Post Session Commentary - Aug 5 2008

The domestic market ended with handsome gains after remained instable till afternoon. Heavy buying was contributed by sharp drop in crude oil prices and rate sensitive stocks on expected Fed rate hike. Federal Reserve’s meeting is scheduled today to decide on US interest rates. Crude oil dropped by $3.69 to close at $121.41 a barrel on the NYMEX. Positive cues from European markets also added to the positive sentiment. Market opened with marginal losses tracking weak global cues and soon after start it turned volatile. Further, market gathered momentum after mid session and continued to gain ground till end. NSE Nifty ended above 4,500 mark and BSE Sensex ended above 14,900 level and reached very nearer to 15,000 mark. BSE Midcaps and Smallcaps maintained their opening gains and ended with increase of more than 1%. From the sectoral front, Bank and Reality stocks posted sharp gains with increase of more than 6% followed by Auto stocks, which gained more than 4%. Along with this, Capital Goods, Oil & Gas, Power and IT stocks also were in the limelight as witnessed significant buying from these baskets. However, only Metal and Consumer Durables stocks were sufferers of negative sentiment. The market breadth was positive as 1779 stocks closed in green while 923 stocks closed in red and 65 stocks remained unchanged.

The BSE Sensex closed higher by 383.20 points at 14,961.07 and NSE Nifty ended up by 107.50 points at 4,502.85. The BSE Mid Caps closed with gains of 101.16 points at 5,843.88 and Small Cap ended up by 89.45 points 7,192.79. The BSE Sensex touched intraday high of 14,986.63 and intraday low of 14,529.21.

Gainers from the BSE are ICICI Bank Ltd (8.24%), DLF Ltd (7.66%), Maruti Suzuki (7.38%), HDFC Bank Ltd (6.83%), Grasim In Ltd (6.56%), JP Associates (6.05%), M&M Ltd (5.46%), ACC Ltd (5.18%), SBI (4.62%) and Relaince Infra (4.18%).

The BSE Bank index gained 450.37 points to close at 7,217.98. Major gainers are IDBI Bank Ltd (9.08%), ICICI Bank Ltd (8.24%), Axis Bank (7.76%), Bank of Baroda (7.35%), Canara Bank (7.18%) and Indus Ind Bank 6.94%).

The BSE Reality index ended up by 343.45 points at 5,575.07. Major gainers are Unitech Ltd (7.73%), DLF Ltd (7.66%), Sobha Dev (7.47%), Omaxe Ltd (7.38%), Mahindra Life (6.91%) and Orbit Co (4.99%).

The BSE Capital Goods index closed higher by 250.81 points at 12,279.77. Gainers are Elecon Eng C (13.40%), Crompton Greaves (7.08%), Aiaengineer (3.84%), Thermax Ltd (3.59%), BHEL (3.28%), Gammon Indi (3.28%) and Punj Lloyd (2.53%).

The BSE Auto index ended up by 150.58 points at 3,819.17. As Ashok Leyland (9.83%), Maruto Suzuki (7.38%), Apollo Tyre (6.96%), M&M Ltd (5.46%), Cummins India (4.94%) and Hero Honda Motors (4.23%) closed in positive territory.

The Oil & Gas index ended higher by 130.66 points at 10,159.11. As Gail India 4.04%), HPCL (3.24%), BPCL (2.64%), ONGC (2.12%) and IOC Ltd (1.69%) closed in positive territory.

The Metal index closed down by 258.74 points at 13,264.83. Lossers are Sterlite In (6.76%), Sesa Goa Ltd (5.95%), Gujarat Nre C (5.93%), JSW SL (3.92%), Tata Steel (2.28%), and Ispat Indus (2.18%).

India Telecom

India Telecom

Sensex gains amid sharp volatility

The Sensex seems to be determined to make new highs in every session as bulls eye the 15,000 mark. But today's rally was mainly backed by the upsurge in few select heavyweight stocks. Tracking negative global cues, the Sensex opened 12 points lower and immediately touched the day’s low at 14,529. The strong bearish sentiment kept the Sensex in negative and positive territory throughout the trading session, but a bout of buying in banking and realty stocks catapulted the index to the day's high of 14,987 in the late afternoon. The Sensex finally ended the session at 14,961, up 383 points. The Nifty closed 108 point up at 4,503.

The breadth of the market was positive. Of the 2,767 stocks traded on the BSE, 1,776 (~64%) stocks advanced, 930 (~33%) stocks declined and 61 (~2%) stocks ended unchanged. On the sectoral front, BSE Bankex was up 6.65% at 7,218, BSE Realty index gained 6.56% at 5,575, while the BSE Auto index, BSE Power index, BSE PSU index, BSE CG index, BSE Teck index, BSE FMCG index, BSE IT index, BSE Oil & Gas index and BSE HC index were up by around 1-4% each.


Action in select index heavyweights lifted the market. ICICI Bank led the pack and shot up by 8.24% to Rs693.30. DLF soared 7.66% at Rs553.15, Maruti Suzuki India surged 7.38% at Rs614.40, HDFC Bank flared up by 6.83% at Rs1,184.35, Grasim Industries jumped by 6.56% at Rs2,018.60, JaiPrakash Associates added 6.05% at Rs185.05, Mahindra & Mahindra advanced by 5.46% at Rs548 and ACC moved up by 5.18% at Rs616.15. However Sterlite Industries slipped 6.76% at Rs575.05, Tata Steel fell by 2.28% at Rs675.95, Tata Power lost 1.61% at Rs1,101.35 and Ranbaxy Laboratories was down 1.52% at Rs516.05.

Over 2.74 crore shares of Reliance Natural Resources changed hands on the BSE followed by Ispat Industries (2.07 crore shares), IFCI (1.26 crore shares) and Reliance Petroleum (1.02 crore shares).

NSE Bulk Deals to Watch - Aug 5 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
5-Aug-08,CHI,CHI Investments Limited,ARUMUGAM C,BUY,58500,32.4,-
5-Aug-08,FIRSTWIN,First Winner Industries L,RAGHUNATH VISHWANATH DESHPANDE HUF,BUY,200000,154.15,-
5-Aug-08,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,BUY,3960747,51.5,-
5-Aug-08,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,10371471,29.31,-
5-Aug-08,JHS,JHS Svendgaard Laboratori,NANDA NIKHIL,BUY,182992,28,-
5-Aug-08,PRAENG,Prajay Engineers Syndicat,NAMAN SECURITIES & FINANCE PVT LTD,BUY,154779,71.64,-
5-Aug-08,RUCHISOYA,Ruchi Soya Inds Ltd.,RUCI INFRASTRUCTURE LTD,BUY,1000000,83.5,-
5-Aug-08,SELMCL,SEL Manufacturing Company,B K SHAH CO KETAN BHAILAL SHAH,BUY,83383,619.11,-
5-Aug-08,SELMCL,SEL Manufacturing Company,DKG SECURITIES PVT LTD.,BUY,88407,611.75,-
5-Aug-08,XLTL,XL Telecom Limited,DYNAMIC STCOK BROKING (I) PVT LTD,BUY,104290,202.98,-
5-Aug-08,CHI,CHI Investments Limited,ARUMUGAM C,SELL,25000,32.32,-
5-Aug-08,CREWBOS,Crew B.O.S. Products Limi,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,72000,35.59,-
5-Aug-08,GOLDTECH,Goldstone Tech Ltd.,LAXMA REDDY BANDARI,SELL,115000,125.6,-
5-Aug-08,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,SELL,3960745,51.52,-
5-Aug-08,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,9511614,29.4,-
5-Aug-08,JHS,JHS Svendgaard Laboratori,SAJAL GUPTA PROP INVESTMAENT CENTRE,SELL,169577,28,-
5-Aug-08,ORGINFO,ORG Informatics Limited,DEUTSCHE BANK AG LONDON,SELL,150000,31.44,-
5-Aug-08,PIONEEREMB,Pioneer Embroideries Limi,BIRLA GLOBAL FINANCE COMPANY LTD,SELL,93611,43.07,-
5-Aug-08,PRAENG,Prajay Engineers Syndicat,NAMAN SECURITIES & FINANCE PVT LTD,SELL,137295,71.75,-
5-Aug-08,SELMCL,SEL Manufacturing Company,B K SHAH CO KETAN BHAILAL SHAH,SELL,82885,617.86,-
5-Aug-08,SELMCL,SEL Manufacturing Company,DKG SECURITIES PVT LTD.,SELL,89912,613.06,-
5-Aug-08,XLTL,XL Telecom Limited,DYNAMIC STCOK BROKING (I) PVT LTD,SELL,90792,202.26,-

BSE Bulk Deals to Watch - Aug 5 2008

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/8/2008 532840 ADVANTA ACACIA PARTNERS LP B 186000 762.00
5/8/2008 532840 ADVANTA CARLSON FUND EQUITY AC ASIAN SMALLCAP S 300000 762.00
5/8/2008 513335 AHMEDNAGAR F MAVI INVESTMENT FUND LTD S 251201 94.39
5/8/2008 531223 ANJANI SYNTH NARENDRA V. BAHUVA S 54077 36.40
5/8/2008 590059 BIHAR TUBES SAROJINI FINANCE AND INVESTMENTS P LTD B 302357 129.97
5/8/2008 590059 BIHAR TUBES SARLA B GIDWANI B 75000 141.20
5/8/2008 590059 BIHAR TUBES PUSHPMAN CONSULTANTS S 100000 127.80
5/8/2008 512018 CNI RES LTD CHANDRAKANT J VALLAKATI B 250000 5.50
5/8/2008 512018 CNI RES LTD ACME CRAFT PVT LTD S 293199 5.50
5/8/2008 532271 CYBERMAT INF S V ENTERPRISES B 1718397 4.49
5/8/2008 532271 CYBERMAT INF S V ENTERPRISES S 1715394 4.44
5/8/2008 517973 DMC INTER VIJENDER GOYAL S 23396 9.06
5/8/2008 532787 ESS DEE ALUM DEUTSCHE SECURITIES MAURITIUS LIMITED S 500000 335.00
5/8/2008 531439 GOLDSTON TEC LAXMA REDDY BANDARI S 175000 126.40
5/8/2008 530655 GOOD LUCK ST HANS SEC BROKING P LTD S 36000 213.15
5/8/2008 532836 GREMAC INFRA MAVI INVESTMENT FUND LTD S 86672 93.50
5/8/2008 590043 HARITA SEAT HORTICULTURAL AND CONS ENG P LTD B 511072 66.00
5/8/2008 590043 HARITA SEAT RELIANCE CAPITAL TRUSTEE CO. LTD. AC RELIANCE TAX SAVER ELSS FUND S 511072 66.00
5/8/2008 530885 JAISAL SECUR RAJAGOPALAN K P B 25000 37.26
5/8/2008 530885 JAISAL SECUR CANOS TRADING PVT LTD. S 28000 37.25
5/8/2008 532283 KASHYAP TEC AYODHYPATI INVESTMENT PVT. LTD. B 2252685 1.40
5/8/2008 532283 KASHYAP TEC AYODHYPATI INVESTMENT PVT. LTD. S 2239646 1.42
5/8/2008 507912 LKP MER FIN. PADMAKSHI FIN .SERV.P.LTD. B 150000 124.91
5/8/2008 517195 ORG INFORMAT DEUTSCHE BANK AG LONDON GDR AC S 230000 31.55
5/8/2008 532606 PAREKH ALUM MANISH MARU B 180000 140.08
5/8/2008 532606 PAREKH ALUM PIONEER NIRMAN INDIA PRIVATE L S 147633 140.18
5/8/2008 514300 PIONER EMBRO BIRLA GLOBAL FINANCE COMPANY LIMITED S 71389 42.66
5/8/2008 531746 PRAJAY ENG S DEUTSCHE SECURITIES MAURITIUS LIMITED B 377443 71.40
5/8/2008 531746 PRAJAY ENG S DEUTSCHE BANK AG LONDON GDR AC S 377443 71.40
5/8/2008 508976 SPANC TELESY INTELL INVOFIN INDIA PVT LTD B 258293 93.50
5/8/2008 508976 SPANC TELESY ASHOK R RUIA S 268925 93.51
5/8/2008 517224 SUJANA UNIV PARSHURAM SHIVAJI CHAUDHARI B 1769776 14.46
5/8/2008 517224 SUJANA UNIV S V ENTERPRISES B 2073462 14.26
5/8/2008 517224 SUJANA UNIV PARSHURAM SHIVAJI CHAUDHARI S 1750393 14.49
5/8/2008 517224 SUJANA UNIV S V ENTERPRISES S 2001961 14.22
5/8/2008 532338 VALUEMART IN PARSHURAM SHIVAJI CHAUDHARI B 423711 5.26
5/8/2008 532338 VALUEMART IN PARSHURAM SHIVAJI CHAUDHARI S 526667 5.12
5/8/2008 531950 VERTEX SECUR SAMIR S SHAH B 51590 31.80
5/8/2008 512167 YASHRAJ SECR GOPALA PILLAI VIJAYAKUMAR B 272745 8.42
5/8/2008 512167 YASHRAJ SECR MUJAHID A. SHAIKH S 145000 8.44
5/8/2008 512167 YASHRAJ SECR IRFAN K. KAZI S 140000 8.42

Market settles near day’s apex

Frenzied buying in index pivotals tracking the US crude oil prices which slumped to 3-month low and firm European markets triggered a solid rally on the bourses despite a shaky start. The BSE Sensex almost kissed 15,000 mark in late trade. The S&P CNX Nifty surged past the 4,500 mark in late trade.

Interest rate sensitive sectors like realty, auto and banking shares were in forefront. Volatility was high throughout the day. The market breadth was strong. Total turnover on the bourses surged.

US crude oil dropped to a low of $118 per barrel in Asian trades today, a lowest level since 5 May 2008. US crude futures tumbled yesterday, 4 August 2008, as OPEC output rose for the third month in a row in July, outweighing concerns about Tropical Storm Edouard. On the New York Mercantile Exchange, September crude settled down $3.69 at $121.41 a barrel.

The BSE 30-share Sensex advanced 383.20 points or 2.63% to 14,961.07. It had opened 15.19 points lower at 14,562.68. At the day’s low of 14,529.21 hit in early afternoon trade, the Sensex lost 48.66 points. At the day’s high of 14,986.63 hit in late trade, the Sensex gained 408.76 points.

The S&P CNX Nifty surged 107.5 points or 2.45% at 4,502.85. It moved in a range of 4515.15 and 4376 during the day. Nifty August 2008 futures were at 4533.10, a premium of 30.25 points as compared to spot closing.

Total turnover on the bourses surged. NSE's futures & options (F&O) segment turnover was Rs 52,692.78 crore, which was higher than Rs 43,364.62 crore on Monday, 5 August 2008. Turnover on BSE amounted to Rs 6941 crore on BSE as compared to Rs 6,008.96 crore on Monday, 5 August 2008.

The market breadth was strong on BSE with 1764 shares advancing as compared to 940 that declined. 64 remained unchanged.

Among the 30-member Sensex pack, 28 advanced while only 2 of them slipped.

Auto stocks surged after crude oil prices hit $118 per barrel in Asian trades today, a lowest level since 5 May 2008.. India’s top small car maker in terms of sales Maruti Suzuki India galloped 8.36% to Rs 620 on 2.98 lakh shares. It was the top gainer from the Sensex pack.

Other auto shares Tata Motors (up 3.71% to Rs 410.95), Hero Honda Motors (up 4.12% to Rs 828), Ashok Leyland (up 10.69% to Rs 32.10), Bajaj Auto (up 10.68% to Rs 379.95), and Mahindra & Mahindra (up 5.26% to Rs 547), advanced.

Banking shares vaulted on intense buying in anticipation of reforms in the financial sector post the UPA Government winning the trust vote late last month. HDFC Bank (up 6.44% to Rs 1180), ICICI Bank (up 8.06% to Rs 692.10), and State Bank of India Bank (up 4.69% to Rs 1579.90), surged from the frontline banking pack.

Realty shares surged on fresh buying. DLF (up 7.94% to Rs 554.60), Parsvnath Developers (up 4.70% to Rs 127.05), HDIL (up 6.18% to Rs 507.50), and Indiabulls Real Estate (up 2.80% to Rs 312.05), also logged gains from the realty space.

Cement shares also joined the rally despite agreeing to maintain status quo on low monsoon demand, capacity addition. Cement companies, which agreed in May to hold prices for three months to help the government contain inflation, could find it difficult to raise rates when the moratorium ends on 14 August 2008.

Ambuja Cements (up 5.24% to Rs 87.30), Grasim (up 7.21% to Rs 2031), and ACC (up 5.50% to Rs 618), were the other gainers from cement pack.

National Thermal Power Corporation (NTPC), the country’s biggest power utility soared 4.03% to Rs 182.20 on reports that the firm has readied a $3-billion war chest for global buyouts.

India’s largest power equipment maker by sales, Bharat Heavy Electricals gained 3.55% to Rs 1755 after the company bagged an order worth Rs 2500 crore to supply 800-megawatt generators for a power plant in south India.

India’s number two cellular services provider in terms of market capitalisation Reliance Communications was up 0.67% to Rs 442.30. According to reports, the company is all set to float a $500-million tender for GSM 3G networks. At present, RCOM is predominantly a CDMA-based operator which is now looking at 3G services only in the GSM space.

IT pivotals made a comeback after yesterday’s fall. TCS (up 2.17% to Rs 834), Infosys (up 1.28% to Rs 1677), Satyam Computer (up 1.11% to Rs 400.05), and Wipro (up 3.60% to Rs 446.30), edged higher.

Jaiprakash Associates (up 7.02% to Rs 186.75), HDFC (up 3.89% to Rs 2465), and Reliance Infrastructure (up 4.43% to Rs 1043) edged higher from Sensex pack.

India’s largest private sector firm by market capitalization and oil refiner Reliance Industries recovered from day’s low of Rs 2206.70. It was up 1.49% at Rs 2276 on 16.86 lakh shares.

Tata Steel, India’s largest private sector steelmaker by sales slumped 2.59% to Rs 673.80 on 27.03 lakh shares. The stock moved in a range of Rs 693 and Rs 655.50 during the day. It was the top loser from the Sensex pack. As per reports, the company has consolidated all its overseas assets including Corus under a new holding company, Tata Steel Global, to raise funds for its overseas expansion including future acquisitions. Tata Steel Global, based in Singapore with over $13 billion enterprise value, will raise funds for international acquisitions of smaller steel makers and mines.

India’s largest bulk drug market in terms of sales Ranbaxy slipped 2.07% to Rs 513.15. The company today, 5 August 2008, said that the open offer by the Japanese drug maker Daiichi Sankyo for acquiring an additional 20% stake in it will commence on 16 August 2008 from the earlier schedule of 8 August 2008. The offer would now expire on 4 September 2008, instead of the previously scheduled 27 August 2008.

Reliance Industries topped the turnover chart on BSE with a turnover of Rs 380 crore followed by Reliance Capital (Rs 360 crore), Reliance Natural Resources (Rs 288.50 crore), ICICI Bank (Rs 220 crore) and Essar Oil (Rs 203.65 crore), in that order.

Reliance Natural Resources led the volumes chart on BSE with volumes of 2.75 crore shares followed by Ispat Industries (2.07 crore shares), IFCI (1.27 crore shares), Reliance Petroleum (1.02 crore shares) and Kashyap Technologies (92.40 lakh shares) in that order.

State-run oil marketing companies advanced after crude oil prices hit $118 per barrel in Asian trades today, a lowest level since 5 May 2008. Hindustan Petroleum Corporation (up 3.65% to Rs 235.10), Bharat Petroleum Corporation (up 2.87% to Rs 337), and Indian Oil Corporation (up 1.77% to Rs 433.60), gained.

Stocks of the sugar companies advanced on reports the government fixed lower free sale sugar quota in August 2008 at 900,000 tonnes. Reports also suggested that sugar prices in Maharashtra may spike to over-two-year highs in the first half of next year as output in the year ending September 2009 may fall by over 37%.

Sakthi Sugars (up 2.44% to Rs 109.20), Balrampur Chini (up 1.89% at Rs 91.75), and Bajaj Hindustan (up 1.87% at Rs 172), spurted on the back of such reports.

Among the side counters, XL Telecom (up 20% to Rs 211.65), Sujana Industries (up 19.95% to Rs 14.49), and Rama Paper (up 19.94% to Rs 20.75), surged.

Moschip Semiconductor (down 8.79% to Rs 17.65), Jai Balaji (down 9.35% to Rs 308), and Trigyn Tech (down 8.36% to Rs 20.50), slumped.

Thermax jumped 4.18% to Rs 470, extending previous day's gain after the company bagged an order worth Rs 415 crore for setting up a captive power plant for a leading steel making company. The company made this announcement during trading hours on Monday, 4 August 2008 when the stock settled 3.33% higher at Rs 451.15.

i-flex Solutions rose 2.37% to Rs 1450 after the company said China-based Taizhou City Commercial Bank has selected its banking suit Flexcube for internet banking platform. The company made this announcement before trading hours on Tuesday, 5 August 2008.

Sesa Goa plunged 6% to Rs 3335 on reports the Centre is considering a proposal to bring iron ore under price control in an attempt to check steel prices.

European markets, which opened after Indian markets, extended early gains. Key benchmark indices in UK, France and Germany were up by between 1.24% and 2.01%. In a crucial event, the US Federal Reserve meets after Indian market hours today to decide on interest rates.

Asian markets, which opened before Indian market, settled lower today, 5 August 2008. Key benchmark indices in China, Hong Kong, Japan, Taiwan, Singapore, and South Korea were down by between 0.49% and 2.51%.

US stocks fell yesterday, 4 August 2008, as shares of energy and commodity-related companies tumbled on falling oil and metals prices and investors worried the housing slump could fuel further losses at financial companies. The Dow Jones Industrial Average fell 42.17 points, or 0.37%, to 11,284.15, the Standard & Poor's 500 Index slid 11.30 points, or 0.9% to 1,249.01, while the Nasdaq Composite Index dropped 25.40 points, or 1.10%, to 2,285.56.

Back home, key indices ended lower in a turbulent session yesterday, 4 August 2008. The BSE Sensex slipped 78.82 points or 0.54% to 14,577.87 and the NSE Nifty shed 18 points or 0.41% to 4395.35.

Meanwhile, international credit rating agency Moody’s Corporation has cautioned that they might be looking at revising India’s rating downward. This is the second rating agency other than S&P that has given out a red flag on India’s economic fundamentals.

Market likely to see volatile session

Local bourses open lower tracking negative cues from overseas markets. Caution may prevail ahead of Federal Reserve meeting scheduled after Indian market hours today to decide on US interest rates.

US crude futures tumbled yesterday, 4 August 2008, as OPEC output rose for the third month in a row in July, outweighing concerns about Tropical Storm Edouard. On the New York Mercantile Exchange, September crude settled down $3.69 at $121.41 a barrel.

Most Asian markets were trading lower today, 5 August 2008. China's Shanghai Composite was down 0.61% or 16.80 points at 2,724.94, Hong Kong's Hang Seng plunged 1.61% or 362.23 points at 22,152.69, Taiwan's Taiwan Weighted slipped 1.85% or 129.20 points at 6,848.16, Singapore's Straits Times fell 0.65% or 18.80 points at 2,857.28, South Korea's Seoul Composite lost 0.30% or 4.69 points at 1,538.36. However, Japan's Nikkei rose 0.27% or 34.85 points at 12,968.03

US stocks fell yesterday, 4 August 2008, as shares of energy and commodity-related companies tumbled on falling oil and metals prices and investors worried the housing slump could fuel further losses at financial companies. The Dow Jones Industrial Average fell 42.17 points, or 0.37%, to 11,284.15, the Standard & Poor's 500 Index slid 11.30 points, or 0.9% to 1,249.01, while the Nasdaq Composite Index dropped 25.40 points, or 1.10%, to 2,285.56.

Back home, key indices ended lower in a turbulent session yesterday, 4 August 2008. The BSE Sensex slipped 78.82 points or 0.54% to 14,577.87 and the NSE Nifty shed 18 points or 0.41% to 4395.35.

Foreign institutional investors were net sellers of equity worth Rs 507.81 crore while mutual funds net sold 46.97 crore yesterday, 4 August 2008. According to provisional data on NSE.

Foreign institutional investors (FIIs) were net sellers of Rs 631.90 crore in the futures & options segment on Monday, 4 August 2008. They were net sellers of index futures to the tune of Rs 227.23 crore and sold index options worth Rs 86.38 crore. They were net sellers of stock futures to the tune of Rs 348.99 crore and bought stock options worth Rs 30.70 crore.

Meanwhile, international credit rating agency Moody’s Corporation has cautioned that they might be looking at revising India’s rating downward. This is the second rating agency other than S&P that has given out a red flag on India’s economic fundamentals.

Pre Session Commentary - Aug 5 2008

The Indian Market is expected to have negative opening due to weak global cues ahead of Federal Reserve meeting to decide on US interest rates today. On Monday, the Indian market broke its three days upward movement and ended with losses. The domestic market opened on negative note and soon turned volatile. Further market tried to recover during mid session but was not able to gather the momentum and remained unstable till end to close in red. BSE Sensex ended below 14,600 mark and NSE Nifty below 4,400 level. BSE Midcaps and Smallcaps maintained their opening gains and ended with increase of more than 1.5%. From the sectoral front, Capital Goods, Oil & Gas and Power stocks remained out of favor as witnessed most of the selling pressure from these baskets. However, Metal, Consumer Durables, Pharma and Bank stocks were in the limelight as contributed to the significant buying. The BSE Sensex closed lower by 78.82 points at 14,577.87 and NSE Nifty ended down by 18.20 points at 4,395.35. We expect that market may remain volatile during the trading session.

On Monday, the US market was closed in red. Oil prices dropped to 16% below the record price set in early July. Crude oil dropped by $3.69 to close at $121.41 a barrel on the NYMEX.

The Dow Jones Industrial Average (DJIA) closed lower by 42.17 points at 11,284.15 along with NASDAQ ended down by 25.40 points at 2,285.56 and S&P 500 index closed lower by 11.30 points at 1,249.01.

Indian ADRs ended down. In technology sector, Wipro ended lower by (5.42%) along with Infosys by (2.15%) and Satyam by (1.57%) while Patni Computers advanced by (0.09%). In banking sector, HDFC bank gained (0.11%) while ICICI bank dropped by (3.45%). In telecommunication sector, MTNL ended up by (0.98%) while Tata Communication lost (3.65%). Sterlite Industries decreased by (5.78%).

Today the major stock markets in Asia are trading weak. Hang Seng index is trading down by 362.23 points at 22,152.69 along with Taiwan Weighted is trading at 6,848.16 down by 129.20 points. However, Japan''s Nikkei rose 34.85 points at 12,968.03.

The FIIs on Monday stood as net seller in equity. The gross equity purchased was Rs2,889.70 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,231.90 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs342.20) Crore and net debt was Rs0.00 Crore.

Today, Nifty has support at 4,306 and resistance at 4,466 and BSE Sensex has support at 14,232 and resistance at 14,862.

Earnings Guide - Aug 2008

Earnings Guide - Aug 2008

Morning Call - Aug 5 2008

Market Grape Wine :

In House :

Nifty at a support of 4355 and 4295 with resistance at 4425 and 4465 levels.

Cash: Buy DIVIS LAB above 1440 target 1500 with S/L 1420

Cash: Sell RELIANCE below 2260 target 2200 with S/L 2290

Future: Buy MARUTI above 566 targets 587 with S/L 562.

Your Ad Here

Out House:

Markets at a support of 14241 & 14432 levels with resistance at 14786 & 14646 levels .

Buy : Chambal & NagarFert

Buy : Lupin Bullet break out s/l of 740 target 778 above that 794 above that 818 levels

Buy : Adalbs & RPower

Buy : SesaGoa & JSwSteel

Buy : Tisco

Buy : LNT

Buy : IBulls & IBreal

Buy : Aftekinfo

Buy : SBIN & IciciBank

Buy : Core project

Buy : JaiBalaji bullet

Dark Horse : Jaibalaji , Sesa Goa , Aftek , RIL , SBIN , Core & Adlabs

Market may slide further

The market is likely to remain under pressure following an sharp drop in the US market in yesterday's trades and weakness among major Asian indices in the ongoing trades. Persisting offloading of equities from FIIs in the domestic market may also add pressure. Among the key local indices, the Nifty has a key support at 4350 and a slip below this level could see it test lower levels around 4300, while on the upside the index could test 4475. The Sensex has a likely support at 14450 and may face resistance at 14800.

Major US indices finished with marginal loss on Monday with the Dow Jones lost by 42 points at 11284, the Nasdaq declined by 25 points to close at 2286.

Most of the ADRs ended with heavy losses on the US bourses. Wipro, VSNL and ICICI Bank dropped over 3-5% each while Tata Motors, Rediff, Infosys, Satyam and Dr Reddy's were down over 1-2% each. However, MTNL, HDFC Bank and Patni Computer closed with marginal gains.

Crude oil prices inched lower, with the Nymex light crude oil for September delivery slipping by $3.69 at $121.41 a barrel. In the commodity segment, the Comex gold for December series lost $9.60 to settle at $907.90 an ounce.

Welspun-Gujarat Stahl Rohren

We recommend a buy in Welspun-Gujarat Stahl Rohren from a short-term perspective. From the charts of Welspun-Gujarat Stahl Rohren we observe that it has been moving down steadily since it recorded the peak at Rs 537 in January. This decline halted in July at Rs 269. This is a significant support level and the stock has reversed firmly from here. The reversal gained impetus by the positive divergence in the weekly relative strength index (RSI).The RSI in the daily chart too is moving in to the bullish region, denoting that this up trend can gain strength. Another oscillator, the daily moving average convergence and divergence has also entered the positive territory. The stock is currently positioned above its 21 and 50-day moving averages denoting a short-term trend reversal. We are bullish on the stock in the short-term horizon. We expect its current up move to prolong until it hits our price target of Rs 387 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 332.

via BL

Daily Technicals - Aug 5 2008

Daily Technicals - Aug 5 2008

Big drop for crude

Prices drop by almost $4 on inflation worries at US

Crude prices ended substantially lower on Monday, 04 August, 2008 as the dollar fluctuated and demand concerns regarding oil from US once again cropped up. Prices dropped below $120 level during intra day trading after a long time but stayed for a very short time.

Crude-oil futures for light sweet crude for September delivery closed at $121.41/barrel (lower by 3.69 or 3%) on the New York Mercantile Exchange. Futures earlier fell to an intraday low of $119.5 a barrel. Last week, crude prices ended higher by 1.5%. Crude lost $15.92 (11%) in July, 2008, the biggest ever in dollars. It's now 18% lower than the $147.27 record high hit last on 10 July, 2008.

Government data today showed an increase in inflation at USA. June personal income and spending report was mixed, with investors showing disappointment regarding the report's inflation component. Month-over-month, personal income rose 0.1% (-0.2% consensus), personal spending increased 0.6% (0.4% consensus) and core PCE, the Fed's preferred inflation measure, rose 0.3% (+0.2% consensus). The PCE price index was up 0.8% month-over-month and as a result, real spending and income actually fell in June.

This report fuelled concerns that rise in inflation might dampen the forthcoming demand for oil and crude products from the largest consumer of oil, US.

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 55% higher than a year ago. For the year, crude is up by 28% till date.

Against this background, September reformulated gasoline shed 8.4 cents to close at $3.0002 a gallon in Nymex action, while September heating oil dipped 8.7 cents to end at $3.3501 a gallon.

Natural gas in New York fell to the lowest in six months amid speculation a storm in the Gulf of Mexico will not disrupt production. Natural gas the September futures contract skidded 66.3 cents (7.1%) to close at $8.726 per million British thermal units.

At the MCX, crude oil for August delivery closed at Rs 5,126/barrel, lower by Rs 181 (3.4%) against previous day’s close. Natural gas for August delivery closed at Rs 369.9/mmbtu, lower by Rs 28/mmbtu (7%).

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Trading Calls - Aug 5 2008

Nifty (4395) Sup 4320 Res 4480

Buy Bongaigaon Ref (66) SL 63 Target 72, 74

Buy Tata Steel (691) SL 685 Target 792, 795

Buy Jindal Steel (2147) SL 2125 Target 2190, 2200

Sell NIIT (88) SL 91
Target 83, 81

Sell Hindalco (142) SL 145 Target 136, 134

Nuts and bolts of life

It takes hundreds of nuts to hold a car together, but it takes only one of them to scatter it all over the highway.

Market players seem to be on a highway. Earlier, they just kept shifting lanes. The problem now is they are forced to change direction too often burning precious fuel and reaching nowhere. With fuel prices falling, ideally we should have a better opening. But with global markets waiting for the Fed signal, there is nothing much we can do but wait. It’s frustrating driving on a road in India and having signals controlled from abroad.

We may see a flat opening despite the 3% fall in oil prices overnight. The unusual weakness across global markets could dampen the mood. On the whole, we expect the market to remain volatile and rangebound for the rest of the month in the absence of any great triggers. The bias remains positive though, and the Nifty could rise a couple of hundred points provided there is some more cooling in crude oil and local inflation doesn't shoot up.

After a highly volatile day of trade, the frontline indices ended in the red. Weakness in Asian and later on in European markets weighed on sentiment. Like in a crowded highway where bigger vehicles are stuck, the small ones manage to wriggle ahead somehow. The interesting aspect of Monday's trade was the big gains in the small-cap and mid-cap shares. After a long time, the broader markets outperformed the main indices. This resulted in a positive market breadth, though turnover was still down, which is usually the case on Monday. One has to be careful while dealing with small-cap and mid-cap shares, especially with the market still grappling with quite a few uncertainties.

With almost all the big events out of the way, the market is now at the mercy of newsflow. The prominent developments that remain to be watched are the interest rate decisions in the US, UK and Europe this week. The Fed is widely expected to keep interest rates steady amid slowing economic growth and rising inflation. The Bank of England and the European Central Bank (ECB) also face similar dilemmas. They are also likely to maintain status quo. Global markets have already discounted these moves. As a result, they may not have any big impact on sentiment. What is keenly awaited are the remarks from all the three central banks on the situation in their respective economies.

Meanwhile, crude oil continues to be the key factor that could change the course of markets around the globe. It has slipped substantially from the all-time peak of around $148 per barrel. Yesterday it fell below $120 per barrel for the first time since May 5 and closed at a three-month low. Some analysts and market experts see oil prices falling further. We would not like to take a call on the levels of the crude oil, but will only say that any cooling in it is good news for the global economy and markets. India has much to benefit from a sharp drop in oil prices, as it imports nearly two thirds of its annual requirement.

FIIs were net sellers of Rs5.08bn (provisional) in the cash segment on Monday and the local funds pulled out stocks worth Rs469.7mn. In the F&O segment, the foreign funds were net sellers of Rs6.32bn. On Friday, FIIs were net sellers Rs3.42bn in the cash segment. Mutual funds were net buyers of Rs2.26bn.

Asian stocks fell for a third day on Tuesday, as a drop in commodity prices pushed down metal and oil companies. Consumer electronics manufacturers and automakers gained.

BHP Billiton dropped as copper plunged to the lowest in six months and crude oil slipped under $120 a barrel. Canon and Toyota climbed in Tokyo on speculation that lower energy costs will bolster consumer spending. Korea Electric Power Corp. led gains among power companies.

The MSCI Asia-Pacific Index slipped 0.5% to 127.90 as of 10:16 a.m. in Tokyo, poised for the lowest close since October 2006. Indices tracking energy and mining companies had the biggest declines among the 10 industry groups making up the benchmark index, which fell 2.9% in the previous two days.

US stocks ended lower on Monday, though off earlier lows, as a slide in oil prices hit energy and commodities-related stocks, a day ahead of the Fed decision on interest rates. Concerns about the health of the US economy continued to cast their shadow on Wall Street.

While the drop in crude and other commodities is good news, the US market is awaiting the outcome of the FOMC meeting on Tuesday. The market will be focused on the central bank's statement to see if the language gives any indication on the timing of a possible rate hike.

The Standard & Poor's 500 Index lost 11.29 points, or 0.9%, to 1,249.02. The Dow Jones Industrial Average slipped 42.17 points, or 0.4%, to 11,284.15. The Nasdaq Composite Index sank 25.40 points, or 1.1%, to 2,285.56.

More than two stocks dropped for each that rose on the New York Stock Exchange.

In the day's economic news, the Commerce Department reported that personal spending and income edged higher in June. Separately, the government reported that factory orders jumped in June on higher oil prices and demand for military equipment.

Oil prices fell as traders responded to reports that a tropical storm in the Gulf of Mexico is loosing steam. Light, sweet crude for September delivery fell $3.69 to settle at $121.41 a barrel on the New York Mercantile Exchange, after being down as low as $119.50.

Crude oil futures were also being pressured by signs of softening demand, which outweighed concerns about possible supply disruptions due to a tense political situation with Iran.

Bond prices mostly fell. The benchmark 10-note shed 3/32 to 99 13/32, its yield held steady at 3.94%, unchanged from Friday. Gold for December delivery fell $9.60 at $907.90 an ounce in New York.

The dollar was mixed against other currencies. The euro rose to buy $1.5589, up from $1.5541 on Friday. But the dollar gained against the Japanese yen, climbing to ¥108.19 from ¥107.75 last week.

HSBC, one of Europe's largest banks, reported a sharp decline in quarterly profit due to difficult financial markets. HSBC said its first-half net profit fell 29% to $7.72bn due to higher loan impairment charges and other credit risk provisions. The profit broadly matched analyst expectations.

HSBC's biggest losses were in the North American market, where a subsidiary that was heavily exposed to the subprime mortgage market. Shares of the British bank fell 1.5%.

Weakness from miners and banks dragged European shares into the red. However, strength from some more defensive stocks helped arrest the slide. The pan-European Dow Jones Stoxx 600 index ended 0.9% lower to 277.59.

UK's FTSE 100 ended 0.6% lower at 5,320.20, while the French CAC-40 dipped 0.8% to 4,280.63 and Germany's DAX 30 fell 0.7% to 6,349.81.

In the emerging markets, the Bovespa in Brazil slumped 3.5% to 55,609 while the IPC index in Mexico was down 1.75% at 26,487. The RTS index in Russia slid 2.4% to 1895 and the ISE National-30 index in Turkey rose 0.14% to 53,513.

Waiting for the Fed

Markets ended in negative terrain after fetching gains for three straight trading sessions. The benchmark Sensex gyrated over 200 points and Nifty swung over 70 points between their respective high and low’s. Selling pressure was witnessed in the Capital Goods, Power and Oil & Gas stocks. On the other hand, bucking the negative trend were, Metal, Pharma and Realty stocks. Finally, the benchmark Sensex ended 78 points lower to close at 14,577 and Nifty slipped18 points to close at 4,395.

Among the 30-components of Sensex, 14 stocks were in green and 16 stocks were in red. Reliance Industries, L&T, BHEL and HDFC were among the major laggards. On the other hand, Infosys, Tata Steel and Grasim were among the major gainers.

BHEL ended lower by a 2.3% to Rs1714. The company announced that it won Rs2bn order to set up equipment for a hydroelectric project in Vietnam. BHEL secured orders from Nam Chien Hydropower Joint Stock Co. of Vietnam. The company would design, manufacture and install two hydroelectric units of 100MW each.

The scrip touched an intra-day high of Rs1789 and a low of Rs1700 and recorded volumes of over 4,00,000 shares on BSE.

ICRA slipped by 1.5% to Rs656. The company announced that it has signed a MoU with Canara Bank under which ICRA will assign ratings to the Banks loans and its other exposures under the standardized approach of RBI's New Capital Adequacy Framework for Basal-II.

ICRA's ratings for the standardized approach would be carried out under its "Line of Credit" rating service and would enable Canara Bank to assign the new risk weights applicable to its borrowers under Basel-II. The risk weights would be linked to the various rating categories and would be as per RBI's Basel II guidelines.

The scrip touched an intra-day high of Rs700 and a low of Rs1640 and recorded volumes of over 2,000 shares on BSE.

Gayatri Projects gained by 1.2% to Rs252 after the company announced that it would invest Rs2bn in Gayatri Infra Transportation. The scrip touched an intra-day high of Rs257 and a low of Rs246 and recorded volumes of over 63,000 shares on BSE.

Shares of Action Construction rallied by over 10% to Rs81 after the company announced that it has signed MoU with Chinese Company. The scrip touched an intra-day high of Rs87 and a low of Rs69 and recorded volumes of over 6,00,000 shares on BSE.

Wipro was edged lower by half a percent to Rs430. The company announced that its unit Wipro Infotech has won a five-year multi-million-dollar order from Spencer's Retail Ltd., a unit of RPG Enterprises. The scrip touched an intra-day high of Rs438 and a low of Rs424 and recorded volumes of over 1,00,000 shares on BSE.

Thermax surged by over 3% to Rs451 after the company announced that it received an order of Rs4.15bn, for setting up a captive power plant for their upcoming blast furnace complex on an EPC basis. The captive power plant will use the waste gas from the furnace to produce power. The scrip touched an intra-day high of Rs456 and a low of Rs434 and recorded volumes of over 21,000 shares on BSE.

Shares of OK Play surged by over 4% to Rs47.7 after the company announced that it secured a rate contract for the supply of water storage tanks worth Rs327mn from the Government of Haryana which is valid till March 31, 2009. The scrip touched an intra-day high of Rs52 and a low of Rs46 and recorded volumes of over 10,000 shares on BSE.

Apollo Tyres marginally slipped by half a percent to Rs29.4. The company’s plans to build a factory in Gyongyos, central Hungary, will be delayed by difficulties related to purchasing the property, Napi Gazdasag reported. Production at the 200mn-euro (US$311.7mn) plant will probably begin in June 2010 instead of June 2009 as originally planned, reports added.

The investment was delayed after one of the parties in the Gyongyos city council rejected the terms of sale for the 45 hectare (111 acre) property, said reports. The scrip touched an intra-day high of Rs30 and a low of Rs29 and recorded volumes of over 4,00,000 shares on BSE.

Indiaco Ventures was locked at 5% upper circuit to Rs413.55 after the company announced that IndiaCo Venture's Technology division, 'Venturing Group' entered into an alliance with California based 'The Aerospace Corporation' by virtue of MoU for collaborative R&D and technology licensing. The scrip touched an intra-day high of Rs413.55 and a low of Rs387.

Era Infra slipped 1% to Rs515. The company announced that it has secured a contract worth Rs351.7mn for construction of additional general pool office accommodation at Kavadiguda, Secunderabad. The scrip touched an intra-day high of Rs530 and a low of Rs512 and recorded volumes of over 8,000 shares on BSE.

TRAI has asked GSM mobile service providers to provide interconnectivity to RCom for starting its services in dual technology. (BS)

RCom to float a US$500mn tender for GSM 3G networks. (ET)

Hindalco to restate Novelis FY08 results. (BS)

Hindalco may cut its Rs50bn rights issue by ~15-20%. (ET)

Daiichi gets SEBI nod for Ranbaxy open offer. (BS)

Reliance Power to raise Rs25bn from IDBI. (BS)

NTPC in negotiations to buy at least one coal mine in Indonesia and taking a long lease on another. (ET)

SAIL tests dual pricing system to up realisation. (BL)

BHEL to get preference over others during the international competitive bidding process for manufacturing 660MW supercritical units. (BS)
IOC, BPCL and HPCL are together losing Rs6bn per day on fuel sales. (ET)

Apollo Hospitals to spin off pharmacy business. (BS)

Apollo Hospitals to buy a Delhi based pharmacy chain for ~Rs200mn. (ET)

KEC International plans to foray into new businesses, including railway projects, construction of telecommunication towers and designing of substations. (BS)

IFC to invest US$14mn in Delhi based Rockland Hospital. (ET)

RCom to take GSM route for 3G rollout. (BS)

ONGC and GSPC have revised their estimates of gas reserves in their blocks off the country’s east coast by nearly three times. (BS)

Tata Motors is in talks with a Norway-based company, Miljobil Grenland to develop an electric car. (ET)

Andhra Pradesh Cabinet has approved the selection of the Nava Bharat-Maytas consortium as the developer for the Hyderabad Metro Rail project. (BS)

Yes Bank intends to launch three PE funds over the next 18-24 months, a US$300mn Clean Energy fund, a US$500mn Infrastructure fund and a US$75mn Social Enterprises fund. (BS)

Orient Paper & Industries plans to foray into newer domestic markets for its cement business and to set up plants in West Bengal, Orissa, Rajasthan or Karnataka in FY09. (ET)

Essar’s Aegis BPO to buy the Nasdaq listed off-shoring firm PeopleSupport Inc for US$250mn. (BL)

Ceat has re-negotiated prices for a bulk of its existing export orders for the next 4-5 months on steep surge in cost of inputs such as rubber and carbon black. (BL)

Apollo Tyres to invest a total US$320mn on expansion by building plants in India as well as South Africa. (ET)

Essar Steel has appealed to the petroleum ministry to consider it on par with fertilizer units for gas allocation for the purpose of gas utilization policy. (FE)

SEL Manufacturing has outlined an inorganic growth plan of Rs15bn. (ET)
General Atlantic LLC (GA) is likely to pick up a ~20% stake in Wockhardt Hospitals for US$80-100mn. (FE)
Toyota Kirloskar Motor plans to double the production at its second plant from current 100,000 units in the near future. (ET)

Economy Front page

The RBI has recommended that foreign venture capital investments be restricted to nine sectors (investment in other sectors being treated as foreign direct investment). (ET)

The Government is considering a proposal to bring iron ore under price control in an attempt to check steel prices. (ET)

The Finance Ministry has asked state governments to consider increasing the 4% VAT on intermediate goods by 1% from 2009-10. (FE)

The Government extends export ban on rice and other foodgrains till November end. (BS)

The mutual fund industry witnessed an ~6% drop in its AUM for the second consecutive month in July. (BS)

The finalisation of the two-year-old draft pharma policy is likely to be delayed further. (BS)

The Government has decided that the three UMPPs, with a total capacity of 12,000MW, would be located in Tamil Nadu, Maharashtra and Orissa in the 12th Five-year Plan (2012-17). (BS)

Gujarat government officials and industry players estimate sugarcane production in 2008-09 likely to dip by around 20-25% in 2008-09 on account of lower plantations. (BS)

Ministry of Defence has unveiled revised policy for defence purchases, which succeeds DPP 2006 will come into effect from September 1. (ET)

India’s coffee exports rose by 6% yoy in January-July’08 to 0.15mn tons. (ET)

The Government plans to allow private developers and JV firms to develop terminal side infrastructure at non-metro airports. (FE)

The Government has decided to withdraw the benefit under which exporters earned interest on Exchange Earners’ Foreign Currency accounts from November 1. (FE)

Bullion metals continue to drop

Gold and silver prices slip to six week low figures

Bullion metal prices registered substantial losses on Monday, 04 August, 2008 after the crude prices slipped by almost $4 and US dollar strengthened. Gold prices came tits lowest levels in almost six weeks. Silver prices also fell for the day.

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.

Comex Gold for August delivery fell $9.7 (1.05%) to close at $907.9 ounce on the New York Mercantile Exchange. It fell to an intra day low price of $903. Last week, it ended lower by 2.1%. 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 8.4% till date against a 8.2% drop for the dollar against the euro. Gold ended July, 2008 lower by $11 (1.1%). The yellow metal ended second quarter with a marginal gain of 0.7%. It ended June, 2008 with a gain of 4.1%. 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%.

On Monday, Comex silver futures for September delivery fell 38 cents (2.2%) to $17.14 an ounce. Silver has gained 17% in 2008 till date. It ended July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also has gained for seven straight years.

At the currency markets on Monday, the U.S. dollar edged higher against most other major currencies, but remained in recent narrow ranges as investors await this week's interest-rate decisions from the Federal Reserve, the Bank of England and the European Central Bank. Gold prices were also pressured by anticipation that the U.S. Federal Reserve might have to hike interest rates sooner due to the spike in inflation pressures. The dollar index, a measure of the greenback against a trade-weighted currency basket, was at 73.49, compared with last closing of 73.428.

Today, The Commerce Department reported that nominal spending grew 0.6% on the month, but the increase was all due to higher prices, which spiked 0.8%, the most since Hurricane Katrina hit in September 2005. Moreover, inflation's up 4.1% in the past year, the largest rate of growth in 17 years.

At the crude market on Monday, crude for September delivery tumbled $3.80 to $121.30 a barrel on the Nymex amid worries about the U.S. economy and demand for oil.

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 32% and 56% since the past one year.

During last week of June, Federal Reserve 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% in June, 2008.

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. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for August delivery closed lower by Rs 161 (1.3%) at Rs 12,348 per 10 grams. Prices rose to a high of Rs 12,570 per 10 grams and fell to a low of Rs 12,300 per 10 grams during the day’s trading.

At the MCX, silver prices for September delivery closed Rs 499 (2.03%) lower at Rs 23,980/Kg. Prices opened at Rs 24,550/kg and fell to a low of Rs 23,810/Kg during the day’s trading.

Tata Steel August 2008 futures at premium

Turnover drops

Nifty August 2008 futures were at 4400, at a premium of 4.65 points as compared to spot closing of 4395.35. NSE's futures & options (F&O) segment turnover was Rs 43,364.62 crore, which was lower than Rs 48,778.01 crore on Friday, 1 August 2008.

Tata Steel August 2008 futures were at premium at 694.55 compared to the spot closing of 691.55.

Essar Oil August 2008 futures were near spot price at 232.10 compared to the spot closing of 231.85.

State Bank of India August 2008 futures were at discount at 1472 compared to the spot closing of 1510.50.

In the cash market, the S&P CNX Nifty lost 18.20 points or 0.41% at 4395.35.

Eveninger - Aug 4 2008

Eveninger - Aug 4 2008