Dead Presidents! - India Equity Research: May 29, 2009

Friday, May 29, 2009

The domestic market closed the session on a strong note backed by heavy buying across the sectoral indices. The rally was supported by better than expected fourth quarter GDP growth that boosted the expectations that the economy will grow at a faster pace this fiscal. India’s GDP grew a faster than expected 5.8 percent in the March quarter from a year earlier. Adding to this, the comments from oil minister, Murli Deora that he would seek the approval of the cabinet for the oil price deregulation in the next 6 to 8 weeks, which spurred the oil and energy stocks to witnesses hue buying. Moreover, the positive global cues also supported the investors sentiments.

The market opened the session with decent gains tracking the positive global markets and favoring cues from the domestic markets and kept on marching forward for the most part of the session. The market gained further momentum on GDP numbers and continued its northward journey. However, the market comes off marginally from the day’s in the final hours on selective profit booking. Moreover, in the global arena, the US market closed in green on the back of a surprise auction of the 7-year Treasury Note auction. The auction’s bid-to-cover ratio came in just below 2.3 which was parallel with the prior three similar auctions. The yield on the 10-year note increased by 28 ticks to 3.64% 2009 high. Also added to the sentiments was the new-home sales up 0.3% to a seasonally adjusted rate of 352,000 in April 2009, less than expected. Along with this, the continuing jobless claims stands at 6.8 million and the initial data of weekly claims recorded at 6,23,000. However, benchmark indices gained strength during the session with BSE Sensex closed above 14,727.28 level and NSE Nifty above 4,440 mark. From sectoral front, investors on-loaded position across the sectors led by Realty, Capital Goods, Consumer Durables, Auto and Oil & Gas index.

The GDP for the fourth quarter of the current fiscal stood at 5.8% from a year earlier. However, the GDP for the current fiscal 2008-09 as a whole was down 6.7% as against the previous projection of 7.1%. The previous fiscal GDP was 8.8%. During the January-March quarter, the manufacturing sector contracted 1.4 percent from a year earlier, while the farm output grew an annual 2.7 percent, government data showed on Friday.

Among the Sensex pack 26 stocks ended in green territory and 4 in red. The market breadth indicating the overall health of the market remained firm as 2,147 stocks closed in positive while 649 stocks closed in negative and 56 stocks remained unchanged in BSE.

The BSE Sensex closed up by 329.24 points or 2.30% at 14,625.25 and NSE Nifty closed higher by 111.85 points or 2.58% at 4,448.95. BSE Mid Caps and Small Caps closed with gains of 121.18 and 175.13 points at 5,056.74 and 5,986.82. The BSE Sensex touched intraday high of 14,727.28 and intraday low of 14,319.87.

Gainers from the BSE Sensex pack are ACC Ltd (8.56%) followed by Dlf (8.41%), JP Associates (8.21%), TCS (6.05%), Tata Steel (5.92%) and M&M (5.67%).

Losers from the BSE Sensex pack are Sun Pharma (8.24%) along with Grasim industries (3.59%), Tata Power (2.47%) and ITC (0.05%).

On the global markets front the Asian markets which opened before the Indian market, closed in green. Hang Seng, Strait Times, Nikkei and Seoul Composite closed up by 1.60%, 1.57%, 0.75%, 0.27% at 18,171, 2,329.08, 9,552.50 and 1,395.89 respectively.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 1.38% at 5,001.17 and in London FTSE 100 is trading higher by 1.36% at 4,447.35.

The BSE Realty index surged (6.76%) or 241.95 points to close at 3,819.89. Main gainers are Ansal Infra (9.58%), India Bull Real (9.13%), Phoenisx Mill (9.09%), DLF (8.41%), Orbit Co (7.74%) and Omaxe Ltd. (5.67%).

The BSE Capital Goods index surged (4.13%) or 472.67 points at 11,921.39. Scrips that mostly gained are Reliance Industrial Infra (13.56%), Jyothi Structure (9.98%), AIA Engineeering (8.04%), Punj Lloyd (7.55%), L&T (4.75%) and Praj Industries (4.45%).

The BSE CD index also ended higher by (3.55%) or 94.59 points at 2,758.07. Blue Star (6.23%), Videocon Industries (5.22%), Titan Industries (4.19%), Gitanjali Gems (1.35%) and Rajesh Export (0.56%) ended in positive territory.

The BSE Auto index grew (3.41%) or 151.95 points to close at 4,610.61. Gainers are Ashok Leyland (8.71%), Bajaj Auto (8.27%), Mahindra & Mahindra (5.67%) and Maruti Suzuki (2.32%).

The BSE Oil and Gas advanced (3.31%) or 333.60 points at 10,419.47. Gainers are HPCL (8.33%), Indian Oil (6.90%), Cairn India (6.12%), Gail India (5.01%), RPL (3.75%) and Aban Offshore (3.51%).

The BSE Metal stocks gained (3.11%) or 328.47 points to close at 10,878.42. Gainers are NMDC (6.35%), Tata Steel (5.92%), SAIL (5.17%), Jai Corp (5%) and Hindalco Industries (3.93%).

The BSE IT increased (2.37%) or 69.40 points at 2,997.55. Gainers are Financial Technologies (8.56%), TCS (6.05%), Wipro (3.57%) and Tech Mahindra (2.22%).

Bank of India surged 4.21% to close at Rs337.85. The bank has announced the Audited Consolidated results for the Year ended March 31, 2008. The Group has posted a net profit of Rs 30875.40 million for the year ended March 31, 2009 as compared to Rs 19598.40 million for the year ended March 31, 2008. Total Income has increased from Rs 145284.10 million for the year ended March 31, 2008 to Rs 194930.50 million for the year ended March 31, 2009.

Indian Oil Corporation Ltd galloped 6.90% to Rs609.30. The company has posted a net profit of Rs 66229.60 million for the quarter ended March 31, 2009 where as the same was net loss at Rs (4142.70) million for the quarter ended March 31, 2008. Total Income is Rs 605998.00 million for the quarter ended March 31, 2009 where as the same was at Rs 717928.20 million for the quarter ended March 31, 2008.

Tata Motors Ltd shot up 1.22% to close at Rs336.70. The company has posted a net profit of 10012.60 million for the year ended March 31, 2009 as compared to Rs 20289.20 million for the year ended March 31, 2008. Total Income has decreased from Rs 292225.90 million for the year ended March 31, 2008 to Rs 265867.60 million for the year ended March 31, 2009.

IVRCL Infrastructures & Projects Ltd closed up by 9.17% at Rs329.15. The company has posted a net profit of Rs 798.823 million for the quarter ended March 31, 2009 as compared to Rs 733.028 million for the quarter ended March 31, 2008. Total Income has increased from Rs 13227.416 million for the quarter ended March 31, 2008 to Rs 16359.305 million for the quarter ended March 31, 2009.

Sanghvi Movers

BSE Bulk Deals to Watch - May 29 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
29/5/2009 522150 ADITYA FORGE DHANVANTIHEMCHANDGALA S 27300 3.23
29/5/2009 532981 ANU LABS KABIR GOBIND GUMNANI S 800000 33.47
29/5/2009 512535 ASAHI INFR P JATINRATHI S 200000 1.47
29/5/2009 522005 AUSTIN ENGG.* BAJAJ HOLDINGS & INVESTMENTS LTD. S 18799 61.15
29/5/2009 512149 AVANCE TECHN JASMIN SUSILKUMAR BAJORIYA B 25000 20.37
29/5/2009 512149 AVANCE TECHN CHANDRAKANTBSHAH B 30000 20.37
29/5/2009 512149 AVANCE TECHN JASMINSBAJORIYA B 40000 20.37
29/5/2009 512149 AVANCE TECHN VIHANGIDSHAH S 50000 20.37
29/5/2009 512149 AVANCE TECHN JITENDRARAMANIKLALMODY S 29690 20.37
29/5/2009 532406 AVANTEL LTD* AVANTEL LIMITED B 55401 49.00
29/5/2009 532995 AVON CORP DHEERAJ KUMAR . . . . ... B 97448 8.59
29/5/2009 531733 BAFNA SPINNI PUKHRAJHIRACHANDBAFNA S 250000 2.24
29/5/2009 531719 BHAGIR CHE I VVSS ESTATES PRIVATE LIMITED B 39500 53.88
29/5/2009 531719 BHAGIR CHE I VVSS AGRO FARMS PRIVATE LIMITED B 60500 54.37
29/5/2009 531719 BHAGIR CHE I SSVV ESTATES PRIVATE LIMITED S 40000 53.88
29/5/2009 531719 BHAGIR CHE I SSVV AGRO FARMS PRIVATE LIMITED S 60500 54.37
29/5/2009 512253 BIO GREEN I RAMESHJAMNADASBHAYANI S 50000 13.19
29/5/2009 512253 BIO GREEN I PANKAJJAMNADASBHAYANI S 50000 13.19
29/5/2009 530207 BRAWN PHARMA R K TULI S 15200 34.68
29/5/2009 590076 CAMSON BIO GRAND SLAM INVESTMENT PVT LTD S 50000 42.85
29/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD B 831060 5.95
29/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD B 177200 6.00
29/5/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 580255 5.99
29/5/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD S 392200 5.95
29/5/2009 505923 CEEKAY DIAKI VISHWAS SECURITIES LTD. B 26510 32.70
29/5/2009 531270 DAZZEL CONFI JAYESHRAMESHBHAIRAIYANI B 30000 6.08
29/5/2009 531270 DAZZEL CONFI SRIDEVI.MEDABALMI S 34985 6.08
29/5/2009 521216 DHANALA RO S VAISHAK SHARES LIMITED B 30500 9.79
29/5/2009 521216 DHANALA RO S NANDISHGKUMAR S 30500 9.79
29/5/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH B 36124 101.96
29/5/2009 532022 FILAT FASH CHANDRESHCHANDRAKANTSHAH S 35584 102.01
29/5/2009 532622 GATEWAY DIST PEGASUS STOCK & SHARES PVT LTD B 747630 98.09
29/5/2009 532715 GITANJALI GE* BNP PARIBAS ARBITRAGE B 453269 123.85
29/5/2009 532715 GITANJALI GE* SWISS FINANCE CORPORATION (MAURITIUS) LIMITED S 453269 123.85
29/5/2009 500179 HCL INFOSYS BNP PARIBAS ARBITRAGE B 928767 117.50
29/5/2009 500179 HCL INFOSYS ABN AMRO BANK NV S 928767 117.50
29/5/2009 504176 HIGH ENERGY BP FINTRADE PRIVATE LIMITED B 7015 124.27
29/5/2009 516078 JUMBO BAG LT J V STOCK BROKING PRIVATE LIMITED B 35951 28.87
29/5/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 40500 29.14
29/5/2009 516078 JUMBO BAG LT HEMENDRA AGARWAL B 51000 28.60
29/5/2009 532081 K SERA SERA S V ENTERPRISES B 426356 14.42
29/5/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD S 600000 14.49
29/5/2009 532081 K SERA SERA S V ENTERPRISES S 426356 14.48
29/5/2009 511131 KAMAN HSG MOHANKARNANI S 88686 33.14
29/5/2009 532283 KASHYAP TEC JMP SECURITIES PVT LTD B 3407935 1.21
29/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. B 60686 7.98
29/5/2009 530255 KAY POW PAP B.S.KHANDELWAL B 127647 8.20
29/5/2009 530255 KAY POW PAP BAMPSL SECURITIES LTD. S 70961 8.20
29/5/2009 530255 KAY POW PAP PRAKASHCHANDGUPTA S 59908 8.17
29/5/2009 530255 KAY POW PAP GIRRAJPRASADGUPTA S 65000 7.98
29/5/2009 590011 MOVING PICTU-PMS GAURAVCHHABRA B 60000 5.65
29/5/2009 590011 MOVING PICTU-PMS BHARATH KUMAR BANAVARA ESWARAIAH S 76355 5.65
29/5/2009 532045 NEXXOFT INFO HARSHAHARESHCHHATBAR S 52216 13.79
29/5/2009 532045 NEXXOFT INFO SNEHAPANKAJDESAI S 50000 13.79
29/5/2009 532045 NEXXOFT INFO MUKESHHIRALALDOCTARIA S 50000 13.75
29/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD B 62239 33.06
29/5/2009 532986 NIRAJ CEMENT AYODHYAPATI INVESTMENT PVT LTD S 72701 33.15
29/5/2009 532986 NIRAJ CEMENT RAJ CORPORATION S 150000 33.08
29/5/2009 590057 NORTHGATE TE Naman Securities & Finance Pvt. Ltd. B 240329 44.80
29/5/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD B 250925 44.75
29/5/2009 590057 NORTHGATE TE BP FINTRADE PRIVATE LIMITED B 200066 44.81
29/5/2009 590057 NORTHGATE TE Naman Securities & Finance Pvt. Ltd. S 237027 44.75
29/5/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD S 217925 44.81
29/5/2009 533008 OCL IRON&ST GARIMA BUILDPROP PRIVATE LIMITED B 13414316 21.00
29/5/2009 533008 OCL IRON&ST RAGHU HARI DALMIA S 13414316 21.00
29/5/2009 532827 PAGE INDUSTR ICICI PRUDENTIAL MUTUAL FUND A/C DISCOVERY FUND B 80000 450.00
29/5/2009 570002 PANTALBNDVR BLESSINGS MERCANTILE PRIVATE LIMITED B 113757 236.25
29/5/2009 570002 PANTALBNDVR ASHITABPAREKH S 82157 236.25
29/5/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD B 157596 1076.77
29/5/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC OPG SECURITIES P LTD S 157596 1077.76
29/5/2009 526753 ROSELABS LTD AYUSHSHIVKUMARAGRAWAL S 143000 10.03
29/5/2009 512105 SHREENATH ASHWIN C JAIN (HUF) B 1500 62.50
29/5/2009 512105 SHREENATH S K INVESTMENTS S 1500 62.50
29/5/2009 500285 SPICEJET LTD JMP SECURITIES PVT LTD B 1996777 23.60
29/5/2009 519228 TEMPT.FOODS HSBC BANK (MAURITIUS) LIMITED S 311914 39.51
29/5/2009 531917 TWINSTA SO E MITESHVERSHIVORA B 139750 2.54
29/5/2009 531917 TWINSTA SO E VIJAY CHIMANLAL THAKKAR S 139750 2.54
29/5/2009 532765 USHER AGRO OODNAP AGROTECH LIMITED S 620000 37.24
29/5/2009 532765 USHER AGRO TAIB BANK A/C TSML S 127575 36.98
29/5/2009 532765 USHER AGRO DRB SECURITIES PVT LTD S 235074 37.06
29/5/2009 531874 VENUS VENT HARISHTARSEMMITTAL B 35000 39.43
29/5/2009 531874 VENUS VENT VIPUL HIRALAL SHAH S 36520 39.50
29/5/2009 512217 WOOLITE MERC UMESHPURUSHOTTAMCHAMDIA B 55912 15.76
29/5/2009 512217 WOOLITE MERC PAAWANRAMESHSEKSARIA S 10000 15.75
29/5/2009 512217 WOOLITE MERC PARAG VIPIN SHAH HUF S 13500 15.75
29/5/2009 512217 WOOLITE MERC SUNITARAMESHSEKSARIA S 22425 15.75
29/5/2009 512217 WOOLITE MERC PIONEER NIRMAN INDIA PRIVATE LIMITED S 10737 15.87

NSE Bulk Deals to Watch - May 29 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
29-MAY-2009,ADLABSFILM,Adlabs Films Limited,PARWATI CAPITAL MARKET PRIVATE LIMITED,BUY,260831,352.15,-
29-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,2711991,24.16,-
29-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,7748595,25.16,-
29-MAY-2009,NORTHGATE,Northgate Technologies Li,BP FINTRADE PRIVATE LIMITED,BUY,187692,44.48,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,UNITED STEEL ALLIED INDUSTRIES PRIVATE LIMITED,BUY,305000,68.86,-
29-MAY-2009,PAGEIND,Page Industries Limited,ICICI PRUDENTIAL MUTUAL FUND A/C DISCOVERY FUND,BUY,80000,450.00,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,BUY,106780,1082.98,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,BUY,124311,1082.67,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,KANUDIA CAPITAL & MANAGEMENT SERVICES PVT. LTD.,BUY,155728,86.05,-
29-MAY-2009,TUBEINVEST,Tube Investments Ltd,MARUICHI STEEL TUBE LIMITED,BUY,2000000,44.05,-
29-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1397140,23.01,-
29-MAY-2009,ADLABSFILM,Adlabs Films Limited,PARWATI CAPITAL MARKET PRIVATE LIMITED,SELL,260831,352.31,-
29-MAY-2009,ALOKTEXT,Alok Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,2513559,24.14,-
29-MAY-2009,EDSERV,Edserv Softsystems Limite,JAIRAM RAMCHAND JHAMTANI,SELL,75023,26.28,-
29-MAY-2009,IBREALEST,Indiabulls Real Estate Li,SWISS FINANCE CORPORATION (MAURITIUS) LIMITED,SELL,2252523,241.45,-
29-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,7809511,25.17,-
29-MAY-2009,JSWSTEEL,JSW Steel Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,1296961,557.13,-
29-MAY-2009,MAHLIFE,Mahindra Lifespace DevLtd,CLSA (MAURITIUS) LIMITED,SELL,500000,284.15,-
29-MAY-2009,NORTHGATE,Northgate Technologies Li,BP FINTRADE PRIVATE LIMITED,SELL,273313,44.62,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,ANNIRUDDH MUNDRA,SELL,222030,68.82,-
29-MAY-2009,OILCOUNTUB,Oil Country Tubular Ltd,BADRINATH ADVISORY PVT LTD,SELL,270000,66.89,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,SELL,106780,1083.74,-
29-MAY-2009,RIIL,Reliance Indl Infra Ltd,PRB SECURITIES PRIVATE LTD.,SELL,83511,1095.02,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,KANUDIA CAPITAL & MANAGEMENT SERVICES PVT. LTD.,SELL,155728,85.52,-
29-MAY-2009,SELMCL,SEL Manufacturing Company,MAVI INVESTMENT FUND LTD DEUTSCHE BANK,SELL,100000,86.10,-
29-MAY-2009,TUBEINVEST,Tube Investments Ltd,UTI MUTUAL FUND-UT042,SELL,2000000,44.05,-
29-MAY-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1370036,23.04,-

Turnover declines

Nifty June 2009 futures at discount

Nifty June 2009 futures were at 4,442.60, at a discount of 6.35 points as compared to the spot closing of 4,448.95. Turnover in NSE's futures & options (F&O) segment was Rs 63,060.58 crore much lower than Rs 90,315.67 crore on Thursday, 28 May 2009.

Suzlon Energy June 2009 futures were at premium at 99.05 compared to the spot closing of 97.90.

Tata Steel June 2009 futures were at discount at 399.65 compared to the spot closing of 405.35.

Jaiprakash Associates June 2009 futures were near spot price at 208 compared to the spot closing of 208.10.

In the cash market, the S&P CNX Nifty surged 111.85 points or 2.58% at 4,448.95.

Market gains for the 12th straight week

Key benchmark indices surged to 8-month high, extending gains for the twelfth straight week, boosted by strong inflow from foreign funds and positive global cues. Further signs of recovery in domestic and global economy and anticipation of a strong push for economic reforms by the newly elected United Progressive Alliance (UPA) government bolstered the bulls. The market gained in 4 out of 5 trading sessions in the week ended Friday, 29 May 2009. The BSE Small-Cap and BSE Mid-Cap indices outperformed the Sensex

On the back of higher government expenditure, India's economy expanded 5.8% in the fourth quarter ended March 2009 compared with a year earlier. That matched a revised gain of the previous quarter, government data announced at 11:00 IST on Friday, 29 May 2009 showed. Economists were expecting a 5% increase. The GDP grew 6.7% in the year ended March 2009, slowing from 9% in the previous year.

A leading indicator of German business activity rebounded in May 2009, hinting that the economic slump is easing, though the gain was less than expected. The Ifo business climate index, released on Monday, 25 May 2009 rose for the second straight month, to 84.2 in May 2009 from 83.7 in April 2009. The outcome fell below forecasts for a reading of 85.

In Asia, Bank of Japan Governor Masaaki Shirakawa said the economy is likely to experience a mild recovery as exports and production improve. He, however, said the outlook on the economy remains fraught with considerable uncertainties.

The 30-share BSE Sensex gained 738.10 points or 5.31% to 14,625.25, in week ended Friday, 29 May 2009. The broader 50-issue Nifty jumped 210.45 points, or 4.96%, to end the week at 4448.95

The BSE Sensex has surged 4977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6464.85 points or 79.22%.

The BSE Mid-Cap index gained 301.06 points or 6.33% to 5,056.74 and the BSE Small-Cap index advanced 473.66 points or 8.59% to 5,986.82 in the week ended 29 May 2009. Both these indices outperformed the Sensex

Key benchmark indices saw divergent trend on first day of the trading week on Monday, 25 May 2009. However, frenzied buying continued in small-cap and mid-cap shares in what was a highly volatile trading session. The BSE 30-share Sensex rose 26.07 points or 0.19% to 13,913.22. However the S&P CNX Nifty fell 0.95 points or 0.02% to 4,237.55.

The market lost ground on Tuesday, 26 May 2009, on concerns a glut of share sales will soak liquidity from the secondary market. The BSE 30-share Sensex fell 323.99 points or 2.33% to 13,589.23 and the S&P CNX Nifty slipped 120.85 points or 2.85% to 4,116.70.

Bulls were in back in charge of the proceedings on Wednesday, 27 May 2009 as key benchmark indices clocked smart gains after Finance Minister Pranab Mukherjee said reviving growth momentum is a top priority for the government. The BSE 30-share Sensex jumped 520.41 points or 3.83% to 14,109.64 and the S&P CNX Nifty gained 159.35 points or 3.87% to 4,276.05.

Finance Minister Pranab Mukherjee's comments that the government would take advantage of its political stability and push long-pending reforms boosted the bourses on Thursday, 28 May 2009. However volatility was high as traders rolled over positions from May 2009 series to June 2009 series in the futures & options (F&O) segment on last day of expiry. The BSE 30-share Sensex surged 186.37 points or 1.32% to 14,296.01 and the S&P CNX Nifty advanced 61.05 points or 1.43% to 4,337.10

Key benchmark indices extended gains for third straight session on Friday, 29 May 2009 as data showing a better-than-expected fourth quarter GDP growth strengthened expectations the economy will grow faster in the fiscal second-half of the year that began on 1 April 2009. The BSE 30-share Sensex rose 329.24 points or 2.3% to 14,625.25 its highest closing since 10 September 2008. The S&P CNX Nifty rose 111.85 points or 2.58% to 4,448.95 its highest closing since 9 September 2008.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 4.32% to Rs 2277.50 in the week on reports it has struck gas in two blocks (D3 and D9), with estimates putting the natural gas reserves at 20 trillion cubic feet (tcf). Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.

Shares of state-run oil firms surged boosted by Oil Minister Murli Deora's comments on deregulation of oil prices. BPCL (up 3.90%), HPCL (up 13.28%), and IOC (up 17.06%), gained.

Soon after taking charge, Oil Minister Deora on Friday, 29 May 2009 said a proposal to allow firms set retail fuel prices based on market prices would be sent to cabinet for discussion within six weeks. Currently the government sets prices for retail fuel such as petrol and diesel below actual prices, and partially subsidises state-run marketing firms for the difference.

India's largest oil exploration firm by revenue Oil & Natural Gas Corporation rose 12.49% to Rs 1175.95 on a recent 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.

India's largest construction & engineering firm by sales Larsen & Toubro gained 8.01% to Rs 1405.60 after net profit rose 3.28% to Rs 998.52 crore on 24.01% rise in total income to Rs 10835.79 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours on Thursday, 28 May 2009.

Notwithstanding a slowdown in the Indian capital goods and infrastructure sectors, L&T's order intake rose 23% to Rs 51621 crore in the year ended March 2009 (FY 2009). The order book stood at Rs 70319 crore as on 31 March 2009, which is two times its revenue of Rs 34045 crore in FY 2009, giving a strong revenue visibility.

India's largest electric equipment maker by sales Bharat Heavy Electricals advanced 9.74% to Rs 2174.90 as net profit rose 21.29% to Rs 1347.47 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after trading hours on Wednesday, 27 May 2009

India's second largest private sector power generation firm by sales Reliance Infrastructure shot up 13.93% to Rs 1276.85. 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).

Metal stocks gained on firm prices on the London Metal Exchange. Sterlite Industries (up 22.59%), Hindalco Industries (up 10.14%), Steel Authority of India (up 9.05%), and Tata Steel (up 11.85%), edged higher

India's largest drugmaker by sales Ranbaxy Laboratories jumped 26.21% to Rs 278.80. 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.

bank stocks rose on expectations of financial sector reforms by the Congress-led UPA government. India's second largest private sector lender by market capitalisation ICICI Bank rose 5.59% to Rs 740.70. India's largest private sector bank by market capitalisation HDFC Bank rose 5.35% to Rs 1442.35.

India's largest commercial bank by branch network State Bank of India jumped 7.93% to Rs 1869.10 on reports its credit growth could rise 25% in 2009-10, higher than an expected overall loan growth of 19-20% for the banking sector.

Auto stocks gained on hopes the new government will treat auto sector as a priority sector and attend to some pressing concerns of the sector, mainly differential excise duty, lack of retail finance and lack of focus on infrastructure. Maruti Suzuki (up 6.41%), Hero Honda Motors (up 3.62%), and Bajaj Auto (up 8.95%), rose

India's largest tractor maker by sales Mahindra & Mahindra spurted 7.17% to Rs 675.50 after its net profit jumped 89% to Rs 418.07 crore in Q4 March 2009 over Q4 March 2008. The results were announced during market hours on 28 May 2009.

However India's largest truck maker by sales Tata Motors fell 2.60% to Rs 336.70. The company reported a 50.7% fall in net profit to Rs 1001.26 crore in the year ended March 2009 over the year ended March 2008. The results were announced during market hours on Friday, 29 May 2009.

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 (up 20.77%), Indiabulls Real Estate (up 17.55%), and Unitech (up 11.93%), rose.

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).

India's top mobile operator by sales, Bharti Airtel lost 4.45% to Rs 819.65 on concerns of earnings dilution after the company on 25 May 2009 said it is in talks to buy 49% of Johannesburg-based MTN, the first step in a potential $23 billion merger. The deal may also see MTN, Africa's largest mobile-phone company, buy 36% of Bharti Airtel

Outsourcing focussed IT rose on a strong recent reading of US consumer confidence index. US is the biggest market for Indian IT firms.

India's largest software services exporter by sales TCS rose 10.38% to Rs 699.75. India's third largest software services exporter by sales Wipro gained 3.49% to Rs 381.55. India's second largest software services exporter by sales Infosys rose 5.44% to Rs 1602.

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. NMDC (up 49.53%), HMT (up 27.28%), Shipping Corporation of India (up 5.20%), rose.

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.

Swiss bank UBS AG's lead economic indicator rose for the fourth consecutive month in April 2009, pointing to a rebound in industrial activity by June 2009, it said in a note on Friday, 29 May 2009.

UBS said the key variables which have boosted its lead indicator index were the government bond yield spread, revival in foreign capital inflows and a rally in the stock markets.

Finance Minister Pranab Mukherjee on Thursday, 27 May 2009 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. The minister 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.

The Federation of Indian Export Organisations (FIEO) said on Wednesday, 27 May 2009 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.

Market likely to extend recent solid surge

The market may extend their twelve-week solid surge in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. Besides global cues, foreign funds activity and the progress of monsoon will also influence market trend. Profit booking cannot be ruled out after a recent solid surge. The BSE Sensex has surged 4977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6464.85 points or 79.22%.

The sentiment on the stock market is likely to remain firm following upgrade in earnings of India Inc as thumping victory of the Congress-led United Progressive Alliance (UPA) in the 15th Lok Sabha elections means political stability for the next five years.

Market may see a pre-budget rally on hopes of accelerated economic reforms and pro-reforms announcements. The UPA government's comfortable victory, without the support of the Left parties, has raised expectations that the government may revive disinvestment programme. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on backburner due to stiff opposition from the Left front.

Also the passage of the Bill to amend the Insurance Act, 1938 is likely to be touched upon in the full Budget likely to be announced in the first week of July 2009. 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.

Finance Minister Pranab Mukherjee on 26 May 2009 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. The minister 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.

Meanwhile, the newly elected UPA government will convene the first session of the 15th Lok Sabha from 1 to 9 June 2009. As regards the business of the first Lok Sabha session, the first two days will be reserved for oath of affirmation to the newly elected members. On 3 June 2009, election for the Lok Sabha Speaker would be held, followed by the President's address to both the houses of parliament on 4 June - the date of commencement of Rajya Sabha session. In all, the Parliament session will have seven sittings

Investors will keenly watch President's address to the Lok Sabha on 4 June 2009 which will unveil the new agenda of the government.

Foreign institutional investors (FII) inflow in May 2009 (till 27 May 2009) totaled Rs 17,643.50 crore, with their inflow in calendar year 2009 at Rs 18,356.10 crore. Meanwhile, mutual funds, which are sitting on a large cash pile, are also likely to buy on dips.

Annual monsoon rains, which hit the country's southern coast more than a week ahead of schedule, remained weak and have not advanced northwards, the India Meteorological Department reportedly said on Thursday, 28 May 2009. The annual rain cycle hit the Kerala coast on Saturday, 23 May 2009 and progressed for some time, but has lost pace since Monday, 25 May 2009, reports indicated.

The India Meteorological Department (IMD) on 17 April 2009 forecast a near normal monsoon this year. The IMD said rainfall in the June-September 2009 monsoon season was expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.

Cement and auto stocks are likely to be in action next week as firms announce their May 2009 sales figures.

Hindustan Petroleum Corporation, National Aluminium Company and GMR Infrastructure will declare their March 2009 quarterly results in the week ending 5 June 2009. Aggregate results of 1991 firms showed net profit rose 14.8% on 3.4% rise in sales in Q4 March 2009 over Q4 March 2008.

Sensex, Nifty attain highest closing since early September 2008

The key benchmark indices rose for the straight third day as data showing a better-than-expected fourth quarter GDP growth strengthened expectations the economy will grow faster in the fiscal second-half of the year that began on 1 April 2009. Both the Sensex & S&P CNX Nifty today attained their highest closing levels in the last eight and half months. Also boosting the sentiment Oil Minister Murli Deora said his ministry will seek Cabinet approval for oil price deregulation. His comments reinforced expectations for economic reforms. Positive global cues also the rally.

The market, however, came off the higher level in late trade as banking stocks and index heavyweight Reliance Industries came off the day's highs. The BSE 30-share Sensex rose 329.24 points or 2.3%, off close to 100 points from the day's high. The Sensex today, 29 May 2009, crossed the 14,500 mark. The barometer index has risen 1,036.02 points or 7.62% in last three days.

It was the 12th straight weekly advance for the barometer index BSE Sensex.

Soon after taking charge, Oil Minister Deora today said a proposal to allow firms set retail fuel prices based on market prices would be sent to cabinet for discussion within six weeks. Currently the government sets prices for retail fuel such as petrol and diesel below actual prices, and partially subsidises state-run marketing firms for the difference.

Deora's comments come close on the heels of Finance Minister Pranab Mukherjee's comments on Wednesday, 27 May 2009, that the government would take advantage of its political stability and push long-pending reforms. Expectations of a strong push for economic reforms by the government have send stock prices surging ever since the outcome of the election on 16 May 2009.

Foreign funds have aggressively bought Indian stocks in past 2-1/2 months. FII inflow in May 2009 totaled Rs 17,643.50 crore (till 27 May 2009). FII inflow in calendar year 2009 totaled Rs 18,356.10 crore (till 27 May 2009).

On the back of higher government expenditure, India's economy expanded 5.8% in the fourth quarter ended March 2009 compared with a year earlier. That matched a revised gain of the previous quarter, government data announced at 11:00 IST today showed. Economists were expecting a 5% increase. The GDP grew 6.7% in the year ended March 2009, slowing from 9% in the previous year.

Meanwhile, Swiss bank UBS AG's lead India economic indicator was up for the fourth consecutive month in April 2009, pointing to a rebound in industrial activity by June 2009, it said in a note today, 29 May 2009.

European shares rose on Friday, tracking stock market gains in Japan and the United State, with banks in the lead ahead of a raft of US economic data due for release later in the session. Key benchmark indices in France, Germany and UK were up by between 1.32% to 1.67%.

In Asia, commodity stocks were helped by stronger prices for metals and crude oil. Key benchmark indices in Hong Kong, South Korea and Singapore were up by between 0.27% to 1.6%.

Japan's Nikkei rose 0.75% as Japan's industrial output rose 5.2% on month in April 2009, higher than economists' expectations of a 3.3% gain. On the flip side, the April data also showed a rising jobless rate and tepid household spending. Stock markets in China and Taiwan were closed.

Trading in US index futures showed the Dow could rise 66 points at the opening bell on today, 29 May 2009.

US stocks surged on Thursday 28 May 2009 helped by energy stocks amid rising crude prices and as concerns eased about a series of government debt sales. The Dow gained 103.78 points, or 1.3%, to 8,403.80. The S&P 500 index added 13.77 points, or 1.5%, to 906.83, and the Nasdaq composite index advanced 20.71 points, or 1.2%, to 1,751.79.

In the day's economic news, new-home sales ticked up 0.3% to a seasonally adjusted rate of 352,000 in April 2009, less than expected. March sales were revised sharply lower. Meanwhile, initial jobless claims dropped by 13,000 to 623,000 from a slightly revised 636,000.

Crude shot up to near a six-month high of $65 a barrel after the Organisation of Petroleum Exporting Countries (Opec) left production quotas unchanged and a report showed that US crude inventories were pared down by 5.413 million barrels last week.

Closer home, Finance Minister Pranab Mukherjee on Wednesday, 27 May 2009, said inflation is reasonably down and reviving growth will be the government's top priority. The wholesale price index rose 0.61% in the 12 months to 16 May 2009, matching the previous week's annual rise, government data on 28 May 2009 showed. The government, meanwhile, revised upwards the rate of inflation for the year through 21 March 2009 to 0.84% from 0.31%.

Mukherjee said on Wednesday that 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. India's credit rating may come under pressure if the government is not able to rein in a widening budget deficit, Moody's Investors Service said on, 28 May 2009, said. "The stable outlook on the ratings has recently faced growing pressure, mainly due to substantial deterioration in the fiscal position," Aninda Mitra, a senior analyst at Moody's in Singapore, said in a report today. "Inability of the newly re- elected government to meaningfully adjust fiscal policies and push ahead with reforms could pressurize the foreign currency credit rating".

Moody's Baa2 rating on India's long-term foreign debt is the second-lowest investment grade. The ranking is the highest in South Asia after Kazakhstan's, four levels below China's, two levels under Malaysia's and six levels above Pakistan's.

"If the newly re-elected government proves able to quickly outline and sustain a credible program for reducing consolidated deficits, then the sustainability prospects for general government debt would improve," Moody's said in its report. These trends could boost the outlook for the country's local currency credit ratings. Kamal Nath, trade minister in the previous government, would become minister for road transport and highways.

The comments from Moody's came after Fitch Ratings, which ranks India's debt BBB-, on 14 May 2009 said it expected the new government to step up spending to arrest slowing growth. That would widen India's national budget deficit, including state government finances, to more than 10% of GDP for a second year in a row, Fitch said.

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. Analysts also say labour reforms are needed as a number of youngsters enter the job market.

The FM on Wednesday 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.

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.

On the political front, ending nearly a fortnight of suspense, the United Progressive Alliance (UPA) cabinet under the leadership of Prime Minister Manmohan Singh finally took shape on Thursday. Key cabinet ministers who retained their portfolios are Jaipal Reddy (urban development), Sushil Kumar Shinde (power), Vayalar Ravi (overseas Indian affairs), A. Raja (communications and information technology), Murli Deora (petroleum and natural gas), Kumari Selja (housing and urban poverty alleviation), Subodh Kant Sahay (food processing industries) and M.S. Gill (youth affairs and sports).

Anand Sharma was made commerce and industry minister. Kamal Nath, trade minister in the previous government, would become minister for road transport and highways. Kapil Sibal has become the HRD minister and Veerappa Moily is the new law minister.

Vilasrao Deshmukh, who was removed as chief minister of Maharashtra after the 26/11 terror attacks in Mumbai, has got heavy industries and public enterprise and former Himachal Pradesh chief minister Virbhadra Singh the ministry of steel. Former Jammu and Kashmir chief minister Ghulam Nabi Azad was given health and family welfare.

Former Jammu and Kashmir chief minister Farooq Abdullah was allocated the ministry of new and renewable energy. Debutant C.P. Joshi from Rajasthan was given the portfolio of rural development and panchayati raj.

Another first-timer, Shashi Tharoor, was appointed minister of state (MoS) in the external affairs ministry, while Sachin Pilot will take charge as an MoS in the communications and information technology ministry and Agatha Sangma as his counterpart in the rural development ministry.

Jyotiraditya Scindia will now move to the commerce ministry as MoS. Dayanidhi Maran from Dravida Munnetra Kazhagam got textiles and B.K. Handique from Assam was made minister of mines as well as the development of north-eastern region. Among those with independent charge, Praful Patel retains civil aviation. Congress leader Prithviraj Chavan, too retained his post as MoS in the Prime Minister's Office and got additional charge as an MoS for science and technology, ministry of earth as well parliamentary affairs, among others. Salman Khurshid was made MoS with independent charge of corporate affairs, along with minority affairs.

The portfolio announcements came late in the evening, well after the conclusion of the second round of cabinet expansion. On Thursday, 14 cabinet ministers, seven ministers with independent charge and 38 ministers of state were sworn in, while 19 cabinet ministers were sworn in on 22 May. Of the 59 ministers inducted on Thursday, 42 are from the Congress, taking the total number of ministers from the party to 60, including the Prime Minister.

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. It remains to be seen whether the government undertakes privatisation of state-run firms.

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 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 rose 329.24 points or 2.3% to 14,625.25, its highest closing since 10 September 2008. The Sensex gained 431.27 points at the day's high of 14,727.28 in late trade. At the day's low of 14,319.87, the Sensex rose 23.86 points in early trade.

The S&P CNX Nifty rose 111.85 points or 2.58% to 4,448.95, its highest closing since 9 September 2008. Nifty June 2009 futures were at 4,442.60, at a discount of 6.35 points as compared to the spot closing of 4,448.95. Turnover in NSE's futures & options (F&O) segment was Rs 63,060.58 crore much lower than Rs 90,315.67 crore on Thursday, 28 May 2009.

The Sensex is up 4,977.94 points or 51.59% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,464.85 points or 79.22%.

BSE clocked a turnover of Rs 8,384 crore today, higher than Rs 7,032.24 crore on Thursday, 28 May 2009.

The BSE Mid-Cap index was up 2.46% and the BSE Small-Cap index was up 3.01%. Both the indices outperformed the Sensex.

The BSE Realty index (up 6.76%), %), the BSE Capital Goods index (up 4.13%), the BSE Consumer Durables index (up 3.55%), the BSE Auto index (up 3.41%), the BSE Oil & Gas index (up 3.31%), the BSE PSU index (up 3.3%), the BSE Metal index (up 3.11%), the BSE IT index (up 2.37%), the BSE TECk index (up 2.33%), outperformed the Sensex.

The BSE Healthcare index (down 1.36%), the BSE FMCG index (down 0.25%), the BSE Bankex (up 1.17%) and the BSE Power index (up 2.02%), underperfomed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2,141 shares rose as compared with 647 that fell. A total of 55 shares remained unchanged.

From the 30 share Sensex pack, 26 stocks rose and rest fell.

Shares of state-run oil firms surged boosted by Deora's comments on deregulation of oil prices. PSU OMCs, BPCL and HPCL rose by between 3.75% to 8.33%.

Indian Oil Corporation rose 6.9% after it posted a net profit of Rs 6620 crore in Q4 March 2009 compared to a net loss of Rs 414 crore in Q4 March 2008. The company announced the result during the market hours today.

India's largest oil exploration firm by revenue Oil & Natural Gas Corp rose 3.99% on a recent 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.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.59% to Rs 2277.50 on reports it has struck gas in two blocks (D3 and D9), with estimates putting the natural gas reserves at 20 trillion cubic feet (tcf). But the stock came off the day's high of Rs 2,304. Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.

Analysts expect strong growth in RIL's bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

Bank stocks pared gains as surging bond yields will result in diminution in the value of banks' bond portfolio. The yields on the benchmark 10-year paper climbed for a fifth week to trade at 6.7% at 13:30 IST after a finance ministry official said India may borrow more than planned in the first half of the fiscal year that started on 1 April 2009. Bond prices and bond yields are inversely related.

India's largest private sector bank by net profit ICICI Bank was up 1.54% to Rs 740.70, off the day's high of Rs 754. Its American depository receipt (ADR) rose 5.06% on Thursday, 28 May 2009. India's second largest private sector bank by net profit HDFC Bank was up 0.43% to Rs 1,442.35, off the day's high of Rs 1,459.50. Its ADR rose 2.6% overnight.

India's biggest bank in terms of branch network State Bank of India (SBI) was up 2.2% to Rs 1,869.10, off the day's high of Rs 1,891. 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.

India's biggest dedicated housing finance firm by operating income HDFC rose 0.18%. 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.

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. Housing Development & Infrastrucutre, Indiabulls Real Estate, Unitech rose by between 3.07% to 9.13%.

India's largest realty player by market capitalization DLF rose 8.41% on reports the founders of realtor DLF are planning to sell another 5.5% stake to raise Rs 1000 - 1500 crore. DLF has reportedly denied stake sale plan by promoters.

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).

Auto stocks rose ahead of monthly sales figures for May 2009 which auto firms will unveil next week. Hero Honda Motors, Maruti Suzuki India, Bajaj Auto rose by between 1.13% to 2.32%.

India's largest tractor maker by sales Mahindra & Mahindra spurted 5.67% extending recent gains after net profit jumped 89% to Rs 418.07 crore in Q4 March 2009 over Q4 March 2008. The results were announced during market hours yesterday, 28 May 2009, when the stock ended 2.16% higher at Rs 638.80.

Capital goods and construction stocks rose on expectations of increased infrastructure spending by the Congress-led UPA government to boost growth. Other capital goods stocks, Thermax, ABB, Praj Industries Siemens and Punj Lloyd rose by between 1.04% to 7.55%.

India's largest construction & engineering firm by sales Larsen & Toubro rose 4.75% after company's net profit rose 3.28% to Rs 998.52 crore on 24.01% rise in total income to Rs 10835.79 crore in Q4 March 2009 over Q4 March 2008. The company announced the results during trading hours yesterday when the stock had risen 2.32%.

Notwithstanding a slowdown in the Indian capital goods and infrastructure sectors, L&T's order intake rose 23% to Rs 51621 crore in the year ended March 2009 (FY 2009). The order book stood at Rs 70319 crore as on 31 March 2009, which is two times its revenue of Rs 34045 crore in FY 2009, giving a strong revenue visibility.

India's largest electric equipment maker by sales Bharat Heavy Electricals rose 2.71% as net profit rose 21.29% to Rs 1347.47 crore in Q4 March 2009 over Q4 March 2008. The company announced the results after trading hours on Wednesday, 27 May 2009

Reliance Infrastructure rose 0.46%. 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).

Construction stocks rose on expectations that the Congress-led UPA government will increase infrastructure spending, including new power plants, to boost growth. Hindustan Construction Company, Nagarjuna Construction Company, IVRCL Infrastructure & Projects and Gammon Infrastructure, rose by between 7.38% to 10.11%.

Cement stocks rose as a likely thrust on the infrastructure spending by the new government would boost demand. ACC, Ambuja Cements, India Cements and Ultratech Cements rose, by between 2.63% to 8.56%. Cement firms will announce their monthly sales figures for May 2009 next week.

Steel makers rose after the steel minister said he will consider additional tax on steel imports. Steel Authority of India, JSL, Tata Steel, JSW Steel, Jindal Steel & Power and Bhushan Steel rose by between 0.2% to 5.17%.

Virbhadra Singh, the new steel minister said today, 29 May 2009, that India will consider slapping additional import tax on steel to protect the domestic industries from cheap imports. He added that the issue has to be addressed immediately.

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. Dredging Corporation of India, HMT, Shipping Corporation of India, Central Bank of India rose by between 2.15% to 5%.

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.

Airlines stocks rose on hopes the newly elected government may allow foreign direct investment in the sector.Jet Airways, Kingfisher Airlines and SpiceJet rose by between 3.37% to 9.96%.

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.

Cals Refineries clocked the highest volume of 4.59 crore shares on BSE. Unitech (3.2 crore shares), Suzlon Energy (2.5 crore shares), Reliance Natural Resources (2.11 crore shares) and Ispat Industries (1.97 crore shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 362.47 crore on BSE. DLF (Rs 298.44 crore), Unitech (Rs 256.57 crore), Indiabulls Real Estate (Rs 246.69 crore) and Suzlon Energy (Rs 244.64 crore) were the other turnover toppers in that order.

Market may extend recent gains

The key benchmark indices may extend last two day's of gains on positive global cues. Investors will keenly watch the GDP figures for the quarter ended March 2009 to be announced today.

The market expectations are that the economy is estimated to have expanded 5.2 % in the fiscal fourth quarter to 31 March 31, compared with a year earlier, Asia's third-largest economy grew 7.9 % in the June 2008 quarter, 7.6% in the September 2008 quarter and 5.3 % in the December 2008 quarter.

Meanwhile, the barometer index Sensex has risen 706.78 points or 5.2% in the last two trading sessions.

Asian stocks rose today led by mining companies, as a better-than-expected Japanese factory output report boosted copper prices. Key bechchmark indices in HongKong and Singapore rose by between 0.43% to 1.25%.

Japan's Nikkei rose 0.06% after its industrial output rose 5.2 % in April 2009, the biggest monthly gain in more than half a century and sharply higher than the median market forecast for a 3.2 % rise. It was the second month in a row of increasing production after five months of decline.

The US markets ended higher on Thursday 28 May 2009 as crude prices climbed to 65 dollars after an inventory pare-down and the results of the Treasury bond auction eased concerns about government debt. The Dow gained 103.78 points, or 1.3%, to 8,403.80. The S&P 500 index added 13.77 points, or 1.5%, to 906.83, and the Nasdaq composite index advanced 20.71 points, or 1.2%, to 1,751.79.

In the day's economic news, new-home sales ticked up 0.3 % to a seasonally adjusted rate of 352,000 in April 2009, less than expected. March sales were revised sharply lower. Meanwhile, initial jobless claims dropped by 13,000 to 623,000 from a slightly revised 636,000. Continuing claims rose to another record around 6.8 million.And durable-good orders rose 1.9 % in April 2009 but enthusiasm was tempered by a sharply lower revision for March 2009.

Crude shot up to near a six-month high of 65 dollars as OPEC left production quotas unchanged and a report showed that crude inventories were pared down by 5.413 million barrels last week.

Back home, the wholesale price index rose 0.61% in the 12 months to 16 May 2009, matching the previous week's annual rise, government data showed today, 28 May 2009. The government, meanwhile, revised upwards the rate of inflation for the year through 21 March 2009 to 0.84% from 0.31%. Finance Minister Pranab Mukherjee on Wednesday said inflation is reasonably down and reviving growth will be the government's top priority.

Mukherjee during on Wednesday 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. India's credit rating may come under pressure if the government is not able to rein in a widening budget deficit, Moody's Investors Service today, 28 May 2009, said. “The stable outlook on the ratings has recently faced growing pressure, mainly due to substantial deterioration in the fiscal position,” Aninda Mitra, a senior analyst at Moody's in Singapore, said in a report today. “Inability of the newly re- elected government to meaningfully adjust fiscal policies and push ahead with reforms could pressurize the foreign currency credit rating.”

Moody's Baa2 rating on India's long-term foreign debt is the second-lowest investment grade. The ranking is the highest in South Asia after Kazakhstan's, four levels below China's, two levels under Malaysia's and six levels above Pakistan's.

“If the newly re-elected government proves able to quickly outline and sustain a credible program for reducing consolidated deficits, then the sustainability prospects for general government debt would improve,” Moody's said in its report. “These trends could boost the outlook for the country's local currency credit ratings.”

The comments from Moody's came after Fitch Ratings, which ranks India's debt BBB-, on 14 May 2009 said it expected the new government to step up spending to arrest slowing growth. That would widen India's national budget deficit, including state government finances, to more than 10% of GDP for a second year in a row, Fitch said.

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. Analysts also say labour reforms are needed as a number of youngsters enter the job market.

The FM on Wednesday 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.

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.

In the political front, ending nearly a fortnight of suspense, the United Progressive Alliance (UPA) cabinet under the leadership of Prime Minister Manmohan Singh finally took shape on Thursday. While eight of the 27 cabinet ministers retained their portfolios Jairam Ramesh becomes minister of state with independent charge. Key cabinet ministers who retained their portfolios are Jaipal Reddy (urban development), Sushil Kumar Shinde (power), Vayalar Ravi (overseas Indian affairs), A. Raja (communications and information technology), Murli Deora (petroleum and natural gas), Kumari Selja (housing and urban poverty alleviation), Subodh Kant Sahay (food processing industries) and M.S. Gill (youth affairs and sports).

Vilasrao Deshmukh, who was removed as chief minister of Maharashtra after the 26/11 terror attacks in Mumbai, has got heavy industries and public enterprise and former Himachal Pradesh chief minister Virbhadra Singh the ministry of steel. Former Jammu and Kashmir chief minister Ghulam Nabi Azad was given health and family welfare.

Moily was given charge of law ministry, while another former Jammu and Kashmir chief minister Farooq Abdullah was allocated the ministry of new and renewable energy. Debutant C.P. Joshi from Rajasthan was given the portfolio of rural development and panchayati raj.

Another first-timer, Shashi Tharoor, was appointed minister of state (MoS) in the external affairs ministry, while Sachin Pilot will take charge as an MoS in the communications and information technology ministry and Agatha Sangma as his counterpart in the rural development ministry.

Jyotiraditya Scindia will now move to the commerce ministry as MoS. Dayanidhi Maran from Dravida Munnetra Kazhagam got textiles and B.K. Handique from Assam was made minister of mines as well as the development of north-eastern region. Among those with independent charge, Praful Patel retains civil aviation. Congress leader Prithviraj Chavan, too retained his post as MoS in the Prime Minister's Office and got additional charge as an MoS for science and technology, ministry of earth as well parliamentary affairs, among others. Salman Khurshid was made MoS with independent charge of corporate affairs, along with minority affairs.

The portfolio announcements came late in the evening, well after the conclusion of the second round of cabinet expansion. On Thursday, 14 cabinet ministers, seven ministers with independent charge and 38 ministers of state were sworn in, while 19 cabinet ministers were sworn in on 22 May. Of the 59 ministers inducted on Thursday, 42 are from the Congress, taking the total number of ministers from the party to 60, including the Prime Minister.

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. It remains to be seen whether the government undertakes privatisation of state-run firms.

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 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.

Tata Communications

We recommend a sell in the Tata Communications stock from a short-term trading perspective. It is evident from the charts of Tata Communications that it was on an intermediate-term uptrend from February support level of Rs 390 till the May peak of Rs 651.The stock changed its trend after encountering resistance at Rs 651. This reversal was backed by a negative divergence in the daily moving average convergence and divergence indicator. Since mid of May, the stock has been on a short-term down trend. While trending down, it tumbled almost 7 per cent on May 26, conclusively penetrating the 21-day moving average. The stock’s decline continued on May 28when it broke the key support at Rs 510 by diving 5 per cent. It is currently trading well below the 21 and 50-day moving averages. The daily relative strength index has entered into the bearish zone from the neutral region and the weekly RSI is declining in the neutral region. We are bearish on the stock from a short-term horizon. We expect its fall to prolong until it hits our price target of Rs 450 in the approaching trading sessions. Traders with short-term perspective can utilise rallies to sell the stock while maintaining a stop-loss at Rs 524.

via BL

SGX Nifty fairly positive

4,365.0 +33.0

Daily News Roundup- May 29 2009

Petroleum consultant Gaffney, Cline & Associates has confirmed the presence of oil & gas in two offshore blocks in Reliance’s KG basin-D3 and D9. (BL)

Suzlon Energy has successfully renegotiated financial covenants and amended key terms of the bank loan facilities it had taken for acquiring REpower Systems AG and Hansen Transmission. (BS)

Aditya Birla Group may not buy L&T stake in Ultratech Cement. (ET)

Tata Motors may have to infuse funds to bridge JLR pension gap. (ET)

R-Power in talks with Australian mining firm BHP Billiton and Rio Tinto for setting up a coal mining joint venture. (ET)

Tata Motors has concluded an agreement for amending its bridge loan, extending the final maturity of US$1bn by 18 months upto December 31st, 2010. (BL)

JSW Steel plans to raise US$1bn via QIP and a FCCB issue. (BS)

Datacom and Sistema Shyam Teleservices have short listed Wipro, Tech Mahindra and IBM for an IT outsourcing contract worth US$150mn each. (ET)

The 1,000MW NTPC-Simhadri Unit III will be ready by Nov 2010. (BS)

SAIL plans to nearly double it capital expenditure to Rs100bn in FY10. (BL)

Satyam may downsize overseas operations and terminate lease contracts. (BL)

Aditya Birla Group Company to set up 10mn tons captive port at Chudamani. (BS)

Novartis has revised the open-offer price for its shares to Rs450 from Rs351 to buy back an additional stake of up to 39%.(BS)

Finance Ministry mulls special audit of Satyam accounts. (FE)

US FDA to review Ranbaxy corrective plan. (FE)

Government to allow UBI, Dena Bank and Bank of Maharashtra to tap market to boost their capital base. (ET)

Dewan Housing Finance Corporation (DHFL) is planning to issue non-convertible debentures (NCDs) worth up to Rs10bn in July to meet its credit disbursal targets for the current financial year. (BS)

Spice Group is diversifying into financial services with plans to start businesses which will deal with asset reconstruction, remittances, over-the-counter exchange and fixed income products. (BS)

The consortium led by GMR Infrastructure Ltd has won the 181km Hyderabad-Vijayawada highway project to be executed on a BOT basis. (BL)

Coromandel Fertilisers Ltd has signed a JV with Soquimich European Holdings BV, Netherlands, a subsidiary of SQM, Chile, for setting up 15,000 tons water soluble fertilisers plant at Kakinada in Andhra Pradesh. (BL)

Siemens Ltd plans to invest Rs2.7bn to triple capacity of its steam turbine manufacturing facility in Vadodara, Gujarat. (BL)

Religare to acquire Maharashi Housing Development Finance Corporation to foray into home finance business. (ET)

Ericsson bags order worth US$500mn from Unitech Wireless to supply and manage all network equipments for its three telecom circles. (ET)

Government of India raised Rs150bn (US$3.14bn) by selling four bonds maturing between 2016 and 2035. (BS)

SEBI plans to extend the facility of internet trading in securities on exchanges by enabling use of wireless technology. (BS)

The annual wholesale inflation rate remained unchanged at 0.61% for the week ended May 16. (BL)

Moody’s has toned down its pessimism on India by retaining a stable outlook. (ET)

Government has decided not to apply an area limit of 5,000 hectares for SEZ if two or more such zones are merged. (ET)

Dis-May…bears run for cover!

Great things are not done by impulse, but by a series of small things brought together.

With ~28% gain in the May F&O series, the bulls seem to have managed their impulse for quite some time now. The rollover to June was around 58%, which is relatively less.

The outlook at start is expected to be positive though FIIs were net sellers to the tune of Rs7.29bn. Moody’s meanwhile has toned down its pessimism on India by retaining a stable outlook. Hold on to your horses as the GDP numbers for March will be announced today. Expectations are the growth in March quarter may have been the slowest with the economy expanding a little over 5%. Should it disappoint, some profit taking could be seen.

The cues from the global markets show no concerns for the day. The US market ended higher after the government’s recent debt auction saw healthy demand. The Treasury Department said it received $58.7 billion worth of bids for the $26 billion in 7-year notes offered Thursday.

Meanwhile, Government of India raised Rs150bn by selling four bonds maturing between 2016 and 2035.

The Dow Jones industrial average (INDU) rose 103 points, or 1.2% while the broader S&P 500 (SPX) added 14 points, or 1.5%. The Nasdaq composite (COMP) gained 1.2%, adding 20 points.

Asian stocks were mixed in the morning trades, however, the mining stocks recorded smart gains as a better-than-expected Japanese factory output report boosted copper prices. Mitsui & Co gained 1.6%, BHP Billiton advanced 2%, Mitsui O.S.K. Lines was u p 3.4%.

The Nikkei index was flat at 9,457. The Hang Seng index was up 0.3% at 17,949. Straits Times gained 1%. Australia's S&P/ASX gained 1.4% at 3,806. The MSCI Asia Pacific Index gained 0.3% to 100.45 as of 10:38 a.m. in Tokyo.

Japan’s unemployment rate rose to a 5-year high in the month of April. The jobless rate rose to 5% from 4.8% in the month of March.

Crude oil shot up to US$65.08 a barrel after OPEC decided to leave production quotas unchanged.

In news from the media:

Petroleum consultant Gaffney, Cline & Associates has confirmed the presence of oil & gas in two offshore blocks in Reliance’s KG basin-D3 and D9.

Suzlon Energy has successfully renegotiated financial covenants and amended key terms of the bank loan facilities it had taken for acquiring REpower Systems AG and Hansen Transmission.

Aditya Birla Group may not buy L&T stake in Ultratech Cement.

R-Power in talks with Australian mining firm BHP Billiton and Rio Tinto for setting up a coal mining joint venture.

SEBI plans to extend the facility of internet trading in securities on exchanges by enabling use of wireless technology.

The annual wholesale inflation rate remained unchanged at 0.61% for the week ended May 16.

It was the second straight day of gains for the Indian markets on Thursday. The upswing was seen despite weak cues from the US and the Asian markets. The Metal, Banking and the PSU stocks were among the top gainers followed by the Capital Goods and the Realty stocks. However, some offloading was seen in the Pharma, IT and FMCG counters.

The Sensex surged 186 points or 1.3% to close at 14,296 after touching a high of 14,377 and a low of 14,078. The index had opened at 14,115 against the previous close of 14,109.

The NSE Nifty gained 61 points or 1.4% to shut shop at 4,336.

Among the BSE Sectoral indices BSE Metal index was the top gainer adding 2.7%, followed by the BSE PSU index up 2.3%, BSE Bankex index up 1.8%, BSE Capital Goods index up 1.7% and BSE Realty index up 1.7%.

Shares of L&T gained by 2.3% to Rs1342 after the company announced its Q4 results with net profit at Rs9.99bn posting 3.3% growth as against Rs9.67bn in the same period last year. The company’s net sales grew 23.6% yoy at Rs104.7bn as against to Rs84.7bn and has one-time loss of Rs1.44bn. The company announced that it would pay dividend of Rs10.50 per share.

Shares of M&M advanced by 2.1% to Rs639 after the company announced its Q4 results with net profit at Rs4.18bn posting a growth of 89% yoy as against Rs2.21bn. Net sales were up 15% at Rs36.2 versus Rs31.4. The company Q4 EPS was at Rs10.81 versus Rs9.02 and also announced that they would pay dividend of Rs10 per share.

SAIL surged by over 6.5% to Rs164. The company’s Q4 net profit dropped 37% yoy at Rs14.9bn as against Rs23.8bn in the same period last year. The company posted revenues of Rs120.6bn as against Rs134.8bn.

After gaining over 700 points in two trading sessions, some cooling off is not ruled out as trader and investors would prefer to book some profits ahead of the weekend. No other immediate catalysts for now besides the GDP numbers tomorrow.

ITC - Results

Inflation stands unchanged at 0.61%

India's Wholesale Price Index (WPI) based inflation rose 0.61% in the week ended 16 May 2009 from year earlier same as in the previous week, but substantially lower compared to 8.66% a year ago. However, the index rose 0.1% to 232.2 from previous weeks level, recording seventh weekly gains.

The index of primary articles rose 0.04% from previous weeks level, recording rise for the seventh consecutive week, while manufacturing index rose 0.1% posting tenth weekly rise. However, the index of fuel, power, light and lubricants also moved 0.1% during the week compared to its previous weeks level.

Within the primary articles, the index of food articles declined 0.04% from the previous weeks level due to lower prices of gram, fruits & vegetables and jowar (1% each), but non-food articles increased 0.2% powered by higher prices of raw cotton (2%) and linseed (1%). However, the primary article inflation climbed up to 6.22% from 6.05% in the previous week.

The index for manufacturing product group rose 0.1% from previous week, while the annual inflation in the manufactured product group stood at 1.1%. Among the manufactured products, the index for food product climbed up 0.5% due to higher prices of bagasse (25%), unrefined oil (21%), malted food (7%), imported edible oil (3%) etc, while the index of beverages tobacco & tobacco products rose 0.1% from the previous week level. However, the index of textile group and transport equipment & parts declined 0.1% each from their previous weeks levels.

The inflation has continued to be below 1% for the sequential eleventh week, but it has been rising for the seventh week on week-on-week basis, which is raising concerns. The weekly rise is largely contributed by primary articles, while lower industrial production has also pressured the prices of manufactured products.

A survey of professional forecasters conducted by the Reserve bank has projected the WPI based inflation to be negative at -1.4% in the first quarter of 2009-10 and further deeper negative at –2.5% in the second quarter, due to rapid rise in prices in the corresponding previous period. However, during the first seven weeks out of the 13 weeks in the first quarter, the inflation stood at 0.5% compared to 8.3% in the corresponding previous year period.

Bajaj Auto

Ultratech Cement

ITC

Patel Engineering

BHEL, Cairn India, Jindal Steel and Power, Federal Bank,Jaiprakash Associates

Derivatives - May 29 2009

Rollover Analysis - May 29 2009

Satyam to downsize operations, close offices

A handful of the 105 offices and 30 delivery centres that Satyam Computer Services has worldwide may soon cease to exist.

The Hyderabad-based company, recently acquired by Tech Mahindra, is evaluating options to downsize operations at its overseas development centres and terminate lease contracts for offices and other properties.

By consolidating its offices and delivery infrastructure, Satyam will be able to up capacity utilisation and also reduce overhead costs, two persons in the knowledge of the development told Business Line.

“The concept of global delivery centres is good but all delivery centres and offices will be right-sized both in terms of people and physical infrastructure,” one of them said.
Resurrection Plan

This review of operations is part of Operation Phoenix, Tech Mahindra’s plan of resurrecting Satyam.

Satyam has seven development centres in China, Germany, Brazil, Egypt and Malaysia, which act as near-shore destinations for getting work done in the same time zone as places such as the US and the UK.

A spokesperson for Satyam refused to comment on the news.

In April, Satyamites on bench in the US were asked to quit and return to India.

Satyam has already pruned its sales force across the globe.

However, recent news reports indicate that it plans to increase the sales team by 20 per cent. This could not be verified independently.

Another official said that Satyam is likely to consolidate sales operations in the US as a section of customers based there has severed ties with the company. The company has 14 offices in the country.

Apart from its 10,000 excess employees, Satyam is believed to have 20,000 spare seats in India across the 23 delivery centres.

“We have identified several rented premises whose lease will be terminated to provide sizeable savings. This space is anyway in excess and was invested based on anticipated growth,” Mr A. S. Murthy, Chief Executive Officer of Satyam, told staff in a recent email.
High-profile exodus

Meanwhile, the exodus of high-profile officials from Satyam continues

Those who have quit include Mr Virender Agarwal, Business Head of India, the Middle-East and the Asia-Pacific regions; Mr Hetzel Folden, head of the strategic deals group; Mr Naresh Jhangiani, human resource head of business process outsourcing, and Mr Deepak Nangia, head of the Australian region.

Ms Archana Muthappa, India-based spokesperson for Satyam, too has put in her papers.
Last week, Mr Vineet Nayyar, CEO of Tech Mahindra, had said Satyam has excess staff of 10,000

via BL

Crude tops $64

Prices surge as energy department reports unexpected drop inc rude inventories

Crude oil prices rose substantially higher on Thursday, 28 May 2009. Prices rose for the fourth consecutive session as energy department reported unexpected drop in crude inventories for last week. Market was anticipating a buildup in crude inventories.

On Thursday, crude-oil futures for light sweet crude for June delivery closed at $64.59/barrel (higher by $1.14 or 1.7%). 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. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 56% since then. Year to date, in 2009, crude prices are higher by 33%. On a yearly basis, crude prices are lower by 42%.

The energy department reported today that crude inventories declined by 5.4 million barrels in the week ended 22 May, 2009. Market was expecting stockpiles to show an increase of 1.8 million barrels. U.S. refineries ran at 85.1% of their operable capacity last week, up sharply from 81.8% in the prior week.

The EIA also reported that gasoline inventories fell by 600,000 barrels last week. Distillate stockpiles, which include heating oil and diesel, rose 300,000 barrels last week.

Gasoline production averaged nearly 9.4 million barrels a day last week, up from 8.7 million barrels in the week ended 15 May, 2009 as the nation entered into the post-Memorial Day driving season.

In its latest annual report, EIA reported yesterday, on international outlook for energy that global oil demand will grow to 91 million barrels a day in 2015 and 107 million barrels a day in 2030. Global oil supply will rise to 106.6 million barrels a day by 2030. The EIA also said natural-gas consumption will increase to 153 trillion cubic feet in 2030. The Energy Information Administration predicted in a newly released report that oil prices will rise to $110 in 2015 and $130 in 2030.

OPEC, in its latest meeting, decided to keep production quotas unchanged, in line with expectations. The cartel, which accounts for about one-third of the world's oil production, decided to leave production levels unchanged at today's meeting in Vienna.

Also at the Nymex on Thursday, June-dated reformulated gasoline rose 0.2% to $1.8955 a gallon, while June heating oil gained 2% to $1.5927 a gallon.

Natural gas for July delivery jumped 7% to reach $3.888 per million British thermal units. EIA also reported today that U.S. natural-gas inventories rose 106 billion cubic feet in the week ended 22 May.

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 3,087/barrel, higher by Rs 70 (2.3%) against previous day's close. Natural gas for June delivery closed at Rs 188.3/mmbtu, higher by Rs 14.6/mmbtu (8.4%).

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