Weekly Wrap - June 6 2009

Weekly Wrap - June 6 2009

Infosys

Infosys moved in line with our expectation and rallied to the intra-week peak of Rs 1706. But the stock is pausing below this resistance. The near-term view will be ambivalent as long as the stock remains at these levels for a move above Rs 1706 can take it higher to Rs 1830 while failure to surpass this level will cause a decline to Rs 1500 again.

Our medium-term view for Infosys stays negative as long as it trades below Rs 1750. Failure to move above this level over the next two weeks can cause a decline to Rs 1486 or Rs 1400 over the medium term.

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ONGC

ONGC is currently in a short-term correction that is making the stock move in the range between Rs 1140 and Rs 1220. Short-term investors can buy on declines with a stop at Rs 1085. The stock can move higher to Rs 1257 or Rs 1340 in the near term

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Maruti Suzuki

Maruti recorded yet another spurt last week that made it rally above our medium-term target of Rs 1100 to peak at Rs 1113. The stock is halting at the upper boundary of the trend-channel that is enclosing the stock’s movement since January 2009. Reversal from here can drag the stock lower to Rs 960. But the medium-term view will stay positive as long as this level holds. If it holds above Rs 960, Maruti can have another shy at its all-time high over the medium term.

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Reliance Industries

RIL moved in line with our expectation, reversing below the resistance indicated last week thus highlighting the weak outlook for the short-term. The stock can decline to Rs 2094 or Rs 2066 in the near-term and a close above Rs 2343 is needed to reverse this view. The ceiling of the gap formed on May 18 at Rs 2102 will be the key short-term support for the stock.

We continue to advise caution from a medium-term perspective unless there is a weekly close above Rs 2384. A gradual decline to Rs 1900 or Rs 1700 can not be ruled out in the medium term.

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Tata Steel

Tata Steel led the market forward last week with a 14 per cent gain. The stock moved slightly above our second medium-term target of Rs 487 to peak at Rs 496. There could be a short-term correction to Rs 448 or Rs 416 in the near term. Short-term traders can buy on such declines with a stop at Rs 410. Resistances for the week would be at Rs 481 or Rs 496.

The stock is in a strong medium term up-trend and this move can continue to take Tata Steel towards the medium-term target of Rs 552. The positive medium-term view will be marred only on a close below Rs 330.

Tanla Solutions

Investors with a medium-term standpoint can consider buying Tanla Solutions. The stock was on a structural down-trend from its lifetime high of Rs 410 recorded in January 2008. This move was arrested at Rs 21 in March. The prolonged positive divergence in the weekly indicators triggered its trend reversal. An emerging intermediate-term uptrend is visible since then.

Though the stock is undergoing sideway consolidation between Rs 74 and Rs 84, the medium-term prospect is bullish. Following this sideways movement, the stock has the potential to rally up to Rs 104 in the medium term. Medium-term investor can buy the stock while maintaining stop-loss at Rs 67. Short-term investor can buy with the target of Rs 89 and stop at Rs 71.

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Kaveri Seed Company

A small-sized company with a sizeable portfolio of sunflower, maize, cotton, and paddy hybrids, Kaveri Seed has sustained strong financial performance since its IPO in September 2007. The per share earning for the past year now stands at Rs 18.5 (excluding one-off items) against Rs 8 at the time of the IPO.

Yet, the market meltdown has whittled down the stock’s valuation; its PE shrinking from about 16 times to its current 11 times (market price of Rs.209). Given the bright growth prospects for the seeds and micronutrients business, the company’s growth history and established presence, the stock deserves a better valuation. Kaveri’s larger rivals — Monsanto India and Rallis India — the only other listed companies which have a presence in seeds, have already seen a sharp re-rating and now trade at 17 and 12 times earnings respectively.
High entry barriers

With a two-decade presence in the seeds business, Kaveri Seed has a portfolio of about 40 certified hybrids in corn (12 hybrids), sunflower (5), cotton (6) and paddy (13). Building a product portfolio of this size requires a fairly long gestation period, as development of each hybrid strain usually takes four-six years.

Production of hybrid seeds also calls for access to proprietary germplasm (genetic material) with the required traits making for high entry barriers to the business. The company also sells crop micronutrients under the brand name Microtek; another business with good potential.

Kaveri Seeds’ IPO in 2007 raised Rs 68 crore to fund acquisition of farmlands, upgradation of seed processing plants and working capital requirements. The bulk (Rs 62 crore) of the proceeds have already been utilised.
Potential in seeds

The bright demand prospects for domestic seed companies arise from the huge shortfall in availability of quality seeds and increasing adoption of hybrids, given the need to improve agricultural yields on food and feed crops (Indian yields are far below world standards).

The Indian market has been seeing a substantial deficit in the supply of certified seeds over the past few years. Data put out by the Agriculture Ministry for kharif 2009 suggests that crops such as paddy (shortfall of 28 lakh quintals for the season), maize (2.2 lakh quintals), sunflower (0.59 lakh quintals) and cotton (1.15 lakh quintals) saw persistent shortfalls over the past four years.

All of these crops feature in Kaveri Seed’s portfolio. The policy regime for the sector is likely to be friendly over the next few years, given the incumbent government’s stated intention of improving seed availability.
High on growth

In terms of financials, Kaveri Seed has managed to deliver impressive and yet consistent growth over the past four years, with a compounded annual growth of 22 per cent in sales and over 100 per cent growth in profits in this period, albeit on a low base.

Operating profit margins over this period have expanded from the low single-digits to well over 25 per cent for the past three years; the bulk of this improvement coming from a backward integration move into foundation seeds in 2006-07.

That performance was sustained over the past year. For the nine months ended December 2008, net profits rose 46 per cent while net sales grew 23 per cent, driven by a higher contribution from the seeds business and overall margin expansion. The micronutrients division despite more sedate growth than seeds, managed improved margins.

Going forward, the company appears well placed to sustain margins at healthy levels, mainly due to pricing power. Focussed on lucrative cash crops such as sunflower, maize and cotton, the company may be comfortably placed to pass on any cost increases to consumers, given the strong demand.

The upward bias in farm product prices and the sharp hikes in the minimum support prices of key crops last year are likely to have lifted the purchasing power of farmers and may lend support to both volumes and pricing power for Kaveri’s target crops.

Kaveri’s balance sheet remains quite strong, with near zero debt (thanks to the IPO proceeds of Rs.68 crore), healthy ROCE and RONW (22 per cent and 16 per cent respectively).

This apart, the recent upward spiral in crude oil (and in tandem, ethanol) prices, if sustained, may lift export prospects for Indian which have been lacklustre since last year’s ban (lifted in October). The sharp spiral in freight rates may also make Indian corn exports more cost competitive for shipping to the South-East Asian markets.

The key risks to the business arise from the weather-related risks enedemic to any agri-business and relatively high working capital requirements, due to a long debtor cycle.

For investors, the stock’s small cap status would peg up volatility and render the investment quite vulnerable to any broader market decline.

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Jagran Prakashan

Investors may retain their shares of Jagran Prakashan, the top newspaper in the ‘Hindi-heartland’, considering its ability to monetise its leadership status in garnering greater advertisement revenues along with reasonable growth on subscription.

At Rs 83, the stock trades at 28 times its likely 2008-09 per share earnings. This is at a significant premium to the broader market and papers such as Deccan Chronicle, but at a discount to HT Media.

Given the expensive nature of the stock and average growth rates in advertising expected over the next one year, investors may have to hold on with a two-three-year perspective for capital appreciation.

But decline in newsprint prices, expectation of higher spends from the relatively insulated education and telecom sectors, and increase in cover price may expand revenues and realisations for the company.

Even in the turbulent December 2008 quarter, advertisements (which contribute 67 per cent to overall revenues) as well as subscription revenues have each grown by 4 per cent over the previous year.
Circulation leadership

Jagran runs 37 editions of its newspaper across 11 States under the ‘Dainik Jagran’ brand. It is the most read (with maximum circulation) regional language newspaper in the country, catering largely to the Hindi speaking States. There is very strong presence in towns and rural areas.

Rural demand is expected to be fairly robust as evidenced by sales figures of FMCG companies and the increasing presence of mobile operators in these areas. As with broadcasting, delivering increasingly regional (and localised) flavour has been a prov

Hindustan Times, for example, has looked to expand in the Hindi language genre under the Hindustan brand and is now the third largest read in this category according to recent IRS surveys (IRS 2008 R2).

Against this background, Jagran derives 60 per cent of its advertising revenues from regional advertisers and the balance from national ones. Regional advertising has grown by 14 per cent over the past one year for the company. With leadership in most of these 11 States, Jagran appears well placed to monetise its leadership status.

Near-term triggers for advertising revenues include the education sector, with admissions around the corner as well as the election-related ads (expected to show up in the 2009-10 numbers).

Over the long-term however, telecom, with more operators looking to expand and new operators coming in, automobiles, with the sector looking at a revival and others such as FMCG and financial services may be key advertisers.

A recent FICCI-KPMG report estimates advertising in print to grow at a compounded annual rate of 10 per cent to Rs 17,430 crore over the next four-five years led by education, services and banking sectors.
Cost triggers

Jagran managed to increase its cover price late in December, which the company has indicated would help increase circulation revenues by about 10 per cent.

This apart, newsprint prices, which were hovering around $900 per tonne levels in mid 2008, have now declined to $600 levels, and this should help rein in raw material cost substantially.

Raw material cost accounts for over 40 per cent of revenues currently for Jagran. But given that companies maintain close to a three-month inventory of newsprint, the cost savings may trickle in only from the first quarter of FY10 onwards.

The rupee has also appreciated nearly 8 per cent from its peak to Rs 47 levels.

A cap on employee costs (through curtailed increments) is also in place. Taken together, all these factors point to strong cost-optimisation, which could help margins for Jagran.
Financials

For the nine months of FY09, the company’s revenues grew by 11 per cent to Rs 622.1 crore over the same period of FY08, while net profits declined by 15.5 per cent to Rs 69.8 crore. Raw material cost had shot up by 22 per cent during this period.

This, clubbed with a 21 per cent increase in staff cost, may have played a key role in bringing down margins.

The company also has an out-of-home (OOH) advertising division (Jagran Engage) that has started to contribute to revenues. I-Next, its bilingual daily, has also started to contribute to advertising revenues. Both these are at a nascent stage and may have to be watched closely for their contribution to overall revenues.

Competition from papers such as Hindustan and Amar Ujala requiring a rejig of the pricing strategy is a key risk to earnings.

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Bajaj Auto

Investors holding the Bajaj Auto stock can consider taking profits at the current price levels. The stock has run up quite sharply from its low of Rs 294 in December 2008. Trading at Rs 1133, the trailing price-earning ratio for the stock is 17 times.

Bajaj Auto is still at a discount to the BSE Auto basket (21 times PE) though it is almost on a par with the market leader, Hero Honda (trading at 17.8 times PE).

After a poor show until the December quarter of 2008, Bajaj Auto has seen an improvement in sales numbers, driven by easier credit availability, particularly for the high-end models. The company’s earnings over the next few quarters may also benefit from excise duty cuts and lower input costs.

However, across segments, be it motorcycles, three-wheelers or scooters, planned launches will hold the key to the company regaining lost market share. In this backdrop, the sharp improvement in the stock’s valuation limits the room for upside.
Two wheelers

Bajaj Auto offers eight models in the two-wheeler space, catering primarily to the executive and premium segments. In 2008, it reduced its focus on economy bikes to concentrate on executive and premium bikes, taking the view that these segments offer better long-term potential.

But with the credit squeeze that affected higher value purchases, the strategy shift appears to have backfired as the bulk of growth in the two-wheeler sector over the past year came from sub-125 cc motorcycles, an area of strength for its rival - Hero Honda.

With sales volumes declining for the year, Bajaj Auto’s market share in motorcycles also dropped from 54 per cent in FY-08 to 42 per cent in FY-09.

An improvement is evident in the premium bike sales in recent months, with sales recovering by about 40 per cent from their low in December 2008. This has come from the XCD range, mainly the XCD — 135 launched in January 2008 apart from the continued interest in its flagship model — Pulsar, including the new variants launched in May.

On a year-on-year basis, growth still remains muted. When compared to last year’s numbers, the year-to-date sales are down by 18 per cent, while volumes sold in May 2009 were 8 per cent below its last year’s numbers.
Riding on launches

Plans to strengthen the premium segment include the launch of another Pulsar. Pulsar enjoyed a 60 per cent market share in the total bikes sold in the above 150 cc segment until FY-08. Its share-to-sales has now fallen to 56 per cent.

Given the intense competition from foreign players in terms of product offerings and pricing, it is crucial for the company to strengthen the Pulsar brand.

The same is the case with its three-wheelers segment as well, which accounts for 15 per cent of the total volumes.

The success of the launches will be vital to revive the market share that the company ceded to Piaggio and Mahindra & Mahindra last year. Bajaj Auto also plans to launch a scooter that is likely to rival Honda Motors’ Activa. Kristal (rolled out in 2007) is yet to capture significant share (its current market share even less than one per cent).

The ambitious compact car project has its share of uncertainties. With an investment of Rs 1,000 crore, the car is expected to be launched by end-FY-10.

However, the company has not yet signed MoU with its partners, Nissan and Renault, which will be providing technology apart from each of them holding 25 per cent stake in the JV. Competition in this segment is also intense, as Nano has already garnered sizeable bookings and Maruti Suzuki is aggressively adding to its line-up.
Unfulfilled promises

Bajaj Auto has increased its stake by another 25 per cent in KTM Sportmotorcycle, a significant player in high-end bikes. In early 2008, Bajaj Auto promised to roll out the KTM’s bikes in India. These plans were deferred to May 2009 due to adverse market conditions.

Kawasaki Ninja, another launch planned this year, is yet to materialise. The launch of Ninja and KTM’s bikes may be significant for Bajaj Auto to hold up its image in the high-end bikes market.
Financial Performance

Notwithstanding a 20 per cent drop in sales volumes compared with last year and a 10 per cent decline in standalone net sales in the last quarter of FY-09, Bajaj Auto has managed to end the March quarter with an 8 per cent increase in net profits.

A 16 per cent decline in raw material costs, primarily on account of lower prices of steel, aluminium and rubber aided the company’s operating profits register a 9.2 per cent growth.

But for the forex loss on account of hedge contracts and expenses incurred under a voluntary retirement scheme, the net profits would have seen a 14 per cent increase compared to the previous year.

Exports have been the saving grace to Bajaj Auto’s sales numbers for 2008-09, expanding 25 per cent even as domestic sales shrank 10 per cent.

The company has recently commenced operations in its plant in China to cater to exports. This may add to its cost competitiveness.

Though the latest quarter of FY-09 ended on a slightly optimistic note, rough patches witnessed in the earlier quarter dented the annual performance.

Bajaj Auto has the headroom to benefit from softening raw material costs and exports from the Chinese plant, but its business prospects hinge mainly on how the market accepts its launches.

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C&C Constructions

Investors with a long-term horizon may capitalise on attractive valuations to buy into the stock of construction contractor C&C Constructions. Currently trading at Rs 181.5, the stock is valued at 8 times its trailing four-quarter earnings.

C&C Constructions’ core competency is in road infrastructure, the segment accounting for 61 per cent of the order-book. This segment may see a pick-up in the coming years, with the focus on infrastructure development. Entry into BOT projects and other infrastructure spaces such as railways, water and sanitation, as well as commercial buildings provides a balance to the order-book and a platform for expansion into bigger projects and new segments.

Order-book growth has been healthy; at 75 per cent (to Rs 3,057 crore) since the start of the current financial year in June 2008. The order-book features a 14 per cent overseas exposure, constituting projects in challenging areas such as Afghanistan, which offer superior margins. It is executable over a period of 30 months, providing good earnings visibility for the coming quarters.

In tandem with the order-book, sales too clocked strong growth at 50 per cent-plus over the past four quarters, despite the general economic slowdown. Sales growth is suggestive of fast-paced execution, allowing it to secure more contracts while building on credibility. The company has traditionally banked on joint venture partners to qualify for bigger bids and enter new construction segments. That said, the company has also managed to bag projects on its own merits; share of joint venture projects in its order-book has dropped to 45 per cent in the March 2008 quarter over 55 per cent the quarter before. Another strategy is to own most of its equipment. While that may mean increased capex in the short-term, it ensures timely availability of critical equipment and easy mobility between projects.

A shift away from the Afghan projects, high employee costs and interest payouts due to debt-funded growth have cut down margins significantly over the past few quarters; this may continue. Debt is currently 1.5 times equity, and will be capped at 1.75 times. Increased project intake and execution has stretched the working capital cycle, but that should get addressed with easing credit availability.

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Bernanke raises red flag as fiscal gap climbs

Federal Reserve chairman, Ben S. Bernanke, called for a plan to restore fiscal balance, even as the Barack Obama administration spends its way out of trouble in the aftermath of the worst economic crisis since the Great Depression. Testifying before the House Budget Committee, Bernanke said the US government must address the immediate problems of a crippling recession that has erased trillions of dollars in household wealth, hit investment portfolios and sent unemployment soaring. Still, he said, the government needs to think about putting its fiscal house back in order. "Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," he said. "Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance," he added. The deficit is expected to reach US$1.8 trillion this year, the highest projections as a share of gross domestic product (GDP) since World War II. He said that the Fed won’t finance government spending over the long term, while warning that the financial industry remains under stress and the credit crunch continues to limit spending. The Fed chief said deficit concerns are already influencing the prices of long-term Treasuries. Yields on 10-year notes have climbed about 1% since the Fed announced plans in March to buy US$300bn of long-term government bonds.

SEBI clears Tech M open offer for Satyam

Venturbay Consultants Pvt Ltd and Tech Mahindra Ltd. announced that the last date by which Letter of Offer will be dispatched to the shareholders has been revised to June 9 from the earlier scheduled date of June 3. Furthermore, last date of withdrawal by shareholders has also been revised to June 26 from the earlier scheduled date June 27. Dates for all other activities of the schedule remains unchanged. The announcement was made by Kotak Mahindra Capital Co., the lead manager to the offer. Tech Mahindra has made the open offer for acquiring an additional 20% stake in Satyam at a price of Rs58 per share. The total cost will be Rs11.55bn. The Securities and Exchange Board of India (SEBI) has cleared the open offer for Satyam by Tech Mahindra. However, the capital market regulator has asked Tech Mahindra to share with the company’s stakeholders the information Satyam had provided to the bidders.

HDIL to develop rental housing project in Virar

Housing Development & Infrastructure Ltd. (HDIL) said that it has entered in to a joint venture with Mumbai Metropolitan Region Development Authority (MMRDA) for development of 525 acre of land under rental housing scheme at Virar. As per the arrangement, the company will develop approximately 13 million square feet for rental space and hand it over to MMRDA free of cost and remaining about 39 million of sq ft space will be available to the company for free sale. But, the Shiv Sena expressed a strong opposition to the scheme terming it a move to separate Mumbai from the state. Reacting to threats by the hardline saffron party, the state government decided to make domicile a compulsory eligibility criterion in the new rental housing project. Reports said that the government would immediately issue orders allowing only those who have resided in the Mumbai Metropolitan Region (MMR) for the last 15 years to avail a rental home under the scheme. Meanwhile, the MMRDA is opposing any such change in the policy.

Abhu Dhabi govt sells Barclays shares

Abu Dhabi's state-owned International Petroleum Investment Company (IPIC) sold securities in Barclays worth £1.25bn on June 4. Demand for the reserve capital notes - similar to preference shares - was three times the amount on offer when they were sold on June 3. Earlier this week, the state-backed IPIC had disposed of 1.3 billion shares in Barclays. The shares were sold on June 2 for about £5bn, according to Credit Suisse Securities, handing IPIC a gain of £1.5bn in just seven months. Last year, Barclays secured a £7bn capital injection which was largely backed by oil-rich investors from Abu Dhabi and Qatar, as it sought to avoid taking government funds in a bid to survive the credit crunch. Abu Dhabi's shock move this week to sell came after Barclays shares had surged by about 50% in value since last October. Meanwhile, reports emerged that Singapore investment firm Temasek Holdings has sold its stake in Barclays at a loss of £500-600mn.

Govt may not merge MTNL and BSNL: A Raja

Telecommunications and IT Minister A. Raja ruled out a merger of Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL), saying that there are a lot of legal hurdles against the proposed move. Publicly listed MTNL provides telecom services in New Delhi and Mumbai, while BSNL serves the rest of India. Raja said that the Government would consider the listing of BSNL as proposed by the state-run company's Board. He however said that the company's union will also be involved in talks for the same. Estimates suggest that BSNL is worth US$100bn and dilution of 10% stake would help the company raise US$10bn. Raja also said that he would push for an extension of tax sops under Sections 10(A) and 10(B) of the of the Software Technology Parks of India Act for at least another two years. The sops, which were due to lapse in the current financial year, have already been extended by one year.

India receives 35% less rain in 1st week of June: IMD

Monsoon rains so far have been 35% below average till the week ended June 3 after the tropical cyclone Aila lashed the country’s east coasts on May 25, slowing progress of the weather system, according to the Indian Meteorological Department (IMD). The country received 12.5 millimeters of rainfall in the period as against the 50-year average of 19.2 millimeters, the weather bureau said. Rains were 32% below normal in the three months to May 31, the IMD said. The nation received 91 millimeters in the quarter, less than the 134.5 millimeter average, the agency said. Rains were deficient or scanty in 24 out of 36 weather zones last week, and normal in the remainder. The June-September rainfall will be 96% of the so-called long-period average, recorded between 1941 and 1990, a level deemed near normal, the weather bureau said.

The meteorological analysis and numerical weather prediction models suggest further advances of rains over some more parts of Karnataka, Andhra Pradesh and Coastal areas of Orissa during next 48 hour, the IMD says on its web site. The southwest monsoon may revive in two days, after remaining stagnant for the last few days following an early onset over the Kerala coast, the weather bureau said. Scattered to fairly wide spread rainfall activity over west coast of India and northeastern states, is likely from June 7, it added. The monsoon covered Kerala, Tamil Nadu, Karnataka and Andhra Pradesh and some parts of Orissa, West Bengal and Sikkim before stalling on May 25, the IMD said. Rains were meant to move next to Maharashtra.

Exports continue to slide in April, May

India's merchandise exports declined 33.2% in April from a year earlier to US$10.74bn, the Commerce & Industry Ministry said. In rupee terms, exports were down 16.4% at Rs643.4bn. Imports fell by 36.6% to US$15.75bn in April while in rupee terms the same were down by 20.6% at Rs788.32bn. This takes the trade deficit for the month to US$5bn from US$8.75bn in April last year. Oil imports declined by a whopping 58.5% to US$3.63bn in April and non-oil imports fell by 24.6% to US$12.11bn. Meanwhile, media reports showed that merchandise exports have fallen by 30% in May, the eight straight month of decline. Quick estimates put out by the Commerce Ministry showed that May exports fell to US$10.8bn from US$15.5bn in the year-earlier period. Commerce & Industry Minister Anand Sharma said that there would be measures in the Union Budget and in the foreign trade policy, to be announced in August, to help alleviate some of the pain being felt the sector, the worst victim in India of the global recession.

Weekly Stock Picks - Jun 6 2009

Buy Reliance Capital

Buy Indiabulls Real Estate

Buy ONGC

Buy R Com

Buy Escorts

Weekly Newsletter -Jun 6 2009

The market seems to be cruising on a vehicle without reverse gear. Sooner than later, some speed-breakers could come up which the advancing market may find tough to drive through. Given that we had the longest rally in recent years, some rest could be considered for the bulls. The IIP numbers may turn out to be better than the previous months which could give a further fillip after a brief correction if any. Inflation numbers have become a non-event for the time being. With no other major news, the market could get provoked by petty issues. Stay guarded and take some profit home. Having said that, Monday morning should at least be a good one with US markets rising on the back of a surprisingly better jobs data. From thereon, the market will be at the mercy of global cues, besides of course liquidity and risk appetite of the bulls. A lot will be reported about the forthcoming budget over the next few days. Though President's parliament address has made things amply clear about the new Government's thinking on policy front, budget will be an event to watch out for.

Fall from grace...GM finally files for bankruptcy

General Motors (GM), once the crown jewel of America's flourishing industrial sector and the world's No.1 automaker till not too long ago, filed for Chapter 11 bankruptcy on June 1. The Detroit auto major submitted its reorganization papers to a federal clerk in Lower Manhattan. This marked the largest bankruptcy filing in the history of American industry. US President Barack Obama marked the lowest point in GM's 100-year history - its bankruptcy filing - by barely mentioning it, instead focusing his remarks on the second chance GM will have to become a viable company with more government aid. He described the investment of more billions of taxpayer dollars in GM as necessary to avert a calamity that could hurt millions of people.

The Obama administration will commit another US$30bn on top of the US$19.4bn it has already given GM to cover its losses and fund its operations. The US government will get a 60% equity stake in the new company after restructuring, as well as US$8.8bn in debt and preferred stock. A trust established to fund health care benefits for retirees of the United Auto Workers (UAW) union will own 17.5%, and get the right to purchase another 2.5%.

The governments of Canada and Ontario will lend US$9.5bn and receive 12% of the equity in the new GM. Finally, bondholders who lent GM US$27bn will forgo much of what they are owed and instead get a 10% share of the new company plus the right to secure another 15%. In addition, investors who own 54% of those bonds have agreed to not fight plans for a quick bankruptcy.

GM employs 230,000 people around the world, building more than 20,000 vehicles a day. GM said it aims to emerge from Chapter 11 by August, shorn of much of its debt, four of its eight brands, and surplus plants and dealers.

Meanwhile, GM's European arm will be shielded from the bankruptcy after an 11th hour deal reached on May 30 that will see Magna International, the Canadian parts supplier, take over the business with financial backing from the German government. Fiat withdrew from talks with Berlin. GM's European operations include the Opel and Vauxhall brands. Under the signed Memorandum of Understanding (MoU) between GM and Magna, shares in GME will be transferred to a trust to protect it from a GM insolvency. GME will also receive €1.5bn in credit guarantees from the German government to keep it afloat while GM and Magna negotiate a final deal.

Inclusive growth tops UPA's agenda once again

The United Progressive Alliance (UPA) Government is committed to maintaining high economic growth with low inflation particularly in relation to prices of essential agricultural and industrial commodities, President Pratibha Patil told a joint session of parliament on June 4. The Government will ensure that the growth process is not only accelerated but also made socially and regionally more inclusive and equitable, Patil said in her customary address.

The current financial year is expected to see a slowdown of growth on account of the global recession, but a range of measures taken by the Government in the past few months of its last term have begun to show results, Patil said. The immediate priority is to focus on management of the economy that will counter the effect of the global slowdown by a combination of sectoral and macro-level policies, the President said. The Government will focus attention on sectors that are adversely affected, especially Small and Medium Enterprises, Exports, Textiles, Commercial Vehicles, Infrastructure and Housing, according to the President. This will be accompanied by measures to achieve a countercyclical expansion in public investment in infrastructure sectors, including public-private partnerships, she said.

Infrastructure development will be a key focus area for the next five years, the President said, adding that public investment in infrastructure is of paramount importance. The Government will develop a roadmap for listing and people-ownership of public sector undertakings while ensuring that the Centre equity does not fall below 51%. The UPA will also steadfastly observe fiscal responsibility so that the ability of the Centre to invest in essential social and economic infrastructure is continuously enhanced.

The roadmap for moving towards a Goods and Services Tax (GST) will be vigorously pursued. The Government is fully seized of the issue of illegal money of Indian citizens outside the country in secret bank accounts. It will vigorously pursue all necessary steps in coordination with the countries concerned, the President said.

The Government intends to add at least 13,000 MW of new power generating capacity each year through a mix of coal, hydel, nuclear and renewable resources. The pace of oil and gas exploration will be intensified and India’s oil diplomacy will be aggressively pursued, Patil said. Reforms in the coal sector, for which a detailed blueprint has been prepared, will be pursued with urgency, she added. The international civil nuclear agreements will be operationalised with various countries even as domestic sources of uranium are exploited and work continues on the indigenously designed fast breeder and thorium reactors.

Post Session Commentary - June 5 2009

The domestic stock market managed to close the extreme volatile session on a positive note. The domestic market came off sharply form the day’s high in the final hour of the session to pare most of its gains due to profit booking across selective indices. Though there was a gap up opening tracking the positive Asian markets but it soon turned volatile as profit booking takes a lead. The investors took calculated steps during the trading session as the investors are eyeing the Union budget, which is scheduled to be announced on July 3, 2009 by Pranab Mukherjee.

The domestic key benchmark indices opened on a positive note tracking the positive global markets but remained rangebound for most part of the session. However, the market showed sharp upward trend after the mid session but did not able to sustain at that level and fell to pare most of its gains. Moreover, in the global arena, the Bank of England kept the interest rate unchanged. Also no fresh measures have been announced by the Bank to stimulate the economy. The Bank, in the last month, had announced that it would be injecting an extra pound 50bn into the economy as part of its quantitative easing policy. Policymakers are attempting to find out how the economy is faring amid tentative signs of a recovery. According to a closely-watched survey on the service sector, the recovery may be coming faster than expected. Moreover, On Thursday, the US Markets closed in positive territory. On macro economic scenario, retailers reported unimpressive comparable store sales for May. The sector had lost 3.0% at their session low however later managed to close at a loss of 1.2%. On the other hand, the numbers of initial jobless claims are slowing as initial weekly claims for the week ending May 30 totaled 621,000, in-line with the consensus estimate. Continuing jobless claims cooled off from record highs by coming in at 6.74 million, which is below what was expected. However, the BSE Sensex after witnessing a lot of volatility during the session closed above 15,100 mark and NSE Nifty above 4,580 mark. From sectoral front, investors on-loaded position across the sectors led by Capital Goods, IT and Auto index while the investors offload across FMCG and Realty index.

Among the Sensex pack 20 stocks ended in positive territory and 10 in negative. The market breadth indicating the overall health of the market remained strong as 1,519 stocks closed in green while 1,318 stocks closed in negative and 54 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 94.87 points or 0.63% at 15,103.55 and NSE Nifty closed up by 14.25 points or 0.31% at 4,586.90. The BSE Mid Caps and Small Caps closed with losses of 36.30 and 66.54 points at 5,409.78 and 6,458.65. The BSE Sensex touched intraday high of 15,257.30 and intraday low of 14,993.60.

Gainers from the BSE Sensex pack are Grasim Inds (6.06%) followed by Tata Motors (5.31%), Bhel (5.30%), L&T (4.35%), Infosys (3.91%) and Tata Power (3.82%).

Losers from the BSE Sensex pack are ITC (5.46%), Reliance Infra (3.66%), SBI (3.09%), DLF (1.95%) and Reliance Inds (1.94%).

On the global markets front the Asian markets which opened before the Indian market, closed mixed. Strait Times, Seoul Composite, Nikkei and Hang Seng closed up by 1.42%, 1.20%, 1.02% and 0.96% at 2,396.35, 1,394.71, 9,768.01 and 18,679.53. While Sanghai Composite and Taiwan Weighted closed lower by 0.48% and 0.28% at 2,753.981 and 6,767.10.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading higher by 0.40% at 5,085.23 and in London FTSE 100 is trading up by 1.33% at 4,445.47.

The BSE Consumer Durables index increased (0.78%) or 23.55 points to close at 3,030.84. Main gainers are Rajesh Export (3.73%), Titan Industries (2.28%) and Gitanjali Gems (0.32%).

The BSE Bankex index increased (0.49%) or 39.63 points at 8,204.48. Scrips that mostly gained are Bank of Baroda (3.49%), HDFC Bank (2.15%), ICICI Bank (2.30%), Allahabad Bank (1.93%) and Axis Bank (0.36%).

The BSE Metal index ended marginally lower by (0.03%) or 4.03 points at 11,695.50. Welspun Gujurat Sthal (4.09%), Ispat Industries (3.93%), Sesa Goa (3.74%), NMDC (3.49% and Jindal Saw (2.02%) ended in negative territory.

The BSE IT index grew (2.61%) or 80.35 points to close at 3,154.35. Gainers are Infosys Technologies (3.91%), Financial Technologies (1.94%), TCS (1.93%), HCL Technologies (0.29%) and Oracle Fin (0.06%).

The BSE Power improved (0.18%) or 5.42 points at 3,008.64. Losers are GVK Power (4.52%), Suzlon Energy (4.31%), Reliance Power (3.28%), Torent Power (1.37%) and NTPC (1.17%). However Tata Power ended higher by (3.82%).

The BSE Realty index dropped (2.12%) or 87.25 points to close at 4,029.74. Losers are Phoenix Mill (8.91%), HDIL (5.67%), India Bull Real (4.75%), Anant Raj Industries (4.09%) and Penland (2.30%).

The BSE Health Care increased (0.77%) or 27.87 points at 3,638.11. Gainers are Dr. Reddy (6.22%), Aurobindo Pharma (4%), Biocon (2.98%), Disman Pharma (2.94%), and Sun Pharmaceutical (2.70%).

Indian Overseas Bank (IOB) dropped 0.65% to Rs91.75. The company has informed that on June 04, 2009, the Bank has entered into a Joint Venture Agreement with Bank of Baroda and Andhra Bank for setting up a banking subsidiary in Malaysia in the name of BIA Bank (Malaysia) Bhd. The shareholding pattern in the subsidiary is Bank of Baroda - 40%, Indian Overseas Bank - 35% and Andhra Bank - 25%.

GMR Infrastructure Ltd fell 3.63% to Rs. 171.05. The net profit of the company rose 55.79% to Rs 97.67 crore on a 47.07% increase in total income to Rs 165.02 crore in the year ended March 2009 over the year ended March 2008.

JSW Steel Limited plunged 0.37% to Rs 584.75. The company reported a growth of 33% in Crude Steel production for May 2009 compared to that of corresponding month in the last fiscal year. The substantial growth in production is mainly attributable to the production from 2.8 MTPA expansion project at Vijayanagar works.

Jain Irrigation tumbled 0.12% to Rs650.35. The company has bagged the TN-IAMWARM order of World Bank, which is valued at Rs. 778 mn covering 22,345 Ha to be executed during this year.

BSE Bulk Deals to Watch - June 5 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/6/2009 530721 ANG AUTO PIVOTAL SEC P LTD S 85644 58.08
5/6/2009 512535 ASAHI INFR P PARESH L RATHI S 224406 1.85
5/6/2009 530355 ASIAN OILFIE DECENT FIN SER LTD B 128000 67.82
5/6/2009 530355 ASIAN OILFIE RELIGARE FINVEST LTD S 128000 67.81
5/6/2009 512149 AVANCE TECHN JASMINSBAJORIYA B 38647 21.84
5/6/2009 512149 AVANCE TECHN BHAVANA DEVANG MASTER B 25000 21.90
5/6/2009 512149 AVANCE TECHN VICKY RAJESHBHAI JHAVERI S 25000 21.90
5/6/2009 531733 BAFNA SPINNI PUKHRAJHIRACHANDBAFNA S 250000 2.83
5/6/2009 511664 BGIL FL TEC TARUNKUMARGURUCHARANBRAHMBHATT S 39020 46.41
5/6/2009 511664 BGIL FL TEC PRARTHANATARUNKUMARBRAHMBHATT S 44188 46.14
5/6/2009 590059 BIHAR TUBES THE PERLESS CONSULTANCY SERVICES PRIVATE LIMITED S 200000 63.90
5/6/2009 500446 CAROL INFO GANDIV INVESTMENT PVT. LTD. B 214342 56.38
5/6/2009 500446 CAROL INFO COSMO INVESTMENT B 192032 58.01
5/6/2009 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD B 579130 6.50
5/6/2009 531682 CAT TECHNOL JMP SECURITIES PVT LTD S 434822 6.50
5/6/2009 523200 CLASS DIAM I MERRILL LYNCH CAPITAL MARKET ESPANA SA SVB S 465000 20.91
5/6/2009 500136 ESTER INDUST AJAY GUPTA B 373610 23.57
5/6/2009 590024 FERT CHEM R.B.K.SHARE BROKING LIMITED. B 62638 55.73
5/6/2009 590024 FERT CHEM R.B.K.SHARE BROKING LIMITED. S 38084 55.24
5/6/2009 532836 GREMAC INFRA VIKSIT ENGINEERING LIMITED B 80000 52.50
5/6/2009 532836 GREMAC INFRA RISHIRAJ AGARWAL S 129500 52.61
5/6/2009 532836 GREMAC INFRA GUJARAT FREEFLOW SALTS REFINERY PVT LTD S 123378 52.74
5/6/2009 508918 GREYCELLS EN PARSHURMAGSHINDE B 32000 252.00
5/6/2009 508918 GREYCELLS EN HEMANG KIRITKUMAR MUCHHALA S 32000 252.00
5/6/2009 504176 HIGH ENERGY KALIDENDI VENUGOPAL RAJU B 5000 128.37
5/6/2009 504176 HIGH ENERGY SANJAYPDAVDA S 5000 133.04
5/6/2009 504176 HIGH ENERGY KALIDENDI VENUGOPAL RAJU S 5000 134.88
5/6/2009 500185 HINDUS CONST MORGAN STANLEY INVESTMENT MGT INC. A/C MORGAN STANLEY INDIA INVT B 1200000 123.75
5/6/2009 500185 HINDUS CONST TEMPLETON INSTITUTIONAL FUNDS INC TEMPLETON EMERGING MARKETS SERI S 1200000 123.75
5/6/2009 590018 HISAR METAL RIDHINARULA B 27000 26.55
5/6/2009 590018 HISAR METAL SUKARMA FINANCE LTD S 26398 26.55
5/6/2009 532264 INDAGE RES PIVOTAL SEC P LTD S 206500 17.30
5/6/2009 532627 JP HYDROPOW OPG SECURITIES P LTD B 4288245 97.99
5/6/2009 532627 JP HYDROPOW OPG SECURITIES P LTD S 4288245 98.10
5/6/2009 516078 JUMBO BAG LT KRUPAL VIKRAMBHAI PATEL S 37175 31.87
5/6/2009 532081 K SERA SERA BASMATI SECURITIES PVT LTD B 375289 17.93
5/6/2009 532081 K SERA SERA S V ENTERPRISES B 1492720 17.84
5/6/2009 532081 K SERA SERA S V ENTERPRISES S 1038303 18.00
5/6/2009 531687 KARUTURI GLO KMUK A/C LTD SANDSTONE CAPITAL INDIA MASTER FUND LTD B 5000000 15.80
5/6/2009 531687 KARUTURI GLO MAVI INVESTMENT FUND LIMITED S 3840386 15.80
5/6/2009 532092 KIRTI FINVES VIKAS TUKARAM MANE B 271000 0.61
5/6/2009 500250 L.G.BALABROS EAST SAIL S 500000 16.46
5/6/2009 590011 MOVING PICTU-PMS RAHULGUPTA B 50000 5.51
5/6/2009 531083 NIHAR INFO DIVYESH NIHAR BODA B 74525 3.35
5/6/2009 531083 NIHAR INFO SATYANAGASURYANARAYANA BODA S 90918 3.34
5/6/2009 523670 NOIDA MEDI C JAYKPANDYA B 31456 15.62
5/6/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD B 236604 57.05
5/6/2009 590057 NORTHGATE TE JMP SECURITIES PVT LTD S 346606 57.04
5/6/2009 523483 PACIFIC INDU GANGA JAMUNA FINANCIAL ADVISOR PVT LTD B 7500 321.45
5/6/2009 523483 PACIFIC INDU ASHOKA FINSTOCK LTD B 9963 319.99
5/6/2009 523483 PACIFIC INDU BHARATJAYANTILALPATEL S 7500 317.92
5/6/2009 523483 PACIFIC INDU ASHOKA FINSTOCK LTD S 9963 319.93
5/6/2009 530923 PASSARI CELL SUNITHA KUMARI S 26600 31.90
5/6/2009 517522 RAJ GLO WIR MRINALINI TRADING CO PVT LTD B 85000 76.00
5/6/2009 517522 RAJ GLO WIR SURBHI INV & TRADING CO PVT LTD S 85000 76.00
5/6/2009 503162 REL CHEMO IN RAKESHBHAI AMULAKHBHAI MEHTA B 30765 39.53
5/6/2009 526753 ROSELABS LTD PAWANKUMAR AGARWAL S 124235 11.70
5/6/2009 531898 SANGUINE MD SETU SECURITIES PVT LTD B 150000 4.36
5/6/2009 531898 SANGUINE MD BCB FINANCE PRIVATE LIMITED B 86265 4.36
5/6/2009 531898 SANGUINE MD SANGHVI FINCAP LTD. S 200000 4.36
5/6/2009 532886 SEL MANUF MAVI INVESTMENT FUND S 90600 83.49
5/6/2009 512499 SHALIMAR PRO ANANTPRAKASHKABRA S 150000 1.58
5/6/2009 532765 USHER AGRO HEMCHANDGANDHI S 250000 39.19
5/6/2009 513216 UTTAM GALVA SANJUG TRADING COMPANY LIMITED B 1100000 57.27
5/6/2009 513216 UTTAM GALVA YATINKHANNA S 1100000 57.26
5/6/2009 531874 VENUS VENT KANCHAN VIJAYKUMAR THAKKAR B 37230 49.63
5/6/2009 531874 VENUS VENT VIPULHIRALALSHAH B 30000 49.68
5/6/2009 531874 VENUS VENT PATCHAVASRIKANTH S 30000 50.00
5/6/2009 531874 VENUS VENT KANCHAN VIJAYKUMAR THAKKAR S 32225 49.71
5/6/2009 532648 YES BANK FRANKLIN TEMPLETON MUTUAL FUND B 1500000 135.00
5/6/2009 532648 YES BANK MAGS FINVEST PVT LTD S 2000000 136.63

NSE Bulk Deal Watch - June 5 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,291447,1228.87,-
05-JUN-2009,ADLABSFILM,Adlabs Films Limited,A TO Z STOCK TRADE PRIVATE LIMITED,BUY,285667,452.67,-
05-JUN-2009,ADLABSFILM,Adlabs Films Limited,GLOBE CAPITAL MARKET LIMITED,BUY,103628,451.44,-
05-JUN-2009,BAJAUTOFIN,Bajaj Auto Finance Ltd,RELIANCE CAPITAL TRUSTEE CO. LTD. A/C RELIANCE VISION FUND,BUY,493727,166.05,-
05-JUN-2009,CREWBOS,Crew B.O.S. Products Limi,NEENA DHAWAN,BUY,71200,48.70,-
05-JUN-2009,DSKULKARNI,DS Kulkarni Dev. Ltd.,BP FINTRADE PRIVATE LIMITED,BUY,215992,65.45,-
05-JUN-2009,HARRMALAYA,Harrisons Malayalam Ltd,VAIBHAV DOSHI,BUY,135050,84.93,-
05-JUN-2009,HCC,Hindustan Construc Co.,MORGAN STANLEY INVESTMENT MANAGEMENT INC A/C MORGAN STANLEY,BUY,1305000,124.85,-
05-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,3649756,54.79,-
05-JUN-2009,ISPATIND,Ispat Industries Limited,EXCEL FINCOM,BUY,7379403,27.77,-
05-JUN-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,9672083,27.97,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,3370050,98.24,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,GENUINE STOCK BROKERS PVT LTD,BUY,3457667,97.57,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,PRB SECURITIES PRIVATE LTD.,BUY,3307114,97.10,-
05-JUN-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,BUY,442019,17.93,-
05-JUN-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,RELIANCE CAPITAL MUTUAL FUND A/C RELIANCE GROWTH FUND,BUY,2373982,285.00,-
05-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,2063488,26.80,-
05-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,291447,1229.94,-
05-JUN-2009,ADLABSFILM,Adlabs Films Limited,A TO Z STOCK TRADE PRIVATE LIMITED,SELL,285667,452.23,-
05-JUN-2009,ADLABSFILM,Adlabs Films Limited,GLOBE CAPITAL MARKET LIMITED,SELL,237474,454.91,-
05-JUN-2009,ALPSINDUS,Alps Industries Ltd.,BEAUMARIS INVESTMENTS LIMITED,SELL,250000,16.03,-
05-JUN-2009,ANGAUTO,ANG Auto Limited,PIVOTAL SECURITES PVT. LTD.,SELL,77845,58.41,-
05-JUN-2009,BAJAUTOFIN,Bajaj Auto Finance Ltd,MACQUARIE BANK LIMITED,SELL,414631,166.12,-
05-JUN-2009,CLASSIC,Classic Diamonds (India),MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,530579,20.93,-
05-JUN-2009,DSKULKARNI,DS Kulkarni Dev. Ltd.,BP FINTRADE PRIVATE LIMITED,SELL,204992,65.65,-
05-JUN-2009,HARRMALAYA,Harrisons Malayalam Ltd,VAIBHAV DOSHI,SELL,47050,84.65,-
05-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,3697036,54.79,-
05-JUN-2009,ISPATIND,Ispat Industries Limited,EXCEL FINCOM,SELL,7379403,27.82,-
05-JUN-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,10652983,27.95,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,3375150,98.33,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,GENUINE STOCK BROKERS PVT LTD,SELL,3442016,97.66,-
05-JUN-2009,JPHYDRO,Jaiprakash Hydro-Power Li,PRB SECURITIES PRIVATE LTD.,SELL,3182114,97.14,-
05-JUN-2009,KALINDEE,Kalindee Rail Nirman (Eng,T ROWE PRICE INT INC A/C T ROWE PRICE NEW ASIA FUND,SELL,355177,202.55,-
05-JUN-2009,KSERAPRO,K Sera Sera Productions L,BASMATI SECURITIES PVT LTD,SELL,1100,17.74,-
05-JUN-2009,LGBROS,LG Balakrishnan & Bros ,EAST SAIL, (MAU) PARI WASHINGT,SELL,657011,16.33,-
05-JUN-2009,LUMAXAUTO,Lumax Automotive Systems,RELIGARE FINVEST LTD.,SELL,45000,30.75,-
05-JUN-2009,SELMCL,SEL Manufacturing Company,MAVI INVESTMENT FUND,SELL,100000,83.29,-
05-JUN-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,AXIS BANK LTD,SELL,2480000,285.02,-
05-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2080734,26.81,-

Market flat almost

The market appeared to be heading towards a negative close after a strong bout of profit taking towards the close shaved off nearly 153 points from the day’s high.

Starting the day with a positive gap of 31 points at 15040, the Sensex witnessed strong optimism till afternoon. Sustained buying in several counters held the market firm above 15200 levels in the first half of the trading session. In afternoon session, the index notched up further gains to touch the day's high of 15257. However, the market slid towards the close, as weakness in select heavyweights, fast moving consumer goods, realty and oil stocks erased 200 points from the index’ day’s high. The Sensex however ended the session with marginal gains of 95 points at 15104, while Nifty gained 14 points to close at 4587.

The market breadth was positive. Of the 2,891 stocks traded on the BSE, 1,519 stocks advanced, 1,318 stocks declined. 54 stocks ended unchanged. Most of the sectoral indices on the BSE remained above their yesterday’s close. BSE CG gained 2.95% followed by BSE IT (up 2.61%), BSE Auto (up 2.49%) and BSE Teck (up 1.58%). However, BSE FMCG (down 2.34%), BSE Realty, BSE Oil & Gas and BSE Metal closed with marginal losses.

Among the Sensex stocks, Grasim Industries was the leading gainer, soaring 6.06% at Rs2,510.70 for the day. Tata Motors advanced 5.31% at Rs389.05, Bharat Heavy Electricals jumped 5.30% at Rs2287.40, Larsen & Toubro shot up by 4.35% at Rs1519.30, Infosys Technologies added 3.91% at Rs1,690.55, while Tata Power, Hindalco Industries, Mahindra & Mahindra, Sun Pharmaceutical Industries and ACC closed with marginal gains. Among laggards, ITC tumbled 5.46% at Rs191.40, Reliance Infrastructure shed 3.66% at Rs1,226.80 and State Bank of India declined 3.09% at Rs1,817.90. DLF, Reliance Industries and Tata Steel lost 1% each.

Over 8.61 crore shares of Cals Refineries changed hands on the BSE followed by JP Hydro (3.20 crore shares), Unitech (3.05 crore shares), Satyam Computer Services (2.65 crore shares) and Ispat Industries (2.28 crore shares).

Market extends rally for thirteenth week; settle at multi month high

Key benchmark indices surged to multi-month highs, extending gains for the thirteen straight week in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. The barometer index BSE Sensex raced past the psychological 15,000 mark. Besides strong inflow from foreign funds, positive global cues and further signs of recovery in domestic and global economy boosted the sentiment further. Strong buying momentum was seen in small and mid-cap stocks

There are signs of recovery in the Indian economy. Manufacturing activity in India expanded for a second straight month in May 2009 to its highest in eight months, a survey showed, reflecting a revival in domestic demand but export orders remained weak. The Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.

The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said.

President Pratibha Patil addressed to a joint session of both houses on 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.

Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.

Hopes of market friendly measures propelled key benchmark indices in the week ended Friday, 5 June 2009. The BSE Sensex advance 478.30 points or 3.27% to 15,103.5512, its highest closing since 12 August 2008. The S&P CNX Nifty gained 137.95 points or 3.1% to 4586.90 its highest closing since 11 August 2009.

The BSE Mid-Cap index gained 353.04 points or 6.98% to 5,409.78 and the BSE Small-Cap index advanced 471.83 points or 7.88% to 6,458.65 in the week ended Friday, 5 June 2009. Both these indices outperformed the Sensex

Trading for the week started on an upbeat note with markets advancing on Monday, 1 June 2009 in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. The BSE 30-share Sensex gained 215.38 points, or 1.47%, to 14,840.63 and the S&P CNX Nifty rose 80.95 points, or 1.82%, to 4,529.90

Key benchmark indices saw divergent trend on Tuesday, 2 June 2009 with the BSE Sensex logging small gains and Nifty ending slightly lower in what was a highly choppy trading day. The BSE 30-share Sensex rose 34.28 points, or 0.23%, to 14,874.91. However the S&P CNX Nifty fell 4.65 points, or 0.10%, to 4525.25

Indices continued to see divergent trend for the second running day on Wednesday, 3 June 2009 as the Sensex ended with marginal loss while the S&P CNX Nifty settled slightly higher. The BSE 30-share Sensex fell 4.01 points, or 0.03%, to 14,870.90 after surging past the psychological 15,000 mark, the level it reached for the first time in nearly 9 months in intra-day trade. However, the S&P CNX Nifty rose 5.45 points, or 0.12%, to 4,530.70, its highest closing since 12 August 2008.

Buying frenzy in late trade helped indices reverse early losses caused due to weak global cues and log decent gains on Thursday, 4 June 2009. The BSE 30-share Sensex rose 137.78 points, or 0.93%, to 15,008.68 and the S&P CNX Nifty shot up 41.95 points, or 0.93%, to 4,572.65

Market extended gains on Friday, 5 June 2009 on the back of firm global cues and continued buying demand for index pivotals. The BSE 30-share Sensex rose 94.87 points, or 0.63%, to 15,103.55 and the S&P CNX Nifty rose 14.25 points, or 0.31%, to 4,586.90

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped 2.28% to Rs 2211.85 after its German unit Trevira, a specialty polyester manufacturer, went bankrupt. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fibre and yarn producer

Meanwhile, the Directorate General of Hydrocarbons has also reportedly contested the authenticity of claims of gas reserves at Krishna Godavari basin blocks D-3 and D-9 by Hardy Oil & Gas Plc. UK-based Hardy Oil, late last month, said 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. 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, it had said. Hardy Oil & Gas Plc has 10% stake each in the two blocks where RIL is the operator with 90% interest.

Metal shares advanced on strong domestic demand and firm prices on the London Metal Exchange (LME). Steel Authority of India (up 1.71%), Hindalco (up 9.68%), Sterlite Industries (up 7.95%), and Hindustan Zinc (up 9.55%), edged higher.

The world's sixth largest steel maker by sales Tata Steel jumped 14.18% to Rs 463.90 after its unit, Tata Steel UK, won approval from banks to ease conditions on a 3.7 billion pounds loans it took to buy Anglo-Dutch Corus. The announcement was made on Saturday, 30 May 2009.

India's top small car maker by sales Maruti Suzuki gained 5.99% to Rs 1082.25 after total sales rose 15.7% to 79,872 units in May 2009 over May 2008.

India's top truck marker by sales Tata Motors jumped 15.55% to Rs 389.05 after global credit rating agency Moody's on Tuesday, 2 June 2009 revised upwards outlook for its low investment grade rating on from negative to stable after the company successfully refinanced a bridge loan for Jaguar and Land Rover acquisition. Despite the sharp rise, the stock is off day's high of Rs 378.70

India's second largest listed cellular services provider by sales Reliance Communications (RCom) surged 10.81% to Rs 338.85 on the company's plans to raise funds through the qualified institutional placement route.

RCom will seek shareholders' approval to garner funds from qualified institutional investors, either through a share sale or an issue of a variety of instruments including fully convertible, partly convertible or non-convertible debentures with warrants or any other security. Although the company did not say how much it planned to raise reports suggested it may be around $500 million and will be used to strengthen financial position for a planned participation in the upcoming auction for nationwide 3G and Wi-Max spectrum allocation by the Indian government.

India's largest cellular services provider by sales Bharti Airtel rose 0.63% to Rs 824.80, on fears that the merger deal with MTN would lead to dilution in earnings per share. On 25 May 2009, Bharti Airtel 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

Infrastructure shares gained on hopes the Congress-led UPA government may boost spending on infrastructure sector. GVK Power & Infrastructure (up 1.86%), GMR Infrastructure (up 3.79%), Bhel (up 5.17%), IVRCL Infrastructures & Projects (up 11.21%), surged

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 1.18%), Housing Development & Infrastructure (up 7.13%), and Unitech (up 22.63%), gained.

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 largest bank by net profit and branch network State Bank of India (SBI) fell 2.74% to Rs 1817.90 on profit booking after the recent rally. Reportedly the bank hopes to earn more profit than the landmark figure of Rs 10,000 crore in the current fiscal

India's second largest bank by net profit ICICI Bank rose 1.41% to Rs 751.15 after it said on 4 June 2009 it will cut lending rates by 50 basis points from Friday, 5 June 2009. The benchmark advance rate, or the rate that it charges its top customers, will drop to 15.75% from 16.25%. It also cut floating reference rate (FRR) applicable to floating rate retail loans (including floating rate home loans) by 50 basis points. The revised FRR will be 12.75% from 13.25%. All the existing floating rate customers to benefit from the cut.

Shares of public sector firms gained on speculation the UPA government may revive disinvestment programme. Shipping Corporation of India (up 5.86%), HMT (up 4.87%), Hindustan Copper (up 26.55%), MMTC (up 24.09%), rose

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 the back burner due to stiff opposition from the Left front which provided support to the previous government for most part of the five-year term.

India's largest cement manufacturer by sales ACC gained 9.57% to Rs 857.95 after cement production rose 1.11% to 1.81 million tonnes and cement dispatches rose 1.11% to 1.82 million tonnes in May 2009 over May 2008.

India's second largest software firm by sales Infosys Technologies gained 5.53% to Rs 1690.55 on reports the firm is looking at three to four companies with annual revenue of $100 million to $200 million in the U.S. and Europe for a potential acquisition.

Wholesale price index rose 0.48 % in the 12 months to 23 May 2009 lower than previous week's annual rise of 0.61%, government data showed on Thursday, 4 June 2009. The annual inflation rate was 8.9% during the corresponding week of the previous year.

The National Stock Exchange (NSE) after trading hours on 29 May 2009, announced a reduction in the lot size of a number of derivatives contracts as a part of a periodic review to meet a previously set value of the contract at Rs 2 lakh. For most of the stocks, the changes will be applicable from July 2009 derivative contracts. The reduction in lot size may result in increased participation from retail investors.

Thus, the lot size of Maruti Suzuki has been slashed to 200 from 800 and that of Steel Authority of India (Sail) has been reduced to 1350 from 5400. The lot size of Axis Bank has been halved to 450 from 900 and for Reliance Industries also the lot size has been halved to 150 from 300. State Bank of India's lot size too has been halved to 132 from 264.

India's infrastructure sector output grew 4.3% in April from a year earlier, government data showed on Tuesday, 2 June 2009. Output had risen 2.3% in the same month last year, and climbed 2.7% in the fiscal year ended March 2009 compared with 5.9% growth in 2007/08. The infrastructure sector accounts for 26.7% of India's industrial output.

Data during trading hours on Monday 1 June 2009 showed that the Market Purchasing Managers' Index (PMI) based on a survey of 500 companies, rose to 55.7 in May 2009 from April's 53.3, well above the threshold of 50 that separates expansion from contraction.

The manufacturing index was boosted mainly by the new orders index, which rose to 59.1 in May 2009 from 54.9 in April 2009. Manufacturing makes up about 15% of India's gross domestic product. Although domestic demand improved, the pricing power of manufacturers was hurt by intense competition, while higher commodity prices also pushed up input prices, Market economist Gemma Wallace said

Globally, China's official purchasing managers' index, a key economic indicator, slipped slightly in May 2009, but stayed above the 50 reading indicating manufacturing activity continued to expand for the third consecutive month. The Purchasing Managers Index slipped to 53.1 in May 2009 from 53.5 in April 2009 but held over the expansionary 50 mark, the China Federation of Logistics & Purchasing said.

US Treasury Secretary Timothy Geithner today, 1 June 2009 said that the global recession seemed to be losing force but that it will be critical for the United States and China to institute major economic reforms to put the world on a more sustained footing. Geithner said that a successful transition to a more balanced and stable global economy will require substantial changes to economic policy and financial regulation around the world and especially in the world's largest and third largest economies.

US GDP decreased at an annual rate of 5.7% in the first quarter of 2009, according to preliminary estimates from the Bureau of Economic Analysis. Although a significant contraction, the fall was smaller than the 6.3% drop in the fourth quarter of last year, and also beat advance estimates which had suggested a decline of 6.1%

Market seen consolidating after sharp recent rally

Key benchmark indices are likely to consolidate as some profit booking might emerge after witnessing a stupendous rally in the past thirteen weeks. However a lot would also depend on global cues, foreign funds flows and the progress of monsoon.

The recent surge propelled the BSE Sensex and the S&P CNX Nifty to multi-month highs in anticipation of a strong push for economic reforms by the newly-elected United Progressive Alliance (UPA) government. Hopes of market friendly measures helped the BSE Sensex advance 478.30 points or 3.27% to 15,103.55 and the S&P CNX Nifty gained 137.95 points or 3.1% to 4586.90 in the week ended Friday, 5 June 2009.

However the broad 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 even see a pre-budget rally on hopes of accelerated economic reforms and pro-reforms announcements. Finance Minister Pranab Mukherjee will present the Union Budget on 3 July 2009 while Railway Minister Mamata Banerjee will present the Rail Budget on 1 July 2009. The Economic Survey will be held on 2 July 2009. The Union Budget 2009 attains significant importance in the wake of the global financial crisis. Despite the country being relatively unharmed compared to the West, the UPA government will have many tasks on its to-do list, which includes boosting growth and demand, continuing to maintain liquidity, balancing inflation and also containing the country's worrying fiscal situation.

The Government has made its intention clear to push for reforms and pursue the disinvestment agenda, which was met with stiff opposition in the UPA's previous stint when the Left parties were members for a major part of the five-year tenure. 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.

While addressing to a joint session of both houses on 4 June 2009 President Pratibha Patil disclosing the agenda of the UPA coalition government said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.

Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.

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.

The BSE Sensex has advanced 5456.24 points or 56.55% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6943.15 points or 85.08%.

Foreign institutional investors (FII) were the key drivers of the recent solid surge. After being heavy net sellers of Rs 4250.30 crore in January 2009 and to the tune of Rs 2707 crore in February 2009, foreign fund selling eased in March 2009, when they tuned net sellers of only Rs 1.1 crore. Their buying gathered steam in April 2009 when they pumped Rs 7384.50 crore. They continue their buying spree in May 2009 pouring Rs 20,606.80 in equities. Their inflow in calendar year 2009 stood at Rs 21,818.80 crore till 3 June 2009. Meanwhile, mutual funds, which are sitting on a large cash pile, are also likely to buy on dips.

Meanwhile annual monsoon rains may further advance to more parts during the next 48 hours, India Meteorological Department (IMD), said on its website late on Thursday, 4 June 2009. Monsoon rains, which hit the country's mainland on 23 May 2009 ahead of its normal schedule of 1 June 2009, encountered a weak phase in the last week of May 2009.

The IMD on 17 April 2009 forecast a near normal monsoon this year saying rainfall in the June-September 2009 monsoon season is 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.

Jaiprakash Associates, Divi's Laboratories, Indiabulls Financial Services, Sadbhav Engineering, CESC will unveil their March 2009 quarterly earnings in the forthcoming week. Aggregate results of 2157 firms showed net profit rose 27.90% on 0.7% rise in sales in q4 march 2009 over q4 march 2008.

Sensex extends gains for seventh straight day

The benchmark index BSE Sensex rose for the straight seventh day on firm global cues. It hits its highest closing since 12 August 2008. The BSE 30-share Sensex rose 94.87 points, or 0.63%, off close to 155 points from the day's high and up close to 110 points from the day's low. Banking stocks pared gains and index heavyweight Reliance Industries faltered. While IT stocks rose. Hopes of renewed reforms and rekindled growth by the new government also bolstered investor sentiment.

The market was volatile. After a firm start tracking positive Asia market turned red for a brief period in mid-morning trade before regaining strength later. Market pared gains after hitting the fresh day's high in early afternoon trade. Market remained firm in afternoon trade. It surged to the fresh day's high in mid-afternoon trade. It pared most of its gains in late trade.

The recent solid surge in the market materialised as foreign funds' pumped Rs 20,606.80 crore in May 2009 and their inflow in calendar year 2009 Rs 21,818.80 crore (till 3 June 2009). As per the provisional data on NSE, foreign funds bought shares worth Rs 465.34 crore on Thursday, 4 June 2009.

Annual monsoon rains may further advance to more parts during the next 48 hours, India Meteorological Department (IMD), said on its website late on Thursday. Monsoon rains, which hit the country's mainland on 23 May ahead of normal schedule of 1 June, encountered a weak phase in the last week of May.

In the political front, President Pratibha Patil addressed to a joint session of both houses on Thursday, 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.

Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.

There are reasons to believe that the recent strong rally may continue. For one, equity analysts are raising earnings forecasts of India Inc on hopes that the new government will focus on infrastructure sector and push economic reforms to boost growth.

The investors expect a pre-budget rally over the next one month 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.

Finance Minister Pranab Mukherjee is likely to present the Union Budget in the first week of July 2009 with focus on ‘Aam Admi' while providing special attention to sectors hit hard by global crisis. Railway Budget for the year 2009-10 would be presented on 1 July 2009 followed by Economic Survey on 2 July 2009.

Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present. 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.

Congress candidate Meira Kumar was elected Speaker of the 15th Lok Sabha unanimously on Wednesday, 3 June 2009. Kumar is the first woman to be elected as the Speaker of the Lok Sabha. The first session of the 15th Lok Sabha on Monday, 1 June 2009. The session will last till 9 June 2009. In all, the Parliament session will have seven sittings.

European shares rose on Friday, with Rio Tinto leading miners higher after scrapping a planned tie-up with Chinalco, and energy companies rising on higher crude prices. Key benchmark indices indices in France, Germany and UK rose by between 0.54% to 1.58%.

. Asian shares rose on Friday as hopes for a global economic recovery drove up appetite for riskier assets, but traders were cautious ahead of U.S. monthly job data. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore rose by between 0.96% to 1.42%. Key indices in Taiwan and China fell by between 0.28% to 0.48%.

U.S. nonfarm payrolls data due later in the day is expected to show employers cut 520,000 jobs in May 2009, lower than 539,000 in April 2009, and the unemployment rate is forecast to rise to 9.2 % from 8.9 % in April 2009.

Trading in the US index futures indicated Dow could rise 19 points at the opening bell today 5 June 2009.

The US markets advanced on Thursday 4 June 2009 as a report showed jobless claims fell last week and banks gained. The Dow Jones Industrial Average gained 74.96 points, or 0.9%, to 8,750.24. The S&P 500 index rose 10.70 points, or 1.2%, to 942.46, and the Nasdaq Composite rose 24.10 points, or 1.3%, to 1,850.02.

In economic news, initial jobless claims fell by 4,000 last week. Continuing claims fell to 6.73 million. It's the first time that it has declined since early January 2009, following 17 straight weeks of record highs. However, retail sales data disappointed. May 2009 sales reports from the nation's largest retailers showed 76% of retailers missed estimates.

The BSE 30-share Sensex rose 94.87 points, or 0.63%, to 15,103.55 its highest closing since 12 August 2008. The Sensex rose 248.62 points at the day's high of 15,257.30 hit in the mid-afternoon trade, its highest since 13 August 2008. At the day's low of 14,993.60, the Sensex fell 15.08 points in mid-morning trade.

The S&P CNX Nifty rose 14.25 points, or 0.31%, to 4,586.90 its highest closing since 11 August 2008. Nifty June 2009 futures were at 4594.80, at a premium of 7.90 points as compared to the spot closing of 4586.90. Turnover in NSE's futures & options (F&O) segment was Rs 65,938.39 crore lower than Rs 66,932.80 crore on Thursday, 4 June 2009.

BSE clocked a turnover of Rs 8.934 crore today lower than Rs 9,175.26 crore on 4 June 2009.

The Sensex jumped 5456.24 points or 56.55% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6,943.15 points or 85.08%.

The BSE Capital Goods index (up 2.95%), the BSE IT index (up 2.61%), the BSE Auto index (up 2.49%), the BSE TECk index (up 1.58%), the BSE PSU index (up 1.33%), the BSE Consumer Durables index (up 0.78%), the BSE Healthcare index (up 0.77%) outperformed the Sensex.

The BSE FMCG index (down 2.34%), the BSE Realty index (down 2.12%), the BSE Oil & Gas index (down 0.77%), the BSE Metal index (down 0.03%), the BSE Power index (up 0.18%), the BSE Bankex (up 0.49%) underperfomed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,514 shares rose as compared with 1,315 that declined. A total of 54 shares remained unchanged.

Among the 30-member Sensex pack, 20 rose while the rest declined.

The BSE Mid-Cap index was down 0.67% and the BSE Small-Cap index was down 1.02%. Both the indices underperformed the Sensex.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) fell 1.94% to Rs 2,211.85 after its German unit Trevira, a specialty polyester manufacturer, went bankrupt. Reliance Industries had acquired Trevira five years ago for Rs 440 crore. This acquisition in 2004 had propelled Reliance to the position of the world's largest polyester fibre and yarn producer. The announcement was made after market hours on 3 June 2009.

Banking stocks pare gains on profit taking after they rose recently on hopes the UPA government will pursue financial sector reforms. India's largest private sector bank by net profit ICICI Bank rose 2.3% to Rs 751.15. The stock hit a high of Rs 763.80 and a low of Rs 738. Its American depository receipt (ADR) rose 7.19% on Thursday, 4 June 2009.

ICICI Bank on 4 June 2009 said it will cut lending rates by 50 basis points from Friday, 5 June 2009. The benchmark advance rate, or the rate that it charges its top customers, will drop to 15.75% from 16.25%. It also cut floating reference rate (FRR) applicable to floating rate retail loans (including floating rate home loans) by 50 basis points. The revised FRR will be 12.75% from 13.25%. All the existing floating rate customers to benefit from the cut.

India's second largest private sector bank by operating income HDFC Bank rose 2.15% to Rs 1,418.70. Its ADR rose 3.06% overnight. The stock hit a high of Rs 1,431 and a low of Rs 1,386.50.

But, India's biggest bank in terms of branch network State Bank of India (SBI) fell 3.09% to Rs 1,817.90. The stock hit a high of Rs 1,920.90 and a low of Rs 1,810. Reports suggest SBI Chairman O P Bhatt said there is room to cut lending rates by 25 basis points.

India's biggest dedicated housing finance firm by operating income HDFC fell 0.63%.

Outsourcing focussed IT stocks rose on hopes aggressive measures by the United States to revive the economy may bear fruit. US is the biggest market for Indian IT firms. India's second largest software firm by sales Infosys Technologies rose 3.91% on recent reports the firm is looking at three to four companies with annual revenue of $100 million to $200 million in the U.S. and Europe for a potential acquisition. Its ADR gained 0.94% overnight.

India's third largest software services exporter by sales Wipro rose 0.49% as its ADR rose 1.48% overnight.

But, India's largest software services exporter by sales TCS rose 1.93%.

Cement stocks rose on posting healthy growth in shipments in the month of May 2009. India Cements, Grasim Industries, ACC, Ambuja Cements rose by between 0.68% to 6.06%.

Some capital goods stocks rose on hopes the UPA government's aim to revive economic growth would spur orders. Larsen & Toubro, Bharat Heavy Electricals, Crompton Greaves, Siemens, Thermax, Praj Industries rose by between 0.78% to 5.3%.

Auto stocks rose on posting good monthly sales figures in the month of May 2009. Tata Motors, Mahindra & Mahindra, Bajaj Auto, Maruti Suzuki India and Hero Honda Motors rose by between 0.73% to 5.64%.

Healthcare stocks rose on hopes newly elected UPA government will give primary importance to healthcare segment and health of citizens. Ranbaxy Laboratories, Dr Reddy's Laboratories, Biocon, Wochardt, Pfizer rose by between 0.41% to 6.22%.

Telecom stocks rose on hopes government may speed up the auction process for the spectrum allocation of third generation WiMax services and stress on rural telephony. Idea Cellular and Bharti Airtel rose by between 1.56% to 1.59%. Reliance Communications fell 0.98%.

Metal stocks as Copper rose in London, heading for a third straight weekly gain, on speculation that the pace of job cuts slowed in the U.S., adding to indications that the worst of the economic slump may be past. Steel Authority of India, National Aluminum Company, Hindalco Industries and Sterlite Industries rose by between 0.77% to 3.39%.

Hindustan Zinc rose 0.05% on raising zinc and lead prices.

Sugar stocks rose on hopes of a firm sugar prices on fall in output. Dhampur Sugar, Shree Renuka Sugars and Bajaj Hindustan rose by between 2.74% to 8.92%.

Shares of multiplex cinema operators rose on reports talks between Bollywood producers and multiplex owners came to an end as the two parties reached a revenue sharing deal. Cinemax India, Adlabs Films, PVR, Inox Leisure, Pyramid Saimira, and Fame India rose by between 0.95% to 5%.

Cals Refineries clocked the highest volume of 8.61 crore shares on BSE. Jaiprakash Associates (3.2 crore shares), Unitech (3.05 crore shares), Satyam computer Services (2.65 crore shares) and Ispat Industries (2.26 crore shares) were the other volume toppers in that order.

Jaiprkash Hydro Power clocked the highest turnover of Rs 308.19 crore on BSE. Unitech (Rs 298.34 crore), Suzlon Energy (Rs 292.50 crore), Reliance Capital (Rs 274.32 crore) and Reliance Industries (Rs 217.99 crore) were the other turnover toppers in that order.

SGX Nifty Live Update - June 5 2009

4,607.5 +22.5

Pre Session Commentary - June 5 2009

Today domestic markets are likely to open positive as the US markets closed in green on the back of better than expected weekly job claims. The other Asian markets are trading positive thus paving way for another northward movement today. The government’s focus on the key sectors would help the market sentiments for further firmness. One would witness strong buying sentiments across broader level especially in the mid cap and small cap basket. Stock specific movement would also prevail throughout the trading session.

On Thursday, the domestic markets closed with moderate gains. The session started with a subdued opening on the back of weak global cues. However statement from our Honorable President Pratibha Patil in the 15th Lok Sabha about reviving the Indian economy helped built strong sentiments. As per her statement the government would keep a keen focus on infrastructure, exports, SMEs, housing sector and recapitalise public sector banks. The government would further adopt the disinvestment policy to reduce government’s stake in PSUs to 51%. The markets reacted very positively to the statement. Sectors like Realty, CG, HC and Power inclined by 3.29%, 3.23%, 2.60% and 2.30% respectively. On the other hand, Mid cap and Small cap stocks were once again the out performers for the day with remarkable gains of 2.26% and 2.20% respectively. We expect the markets to be trading positive.

The BSE Sensex closed with a gain of 137.78 points at 15,008.68 and NSE Nifty ended up by 41.95 at 4,572.65. BSE Mid Caps and Small Caps closed with gains of 120.54 points and 140.27 points at 5,446.08 and 6,525.19 respectively. The BSE Sensex touched intraday high of 14,599.43 and intraday low of 15,026.03.

On Thursday, the US Markets closed positive. The markets started with phenomenal gains led by financial stocks which closed 4.0% higher as all the banking stocks rallied. The energy and materials stocks rebound from their previous losses to close with moderate gains of 2% and 2.2% respectively. On macro economic scenario, retailers reported unimpressive comparable store sales for May. The sector had lost 3.0% at their session low however later managed to close at a loss of 1.2%. On the other hand, the numbers of initial jobless claims are slowing as initial weekly claims for the week ending May 30 totaled 621,000, in-line with the consensus estimate. Continuing jobless claims cooled off from record highs by coming in at 6.74 million, which is below what was expected. Traders had broader look at the unemployment picture with tomorrow''s nonfarm jobs report, which is due ahead of the opening bell. The US light crude oil for July delivery inclined by 3.7% to settle at $68.70 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed high by 74.96 points at 8,750.24, the NASDAQ Composite (RIXF) index inclined by 24.108 points to close at 1,850.02 and the S&P 500 (SPX) gained 10.70 points to close at 942.46.

Indian ADRs rallied on Thursday. In the telecom space, Tata Communication was up 10.08% and MTNL was up 4.15%. In the banking space, ICICI Bank was up 7.19% and HDFC Bank was up 3.06%. In the IT space, Wipro was up 1.48%, Infosys was up 0.94%, Patni Computers was up 2.79% while Satyam Computers was down 15.38%.

Today major stock markets in Asia are trading positive. Hang Seng is flat at 18,498.92. Shanghai Composite is flat at 2,764.83. Japan''s Nikkei is trading up by 76.80 points at 9,745.76. Strait Times is also up by 14.09 points at 2,376.83. KLSE Composite is up by 8.57 points at 1,063.97.

The FIIs on Thursday stood as net sellers in equity and net buyers in debt. Gross equity purchased stood at Rs 3,423.80 Crore and gross debt purchased stood at Rs 428.20 Crore, while the gross equity sold stood at Rs 3,740.00 Crore and gross debt sold stood at Rs. 209.80 Crore. Therefore, the net investment of equity and debt reported were Rs (316.20) Crore and Rs 218.40 Crore respectively.

On Thursday, the partially convertible rupee closed at 47.20/21 per dollar, 0.3% weaker than it previous close at 47.07/08. The rupee fell as investors booked profit on previous rally.

On BSE, total number of shares traded were 80.49 Crore and total turnover stood at Rs 9,175.26 Crore. On NSE, total number of shares traded was 167.06 Crore and total turnover was Rs 26,357.67 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with 101522634 shares, Unitech with 89022623 shares, Hindalco with 21048781 shares, DLF with 14756408 shares, followed by Reliance Comm with 12108305 shares.

On NSE Future and Options, total number of contracts traded in index futures was 670007 with a total turnover of Rs 14,488.22 Crore. Along with this total number of contracts traded in stock futures were 490752 with a total turnover of Rs 29,650.73 Crore. Total numbers of contracts for index options were 893178 with a total turnover of Rs 205,43.25 Crore and total numbers of contracts for stock options were 36685 and notional turnover was Rs 2,250.60 Crore.

Today, Nifty would have a support at 4,525 and resistance at 4,626 and BSE Sensex has support at 14,912 and resistance at 15,245.

Stocks to Watch - Bharti Airtel, DLF, GMR

The government has reportedly asked Bharti Airtel to furnish details of its proposed $23-billion deal with South African operator MTN. The matter will be referred to the law ministry for legal opinion, the reports added.

Financial Technologies said on Thursday, 4 June 2009, the MCX Stock Exchange plans to divest 18% of its equity to Indian banks. Of this, it has already divested 6.48% equity with Union Bank of India and Bank of India through a primary offering for Rs 87.5 crore. The exchange is also expecting another 11.52% divestment to other public and private banks.

Indage Vintners has denied a report that it was in talks with Japanese beer maker Asahi Breweries and Indian entrepreneur Ravi Jain about a stake sale. Some reports had suggested Asahi and Jain were in the race to buy a major stake in Indage, which it said could attract an enterprise valuation of around $150 million.

Aban Offshore has reportedly told its bankers to moderate or change its huge debt repayment schedule and terms, due to a massive loan of Rs 15,000 crore taken for an overseas acquisition.

DLF is reportedly looking to sell land assets over the next one year to raise Rs 2000 crore in a bid to retire debt.

Fortune Hotels, a unit of ITC, is reportedly planning to launch 26 hotels in India by mid-2011. Currently it has 29 hotels with a room inventory of 2,400.

GMR Group is reported to be in talks with Nuclear Power Corporation of India to set up a nuclear power joint venture company.

Market may open higher

The key benchmark indices may open higher extending recent strong gains tracking positive global cues. Hopes of renewed reforms and rekindled growth by the new government may also bolster investor sentiment. However profit taking at higher levels may cap the upside.

The Sensex jumped 5361.37 points or 55.57% in calendar year 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 6848.28 points or 83.92%. The solid surge in the market materialised as foreign funds' pumped Rs 20,606.80 crore in May 2009 and their inflow in calendar year 2009 Rs 21,818.80 crore (till 3 June 2009). As per the provisional data on NSE, foreign funds bought shares worth Rs 465.34 crore on Thursday, 4 June 2009.

In the political front, President Pratibha Patil addressed to a joint session of both houses on Thursday, 4 June 2009 formally disclosing the agenda of the UPA coalition government. She said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list shares of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.

Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.

On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.

There are reasons to believe that the recent strong rally may continue. For one, equity analysts are raising earnings forecasts of India Inc on hopes that the new government will focus on infrastructure sector and push economic reforms to boost growth.

The investors expect a pre-budget rally over the next one month 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.

Finance Minister Pranab Mukherjee is likely to present the Union Budget in the first week of July 2009 with focus on ‘Aam Admi' while providing special attention to sectors hit hard by global crisis. Railway Budget for the year 2009-10 would be presented on 1 July 2009 followed by Economic Survey on 2 July 2009.

Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present. 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.

Congress candidate Meira Kumar was elected Speaker of the 15th Lok Sabha unanimously on Wednesday, 3 June 2009. Kumar is the first woman to be elected as the Speaker of the Lok Sabha. The first session of the 15th Lok Sabha on Monday, 1 June 2009. The session will last till 9 June 2009. In all, the Parliament session will have seven sittings.

Asian stocks gained today with the MSCI Asia Pacific Index set for its third weekly advance, after BHP Billiton Ltd. and Rio Tinto Group said they're forming an iron- ore venture and the yen fell to its lowest in a week. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan rose by between 0.26% to 0.95%. China's Shanghai Composite down 0.05%.

The US markets advanced on Thursday 4 June 2009 as a report showed jobless claims fell last week and banks gained. The Dow Jones Industrial Average gained 74.96 points, or 0.9%, to 8,750.24. The S&P 500 index rose 10.70 points, or 1.2%, to 942.46, and the Nasdaq Composite rose 24.10 points, or 1.3%, to 1,850.02.

In economic news, initial jobless claims fell by 4,000 last week. Continuing claims fell to 6.73 million. It's the first time that it has declined since early January 2009, following 17 straight weeks of record highs. However, retail sales data disappointed. May 2009 sales reports from the nation's largest retailers showed 76% of retailers missed estimates.

Tata Communications Ltd

Tata Communications