BSE Bulk Deals to Watch - Dec 19 2008

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
19/12/2008 530027 AADI INDUS L RUSHABH J SHAH B 28254 4.58
19/12/2008 530027 AADI INDUS L HAREN TEXTILES PVT LTD S 29896 4.58
19/12/2008 532919 ALLIED COMP PRAVIN DEEPSINH CHAVDA S 103000 0.50
19/12/2008 512624 CHANDRIK TRA DINESH PAREEKH B 33000 3.19
19/12/2008 512624 CHANDRIK TRA SHAKTI HOTELS PRIVATE LIMITED S 32994 3.20
19/12/2008 505840 JAIPAN INDUS KAILASH CHHAPARWAL S 36613 29.52
19/12/2008 524826 JUPITER BIOS MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. S.V. S 211185 40.16
19/12/2008 531602 KOFF BR PICT HAREN TEXTILES PVT LTD S 48105 3.20
19/12/2008 590069 LAKSHMI VILA M N DASTUR AND COMPANY PVT LTD B 206816 80.89
19/12/2008 531096 MOUNT EVE MI MANMOHAN DAMANI B 230610 71.71
19/12/2008 531096 MOUNT EVE MI MAVI INVESTMENT FUND LTD. S 280000 71.47
19/12/2008 500315 ORIENTAL BK TCI CYPRUS HOLDING LIMITED S 1255000 155.43
19/12/2008 526801 PSL LIMITED SUNDARAM ENERGY OPPORTUNITIES FUND B 462000 79.50
19/12/2008 526801 PSL LIMITED HSBC UNIQUE OPPORTUNITIES FUND S 250000 79.50
19/12/2008 526801 PSL LIMITED HSBC ADVANTAGE INDIA FUND S 250000 79.50
19/12/2008 531646 RFL INTERNAT SANTOSH MAFATLAL JAIN S 116000 1.30
19/12/2008 531324 ROSELABS FIN SURVASHYA FARMS AND DEVELOPERS B 95000 5.40
19/12/2008 531324 ROSELABS FIN ASHWINI HI RISE AND FARMS PVT LTD B 95000 5.25
19/12/2008 531324 ROSELABS FIN ARHANATHJI BUILDERS ADN FARMS B 100000 5.25
19/12/2008 531324 ROSELABS FIN YASH MANAGEMENT AND SATELLITE LTD S 290000 5.30
19/12/2008 521182 SEASONS FURN SUBHASH CHANDER KAHNEJA B 33563 7.13
19/12/2008 521182 SEASONS FURN SANT LAL KAHNEJA HUF S 33563 7.13
19/12/2008 532733 SUN TVNET NALANDA INDIA FUND LIMITED B 7000000 145.00
19/12/2008 532733 SUN TVNET INDIABULLS FINANCIAL SERVICES LTD S 10404640 145.03
19/12/2008 511431 VAKRAN SOFTW GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD S 117869 41.45
19/12/2008 531752 WELLWOR OVER NIMISHA D. PATEL S 603500 0.22

Post Session Commentary - Dec 19 2008

The domestic market managed to conclude with marginal gains on the back of buying interest observed in the index heavyweights. Market staged a rebound from its lows on expectations of a second stimulus package by the government for economy and on hopes of further cut in interest rates by the central bank. Sharp drop in inflation provided some relief to the investors and raised the prospect of deeper interest rate cuts in coming weeks. Along with this slash in interest rates by Bank of Japan also lifted the sentiments. The Bank of Japan lowered its key rate from 0.3% to 0.1%.

The Indian market opened marginally lower tracking weak cues from the global markets. Benchmark indices bounced back soon after start but were not able to hold the same impetus and turned volatile on profit booking at higher levels. Further stocks tried to recover again on decision by the Bank of Japan to cut interest rates. But this move was not excessively effective, as Japan’s government has forecast that the country’s economy will have zero growth in the year ending March 2010. BSE Sensex ended around 10,100 mark and NSE Nifty above 3,050 level. From the sectoral front, Investors on-loaded positions across most of the sectors and Reality stocks outperformed the benchmark indices as ended with gain of more than 10%. Along with that, Auto, Consumer Durable, Pharma, Power FMCG, PSU and Capital Goods stocks contributed to the recovery. Midcap and Small cap stocks also ended higher. However, Oil & Gas stocks remained under pressure.

Among the Sensex pack 18 stocks ended in green territory and 12 in red. The market breadth was positive as 1482 stocks closed in green while 1033 stocks closed in red and 84 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 23.48 points at 10,099.91 and NSE Nifty ended up by 16.75 points at 3,077.50. The BSE Mid Caps and Small Caps ended with gains of 59.43 points and 32.07 points at 3,263.99 and 3,744.02 respectively. The BSE Sensex touched intraday high of 10,188.54 and intraday low of 9,987.42.

Gainers from the BSE Sensex pack are DLF Ltd (10.80%), JP Associates (6.00%), M&M Ltd (4.23%), Sterlite Industries (3.62%), HUL (3.61%), Tata Motors (3.28%), Reliance Infra (3.08%), Tata Steel (3.04%), Reliance Communication Ltd (2.66%), Maruti Suzuki (2.49%), Bharti Airtel (1.55%) and Tata Power (1.38 %).

Losers from the BSE Sensex pack are Satyam Computer (3.87%), ONGC Ltd (3.23%), ACC Ltd (2.33%), HDFC (1.72%), ITC Ltd (1.11%), HDFC Bank (0.84%), Reliance (0.81%), Ranbaxy Lab (0.64%) and SBI (0.63%).

The BSE Reality index ended up by (10.57%) or 241.35 points at 2,525.34. Major gainers are Unitech Ltd (16.14%), Indiabull Real (11.67%), DLF Ltd (10.80%), Anant Raj (9.95%), Orbit Co (9.62%) and Omaxe Ltd (8.90%).

The BSE Auto index advanced by (1.79%) or 45.14 points to close at 2,561.63. Gainers are Amtek Auto (8.14%), Ashok Leyland (5.19%), M&M Ltd (4.23%), Tata Motors (3.28%), Exide Industries (3.23%) and Maruti Suzuki (2.49%).

The BSE Consumer Durable index surged (1.59%) or 31.34 points to close at 1,998.76 as Titan Ind (3.02%), Videocon Ind (1.15%) and Blue Star L (0.65%) ended in positive territory.

The BSE Pharma index gained (1.55%) or 45.30 points to close at 2,960.67 as Matrix Labs (9.35%), Dishman Pharma (9.31%), Piramal Healt (5.55%), Biocon Ltd (5.02%), Dr Reddy’s Lab (4.23%) and Lupin Ltd (4.07%) ended in green.

The BSE Power index ended higher by (1.01%) or 18.67 points at 1,863.67. Main Gainers are GVK Power (7.94%), Power Grid (4.58%), Lanco Infra (3.70%), GMR Infra (3.17%), Reliance Infra (3.08%) and ABB Ltd (2.52%).

The BSE Oil & Gas index ended lower by (0.63%) or 40.79 points at 6,443.81. Major losers are Cairn Ind (4.26%), ONGC Ltd (3.23%), Aban Offshore (1.54%), Reliance (0.81%) and Reliance Natural Resources (0.18%).

Market may extend gains on rate cut hopes

Key benchmark indices may extend gains on on a likely second government stimulus to pump prime the ailing economy and on expectations of a further fall of key policy rates with the inflation rate dropping to a nine-month low. However, the market may be volatile as derivative contracts for December 2008 series expire on Wednesday, 24 December 2008. It will be a truncated trading week as the market remains closed on Thursday, 25 December 2008 on account of Christmas.

Buying by foreign funds this month has lifted sentiments. FIIs bought shares equities worth Rs 1626.90 crore this month, till 18 December 2008. However they were net sellers in calendar 2008, so far, as they offloaded shares worth Rs 52,690.90 crore.

In its second stimulus package to boost growth, the government is likely to provide sops to the automobile, housing and steel sectors, reports suggest. The committee of secretaries (CoS) on economic crisis is examining proposals like increasing the limit for low interest-rate housing loans from Rs 20 lakh to Rs 30 lakh, increasing the tax rebate on home loans, reducing car and two-wheeler loan rates by 2% (from the current 12-14%), increasing depreciation and ensuring faster disbursal of central value added tax (Cenvat) credit for the steel sector.

The new package could also include monetary measures such as cuts in the cash reserve ratio (CRR), and statutory liquidity ratio (SLR) by the Reserve Bank of India (RBI), after the inflation rate in the week ended 6 December 2008 dropped to a nine-month low of 6.84%, below the RBI's target of 7% for 2008-09. Lower rates may revive demand over a medium term.

Inflation had surged into double digits in early June this year after an increase in state-set retail fuel prices, and peaked at 12.91% on, 2 August 2008, the highest reading since annual numbers in the current data series became available in April 1995.

The RBI on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

The first stimulus package unveiled by the government on Sunday, 7 December 2008, involved Rs 20,000 crore in additional government expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.

Volatility is expected to rise as derivative contracts for December 2008 series expire on Wednesday, 24 December 2008. As per reports, rollover of Nifty positions from December 2008 series to January 2009 series stood at 23.2% as of Thursday, 18 December 2008.

A preliminary data on advance tax payments for December 2008 quarter reflects strong signs of a slowdown in the economy. The top 100 tax-paying companies in each of India's four major tax collection centres have reportedly paid 5-28% lower advance tax in the third quarter because of the current economic slowdown. Companies are required to pay three-fourth of their annual tax liability in three installments, by 15 June, 15 September and 15 December, depending on their annual profit projections. Advance tax payout is seen as a leading indicator of the performance of the company as it is based on its estimate of profit for the full year.

Lower advance tax receipts might also put pressure on government finances at a time when it is trying to increase spending to revive demand.

Meanwhile, uncertainty about the fate of the struggling US automakers may keep global markets subdued. While US president George W Bush reportedly said the government is looking at all options for the troubled US auto giants and wanted to move in an expeditious way, Treasury Secretary Henry Paulson offered mixed signals on the chances of a bailout for troubled US automakers, saying failure is not an option but adding that any bankruptcy should be orderly.

The big 3 US automakers -GM, Ford and Chrysler have warned that without a financial aid, millions of jobs could be lost, which will add further problems to the faltering US economy. The automakers have been looking at $14 billion package from government to help weather the crisis.

Sensex, Nifty regain vital levels

Key benchmark indices- the BSE Sensex and S&P CNX Nifty regained key levels of 10,000 and 3,000 levels respectively on buying support from foreign institutional investors. Fall in inflation to a 9-month low and slump in crude oil prices further bolstered the sentiment.

The BSE 30-share Sensex rose 409.84 points or 4.22% to 10,099.91 in the week ended Friday, 19 December 2008. The Sensex had last close above the 10,000 level on 10 November 2008. The S&P CNX Nifty gained 156.15 points or 5.34% to 3,077.50 in the week. The Nifty had last closed above the 3,000 level on 4 November 2008.

The BSE Mid-Cap gained 213.51 points or 6.99% to 3,263.99 and the BSE Small-Cap index advanced 213.06 points or 6.03% to 3,744.02 in the week. Both these indices outperformed the Sensex.

The Sensex is down 10187.08 points or 50.21% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11106.86 points or 52.37% below its all-time high of 21,206.77 struck on 10 January 2008.

Buying by foreign funds this month has lifted sentiments. FIIs bought shares equities worth Rs 1626.90 crore this month, till 18 December 2008. However they were net sellers in calendar 2008, so far, as they offloaded shares worth Rs 52,690.90 crore.

Trading for the week started on an upbeat note as expectations of a second tranche of fiscal sops from the government and hopes of additional interest rate cuts by the central bank to shield the domestic economy from the global economic recession boosted the market on Monday, 15 December 2008. The BSE 30-share Sensex gained 142.32 points, or 1.47%, to 9,832.39 and the S&P CNX Nifty was up 59.85 points, or 2.05%, to 2,981.20, on that day.

The barometer index BSE Sensex breached the psychological 10,000 level on Tuesday, 16 December 2008 with index heavyweight Reliance Industries (RIL) leading the surge. Expectations that the US Federal Reserve will lay out emergency tools to dispel a recession at a policy meeting also lifted the sentiment. The BSE 30-share Sensex rose 144.59 points, or 1.47%, to 9,976.98 and the S&P CNX Nifty was up 60.55 points, or 2.03%, to 3,041.75, on that day.

Concerns about a lack of transparency and worries about absence of strict corporate governance practices following an abortive attempt by Satyam Computer Services' to buy two related companies pulled the market lower on Wednesday, 17 December 2008. The BSE 30-share Sensex lost 261.69 points, or 2.62%, to 9,715.29 and the S&P CNX Nifty was down 87.40 points, or 2.87%, to 2,954.35, on that day.

Interest rate sensitive banking, realty and auto stocks led the rally on the bourses on Thursday, 18 December 2008 as a sharp fall in inflation raised the prospect of further interest rate cuts. The BSE 30-share Sensex surged 361.14 points, or 3.72%, to 10,076.43 and the S&P CNX Nifty gained 106.40 points, or 3.6%, to 3,060.75, on that day.

Market pared gains on Friday, 19 December 2008 as weak European markets and lower US index futures offset expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank. The BSE 30-share Sensex rose 23.48 points, or 0.23%, to 10,099.91 and the S&P CNX Nifty gained 16.75 points, or 0.55%, to 3,077.50, on that day.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 3.30% to Rs 1349.25 in the week on hopes stimulus packages around the world would revive demand for its petroleum and petrochemical products. RIL's refining margins comfortably beat most of its global peers, and is seen as well placed to tap any revival in demand.

India's largest oil exploration firm by revenue ONGC jumped 9.70% to Rs 709.15 after UK-listed Imperial Energy said its agreed takeover by ONGC was not at risk because Lehman Brothers held a miniscule stake. There were concerns that as Lehman Brothers is being shut due to bankruptcy, it is possible any shares it owns might not be tendered. But, Imperial Energy clarified that the investment bank only held 0.01% of Imperial's share capital.

Banking rose on hopes further interest rate cuts by the central bank to boost lending growth after inflation rate dropped to a nine-month low in the week ended 6 December 2008.

India's largest commercial bank State Bank of India (SBI), gained 6.01% to Rs 1287.65 on reports it paid 56.25% higher advance tax at Rs 1,700 crore in Q3 December 2008 over Q3 December 2007.

Inflation in the week ended 6 December 2008 dropped to a nine-month low of 6.84%, below the RBI's target of 7% for 2008-09. Data released by the commerce and industry ministry on 18 December 2008 showed that the inflation rate for the week under consideration fell sharply from 8% in the previous week, driven mainly by the cut in fuel prices. Lower rates may revive demand over a medium term.

Auto stocks gained amid hopes the soft interest rate regime may boost demand for vehicles which are mainly financed. Also reports of a likely second government stimulus package including a reduction in interest on car and two-wheeler loans by 2% buoyed the sentiment.

Maruti Suzuki India (up 8.53%), Hero Honda Motors (up 5.31%), Mahindra & Mahindra (up 9.64%), and Tata Motors (up 16.35%), gained.

Real estate stocks advanced on hopes housing demand will improve following a concessional home loan package unveiled by the state-run banks on Monday 15 December 2008. DLF (up 11.65%), Housing Development & Infrastructure (up 53.49%), Unitech (up 29.01%), and Indiabulls Real Estate (up 26.53%), edged higher.

IT stocks gained, barring Satyam Computer Services, after technology outsourcing and consulting firm Accenture's Q1 results topped forecasts. India's second largest IT exporter by sales Infosys rose 7.12% to Rs 1186.30 after it secured a five year, multi-million dollar global sourcing deal from AstraZeneca on 15 December 2008.

India's fourth largest IT exporter by sales Wipro rose 4.27% to Rs 248.90 and India's largest IT exporter by sales Tata Consultancy Services rose 6.42% to Rs 513.20.

HCL Technologies soared 30.10% to Rs 139.40 on reports it has signed $1 billion in contracts in October-December 2008, a record in single quarter. The strong new orders in the quarter have been aided by its purchase of British software firm Axon. HCL Tech said said after market hours yesterday, 15 December 2008, it completed acquisition of the Axon Group for 441.1 million.

However India's fourth largest software firm in terms of sales, Satyam Computer Services tumbled 26.25% to Rs 162.80 as investors slammed its move to buy Maytas Properties for $1.3 billion and a 51% stake in Maytas Infrastructure for $300 a million, as the acquisition could have wiped out its entire nearly $1.2 billion cash pile. Satyam had announced the acquisition after trading hours on Tuesday, 16 December 2008. Meanwhile the stock recovered from 52-week low of Rs 153.80 after the company said its board will meet on 29 December 2008 to consider buyback of shares.

India's largest engineering and construction firm by sales Larsen and Toubro gained 4.02% to Rs 818.65 after its advance tax payment reportedly jumped 73% to Rs 312 crore in Q3 December 2008 over Q3 December 2007.

Among the side counters, India Infoline (up 31%), Educomp Solutions (up 30.85%), Bajaj Hindusthan (up 28.18%), Pyramid Saimira Theatre (up 67.37%) and Varun Industries (up 51.79% ), surged.

Factory output in India fell for the first time in more than 13 years in October 2008, the latest evidence of a rapid economic slowdown. The weak industrial output data for October 2008 has raised expectations of a suitable policy response from the government and the central bank to shield the domestic economy from the global economic recession. There is an anticipation of a second tranche of fiscal sops from the government and additional interest rate cuts by the central bank.

US light crude for January 2009 delivery recorded a 4-year low of $39.19 a barrel on 17 December 2008 as rising US crude inventories and further evidence of slowing demand trumped organisation of petroleum exporting countries biggest ever production cut.

Sensex holds 10,000

Weak global markets pulled the key benchmark indices off the higher level in late trade in what was a choppy trading session. Volatile bank shares caused volatility in the key benchmark indices. The BSE 30-share Sensex was up 23.48 points, or 0.23% , off close to 90 points from the day's high and up 112.49 points from the day's low. The market breadth, indicating the overall health of the market, was strong.

The late slide in the key benchmark indices followed a rally which took the market to day's high in mid-afternoon trade triggered by expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank.

Though the Sensex slipped below the psychological level in intraday trade, a rebound from lower level ensured that it ended above that level for the second day in a row. The Sensex had settled above the 10,000 level for the first time in more than a month on Thursday, 18 December 2008.

The market was volatile right from the onset of the trading session. After a weak opening, the market had bounced back shortly on expectations of a second government stimulus package for the economy and on hopes of further cut in interest rates by the central bank supported the market. The market cut gains after the strong rebound. It soon recovered in mid-morning trade following a decision by the Bank of Japan to cut interest rates. Fall in IT stocks pulled the market lower in early afternoon trade.

The market recovered and held positive zone for a brief before slipping into the red again in afternoon trade on weakness in Asian stocks. The market bounced back again in mid-afternoon trade. It cut gains in late trade. The Sensex swung 201.12 points between the day's high and low.

Trading in US index futures indicated the Dow could fall 53 points at the opening bell. European stocks fell on Friday, 19 December 2008, tracking a drop in US and Asian shares, with sinking oil and metal prices hitting heavyweight energy and mining shares. Key benchmark indices in France, Germany and UK were down by between 1.41% to 2.23%.

In Asia, Japan's Nikkei average fell 0.91% as Toyota Motor declined after a newspaper report warned about an annual operating loss at the auto maker, which overshadowed a rate cut announced by the Bank of Japan. The central bank lowered its key policy rate to 0.1% from 0.3% and took other steps to ease corporate credit strains, as sharp yen rises and crumbling global demand hit an economy already in recession.

Uncertainty about the fate of the troubled US automakers weighed on other Asian stocks. Hong Kong's Hang Seng was down 2.39%, Taiwan Weighted index was down 0.01% and Singapore's Straits Times was down 0.48%. But key benchmark indices in China, and South Korea were up by between 0.14% to 0.43%.

Closer home, a sharp fall in inflation has raised the prospect of deeper interest rate cuts in coming weeks. Lower interest rates may revive the economy over the medium term. Inflation based on the wholesale price index rose 6.84% in the 12 months to 6 December 2008, below the previous week's annual rise of 8%, data released by the government during trading hours on Thursday, 18 December 2008, showed.

In a second stimulus package to boost growth, the government is likely to provide sops to the automobile, housing and steel sectors. As per reports, the committee of secretaries (CoS) on economic crisis is examining proposals like increasing the limit for low interest-rate housing loans from Rs 20 lakh to Rs 30 lakh, increasing the tax rebate on home loans, reducing car and two-wheeler loan rates by 2% (from the current 12-14%), increasing depreciation and ensuring faster disbursal of central value added tax (Cenvat) credit for the steel sector.

The first stimulus package unveiled by the government on Sunday, 7 December 2008, involved Rs 20,000 crore in additional government expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.

The new package could also include monetary measures such as cuts in the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) by the Reserve Bank of India (RBI). CRR, down to 5.5% from 9% in August 2008, impounds cash with RBI while SLR mandates banks to keep a specified proportion of their deposits in government securities.

The BSE 30-share Sensex was up 23.48 points, or 0.23%, to 10,099.91. At the day's low of 9,987.42, the Sensex fell 89.01 points in mid-afternoon trade. The Sensex rose 112.11 points at the day's high of 10,188.54 hit in late trade.

The S&P CNX Nifty was up 16.75 points, or 0.55%, to 3,077.50.

Buying by foreign funds this month has helped market sentiment. Foreign funds bought a net Rs 1,626.90 crore of equities this month till, 18 December 2008. From a recent low of 8,739.24 on 2 December 2008, the Sensex has jumped 1,360.67 points or 15.56% in last nine trading sessions.

But the barometer index is down 10,187.08 points or 50.21% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 11,106.86 points or 52.37% below its all-time high of 21,206.77 struck on 10 January 2008.

The BSE clocked a turnover of Rs 5,052 crore today, marginally lower than Rs 5,095.54 crore on 18 December 2008.

Nifty December 2008 futures were at 3085, at a premium of 7.5 points as compared to the spot closing of 3077.50. Turnover in NSE's futures & options (F&O) segment was Rs 50,670.28 crore, lower than Rs 54,607.11 crore on Thursday, 18 December 2008.

The BSE Realty index (up 10.57%), the BSE Auto index (up 1.79%), the BSE Consumer Durables index (up 1.59%), the BSE HealthCare index (up 1.55%), the BSE Power index (up 1.01%), the BSE FMCG index (up 0.97%), the BSE PSU index (up 0.85%), the BSE Capital Goods index (up 0.79%), the BSE Teck index (up 0.69%) outperformed the Sensex.

The BSE Oil & Gas index (down 0.63%), the BSE IT index (up 0.08%), the BSE Metal index (up 0.12%), the BSE Bankex (up 0.2%) underperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,482 shares rose as compared with 1,033 that declined. 84 shares remained unchanged.

Reliance Infrastructure, Jaiprakash Associates, Hindustan Unilever, Tata Steel & Reliance Communications rose by between 2.66% to 6%.

ACC, NTPC, ITC and Hindalco Industries fell by between 0.46% to 2.33%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 0.81% to Rs 1,349.25 as investors worried about the impact of lower crude prices on its earnings.

Oil exploring firms ONGC and Cairn India fell between 3.23% to 4.26% as crude oil prices tumbled. Oil slumped 9% to trade at $36 a barrel on Thursday, 18 December 2008, its lowest since June 2004 as slumping demand and swelling US inventories offset a record production cut announced by the Organization of the Petroleum Exporting Countries (Opec).

But the sharp slide in oil price boosted PSU OMCs. BPCL, HPCL and Indian Oil Corporation rose by between 1.86% to 4.49%. Lower oil prices will reduce under-recoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Banking stocks were choppy caught between concerns of rising defaults in a weakening economy and hopes falling bond yields and lower rates would accelerate loan growth and profitability. India's largest commercial bank State Bank of India (SBI) fell 0.63% to Rs 1288. The stock swung between a low of Rs 1267.65 and a high of Rs 1325.

India's second largest private sector bank by net profit HDFC Bank fell nearly 1% to Rs 1050. The stock swung between a low of Rs 1032.20 and a high of Rs 1083.40.

India's largest private sector bank by net profit ICICI Bank rose 0.13% to Rs 471.95. The stock hit a low of Rs 456 and a high of Rs 477.50. ICICI Bank today said joint managing director Chanda Kochhar would succeed Chief Executive K.V. Kamath who retires in April 2009. Kamath, chief executive since 1996, will become non-executive chairman from May 2009 replacing N. Vaghul who retires.

Canara Bank surged 6.17% after a block deal of six lakh shares was executed on BSE at Rs 193 per share.

Oriental Bank of Commerce gained 3.94% after a block deal of 12.27 lakh shares was executed on NSE at Rs 155.50

The Reserve Bank of India (RBI) on 6 December 2008, announced a 100-basis point cut in the repo rate and the reverse repo rate each. Repo rate is the rate at which RBI lends to commercial banks and reverse repo rate is the rate at which RBI accepts deposits from banks.

Rate sensitive real estate shares surged on hopes lower rates will spur housing demand. Unitech, DLF and Indiabulls Real Estate rose by between 10.8% to 16.14 %. Home purchases by home buyers are largely through finance.

Autos, which have been beaten down sharply on falling demand, rose on hopes lower rates and falling oil prices would bring buyers back. Maruti Suzuki India, Tata Motors and Mahindra & Mahindra rose by between 2.49% to 4.23%. Recent reports that a likely second government stimulus package for the economy will include a reduction in interest on car and two-wheeler loans by 2%, also aided the rally in auto stocks.

IT stocks dropped after India's second largest IT exporter by sales Infosys' chief executive on Wednesday said the Indian IT industry will go through a slow phase of growth for some time. India's largest IT exporter by sales Tata Consultancy Services slipped 0.6%. India's fourth largest IT exporter by sales Wipro fell 0.3%. But Infosys rose 0.74%.

Satyam Computer Services fell 3.87% as its ADR slipped 3.86% overnight. The stock had gained 7.15% on Thursday after the company said its board will meet on 29 December 2008 to consider buyback of shares, a move aimed at boosting investor confidence. The stock had slumped 30.22% to Rs 158.05 on Wednesday 17 December 2008 after it called off a deal to buy Maytas Properties and Maytas Infra, the two firms promoted by the family of promoter and chairman Ramalinga Raju bowing to investor pressure.

IT stocks fell despite a weaker rupee. The Indian rupee pulled back from a 1-1/2 month peak on Friday. The partially convertible rupee was at 47.06/09 per dollar, 0.2 % weaker than Thursday's close of 46.95/96. It hit an intraday high of 46.88 on Thursday, its highest since 5 November 2008. A weaker rupee augurs well for the sector as IT firms earn most of their revenues from exports.

Airliners rose on expectation recent cuts in jet fuel prices by state-run oil firms would boost margins. Jet Airways, Kingfisher Airlines and SpiceJet rose by between 6.68% to 16.86%. Jet fuel makes up almost half of an airline's operating costs.

Infrastructure stocks rose on the government's effort to boost the infrastructure sector. Gammon India, Nagarjuna Construction Company, Era Infra Engineering, Hindustan Construction Company, Larsen & Toubro rose by between 0.01% to 12.43%. Government had 7 December 2008 had announced a slew of measures to prop up the sector.

Marg was locked at 5 % upper limit at Rs 55.70 on entering into a pact with a Singapore-based firm.

Gremach Infrastructure Equipments & Projects was locked at upper limit of 5% at Rs 28.50 extending recent gains, ahead of a board meeting today, 19 December 2008 to consider rights issue.

C & C Constructions jumped 9.22% after a consortium of the company bagged an order worth Rs 781 crore.

The government hopes to precipitate infrastructure projects worth Rs 100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company, a specialist lender to the infrastructure sector. The government has allowed India Infrastructure Finance Company (IIFCL) to raise Rs 10,000 crore by issuing tax-free bonds.

IIFCL will use these funds to refinance bank lending of longer maturity to infrastructure projects, especially in highways and port sectors.

Shipping stocks rose on recent reports government may bail out the shipping sector from rising cost of borrowings by providing 2-3% interest subsidy. Shipping Corporation of India, Essar Shipping and GE Shipping Company rose by between 3.03% to 4.89%.

Pyramid Saimira Theatre soared 16.36% extending gains for the fifth trading session in a row, after its promoter raised stake in the company through open market purchases.

Sun TV Network rose 2.63%, extending gains for the second day in a row, after a block deal of 1.02 crore shares was executed on BSE at Rs 145 per share.

Country Club India gained 0.8% on BSE, extending gains for the fourth day in row, ahead of a board meeting to consider rights issue of equity shares.

KEC International rose 4.92% on bagging an overseas order worth Rs 88 crore.

BGR Energy Systems galloped 11.77% after the company secured credit lines worth Rs 2105 crore to fund its working capital requirements for a power project at Tamil Nadu.

PTC India moved up 2.58% on reports the company is planning to set up a $1 billion offshore fund to finance power projects in India.

Titan Industries rose 3.02% on company's plan to consider raising Rs 50 crore by issuing debentures to Life Insurance Corporation of India.

Man Industries (India) jumped 10.07% after the company said its board will meet on 26 December 2008 to consider buying back foreign currency convertible bonds.

Wockhardt galloped 3.02% on reports the company has put on block two overseas subsidiaries to raise money to repay debt

Unitech clocked the highest volume of4.25 crore shares on BSE. Reliance Natural Resources (2.84 crore shares), Suzlon Energy (2.51 crore shares), GVK Power & Infrastructure (2.03 crore shares) and Housing Development & Infrastructure (1.23 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 357.61 crore on BSE. DLF (Rs 298.38 crore), Reliance Capital (Rs 272.53 crore), Housing Development & Infrastructure (Rs 202.15 crore) and State Bank of India (Rs 195.70 crore) were the other turnover toppers in that order.

US stocks fell for the second day on Thursday after Standard & Poor's threatened to strip General Electric of its 'AAA' credit rating and slumping oil prices crippled energy shares. The Dow Jones industrial average tumbled 219.35 points, or 2.49%, to end at 8,604.99. The Standard & Poor's 500 Index dropped 19.14 points, or 2.12%, to 885.28. The Nasdaq Composite Index fell 26.94 points, or 1.71%, to 1,552.37.

Daily Call - Dec 19 2008

US stocks skidded again for the second consecutive day as Crude slumped below the $40 mark and possible halt of production by two of Detroite's auto makers. President elect Mr. Obama, is planning for $750 Billion package when he assumes office. In Japan, Government will ask parliament for $227 billion to buy shares to help stabilize nation's faltering stock markets. In India, government officials are busy putting together contours of second bailout package. Foreign investment limits relaxation, auto and housing loans are likely to be highlights this time around. RBI has successfully persuaded banks and most banks will start cutting Prime lending rates from Monday.


Despite weak global cues, markets are technically on a strong wicket. Now, unless markets rise to next resistance of 10500 or falter below 9700, one should buy into any weakness.

Stocks at Wall Street continue to drop

Indices end in the red even starting the day in the green

Stocks at Wall Street ended with losses on Thursday, 18 December. Though stocks on Wall Street started the day in the green, stocks soon slipped back in the red despite rumors in Wall Street that the auto companies might be bailed out before 25 December, 2008. Other than that, oil prices fell to $37/barrel. Seven out of ten sectors ended in the red today led by the energy and industrial sectors.

On Wall Street, the Dow Jones industrial average ended down by 219 points at 8,604, the Nasdaq closed down by 26 points at 1,552.3 and the S&P 500 closed down by 19 points at 885.

The stock market opened higher after investors received better-than-expected quarterly earnings results from FedEx and Nike along with news that automakers could receive federal funding before 25 Dec, 2008.

Economic bellwether General Electric had its credit outlook lowered late in the session. The announcement induced selling pressure.

Among economic reports of the day, weekly initial jobless claims and continuing claims were down a bit from the prior week, and essentially in-line with expectations. Claims totaled 554,000 and 4.38 million, respectively. The claims data reflects the weakness of labor markets and the broader economy.

To help stimulate the economy President-elect Obama is reportedly planning an $850 billion economic stimulus plan. The plan would likely be phased in.

Crude prices continued to drop substantially even today, Thursday, 18 December, 2008. Prices fell due to a strong dollar and also as OPEC announced another production cut yesterday. But prices fell as an impact of the weekly inventory report by the energy department that hit wires yesterday pointing towards lower energy demand.

On Thursday, crude-oil futures for light sweet crude for January delivery closed at $36.22/barrel (lower by $3.84 or 9.6%) on the New York Mercantile Exchange. Earlier in the day, prices touched a low of $35.98. Prices reached a high of $147 on 11 July but have dropped almost 75% since then. For this year in 2008, crude prices have dropped 59%.

For tomorrow, though there are no economic reports expected, trading is expected to be heavy and volatile due to quadruple witching.

Pre Market Watch - Dec 19 2008

Today the markets are expected to open up in red as most of the Asian benchmark indices are trading in red. Going further, the markets may continue to be volatile as some policy news and rate cuts are expected to flow in. The fall in inflation numbers will not only boost the moral of investors but also support the moves for policymakers. In addition the slumping crude oil price may give some energy to the energy stocks.

On Thursday, the markets were flat in the pre mid session and soon in the post session it turned into whopping gains. The significant gain was primarily attributed by the fall in inflation numbers to 6.84%, which may inspire the RBI to think over the further rate cut. The inflation numbers fell by 116bps to 6.84% for the week ended December 6, 2008 as compared to 8% the week before. Sensex and Nifty lost 2.62% and 2.87%. Realty, Teck, Power and Metal conceded losses of 7.36%, 5.02%, 4.44% and 4.36% respectively. Among the sectors the rate sensitive sectors like Realty, Bankex, Power and Auto rolled the red carpet for bulls. During the trading session we expect the markets to be trading volatile with negative bias.

The BSE Sensex closed higher by 361.14 points at 10,076.43 and NSE Nifty ended up by 106.40 points at 3060.75. The BSE Mid Caps and Small Caps ended with gains of 68.39 points and 33.39 points at 3,204.56 and 3,678.56 respectively. The BSE Sensex touched intraday high of 10,110.34 and intraday low of 9,633.04.
On Thursday, the US markets closed in red. The sentiments were weak as the the rating agency S&P has threatened General Electric of down sizing its current rating “AAA” to negative. In addition the falling oil prices crippled the energy shares. Chevron Corp and Exxon Mobil were the biggest drags on the Dow for the second consecutive session as oil fell almost $4, or about 10 percent, to settle near $36 a barrel on growing fears of falling demand. Crude oil futures for the month of January delivery fell $3.84 to $36.22 per barrel on New York Mercantile Exchange. The crude futures have touched an intraday of $35.98 per barrel in the electronic trading. The crude prices have reached a new record level since mid of 2004 as investors pay less attention to worried about the production cut by the Organization of the Petroleum Exporting Countries.
The Dow Jones Industrial Average (DJIA) closed low with 219.35 points at 8,604.99 NASDAQ index fell 26.94 points at 1,552.37 and the S&P 500 (SPX) also closed lower by 19.14 points to close at 885.28 points.
Indian ADRs ended mixed. In technology sector, Infosys gained by 2.29% and Wipro also gained by 3.29% whereas Satyam that dropped by 3.86% and Patni Computers closing low by 3.80%. In banking sector ICICI Bank lost 2.45%, HDFC Bank grew by 0.79%. In telecommunication sector, Tata Communication rose by 5.93%, while MTNL inclined by 3.87%.

Today the major stock markets in Asia opened weak. The Shanghai Composite is trading low by 4.51 at 2,011.18 Hang Seng is low by 282.37 points at 15,215.44. Further Japan''s Nikkei slipped by 94.95 points at 8,572.28. Tiwan weighted low by 4,651.35 points at 1,176.83 and Singapore’s Strait Times is low by 9.43 points at 1,789.52.

The FIIs on Thursday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 2,288.10 Crore and gross debt purchased stood at Rs 305.20 Crore, while the gross equity sold stood at Rs 2,396.80 Crore and gross debt sold stood at Rs 697.00 Crore. Therefore, the net investment of equity and debt reported were Rs (108.70) Crore and Rs (391.90) Crore respectively.

On Thursday Indian Rupee closed at 46.95/96 a dollar, 1.5% stronger than Wednesday''s close of 47.67/69. Rupee gained strength in the wake of rally in the domestic market. As well as the dollar witnessed weakness in the global market.

On BSE, total number of shares traded were 39.43 Crore and total turnover stood at Rs 5,095.54 Crore. On NSE, total number of shares traded were 85.75 Crore and total turnover was Rs 13,363.39 Crore.

Top traded volumes on NSE Nifty – Unitech with 68693875 shares, Suzlon Energy with total volume traded 57199637 shares, Satyam with 36272449 shares, followed by DLF with 18466028 shares, SAIL with 15279032 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1237329 with a total turnover of Rs 17489.91 Crore. Along with this total number of contracts traded in stock futures were 1469346 with a total turnover of Rs 15976.89 Crore. Total numbers of contracts for index options were 1333958 with a total turnover of Rs 20107.92 Crore and total numbers of contracts for stock options were 88989 and notional turnover was Rs 1032.39 Crore.

Today, Nifty would have a support at 2,980 and resistance at 3,100 and BSE Sensex has support at 9,750 and resistance at 10,150.

Profit taking may cap gains

The market may edge lower as weak global cues may trigger profit taking after a recent strong rally. Expectations of a second government stimulus package for the economy, hopes of further cut in interest rates by the central bank and buying by foreign funds aided a strong rally in the past few days. The Sensex jumped 1,337.19 points or 15.3% in a short while to 10,076.43 on Thursday, 18 December 2008 from a recent low of 8,739.24 on 2 December 2008.

Interest rate sensitive banking, realty and auto stocks led a near 4% surge in the Sensex on Thursday as a sharp fall in inflation raised the prospect of deeper interest rate cuts in coming weeks. Inflation based on the wholesale price index rose 6.84% in the 12 months to 6 December 2008, below the previous week's annual rise of 8%, data released by the government during trading hours on Thursday, 18 December 2008, showed. Inflation had surged into double digits in early June this year after an increase in state-set retail fuel prices, and peaked at 12.91% on, 2 August 2008, the highest reading since annual numbers in the current data series became available in April 1995.

The Sensex closed above the psychological 10,000 level for the first time in more than a month on Thursday.

Buying by foreign funds this month has also helped market sentiment. Foreign funds bought a net Rs 1681.10 crore of equities this month till, 17 December 2008.

In a second stimulus package to boost growth, the government is likely to provide sops to the automobile, housing and steel sectors. As per reports, the committee of secretaries (CoS) on economic crisis is examining proposals like increasing the limit for low interest-rate housing loans from Rs 20 lakh to Rs 30 lakh, increasing the tax rebate on home loans, reducing car and two-wheeler loan rates by 2% (from the current 12-14%), increasing depreciation and ensuring faster disbursal of central value added tax (Cenvat) credit for the steel sector.

The first stimulus package unveiled by the government on Sunday, 7 December 2008, involved Rs 20,000 crore in additional government expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.

The new package could also include monetary measures such as cuts in the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) by the Reserve Bank of India (RBI). CRR, down to 5.5% from 9% in August 2008, impounds cash with RBI while SLR mandates banks to keep a specified proportion of their deposits in government securities.

Japan's Nikkei was trading down 0.7% ahead of decision by Bank of Japan on interest rates. The MSCI index of Asia-Pacific stocks excluding Japan was down 0.8%.

US stocks fell for the second day on Thursday after Standard & Poor's threatened to strip General Electric of its 'AAA' credit rating and slumping oil prices crippled energy shares. The Dow Jones industrial average tumbled 219.35 points, or 2.49%, to end at 8,604.99. The Standard & Poor's 500 Index dropped 19.14 points, or 2.12%, to 885.28. The Nasdaq Composite Index fell 26.94 points, or 1.71%, to 1,552.37.

Trading Calls - Dec 19 2008

Nifty (3061) Sup 2975 Res 3105

Buy Crompton Greaves (138)
SL 134 Tgt 145, 148

Buy PNB (503)
SL 497 Tgt 512, 515

Sell ACC (506)
SL 512 Tgt 496, 492

Sell HDFC (1535)
SL 1550 Tgt 1505, 1495

Sell Cairn(160)
SL 164 Tgt 153, 151

Precious metals turn little dull

Gold and silver prices drop down as dollar index gains

Bullion metal prices ended lower on Thursday, 18 December, 2008. Bullion metals fell due to the rising dollar. The dollar became a bit strong today after dropping lower since past few days. 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 and also vice versa.

On Thursday, Comex Gold for February delivery fell $7.9 (0.9%) to close at $860.6 an ounce on the New York Mercantile Exchange. Earlier in the day, it reached a high of $879.6. Last week, gold gained 9%. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (17%) since then.

For the month of November, gold prices ended higher by 14%. Prior to this, for the month of October, gold had ended lower by 18%. It was the biggest percentage loss for gold since February, 1983.

This year, gold prices have gained 2.7% till date. Futures have averaged $878 in 2008. The dollar index has gained 4% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.

On Thursday, Comex silver futures for March delivery fell 30 cents (2.6%) to $11.12 an ounce. Last week, silver gained 80 cents (9%). For the month of November, silver prices had gained 5%. Till date, silver has lost 25.6% this year.

For the month of October, silver had slipped by 20%. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.

At the currency market on Thursday, the dollar index gained 0.7% today.

The Federal Reserve surprised market earlier this week to save the U.S. economy slashing interest rates to just above zero and promising to try an array of new economic measures to stimulate spending. The central bank's Federal Open Market Committee established a target range for the federal funds rate of zero to 0.25%, effectively cutting its key rate for overnight lending to banks by between 0.75% and 1%.

Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the latest move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.

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 February delivery closed lower by Rs 238 (1.8%) at Rs 12,930 per 10 grams. Prices rose to a high of Rs 13,242 per 10 grams and fell to a low of Rs 12,805 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 390 (2.1%) lower at Rs 17,707/Kg. Prices opened at Rs 18,045/kg and fell to a low of Rs 17,530/Kg during the day's trading.

Crude at new lows

Prices continue to drop drastically on demand concerns

Crude prices continued to drop substantially even today, Thursday, 18 December, 2008. Prices fell due to a strong dollar and also as OPEC announced another production cut yesterday. But prices fell as an impact of the weekly inventory report by the energy department that hit wires yesterday pointing towards lower energy demand.

On Thursday, crude-oil futures for light sweet crude for January delivery closed at $36.22/barrel (lower by $3.84 or 9.6%) on the New York Mercantile Exchange. Earlier in the day, prices touched a low of $35.98. Prices reached a high of $147 on 11 July but have dropped almost 75% since then. On 5 Dec, 2008, prices touched a low of $40.5. Last week, prices ended higher by almost 13%. Prior to that, prices coughed up 25% in the week before that. That was the largest weekly loss for crude in past twenty five years. For this year in 2008, crude prices have dropped 59%.

For the month of November, crude prices ended lower by 19.7%. Before this, for the month of October, 2008, crude prices had ended lower by 32.6%, the biggest monthly drop since 1983.

After a meeting in Oran, Algeria, the Organization of the Petroleum Exporting Countries agreed to cut 4.2 million barrels a day from its actual September production level of 29.045 million barrels a day. The production cut is effective on 1 January, 2009. Excluding previously announced cuts, OPEC will actually cut its daily production by 2.2 million barrels from current levels. That constitutes its biggest production cut ever.

At the currency market Thursday, on the dollar index gained 0.7% today.

The Energy Information Administration reported yesterday that that U.S. crude supplies rose by 500,000 barrels to stand at 321.3 million barrels during the week ended 12 December, 2008. At 321.3 million barrels, total U.S. crude inventories were 17.5 million barrels above the five-year average and 24.4 million barrels above year-ago levels. The EIA also reported an increase of 1.3 million barrels in gasoline stocks and a rise of 2.9 million barrels in distillate stocks last week.

For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.

Against this background, January reformulated gasoline fell 5 cents to end at 92 cents a gallon and January heating oil dropped 7 cents to $1.37 a gallon.

January natural gas futures fell 7 cents to finish at $5.55 per million British thermal units. EIA reported today that natural gas inventories fell by 124 billion cubic feet to stand at 3,167 billion cubic feet during the week ended 12 December, 2008.

At the MCX, crude oil for January delivery closed at Rs 2,096/barrel, lower by Rs 118 (5.3%) against previous day's close. Natural gas for December delivery closed at Rs 261.9/mmbtu, lower by Rs 1.4/mmbtu (0.53%).

Morning Note - Dec 19 2008

Morning Note - Dec 19 2008

Daily News Roundup - Dec 19 2008

Satyam Computers plans buy back offer. (ET)

Wockhardt looks for potential buyers for its French subsidiary Negma laboratories to repay debt to investors. (ET)

PTC India plans to setup USD1bn offshore fund to finance power projects in India. (ET)

Chanda Kochhar set to be new ICICI CEO. (ET)

DLF unveils retail plans, targets USD1bn revenue in five years. (ET)

Hyundai motors set to launch i20 by December end. (ET)

Fortis Healthcare is in talks with two leading players – Manipal Hospitals and Wockhardt hospitalsto buy stake. (ET)

J.D Power Asia pacific assigns top rating to Maruti Suzuki .(ET)

Dishman Pharmaceuticals plans bond issue as IFC talks fail.(ET)

Hexaware Technologies has revamped organization structure along with its major industry focus area – financial services, travel and transportation and emerging markets. (ET)

Coal India eyes three Indonesian mines.(ET)

JLR in line for I billion pound bail out package. (ET)

Hyundai to lay off 2000 temporary workers.(BS)

Supreme Court asks Indian patent office to decide on patent validity of Roche before January 31st 2009. (BS)

World bank likely to lend USD600mn to Power Grid.(BS)

Bosch to shut Bangalore plant for a week.(BS)

MRF announces three day plant lock out. (BS)

GMR Holdings raises stake in GMR Infra.(BS)

Jindal Polyfilms approves Rs6bn investment in wholly owned subsidiary Hindustan Thermal Power generation. (BS)

Tata Groups acquires 3.9% in Steel Strip Wheels.(BS)

Thomas Cook India plans to raise Rs2bn via rights issue.(BS)

HDFC to raise Rs10bn through non-convertible debentures.(BS)

Hindustan Zinc cuts zinc prices by Rs2100/ton effective from today.(BS)

BGR Energy ties up funds for 600 MW project.(FE)

L&T considers exiting its petroleum dispensing pumps business.(FE)

DLF plans to add five new international brands to its existing portfolio of its subsidiary DLF brands. (FE)

Honda Siel cars advances launch of Jazz by six months.(FE)

SBI cuts rates by 50-100bps on MSME loans.(FE)

NABARD and IL&FS enter into pact to fund rural infrastructure development. (FE)

Unitech plans to invest Rs25bn to launch ten thousand residential units in the next fiscal.(FE)

Government asks ONGC and Oil India not to extend discounts to public sector OMC’s.(BL)

Marg limited ties up with Surbana to introduce prefab construction technology.(BL)

Zandu Pharma may sell loss making Zandu chemicals.(BL)

McNally Bharat bags two orders from Vedanta group. (BL)

Elecon Engineering bags Rs1.2bn order from Mundra Port.(BL)

Bharti Retail plans to open 30 stores in NCR in a year.(Mint)

Economic Snippets

Inflation at nine month low of 6.84% on fuel price cut. (ET)

DOT may ask cellular companies to cut off handsets without valid code.(ET)

Government unlikely to cut fuel prices further.(ET)

Government tells banks to cut home loan rates.(ET)

Coal ministry plans to cancel coal mines allotted to companies incase of delays in development of captive mines.(ET)

Government not to hive off Dabhol LNG terminal.(ET)

Interest rates on FD’s may fall by 100bps.(ET)

ADB has sanctioned Rs40bn for four hydro power projects totaling to 808MW in Himachal Pradesh.(BS)

Rs200bn stimulus for manufacturing companies and NBFC’s routed through stretched asset stabilization fund. (BS)

New oil subsidy plan likely in January, subsidy share of upstream firms for current year may be capped at Rs300bn.(BS)

Tyre supplies to vehicle makers drop by 70%.(BS)

USD3bn funding from world bank for core sector.(FE)

CERC defers price cap on interstate short term sale.(FE)

Tyre companies to resort to cutting output. (BL)

December quarter may be worst in ten years for IT as customers in US offshore reduce business and bargain for lower prices. (Mint)

Unclear direction

The great thing in this world is not so much where you stand, as in what direction you are moving.

The bulls and bears keep jumping lanes and sometimes signals. A sharper than expected fall in inflation has once again raised hopes of another round of measures, both monetary as well as fiscal, to revive economic growth. As a result, the market rallied on Thursday, with the Sensex ending above 10,000 for the first time in over a month while the Nifty finished above 3,000. Market breadth was strongly positive while traded volume and turnover were too sharply higher. However, foreign funds and local institutions were net sellers, raising some suspicion over the source of the heavy buying.

There are still some doubts over the revival in sentiment, as credit markets are jittery and risk aversion rules the roost. The Indian economy is also going through a bit of a rough patch. The only silver lining is a sharp fall in inflation. Recently, the market has ignored a slew of bad news and has rallied. It has been pretty resilient in the face of negative news. However, the euphoria may not last for longer.

Today, we expect a cautious to slightly weaker start. US stocks fell sharply overnight and Asian markets are down this morning. Do not go overboard and start loading up aggressively as things could turn ugly again. Any rise should be utilised to lighten one's position, especially from weak counters.

US stocks ended sharply lower on Thursday on account of a sharp sell-off in the last hour of yet another volatile session. Energy related shares took a pounding after crude oil fell to four-year lows and two of the nation's Big Three automakers said they would halt production.

Volatility increased ahead of the expiration of options and futures contracts on Friday, an event that is called "quadruple witching in Wall Street parlance.

After falling almost 300 points during the session, the Dow Jones Industrial Average ended at 8,604.99, off 219.35 points, or 2.5%. The S&P 500 Index dropped 19.08 points, or 2.1%, to 885.34, with the Nasdaq Composite Index finishing 26.94 points down at 1,552.37.

Market breadth was negative. On the New York Stock Exchange decliners beat out advancers 3 to 2 on a volume of 1.4bn shares. Meanwhile on the Nasdaq, decliners beat out advancers nearly 2 to 1 with a total market volume of 2.1bn shares.

Shares of Dow component General Electric (GE) fell 8.2% after Standard & Poor's lowered the rating outlook on the company's financial-services arm to negative from stable, citing its reliance on confidence-sensitive wholesale funding. S&P affirmed its AAA-long-term and A-1+ short-term counterparty credit ratings on GE.

Among blue-chip issues, General Motors (GM) was the biggest loser, off 16% after The Wall Street Journal reported that the company and Chrysler have reopened merger talks. However, a GM spokesman denied the report on Thursday morning.

Late on Wednesday, privately held Chrysler said it would idle all 30 of its plants for at least a month, in an effort to bring output closer in line with plunging demand for new cars and trucks.

Separately, shares of Ford Motor fell 9.6%. Reports said the automaker would shut down most of its North American assembly plants for an extra week in January.

All three indexes seesawed in early going. The market is typically more volatile ahead of "quadruple witching," when equity options, stock index futures, stock options and single-stock futures all expire on the same day. There are four such Fridays in the year, and they tend to be preceded by increased market volatility.

The Labor Department reported that the number of people filing for initial unemployment benefits totaled 554,000 in the week ending on Dec. 13. That was a decline of 21,000 from the previous week's 26-year high of a revised 575,000 claims. Analysts expected 558,000 claims for the current week.

Meanwhile, the leading indicators index fell by less than expected in November, according to a report from the Conference Board. The leading indicator fell by 0.4% compared to economists' expectations that it would dip 0.5%. In the prior month, the indicators fell 0.8%.

Also, the Philadelphia Fed Index, an indicator for regional manufacturing, came in with a reading better than expected. The Philly Fed reported that its index improved to negative 32.9 in December, from negative 39.3 in November. According to a consensus of projections, the index was expected to fall to negative 40.5. Any negative reading suggests weakness, but the rebound from November is a positive sign.

Oil prices fell below US$37 a barrel Thursday, reaching levels not seen since June 2004. Crude oil for January fell US$3.84 to settle at US$36.22 a barrel on Thursday. The Organization of Petroleum Exporting Countries (OPEC) announced on Wednesday that it will cut production by 2.2 million barrels a day in January.

The price of crude oil has fallen more than US$100 from the record highs hit over the summer, but as the global economy has slowed to a crawl, demand for energy has also slowed.

The dollar gained against other major currencies, with the yen just off the 13-year high it reached against the dollar on Wednesday. Meanwhile, the 15-nation euro and the British pound both lost against the greenback.

Treasury prices, meanwhile, continued to rally, sending yields to record lows. The benchmark 10-year note rose 1 5/32 to 114 31/32 and its yield fell to an all-time low of 2.07%, down from 2.18% late on Wednesday.

FedEx reported a better-than-expected fiscal second quarter, ended Nov. 30. FedEx reported a quarterly profit of US$1.58 per share, slightly better than the US$1.57 per share projected by a consensus of analysts. FedEx also said that it would be trying to cut costs in the face of economic headwinds.

After the market close, software vendor Oracle reported its second-quarter earnings were hurt by the stronger US dollar. Sales of US$5.6bn were just short of analysts' expectations and earnings of 34 cents per share, when adjusted for expenses, were in line with consensus expectation.

European shares inched lower on Thursday. The pan-European Dow Jones Stoxx 600 index declined 0.1% to 197.31 in another volatile session. Germany's DAX 30 index rose 1% to 4.756.40 amid a 12.7% rise for tire maker Continental. Continental is in the process of being bought by privately owned Schaeffler Group.

The UK's FTSE 100 index inched 0.2% higher to 4,330.66. The French CAC-40 index was down 0.2% at 3,234.15 amid losses for banking group BNP Paribas and retailer Carrefour.

Indian markets ended with gains on Thursday reversing previous day’s losses led by better than expected inflation data which further slipped to nine month low. The rally was led by the interest rate sensitive stocks also the broader indices like the mid-cap and the small-cap indices ended with gains.

Finally, the BSE benchmark Sensex ended at 10,076 surging 361 points and the NSE Nifty index ended at 3,060 adding 106 points.

All the BSE Sectoral indices ended in the green with the interest rate sensitive Power and capital goods stocks leading from the front. Market breath was positive, 1,487 stocks advanced against 967 declines, while, 93 stocks remained unchanged.

Shares of McNally Bharat sky rocketed over 11% to Rs41 after the company announced that it received 2 orders worth Rs2.44bn from Vedanta Group for 1.5mn tones per annum capacity Lead Zinc Beneficiation plant for Rampura Agucha Mines, Bhilwara (Rajasthan) and 1 Aluminium Handling package at Lanjigarh, Orissa. The scrip touched an intra-day high of Rs42 and a low of Rs36 and recorded volumes of over 1,00,000 shares on BSE.

Shares of IOC advanced by over 7% to Rs405 after the company announced that it formed a joint venture with Tata Power for a coal-based power plant. The scrip touched an intra-day high of Rs408 and a low of Rs382 and recorded volumes of over 4,00,000 shares on BSE.

Elecon Engineering announced that it won an order worth Rs1.2bn from Mundra Port and Special Economic Zone of Adani Group. The scope of order includes design, supply, erection, testing and commissioning of material handling system. The stock was however down by 3.5% to Rs35.5 after hitting an intra-day high of Rs38 and a low of Rs35.3 and recorded volumes of over 2,00,000 shares on BSE.

Shares of Titan Industries surged by over 5% to Rs955 after reports stated that the company was planning to spin off its precision engineering division into a JV. The scrip touched an intra-day high of Rs962 and a low of Rs886 and recorded volumes of over 4,00,000 shares on BSE.

MRF slipped by 1% to Rs1997 after the company announced that it called for a lock out at its Arakkonam manufacturing plant. The scrip touched an intra-day high of Rs2049 and a low of Rs1960 and recorded volumes of over 1,000 shares on BSE.

With inflation cooling off to 9 month lows and stimulus package to be announced later in the week bulls may look to carry the momentum at least in the opening trades on Friday. Although, looking at the trend in the recent past, markets may turn highly volatile and profit booking cannot be ruled out at higher levels as well as Nifty would be approaching 3,100 levels. So it would be advisable to use the early spurt to book some profits.

Also, cues from the international equity markets would add to the sentiment.

Events to watch out for,

- Initial Jobless Claims

- UK Retail Sales data

SGX Nifty Live Update - Dec 19 2008

SGX Nifty at 3,040.0 and trading -33.0 points

Economic Review

Economic Review

Eveninger - Dec 18 2008

Eveninger - Dec 18 2008

Maytas in trouble ?

Was the decision to empty the coffers of Satyam Computer Services in favour of Maytas promoters and take over the two construction and infrastructure companies a bailout attempt?

This is one question many analysts are asking even after the acquisition deal has been called off.

While senior executives of both Satyam and Maytas deny such intentions, a top source said it was indeed a bailout package since Maytas is seeking to strengthen its balance sheet to bid for bigger projects on its own.

By getting into the Satyam fold, Maytas would have enjoyed the combined balance sheet and the strong topline support of the fourth-largest IT company in the country.

In fact, the source said, the company is also finding it hard to achieve financial closure for some projects even after winning them.

Though Maytas Infra has already achieved financial closure for some of its projects, it’s Rs 2,000 crore Hyderabad Metro Rail project is being seen as a drag with the company unable to bring financial institutions together to fund it.

Additionally, the project became controversial after Delhi Metro chief E Sreedharan criticised the deal.

But company officials put on a brave face. “Hyderabad Metro is a good project and we are on track for achieving the financial closure.”

“The Satyam controversy is not likely to affect Maytas plans,” Maytas Infra’s chief financial officer V V Raju told DNA Money.

According to him, the company would achieve financial closure for the project as scheduled in March 2009.

But more than the financial closure, it is the company’s ability to bid for bigger projects that’s seen to be one of the reasons for the Satyam to decide on acquiring it and taking Maytas into its fold.

“Maytas has been bidding for many projects jointly. For instance, for the Rs 200-crore airports deal in Karnataka and Rs 1,200 crore port project in Machilipatam, it had to team up with NCC. For the Hyderabad Metro too, it had to team up with Navabharat group. The list goes on. For bigger projects, Maytas is teaming up with others to meet the balance sheet requirements. A merger with Satyam would have been a definite bail out for Maytas,” the source explained.

Meanwhile, there have also been unconfirmed reports about Maytas promoters coming under severe financial crunch due to the land acquisitions they had made in the recent days and the real asset yielding less returns due to the negative real estate market.

These reports also pointed the mortgage of shares by Maytas promoters to raise further funds. “We don’t know what the promoters have done in their individual capacity. For Maytas there is no specific funding problem to execute the Rs 11,000 crore order book,” Raju said.

via DNA Money