 September 2007 with a moderate advance as investors weighed fresh economic data, including a sharp drop in new home sales, for clues to whether more interest rate cuts are in the offing. The Dow Jones industrial average rose 34.79 points, or 0.25%, to 13,912.94. It is now 87 points below its record close of 14,000.41 set on 19 July 2007. Broader indexes also advanced. The Standard & Poor's 500 index rose 5.96 points, or 0.39%, to 1,531.38, and the technology-heavy Nasdaq Composite index rose 10.56 points, or 0.39%, to 2,709.59.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 2226.85 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 311.42 crore on Thursday, 27 September 2007.

Crude oil extended gains for a third day on Friday, 28 September 2007 to above $83 a barrel, nearing its record high as a weak dollar and pre-winter supply worries fuelled fund buying. US crude for November delivery rose 30 cents to $83.18 a barrel Oil is recovering from a profit-taking dip earlier this week that pulled prices off their $83.90 peak. London Brent crude rose 30 cents to $80.33 a barrel.

The 30-shares BSE Sensex up 229.17 points or 1.35% at 17,150.56, an all time closing high, on Thursday, 27 September 2007. It hit an all time high of 17,188.40 in late trade, on that day.

From a recent low of 13,989.11 on 21 August 2007, Sensex surged 3,161.45 points or 22.59% in 27 trading sessions to 17,150.56 on 27 September 2007. FII buying boosted the bourses in this period.

The S&P CNX Nifty was up 60.05 points or 1.22% at 5,000.55, an all time closing high, on Thursday, 27 September 2007. It struck an all time high of 5,016.40 in late trade, on that day.

The NSE F&O turnover was a record Rs 86,226.41 crore yesterday, 27 September 2007 as compared to Rs 78,536.17 crore on Wednesday, 26 September 2007.

US Market registers modest gains

Market gives more importance to weekly claims data than housing data

Despite a weak report on the housing sector and energy prices once again touching the $83/barrel mark, US stocks managed to close modestly up today, Thursday, 27 September, 2007. New home sales reached their lowest level in more than seven years. Eight of the ten sectors posted gains today. Utility and consumer discretionary were the only two sectors to post losses.

The Dow Jones industrial Average closed higher by 34.79 points at 13,912.94. The Nasdaq Composite Index, finished higher by 10.56 points at 2,709.59. S&P 500 finished higher by 5.96 points at 1,531.38.

Seventeen out of thirty Dow stocks ended in green today. Alcoa, Boeing, 3M and Caterpillar were the top Dow winners. GM, P&G, H-P, Merck and Mc Donalds were the Dow laggards.

Ahead of the opening bell, the Labor Department said first-time claims for jobless benefits last week fell to their lowest level since May.

The Commerce Department reported today that sale of new homes fell 8.3% in August and 21% from a year ago to a seasonally adjusted annual rate of 795,000, which is the worst level since June 2000.

Apple shares strike a new all time high

When market opened in the morning, stocks rallied right out of the gate.

Microsoft stock gave a boost to the market's opening after it was reported that its video game "Halo 3" generated $170 million during its first 24 hours, which makes it the most successful release in U.S. entertainment history.

Technology sector rallied getting a great boost. Apple shares helped the sector and the stock hit an all time new high today.

The Department of Labor's Initial Claims report said that for the week ended 22 September, jobless claims dropped to 298k versus the consensus estimate that was set at 320K. But the claims level remain well below normal recession levels.

The Commerce Department said U.S. economic growth accelerated in the second quarter to the fastest pace in more than a year. It was noted that GDP grew 3.8% in Q2 versus the prior read of 4.0%.

Median home sales price drop the greatest in 37 years

The housing report also stated that the median home sales price fell 7.5% to $225,700 in August from $242,627 last year - the biggest year-over-year drop in 37 years.

Crude oil prices soared today and were back at touching almost $83/bbl. Weak dollar, supply conditions and once again concerns regarding Iran’s nuclear policy took crude prices high.

Crude-oil futures for light sweet crude for November delivery closed at $82.88/barrel (higher by $2.58/barrel or 3.2%) on the New York Mercantile Exchange. Prices are up 32% from a year earlier.

On the New York Stock Exchange, trading volume neared 1.2 billion, with advancing stocks ahead of decliners 2 to 1, while more than 1.7 billion shares were exchanged on the Nasdaq, with advancing stocks outpacing decliners by 4 to 3.

For tomorrow, investors will once again embrace a number of economic reports. The Personal Income and Outlays report should provide a useful measure of consumer health amid a softened economic outlook. The Chicago Purchasing Managers Index will give a glimpse into business conditions in the Chicago area. The University of Michigan's Consumer Sentiment is due mid-morning at 10:00 ET.

Pre Market Watch

Indian market is likely to have a positive opening as the US market closed in green. On Thursday, the Indian markets ended on a positive note as BSE Sensex closed higher by 229.17 points at 17,150.56 while Nifty grew by 60.05 points to close at 5,000.55.Yestarday, Sensex touched the intraday high of 17,188.40 which is its all time high, while Nifty crossed psycholological mark of 5000. We expect the market to see some profit booking during the trading session.

On Thursday, the US market closed in positive territory. The Dow Jones Industrial Average (DJIA) surged 34.79 points to close at 13,912.94. The S&P 500 (SPX) index increased by 5.96 points to close at 1,531.38 and the NASDAQ Composite (RIXF) advanced 10.56 points to close at 2,709.59.

Indian ADRs ended in green. In technology sector, Satyam computers grew by (4.39%) along with Wipro by (3.07%) and Infosys by (2.71%). In banking sector, HDFC bank and ICICI bank grew by (1.78%) and (0.65%) respectively. Tata Motors grew by (0.32%). MTNL and VSNL advanced by (1.08%) and (0.27%) respectively.

The major stock markets in Asia are trading mixed. Japan''s Nikkei is trading lower by 47.57 points at 16,784.65. Hang Seng index trading flat at 27,058.50. Taiwan weighted is trading higher by 43.21 points at 9,456.86. Singapore Strait times trading down by 7.22 points at 3,707.55. Seoul Composite fell 4.48 points to trade at 1,940.80.

Yesterday, the gross equity purchased was Rs.3,810.70 (in crores) and the gross debt purchased was Rs122.60 (in crores). The gross equity sold was Rs2,806.80 (in crores), and the gross debt sold was Rs0.50 (in crores). The net investment of equity was Rs1003.90 (in crores) and the net debt investment was Rs122.10 (in crores).

Today, Nifty has support at 4,926 and resistance at 5,058 and BSE Sensex has support at 16,933 and resistance at 17,294.

Re vs $ in 3 months

< 35 - 41 votes (8%)

> 35 < 40 - 358 Votes (72%)

> 40 < 45 - 87 Votes (17%)

>45 - 9 Votes (1%)

Total Number of Votes - 495

See Our Other Polls

Market may remain nervous

The market is likely to remain uncertain owing to lack of clarity and may witness sideways movement on the back of a sharp intra-day volatility. After witnessing solid gains of over 1200 points in last seven sessions, the market is likely to remain positive as the FIIs continued to remain net buyers of equities in the local market. However, mixed global cues may see the investors remain jittery. Among the key local indices, the Nifty could decline to 4975 on the downside while on the upside there is a near term resistance at 5013. The Sensex has a likely support at 16800 and may face resistance at 17300.

US indices posted modest gains on Thursday, expecting that Federal Reserve may curt the interest rates further on declining new home sales and a weak reading on GDP growth. The Dow Jones gaining 35 points to close at 13912 and the Nasdaq closed 11 points higher at 2710.

Select Indian ADRs clocked decent gains. While Satyam Computers and Wiopro gained over 3-4% each while, Infosys, Tata Motors, ICICI Bank, HDFC Bank, MTNL, Rediff and VSNL gained over 0.50% - 2% each. Among the laggards Dr Reddy's Lab and Patni Computer declined over 0.50% - 1% each.

Crude oil price jumped over the $80 a barrel, with the Nymex light crude oil for November series gaining by $2.58 at $82.88 per barrel. In the commodity space, the Comex gold for December delivery moved up by $4.40 to settle at $735.50 a troy ounce.

Trading Calls

Nifty (5001) Sup 4971 Res 5045

Buy Wipro (460)
SL 455 Target 468, 471

Buy BHEL (1829)
SL 1813 Target 1865, 1875

Buy Praj Inds (235)
SL 231 Target 243, 245

Sell Punj Lloyd (299)
SL 304 Target 292, 290

Sell Dabur (104)
SL 107 Target 98, 96

Rolling bulls gather no loss

People willing to roll up their sleeves seldom lose their shirts.

The bears seem to have lost their shirt for the time being. A smooth September is over for the bulls. The rollover in the F&O segment indicates October optimism is in. Shorts have been squared off and fresh longs created. The market looks poised to break new grounds and conquer new frontiers. The sentiment is definitely upbeat. Where have all the bears gone?

Today, we see a flat to slightly higher opening and a dull end to what has been another good week for the bulls. The market may turn a bit rangebound and choppy in the coming days ahead of the quarterly results, especially that of the IT firms. The bulls may swing to the techno beat for a month and take the IT index to new highs in October. Reliance could probably wait a little before it backs the raging bulls as a slew of announcements are likely by December.

The aggressive rate cuts by the Fed has re-opened the tap of foreign money for emerging markets like India. The sudden spurt in FII inflows has done the trick, by pushing the Sensex and the Nifty past new landmarks in a very short period of time. However, credit should also be given to Fed chief Ben Bernanke, who has in a sense given a new lease of life to the bulls around the globe.

Emerging markets like India are clearly the toast of global investors for mouth-watering prospects in terms of economic growth and earnings visibility. Having said that, some caution is warranted as the main indices have rallied quite a bit since the Fed rate cuts were announced. At the risk of sounding clich├ęd, we would say that a small correction, which will obviously be healthy for the market, is overdue to set the stage for the next round of advance.

US stocks closed with marginal gains, as investors bet that a big drop in new home sales and a weak GDP growth data will force the Federal Reserve to cut interest rates further. However, gains were capped by surging oil prices and nervousness ahead of Friday's economic reports.

The Standard & Poor's 500 Index added 5.96 points, or 0.4%, to 1,531.38. The Dow Jones Industrial Average rose 34.79 points, or 0.3%, to 13,912.94. The Nasdaq Composite Index advanced 10.56 points, or 0.4%, to 2,709.59.

The Dow climbed to within 0.7% of a record following the biggest plunge in new home prices in almost four decades.

Friday brings readings on personal income and spending - and the PCE deflator, the report's inflation component. After the start of trading, the consumer sentiment index from the University of Michigan is due, along with the read on construction spending and the Chicago PMI, a regional manufacturing report.

New home sales fell to a 795,000 annual unit rate in August, the lowest level in seven years, from an 867,000 unit rate in July. It was a steeper-than-expected decline.

US GDP growth was revised down to 3.8% in the second quarter from a previous read of 4%. Economists had been expecting reading of 3.9%. A separate report showed a surprise drop in weekly jobless claims last week.

US light crude oil for November delivery rose $2.58 to settle at $82.88 a barrel on the New York Mercantile Exchange, a jump of more than $3. The contract was up 37 cents at $83.25 a barrel in extended trading in Asia. Last week, the October contract settled at a record high of $83.32.

Treasury prices rose, lowering the yield on the 10-year note to 4.56% from 4.62% late on Wednesday. In currency trading, the dollar fell versus the euro and also dipped versus other major currencies. COMEX gold for December delivery rose $4.40 to settle at $739.90 an ounce.

European shares advanced, paced by gains in construction companies and airlines, though BMW weakened after revealing a new strategy. The pan-European Dow Jones Stoxx 600 index rose 0.8% to 377.83. The UK's FTSE 100 closed up 0.8% at 6,486.40, while the French CAC-40 advanced 0.8% to 5,733.37 and the German DAX 30 rose 0.6% to 7,853.79.

Most emerging markets were up. The Bovespa in Brazil jumped 2.2% to 61,052 while the IPC index in Mexico was up 0.7% at 30,528. The RTS index in Russia gained 0.7% at 2064 and the ISE National-30 index in Turkey rose 0.3% to 69,127.

Asian markets were trading mostly flat to slightly lower though shares in China were up sharply. The Nikkei in Tokyo was down 47 points at 16,784 while the Hang Seng in Hong Kong was up 12 points at 27,077. The Kospi in Seoul was down 4 points and the Straits Times in Singapore fell by 9 points to 3705.

Undoubtedly another stellar session ended at all time high levels as bulls absolutely dominated the day. Nifty and benchmark Sensex ended above the 5k and the 17k mark respectively for first time ever. NSE cash turnover also recorded all time high.

The Reliance Pack was a mixed bag, however Reliance Energy was the star performer, the scrip rose over 8.5%. Among the 30-scrip’s Sensex, ICICI Bank, Infosys, Tata Steel and ONGC were the leading movers. However, Hindustan Unilever, R Comm and Ambuja Cement were among the major laggards. Finally, BSE 30-share benchmark Sensex ended 229 points higher to close at 17,150. NSE Nifty added 60 points to close at 5,000.

VSNL advanced by 2% to Rs445 after reports stated that the company has bagged a bandwidth contract form the UK’s National Network for Research and Education, Janet for an undisclosed amount. The scrip touched an intra-day high of Rs460 and a low of Rs440 and recorded volumes of over 10,00,000 shares on NSE.

Reliance Energy sparked up by 9% to Rs1117 on reports that the company is planning to restructure its business under three verticals - utility, infrastructure and real estate. The scrip touched an intra-day high of Rs1130 and a low of Rs1145 and recorded volumes of over 63,00,000 shares on NSE.

Pantaloon Retail declined 2.5% to Rs526 after the nation's biggest publicly traded retailer said Q4 profit rose 18% as it added stores in the world's second-fastest growing major economy. Net income rose to Rs186.7mn, in the three months ended June 30 from a year earlier. Sales rose 79%. The scrip touched an intra-day high of Rs555 and a low of Rs522 and recorded volumes of over 2,00,000 shares on NSE.

Praj Industries slipped by 2% to Rs234. Tata Sons bought 7.3% stake in Praj Industries for Rs3.4bn to expand its business of making fuel from plants. The scrip touched an intra-day high of Rs246 and a low of Rs232 and recorded volumes of over 43,00,000 shares on NSE.

MRPL fell 2.8% to Rs72. According to reports Japanese trading houses Mitusui & Co and Mitsubishi Corp are likely to take stake in an aromatics unit planned by the company. The scrip touched an intra-day high of Rs78 and a low of Rs69 and recorded volumes of over 1,00,00,000 shares on NSE.

Indian Hotels dropped by over 3% to Rs136. The company announced that they would sell 1 share for 5 held atRs70 per share. The scrip touched an intra-day high of Rs144 and a low of Rs135 and recorded volumes of over 44,00,000 shares on NSE.

IT stocks continued its recovery despite Rupee hit fresh 9-year high of Rs39.62 this morning. Index heavyweight Infosys advanced 5% to Rs1915, Satyam Computer gained 2.5% to Rs442 and TCS added 2% to Rs1062.

Optimistic outlook on the sector and rising prices of metal boosted the metal stocks on Dalal Street. Tata Steel surged by over 5.5% to Rs795, Hindalco gained by 0.6% to Rs164, SAIL was up by 0.3% to Rs201 and JSW Steel added 2.6% to Rs822.

Auto stocks ended higher led by gains in the index heavyweights like Maruti, the scrip advanced by 2% to Rs980, Tata Motors gained by 1.6% to Rs751 and Bajaj Auto added 1% to Rs2535.

Profit booking dragged the Sugar stocks lower. According to reports the industry may get interest free loans equivalent of excise payments. Renuka Sugar slipped 2% to Rs692, Balrampur Chini dropped 4% to Rs74, Sakhti Sugar slipped 3% to Rs85 and Bajaj Hindusthan lost 10% to Rs170.

Banking stocks also continued to be in momentum. HDFC Bank surged by over 4% to Rs1433, SBI advanced 1.8% to Rs1880 and ICICI Bank added 0.8% to Rs1028. Others like Andhra Bank and Bank of Baroda were the major gainers among the Mid-Cap stocks.

FMCG stocks were under pressure. Dabur slipped 3.9% to 103, Hindustan Unilever lost 3% to Rs218, McDowell dropped 2.1% to Rs1691 and Marico declined 1.8% to Rs59.

Stocks in News:

Alphageo India's Board will meet today to consider issue of Warrants to Promoters, their associates, their family owned companies and companies.

Arvind Mills' Board will meet today to consider and approve the issue of equity shares / Fully Convertible Debentures / Partly Convertible Debentures / Warrants Convertible into equity shares or any other financial instruments which would be converted into or exchanged with equity shares at a later date on a preferential basis.

Oudh Sugar Mills will announce its results for the financial year ended June 30, 2007 and to consider recommendation of a dividend.

United Breweries' Board will meet today to consider a Rights Issue.

NIIT Technologies is in preliminary discussions with PE players Carlyle and Texas
Pacific Group for a 25-40% stake sale.

IFCI has short-listed eight bidders for sale of 26% stake including a consortia led by
Wilbur Ross and Shinsei Bank.

Reliance Industries and Gail India examining feasibility of setting up
petrochemical plants in Russia.

The joint venture between L&T and Japan’s Mitsubishi Heavy Industries will invest
Rs.7.5bn in its power equipment plant in Hazira.

Dr Reddy’s Laboratories has secured an exclusive license to sell dermatitis drug
Sebclair in the US.

Suzlon entered the Turkish market by securing an order for 31.5MW of wind turbine
capacity from Ayen Enerji Co Inc.

ICICI Bank raises US $2bn through a 5 year fixed rate notes issue.

The Union Cabinet to sanction Rs1,000bn worth of power projects in the 11th plan.

The Finance Ministry may notify guidelines within a week for determining fair market
value of stock options issued to employees.

The textile machinery sector may come under Textile Upgradation Fund Scheme (TUFS) to facilitate the modernization and upgrade of the Rs38bn segment

Fund Activity:

FIIs were net buyers of Rs22.27bn (provisional) in the cash segment on Thursday and the local institutions pulled out Rs3.11bn. In the F&O segment, foreign funds were net buyers of Rs11.17bn.

On Wednesday, FIIs were net buyers to the tune of Rs10bn in the cash segment. With this, their net investment in Indian shares in the past seven six days has risen to US$2.17bn. Mutual Funds were net sellers of Rs5.17bn on Wednesday.

Major Bulk Deals:

Morgan Stanley has bought Arvind Mills; ICICI Bank, ICICI Ventures and UBS have sold Deccan Aviation; Merrill Lynch has picked up Gitanjali Gems; Morgan Stanley has purchased both HTMT Global and Hinduja TMT; Merrill Lynch has sold HFCL; Lehman Bros has sold IFCI; Merrill Lynch has sold Praj Industries; Bear Stearns has sold Satnam Overseas; Fidelity has bought Shree Renuka Sugars; HSBC, Lehman Bros, Merrill Lynch and The Master Trust Bank of Japan have picked up Sintex Industries; Kotak Mahindra UK has purchased Tera Software; Merrill Lynch has sold TVS Motor; Morgan Stanley has bought Vakrangee Software; BNP Paribas has picked up Vishnu Chemical; Citigroup has sold Welspun Gujarat.

Upper Circuit:

Ruby Mills, Swan Mills, Shree Precoated, Deep Industries, Jayant Agro, Jai Corp, RIIL, Rei Agro and Marksans.

Lower Circuit:

Accel Frontline, IID Forgings and Tanla.