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Thursday, July 24, 2008

BSE Bulk deals to Watch - July 24 2008

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
24/7/2008 531223 ANJANI SYNTH TEJASH JAYANTILAL SHAH S 67000 42.64
24/7/2008 532871 CELEST LABS CHETAN KANTILAL MEHTA S 105495 32.91
24/7/2008 532836 GREMAC INFRA HEMENDRA R SHAH B 100000 88.77
24/7/2008 530165 KANCHA INTER BHARAT SHANTILAL SHA S 17865 5.40
24/7/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 230625 21.45
24/7/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 80306 20.88
24/7/2008 512559 KOHINORFOODS VINEETA SINGHANIA B 160000 114.02
24/7/2008 531096 MOUNT EVE MI DSP MERRILL LYNCH LIMITED S 272662 142.55
24/7/2008 532045 NEXXOFT INFO SUPER VELOURS PVT LTD B 30000 26.20
24/7/2008 532541 NIIT TECHNO RELIANCE MUTUAL FUND S 394300 111.55
24/7/2008 513583 SBT INTERN KAPIL PURI B 104986 13.50
24/7/2008 533001 SOMI CONVEY MANJU P. SURANA B 74500 29.70
24/7/2008 533001 SOMI CONVEY HI TECH FINVEST SERVICES PVT. LTD B 240700 29.92
24/7/2008 533001 SOMI CONVEY S. M. NISSAR B 119955 30.22
24/7/2008 533001 SOMI CONVEY PRABHUDAS LILLADHER PVT. LTD. B 122453 28.19
24/7/2008 533001 SOMI CONVEY N D NISSAR B 627117 29.06
24/7/2008 533001 SOMI CONVEY MANJU P. SURANA S 74500 27.70
24/7/2008 533001 SOMI CONVEY HI TECH FINVEST SERVICES PVT LTD S 240700 28.50
24/7/2008 533001 SOMI CONVEY S. M. NISSAR S 119955 30.34
24/7/2008 533001 SOMI CONVEY PRABHUDAS LILLADHER PVT. LTD. S 122453 28.19
24/7/2008 533001 SOMI CONVEY N D NISSAR S 627117 29.12
24/7/2008 533001 SOMI CONVEY INDIA MAX INVESTMENT FUND LTD. S 240161 29.40
24/7/2008 521163 ZODIAC CLOTH M3 INVESTMENT PRIVATE LIMITED B 308000 400.00

NSE Bulk Deals to Watch - July 24 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
24-JUL-2008,ADLABSFILM,Adlabs Films Limited,A TO Z STOCK TRADE PRIVATE LIMITED,BUY,332315,527.12,-
24-JUL-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,CLEAN FINANCE & INVESTMENT LTD,BUY,2561163,70.23,-
24-JUL-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,DSP MERILL LYNCH MUTUAL FUND,BUY,2094766,71.31,-
24-JUL-2008,FIRSTWIN,First Winner Industries L,DIPAK RAMANBHAI RATHOD,BUY,119647,138.21,-
24-JUL-2008,FIRSTWIN,First Winner Industries L,TRANSGLOBAL SECURITIES LTD.,BUY,95006,139.58,-
24-JUL-2008,IOLN,IOL Netcom Limited,JAROLI VINCOM PVT LTD,BUY,165000,79.90,-
24-JUL-2008,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,6509014,24.66,-
24-JUL-2008,KHAITANLTD,Khaitan (India) Ltd.,RESPECT VYAPAAR PVT. LTD,BUY,30000,35.48,-
24-JUL-2008,KHAITANLTD,Khaitan (India) Ltd.,SUNDRM CONSULTANTS PVT LTD,BUY,30000,35.53,-
24-JUL-2008,KOHINOOR,Kohinoor Foods Limited,VINEETA SINGHANIA,BUY,151000,114.11,-
24-JUL-2008,LOGIXMICRO,Logix Microsystems Limite,ASHISH DHAWAN,BUY,200000,110.00,-
24-JUL-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,BUY,4411636,37.34,-
24-JUL-2008,SB&TINTL,SB&T International Ltd,PURI KAPIL,BUY,138647,13.50,-
24-JUL-2008,ADLABSFILM,Adlabs Films Limited,A TO Z STOCK TRADE PRIVATE LIMITED,SELL,332315,527.79,-
24-JUL-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD,SELL,2973000,70.78,-
24-JUL-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,CLEAN FINANCE & INVESTMENT LTD,SELL,2561163,70.28,-
24-JUL-2008,FIRSTWIN,First Winner Industries L,DIPAK RAMANBHAI RATHOD,SELL,96147,142.92,-
24-JUL-2008,FIRSTWIN,First Winner Industries L,TRANSGLOBAL SECURITIES LTD.,SELL,95006,140.01,-
24-JUL-2008,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,6598733,24.76,-
24-JUL-2008,JAYAGROGN,Jayant Agro Organics Ltd.,SHASHIKANT BHAI PATEL,SELL,200000,58.30,-
24-JUL-2008,KHAITANLTD,Khaitan (India) Ltd.,CD EQUI FINANCE PVT LTD,SELL,27829,35.50,-
24-JUL-2008,KHAITANLTD,Khaitan (India) Ltd.,CHANDRAVADAN DESAI (HUF),SELL,30139,35.55,-
24-JUL-2008,NAGARFERT,Nagarjuna Fert & Chem,CLEAN FINANCE & INVESTMENT LTD,SELL,4411636,37.36,-
24-JUL-2008,NIITTECH,NIIT Technologies Limited,RELIANCE CAPITAL TRUSTEE CO.LTD.,SELL,505700,111.75,-

Post Session Commentary -July 24 2008

The domestic market concluded the day in red as investors eyed on inflation data, which is scheduled today and it is expected that to cross 12% for the week ended 12th July 2008. The Indian market opened significantly higher on the back of positive cues from the global markets and drop in crude oil prices that fell by 3.1% to $124.48 per barrel, which is lowest level in more than six weeks. Further it was not able to sustain the momentum and slipped to negative territory ahead of the announcement of the inflation figures. After a firm start, the market changed its gears to trade downward to close with losses. The BSE Sensex touched the 15,000 mark during early trading but ended below 14,800 and NSE Nifty closed below 4,500. From the sectoral front, the Oil & Gas index index was in limelight as was able go gain favor from market. While the Metal, Capital Goods, bank and IT stocks remained out of favor as witnesses most of the selling from these baskets. The market breadth was negative as 1258 stocks closed in green while 1458 stocks closed in red and 67 stocks remained unchanged.

The BSE Sensex closed lower by 165.27 points at 14,777.01 and NSE Nifty ended down by 49.20 points at 4,433.55. The BSE Mid Caps and Small Cap closed with losses of 35.04 points and 16.53 points to 5,580.90 and 6,796.11 respectively. The BSE Sensex touched intraday high of 15,130.09 and intraday low of 14,608.05.

Losers from the BSE are TCS Ltd (6.49%), Tata Steel (5.40%), ACC Ltd (5.13%), Reliance Com Ltd (4.52%), SBI (4.24%), BHEL (2.71%), NTPC Ltd (2.55%), Infosys Tech (2.38%), Satyam Comp (2.21%) and Bharti Airtel (2.21%).

The Metal index closed down by 374.27 points at 12,696.25. Lossers are Sh Precoated (6.61), Jindal steel (6.11%), Hindustan Zinc (3.71%), Sesa Goa Ltd (3.31%), Steel Authority (2.71%), and Gujarat Nre C (2.71%).

The BSE Capital Goods index lost 220.61 points to close at 12,119.16. Major lossers are Aiaengineer (4.45%), Jyoti Struct (4.11%), Praj Indus (3.24%), BHEL (2.71%), Alstom Proje (2.66%) and Havells India (2.21%).

The BSE Bank index closed lower by 128.02 points at 7,163.48. Major lossers are PNB (5.14%), Bank of Baroda (4.27%), SBI (4.24%), Bank of India (4.08%), OBC (3.72%), Union Bank (3.58%), and Indian Overseas Bank (3.22%).

The BSE IT index ended down by 103.47 points at 3,630.04. As DLF Ltd (8.44%), TCS Ltd (6.49%), Tech Mahindra (6.23%), Financ Techn (4.36%), NIIT Ltd (2.71%), Infosys Tech (2.38%) and HCL Tech (2.35%) closed in negative territory.

The BSE Consumer Durables index lost 87.35 points to close at 3,6,49.90. Major lossers are Lloyd Ele En (3.08%), Titan India (3.06%), Blue Star Ltd (2.56%), Videocon Industries (2.34%), Gitanjali Ge (1.44%) and Rajesh Exports (0.80%).

The Oil & Gas index ended up by 148.81 points at 10,013.40. As Reliance Natural Resources (9.47%), ONGC (3.25%), BPCL (2.25%), Cairn India (1.84%), Reliance (1.81%) and IOC (0.90%) closed in positive territory.

Market drifts lower on profit taking; rupee rise hits IT stocks

The market slipped today as investors booked profits after a sharp run-up in stocks for five straight sessions. Weak European market also weighed on the sentiments. Caution also prevailed ahead of inflation figures to be announced after the market hours today.

Selling was broad based. However, severity of fall was more on IT sector stocks as the rupee hit its highest in more than two months. Oil & gas stock bucked the weak market trend as crude oil prices slipped further.

The 30-share BSE Sensex lost 165.27 points or 1.11% at 14,777.01. The index lost 334.23 points at the day’s low of 14,608.05, hit in mid-afternoon trade. The index gained 187.81 at day's high of 15,130.09 hit at the onset of trading session.

The broader based S&P CNX Nifty fell 43.25 points or 0.97% at 4433.55. Nifty July 2008 futures were at 4441.90, at a premium of 8.35 points as compared to spot closing.

The BSE Mid-Cap index was down 0.62% to 5,580.90 and the BSE Small-Cap index shed 0.24% to 6,796.11. Both these indices outperformed the Sensex.

The market had surged in the last five days. Sensex had risen 2366.48 points or 18.81% in five trading sessions to 14,942.28 on Wednesday, 23 July 2008, from a low of 12,575.80 on 16 July 2008.

The barometer index is down 5509.98 points or 27.16% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6429.76 points or 30.31% away from its all-time high of 21,206.77 struck on 10 January 2008.

The market breadth was weak on BSE with 1258 shares advancing as compared to 1458 that declined. 67 remained unchanged. The breadth was strong earlier in the day.

BSE clocked a turnover of Rs 7398 crore as against Rs 7,467 on Wednesday, 23 July 2008. NSE's futures & options (F&O) segment turnover was Rs 58,129.42 crore, which was lower than Rs 68,010.68 crore on Wednesday, 23 July 2008.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 1.81% to Rs 2306.55, ahead of its Q1 June 2008 results. After trading hours, RIL reported 13.2% growth in net profit to Rs 4110 crore on 40.65% increase in total income to Rs 41,805 crore in Q1 June 2008 over Q1 June 2007.

The top Sensex gainers were, ONGC (up 3.25% at Rs 1027.25), DLF (up 2.35% at Rs 507.20), Maruti Suzuki (up 1.80% at Rs 617.90), Reliance Infrastructure (up 1.23% at Rs 1027), HDFC Bank (up 0.70% at Rs 1214.20).

Top Sensex losers were, Tata Steel (down 5.40% at Rs 631), ACC (down 5.13% at Rs 560.75), Reliance Communication (down 4.52% at Rs 501.50), and State Bank of India (down 4.24% at Rs 1478.35).

India’s largest listed cellular services provider by sales Bharti Airtel fell 2.21% at Rs 797.95. The stock came off early high of Rs 861. Before trading hours today, Bharti reported 44.86% growth in net profit to Rs 2046.79 crore on a 39.72% increase in revenue to Rs 7952.32 crore in Q1 June 2008 over Q1 June 2007.

India’s largest private sector bank by assets ICICI Bank fell 1.55% at Rs 726.80.

Oil stocks rose. ONGC (up 3.25% at Rs 1,027.25), BPCL (up 2.25% at Rs 316.20), Cairn India (up 1.84% at Rs 224.30), Indian Oil Corporation (up 0.90% at Rs 404.15), and HPCL (up 0.48% at Rs 230.15), jumped. The BSE Oil & Gas index outperformed the Sensex, rising 1.51% to 10,013.40.

Reliance Natural Resources, Anil Dhirubhai Ambani Group-controlled gas transportation firm, spurted 9.47% at Rs 98.80. Fast-tracking the legal proceedings over the KG basin gas dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL), the Bombay High court on Wednesday, 23 July 2008 decided to begin daily hearing between 12:00 IST and 14:00 IST every day from Thursday, 24 July 2008.

IT stocks slipped on strong domestic currency. India's second largest software exporter by sales Infosys Techologies fell 2.38% to Rs 1,565.620. TCS (down 6.49% at Rs 802.75), Tec Mahindra (down 6.23% at Rs 706.45), Satyam Computer (down 2.21% at Rs 369.35), and Wipro (down 0.09% at Rs 407.40), slipped. The BSE IT index underperformed the Sensex, falling 2.77% to 3,630.04.

Metal stocks tumbled. Jindal Steel & Power (down 6.11% at Rs 1,975.45), Tata Steel (down 5.40% at Rs 631), Sesa Goa (down 3.31% at Rs 3,194.85), Steel Authority of India (down 2.71% at Rs 142.05), and Sterlite Industries (down 2.65% at Rs 628), declined.

Drug maker Bliss GVS Pharma surged 20% to Rs 46.25 after the company said its board will meet on 29 July 2008 to consider issue of bonus shares.

Anil Dhirhai Ambani-controlled Reliance Power rose 2.95% to Rs 176 on reports it is set to enter the power equipment manufacturing sector in collaboration with the $7-billion global major Shanghai Electric.

State-run international trading firm MMTC rose 0.32% to Rs 24385.70 on reporting 38.1% surge in net profit to Rs 53.76 crore on a 60.8% rise in sales to Rs 9777.78 crore in Q1 June 2008 over Q1 June 2007.

Agrochemical maker United Phosphorous rose 3.04% to Rs 320.25 after it reported 57.9% rise in net profit to Rs 46.63 crore on 54.26% rise in total income to Rs 553.67 crore in Q1 June 2008 over Q1 June 2007. The company also approved 1-for-1 bonus issue of shares.

Cummins India surged 4.27% to Rs 289.10 on reporting 37.83% surge in net profit to Rs 88.24 crore on a 31.69% rise in total income to Rs 744.70 crore in Q1 June 2008 over Q1 June 2007.

Reliance Natural Resources reported a highest turnover of Rs 718.82 crore on BSE. Relance Capital (Rs 606.04 crore), Reliance Power (Rs 318.99 crore), Reliance Industries (Rs 283.70 crore), and Reliance Infrastructure (Rs 218.09 crore), were the other turnover toppers on BSE in that order.

Reliance Natural Resources clocked a highest volume of 7.29 crore shares on BSE. Chambal Fertilisers & Chemicals (1.94 crore shares), Nagarjuna Fertlisers & Chemicals (1.84 crore shares), Reliance Power (1.77 crore shares), and IFCI (1.73 crore shares), were the other volume toppers on BSE in that order.

European markets were weak. In Europe, key benchmark indices in UK, France and Germany were down by 0.51% to 0.98%.

Asian markets, which opened before Indian market, were mixed. Key indices in China, Japan, South Korea and Taiwan were up 0.80% to 2.55%. However, key indices in Singapore and Hong Kong were down 0.04% to 1.26%.

US stocks rose on Wednesday, 23 July 2008, as financial shares climbed on hopes lawmakers will approve a rescue plan for mortgage finance companies Fannie Mae > and Freddie Mac and as the price of oil fell. The Dow Jones industrial average rose 29.88 points, or 0.26%, to 11,632.38, while the Standard & Poor's 500 Index gained 5.11 points, or 0.40%, to 1,282.11, a three-week closing high. The Nasdaq Composite Index was up 21.92 points, or 0.95 percent, at 2,325.88.

Pre Session Commentary - July 24 2008

The Indian Market is expected to have positive opening on positive global cues as US markets closed in positive territory and Asian markets are trading higher along with further drop in crude oil prices. On Wednesday, the Indian market closed in with handsome gains mainly due to the UPA’s victory over the crucial vote of confidence in parliament on Tuesday. The domestic market opened with strong attitude supported by favorable global cues and drop in crude oil. Further, market gathered the momentum to continue its northward journey and conclude the day in sea of green. The BSE Sensex ended above 14,900 level and NSE Nifty closed above 4,400 mark. The sharp rise was due to the heavy buying activities across all indices that ended in green. Out of which, Bank index rallied to close with a gain of around 10%. Also, the Capital Goods, Metal, Reality, Power and Oil & Gas stocks witnessed heavy buying from these baskets. The BSE Sensex closed higher by 838.08 points at 14,942.28 and NSE Nifty ended up by 236.70 points at 4,476.80. We expect that market may gain some further ground during the trading session.

On Wednesday, the US market was closed with gains on steep drop in crude prices and better-than-expected earnings reports from several biggies that includes McDonald''s, PepsiCo, and Pfizer. Oil prices fell by 3.1% to $124.48 per barrel, which is lowest level in more than six weeks.

The Dow Jones Industrial Average (DJIA) closed higher by 29.88 points at 11,632.38 along with NASDAQ ended up by 21.92 points at 2,325.88 and S&P 500 index closed higher by 5.19 points at 1,282.19.

Indian ADRs ended high. In technology sector, Wipro ended higher by (2.80%) along with Infosys by (1.99%) and Satyam by (0.50%) while Patni Computers ended lower by (1.58%). In banking sector, ICICI bank and HDFC bank gained (8.65%) and (6.99%) respectively. In telecommunication sector, Tata Communication ended up by (7.80%) and MTNL gained by (2.14%). Sterlite industries increased by (4.05%).

Today the major stock markets in Asia are trading firm. Japan’s Nikkei is trading higher by 168.78 points at 13,481.71 along with Hang Seng index trading up by 72.58 points at 23,207.13 and Taiwan Weighted trading at 7,318.48 advanced by 8.65 points.

The FIIs on Wednesday stood as net seller in equity. The gross equity purchased was Rs2,264.40 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs2,654.90 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs390.50) Crore and net debt was Rs0.00Crore.

Today, Nifty has support at 4,404 and resistance at 4,591 and BSE Sensex has support at 14,678 and resistance at 15,348.

Market may extend gains as oil falls further

A fresh setback in oil prices and positive cues from the global markets will trigger firm opening of the Indian stocks after the market clocked its biggest rally in four months on Wednesday, 23 July 2008, triggered by hopes the government would revive stalled economic reforms.

Oil prices steadied around $124.50 per barrel in Asian trading toady, 24 July 2008, down nearly $23 from its record high hit earlier this month and hitting a seven-week low. The sharp fall in oil prices will ease concerns about inflation and interest rates. High oil and commodity prices have been a key cause for surging inflation and rising interest rates. Inflation is nearly 12% annually, its highest in more than 13 years. The quarterly monetary policy review of the Reserve Bank of India is scheduled on Tuesday, 29 July 2008.

Q1 June 2008 results announced so far have been a mixed bag. The key Q1 result today is that of Reliance Industries (RIL). Pressure on petrochemicals margins are seen offsetting strong refining margins of RIL in Q1 June 2008.

The market soared on Wednesday, 23 July 2008, on hopes the government may push forward some economic reforms which had been stalled over the past four years due to opposition from Left parties, after it won trust vote in parliament on Tuesday, 22 July 2008. Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank. The government has retained power thanks to support from regional parties including Samajwadi Party (SP), a regional party in Uttar Pradesh.

Some analysts, however, feel that a major big-bang push to reforms is unlikely as the government will focus primarily on bringing down inflation ahead of key state polls and parliamentary elections which are due in May 2009.

As per provisional data released by the stock exchanges, foreign funds on Wednesday, 23 July 2008, bought shares worth a net Rs 1,306.56 crore. Foreign funds sold shares worth a net Rs 390.50 crore on Tuesday, 22 July 2008, data released by the market regulator Securities & Exchange Board of India (Sebi) on Wednesday, 23 July 2008, showed.

US stocks rose on Wednesday, 23 July 2008, as financial shares climbed on hopes lawmakers will approve a rescue plan for mortgage finance companies Fannie Mae > and Freddie Mac and as the price of oil fell. The Dow Jones industrial average rose 29.88 points, or 0.26%, to 11,632.38, while the Standard & Poor's 500 Index gained 5.11 points, or 0.40%, to 1,282.11, a three-week closing high. The Nasdaq Composite Index was up 21.92 points, or 0.95 percent, at 2,325.88.

Asian markets were mostly in green today, 24 July 2008. Key benchmark indices in Hong Kong, Japan, China, South Korea and Taiwan were up by between 0.19% to 1.6%.

Market Outlook - July 24 2008

Market Outlook - July 24 2008

Daily Call -July 24 2008

The Sensex posted its sixth largest rise in point terms as it stopped short of the 15000 mark. The rally was powered, as expected by banking, ADAG and power-engineering stocks. The Bank Nifty posted it’s largest rise ever of 9.48%. The banking sector is back with a bang. It was aided by some positive remarks from the Finance Minister on the agenda of reforms.

Though the Open Interest (OI) increased by 5670 Cr, about Rs 4550 cr could be attributed to the rise in value of shares. 62% of the positions built were in the Nifty. The rally got extended power with a rise in Reliance stock. The company presents its quarterly credentials today, after the close. The environment is congenial for the banking stocks to do well with Crude continuing to slide.

Trading Calls - July 24 2008

Nifty (4477) Sup 4390 Res 4535

Buy Sterlite (645)
SL 638 Target 655, 660

Buy EKC (284)
SL 279 Target 294, 297

Buy Aban (2748)
SL 2725 Target 2800, 2810

Buy United Phosphorus (310)
SL 305 Target 320, 324

Sell Ranbaxy (464)
SL 469 Target 454, 451

Bulls may remain in command

The undertaking of a new action brings new strength.

As expected, the bulls came out in full strength on Wednesday, a day after the UPA convincingly won the confidence motion. The Sensex gained almost 6% while the Nifty jumped nearly 5.6%. Even the Mid-Cap and Small-Cap indices joined the party. Market breadth was obviously positive. Traded volume and cash market turnover too rose sharply. There is growing optimism among the bulls that with the Left parties out of the way, the Congress-led coalition may press ahead with its reform agenda. The Finance Minister's comments that the Government will table the bills on banking and insurance in parliament soon added fuel to the fire. Banking stocks were the biggest beneficiary, with the BSE Bankex surging by 10%. According to the FM, reforms are also likely in pension and FDI. Disinvestment (in both listed and unlisted PSUs) is also expected to be revived.

But, intent is one thing, and execution another. Whether the Centre is actually able to clear some of the reforms is doubtful, as the new allies might not be too supportive. Also, the Left and its new allies may continue to oppose reforms that require approval in parliament. The topmost priority is to try and contain inflation. The monsoon has also been quite indifferent, with the western and southern states getting deficit rainfall. A revival in monsoon, particularly in these regions, could help soften prices of essential food commodities before the year-end. On the other hand, weak rainfall will hurt food and other commercial crops, putting fresh pressure on prices. The Centre's fiscal situation is another area that needs urgent attention. A few divestments will prove to be more than handy. The Government clearly has its task cut out, and will need to address the macro-economic issues to not only win votes but bring back the bulls.

Talking of bulls, FIIs pumped in Rs13bn (provisional) in the cash segment yesterday even as the local institutions sought to cash out. If the market has to sustain the resurgence in mood, the foreign funds will have to play a crucial role. Whether the overseas investors oblige the market is a million-dollar question. Most analysts believe that FIIs remain bearish on India over the longer term despite the recent reversal in their money flows. Also, most of the FII buying off late is mostly short covering. The market needs fresh buying on a sustained basis to continue the north-bound journey. We expect the key indices to run a few miles more, but one should use the opportunity to lock in gains rather than go aggressively long.

Today, we expect the momentum to continue, as global markets remain firm while crude oil prices have fallen below $125 per barrel. Having said that, there could be some cooling after an initial spurt, as the Sensex has gained well over 2,000 points in the past five sessions. Inflation will be out today at 5 pm. Most experts expect the headline number to cross 12%. Despite the steep drop in crude oil prices, the RBI is expected to go for another round of monetary tightening next week. But, if oil prices soften further, the central bank may choose to be a bit less hawkish. F&O expiry will lead to heightened volatility as well. The current run-up looks more a bear-market rally rather than beginning of a fresh upturn. Hence, one must remain guarded at all times.

Key Results Today: ACC, Aventis Pharma, Bajaj Electricals, Bharti Airtel, CRISIL, Cummins India, Essel Propack, Exide, Gulf Oil, Hindustan Zinc, Idea Cellular, Info Edge, JK Tyre, MRF, Marico, Mysore Cement, NIIT, NMDC, Piramal Healthcare, Reliance Industries, Rolta, Shaw Wallace, Sobha Developers, United Breweries, United Phosphorus, WWIL, Zee News and Zensar Tech.

FIIs were net buyers of Rs20bn in the F&O segment yesterday. On Tuesday, FIIs were net sellers of Rs3.9bn in the cash segment. Mutual funds were net buyers of Rs3.72bn on the same day.

Shares of Somi Conveyor Beltings Ltd. will get listed on the bourses.

Shares of IT companies could come under pressure as the rupee has hit a new 10-week high this morning.

Asian stocks advanced for a fourth day, led by automakers and consumer-electronics manufacturers, as a stronger dollar and declining oil prices bolster earnings.

Honda gained as a weaker yen against the dollar boosted the value of overseas earnings and European carmakers reported results that beat analyst estimates. Sony advanced in Tokyo. Bridgestone climbed for a sixth day, as oil traded near the lowest in seven weeks and the price of rubber fell.

The MSCI Asia Pacific Index gained 0.9% to 136.05 as of 10:53 a.m. in Tokyo. The index has climbed 5.3% this week, heading for its biggest weekly advance since Aug. 24. About five stocks rose for each that declined, with eight of the index's 10 groups advancing.

The Nikkei in Tokyo was up 1.2% at 13,470 while the Hang Seng in Hong Kong was nearly flat at 23,156.

US stocks finished higher on Wednesday as investors cheered falling oil prices, even as lawmakers came closer to approving a plan to help troubled mortgage companies Fannie Mae and Freddie Mac.

The S&P 500 added 5 points, or 0.4%, to 1,282.19, a three-week high. The Dow Jones Industrial Average rose 30 points, or 0.3%, to 11,632.38. The Nasdaq Composite Index advanced 22 points, or 1%, to 2,325.88.

Market breadth was positive. Three stocks rose for every two that fell on the New York Stock Exchange.

Oil prices continued to decline after a government report showed stronger-than-expected inventories and a Federal Reserve report showed a weakening economy. Light, sweet crude for September delivery fell $3.98 to settle at $124.44 a barrel on the New York Mercantile Exchange, the lowest close since June 4.

After the close, the US House of Representatives voted 272-152 to pass sweeping legislation that will offer up to $300bn in assistance to troubled homeowners and throw government support behind mortgage finance giants Fannie Mae and Freddie Mac.

In currency trading, the dollar hit a two-week high against the euro, and gained against the Japanese yen as well. In the bond market, Treasury prices fell, sending yields higher. The yield of the benchmark 10-year note rose to 4.11%, up from 4.10% Tuesday. COMEX gold for August delivery fell $25.70 to $922.80.

Shares in the UK rose on Wednesday, helped by strong gains for banks and airlines. Banks were the main sector supporting the U.K. index after strong gains for their Wall Street rivals on Tuesday. The main FTSE 100 index closed up 1.6%, or 85.80 points, to 5,449.90.

Indian bourses ended with significant gains recording its biggest intra-day point gains for Sensex since March 25, 2008. UPA winning the confidence motion with an unexpectedly wide margin proved to be a major trigger for the markets. A sharp decline in crude oil prices coupled with encouraging global cues further boosted the sentiments on Dalal-Street.

Banking stocks were in demand as the UPA government would face less resistance to carry out reforms in the banking sector. Early in the day, Finance Minister P Chidambaram announced that reforms in the banking sector are top priority.

The Banking Regulation Bill is likely to be introduced in parliament during the forthcoming session. This bill is to allow foreign investors to have voting rights in banks in proportion with their equity holding.

The BSE Capital Goods, BSE Realty, BSE Power and BSE Metal indices were up by over 7% each. Even the Mid-Cap and the Small-Cap indices were up by over 4% each.

Among the 30-scrips of Sensex, ICICI Bank, Reliance Industries, HDFC and L&T were among the major gainers. However, the major laggards were Cipla and Hindustan Unilever. Finally the Sensex rallied 838 points to close at 14,942 and the Nifty surged 236 points to close at 4,476.

Shares of Sesa Goa rallied by over 14% to Rs3304 after the company announced its Q1 results with Net income rising to Rs6.33bn in the three months ended June 2008 from Rs1.31bn a year earlier and sales more than doubled to Rs12.8bn.

The company’s earnings per ton from iron ore in the June quarter climbed 43% to US$90 per ton and gains from coke, used to fire blast furnaces, doubled to US$500 per ton, said a top official in an interview. Income from sources other than its main business surged fivefold to Rs611.2mn. The stock had hit a 52-week high of Rs4,400 on May 5, 2008 and 52-week low of Rs1,686 on August 17, 2007.

Shares of Strides Arcolab rallied by over 17% to Rs172 after Onco Therapies Ltd ("OTL"), the JV between Strides Arcolab Ltd ("Strides"), and Aspen Pharmacare Holdings Ltd ("Aspen"), concluded a licensing and supply agreement with leading multinational pharmaceutical corporation, GlaxoSmithKline ("GSK"). In terms of the agreement OTL will license intellectual property and supply finished dosage form pharmaceuticals to GSK. The licensing and supply agreement is for 95 emerging market countries.

J Kumar Infraprojects was locked at 20% upper circuit to Rs100.95 after the company announced that it secured Rs200mn Mumbai Metropolitan Region Development Authority for Construction of Sky Walk from Kanjurmarg Station (East) to MMRDA Colony and also secured order for Rs330mn from Planning Cell, Engineering Services & Project Bldg for Augmentation of SWD system at Catchment No 117 BPT Colony, railway Yard and Training of Kharoo Creek Nalla.

The scrip touched an intra-day high of Rs100.95 and a low of Rs87 and recorded volumes of over 1,00,000 shares on NSE.

Shares of Maytas Infra rallied by over 19% to Rs494 after the company’s consortium won Hyderabad Metro Railway order, stated reports. The scrip touched an intra-day high of Rs495.80 and a low of Rs420 and recorded volumes of over 1,00,000 shares on NSE.

Valecha Engineering surged by over 9% to Rs141 after the company announced that it recently secured new projects worth ~Rs1.33bn which includes Road Project at Indore worth ~Rs980mn, Bridge Project at Delhi worth ~Rs350mn to be executed in 18-24 months. The scrip touched an intra-day high of Rs147 and a low of Rs133 and recorded volumes of over 45,000 shares on NSE.

Exide Industries advanced by 6% to Rs69 after reports stated that the company expects to double its supplies to automobile makers in FY10 to 5mn units. The scrip touched an intra-day high of Rs73 and a low of Rs66 and recorded volumes of over 49,000 shares on NSE.

Hotel Leela surged by over 6% to Rs33 as the company is reportedly entering into a marketing pact with US-based Preferred Hotel Group to increase its brand awareness and plans to invest US$500mn to add seven hotels in three years. The scrip touched an intra-day high of Rs33 and a low of Rs31 and recorded volumes of over 4,00,000 shares on NSE.

Arvind Ltd surged by over 5% to Rs33 after the company announced that it plans to float a new retail chain that will house six of its key premium brands under one roof. The scrip touched an intra-day high of Rs35 and a low of Rs32.5 and recorded volumes of over 8,00,000 shares on NSE.

NOCIL rallied by over 14% to Rs24 as the company is reportedly planning to increase its turnover to Rs10bn by 2012 and double its market share from 4% to 8%. The scrip touched an intra-day high of Rs25.5 and a low of Rs22 and recorded volumes of over 18,00,000 shares on NSE.

Government plans pre-IPO placement for OIL (BS)

Reliance Power to enter the power equipment space in collaboration with global major Shanghai Electric to manufacture boilers, turbine and generators (ET)

Two US senators asked the USFDA to provide details of market approvals given to all medicines sold by Ranbaxy in that country (BS)

BSNL’s proposed US$10bn IPO plan is back on track (ET)

A clutch of banks like SBI, HDFC, Axis bank plans to open a new exchange to facilitate trading exclusively in currency futures (ET)

Tata Power aims 1,000MW wind and solar energy projects in Gujarat (BS)

Kingfisher airlines may fly to Pakistan in September (BS)

Taib Bank, Bahrain has picked up a 26% stake in Anant Raj Projects for Rs2.2bn (ET)

The Government is examining possibilities of easing out a part of the shortage in diesel by diverting some of the fuel produced by RIL’s EOU refinery in Jamnagar to the domestic market. (ET)

Max India has restructured its joint venture with its insurance partner New York Life Insurance (BS)
IFCI drags Emaar MGF to court, seeks refund of Rs0.5bn given during a pre-IPO placement (BS)

Shree Cement plans to invest Rs5.5bn in FY09 (ET)

Air India to cut down its total capacity by ~10-12% (BS)

Tata Steel to resume work at Orissa plant by this month end (BS)

Biocon along with CSIR has developed a recombinant enzyme expression system which has wide applications in food, cattlefeed and industry (BS)

IDFC Projects has entered into an agreement with Indian Renewable Energy Development Agency to structure and implement a renewable energy development program (ET)

Century Textiles plans to invest Rs63bn, including Rs26bn to develop commercial projects in Worli and Rs18bn for cement manufacturing capacity expansion, over the next five years (ET)

Strides Arcolab Ltd’s JV with South Africa’s Aspen Pharmacare has struck a global licensing and supply agreement with GlaxoSmithKline (BL)

SBI plans to hire 3,000 marketing and recovery officers (ET)

Maytas consortium emerges lowest bidder for Hyderabad Metro project (BL)

Ranbaxy launches hypertension drug in Japan (BL)

The Godrej group plans to enter oil & gas equipment business, which will be executed through Godrej & Boyce with an initial investment of Rs1.5bn (ET)

United Spirits has launched Romanov Red, an extension of its million plus premium Vodka brand Romanov (ET)

Dalmia Cement (Bharat) Ltd floated a subsidiary which will invest over Rs40bn in the next three years to expand cement production (BL)

J. Kumar Infraprojects Ltd has secured two orders worth Rs0.5bn for construction of sky-walk in Mumbai (BL)

Two international banks to pick up stake in the International Asset Reconstruction Company (IARC) (BS)

Thanalakshmi Srinivasan Sugars Ltd plans to set up a 3,500 ton a day sugar mill in Tamil Nadu with an investment of Rs3.5bn (BS)

Economic Front Page

DoT has identified spectrum of up to 60 MHz for 3G services in a move that could allow up to 12 players in a circle (FE)

Trai has issued a consultation paper on a plethora of tariff offers in access service (FE)

The ministry of coal plans to fix the normative quantity of biomass power and bagassee cogeneration plants at 15% of the total energy consumption in kilo calories or as per the detailed project report (FE)

Government likely to relax human trial norms (BS)

The Rupee against the Dollar surges by 65 paise (BL)

COAI has issued a letter to the media slamming the CDMA body over 2G spectrum issue (BS)

TRAI has proposed to increase the minimum protection period available to access services consumers from tariff hikes to one year from the date of enrolment into a tariff plan (BL)

Orissa Government is negotiating with National Hydro Power Corporation for establishing about 10 multi-purpose projects including hydel power generation stations (FE)

The ethanol producing sugar co-operatives in Maharashtra have demanded that the procurement price be raised to Rs30 from current Rs21.5 per litre (ET)

The flower exports are likely to fall by ~20% in FY09 (ET)

Short Term Trading Calls - July 24 2008

Buy Yes Bank SL - Rs 126 Target - Rs 175

Buy Reliance Capital SL - Rs 1225 Target - Rs 1550

Morning Call - July 24 2008

Market Grape Wine :

In House :

Nifty at a support at 4458 and 4355 with resistance at 4547 and 4632 levels.

Cash: Buy RELIANCE above 2285 target 2348 with S/L 2255.

Cash: Buy REL CAPITAL above 1351 target 1420 with S/L 1319

Future: Buy RCOM above 510 target 540 with S/L 495

Future: Buy RPL above 168 targets 180 with S/L 164.

Out House:

Markets at a support of 14786 & 14532 levls with resistance at 15191 & 15432 levels .

Buy : Kotak & Adalbs

Buy : RIL & RPL

Buy : RNRL & GujNre

Buy : LT & Bhel

Buy : NTPC

Buy : SBIN & IciciBank

Buy : APIL

Buy : PFC

Buy : Core project

Dark Horse : RelCap , LNT , RNRL , RIL , IciciBank ,Core , NTPC & Adlabs

Insurance bill coming soon

Free from the clutches of the Left parties, Finance Minister P Chidambaram on Wednesday said the government would try to speed up reforms that could see passage of bills, including the insurance legislation.

"We will try to take the reform process forward... The insurance bill is one of many bills which is pending," he told reporters here after inaugurating the Sriram General Insurance scheme in Rajasthan.

He said the government, which won the trust vote in Parliament yesterday, would "reach out to other parties... try to build on the majority that we have demonstrated... and pass these bills."

The government scored a comfortable victory in the confidence vote by garnering the support of 275 lawmakers against the 271 needed to stay in power.

"I am confident that we can secure a comfortable majority for many of these bills if we talk to the other parties and that is what I intend to do," Chidambaram said, while adding that the insurance bill as a very important bill and it was necessary to find ways by which these bills can be taken forward.

The insurance bill would enable the government to raise FDI in insurance sector from 26 per cent to 49 per cent, he said.

The Left parties, which withdrew support to the UPA early this month over the civil nuclear deal with the US, were fiercely opposed to raising FDI cap in insurance sector as also allowing foreign investment in multi-brand retail.

"Yesterday, Prime Minister Manmohan Singh wanted to make a point (on reforms) in his reply after the debate on trust vote, but he had to table it due to the uproar in Lok Sabha," the Finance Minister said.

Others bills that are due for passage relate to Ministry of Finance, Ministry of Labour, Women and Child Development, and Social Sector, he added.

Alluding to the hurdles to reforms put up by the Left, Chidambaram told Parliament yesterday that "there are some people in the country who do not want India to catch up with China...They do not want India to be ahead of China."

Pre Market Watch -July 24 2008

Equities are likely to extend gains on Thursday as the sentiment remains upbeat after the government won the confidence motion on Tuesday. Crude oil's further slide and positive global cues will add to the optimism. The market will also keenly watch earnings declaration for the April-June quarter from the likes of Bharti Airtel, Reliance Industries and Idea Cellular.

Inflation data is also expected after market hours today. The wholesale price index is forecast to have risen 12.03 percent in the 12 months to July 12 driven by higher costs of commodities and strong demand in the economy. Data showed inflation at 11.91 percent a week earlier.

Meanwhile, US stocks rose overnight as crude oil's slide deepened to seven-week lows while financial shares climbed on hopes lawmakers will approve a rescue plan for mortgage finance companies Fannie Mae and Freddie Mac. Strong earnings declaration from earnings reports from AT&T and Pfizer also eased concern that the profit slump will worsen.

Oil edged down to $124 on Thursday, extending a precipitous pull-back from this month's record high after US data signalled that economic woes and high prices slackened demand. US light crude for September delivery fell 46 cents to a seven-week low of $123.98 a barrel.

Asian stocks advanced tracking Wall Street gains and declining oil prices. The Nikkei was up 1.27 per cent, Hang Seng rose 0.06 per cent, S&P ASX 200 climbed 0.5 per cent and Straits Times added 0.1 per cent.

Back home, it was a spectacular rally on Dalal Street Wednesday in reaction to the UPA government's confidence vote win in parliament. Bombay Stock Exchange's Sensex settled 5.94 per cent or 838.08 points higher at 14,942.28, just 58 points away from the 15000 mark. It soared to a high of 14,979.90 from a low of 14,568.22.

National Stock Exchange's Nifty ended at 4476.80, up 5.58 per cent or 236 points higher. The broader index touched a high of 4491.55 and low of 4246.70 during the day.

Foreign institutional investors were net buyers of equity worth a whopping Rs 1306.56 crore while mutual funds net sold Rs 875.22 crore of equity on Wednesday, according to provisional data on NSE.

Today's Pick - SAIL

We recommend a buy in Steel Authority of India (SAIL) from a short-term perspective. From the charts of the SAIL, we see that it was on an intermediate-term downtrend from its December 2007 high of Rs 292 to its July 2008 low of Rs 117.

However, the stock found support at around Rs 123 level recently, which is a significant long-term support level and bounced up. The stock’s recent reversal has been triggered by the positive divergence in the daily moving average convergence and divergence and the weekly relative strength index (RSI).

On July 23, in line with the broader market gain, the stock surged 8 per cent penetrating the 21-day moving average and its intermediate-term down trendline. We also notice that there is an increase in volume over the past five trading sessions. The daily RSI is rising in the neutral region and the weekly RSI has entered in the neutral region from the bearish zone. Our short-term outlook of the stock is bullish.

We expect the stock to move up until it hits our price target of Rs 165 in the upcoming trading sessions. Traders with short-term perspective can initiate a buy in the stock while maintaining stop-loss at Rs 137.

Nifty July 2008 futures at premium

Turnover spurts

Nifty July 2008 futures were at 4489.90, at a premium of 13.10 points as compared to spot closing of 4476.80. NSE's futures & options (F&O) segment turnover was Rs 68,010.68 crore, which was higher than Rs 54,100.84 crore on Tuesday, 22 July 2008.

Reliance Communications July 2008 futures were at premium at 526.40 compared to the spot closing of 525.70.

Shree Renuka Sugars July 2008 futures were near spot price at 118.40 compared to the spot closing of 118.25.

Reliance Natural Resources July 2008 futures were at discount at 90.05 compared to the spot closing of 90.35.

In the cash market, the S&P CNX Nifty gained 236.70 points or 5.58% at 4476.80.

Another dull day for bullion metals

Lower crude price and rebounding dollar continue to weaken precious metals

Lower crude prices and rebound in the US dollar led to lower bullion metal prices once again today, Wednesday, 23 July, 2008. Gold prices fell the modt in almost six weeks. The factors reduced precious metals’ appeal against a hedge against inflation. Going economic concerns about the current health of the US economy had been increasing the metal’s demand as a safe asset against the rising inflation in recent times. Silver prices also fell for the day.

Comex Gold for August delivery fell $25.7 (2.7%) to close at $922.8 ounce on the New York Mercantile Exchange. Yesterday, gold prices had slipped by more than $15. Last week, it ended marginally lower by $2.6. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped since then.

This year, gold prices have gained 10.8% till date against a 10% drop for the dollar against the euro. Gold prices ended June, 2008 with a gain of 4.1%. The yellow metal ended second quarter with a marginal gain of 0.7%. In May, it ended with a gain of higher by $22.5 (2.5%). Before May, for April, prices closed lower by 6.3%.

For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Today, Comex silver futures for September delivery fell 54.7 cents (3%) to $17.458 an ounce. Silver has gained 18% in 2008 till date. For the second quarter, it gained a paltry 1.4%.

Silver prices ended the month of May 2008 with a gain of 2.7%. For April, it closed lower by 5.5%. Silver had gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

At the currency markets on Wednesday, the dollar index, a measure of the greenback against a trade-weighted basket of currencies, gained 0.4% to 72.74. The dollar was boosted by Philadelphia Federal Reserve Bank President Charles Plosser's comments that accommodative monetary policy needs to be reversed and that rate hikes will need to begin soon. Separately, Treasury Secretary Henry Paulson reaffirmed U.S. support for a strong dollar in a speech yesterday.

In the crude market on Wednesday, crude-oil futures slumped almost $4 retreating for a second day as Energy Department’s data showed U.S. inventories fell less than expected and as concerns faded that Hurricane Dolly would pose much of a threat to energy infrastructure in the Gulf of Mexico. Crude prices for September delivery fell $3.98 (3.1%) to settle at $124.44 a barrel.

The weakening dollar and higher global demand for raw materials have led to records this year for commodities including gold. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Gold and oil has climbed 41% and 73% since the past one year.

During last week of June, Federal Reserve yesterday sharpened its focus on inflation, saying that the upside risks to inflation have increased. Fed held its target for short-term interest rates steady at 2%. Since last September, Fed has axed interest rates seven times and brought it down to 2%. On the other hand, after keeping interest rates unchanged at 4% since June, 2007, ECB hiked the same to 4.25% last month.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for August delivery closed lower by Rs 430 (3.3%) at Rs 12,644 per 10 grams. Prices rose to a high of Rs 13,041 per 10 grams and fell to a low of Rs 12,590 per 10 grams during the day’s trading.

At the MCX, silver prices for September delivery closed Rs 710 (2.8%) lower at Rs 24,453/Kg. Prices opened at Rs 25,110/kg and fell to a low of Rs 24,290/Kg during the day’s trading.

Crude prices continue to tumble

Prices drop again as hurricane worries fade and crude inventories fall less than expected

The weekly inventory report by the Energy Department and the rebounding dollar pressured crude prices for the second consecutive day today, Wednesday, 23 July, 2008. Prices also fell after concerns faded that Hurricane Dolly would pose much of a threat to energy infrastructure in the Gulf of Mexico.

Crude-oil futures for light sweet crude for September delivery closed at $124.44/barrel (lower by $3.98/barrel or 3.1%) on the New York Mercantile Exchange. Prices gave up more than $7 in the past two sessions. Last week, prices coughed up $16.5 (11.2%). It's now 16% lower than the $147.27 record high hit last on Thursday, 10 July, 2008.

Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Prices are 66% higher than a year ago. For the year, crude is up by 33.3% till date.

EIA reported in its weekly inventory report today that U.S. crude inventories fell less than expected last week and fell 1.6 million in the week ended 18 July. Market expected a figure around 2 million. At 295.3 million barrels, U.S. crude-oil inventories are in the lower half of the average range for this time of year.

As per the report, U.S. crude-oil imports averaged 9.8 million barrels per day last week, down 985,000 barrels per day from the previous week. U.S. refineries operated at 87.1% of their operable capacity last week. The EIA also reported U.S. gasoline supplies rose by 2.9 million barrels in the latest week, and distillate stocks gained by 2.4 million barrels.

EIA data also showed that an economic slowdown is taking toll on energy demand. Over the past four weeks, U.S. motor gasoline demand has averaged 9.3 million barrels per day, down by 2.4% from the same period last year.

At the currency markets on Wednesday, the dollar index, a measure of the greenback against a trade-weighted basket of currencies, gained 0.4% to 72.74. The dollar was boosted by Philadelphia Federal Reserve Bank President Charles Plosser's comments that accommodative monetary policy needs to be reversed and that rate hikes will need to begin soon. Separately, Treasury Secretary Henry Paulson reaffirmed U.S. support for a strong dollar in a speech yesterday.

In its monthly report issued last week, OPEC lowered its forecast for world oil-demand growth for 2008 to 1.03 million barrels a day, which represents a decline of 70,000 barrels from its previous estimate. Global oil demand this year is expected to average 86.81 million barrels a day. Earlier this month, the Energy Information Administration projected that U.S. petroleum consumption will shrink by 400,000 barrels a day in 2008, 38% more than EIA's June projection of a decline of 290,000 barrels.

Brent crude oil for September settlement dropped $4.26 (3.3%) to close at $125.29 a barrel on London's ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.

Against this background, September reformulated gasoline fell 11.55 cents to $3.05 a gallon and September heating oil sank 12.53 cents to $3.58 a gallon.

Natural gas in New York declined as crude oil fell after fuel inventories rose and a stronger U.S. dollar reduced the appeal of commodities as a hedge against inflation. Natural gas for August delivery fell 27.9 cents (2.8%) to settle at $9.788 per million British thermal units.

At the MCX, crude oil for August delivery closed at Rs 5,342/barrel, lower by Rs 100 (1.8%) against previous day’s close. Natural gas for August delivery closed at Rs 428/mmbtu, lower by Rs 2.7/mmbtu (0.62%)