India Strategy - May 2009

India Strategy - May 2009

BSE Bulk Deals to Watch - May 27 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
27/5/2009 524412 AAREY DRUGS PRITICHETANMEHTA S 50000 41.00
27/5/2009 531897 ACCENT TECH FAISAL ZUBAIRHAWA B 100000 122.85
27/5/2009 530715 ALPS INDUST SUNSTAR SHARE BROKERS PRIVATE LIMITED B 213000 11.24
27/5/2009 530715 ALPS INDUST BEAUMARIS INVESTMENTS LTD S 255000 11.24
27/5/2009 532981 ANU LABS VJPATEL INVESTMENT S 996000 35.57
27/5/2009 532981 ANU LABS VAJSHAH SHARES & CONSULTANCY P S 1077391 36.54
27/5/2009 532981 ANU LABS REAL MARKETING PVT LTD S 647007 34.98
27/5/2009 532981 ANU LABS H K STOCK SERVICES PVT LTD S 611810 39.08
27/5/2009 532981 ANU LABS SANDEEP MAHENDRA BHAMMER S 750000 39.38
27/5/2009 532981 ANU LABS D. B. SECURITIES. PVT. LTD. S 650044 38.67
27/5/2009 532212 ARCHIES LTD COSMO INVESTMENT B 37552 95.57
27/5/2009 531381 ARIH FOUND H PIONEER INTER. P. LTD. B 50000 96.21
27/5/2009 531381 ARIH FOUND H TECHSPEC SALES PVT LTD S 50000 96.21
27/5/2009 512149 AVANCE TECHN KIRANBEN SUNILBHAI SEVANI S 40300 18.48
27/5/2009 532406 AVANTEL LTD AVANTEL LIMITED B 39539 47.05
27/5/2009 532406 AVANTEL LTD SUBBA RAO KOLLI S 30000 47.00
27/5/2009 531733 BAFNA SPINNI VINOD PUKHRA JJAIN S 550000 2.04
27/5/2009 531719 BHAGIR CHE I SSVV ESTATES PRIVATE LIMITED B 40000 50.96
27/5/2009 531719 BHAGIR CHE I SSVV AGRO FARMS PRIVATE LIMITED B 60500 50.61
27/5/2009 531719 BHAGIR CHE I VIJAYALAKSHMI INS AND PEST LTD S 100500 50.75
27/5/2009 532330 BIOPAC INCOR PRASHANT DESAI S 105587 12.23
27/5/2009 590076 CAMSON BIO GRAND SLAM INVESTMENT PVT LTD S 160000 38.94
27/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD B 587613 5.81
27/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD B 724000 5.88
27/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 653591 5.87
27/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 313434 5.88
27/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD S 210000 5.82
27/5/2009 505923 CEEKAY DIAKI ISF SECURITIES LIMITED B 27036 29.64
27/5/2009 505923 CEEKAY DIAKI ISF SECURITIES LIMITED S 35186 29.77
27/5/2009 532413 CEREBRA INT VILPABEN PRANAVBHAI VORA S 70000 10.60
27/5/2009 532413 CEREBRA INT KOSHTI SECURITIES S 70000 10.60
27/5/2009 531270 DAZZEL CONFI POONAM NIREN MEHTA B 40500 5.01
27/5/2009 531270 DAZZEL CONFI NIREN RASHMIKANT MEHTA B 80300 5.05
27/5/2009 531270 DAZZEL CONFI VIMAL KUMAR AGRAWAL S 58502 5.05
27/5/2009 531270 DAZZEL CONFI JYOTI AGRAWAL S 47786 5.05
27/5/2009 531270 DAZZEL CONFI ARPIT RAWAT S 61493 5.02
27/5/2009 505200 EICHER MOTORS LTD. RELIALNCE CAPITAL TRUSTEE CO. LTD A/C RELIANCE TAX SAVERELSS FUND S 199823 292.50
27/5/2009 504000 ELPRO INTERN GOEL FINTRADE PRIVATE LIMITED S 35045 345.23
27/5/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 89731 347.76
27/5/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 89731 348.75
27/5/2009 590024 FERT CHEM SAINATH HERBAL CARE MARKETING P.LTD B 40000 44.35
27/5/2009 590024 FERT CHEM SAINATH HERBAL CARE MARKETING P.LTD S 42755 44.53
27/5/2009 530863 FINANC EYE I AJAR AMAR TRADING & INVESTMENT PVT LTD B 23131 24.25
27/5/2009 530863 FINANC EYE I M K INTERNATIONAL LTD S 17631 24.25
27/5/2009 532857 GLORY POLY EPOCH SYNTHETICS PVT LTD S 138026 28.31
27/5/2009 500168 GOODYEA INDI PRAGNESH ROHITKUMAR PANDYA S 116584 135.98
27/5/2009 504176 HIGH ENERGY PRAKASH MOHANLAL MODI S 10500 96.77
27/5/2009 532414 IKF TECHNO JMP SECURITIES PVT LTD S 1469096 4.92
27/5/2009 530049 JJ EXPORTER AMIT BUSINESS PVT LTD B 140000 23.74
27/5/2009 530049 JJ EXPORTER IVORY CONSULTANTS PVT LTD S 140000 23.73
27/5/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 50496 31.00
27/5/2009 516078 JUMBO BAG LT BALAJI TRADINGENTERPRISESPRIVATELIMITED S 100000 31.01
27/5/2009 532081 K SERA SERA JMP SECURITIES PVT LTD B 594000 13.18
27/5/2009 532081 K SERA SERA S V ENTERPRISES B 2340415 13.00
27/5/2009 532081 K SERA SERA CHIMANLAL MANEKLAL SECURITIES PVT.LTD B 368127 13.12
27/5/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD S 680496 13.21
27/5/2009 532081 K SERA SERA JMP SECURITIES PVT LTD S 345000 13.09
27/5/2009 532081 K SERA SERA S V ENTERPRISES S 2340415 13.10
27/5/2009 532720 M&M FINANSER COPTHALL MAURITIUS INVESTMENT LIMITED S 703000 225.01
27/5/2009 531146 MEDICAMN BIO ASHISH CHUGH B 40707 11.22
27/5/2009 526263 MOLDTEK TECH ADITYA BANGAD B 20000 45.20
27/5/2009 526263 MOLDTEK TECH MOLD TEK PLASTICS LIMITED S 20000 45.20
27/5/2009 531272 NIKKI GLOB F LAXMICHAND SHAH S 23000 9.97
27/5/2009 526747 P G FOILS LT PREM CABLES PVT LTD S 55285 24.15
27/5/2009 532626 PONDY OXIDES VISHWAS SECURITIES LTD. S 68228 15.97
27/5/2009 506618 PUNJAB CHEM PRIMORE SOLUTIONS PVT.LTD B 28098 203.69
27/5/2009 506618 PUNJAB CHEM PRIMORE SOLUTIONS PVT.LTD S 25395 202.45
27/5/2009 506618 PUNJAB CHEM EMERGING CAPITAL ADVISORS LTD S 28500 208.64
27/5/2009 526753 ROSELABS LTD AABHASSHIV KUMAR AGRAWAL S 127865 10.00
27/5/2009 519566 SIMRAN FARMS DEEPINDER SINGH POONIAN B 20801 8.45
27/5/2009 526133 SUPERTEX IND SHAISHIL T JHAVERI B 71411 42.21
27/5/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD S 52900 42.61
27/5/2009 526133 SUPERTEX IND SHAILESH SOMABHAI PATEL S 70000 42.08
27/5/2009 532966 TITAGARH WAG INDUS CAPITAL ADVISORS UK LLP A/C INDUS INDIA FUND MAURITIUS LIMI B 400000 298.00
27/5/2009 532966 TITAGARH WAG 2I CAPITAL PCC S 400000 298.00
27/5/2009 531917 TWINSTA SO E NAMITA STOCK TRADE PVT. LTD. S 100000 2.55
27/5/2009 532765 USHER AGRO CHANDRASHEKARJAYKISHANTHANVI B 121758 36.24
27/5/2009 532765 USHER AGRO CHANDRASHEKARJAYKISHANTHANVI S 121758 36.40
27/5/2009 531874 VENUS VENT IK PROJECTS PRIVATE LIMITED S 39007 39.30
27/5/2009 524394 VIMTA LABS L PRUDENTIAL ICICI FUSION FUND SERIES TWO S 165489 35.09
27/5/2009 532360 VINTAGE CARD NARESHCHAND JAIN B 18539 25.70
27/5/2009 532360 VINTAGE CARD CHIMANLAL MANEKLAL SECURITIES PVT.LTD B 4511 25.98
27/5/2009 532360 VINTAGE CARD SMK SHARES & STOCK BROKING PVT. LTD. S 3563 25.70
27/5/2009 532360 VINTAGE CARD NARESHCHAND JAIN S 6055 25.67
27/5/2009 532360 VINTAGE CARD LAXMI PAT DUDHERIA S 7619 26.25
27/5/2009 532360 VINTAGE CARD CHIMANLAL MANEKLAL SECURITIES PVT.LTD S 3511 24.78

NSE Bulk Deals to Watch - May 27 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,5628581,23.31,-
27-MAY-2009,ALPSINDUS,Alps Industries Ltd.,ATUL SAREEN,BUY,263594,11.25,-
27-MAY-2009,ALPSINDUS,Alps Industries Ltd.,LALIT KUMAR MALIK,BUY,613000,11.25,-
27-MAY-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,107430,344.22,-
27-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,10842201,24.16,-
27-MAY-2009,ITI,ITI Ltd.,JMP SECURITIES PVT LTD,BUY,200200,40.78,-
27-MAY-2009,IVRCLINFRA,IVRCL Infra & Proj Ltd,BAJAJ ALLIANZ LIFE INSURANCECOMPANY LIMITED,BUY,1000000,286.75,-
27-MAY-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,BUY,936753,12.82,-
27-MAY-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,BUY,2617948,39.62,-
27-MAY-2009,PUNJABCHEM,Punj Chem & Crop Prot Ltd,PRIMORE SOLUTIONS PVT.LTD,BUY,33663,203.98,-
27-MAY-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1437539,40.47,-
27-MAY-2009,VIMTALABS,Vimta Labs Limited,SETU SECURITIES LTD,BUY,129179,39.45,-
27-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1623922,23.07,-
27-MAY-2009,ADLABSFILM,Adlabs Films Limited,CITIGROUP GLOBAL MARKETS MAUTITIUS PRIVATE LIMITED,SELL,276780,329.03,-
27-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,5628581,23.34,-
27-MAY-2009,ALPSINDUS,Alps Industries Ltd.,BEAUMARIS INVESTMENTS LIMITED,SELL,945000,11.25,-
27-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,YOGESH RASIKLAL SANGHAVI,SELL,2326965,3.81,-
27-MAY-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,107430,344.57,-
27-MAY-2009,IBREALEST,Indiabulls Real Estate Li,MERRILL LYNCH CAPITAL MARKET ESPANA S.A SVB,SELL,2712000,202.23,-
27-MAY-2009,INDOWIND,Indowind Energy Limited,ABN AMRO BANK N.V. LONDON BRANCH,SELL,290000,33.69,-
27-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,10792201,24.16,-
27-MAY-2009,ITI,ITI Ltd.,JMP SECURITIES PVT LTD,SELL,200200,40.84,-
27-MAY-2009,JMFINANCIL,JM Financial Limited,ARUNA N KAMPANI,SELL,5600000,50.03,-
27-MAY-2009,KKCL,Kewal Kiran Clothing Limi,HDFC TRUSTEE CO LTD A/C HDFC LONG TERM ADV FUND(TAXPLAN2000),SELL,99300,139.00,-
27-MAY-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,SELL,872187,13.17,-
27-MAY-2009,MAYTASINFR,Maytas Infra Limited,IFCI LTD.,SELL,500000,74.85,-
27-MAY-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,SELL,2218948,39.46,-
27-MAY-2009,PUNJABCHEM,Punj Chem & Crop Prot Ltd,PRIMORE SOLUTIONS PVT.LTD,SELL,39037,203.86,-
27-MAY-2009,SKUMARSYNF,S. Kumars Nationwide Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1403339,40.45,-
27-MAY-2009,VIMTALABS,Vimta Labs Limited,SETU SECURITIES LTD,SELL,87181,39.47,-
27-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1657784,23.07,-

Post Session Commentary - May 27 2009

The domestic market closed the session with strong gains on the back of the comments form the Finance Minister, Pranab Mukherjee that reviving the growth momentum is the top priority for the government and added that the fiscal prudence will be kept in mind. Also the strong global markets gave a boost to the domestic bourses. Mukherjee said that the government will continue to enhance the spending this year to support then growth and also added that the growth and employment are not possible without the increased spending and borrowing. Moreover he also said that he will meet the bankers and get them committed to a more benign plan of action. This gives a boost to the investors sentiments which resulted in heavy buying across the sectoral indices. However, the Indian market completely turned down expiry of May 2009 F&O contract due on Thursday

The market opened the session with decent gains tracking the firm cues from the global markets and kept on marching forward through out the trading session on sustained buying support across the counters. The market further inclined sharply in the final hours on the back of government’s emphasis to bring the economy to a growth trajectory. Moreover, in the global arena, the US Markets on Tuesday closed with huge positive gains due to better than expected consumer confidence data. The sentiments strengthened after the May consumer confidence data was far better than expected at 54.9 as against the prior month data of 40.8. The Retailers also spiked by a remarkable 4.0% as the buying sentiment erupted with expectations of the improving economic condition. However, benchmark indices reported strong gains during the session with BSE Sensex ended above 14,100 level and NSE Nifty above 4,270 mark. From sectoral front, investors on-loaded position across the sectors led by Realty, Bankex, Power, PSU, Metal and Capital Goods index. The broader markets were also remained in the buyers radar as Mid Cap and Small Cap stocks gained more than 3% each.

Among the Sensex pack 27 stocks ended in green territory and 3 in red. The market breadth indicating the overall health of the market remained firm as 2,346 stocks closed in positive while 459 stocks closed in negative and 36 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 520.41 points or 3.83% at 14,109.64 and NSE Nifty ended with gains of 159.35 points at 4,276.05. BSE Mid Caps and Small Caps closed with gains of 173.28 and 189.08 points at 4,897.37 and 5,797.74. The BSE Sensex touched intraday high of 14,122.78 and intraday low of 13,780.41.

Gainers from the BSE Sensex pack are Reliance Infra (14.72%) followed by Sterlite Indus (9.49%), ONGC (9.42%), DLF (8.49%), Grasim Indus (7.27%), Ranbaxy Labs (7.14%), ICICI Bank (6.59%), JP Associates (6.58%) and SBI (6.08%).

Losers from the BSE Sensex pack are Bharti Airtel (0.19%) along with ITC (0.19%) and ACC (0.16%).

On the global markets front the Asian markets which opened before the Indian market, ended in green. Hang Seng, Strait Times, Taiwan Weighted, Nikkei closed up by 5.26%, 3.01%, 3.10%, 1.37% at 17,885.27, 2,306.08, 6,890.44 and 9,438.77 respectively.

European markets which opened after the Indian market are also trading mixed. In Frankfurt the DAX index is trading up by 0.12% at 4,991.48 and in London FTSE 100 is trading lower by 0.08% at 4,408.08.

The BSE Realty index gained (6.09%) or 202.03 points to close at 3,516.77. Main gainers are Ansal Infra (9.98%), DLF (8.49%), Sobha Developers (6.86%), Mahindra Life (6.63%), HDIL (6.42%) and Orbit Co (5.32%).

The BSE Bank index surged (5.42%) or 412.14 points at 8,017.30. Scrips that mostly gained are Indus Ind Bank (9.47%), AXIS Bank (7.21%), ICICI Bank (6.59%), SBI (6.08%), HDFC Bank (5.18%) and Yes Bank (4.96%).

The BSE Capital Goods index also ended higher by (4.24%) or 457.34 points at 11,252.46. Elecon Eng. (9.95%), Lakshmi MA (7.39%), Punj Lloyd (5.90%), Reliance Industrial Infra (5.65%), Jyothi Structure (5.09%) and Alstrom Project (5.31%) ended in positive territory.

The BSE Consumer Durables index grew (3.60%) or 91.73 points to close at 2,640.58. Gainers are Rajesh Export (8.26%), Titan Industries (5.02%), Gitanjali Gems (3.38%) and Videocon Industries (2.52%).

The BSE Power advanced (4.89%) or 130.12 points at 2,788.50. Gainers are Reliance Infra (14.72%), Reliance Power (12.40%), GVK Power (7.76%), Siemens (7.34%), Neyivelli Lig (6.15%) and Suzlon Energy (3.52%).

The BSE Metal stocks gained (4.67%) or 457.67 points to close at 10,266.79. Gainers are NMDC (10%), Sterlite Industries (9.49%), Sesa Goa (7.31%), Nalco (5.80%), Jai Corp (4.98%), Wels pun Gujrat (4.08%) and Gujarat NRE (3.95%).

The BSE oil and gas surged (3.46%) or 333.40 points at 9,971.35. Gainers are ONGC (9.42%), RNRL (6.02%), Cairn India (5.43%), Essar Oil (4.45%), Gail India (2.99%), BPCL (2.66%) and Aban Offshore (2.64%).

Jaiprakash Associates Ltd closed up by 6.58% at Rs190.30. The company has informed that pursuant to the Scheme of Amalgamation sanctioned by the Honble High Court of Judicature at Allahabad, June 12, 2009 has been fixed as the Record Date for the purpose of issue and allotment of Equity Shares to the Shareholders of the Jaypee Hotels Ltd (JHL) (Transferor Company No 1), Jaypee Cement Ltd (JCL) (Transferor Company No 2), Jaiprakash Enterprises Ltd (JEL) ((Transferor Company No 3) & Gujarat Anjan Cement Ltd (GACL) ((Transferor Company No 4) with Jaiprakash Associates Ltd (Transferee Company).

BHEL closed higher by 4.28% at Rs2,078.20. The Company has posted a net profit of Rs 13474.70 million for the quarter ended March 31, 2009 as compared to Rs 11108.70 million for the quarter ended March 31, 2008. Total Income has increased from Rs 76262.00 million for the quarter ended March 31, 2008 to Rs 110472.40 million for the quarter ended March 31, 2009.

Mangalore Refinery & Petrochemicals Ltd (MRPL) surged 15.60% at Rs75.95. The Company has posted a net profit of Rs 6076.20 million for the quarter ended March 31, 2009 as compared to Rs 2253.30 million for the quarter ended March 31, 2008.

Turnover surges

Nifty May 2009 futures at premium

Nifty May 2009 futures were at 4287, at a premium of 10.95 points as compared to the spot closing of 4276.05. Turnover in NSE's futures & options (F&O) segment surged to Rs 83,564.87 crore from Rs 77,396.06 crore on Tuesday, 26 May 2009.

The near-month May 2009 F&O contract will expire tomorrow, 28 May 2009. Rollover in the S&P Nifty futures was 44% from May 2009 contracts to June 2009 at the end of Tuesday's (26 May 2009) trade.

ICICI Bank May 2009 futures were at premium at 711.95 compared to the spot closing of 710.25.

Housing Development & Infrastructure May 2009 futures were at premium at 283 compared to the spot closing of 281.60.

DLF May 2009 futures were near spot price at 366.40 compared to the spot closing of 366.

In the cash market, the S&P CNX Nifty surged 159.35 points or 3.87% at 4,276.05.

Sensex jumps nearly 4% on firm global equities

Bulls were in charge of the proceedings as key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. Media reports that the government is considering a proposal to do away with fringe benefit tax aided the rally. Firm global markets also supported the domestic bourses. World stocks rose on a strong reading of the US consumer confidence index.

Banking, metal and realty stocks led the rally. The BSE 30-share Sensex jumped 520.41 points or 3.83%. The barometer index moved past the psychological 14,000 mark.

The market was volatile. Stocks surged in early trade tracking firm Asian equities. After extending gains in mid-morning trade, the market came sharply off the higher level in early afternoon trade. The market firmed up again later. It surged in late trade.

Volatility may remain high over tomorrow ahead of the expiry of May 2009 futures and options (F&O) contract. Rollover in the S&P Nifty futures was 44% from May 2009 contracts to June 2009 at the end of Tuesday's (26 May 2009) trade. The rollover was 24% in Mini Nifty futures.

Among individual stocks, substantial rollover has been witnessed in Hindustan Unilever, GMR Infrastructure, Reliance Power, Bharat Heavy Electricals and Power Grid Corporation. Stocks where rollover has been low are Jaiprakash Associates, Housing Development & Infrastructure (HDIL), Nagarjuna Fertilisers, Ashok Leyland and Axis Bank.

Finance Minister Pranab Mukherjee today said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.

Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years.

Mukherjee said the government will continue to step up spending this year to support growth, risking a wider budget deficit. Growth and employment are not possible without increased spending and borrowing, the Finance Minister said. The prophets of doom have been unduly focusing on increased public spending and a consequent increase in the fiscal deficit, Mukherjee said. "An early return to our recent growth performance will help us get back to our preferred path of fiscal prudence," he said.

The fiscal deficit jumped to an estimated 10.6% of the nation's gross domestic product in the year ended 31 March 2009. The government's financial strain prompted Moody's Investors Service to place India's long-term local currency rating at Ba2, two levels below investment grade, and lower than the ratings assigned to Colombia, Romania and Kazakhstan. S&P has a BBB- long term credit rating on India, the lowest investment-grade level.

According to analysts the new government should give priority to reforming the subsidy mechanism aimed at improving delivery mechanism while at the same time reducing costs.

The FM today said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.

Addressing a press conference, Mukherjee said the industry and business have been hurt by high cost of finance but added that coordinated steps taken by central bank and government have stabilised the economy. He said the liquidity situation eased considerably adding that international capital flows have resumed.

The FM said he hoped banks would take advantage of the monetary policy and make cheap credit available. "One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action," he said. His comments came in the backdrop of a newspaper report that state-run banks plan to cut lending rates by 100-150 basis points within the next fortnight after a finance ministry directive to lower interest rates in line with falling cost of funds.

Meanwhile, the government is reportedly considering a proposal to do away with fringe benefit tax (FBT) the tax on all benefits and perks that companies provide to their employees introduced in the 2005-06 Finance Bill in the coming Union budget. FBT, at Rs 8,000 crore last year, accounted for just over 2% of the total direct tax collection of Rs 3.4 lakh.

From Day One, corporates opposed FBT not just on account of adding to the tax burden, but because of the huge additional paperwork and accounting complications involved in estimating a company's FBT outgo. FBT is levied on perquisites provided by the employer to the employee in addition to the regular salary. This is a tax paid by the employer on the benefits or perks that the employee receives. It includes components like the employee's accommodation, entertainment, travel expenses and phone calls. Later employee stock option plan (Esop), too, was brought under the FBT umbrella.

Bank stocks led gains in European shares on strong US consumer confidence report. Key benchmark indices in France, Germany and UK were up by between 0.01% to 0.47%.

French consumer confidence showed a reading of minus 40 in May 2009, improved from April's level of minus 41, according to French national statistics body Insee.

Asian stocks surged today, led by automakers and mining companies, after US consumer confidence jumped the most in six years and commodity prices climbed. Key benchmark indices in China, Hong Kong, Japan, Singapore and Taiwan were up by between 1.37% to 5.26%. South Korea's Seoul Composite fell 0.73%.

Hong Kong shares got an additional fillip from the government's announcement of a more than $2 billion stimulus package. Hong Kong's Financial Secretary John Tsang unveiled a 16.8 billion Hong Kong dollar ($2.2 billion) package of relief measures Tuesday that include one-time tax relief measures, loan guarantees for companies, a two-month suspension of rental payments for those in welfare housing, and the suspension on a wide range of government fees.

The measures were the fourth round of economic relief actions announced since February last year, and raised the government stimulus spending pledge to 87.6 billion Hong Kong dollars, or about 5.3% of gross domestic product. The budget was partly aimed at expanding tax breaks introduced by the government earlier this year.

Meanwhile, Japan's exports fell 39.1% in April 2009 from a year earlier, the Finance Ministry said today, less than the 42% decline economists had estimated.

Trading in US index futures showed the Dow could rise 18 points at the opening bell today, 27 May 2009.

US stocks surged on Tuesday 26 May 2009 after the Conference Board's index of US consumer confidence surged to 54.9, the biggest gain since April 2003. A reading above 50 indicates optimists outnumbered pessimists. The Dow gained 196.17 points, or 2.4%, to 8,473.49. The S&P 500 index added 23.33 points, or 2.6%, to 910.33. A brokerage upgrade on Apple triggered sharp gains on the Nasdaq Composite index. The tech-laden index jumped 58.42 points, or 3.5%, to 1,750.43.

Closer home, the Federation of Indian Export Organisations (FIEO) said on Wednesday that India's exports may have fallen by a third in April 2009 as a world-wide slump continued to hurt overseas demand for local goods. Earlier this month, government data showed India's exports declined by a third in March 2009, its sixth straight fall, dragging down the full year's growth to a paltry 3.4% at $168.7 billion in 2008/09.

Meanwhile, Prime Minister Manmohan Singh on Wednesday named 38 new ministers, including 14 of the cabinet rank, as he brought key allies into the government after his resounding general election victory. No portfolios had yet been allotted to the new ministers.

Former chief ministers Vilasrao Deshmukh, Vir Bhadra Singh and Farooq Abdullah were among the 14 politicians who were named as Cabinet ministers in the second list released on Wednesday.

DMK leaders Dayanidhi Maran, A Raja and M K Azhagiri will join the Manmohan Singh government as Cabinet ministers too. The list of Cabinet ministers also includes Mallikarjun Kharge, Kumari Selja, Subod Kant Sahay, M S Gill, G K Vasan, P K Bansal, Mukul Vasnik and Kantilal Bhuria.

As many as 45 politicians will join the government as Ministers of State. NCP leader Praful Patel and Congress leaders Prithviraj Chauhan, Sriprakash Jaiswal, Salman Khursheed, Dinsha Patel, Jairam Ramesh and Krishna Tirath will be Ministers of State with independent charge.

The notable omissions in the list of cabinet ministers are H.R. Bhardwaj, Shivraj Patil, Arjun Singh, Sis Ram Ola and P R Kyndiah.

Dr Manmohan Singh was on 22 May 2009 sworn-in as Prime Minister for a second consecutive term. A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.

The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.

A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.

The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.

The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements. The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest.

Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties.

The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322.

The Congress-led UPA defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake in the recently concluded Lok Sabha election. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents.

The BSE 30-share Sensex jumped 520.41 points or 3.83% to 14,109.64. The Sensex gained 533.55 points at the day's high of 14,122.78 in late trade. At the day's low of 13,780.41, the Sensex rose 191.18 points in late trade.

The S&P CNX Nifty was up 159.35 points or 3.87% to 4,276.05. Nifty May 2009 futures were at 4287, at a premium of 10.95 points as compared to the spot closing of 4276.05. Turnover in NSE's futures & options (F&O) segment surged to Rs 83,564.87 crore from Rs 77,396.06 crore on Tuesday, 26 May 2009.

The Sensex is up 4,462.33 points or 46.25% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,949.24 points or 72.9%.

BSE clocked a turnover of Rs 6884 crore lower than Rs 6938.19 crore on Tuesday 26 May 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2,336 shares rose as compared with 461 that fell. A total of 36 shares remained unchanged.

The BSE Mid-Cap index was up 3.67% and the BSE Small-Cap index was up 3.37%. Both the indices underperformed the Sensex.

The BSE Realty index (up 6.09%), the BSE Bankex (up 5.42%), the BSE Power index (up 4.89%), the BSE PSU index (up 4.71%), the BSE Metal index (up 4.67%), the BSE Capital Goods index (up 4.24%), outperformed the Sensex.

The BSE FMCG index (up 0.27%), the BSE Healthcare index (up 2.31%), the BSE Auto index (up 2.49%), the BSE TECk index (up 2.82%), the BSE IT index (up 3.17%), %), the BSE Oil & Gas index (up 3.46%), the BSE Consumer Durables index (up 3.6%) underperfomed the Sensex.

From the 30 share Sensex pack, 27 stocks rose and rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.01% to Rs 2,187.20. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

RIL may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field, partner Hardy Oil & Gas Plc said. The D-3 and D-9 fields may hold as much as 9.5 trillion cubic feet and 10.8 trillion cubic feet of gas, respectively, UK-based Hardy Oil said in a statement today, citing estimates by consultant Gaffney, Cline & Associates.

India's largest oil exploration firm by revenue Oil & Natural Gas Corp rose 9.42% after a newspaper report that the government may double the price of natural gas. The government may double the administered price of natural gas to $4.2 per million British thermal units. The increase will benefit ONGC and Oil India which sell the fuel at prices fixed by the government, according to the report.

Bank stocks surged on hopes the UPA government will pursue financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 6.59% even as its American depository receipt (ADR) fell 1.02% on Tuesday, 26 May 2009. India's second largest private sector bank by net profit HDFC Bank rose 5.32% as its ADR rose 3.98% overnight.

State-run banks rose on reports they plan to cut lending rates by 100-150 basis points within a fortnight following a finance ministry directive to lower interest rates in line with falling cost of funds.

India's biggest bank in terms of branch network State Bank of India (SBI) was up 6.08%. As per reports, the Congress-led UPA government may go ahead on a plan to merge six associate banks with State Bank of India to create a Indian banking behemoth. The government may also re-introduce the State Bank of India (Amendment) Bill that will enable Centre to reduce its stake in SBI to 51% from current 59.41%. Meanwhile, bank is reportedly expected to lower prime lending rate in next few weeks.

Other PSU stocks, Bank of India, Bank of Baroda, Union Bank of India, rose by between 0.4% to 3.02%.

India's biggest dedicated housing finance firm by operating income HDFC was up 4.36%. As per recent reports, HDFC is likely to cut deposit rates and follow it with a cut in lending rates.

With a decisive mandate, there are expectations that the UPA government may pursue financial sector reforms. There is likely to be some movement on passage of the Bill to amend the Insurance Act, 1938. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.

There are two other Bills - for providing statutory backing to the pensions regulator and to amend the Banking Regulation Act which have been pending in Parliament for over five years, mainly due to the opposition from the Left parties. But now the Left is no longer an ally of the re-elected UPA, the Bills may finally be enacted.

The Pension Fund Regulatory & Development Authority Bill will allow the regulator to issue regulations, instead of the present system where it has to enter into agreements with service providers such as the fund managers. In addition, it will also help PFRDA regulate the pension products offered by life insurance companies. The new government may also announce tax benefits on investment in the New Pension Scheme, which will help make it attractive for investors, reports suggest

The amendments to the Banking Regulation Act will allow foreign investors to exercise voting rights in line with their shareholding. While the Reserve Bank of India has concerns on greater play for foreign banks, it will have no reservations in getting more powers for regulation of banks and supercession of borads, which are provided for in the Bill.

The government may also re-introduce the Micro-finance Development and Regulation Bill

Metal stocks rose on firm metal prices on London Metal Exchange. Tata Steel, National Aluminum Company, Hindalco Industries and Sterlite Industries rose by between 1.21% to 9.49%. LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.07% to 2,196.40 on Tuesday, 26 May 2009, on strong US consumer confidence report

Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF, Unitech, Indiabulls Real Estate and Housing Development & Infrastrucutre rose by between 2.93% to 8.49%.

In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).

Outsourcing focussed IT stocks rose on a strong reading of US consumer confidence index. US is the biggest market for Indian IT firms. India's second largest software services exporter by sales Infosys was up 2.68% as its American depository receipt (ADR) rose 2.56% overnight. India's third largest software services exporter by sales Wipro rose 1.68% as its ADR rose 1.92% overnight. India's largest software services exporter by sales TCS rose 3.34%.

Capital goods stocks rose on expectations of increased infrastructure spending by the Congress-led UPA government to boost growth. India's biggest engineering & construction firm by revenue L&T up 4.51% and India's biggest power equipment maker by revenue Bharat Heavy Electricals (Bhel) was up 4.28%. Other capital goods stocks, Thermax, ABB, Crompton Greaves, Praj Industries Siemens and Punj Lloyd rose by between 0.33% to 7.53%.

Reliance Infrastructure rose 14.79%. The board of Reliance Infrastructure on Sunday, 24 May 2009, approved a new preferential offer of 43 million warrants to the company's promoters, convertible at Rs 1,000 a share, cancelling the current offer of equal size which expires on 19 July 2009 and which carried a conversion price of Rs 1,822 a share. If fully exercised the promoters the Anil Dhirubhai Ambani group would raise their stake in the company to 48%, from 38% currently, at a price of Rs 4,300 crore (against over Rs 7,800 crore through the earlier one).

PSU power firms rose on reports the government may dilute stakes in power sector firms to 51% over the next few years to raised about Rs 60000 crore. Rural Electrification Corporation of India, Power Finance Corporation, NTPC, Power Grid Corporation of India rose by between 0.22% to 4.92%.

India's largest cigarette maker by sales ITC fell 0.19% on reports the company will suspend production at all its factories in a phased manner to introduce pictorial warnings on cigarette packs from 1 June 2009.

Healthcare stocks rose on hopes newly elected UPA government will give primary importance to healthcare segment and health of citizens. Cipla, Sun Pharmaceuticals Industries, Dr Reddy's Laboratories, Biocon, Wockhardt, rose by between 0.68% to 9.84%.

India's largest drugmaker by sales Ranbaxy Laboratories jumped 7.14% after a sharp slide of 8.36% yesterday triggered by reports the firm could take a hit of as much as $50 million due to a delay in supplying a key ingredient to UK's AstraZeneca used to make anti-ulcer drug, Nexium.

The stock had surged 20.73% on Monday 25 May 2009 after its chief executive officer resigned on Sunday, 24 May 2009, as part of efforts to turn around the company. In a swift and unexpected move, Japanese drug maker Daiichi Sankyo on Sunday, 24 May 2009, took complete control of Ranbaxy Laboratories in which it had acquired 63.9% stake in June 2008 after all representatives of the former Indian promoter family resigned from the board. Following a board meeting on Sunday morning, former promoter Malvinder Mohan Singh, whose term was originally supposed to run till 2013, resigned as Chairman and Managing Director.

Besides Singh, two other Singh-family Board nominees, Sunil Godhwani and Balvinder Dhillon, also resigned. Tsutomu Une from Daiichi has been appointed chairman. Atul Sobti, who was originally nominated on the board by the former Indian promoters, has been appointed as CEO and MD for three years.

Airlines stocks rose on hopes the newly elected government may allow foreign direct investment in the sector. Jet Airways , SpiceJet and Kingisher Airlines rose by between 1.43% to 5.57%.

The Indian aviation industry has been plagued by large losses, rising debt levels and a serious liquidity crunch. According to reports, measures like increasing the present cap on foreign direct investment (FDI) in the aviation sector as well as withdrawing the restrictions on investment by foreign airlines in the domestic carriers are important to save the industry from the current crisis that it finds itself in.

Currently, foreign airlines are not allowed to pick up equity in aviation companies while foreign investors and financial institutions can hold up to a 49% stake.

Shares of state-run companies rose on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election.

HMT, Shipping Corporation of India, Hindustan Copper, Power Finance Corporation and Central Bank of India rose by between 2.9% to 9.93%.

It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.

Consequently, in the past five years, the government raised just Rs 8,500 crore from disinvestment as against Rs 28,000 crore raised by the BJP-led government in the preceding five-year period.

Some sugar stocks fell after the commodities regulator suspended futures trade in sugar to drive prices lower. Bajaj Hindustan, Balrampur Chini and Shree Renuka Sugars fell by between 1.45% to 3.52%.

The Forward Markets Commission (FMC) on Tuesday, 26 May 2009, suspended futures trading in sugar till 31 December 2009, even as the trade was betting on further liberalisation after the Government recently lifted the two-year ban on wheat futures.

Cals Refineries clocked the highest volume of 12.76 crore shares on BSE. Alok Industries (2.43 crore shares), Idea Cellular (1.99 crore shares), Reliance Natural Resources (1.8 crore shares) and Unitech (1.64 crore shares) were the other volume toppers in that order.

Reliance Infrastructure clocked the highest turnover of Rs 388.64 crore on BSE. Reliance Capital (Rs 248.75 crore), Bharti Airtel (Rs 248.16 crore), DLF (Rs 243.48 crore) and Reliance Industries (Rs 199.97 crore) were the other turnover toppers in that order.

Sensex jumps nearly 4% on firm global equities

Bulls were in charge of the proceedings as key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. Media reports that the government is considering a proposal to do away with fringe benefit tax aided the rally. Firm global markets also supported the domestic bourses. World stocks rose on a strong reading of the US consumer confidence index.

Banking, metal and realty stocks led the rally. The BSE 30-share Sensex jumped 520.41 points or 3.83%. The barometer index moved past the psychological 14,000 mark.

The market was volatile. Stocks surged in early trade tracking firm Asian equities. After extending gains in mid-morning trade, the market came sharply off the higher level in early afternoon trade. The market firmed up again later. It surged in late trade.

Volatility may remain high over tomorrow ahead of the expiry of May 2009 futures and options (F&O) contract. Rollover in the S&P Nifty futures was 44% from May 2009 contracts to June 2009 at the end of Tuesday's (26 May 2009) trade. The rollover was 24% in Mini Nifty futures.

Among individual stocks, substantial rollover has been witnessed in Hindustan Unilever, GMR Infrastructure, Reliance Power, Bharat Heavy Electricals and Power Grid Corporation. Stocks where rollover has been low are Jaiprakash Associates, Housing Development & Infrastructure (HDIL), Nagarjuna Fertilisers, Ashok Leyland and Axis Bank.

Finance Minister Pranab Mukherjee today said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.

Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years.

Mukherjee said the government will continue to step up spending this year to support growth, risking a wider budget deficit. Growth and employment are not possible without increased spending and borrowing, the Finance Minister said. The prophets of doom have been unduly focusing on increased public spending and a consequent increase in the fiscal deficit, Mukherjee said. "An early return to our recent growth performance will help us get back to our preferred path of fiscal prudence," he said.

The fiscal deficit jumped to an estimated 10.6% of the nation's gross domestic product in the year ended 31 March 2009. The government's financial strain prompted Moody's Investors Service to place India's long-term local currency rating at Ba2, two levels below investment grade, and lower than the ratings assigned to Colombia, Romania and Kazakhstan. S&P has a BBB- long term credit rating on India, the lowest investment-grade level.

According to analysts the new government should give priority to reforming the subsidy mechanism aimed at improving delivery mechanism while at the same time reducing costs.

The FM today said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.

Addressing a press conference, Mukherjee said the industry and business have been hurt by high cost of finance but added that coordinated steps taken by central bank and government have stabilised the economy. He said the liquidity situation eased considerably adding that international capital flows have resumed.

The FM said he hoped banks would take advantage of the monetary policy and make cheap credit available. "One of the first steps I propose to take is to meet bankers and get them committed to a more benign plan of action," he said. His comments came in the backdrop of a newspaper report that state-run banks plan to cut lending rates by 100-150 basis points within the next fortnight after a finance ministry directive to lower interest rates in line with falling cost of funds.

Meanwhile, the government is reportedly considering a proposal to do away with fringe benefit tax (FBT) the tax on all benefits and perks that companies provide to their employees introduced in the 2005-06 Finance Bill in the coming Union budget. FBT, at Rs 8,000 crore last year, accounted for just over 2% of the total direct tax collection of Rs 3.4 lakh.

From Day One, corporates opposed FBT not just on account of adding to the tax burden, but because of the huge additional paperwork and accounting complications involved in estimating a company's FBT outgo. FBT is levied on perquisites provided by the employer to the employee in addition to the regular salary. This is a tax paid by the employer on the benefits or perks that the employee receives. It includes components like the employee's accommodation, entertainment, travel expenses and phone calls. Later employee stock option plan (Esop), too, was brought under the FBT umbrella.

Bank stocks led gains in European shares on strong US consumer confidence report. Key benchmark indices in France, Germany and UK were up by between 0.01% to 0.47%.

French consumer confidence showed a reading of minus 40 in May 2009, improved from April's level of minus 41, according to French national statistics body Insee.

Asian stocks surged today, led by automakers and mining companies, after US consumer confidence jumped the most in six years and commodity prices climbed. Key benchmark indices in China, Hong Kong, Japan, Singapore and Taiwan were up by between 1.37% to 5.26%. South Korea's Seoul Composite fell 0.73%.

Hong Kong shares got an additional fillip from the government's announcement of a more than $2 billion stimulus package. Hong Kong's Financial Secretary John Tsang unveiled a 16.8 billion Hong Kong dollar ($2.2 billion) package of relief measures Tuesday that include one-time tax relief measures, loan guarantees for companies, a two-month suspension of rental payments for those in welfare housing, and the suspension on a wide range of government fees.

The measures were the fourth round of economic relief actions announced since February last year, and raised the government stimulus spending pledge to 87.6 billion Hong Kong dollars, or about 5.3% of gross domestic product. The budget was partly aimed at expanding tax breaks introduced by the government earlier this year.

Meanwhile, Japan's exports fell 39.1% in April 2009 from a year earlier, the Finance Ministry said today, less than the 42% decline economists had estimated.

Trading in US index futures showed the Dow could rise 18 points at the opening bell today, 27 May 2009.

US stocks surged on Tuesday 26 May 2009 after the Conference Board's index of US consumer confidence surged to 54.9, the biggest gain since April 2003. A reading above 50 indicates optimists outnumbered pessimists. The Dow gained 196.17 points, or 2.4%, to 8,473.49. The S&P 500 index added 23.33 points, or 2.6%, to 910.33. A brokerage upgrade on Apple triggered sharp gains on the Nasdaq Composite index. The tech-laden index jumped 58.42 points, or 3.5%, to 1,750.43.

Closer home, the Federation of Indian Export Organisations (FIEO) said on Wednesday that India's exports may have fallen by a third in April 2009 as a world-wide slump continued to hurt overseas demand for local goods. Earlier this month, government data showed India's exports declined by a third in March 2009, its sixth straight fall, dragging down the full year's growth to a paltry 3.4% at $168.7 billion in 2008/09.

Meanwhile, Prime Minister Manmohan Singh on Wednesday named 38 new ministers, including 14 of the cabinet rank, as he brought key allies into the government after his resounding general election victory. No portfolios had yet been allotted to the new ministers.

Former chief ministers Vilasrao Deshmukh, Vir Bhadra Singh and Farooq Abdullah were among the 14 politicians who were named as Cabinet ministers in the second list released on Wednesday.

DMK leaders Dayanidhi Maran, A Raja and M K Azhagiri will join the Manmohan Singh government as Cabinet ministers too. The list of Cabinet ministers also includes Mallikarjun Kharge, Kumari Selja, Subod Kant Sahay, M S Gill, G K Vasan, P K Bansal, Mukul Vasnik and Kantilal Bhuria.

As many as 45 politicians will join the government as Ministers of State. NCP leader Praful Patel and Congress leaders Prithviraj Chauhan, Sriprakash Jaiswal, Salman Khursheed, Dinsha Patel, Jairam Ramesh and Krishna Tirath will be Ministers of State with independent charge.

The notable omissions in the list of cabinet ministers are H.R. Bhardwaj, Shivraj Patil, Arjun Singh, Sis Ram Ola and P R Kyndiah.

Dr Manmohan Singh was on 22 May 2009 sworn-in as Prime Minister for a second consecutive term. A day after the swearing-in of the UPA government on Friday 22 May 2009, the Union cabinet met under the chairmanship of Prime Minister Manmohan Singh on Saturday 23 May 2009. The cabined took a decision to convene the Parliament session from 1 June to 9 June 2009. A meeting with leaders of various parties will be held in the first week of June 2009 for finalising the dates of the budget session, home minister P Chidambaram said after the cabinet meeting on Saturday. He said government is quite hopeful of passing the budget by 31 July 2009.

The Speaker's election would be held on 3 June 2009 and President Pratibha Patil will address the joint sitting on 4 June, the day Rajya Sabha will also be convened. This will be followed by the debate on motion of thanks. Explaining the process of passing the general budget, Chidambaram said this has to be completed by 31 July 2009 failing which a vote-on-account will have to be approved.

A comfortable victory for the Congress-led coalition government in election has raised expectations of a strong push for economic reforms by the government. Dr Manmohan Singh has reportedly prepared the broad contours of an economic revival plan to be taken up soon after the new government is formed, reports suggest. While recommendations to revive growth and ease the credit squeeze are likely to find a place in the plan, tax proposals are expected to be taken up as budget recommendations.

The telecom ministry has prioritised the much delayed auction of 3G airwaves and WiMAX spectrum. It has also prioritised introduction of a new spectrum policy.

The petroleum ministry has reportedly prepared a draft Cabinet note on a partial decontrol of petrol and diesel prices after which they will be linked to international movements. The new government is also likely to pursue disinvestment of state-run undertakings, reports suggest.

Financial sector reforms are likely to get a push in the coming days, which were relegated to the back seat due to persistent opposition from the Left parties.

The Congress party-led coalition has the support of 322 lawmakers, Prime Minister-elect Manmohan Singh said on Wednesday, 20 May 2009, giving it a clear majority in a new government. Congress said it has support of 274 members of the 15th Lok Sabha. In addition, the Bahujan Samaj Party, the Samajwadi Party and the Rashtriya Janata Dal sent letters of support for a Manmohan Singh-led government directly to the President, taking the support base to 322.

The Congress-led UPA defied predictions of a tight election and was only about 11 seats short of an majority from the 543 seats at stake in the recently concluded Lok Sabha election. Congress' alliance took 261 seats, sweeping aside its nearest rival, the bloc led by the Hindu-nationalist Bharatiya Janata Party (BJP), which won only 159 combined. Congress, which alone won 205 seats, needs a handful of partners to reach the 272 seats needed to take power, and is expected to seek the support of more smaller parties or independents.

The BSE 30-share Sensex jumped 520.41 points or 3.83% to 14,109.64. The Sensex gained 533.55 points at the day's high of 14,122.78 in late trade. At the day's low of 13,780.41, the Sensex rose 191.18 points in late trade.

The S&P CNX Nifty was up 159.35 points or 3.87% to 4,276.05. Nifty May 2009 futures were at 4287, at a premium of 10.95 points as compared to the spot closing of 4276.05. Turnover in NSE's futures & options (F&O) segment surged to Rs 83,564.87 crore from Rs 77,396.06 crore on Tuesday, 26 May 2009.

The Sensex is up 4,462.33 points or 46.25% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 5,949.24 points or 72.9%.

BSE clocked a turnover of Rs 6884 crore lower than Rs 6938.19 crore on Tuesday 26 May 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2,336 shares rose as compared with 461 that fell. A total of 36 shares remained unchanged.

The BSE Mid-Cap index was up 3.67% and the BSE Small-Cap index was up 3.37%. Both the indices underperformed the Sensex.

The BSE Realty index (up 6.09%), the BSE Bankex (up 5.42%), the BSE Power index (up 4.89%), the BSE PSU index (up 4.71%), the BSE Metal index (up 4.67%), the BSE Capital Goods index (up 4.24%), outperformed the Sensex.

The BSE FMCG index (up 0.27%), the BSE Healthcare index (up 2.31%), the BSE Auto index (up 2.49%), the BSE TECk index (up 2.82%), the BSE IT index (up 3.17%), %), the BSE Oil & Gas index (up 3.46%), the BSE Consumer Durables index (up 3.6%) underperfomed the Sensex.

From the 30 share Sensex pack, 27 stocks rose and rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.01% to Rs 2,187.20. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

RIL may have an estimated 20 trillion cubic feet of natural gas reserves in two areas off the east coast, more than double the quantity of its biggest field, partner Hardy Oil & Gas Plc said. The D-3 and D-9 fields may hold as much as 9.5 trillion cubic feet and 10.8 trillion cubic feet of gas, respectively, UK-based Hardy Oil said in a statement today, citing estimates by consultant Gaffney, Cline & Associates.

India's largest oil exploration firm by revenue Oil & Natural Gas Corp rose 9.42% after a newspaper report that the government may double the price of natural gas. The government may double the administered price of natural gas to $4.2 per million British thermal units. The increase will benefit ONGC and Oil India which sell the fuel at prices fixed by the government, according to the report.

Bank stocks surged on hopes the UPA government will pursue financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 6.59% even as its American depository receipt (ADR) fell 1.02% on Tuesday, 26 May 2009. India's second largest private sector bank by net profit HDFC Bank rose 5.32% as its ADR rose 3.98% overnight.

State-run banks rose on reports they plan to cut lending rates by 100-150 basis points within a fortnight following a finance ministry directive to lower interest rates in line with falling cost of funds.

India's biggest bank in terms of branch network State Bank of India (SBI) was up 6.08%. As per reports, the Congress-led UPA government may go ahead on a plan to merge six associate banks with State Bank of India to create a Indian banking behemoth. The government may also re-introduce the State Bank of India (Amendment) Bill that will enable Centre to reduce its stake in SBI to 51% from current 59.41%. Meanwhile, bank is reportedly expected to lower prime lending rate in next few weeks.

Other PSU stocks, Bank of India, Bank of Baroda, Union Bank of India, rose by between 0.4% to 3.02%.

India's biggest dedicated housing finance firm by operating income HDFC was up 4.36%. As per recent reports, HDFC is likely to cut deposit rates and follow it with a cut in lending rates.

With a decisive mandate, there are expectations that the UPA government may pursue financial sector reforms. There is likely to be some movement on passage of the Bill to amend the Insurance Act, 1938. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.

There are two other Bills - for providing statutory backing to the pensions regulator and to amend the Banking Regulation Act which have been pending in Parliament for over five years, mainly due to the opposition from the Left parties. But now the Left is no longer an ally of the re-elected UPA, the Bills may finally be enacted.

The Pension Fund Regulatory & Development Authority Bill will allow the regulator to issue regulations, instead of the present system where it has to enter into agreements with service providers such as the fund managers. In addition, it will also help PFRDA regulate the pension products offered by life insurance companies. The new government may also announce tax benefits on investment in the New Pension Scheme, which will help make it attractive for investors, reports suggest

The amendments to the Banking Regulation Act will allow foreign investors to exercise voting rights in line with their shareholding. While the Reserve Bank of India has concerns on greater play for foreign banks, it will have no reservations in getting more powers for regulation of banks and supercession of borads, which are provided for in the Bill.

The government may also re-introduce the Micro-finance Development and Regulation Bill

Metal stocks rose on firm metal prices on London Metal Exchange. Tata Steel, National Aluminum Company, Hindalco Industries and Sterlite Industries rose by between 1.21% to 9.49%. LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.07% to 2,196.40 on Tuesday, 26 May 2009, on strong US consumer confidence report

Realty stocks rose on expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. DLF, Unitech, Indiabulls Real Estate and Housing Development & Infrastrucutre rose by between 2.93% to 8.49%.

In the last six weeks, three realty firms Unitech, DLF and Indiabulls Real Estate, have together raised Rs 8000 crore through qualified institutional placements (QIPs).

Outsourcing focussed IT stocks rose on a strong reading of US consumer confidence index. US is the biggest market for Indian IT firms. India's second largest software services exporter by sales Infosys was up 2.68% as its American depository receipt (ADR) rose 2.56% overnight. India's third largest software services exporter by sales Wipro rose 1.68% as its ADR rose 1.92% overnight. India's largest software services exporter by sales TCS rose 3.34%.

Capital goods stocks rose on expectations of increased infrastructure spending by the Congress-led UPA government to boost growth. India's biggest engineering & construction firm by revenue L&T up 4.51% and India's biggest power equipment maker by revenue Bharat Heavy Electricals (Bhel) was up 4.28%. Other capital goods stocks, Thermax, ABB, Crompton Greaves, Praj Industries Siemens and Punj Lloyd rose by between 0.33% to 7.53%.

Reliance Infrastructure rose 14.79%. The board of Reliance Infrastructure on Sunday, 24 May 2009, approved a new preferential offer of 43 million warrants to the company's promoters, convertible at Rs 1,000 a share, cancelling the current offer of equal size which expires on 19 July 2009 and which carried a conversion price of Rs 1,822 a share. If fully exercised the promoters the Anil Dhirubhai Ambani group would raise their stake in the company to 48%, from 38% currently, at a price of Rs 4,300 crore (against over Rs 7,800 crore through the earlier one).

PSU power firms rose on reports the government may dilute stakes in power sector firms to 51% over the next few years to raised about Rs 60000 crore. Rural Electrification Corporation of India, Power Finance Corporation, NTPC, Power Grid Corporation of India rose by between 0.22% to 4.92%.

India's largest cigarette maker by sales ITC fell 0.19% on reports the company will suspend production at all its factories in a phased manner to introduce pictorial warnings on cigarette packs from 1 June 2009.

Healthcare stocks rose on hopes newly elected UPA government will give primary importance to healthcare segment and health of citizens. Cipla, Sun Pharmaceuticals Industries, Dr Reddy's Laboratories, Biocon, Wockhardt, rose by between 0.68% to 9.84%.

India's largest drugmaker by sales Ranbaxy Laboratories jumped 7.14% after a sharp slide of 8.36% yesterday triggered by reports the firm could take a hit of as much as $50 million due to a delay in supplying a key ingredient to UK's AstraZeneca used to make anti-ulcer drug, Nexium.

The stock had surged 20.73% on Monday 25 May 2009 after its chief executive officer resigned on Sunday, 24 May 2009, as part of efforts to turn around the company. In a swift and unexpected move, Japanese drug maker Daiichi Sankyo on Sunday, 24 May 2009, took complete control of Ranbaxy Laboratories in which it had acquired 63.9% stake in June 2008 after all representatives of the former Indian promoter family resigned from the board. Following a board meeting on Sunday morning, former promoter Malvinder Mohan Singh, whose term was originally supposed to run till 2013, resigned as Chairman and Managing Director.

Besides Singh, two other Singh-family Board nominees, Sunil Godhwani and Balvinder Dhillon, also resigned. Tsutomu Une from Daiichi has been appointed chairman. Atul Sobti, who was originally nominated on the board by the former Indian promoters, has been appointed as CEO and MD for three years.

Airlines stocks rose on hopes the newly elected government may allow foreign direct investment in the sector. Jet Airways , SpiceJet and Kingisher Airlines rose by between 1.43% to 5.57%.

The Indian aviation industry has been plagued by large losses, rising debt levels and a serious liquidity crunch. According to reports, measures like increasing the present cap on foreign direct investment (FDI) in the aviation sector as well as withdrawing the restrictions on investment by foreign airlines in the domestic carriers are important to save the industry from the current crisis that it finds itself in.

Currently, foreign airlines are not allowed to pick up equity in aviation companies while foreign investors and financial institutions can hold up to a 49% stake.

Shares of state-run companies rose on hopes of recommencement of the PSU disinvestment programme after the Congress-led UPA government got a clear mandate in the Lok Sabha election.

HMT, Shipping Corporation of India, Hindustan Copper, Power Finance Corporation and Central Bank of India rose by between 2.9% to 9.93%.

It may be recalled that the BJP-led National Democratic Alliance (NDA) had vigorously pursued PSU divestment. However, it was put in deep freeze in the last five years by the Congress-led United Progressive Alliance (UPA) government as the Left parties which supported the UPA government from outside, were bitterly opposed to the idea.

Consequently, in the past five years, the government raised just Rs 8,500 crore from disinvestment as against Rs 28,000 crore raised by the BJP-led government in the preceding five-year period.

Some sugar stocks fell after the commodities regulator suspended futures trade in sugar to drive prices lower. Bajaj Hindustan, Balrampur Chini and Shree Renuka Sugars fell by between 1.45% to 3.52%.

The Forward Markets Commission (FMC) on Tuesday, 26 May 2009, suspended futures trading in sugar till 31 December 2009, even as the trade was betting on further liberalisation after the Government recently lifted the two-year ban on wheat futures.

Cals Refineries clocked the highest volume of 12.76 crore shares on BSE. Alok Industries (2.43 crore shares), Idea Cellular (1.99 crore shares), Reliance Natural Resources (1.8 crore shares) and Unitech (1.64 crore shares) were the other volume toppers in that order.

Reliance Infrastructure clocked the highest turnover of Rs 388.64 crore on BSE. Reliance Capital (Rs 248.75 crore), Bharti Airtel (Rs 248.16 crore), DLF (Rs 243.48 crore) and Reliance Industries (Rs 199.97 crore) were the other turnover toppers in that order.

Pre Session Commentary - May 27 2009

Today domestic markets are likely to open with a positive gap as majority of Asian markets have opened with phenomenal gains on the back of huge surge witnessed in US markets last night. The better than expected consumer confidence data in US has increased hopes of traders across the world about improving economic condition of US. In the domestic scenario the abrupt surge is likely to bring some profit booking pressures as the F&O expiry will happen tomorrow.

On Tuesday, the domestic markets closed in deep red. After a subdued opening the markets turned volatile to find some cues form other markets. However as the trading progressed, selling pressure emerged on the back of weak cues from the European markets. Rate sensitive sectors like Realty, Bankex and CG plunged by 3.96%, 3.13%, 3.06% and 3.01% respectively. On the other hand IT was the only sector to survive the blaze. Today Mid cap and Small cap stocks also conceded bulk points due to the profit booking pressure as they had gained enough during the previous couple of days trading. We expect the markets to be trading positive.

The BSE Sensex closed low by 323.99 points at 13,589.23 and NSE Nifty ended with a loss of 120.85 points at 4,116.70. BSE Mid Caps and Small Caps closed with losses of 166.06 points and 180.77 points at 4,724.09 and 5,608.66 respectively. The BSE Sensex touched intraday high of 13,991.46 and intraday low of 13,518.79.

On Tuesday, the US Markets closed with huge positive gains due to better than expected consumer confidence data. The sentiments strengthened after the May consumer confidence data was far better than expected at 54.9 as against the prior month data of 40.8. The Retailers also spiked by a remarkable 4.0% as the buying sentiment erupted with expectations of the improving economic condition. On the other hand Auto giant General Motors also gained momentum by climbing 3.8% due to news from Wall Street Journal that the United Auto Workers Union said the government will provide massive additional assistance to GM. Technology sector also advanced by a remarkable 3.3% as the analyst at Morgan Stanley upgraded the stock of tech major Apple. The US light crude oil for June delivery inclined by 1.2% to settle at $62.38 a barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed up by 196.17 points at 8,473.49, the NASDAQ Composite (RIXF) index inclined by 58.42 points to close at 1,750.43 and the S&P 500 (SPX) gained by 23.33 points to close at 910.33.

Today major stock markets in Asia are trading positive. Hang Seng is trading up by 737.37 points at 17,728.93 followed by Shanghai Composite which is up by 21.37 points at 2,609.95. Japan''s Nikkei is up by 180.32 points at 9,491.13, Strait Times is up by 42.40 points at 2,281.19. Seoul Composite is up by 23.96 points at 1,396 respectively.

The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 5,092.60 Crore and gross debt purchased stood at Rs 223.50 Crore, while the gross equity sold stood at Rs 2,046.50 Crore and gross debt sold stood at Rs. 197.00 Crore. Therefore, the net investment of equity and debt reported were Rs 3,046.20 Crore and Rs 26.60 Crore respectively.

On Tuesday, the partially convertible rupee closed at 47.88/90 per dollar, 1.25% weaker than it previous close at 47.28/30. This was the biggest fall of local currency against the green in three months due to fall in the local stock markets.

On BSE, total number of shares traded were 85.08 Crore and total turnover stood at Rs 6,938.19 Crore. On NSE, total number of shares traded was 135.76 Crore and total turnover was Rs 19,358.86 Crore.

Top traded volumes on NSE Nifty – Unitech with 79845452 shares, Suzlon Energy with 43185625 shares, Hindalco with 14748839 shares, Reliance Comm with 14664713 shares followed by Bharti Airtel with 13575114 shares.

On NSE Future and Options, total number of contracts traded in index futures was 953672 with a total turnover of Rs 19,554.31 Crore. Along with this total number of contracts traded in stock futures were 552399 with a total turnover of Rs 28,286.93 Crore. Total numbers of contracts for index options were 1312880 with a total turnover of Rs 27,759.24 Crore and total numbers of contracts for stock options were 34143 and notional turnover was Rs 1,795.57 Crore.

Today, Nifty would have a support at 4,164 and resistance at 4,220 and BSE Sensex has support at 13,755 and resistance at 13,965.

Market may stage a comeback

The firm rally in the US markets and a rise in several Asian indices in the ongoing trading session may help the domestic indices pull-back from lower levels. However, lack of clarity in the market and volatility may drag down the market. Among the indices, the Nifty could face a resistance at 4150-4200 levels and has a likely supports at 4050-4000 levels.

US indices bounced back sharply and finished higher, after a report showing consumer confidence hit an eight-month high offset dismal housing news. As a result the Dow Jones gained 196 points to close at 8473, the Nasdaq ended 58 points higher at 1750.

Barring few, most of the Indian floats had a field day on the US bourses. Patni Computer flared up by 9.23% and HDFC Bank jumped 3.08% , while Dr Reddy's, Infosys, Wipro, MTNL and Wipro gained around 1-3% each. Among the laggards VSNL slipped 11.46%, Rediff fell 11.13%, ICICI Bank lost 1.02%, Tata Motors lost 1.02% and Satyam Computers was down by 0.93%.

Crude oil prices raised a little, with the Nymex light crude oil for July delivery advanced by 78 cents to close at $62.45 a barrel. In the commodity space, the Comex gold for June delivery slipped by $5.60 to settle at $953.30 an ounce.

SGX Nifty shows huge gap up

4,222.0 +114.5

Daily News Roundup - May 27 2009

Bharti gets US$4bn bridge loan for MTN deal (ET)

SAIL, NMDC and RINL mull Rs130bn expansion this fiscal (FE)

Government may kickstart its big ticket disinvestment plan by diluting stakes in power sector firms such as NTPC, NHPC and PowerGrid to 51% over the next few years (ET)

Mr N Chandrasekaran, COO & ED, will take over from Mr S Ramadorai as CEO of TCS (ET)

Madras High Court dismisses Bajaj Auto’s appeal seeking a stay on TVS Motors to manufacture and market ‘Flame’ (ET)

L&T plans to raise Rs10bn through NCDs (BL)

Nalco lowers metal prices by 5% (BL)

S&P retains stable outlook rating on Bharti (ET)

Wipro Infotech to invest Rs2bn to set-up its own data centres in India (BS)

RCOM to demerge optic fibre division (FE)

Unitech sells hotel in Gurgaon for Rs2bn (BS)

DLF, Mundra Port, SEZ plans to be reviewed by the board of approval for SEZs (ET)

DLF, Unitech, HDIL and Puravankara line-up 60mn sqft of new launches (BS)

Decks have been cleared for the merger of the Indian operations of APB with United Breweries (ET)

Reliance Power may earn Rs40bn from carbon credit sales (ET)

PTC to raise ~Rs5bn via QIP (BS)

Bharti Group JV enters food & beverages market (BS)

Sobha Developers ties-up with a private investor for joint development of projects (BL)

Public sector banks plan to cut lending rates by 100-150 bps (ET)

Finance Ministry and RBI to meet on May 30th for revising the schedule and amount of government borrowings (ET)

Government to clear 21 infrastructure projects worth Rs200bn (ET)

Government likely to double the price of natural gas sold through APM to US$4.2/mmbtu (BS)

DoT has proposed to allocate 80% of wireless spectrum on the international border to the defense forces (BS)

Peak energy deficit soared to 12.2% in April against 11.6% in March (FE)

Crude oil imports dip 12.1% in April (FE)

Government is considering a proposal to do away with FBT in the upcoming Budget (ET)

Power-full start for bulls

We have learned that power is a positive force if it is used for positive purposes.

The contraction did take place in the market while the expansion in the cabinet is scheduled for tomorrow. The bulls are set for a powerful start with global cues to the rescue. On the local front, the govt appears to be sending out the right signals, except for the diktat to state-run banks on rate cuts and the ban on sugar futures. Big ticket disinvestment plans in power sector firms are grabbing headlines. Efforts are on to announce the budget in time as well. FBT may be given a burial too.

In the US, consumer confidence has shot up to the highest level since September. But, home prices fell 19% in the Jan-Mar quarter yoy. In Japan, exports tumbled again in April, but the slide seems to be abating a bit. The Hang Seng has crossed 17,500. The Nikkei ended the morning session up 1.5%. Meanwhile, crude oil has risen past $62 per barrel ahead of the OPEC meet on Thursday.

We expect a rebound in key indices. But, things could turn volatile as traders consider their moves before tomorrow’s F&O expiry. Stock specific and sector centric action will continue, especially in the broader market.

Key Results: Asahi India, BHEL, Britannia, Cairn India, Emco, Godrej Industries, Indraprastha Gas, Jindal Steel, MRPL, NIIT, Panacea Biotec and Tamil Nadu Newsprint & Paper.

FIIs were net sellers in the cash segment on Tuesday at Rs1.97bn while the local institutions too pulled out Rs1.38bn. In the F&O segment, the foreign funds were net sellers at Rs12.5bn. On Monday, FIIs were net buyers at Rs30.46bn in the cash segment. Mutual Funds were net buyers at Rs3.88bn on the same day.

US stocks climbed on Tuesday, with the Dow gaining nearly 200 points, spurred by a strong reading on consumer confidence.

The Dow Jones Industrial Average jumped 195 points, or 2.3%, 8,473.49. The S&P 500 index gained 23 points or 2.6%, to 910.33. The Nasdaq Composite index was surged 58 points or 3.4%, to 1,750.43. Tuesday marked the first time the Dow and S&P 500 closed in positive territory since May 18.

Eleven stocks gained for each that fell on the New York Stock Exchange, the broadest rally since May 18. The Russell 2000 Index of small companies rose 4.8% for the steepest advance since April 9.

US stocks opened lower on concerns about North Korea, which had test-fired missiles after conducting a nuclear test on Monday, along with worries over a report that showed a record plunge in US home prices. But a much stronger than expected consumer confidence index offset some of those concerns.

The rally was broad-based, with 28 of the 30 Dow components advancing. IBM, which jumped 3%, led the gainers. Shares of energy producers rose as the price of oil closed at a six-month high, above $62 a barrel. Consumer names, such as McDonalds and Wal-Mart also advanced.

The Conference Board's Consumer Confidence Index rose to 54.9 in May from 40.8 in April. Economists had expected the index to rise to 42. The index now stands at its highest level since September, when it reached 61.4. But that's still low by historical standards.

Home Depot rose 4.1% and helped lead an index of consumer discretionary stocks up 3.8% for the biggest advance among 10 S&P 500 groups after financials.

Separately, a closely watched index of home prices dropped a record 19.1% in the first quarter. The S&P/CaseShiller Home Price Index, which tracks 20 of the largest housing markets, has plummeted 32.2% from its July 2006 peak and has declined for 32 straight months. It fell 18.2% in the previous quarter.

The S&P/Case- Shiller home-price index decreased 18.7% from March 2008, matching the drop in the year ended in February. The measure declined 19% in January, the most since data began in 2001.

The fate of General Motors (GM) and Chrysler still hangs in balance. Tuesday was the last day for GM bondholders to accept an offer to swap $1,000 of the debt for 225 shares of the company. GM faces a June 1 deadline to produce a turnaround plan or file for bankruptcy.

Shares of Apple rose 6% after analysts at Morgan Stanley upgraded the iPhone maker's stock. Qualcomm shares rallied 4.8% after the world’s biggest maker of mobile-phone chips had its 2010 earnings estimates raised at Barclays.

JPMorgan Chase advanced 6.2% as the New York-based bank stands to reap a $29 billion windfall thanks to an accounting rule that lets the second-biggest US bank transform bad loans it purchased from Washington Mutual into income.

Treasury prices slipped, with the yield on the benchmark 10-year at 3.51%. The Treasury sold $40 billion in 2-year notes, kicking off a week packed with debt auctions. The 2-year note sale was strongly bid for, with $117.5 billion in bids coming in for $40 billion in debt.

The auction drew the most demand from a group of investors that includes foreign central banks since November 2006. The sale helped ease concern international investors will begin to shy away from US Treasuries.

Oil for July delivery rose 68 cents to settle at $62.45 a barrel ahead of an OPEC meeting on Thursday. Traders expect the cartel to leave output unchanged at the meeting. Oil prices have settled above the $60 mark for four straight sessions and are now at a more than 6-month high.

In currency trading, the dollar was mixed against its major trading partners. The greenback rose against the euro but fell against the pound and the yen. COMEX gold for June delivery fell $5.60 to settle at $953.30 an ounce.

A report on existing home sales is due shortly after the opening bell on Wednesday. Durable goods orders and a revision of the first-quarter gross domestic product (GDP) report are also on tap this week.

European shares reversed early losses to close higher, as positive consumer-confidence data out of the US raised hopes that the world's largest economy is starting to recover. The pan-European Dow Jones Stoxx 600 index, which was lower for most of the session, gained 0.8% to 208.96.

Germany's DAX 30 index was up 1.4% at 4,985.60 while the French CAC-40 index added 1.1% to 3,270.09. The UK's FTSE 100 index climbed 1.1% to 4,411.72.

Markets witnessed a sharp sell off on Tuesday ahead of the F&O expiry. Offloading in the heavyweights dragged the NSE Nifty to drop below the 4,100 levels in intra-day trades.

The BSE Mid-Cap and the Small-Cap stocks which outperformed the benchmark indices also witnessed some profit booking. Both the small-and the mid-cap indices ended lower by 3% each.

The Sensex slipped 324 points or 2.3% to close at 13,589 after touching a high of 13,991 and a low of 13,518. The index had opened at 13,929 against the previous close of 13,913.

The NSE Nifty fell 130 points or 3% to shut shop at 4,107.

Among the BSE Sectoral indices BSE Realty index was the top loser. The index lost 4%, followed by the BSE Capital Goods index down 3.2%, BSE Power index down 3.1%, BSE Consumer Durable index down 3.1% and BSE Oil & Gas index down 2.7%. Bucking the negative rend was the BSE IT index up 0.5%.

Shares of Parsvnath Developers’ surged by over 4.5% to Rs92 after the board of directors approved a proposal to raise up to Rs25bn by issuing fresh shares to institutional buyers. The scrip touched an intra-day high of Rs98 and a low of Rs90 and recorded volumes of over 2.3mn shares on BSE.

Dishman Pharma was locked at 20% upper circuit to Rs174 after the company’s full-year profit rose 55% from a year earlier. The scrip touched an intra-day high of Rs174 and a low of Rs150 and recorded volumes of over 0.5mn shares on BSE.

Shares of Bharti Airtel dropped by over 5% to Rs770. Reports stated that the company has reopened discussions to acquire a 49% stake in South Africa’s MTN for over US$23bn in a cash-cum-stock swap.

The deal will need the approval of the foreign investment promotion board, in the absence of a policy on share swaps.

The scrip touched an intra-day high of Rs858 and a low of Rs760 and recorded volumes of over 1.8mn shares on BSE.

Shares of L&T declined by over 4% to Rs1254 after reports stated that the Uttarakhand government asked the company to stop work on its 99MW Singoli-Bhatwari hydel project in the hilly Rudraprayag district of the state. The scrip touched an intra-day high of Rs1322 and a low of Rs1245 and recorded volumes of over 0.5mn shares on BSE.

The outlook continues to remain a bit cautious for the coming days as Tuesday saw a breather in the broader markets as well. In addition, the global economic slowdown, sluggish local economy, ballooning fiscal deficit continue to remain as headaches.

However, stock specific action cannot be ruled out, especially in the broader markets. A lot will also depend on the global cues.

Crude pares early losses

Upbeat consumer sentiment data help crude pare early losses

Crude oil prices pared earlier losses and ended modestly higher on Tuesday, 26 May 2009. Prices fell earlier during the day as dollar climbed up. But then, with upbeat consumer sentiment data, prices gave up earlier losses and climbed up on global recovery hopes. Oil also fell earlier in the session on expectations that the Organization of Petroleum Exporting Countries won't cut production quotas at their next meeting scheduled on Thursday, 28 May, 2009.

On Tuesday, crude-oil futures for light sweet crude for June delivery closed at $62.37/barrel (higher by $0.70 or 1.1%). It fell to a low of $59.53 earlier during the day. Last week, crude ended higher by 8.2%.

Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 55% since then. Year to date, in 2009, crude prices are higher by 29.7%. On a yearly basis, crude prices are lower by 51%.

In the currency market on Tuesday, the U.S. dollar index, rose 0.9%. The greenback rose considerably today on positive consumer sentiment data.

The Conference Board in US reported on Tuesday, 26 May, 2009 that reading on U.S. consumer confidence jumped to 54.9 in May from an upwardly revised 40.8 in April as expectations for jobs improved. Market was expecting a reading around 43. Consumers have brighter expectations for jobs in coming months, but their overall confidence remains relatively low. The gain is the fourth-largest in the 32-year history of the survey, and the index is at its highest level in eight months.

The report detailed that for May, consumers' expectations rose to 72.3 from 51 as those expecting business conditions to improve rose to 23.1% from 15.7%, and those expecting more jobs rose to 20% from 14.2%. Consumers' appraisal of the present situation rose to 28.9 from 25.5, though many still view business conditions as "bad."

Also at the Nymex on Tuesday, June-reformulated gasoline fell slightly to $1.8375 a gallon, and June heating oil rose 0.3% to $1.5418 a gallon.

Natural gas for June delivery rose 0.1% to $3.517 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for June delivery closed at Rs 2,942/barrel, higher by Rs 41 (1.41%) against previous day's close. Natural gas for June delivery closed at Rs 172.6/mmbtu, higher by Rs 1.9/mmbtu (1.1%).

Bullion metals turn pale

Strong dollar and upbeat consumer data drag bullion metals lower

Precious metals ended lower on Tuesday, 26 May, 2009 at Comex. Prices gave up some of their prior week's gains after upbeat consumer sentiment data hit the wires today. The strong dollar also played a pivotal role in getting bullion metals down.

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 Tuesday, Comex Gold for June delivery fell $5.6 (0.6%) to close at $953.3 an ounce on the New York Mercantile Exchange. Earlier during the day, it fell to a low of $936.6. Last week, gold ended higher by 3%. Year to date, gold prices are higher by 9.7%.

For the month of April, gold had lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.

On Tuesday, Comex silver futures for July delivery fell 9.5 cents (0.6%) at $14.6 an ounce. Year to date, silver has climbed 28.4% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the U.S. dollar index, rose 0.9%. The greenback rose considerably today on positive consumer sentiment data.

The Conference Board in US reported on Tuesday, 26 May, 2009 that reading on U.S. consumer confidence jumped to 54.9 in May from an upwardly revised 40.8 in April as expectations for jobs improved. Market was expecting a reading around 43. Consumers have brighter expectations for jobs in coming months, but their overall confidence remains relatively low. The gain is the fourth-largest in the 32-year history of the survey, and the index is at its highest level in eight months.

The report detailed that for May, consumers' expectations rose to 72.3 from 51 as those expecting business conditions to improve rose to 23.1% from 15.7%, and those expecting more jobs rose to 20% from 14.2%. Consumers' appraisal of the present situation rose to 28.9 from 25.5, though many still view business conditions as "bad."

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last 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.

Prior to 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 June delivery closed lower by Rs 16 (0.1%) at Rs 14,572 per 10 grams. Prices rose to a high of Rs 14,669 per 10 grams and fell to a low of Rs 14,518 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 107 (0.46%) lower at Rs 22,749/Kg. Prices opened at Rs 22,830/kg and fell to a low of Rs 22,553/Kg during the day's trading.

Bharti Airtel may see action

Bharti Airtel is reportedly learnt to have received a commitment from Standard Chartered Bank to raise a $4-billion bridge loan to finance its deal with MTN. According to reports, Standard Chartered has agreed to fully underwrite Bharti's net acquisition cost. However, it has not yet been decided whether the UK-headquartered bank will put together a syndicate to finance the deal.

Seperately, global rating agency Standard & Poor's on Tuesday said it has affirmed its ‘BBB-' long-term corporate credit rating on Bharti Airtel, with a stable outlook, following the company's renewed efforts for a partnership with South Africa-based MTN Group.

State-run banks reporteedly plan to cut lending rates by 100-150 basis points within a fortnight following a finance ministry directive to lower interest rates in line with falling cost of funds.

ITC will reportedly have to suspend production at all its factories to introduce pictorial warnings on cigarette packs from 1 June 2009, but it will make sure there was no supply gap in the market.

Wipro's chairman Azim Premji said the company's operations were expanding fast in the Middle East, which it sees as a main growth area. The Middle East's share of Wipro's total sales is 6%, said Premji, adding that this was set to increase in the future. He did not give figures.

Sobha Developers sold stake in projects in Bangalore and other cities for a total consideration of Rs 225 crore from Bangalore-based Purna Partners. The firm entered into a term sheet with Purna Partners and has received Rs 25 crore from the investor on Tuesday, 26 May 2009.

The government may reportedly dilute stakes in power sector firms such as NTPC, NHPC and Power Grid Corporation of India to 51% over the next few years for about Rs 60000 crore.

India is reportedly likely to double the price of natural gas sold through the administered price mechanism to $4.2 per million metric British thermal unit, which is equivalent to the price Reliance Industries gets for its KG basin gas, a move that could boost profits of ONGC and unlisted Oil India.

Unitech has reportedly sold its under-construction hotel in Gurgaon for Rs 200 crore to an unidentified individual and is close to selling a service apartment for Rs 200 crore.

Reliance Power, a unit of the Reliance-Anil Dhirubhai Ambani Group, has reportedly achieved financial closure for its 1,200 megawatt, coal-fired Rosa power plant in Uttar Pradesh by raising at least Rs 2400 crore from a domestic consortium.

Monnet Ispat & Energy has bought back 12.8 lakh shares at an average price of Rs 141.52 a share. The buyback begun on 8 December 2008 and closed effective 22 May 2009. The total amount invested in the buyback was Rs 18.20 crore, which is 24.27% of the maximum offer size authorised by the buyback.

Coromandel Fertilisers is reportedly in talks to invest Rs 3000 - Rs 4000 crore to set up a urea and ammonia manufacturing plant in a West Asian country, the details of which will be finalised close to December 2009. Net profit of Cummins India rose 56.32% to Rs 118.18 crore in the quarter ended March 2009 as against Rs 75.60 crore during the previous quarter ended March 2008. Sales rose 53.39% to Rs 1027.68 crore in the quarter ended March 2009 as against Rs 670.00 crore during the previous quarter ended March 2008.

Net profit of Tata Communications rose 439.66% to Rs 302.37 crore in the quarter ended March 2009 as against Rs 56.03 crore during the previous quarter ended March 2008. Sales rose 3.67% to Rs 886.93 crore in the quarter ended March 2009 as against Rs 855.53 crore during the previous quarter ended March 2008. The company earned a profit of Rs 347 crore during the latest March quarter from the sale of shares in group firm Tata Teleservices.

Cairn , BHEL (Audited), Britannia Industries, Godrej Industries, Jindal Steel & Power, Garware Wall & Ropes, NIIT, Shanti Gear, Tamil Nadu Newsprint & Papers, among others will declare March 2009 ended quarter results today, 27 May 2009.