Market may fall tracking weak Asia

The market may fall tracking weak Asia. Investors may book profit after recent strong gains.

Reliance Industries will be in action after it has put Reliance Infrastructure, an Anil Ambani group company, on notice that it would cut gas supply to the latter's 220-MW power plant at Samalkot in Andhra Pradesh, claiming the latter has defaulted on payment. The power plant has been getting gas from RIL since May 10 at $4.20 per mmBtu and marketing margin of $0.13 per mBtu. According to Reliance Infarstructure, it had stopped payment as RIL was charging a marketing margin of $0.135 per mBtu. The marketing margin imposed in the nature of sales price/price of sale of gas is illegal, unauthorised and unwarranted,” Reliance Infrastructure said in a reply to RIL

Investors are worried that a glut in share sales may suck liquidity from the secondary market. The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.

As per one report, companies plan to raise at least Rs 40,000 crore through initial public offers (IPOs)/follow on public offers (FPOs) in the second half of the current financial year. Power companies such as GMR Energy, Indiabulls Power and JSW Energy and state-run Bharat Heavy Electricals and NTPC are likely to tap the primary market. Reliance Infratel also announced on Tuesday, 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.

Three Indian firms and in one case promoters of a company raised about Rs 3000 crore in a single day on Wednesday, 23 September 2009. Majority of the fund raising was routed through share sale in the secondary markets through the stock exchanges mechanism.

Meanwhile, India's exports fell an annual 19.7 % in August 2009, as the global slump hit demand for Indian goods, Trade Minister Anand Sharma said on Thursday.

Nevertheless, there is optimism about Q2 September 2009 results after advance tax collections registered a positive growth in the second quarter after witnessing a negative growth in the first quarter. Corporate advance tax and advance personal income-tax were up by 14.7% and 1.7%, respectively in the September 2009 quarter. Higher advance tax payment indicates good Q2 September 2009 results from India Inc. next month.

India's headline inflation rate rose for the second straight week, data released by the government on Thursday showed. Inflation based on the wholesale price index rose 0.37% in the year through 12 September 2009, higher than previous week's gain of 0.12%. The food article index was responsible for the rise in inflation. The index surged 15.64%.

Asian stocks dropped today after Nomura Holdings Inc. announced a record $5.6 billion share offering and sales of existing U.S. homes unexpectedly declined. The key benchmark indices in China, Hong Kong, South Korea, Japan and Singapore fell by between 0.47% to 2.9%.

US markets fell for a second day in a row on Thursday after the Federal Reserve announced plans to start unwinding some stimulus measures and a report showed existing-home sales fell last month.

The Dow was down 41.11 points, or 0.4%, to 9,707.44. The S&P 500 index fell 10.09 points, or 1%, to 1,050.78, and the Nasdaq Composite Index fell 23.81 points, or 1.1%, to 2,107.61.

In economic data, existing home sales disappointed after it fell 2.7% in August against economists expectations of a 2.9% increase. Initial jobless claims fell to its lowest level in two months. The figure came in at 530,000 which was less than estimates. Continuing claims were also below expectations at 6.14 million against the predicted 6.18 million.

World leaders at the G20 meeting on Thursday closed in on a statement urging new restraints on bankers' pay, a flashpoint for outrage in the global financial crisis. Group of 20 nations have also agreed on a 5 percentage point shift in International Monetary Fund voting power from controlling developed countries to underrepresented countries, G20 sources said on Thursday. The move is part of efforts to give emerging economic powers more say in the IMF to recognize their growing influence in the world economy.

Back home, buying resumed on the bourses on Thursday after Wednesday's (23 September 2009)'s slide that followed a rally in the preceding five days. But volatility ruled the roost as traders rolled over derivatives contracts from September 2009 series to October 2009 series ahead of Thursday's expiry of September 2009 contracts. The BSE 30-share Sensex rose 61.93 points or 0.37% to 16781.43 on that day.

As per provisional figures on NSE, foreign funds bought shares worth Rs 1061.52 crore and domestic funds sold shares worth Rs 616.77 crore on Thursday, 24 September 2009.