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Thursday, November 22, 2007


Qualified Institutional Buyers (QIBs) - 60.9707 times

Non Institutional Investors - 68.8115 times

Retail Individual Investors (RIIs) - 16.5772 times

Employee Reservations - 3.1485 times

OVERALL - 46.18 times

Nifty November futures at a huge premium over spot price

Turnover in F&O segment increases

Nifty November 2007 futures were at Rs 5600, at a premium of 80.65 points as compared to spot closing of 5519.35.

NSE’s futures & options (F&O) segment turnover was Rs 71,149.36 crore, which was higher than Rs 70,758.86 crore on Wednesday, 21 November 2007.

Reliance Capital November 2007 futures were at premium, at Rs 2351, compared to the spot closing of Rs 2321.75.

State Bank of India November 2007 futures were at premium, at Rs 2258, compared to the spot closing of Rs 2249.25.

Larsen & Toubro November 2007 futures were at premium, at Rs 4054.70 compared to the spot closing of Rs 3955.60.

In the cash market, the S&P CNX Nifty lost 41.70 points or 0.75% at 5519.35.

Empee Distilleries to list on Nov 26 2007

On 26 November 2007

Empee Distilleries will list on exchanges on Monday, 26 November 2007. The stock will be placed in the B1 group of securities on BSE.

The company had fixed the IPO price at the top end of the Rs 350-400 price band.

At the IPO price of Rs 400, the PE multiple works out to 34.78, based on the the nine months ended June 2007 annualised EPS of Rs 11.5.

The Empee Distilleries IPO had ended on 6 November 2007 with 6.87 times subscription. The issue received total bids for 3.29 crore shares compared with the issue size of 48 lakh shares.

The qualified institutional buyers (QIB) portion was subscribed 8.76 times, the Non Institutional Investors segment by 2.31 times and the retail investors portion by 6.11 times.

The IPO was priced between Rs 350-400 per share. The issue constitutes 25.26% of the post issue paid-up capital.

Empee Distilleries proposes to part-finance its expansion from the net proceeds.

The company plans to set up 60 klpd grain based distillery and blending & bottling Indian-made-foreign-liquor plant with capacity of 0.07 lakh cases per month in Nellore, Andhra Pradesh. It plans to expand the existing distillery in Mevalorkuppam.

The company will also set up 7.5 mega watts (MW) biomass based power plant in Aranthangi, and develop 2 lakh square feet of residential space at Mevalorkuppam, in Tamil Nadu.

The company currently manufactures various IMFLs in Tamil Nadu and Kerala. It also has a wind mill energy plant in Coimbatore.

Empee Distilleries reported a profit after tax of Rs 16.42 crore on revenue of Rs 525.30 crore in the nine months ended June 2007.

Great Offshore

Great Offshore

Post Market Commentary

The market makes a turnaround towards the end of the session by paring most of its initial losses as the buying intensified across the heavy weight sectoral indices scrips. The market opened on a positive note but all of a sudden lost the momentum and fell as the selling intensified. The Sensex covers an intraday high of 18,744.55 and low of 18,182.83 . The banking and auto indices remained in the limelight as most buying is seen in these scrips. Finally, BSE Sensex closed little lower by 76.30 points at 18,526.32 and NSE Nifty dropped by 41.7 points to close at 5519.35. Overall, the market breadth was weak as 1,965 stocks are closed lower while 805 are closed higher. Both BSE Mid cap and Small cap fell by 127 points and 204.36 points at 8,090.84 and 10,060.87 respectively.

BSE bankex index grew by 178.53 points to close at 10,406.24. Pushing it up are PNB (9.44%), SBI (4.04%), Kotak bank (3.27%), Federal bank (2.60%), ICICI bank (2.16%).

BSE Auto index closed up by 8.31 points at 5,179.16 as Bajaj Auto (2.08%), Maruti Suzuki (1.65%), Tata Motors (0.80%) and M&M (0.49%) closed in green.

BSE Capital Goods index closed with a heavy loss of 487.60 points at 18,815.18. Pulling it down are L&T (4.06%), Areva (3.61%), Havell (3.08%), BHEL (1%), ABB (0.60%)

BSE Metal index declined by 208.47 points to closed at 16,045.12. Scrips that fell are Ispat inds (7.98%), Jindal saw (5.79%), Sterlite (5.09%), Jindal stainless (4.08%) and Nalco (3.47%) closed lower.

BSE oil & gas index dropped by 38.92 points to close at 11,692.07 as Aban offshore (3.34%), ONGC (3.61%), Essar oil (2.23%) and IOCL (1.71%) closed in red.

BSE Power index fell by 95.44 points to close at 4,151.07 as reliance energy (5.18%), torrent power by (4.64%), NTPC (4.99%), CESC (4.10%), Power grid (3.44%) closed in negative.

BSE IT index closed lower by 27.76 points at 3,959.90 as Karut net (8.85%), Rolta India (5.10%), Finance tech (3.96%), Iflex (3.93%) and Infosys (1.05%) closed lower.

FII: - Rs 2222 Cr; MF - Rs 151 Cr

Mkt Sources:

FII Gross purchases Rs 3246 Cr, Gross sales Rs 5469 Cr, Net Sellers Rs 2222 Cr.
MF Gross Purchases Rs 640 Cr, Gross Sales Rs 792 Cr, Net Sellers Rs 151 Cr.
Our View:

Thats a huge negative figure for the FIIs and markets had reacted accordingly.This will cetainly put pressure on markets for tomorrow however a lot depends on the provisional figures today. The US markets will be closed for tomorrow for Thanksgiving so, there are unlikely to be negatives from there.All in all fingers crossed for tomorrow...

Market Close : Tough day but Smart Recovery..

Traggic fall continued but surprise turnaround in the markets which recovered sharply in the last hour of trading session. It opened marginally in red and traded in negative terrain for major part of the day as Asian cues were not inline to support the Indian markets. Indices traded volatile and churned in both the territories going on a yahoo ride. Market recovered over 400 points from the day's low. Amidst heavy selling pressure the Banking stocks and Refinery sector stood strong. SBI's right issue news is on cards which hit the market & kept SBI in limelight and hence the momentum too. On the other hand latest notification from RBI which allowed the Oil and refineries to hedge foreign exchange exposures to 50% of their oil inventory volumes waved a sign of relief though oil prices hit the $100 / barrel mark. In the last hour of trading session the news floated that the Indian pension funds are approved to invest in Indian markets supplemented by the news that China will ``definitely'' go ahead with a program allowing individuals to invest directly in Hong Kong equities. This lifted the sentiments in the market to recovery strong. At close Realty index down by 6%, metal and power index down over 3%. European indices are trading in green.

Sensex closed down by 76 points at 18526. Weighing on the Sensex were losses in Rel Energy (1605.1,-5 percent), NTPC (227.55,-5 percent), L & T (3941.8999,-4 percent), ONGC (1149.55,-4 percent) and HDFC (2560.8501,-2 percent). Losses were restricted by gains in SBI (2241.8,+4 percent), ACC (1103.3,+2 percent), ICICI Bk (1126.9,+2 percent), Bajaj Auto (2472.55,+2 percent) and Maruti (966.75,+2 percent).

Eveready, part of the BM Khaitan Group a market leader in the dry cell battery industry. The battery business was bought by Mcleod Russel from Union Carbide in a leveraged buy-out but the restructuring was done last year and Mcleod Russel was demerged from Eveready. Now Eveready is a focussed and well established FMCG player. Its portfolio comprises of dry cell batteries, rechargeable batteries, flashlights, packet tea and recently introduced mosquito coils. The company had taken (30%) price hike in batteries last year on the back of high zinc prices. Around 55-60% of company's revenue comes from rural India. Here the consumption slipped as consumers opted delay in consumtion given the sharp rise. This led to a fall in volumes. On an average zinc prices were up 2% yoy. On qoq zinc prices are down by 2%. In July zinc came off to $3000 per tonne and the benefit from this should start flowing given that volume pick up is seen to some extent again. Monsoon is the good period as use of batteries is driven by the Farming community which uses Torches to take care of their fields. There is some threat seen on the back of lower power Consuming LED lights. In a sense thats true.. but we believe that these LED lights will create its own set of consumption. The per capita consumption of cells in India is still very small even as compared to that in South East Asian countries. We are informed that the volume growth is somewhat better in the AA segment in the last couple of months. Profits will be good from the new plant by the 3rd quarter and also the benefit of lower Zinc prices. We have detailed note on this. Do read it to have more clearity.

Apar Industries Ltd (Apar) is a diversified company having presence in Speciality Oil, Aluminium Conductor and Polymers. Its 3 plants located at Rabale-Thane, Silvassa and Nalagarh - Himchal Pradesh. Apar is the largest manufacturer of Transformer Oils in India and the second largest manufacturer of high strength overhead power transmission and distribution conductors. The Company earns around 48% of its revenues from the power sector and 42% from Speciality oil and 10% from Polymers. At current market price valuation are fair; Future is bright on the back of high growth expected in power sector. Business scenario sounds good but concern are many to look at. Do have a look at our deatiled note to know our view on this stock.

Technically Speaking: Sensex witnessed a downtrend as mentioned bounced back from 18250 and witnessed an intra day high of 18,745 and low of 18,183. Declines outnumbered Advances in the ratio of 2.5:1. Volume of Rs 6976 cr was churned through out the day. Sensex has taken support as levels anticipated by us. We also had recommended to cover the shorts when the markets were low during the day. A pullback rally is possible now which could run upto 18900. If sensex fails to hold above that, the next target could be as lower as 17100.

Emerging markets good bet

Global investors are continuing with their investment strategy in emerging markets like India, despite weakening global macro-economic conditions, higher crude oil prices and credit concerns, a latest survey states.

According to global financial service provider Merrill Lynch's survey of fund managers for November, investors have remained heavily overweight on the emerging market equities and continue to favour the global technology, energy, materials and industrial sectors.

In the past month, the price of crude oil rose 18 per cent and credit spread. But majority of investors still favour equities and are comfortable with the idea that the global economy can withstand a downturn in the US and believe that bad macro economic news has been priced in, the survey said.

On the other hand, bears can argue that complacency lingers as 12 per cent of respondents expect a global recession in the next 12 months, it added.

However, the survey points out that bulls and bears do agree that the business cycle is maturing with 70 per cent of the panel believing the global economy has entered a late-cycle phase.

"Investors are holding their nerve despite the gloomy outlook for growth and profit expectations," independent consultant to Merrill Lynch David Bowers said. However, signs have emerged that portfolio managers are taking a more conservative view on how they would like to see companies use their cash flow, he added.

Subprime woes lead market slump

The market lost its initial grip and succumbed to heavy losses on selling in realty, power, and capital goods counters. Major US indices fell sharply on Wednesday on worries about the housing sector slump coupled with weak dollar and surging oil prices. Asian markets followed the suit in early trades and closed with loses around 1-2%. The Sensex resumed on a positive note despite mixed cues from the firm Asian markets. The market remained quite thereafter but profit booking in index pivotal stocks dragged the Sensex to negative territory by the afternoon and it touched the day's low of 18,183. The market seemed to close with heavy losses, but sustained buying in frontline stocks towards the close helped the Sensex pare most of its losses and end the session down 76 points at 18,526, while the Nifty shed 42 points at 5,519.

The market breadth was negative. Of the 2,816 stocks traded on the Bombay Stock Exchange (BSE), 1,965 stocks declined, 805 stocks advanced and 46 stocks ended unchanged. Most of the sectoral indices closed in the red. The BSE Realty index dropped 4.99% at 9,457 followed by the BSE CG index (down 2.53% at 18,815) and the BSE Power index (down 2.25% at 4,151).

Among the Sensex majors, DLF tumbled by 5.49% at Rs823, Reliance Energy dropped 5.18% at Rs1,605, NTPC lost 4.99% at Rs228, L&T slumped by 4.06% at Rs3,942, ONGC slipped by 3.61% at Rs1,150, HDFC shed 1.51% at Rs2,561, Ranbaxy lost 1.40% at Rs393, Reliance Communications fell by 1.20% at Rs674, Infosys crumbled by 1.05% at Rs1,532 and Tata Steel dipped marginally at Rs819. However, select counters saw some buying action and ended with gains. SBI advanced by 4.04% at Rs2,242 while ACC, ICICI Bank, Bajaj Auto, Maruti Suzuki, Hindalco, Cipla, Bharti Airtel, Tata Motors and HDFC Bank slipped 1-2% each.

Over 2.46 crore Reliance Petroleum shares changed hands on the BSE followed by Reliance Natural Resources (2.16 crore shares), Ispat Industries (1.73 crore shares), Tata Teleservices (1.63 crore shares) and IFCI (1.23 crore shares).

Reliance Petroleum registered a turnover of Rs504 crore on the BSE followed by Reliance Natural Resources (Rs311 crore), Reliance Industries (Rs288 crore), Reliance Capital (Rs283 crore) and L&T (Rs238 crore).

Sensex sheds 76 points in choppy trade

The market bounced back in late trade as banking and auto stocks jumped amidst volatile trade. State Bank of India surged. Reliance Industries came off lower level. Realty, capital goods, power stocks declined. The market breadth was weak. BSE Mid Cap and Small Cap indices underperformed Sensex. Asian markets were mixed. Chinese stocks declined sharply. European markets were mixed.

The Sensex ended down 76.30 points or 0.41% at 18,526.32. Sensex hit a low of 18,182.83 in afternoon trade. At day’s low of 18,182.83, Sensex had lost 419.79 points. Sensex had surged to a high of 18,744.55 at the onset of the trading session. At day’s high of 18,744.55 Sensex gained 141.93 points.

The S&P CNX Nifty ended 41.7 points or 0.75% lower at 5,519.35.

The market breadth was weak. On BSE, 780 stocks advanced, while 1,963 stocks declined and 34 stocks were unchanged. 17 out of 30 stocks from the Sensex pack were in green.

The BSE Mid-Cap index declined 1.55% to 8,090.84 and the BSE Small-Cap index was down 1.99% to 10,060.87. Both these indices underperformed Sensex.

BSE Auto index (up 0.16% to 5,179.16), BSE Bankex (up 1.75% to 10,406.24), BSE Health Care index (down 0.08% to 3,810.63) and, BSE Oil & Gas index (down 0.33% to 11,692.07) outperformed Sensex. BSE FMCG index was flat at 2,103.72, outperforming Sensex

BSE Capital Goods index (down 2.53% to 18,815.18), BSE IT index (down 0.7% to 3,959.90), BSE Metal index (down 1.28% to 16,045.12), BSE Power index (down 2.25% to 4,151.07) and BSE Realty (down 4.99% to 9,457.37) underperformed Sensex.

Nifty November 2007 futures were at Rs 5600, at a huge premium of 80.65 points as compared to spot closing of 5519.35.

NSE’s futures & options (F&O) segment turnover was Rs 71,149.36 crore, which was higher than Rs 70,758.86 crore on Wednesday, 21 November 2007.

BSE clocked a turnover of Rs 6976 crore compared to Wednesday (21 November 2007)'s Rs 7,952.29 crore.

Index heavyweight and India’s largest private sector firm by market capitalisation Reliance Industries gained 0.25% to Rs 2,728.80, off session's low of Rs 2,666.80.

Banking stocks surged in late trade. State Bank of India (up 4.04% to Rs 2,241.80), ICICI Bank (up 2.16% to Rs 1,126.90), HDFC Bank (up 0.7% to Rs 1,594.04) edged higher.

Auto stocks also gained. Maruti Suzuki India (up 1.65% to Rs 966.75), Bajaj Auto (up 2.08% to Rs 2,472.55), Tata Motors (up 0.8% to Rs 692), Mahindra & Mahindra (up 0.49% to Rs 710.65) edged higher.

Realty stocks were major losers. Unitech (down 8.67% to Rs 328.20), DLF (down 5.49% to Rs 822.75), Indiabulls Real Estate (down 2.02% to Rs 602.85) edged lower.

Capital goods stocks declined. Larsen & Toubro (down 4.06% to Rs 3,941.90), Suzlon Energy (down 2.51% to Rs 1,857.20) edged lower.

India's biggest power equipment maker in terms of revenue Bharat Heavy Electricals declined 0.04% to Rs 2,485.10. It recovered from session’ low of Rs 2,380. It said today that it had received a contract worth Rs 2108 crore ($535 million) for steam generators and steam turbines in Jharkhand.

Power stocks declined. Tata Power Company (down 1.23% to Rs 1,145), Reliance Energy (down 5.18% to Rs 1,605.10), NTPC (down 4.99% to Rs 227.55) edged lower.

India’s second largest cement producer by sales ACC rose 2.21% to Rs 1,103.30.

India's largest oil exploration firm by sales ONGC declined 3.61% to Rs 1,149.55.

Ranbaxy Laboratories, India's largest drug maker by sales declined 1.4% to Rs 393. The company said on Wednesday, 21 November 2007, it had approval from Canadian authorities to manufacture and market tamsulosin hydrochloride capsules. Meanwhile, as per reports Ranbaxy Laboratories has reached an out-of-court settlement to market the generic copy of an innovator drug worth over $1 billion in the US.

Ispat Industries declined 7.98% to Rs 99.65 and was the biggest loser from A group of shares. Corporation Bank (down 7.93% to Rs 407.30), HTMT Global Solutions (down 6.89% to Rs 460), Jindal Saw (down 5.79% to Rs 745.65) and GE Shipping company (down 5.71% to Rs 445.70) edged lower.

Reliance Petroleum rose 2.68% to Rs 208.90 and clocked the highest volume of 2.46 crore shares on BSE. Reliance Natural Resources declined 1.04% to Rs 150.25 and clocked the second highest volume of 2.16 crore shares. Ispat Industries grossed the third highest volume of 1.73 crore. Tata Teleservices Maharashtra declined 2.27% to Rs 44 and clocked the fourth highest volume of 1.63 crore shares. IFCI declined 0.17% to Rs 86.40 and clocked the fifth highest volume of 1.23 crore shares on BSE.

Reliance Petroleum clocked the highest turnover of Rs 504.45 crore on BSE. Reliance Natural Resources (Rs 311.58 crore), Reliance Industries (Rs 288.65 crore), Reliance Capital (Rs 283.01 crore) and Larsen & Toubro (Rs 238.80 crore) were other turnover toppers on BSE in that order.

European markets were trading mixed. France’s CAC 40 (up 0.41% to 5,403.92) and UK’s FTSE 100 (up 0.35% to 6,092) edged higher. However, Germany’s DAX (down 0.2% to 7,503.01) edged lower.

China's Shanghai Composite index lost 4.41% at 4,984.16. Other Asian markets were mixed. Japan's Nikkei (up 0.34% at 14,888.78), and Taiwan Weighted (up 0.18% at 8,499.37) rose. However, South Korea's Seoul Composite (down 0.44% at 1,799.02) and Singapore's Straits Times (down 1.03% at 3,312.88), Hong Kong's Hang Seng (down 2.3% at 26,004.92) declined.

US stocks fell to the lowest in three-months on Wednesday, 21 November 2007 following growing unease over the economic outlook and weakening credit markets. The Dow Jones industrial Average ended the day with a loss of 211 points at 12,799. The Nasdaq Composite index slipped 34 points at 2,562. S&P 500 lost 22.9 points at 1,416.

Crude oil traded near $97 a barrel in New York after falling from a record yesterday, 21 November 2007 amid signs of slowing demand growth in the US, the world's largest energy consumer. Crude oil for January delivery was at $97.44 a barrel, up 15 cents, in after-hours electronic trading on the New York Mercantile Exchange in Singapore.

Pre Market Watch

Indian market is likely to have a negative opening as the us market closed in red and Asian market closed in mixed territory. Also the statement by the media about the increase of securities transaction tax by the finance minister may add to the negative sentiments. On Wednesday, the Indian markets tumbled to close on a deep red note due to heavy selling pressure across the sectoral indices scrips. Finally, BSE Sensex declined by 678.18 points to close at 18,602.62 and Nifty dropped by 219.85 points to close at 5,561.05. We expect the market to remain cautious during the trading session.

On Wednesday, the US market closed in negative territory. The Dow Jones Industrial Average (DJIA) fell by 211.10 points to close at 12,799.04. The S&P 500 (SPX) index decreased by 22.93 points to close at 1,416.77 and the NASDAQ Composite (RIXF) dropped by 34.66 points to close at 2,562.15.

Indian ADRs ended in red. In technology sector, Satyam fell by (6.07%) along with Wipro by (4.18%), Infosys by (3.66%) and Patni computers by (0.52%). In banking sector, ICICI bank and HDFC bank dropped by (7.17%) and (5.97%) respectively. VSNL and MTNL slipped by (8.97%) and (6.42%) respectively.

The major stock markets in Asia are trading mixed. Hang Seng index is trading up by 179.03 points at 26,797.22. Japan''s Nikkei is trading lower by 59.75 points at 14,777.91. Taiwan weighted grew by 6.80 points to trade at 8,490.91. Seoul Composite is fell by 4.51 points at 1,802.48. Singapore Strait times grew by 2.83 points to trade at 3,350.03.

The FIIs stood as the net seller yesterday as the gross equity purchased was Rs.4,816.70 (in crores) and the gross debt purchased was Rs30 (in crores). The gross equity sold was Rs5,888.80 (in crores), and the gross debt sold was Rs65.30 (in crores). The net investment of equity was -Rs1,072.10 (in crores) and the net debt investment was -Rs35.30 (in crores).

Today, Nifty has support at 5,469 and resistance at 5596 and BSE Sensex has support at 18,215 and resistance at 18,816.

IT Sector

IT Sector

Morning Call

Market Grape Wine :

In House :

Nifty at a supp of 5520 and 5460 with resis at 5592 and 5647

Intra Day: Buy Relcap above 2110 with SL and a TGT of 2226

Buy Tatasteel with a TGT of 839 and a SL of 775

F&O: Buy Polaris above 118 with a TGT of 127 and a SL of 113

Sell punj below 460 with a TGT of 447 and a SL of 473

Out House :

Markets at a support of 18484 & 18228 levels with resistance at 18986 & 19129 levels .

On Nifty a big support at 5480 and 5460 levels the markets to bounce back from these levels .

Maintain strict stop loss for your trades as markets to be very choppy and volatile .

Buy : RIL at dips

Buy : RELCAP at dips

Buy : JpAsso & JpHydro at dips

Buy : Bhel & Titan at dips

Buy : GeShipping at dips

Buy : IBUllsreal & IBulls

Buy : IciciBnak & SBIN at dips

Dark Horse : JpAsso , Aban , ONGC , RIL , GeShipping , SBIN & JpHydro

Grey Market - Kolte Patil, Jyothi Lab, Renaissance Jewellery

Reliance Power -- 60 to 61

Edelweiss 725 to 825 740 to 750

Renaissance Jewellery 125 to 150 45 to 50

Kolte Patil 125 to 145 130 to 135

Kaushalya Infra 50 to 60 22 to 23

Jyothi Lab. 620 to 690 370 to 380

Mundra Port & Sez 440 580 to 600

Empee Distilleries 400 38 to 40

Varun Ind. 60 65 to 70

Barak Valley Cement 42 25 to 27

Rathi Bars 35 +/- 4

Allied Computers 12 10 to 12

SVPCL 42 - 3 to -5

Positive, Negative Bias

Stocks for investment : NUCLEUS SOFTWARE, JP ASSOCIATES, SKF and BAJAJ Auto

Slide may continue

Market is likely to continue its downward journey on weak global cues. Market posted losses for fifth straight day yesterday, 21 November 2007 on weak global cues coupled with media reports that the government is considering raising the securities transaction tax (STT) to 0.5%. Another matter of concern is the Japanese Yen which has risen to two year high on concerns of credit markets and record fuel costs. The yen was was trading at the mid-108 levels against the dollar. Any rise from these levels may lead to carry trade unwinding.

The 30-share BSE Sensex tumbled 678.18 points or 3.52% at 18,602.62 on Wednesday, 21 November 2007. The broader CNX S&P Nifty lost 219.85 points or 3.8% at 5,561.05 on that day. It has declined 1326 points in the past five trading sessions from its close of 19929.06 on 14 November 2007.

Finance minister P Chidambaram could move an appropriate amendment to the Finance Act, 2007, in Parliament in the current winter session for raising STT, reports suggested.

Asian markets were trading mixed today, 22 November 2007. Japan's Nikkei (down 0.40% or at 14,777.91) and South Korea's Seoul Composite (down 0.25% at 1,802.48), declined

However Hong Kong's Hang Seng (up 0.67% at 26,797.22), Straits Times (up 0.08% or 2.83 points at 3,350.03), and Taiwan Weighted (up 0.08% at 8,490.91) rose.

US stocks fell to the lowest in three-months on Wednesday, 21 November 2007 following the growing unease over the economic outlook and weakening credit markets. The Dow Jones Industrial Average declined 140.87, or 1.08%, to 12,868.30. The Nasdaq Composite index dropped 20.10, or 0.77%, to 2,576.28. The S&P 500 lost 14.40, or 1.07%, to 1,424.10.

Crude oil traded near $97 a barrel in New York after falling from a record yesterday, 21 November 2007 amid signs of slowing demand growth in the US, the world's largest energy consumer. Crude oil for January delivery was at $97.44 a barrel, up 15 cents, in after-hours electronic trading on the New York Mercantile Exchange in Singapore.

As per provisional data, FIIs sold shares worth a net Rs 2007.70 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 630.06 crore on Wednesday, 21 November 2007.

Slide may continue

After registering the loss of over 650 points in yesterday's trades, the market is likely to exhibit weak trends on the back of a strong intra-day volatile moves. The meltdown in US markets on concerns that losses from mortgage defaults will spread through the economy and mixed Asian indices in morning trades likely to put pressure on the domestic indices. On the upside, the Nifty could test around the 5748 level and may witness support around the 5475 level. The Sensex has a likely support at 18300 and may test higher levels of 19280.

US indices slumped on Wednesday, with the Dow closing at a 7-month low, on worries about the credit and mortgage market and higher oil prices. The Dow Jones sliding over 211 points to close at 12799 while the Nasdaq slipping by 35 points at 2562 amid weak tech stocks.

Indian stocks trading on the US bourses fell sharply. VSNL tumbled over 8% and ICICI Bank slipped over 7%, while HDFC Bank, Tata Motors, Infosys, Satyam, Wipro, MTNL, Rediff, DR Reddy's and Patni Computers were down over 2-6% each.

Crude oil prices in the global market slipped marginally on Wednesday. The Nymex light crude oil for January series slipped 74 cents at $97.29 per barrel. In the commodity segment, the Comex gold for December delivery moved up by $7.20 to settle at $798.60an ounce.

Trading Calls

Nifty (5561) Sup 5477 Res 5667

Sell Hind Zinc (731) SL 737 Target 718, 714

Sell Bharat Forge (333) SL 338 Target 323, 320

Sell SAIL (245) SL 249
Target 234, 231

Buy Purva (399) SL 394
Target 408, 411

Buy LITL (441) SL 437
Target 449, 453

Thursday Thanksgiving…For bulls or bears?

If the only prayer you said in your whole life was, "thank you," that would suffice.

Just like we had fireworks before Diwali, the US seems to have celebrated its Black Friday before Thanksgiving. Black Friday is the day after Thanksgiving in the United States , where it is the beginning of the traditional Christmas shopping season. It’s called Black Friday because it’s considered the beginning of the period when retailers turn into black (profit). Back to markets, the bears, which were hibernating for quite a while, will have reasons to give thanks.

Today, we expect a cautious to slightly higher opening. A technical bounce back is likely following the selloff of the past few days. Intra-day fluctuations are a given. Investors should not risk aggressive buying and stick to a stock specific strategy. Trading for the rest of the day will hinge on the movements in Asian and European markets, and the trend in FII investment.

There has been no dearth of bad news over the past few weeks, especially from the US . Sub-prime contagion, multi-billion dollars of write-downs, High-flying Wall Street CEOs forced to resign, Goldman Sachs’ warning and the Federal Reserve’s scale down of outlook are among news which gave the bears company. The dollar has been on a downward spiral versus its main rivals. The yen, the world's favorite currency for carry trade, is trading near a two-year peak versus the dollar. Crude oil came very close to breaching the $100 per barrel mark. It is likely to cross the milestone sooner rather than later. Risk aversion is on the rise again across the world.

In summary, this is not a good time for the bulls whether they are on Wall Street, Dalal Street or any other street. What's worse, the scenario is unlikely to improve anytime soon, unless the Fed comes to the world's rescue yet again on Dec. 11. But, even so, the US economy may slip into recession next year. This will impact global growth, though India may not be hit all that much. Still, sentimentally the impending recession in the US will have some bearing on the Indian economy and the stock market here. Ideally, India should benefit as it is less dependent on the US economy and its economy is more driven by local factors.

Export-centric sectors like IT, Textiles, etc. will be affected. Whether or not foreign capital inflows into India accelerate is a million-dollar question given the recent curbs imposed on P-Notes. In the last couple of days FIIs have been big sellers in the cash as well as F&O segments. If this trend continues, the market will find it tough to rise. FII inflows are the critical factor for our market. If the main indices are to resume their upward march, FIIs should turn buyers again.

Purvankara Projects and Ranbaxy could do well on positive news flow.

US stocks ended sharply lower on Wednesday, as worries about the sub-prime mess, a weakening dollar and oil near $100 a barrel prompted investors to rush for cover ahead of the Thanksgiving holiday. The fall wiped out this year's gain for the Standard & Poor's 500 Index.

The S&P 500 lost 23 points, or 1.6%, to 1,416.77, leaving it with a 0.1% loss on the year. The Dow Jones Industrial Average declined 211 points, or 1.6%, to 12,799.04 as 29 of its 30 members retreated. The Nasdaq Composite Index dropped 35 points, or 1.3%, to 2,562.15.

Market breadth was negative. Almost four stocks fell for every one that rose on the New York Stock Exchange.

US financial markets are closed on Thursday for Thanksgiving and Friday they are open for half day. Attendance on Friday is expected to be low and trading volume light.

Ten-year Treasury yields fell below 4% for the first time in more than two years as investors sought the safety of US government debt.

The Dow Jones Transportation Average declined for a sixth day to the lowest level since September 2006 as the Dow dropped to the lowest since April. This signals the start of a bear market to investors who follow the so-called "Dow Theory."

The index of leading US economic indicators fell more than forecast in October. The report added to concern that the world's biggest economy is slowing after the Federal Reserve cut its forecast for 2008 growth yesterday.

The November consumer sentiment index from the University of Michigan rose to 76.1 from an initial reading of 75.0, but was down from last month's 80.9. Economists had forecast no change. The number of Americans filing new claims for unemployment last week fell by 11,000, as expected.

Treasury Secretary Henry Paulson said that lenders should move aggressively to offer new mortgage terms as defaults increase, according to the Wall Street Journal. Former Fed Chairman Alan Greenspan said recent signs that a collapse in credit tied to subprime-mortgage lending was ending have proven wrong.

Crude closed down 74 cents, or 0.8%, at $97.29 a barrel on the New York Mercantile Exchange, after earlier rising as high as $99.29. But the pullback only offered a brief respite for stocks. Oil prices were volatile after the release of the weekly oil inventories report, which showed a surprise drop in crude supplies.

COMEX gold for December delivery rose $7.20 to settle at $798.60 an ounce. In currency trading, the dollar fell versus the yen and the euro.

European shares lost ground for the fourth time in five sessions. The pan-European Dow Jones Stoxx 600 index lost 2.6% to 349.18. The German DAX 30 closed down 1.5% at 7,5184.42, the French CAC-40 sank 2.3% to 5,381.30 and the UK's FTSE 100 shed 2.5% to 6,070.90.

Latin American stocks dropped sharply. The Bovespa, Brazil's benchmark equity index, finished 2.8% lower at 60,581.54. Stocks were closed for holiday on Tuesday. In Mexico City, the IPC fell 2.1% to 28,446.45. Argentina's Merval ended down 1.3% at 2,216.45.

Asian stocks extended their losses, sending a regional index to a two-month low, after home prices fell in a third of US cities, adding to concern that mortgage losses will spread and slow global growth.

National Australia Bank led a drop by financial companies on speculation that falling markets globally will spark losses on investments. Japanese exporters such as Toyota declined after the yen strengthened to the highest in more than two years against the dollar, reducing the value of overseas sales.

The MSCI Asia Pacific Index lost 0.7% to 153.58 at 10:00 a.m. in Tokyo, set for its lowest close since Sept. 18.

Japan's Nikkei 225 Stock Average lost 0.2% to 14,801.74, while the broader Topix index slid 0.2%. The Topix is down 21% since a February peak, signaling Japan is the first among the world's 10 biggest markets technically to enter a bear market.

However, the Hang Seng in Hong Kong held firm, and was up 174 points at 26,793.

Global cues, FII selling to call shots

Markets extended their losses to fifth straight trading session posting its biggest drop since October 18. It was bears dominating right from first minute. Markets opened in red after reports stated that the Finance Ministry is contemplating hiking the rate at which the Securities Transaction Tax (STT) is being levied coupled with selling pressure and weak cues from the Asian and European markets dragged the benchmark Sensex further.

However, bulls attempted a recovery but after managing to hit a high of 19,218 Sensex further lost ground finally losing 678 points to close at 18,602. NSE Nifty closed 219 points to close at 5,561.

M&M was down 4.4% to Rs698. The company’s component division Mahindra Systems and Automotive Technology is in talks with S P Metal Forgings, South Africa, for an equity buyout. The scrip touched an intra-day high of Rs739 and a low of Rs684 and recorded volumes of over 5,00,000 shares on NSE.

Fortis Financial surged by 2.8% to Rs102 after the company announced that it purchased 76% stake of UK’s Capital Market Solution. The scrip touched an intra-day high of Rs109 and a low of Rs101 and recorded volumes of over 19,000 shares on NSE.

Reliance Industries declined 2.8% to Rs2709. The company announced that it signed a production sharing agreement for two exploration blocks in Yemen. The scrip has touched an intra-day high of Rs2797 and a low of Rs2690 and has recorded volumes of over 45,00,000 shares on NSE.

Ranbaxy Laboratories was down 4% to Rs397. The company announced that it received approval to sell a generic version of Boehringer Ingelheim's Flomax capsules. The scrip touched an intra-day high of Rs420 and a low of Rs393 and recorded volumes of over 7,00,000 shares on NSE.

In a falling markets Religare Enterprise a financial services provider led by promoters of Ranbaxy Laboratories had a blockbuster listing on the bourses on 21st November, the stock sky rocketed over 200% hitting an intra-day high of Rs601 and finally closed at Rs522 up 182%. The company had fixed the price band of Rs160 to Rs185 for the issue.

Core Projects slipped 1% to Rs261. The company said that it is co-sponsoring the "International Conference on Universal Quality School Education: Challenge of the 21st Century" along with IBM and IL&FS Ltd to be held at New Delhi from November 21, 2007.

The Company also said that it is planning to sign an MOU at this conference with the Indira Gandhi National Open University to set up visualization Laboratories using CAVE 3D Interactive Technology at all IGNOU Centers. The scrip touched an intra-day high of Rs281 and a low of Rs255 and recorded volumes of over 6,00,000 shares on NSE.

Orient Info surged by over 19% to Rs19.4 after the company announced its plans merger with IT People India. The scrip touched an intra-day high of Rs19.6 and a low of Rs15.3 and recorded volumes of over 8,00,000 shares on NSE.

Stocks in News:

Godrej Industries has raised Rs6bn through the allotment of over 279mn equity shares to various domestic and foreign investors.

Hindalco plans to raise its capacity to about 1.5-1.6mn tons per annum by 2011.

Patni plans to double sales in Europe to counter rising Rupee.

Reliance Life to infuse Rs15bn as capital over the next three years.

Puravankara wins 30-acre Hyderabad land deal for Rs7bn.

Wipro has joined hands with GE Fanuc Technologies to work together globally to provide solutions for consumer packaged goods and pharmaceutical industry.

Oil marketing companies to hedge on Nymex on rising crude oil prices.

Gap and Wal-Mart may scale down sourcing from India.

Sasken Communication has set up a wholly-owned subsidiary in Japan.

Ranbaxy has reached an out-of-court settlement to market an innovator drug worth over US$1bn in the US.

Bhilwara Energy to raise equity worth US$200-250mn over the next 6-10 months.

Tata Chemicals to invest in biotech and nanotech R&D.

Tata Chemical has signed an agreement with ICRISAT for enhancing the commercialization of sweet sorghum for bioethanol product.

Kingfisher has asked Airbus for an early delivery for its five A380 aircraft.

Hindujas in talks with Networth to push IndusInd bank business.

PNB gilts gets an approval to work out a merger with Punjab National Bank.

Foreign inflows may be tightened further; the policy change may include cap on ECBs.

India to allow duty free imports of over 4,500 items from South Asian LDCs.

Companies mining bauxite in tribal areas may have to share 20% of their profits with tribals displaced by the mining project.

New derivative offerings are at least two years away.

Spectrum deadlock continues after yesterday’s meeting between the DoT and the country’s top mobile service providers.

Sebi mulls introduction of real estate investment trusts.

Certificates of deposit (CDs) rates have risen by 75-80 basis points on account of liquidity squeeze.

FII Investment Trend:

FIIs were net sellers of Rs20bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs6.3bn.

In the F&O segment, FIIs were net sellers of Rs21.87bn yesterday.

Foreign funds were net sellers of Rs10.7bn in the cash segment on Tuesday. Mutual Funds were net buyers of Rs1.38bn.

Daily Technicals, Futures - Nov 22 2007

Daily Technicals, Futures - Nov 22 2007

Barak Valley Cements Listing

On 23 November 2007

Barak Valley Cements will list on exchanges on Friday, 23 November 2007. The stock will be placed in the B1 group of securities on BSE.

The company has the IPO price at the top end of the Rs 37-Rs 42 price band.

At the IPO price of Rs 42, the PE multiple works out to 7, based on the year ended March 2007 EPS of Rs 6.

The Barak Valley Cements IPO had ended on 1 November 2007 with 29.15 times subscription. The IPO received total bids for 16.50 crore shares as against the issue size of 56.60 lakh shares. The qualified institutional buyers (QIBs) category was subscribed 24.17 times. The non institutional investors category, made up of corporates and high-net individuals, was subscribed 25.50 times. The retail investors category was category was subscribed 39.47 times.

Barak Valley plans to use the proceeds to part finance expansion of clinkerisation capacity from present 420 tonne per day (tpd) to 600 tpd; cement grinding capacity from 460 tpd to 750 tpd; invest in wholly owned subsidiary Badarpur Energy; set up 6 MW biomass based power project; and to meet the working capital requirements.

Barak Valley Cements manufactures various grades of Ordinary Portland Cement and Portland Pozzolana Cement, and its main market is the north-east.

The current cement manufacturing capacity of the company, including that of wholly owned subsidiaries, is 760 tpd, which will increase to 1,050 tpd post expansion.

Barak Valley sold around 1.60 lakh tonne of cement in 2006-07 (April-March).

Barak Valley Cements reported a profit after tax of Rs 14.27 crore on sales of Rs 73.70 crore in year ended March 2007.

Nifty November futures at discount

Turnover in F&O segment declines

Nifty November 2007 futures were at Rs 5536.25, at a discount of 24.80 points as compared to spot closing of 5561.05.

NSE’s futures & options (F&O) segment turnover was Rs 70,758.86 crore, which was lower than Rs 73,178.98 crore on Tuesday, 20 November 2007.

Reliance Industries November 2007 futures were at premium, at Rs 2739, compared to the spot closing of Rs 2709.50.

GMR Infrastructure November 2007 futures were at premium, at Rs 226.50, compared to the spot closing of Rs 224.05.

Reliance Natural Resources November 2007 futures were at premium, at Rs 151.80 compared to the spot closing of Rs 149.60.

In the cash market, the S&P CNX Nifty lost 219.85 points or 3.80% at 5561.05.

Crude fluctuates on inventory data

Prices rise initially but then slip as traders analyze that inventory rose at delivery point

Crude oil prices rose today earlier in the day but then gave up its gains and closed lower for the day. Prices earlier rose but then fell after Energy Department released the weekly inventory report. Price fluctuated after analyzing the inventory data. Earlier in the day, in electronic trading, it crossed $99/barrel but then fell.

For the day ending Wednesday, 21 November, 2007, crude-oil futures for light sweet crude for January delivery closed at $97.29/barrel (lower by $0.74/barrel or 0.75%) on the New York Mercantile Exchange. Prices are up 62% from a year ago.

Brent crude oil for December settlement fell $0.65 (0.7%) to $94.84 on the London-based ICE Futures Europe exchange.

As per the weekly report by the Energy Dept, U.S. crude stockpiles dropped by 1.1 million barrels in the week ending 16 November as against an expected build-up. Crude oil for January delivery rose 55 cents to $98.60 a barrel after the report. But then price fell after traders realized that crude at Cushing, Oklahoma, the delivery point for crude traded on the Nymex, rose 1.2 million barrels to 14.6 million in the latest week.

EIA also reported U.S. refineries operated at 87% of their operable capacity last week, down from the previous week's 87.7%. EIA also reported gasoline supplies rose by 200,000 barrels to 195.2 million barrels in the latest week, while distillate supplies, which include heating oil and diesel, decreased sharply by 2.4 million barrels to 131 million barrels.

Last week, prices rose to $98.62/barrel during intra day trading on 7 November, 2007. Oil prices had rose 16% in October, 2007, the biggest one-month gain since September 2004.

Natural gas rises though heating oil and gasoline slip

Natural gas in New York rose as traders bought contracts to protect against price increases during the U.S. Thanksgiving holiday, when trading is limited. Gas for December delivery rose 7.3 cents (1%) to settle at $7.55 per million British thermal units.

Against this backdrop, December heating oil closed down 0.27 cents at $2.6874. Also on Nymex, December reformulated gasoline ended down 1.44 cents at $2.4371 a gallon.

Last week, OPEC reduced its fourth-quarter estimate of global oil demand growth to 1.97%, down from 2.1%, citing warmer winter weather in the Northern Hemisphere and the higher price of gasoline. The cartel also trimmed this year's world oil demand growth to 1.4% from 1.5%, but the cartel kept the first quarter of next year unchanged at 1.8%.

Attacks on oil facilities in Middle East and tight supplies from OPEC have bolstered crude prices this year. As per the U.S. Energy Information Administration, tight global energy supplies are expected to keep energy prices high through 2008.

There will be no floor trading in New York tomorrow because of the Thanksgiving holiday. All electronic trading tomorrow will be counted as part of the session on 23 November.