Annual Report - Jain Irrigation Systems - 2008-2009

JAIN IRRIGATION SYSTEMS LIMITED

ANNUAL REPORT 2008-2009

DIRECTOR'S REPORT

To
The Members,

The Directors' present hereby their report on the business and operations
of the Company and the financial statements for the year ended 31st March,
2009.

1. Financial Highlights:

Rs. in Million
(except EPS)
Particulars 2008-09 2007-08

Domestic Sales 17,487 12,926

Export Sales & Services 4,886 4,534

Other operating Income 280 129

Sales and Operating Income 22,653 17,589

Operating Profit 3,923 3,595

Interest and Finance Charges 1,563 1,134

Depreciation and Amortisation 473 398

Amounts written off and provisions 50 7

Profit before taxation and exceptional items 1,838 2,056

Exceptional items (Service tax disallowed) - 14
Provision for Tax

Deferred Tax (Asset)/Liability 615 570

Current Tax - provision 206 227

MAT Credit (206) (227)

Fringe Benefit 21 16

Profit for the year 1,202 1,455

Profit b/f from the previous year 2,463 1,386

Less Loss of Orient Vegetexpo Ltd. FY 07 - (5)

Balance available for appropriation 3,664 2,835

Out of which the Directors have
appropriated as under;

Proposed Dividend 219 194

Dividend Tax 37 33

General Reserve 120 145

Transfer to CRR 437

Balance to be carried forward 2,851 2,463
Earnings Per Share

Basic 16.12 21.48

Diluted 16.03 21.41

2. Operations:

The net sales grew by 28% on YoY basis while the other operating income has
grown at 117% to Rs. 280 mn. Despite a severe global slowdown the growth
looks satisfactory. The domestic sales grew at an impressive 35% to
Rs.17,487 mn on the back drop of a robust demand in MIS/SIS, Fruit
processing and PVC piping segments. The exports grew at 8% this year at
Rs.4,886 mn despite a major slowdown in the world economy post major bank
collapse in US. The notional loss on account of foreign currency
fluctuations Rs.777.2 mn (as against gain of Rs.150 mn last year) caused a
383 bps hit to the operating profit. FE loss is book entry and does not
have impact on cash flows, especially given the fact that the Company's FC
denominated loans are for a 8 year term. Thus, the operating profit at
Rs.3,923 mn would have improved by 30.7% had the FC notional loss not
arisen, reflecting the continual improvement in resource utilization. After
providing for depreciation and amortization of Rs. 473 mn, the interest and
finance charges of Rs. 1,563 mn, the deferred tax liability of Rs.615mn and
Rs.21mn of FBT, and the prior year expenses of Rs.4 mn, the profit for the
year is lower than the earlier year by about 17% at Rs. 1,202 mn.

Turnover drops

Nifty September 2009 futures at premium

Nifty September 2009 futures were at 4982, at a premium of 5.95 points as compared to the spot closing of 4976.05. Turnover in NSE's futures & options (F&O) segment was Rs 69,288.12 crore, sharply lower than Rs 83,762.65 crore on Thursday, 17 September 2009.

Reliance Industries September 2009 futures were at premium at 2102.80 compared to the spot closing of 2099.70.

Unitech September 2009 futures were near spot price at 112.50 compared to the spot closing of 112.10.

DLF September 2009 futures were near spot price at 428 compared to the spot closing of 428.80.

In the cash market, the S&P CNX Nifty rose 10.50 points or 0.21% at 4976.05.

BSE Bulk Deals to Watch - Sep 18 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
18/9/2009 505029 ATLAS CYC HR DYNAMIC STOCK BROKING INDIA PVT LTD B 38972 199.99
18/9/2009 505029 ATLAS CYC HR DYNAMIC STOCK BROKING INDIA PVT LTD S 37672 200.57
18/9/2009 505036 AUTOMO COR G PARESH PRITAMLAL MEHTA B 50000 235.00
18/9/2009 505036 AUTOMO COR G MELCHIOR INDIAN OPPERTUNITIES FUND S 50000 235.00
18/9/2009 526839 CCAP LTD BANSI CHETAN SHAH B 21050 63.08
18/9/2009 526546 CHOKSI LABOR AKHILESH JOSHI B 25523 11.11
18/9/2009 523200 CLASS DIAM I TRANSGLOBAL SECURITIES LTD. B 195128 28.77
18/9/2009 523200 CLASS DIAM I DB (INTL) OWN TRADING B 341173 28.47
18/9/2009 523200 CLASS DIAM I TRANSGLOBAL SECURITIES LTD. S 195128 28.72
18/9/2009 523200 CLASS DIAM I DB (INTL) OWN TRADING S 341173 28.41
18/9/2009 532022 FILAT FASH AMRUT SECURITIES LTD. B 186025 38.85
18/9/2009 532022 FILAT FASH HAR PRAKASH GAGGAR B 34369 36.21
18/9/2009 532022 FILAT FASH AMIT SHANTILAL MEHTA B 34750 37.29
18/9/2009 532022 FILAT FASH AADESH COMMODITIES PRIVATE LTD B 73400 37.59
18/9/2009 532022 FILAT FASH ROSHAN SHASHIKANT JHA S 50000 36.27
18/9/2009 532022 FILAT FASH AMRUT SECURITIES LTD. S 123896 37.77
18/9/2009 532022 FILAT FASH AMIT SHANTILAL MEHTA S 34750 37.96
18/9/2009 504701 GONTERM PEIP HITESH SHASHIKANT JHAVERI B 70001 28.45
18/9/2009 523467 JAI MATA GLA MOTI LAL BHASIN S 35574 6.81
18/9/2009 516078 JUMBO BAG LT JAYDEEP HASMUKHLAL KOTHARI S 35000 33.93
18/9/2009 516078 JUMBO BAG LT NEELAM JAIN S 43968 34.25
18/9/2009 526209 K S OILS LTD GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 5600000 58.75
18/9/2009 530813 KRBL LTD STANDARD MARKER B 203000 137.52
18/9/2009 530813 KRBL LTD RELIANCE COMMODITIES DMCC S 200000 137.50
18/9/2009 531261 KUSHAGRA SO ALKEN MANAGEMENT & FINANCIAL SERVICES B 100000 10.11
18/9/2009 531261 KUSHAGRA SO HANDFUL PVT LTD. S 487101 10.24
18/9/2009 504258 LAKSHM EL CO ASK INVESTMENT & FINANCIAL CONSULTANTS LTD. B 20000 164.00
18/9/2009 504258 LAKSHM EL CO LEENA SAMEER KOTICHA S 20000 164.00
18/9/2009 509048 LANCOR HOLDS SHEKAR VISWANATH RAJAMANI B 123859 87.34
18/9/2009 507912 LKP FIN KANCHAN CHHABRA B 77479 151.73
18/9/2009 507912 LKP FIN KANCHAN CHHABRA S 77479 155.30
18/9/2009 531528 MAARS SOFTWR SPM FINANCIAL ADVISORY SERVICES PVT LTD B 1653569 4.00
18/9/2009 531528 MAARS SOFTWR SPM FINANCIAL ADVISORY SERVICES PVT LTD S 1653569 4.03
18/9/2009 590011 MOVING PICTU-PMS AMAL TANNA S 44276 5.54
18/9/2009 515037 MURUEDM RAJESH KUMAR BIPINBHAI PATEL B 101395 36.71
18/9/2009 515037 MURUEDM RAJESH KUMAR BIPINBHAI PATEL S 101395 37.02
18/9/2009 530377 NILA INFRAST MANOJBHAI BHUPATBHAI VADODARIA B 2247000 2.05
18/9/2009 530377 NILA INFRAST PEARL STOCKHOLDING PVT LTD S 2247000 2.05
18/9/2009 524372 ORCHID CHEM GENUINE STOCK BROKERS PVT. LTD. B 382646 163.29
18/9/2009 524372 ORCHID CHEM GENUINE STOCK BROKERS PVT. LTD. S 382646 163.30
18/9/2009 531280 PANKAJ POLYM GSLOT ENTERTAINMENT LTD B 35000 9.57
18/9/2009 531280 PANKAJ POLYM SARYU PANDEY HUF S 40000 9.50
18/9/2009 511702 PARSHART INV SHIVA INVESTMENTS B 17250 16.50
18/9/2009 517556 PVP VENT LTD PVP MALAXMI ENERGY VENTURES PRIVATE LIMITED S 1700000 55.64
18/9/2009 590077 RANKLIN SOLU K M REDDY B 30000 40.25
18/9/2009 590077 RANKLIN SOLU NIBU KRISHNAN B 25800 39.65
18/9/2009 500330 RAYMOND LTD HITESH SHASHIKANT JHAVERI S 359997 223.69
18/9/2009 531646 RFL INTERNAT JAY DEEPAK KAPADIA B 47000 1.58
18/9/2009 531099 RUBRA MEDICA NILESH CHANDRAKANT SHETH S 65000 24.38
18/9/2009 506172 SAMPADA CHEM THE PREMIER COMMERCIAL COPVT LTD S 51000 26.01
18/9/2009 507458 UNITED BREWR PLATINUM INVESTMENT MANAGEMENT LIMITED A/C PLATINUM ASIA FUND B 1973000 192.00
18/9/2009 507458 UNITED BREWR DEUTSCHE SECURITIES MAURITIUS LIMITED S 1000000 192.00
18/9/2009 507458 UNITED BREWR CROWN CAPITAL LIMITED S 1000000 192.02

NSE Bulk Deals to Watch - Sep 18 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
18-SEP-2009,ALCHEM,Alchemist Ltd,CLSA (MAURITIUS) LIMITED,BUY,75000,104.00,-
18-SEP-2009,ALCHEM,Alchemist Ltd,GUPTA RAJEEV,BUY,11525,104.25,-
18-SEP-2009,APTECHT,Aptech Limited,MANISH VRAJLAL SARVAIYA,BUY,255997,279.78,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),DB (INTERNATIONAL) STOCK BROKERS LTD.,BUY,294027,28.38,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),DHYAN SECURITIES PVT LTD,BUY,305194,28.63,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),GAURAV ASSET MANAGEMENT PRIVATE LIMITED,BUY,88888,27.67,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),TRANSGLOBAL SECURITIES LTD.,BUY,276500,28.84,-
18-SEP-2009,GMRFER,GMR Ferro Alloys & Indust,ANKITA VISHAL SHAH,BUY,85297,38.33,-
18-SEP-2009,HCC,Hindustan Construc Co.,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,BUY,1540079,119.92,-
18-SEP-2009,HCC,Hindustan Construc Co.,MORGAN STANLEY MAURITIUS COMPANY LTD,BUY,2200000,124.10,-
18-SEP-2009,ICI,ICI India Ltd.,SBI MUTUAL FUND A/C MGLF,BUY,450000,565.00,-
18-SEP-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,12458114,24.00,-
18-SEP-2009,KFA,Kingfisher Airlines Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,1367541,53.16,-
18-SEP-2009,MURUDCERA,Murudeshwar Ceram Ltd,PATEL RAJESHKUMAR BIPINBHAI,BUY,91712,36.82,-
18-SEP-2009,ORCHIDCHEM,Orchid Chemicals Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,647632,163.28,-
18-SEP-2009,RAYMOND,Raymond Ltd.,JMP SECURITIES PVT LTD,BUY,354850,226.03,-
18-SEP-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,CARLSON FUND EQUITY ASIAN SMALL CAP (CASC),BUY,1500000,380.00,-
18-SEP-2009,ALCHEM,Alchemist Ltd,GUPTA RAJEEV,SELL,63000,104.00,-
18-SEP-2009,APTECHT,Aptech Limited,MANISH VRAJLAL SARVAIYA,SELL,255997,281.07,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),DB (INTERNATIONAL) STOCK BROKERS LTD.,SELL,294027,28.52,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),DHYAN SECURITIES PVT LTD,SELL,305194,28.67,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),GAURAV ASSET MANAGEMENT PRIVATE LIMITED,SELL,238888,26.84,-
18-SEP-2009,CLASSIC,Classic Diamonds (India),TRANSGLOBAL SECURITIES LTD.,SELL,276500,28.95,-
18-SEP-2009,GMRFER,GMR Ferro Alloys & Indust,ANKITA VISHAL SHAH,SELL,85297,38.85,-
18-SEP-2009,ICI,ICI India Ltd.,ASIAN PAINTS LIMITED,SELL,450000,565.00,-
18-SEP-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,12735178,23.98,-
18-SEP-2009,KFA,Kingfisher Airlines Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,1367541,53.23,-
18-SEP-2009,MURUDCERA,Murudeshwar Ceram Ltd,PATEL RAJESHKUMAR BIPINBHAI,SELL,91712,36.98,-
18-SEP-2009,ORCHIDCHEM,Orchid Chemicals Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,649002,163.38,-
18-SEP-2009,PNC,Pritish Nandy Comm. Ltd.,ALKA SECURITIES LTD,SELL,205000,33.77,-
18-SEP-2009,PVP,PVP Ventures Limited,PVP MALAXMI ENERGY VENTURES PRIVATE LIMITED,SELL,1900000,55.68,-
18-SEP-2009,RAYMOND,Raymond Ltd.,JMP SECURITIES PVT LTD,SELL,268136,225.27,-
18-SEP-2009,SRTRANSFIN,Shriram Trans Fin Co. Ltd,UNO INVESTMENTS,SELL,3300000,380.04,-

Post Session Commentary - Sep 18 2009

Indian market closed the today’s volatile session on flat note as investors booked profits following steep rise in previous sessions. Market continued to exhibit instability, as most of the Asian stocks ended lower, which led selling pressure in the domestic stocks. However, stocks tried to recover till mid session and again during final trading hours on gains in Auto stocks. Further, the negative opening of European markets hit the sentiments though they recovered later and contributed a bit of recovery in domestic stocks during last hours. Concerns regarding poor rains also contributed to the uneasiness of investors, as the South West monsoon rains were 41% below average in the week to 16 September 2009, according to the government-run India Meteorological Department (IMD). The BSE Sensex ended above 16,700 level and NSE Nifty closed above 4,950 mark.

Weak cues from the markets all over the world led the gap down opening of the market. Asian stocks had opened with losses and the US markets closed flat on Thursday, on concern that recent gains were overstretched. Market ignored the solid economic data and gave up all gains. Shares of financials, energy and other sectors that contributed to recent gains, lost ground. Further, Indian benchmark turned volatile and continued to skip up and down during the trading. Market exhibited instability during the trading and continued to swing between positive and negative terrain further. Stocks moved in a narrow range till mid session as weak Asian stocks fueled the downbeat response that directed the market to end the today’s journey on flat note. From the sectoral front, most of the buying was witnessed in Auto, Realty, Power and Pharma stocks. BSE Mid Caps and Small Caps stocks also witnessed some buying. However, Bank, Consumer Durable and FMCG stocks remained out of favour during the trading.

The market is closed on Monday, 21 September 2009, for a public holiday.

Among the Sensex pack 18 stocks ended in green territory and 12 in red territory. The market breadth indicating the overall health of the market remained positive as 1443 stocks closed in red while 1334 stocks closed in green and 81 stocks remained unchanged in BSE.

The BSE Sensex closed marginally higher by 30.19 points at 16,741.30 and NSE Nifty ended slightly up by 10.50 points at 4,976.05. BSE Mid Caps and Small Caps closed with gains of 27.61 and 56.14 points at 6,171.23 and 7,373.64 respectively. The BSE Sensex touched intraday high of 16,765.03 and intraday low of 16,610.05.

Gainers from the BSE Sensex pack are Maruti Suzuki (5.23 %), Reliance Infra (4.47%), JP Associates (3.82%), Bharti Airtel (2.18%), ACC Ltd (2.04%), DLF Ltd (1.92%), M&M Ltd (1.75%), SBI (1.69%), Grasim Insutries (1.49%), Hindalco (1.21%), Herohonda Motors (0.92%) and TCS Ltd (0.67%),

Losers from the BSE Sensex pack are ICICI Bank (3.35%), Sun Pharma (1.61%), RCom (1.49%), Sterlita Industries (1.29%), Tata Motors (1.19%), HDFC (0.95%), HDFC Bank (0.84%) and Tata Steel (0.59%).

On the global markets front, the Asian markets that opened before the Indian market, ended lower. Shanghai Composite, Hang Seng, Nikkei 225 and Singapore''s Straits Times Index closed down by 97.59, 145.06, 73.26 and 24.69 points at 2,962.67, 21,623.45, 10,370.54 and 2,647.91 respectively. Financial stocks took a hit after consumer lender Aiful said it will ask its creditors to accept delays in repayment of $3.1 billion in debts. However, Seoul Composite gained 4.24 points at 1,699.71 respectively.

European markets, which opened after the Indian market, are trading up. In Paris the CAC 40 is slightly higher by 2.35 points at 3,837.62, in Frankfurt DAX index is trading up 2.45 points at 5,733.59 and in London FTSE 100 is trading higher 5.47 points at 5,169.42.

The BSE Auto index gained (2.10%) or 135.89 points 6,603.10. Bharat Froge (12.88%), Escorts Ltd (12.67%), Mruti Suzuki (5.23%), Bajaj Auto (3.14%), and Ashok Leyland (1.67%) ended in green.

The BSE Realty index closed lower by (1.29%) or 56.88 points at 4,473.21. Losers are Orbit Co (10%), Sobha Dev (5.19%), Omaxe Ltd (4%), Unitech Ltd (2.23%) and DLF Ltd (1.92%).

The BSE Pharma index ended up by (0.89%) or 35.49 points 4,023.54. Gainers are Piramal Health (4.97%), Dr Reddys Lab (3.63%), Ranbaxy Lab (2.62%), Wockhardt Ltd (2.29%) and Glenmark Pharma (2.09%).

The BSE Power index ended up by (0.77%) or 23.22 points at 3,046.28. Gainers are Reliance Power (5.03%), Reliance Power (4.47%), Torrent Power (3.70%), Lanco Infra (1.78%) and GMR Infra (1.63%).

The BSE Bank index lost (1.17%) or 110.58 points at 9,324.10 on profit booking, as ICICI Bank (3.35%), Bank of India (2.72%), Indus Ind Bank (2.71%), Oriental Bank (2.48%) and IDBI Bank (2.40%) closed in negative terrain.

The BSE PSU index dropped by (0.16%) or 13.15 points at 8,742.90. Main losers are Shipping Corporation (4.74%), Dena Bank (3.06%), MRPL (2.98%), Bank of India (2.72%) and Bank Maha (2.66%).

Aurobindo Pharma Limited dropped by 2.49% despite it has received the tentative approval for Atomoxetine Hydrachloride Capsules 10mg, I8mg , 25mg , 4Qrng, 60mg, 8Qmg and 100mg and final approvals for Ribavirin Tablets 200mg and Ribavirin Capsules 200mg from the US Food & Drug Administration (USFDA).

Orchid Chemicals & Pharmaceuticals Ltd advanced by 0.15%. The company has announced that Orchid has received an approval from the US Food and Drug Administration (US FDA) for its Abbreviated New Drug Application (ANDA) for Zaleplon Capsules, 5 mg and 10 mg.

NATCO Pharma zoomed 6.26T. The company has launched NATFLU capsules (generic version of Tarniflu - Oseltamivir) the cure for Swine Flu. The medicine, whose maximum retail price is fixed at Rs. 480 for a bottle of ia capsules, is available in all licensed pharmacies.

HCL Technologies Ltd. closed lower by 1.02% at Rs. 334.50 despite on news that the company bagged a five-year transformational IT infrastructure management contracts aggregating $113 million from two power companies based in Texas, US.

Thermax Ltd spurted 5.56% after the company''s power division bagged a project order worth Rs. 1001 crore from a Hyderabad-based infrastructure firm.

Falcon Tyres Ltd gained 5% after the company fixed 29 September 2009 as the record date for a 2-for-1 stock split and a 2:1 bonus issue.

Flawless Diamond (India) Ltd zoomed 6.34% after the company bagged an overseas order worth Rs. 17 crore from Malay Impex of Hong Kong for supply of diamond and designer jewellery.

Dr Reddy''s Laboratories Ltd gained 3.63% on reports UK-based GlaxoSmithKline Plc is in talks to buy a 5% stake in the Hyderabad-based drug maker.

Listless session

In a spiritless trading session, the market displayed range-bound trend with select bouts of buying and selling.

After opening 61 points lower over its previous close of 16711, the Sensex scaled lower to touch an intra-day low of 16610. In mid session, the market remained steady, however the sentiment turned bullish at the end of the session and the index rose to the day's high of 16765. However, the Sensex on the back of selective pivotals ended on a flat note at 16741, up 30 points. Nifty advanced 10 points to close at 4976. The market breadth was positive. Of the 2,852 stocks on the BSE, 1,423 stocks rose, 1,340 stocks fell and the 89 stocks ended unchanged.



Most of the sectoral indices had listless outing. BSE Auto was the top gainer rising 2.10% for the day followed by BSE Realty adding 1.29% and BSE HC up 0.89%. BSE Bankex, BSE PSU posted losses today.



Among gainers, passenger car maker Maruti Suzuki India flared up 5.23% to Rs1,640.85, Reliance Infrastructure moved up 4.47% to Rs1,243.15, Jaiprakash Associates jumped 3.82% to Rs256.85, telecom leader Bharti Airtel gained 2.18% to Rs442.60 and cement major ACC advanced 2.04% to Rs844.80. Realtor DLF, auto maker Mahindra & Mahindra, public sector banker State Bank of India, conglomerate Grasim Industries, aluminium maker Hindalco Industries reported steady gains. However, private sector lender ICICI Bank dropped 3.35% to Rs843.35, Sun Pharmaceutical Industries shed 1.61% to Rs1201.15, Reliance Communications dipped 1.49% to Rs306.60, copper giant Sterlite Industries lost 1.29% to quote at Rs762 and Truck maker Tata Motors dropped 1.19% to Rs598.95.



Ispat Industries was the most traded counter today with over 1.92 crore shares changing hands followed by Reliance Natural Resources (1.36 crore shares), KS Oils (1.25 crore shares) and NHPC (1.10 crore shares) and Unitech (1.03 crore shares).

Sensex ends on a flat note

The Sensex ended on a flat note with positive bias with gains led by auto, realty and healthcare stocks, while banking, PSU and FMCG stocks were under pressure. It opened with a loss of 61.06 points, at 16,650.05 on Friday tracking negative global cues. Later the index moved up into the positive terrain and again fell into the red. The benchmarks traded in a narrow range amid volatility the entire day and finally closed marginally higher, touching a high of 16,765.03 and low of 16,610.05.

BSE Midcap and Smallcap index rose 0.45% and 0.77% respectively.

On sectoral front, BSE Auto advanced 2.10%, Realty rose 1.29%, Healthcare up by 0.89%, while Bankex down 1.17%, PSU dipped 0.16%.

European stocks declined on speculation that a six-month rally in global equity markets has outpaced the prospects for earnings. UK`s benchmark index FTSE 100 rose 4.51 points, or 0.09%, to trade at 5,167.72. French benchmark index CAC 40 lost 2.67 points, or 0.07%, to trade at 3,837.39. Germany`s benchmark index DAX rose 2.27 points, or 0.04%, to trade at 5,732.31. (4.25 pm)

Asian stocks fell as Aiful Corp. sought to reschedule debt payments and Hong Kong`s central bank said competition on mortgages may hurt the city`s lenders. Japanese benchmark index Nikkei fell 73.26 points, or 0.70%, to end at 10,370.54. Hong Kong`s Hang Seng index declined 145.06 points, or 0.67%, to close at 21,623.45. China`s Shanghai Composite decreased 97.59 points, or 3.19% to settle at 2,962.67.

The Sensex ended the day with a gain of 30.19 points, or 0.18% at 16,741.30 after touching a high of 16,765.03 and a low of 16,610.05. The broad-based NSE Nifty gained 10.50 points, or 0.21% at 4,976.05 after hitting a high of 4,980.85 and a low of 4,931.90.

Major gainers in the 30-share index were Maruti Suzuki India (5.23%), Reliance Infrastructure (4.47%), Jaiprakash Associates (3.82%), Bharti Airtel (2.18%), Reliance Capital (2.10%), and ACC (2.04%).

On the other hand, ICICI Bank (3.35%), Sun Pharmaceutical Industries (1.61%), Reliance Communications (1.49%), Sterlite Industries (India) (1.29%), Tata Motors (1.19%), and Housing Development Finance Corporation (0.95%) were the major losers in the Sensex.

Overall market breadth was mixed. Out of the total 2,858 stocks traded at BSE, 1,443 advanced, 1,334 declined while 81 remained unchanged.

Bourses are shut on Monday on account of Ramzan Id.

India Strategy - Sep 18 2009

India Strategy - Sep 18 2009

Market may enter consolidation phase

After a solid surge in past few sessions, the market momentum is now aiming towards consolidation. The market will remain shut on Monday, 21 September 2009, on account of Ramzan Id. The derivatives expiry on Thursday, 24 September 2009, may keep key benchmarks choppy in the near term.

Among the major international cues, the US Federal Reserve will meet next on 22 and 23 September 2009. At the Federal Open Market Committee's meeting, the policy makers will assess the early signs of improvement now taking shape across the economy.

Back home, market may witness selective buying in sectors, which thrive on consumer demand like automobiles and consumer durables ahead of the festive season. Metal and shipping stocks may attract buyers on the back of rise in global industrial activity.

The 50-unit Nifty tested the iconic 5,000 mark on Thursday, 17 September 2009, but retreated to close some points below that level. The trigger was higher advance tax payments by companies for the September 2009 quarter, which boosted investor sentiment and pushed the benchmark index to a 15-1/2 month high.

According to numbers reported by newspapers, advance tax payments improved by as much as six times for some firms compared with the previous quarter. The robust advance tax payouts indicate that the economic recovery is underway.

Going forward, the upcoming earnings season will be closely watched by investors to get a hint of what is in store in terms of corporate earnings in the near term. The investors will also focus on the impact of drought in nearly half the country's districts. Drought in many parts may keep upward pressure on food prices, which may elevate inflation.

Data released by the government on Thursday, 17 September 2009, showed the headline inflation entered the positive territory after a gap of 13 weeks. Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week's annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

The Union Cabinet on Thursday extended limits on stocks that can be held by traders of sugar, vegetable oils, lentils and rice until September 2010. The move is aimed at keeping a lid on prices of those commodities.

Liquidity has been the key driver in catapulting Indian equities since the lows of 9 March 2009, the fastest such surge since the early 1990s when economic liberalization boosted the market to dizzy heights.

Indeed, foreign institutional investors (FIIs), the largest investor category in local equities, have bought Indian stocks worth Rs 45011.10 crore this year (till 16 September 2009). In 2008, FIIs took out Rs 52987.10 crore from the Indian equities.

Market continues to rally; Nifty tests 5K

The key benchmark indices hit a 15-1/2 month high following improved investor sentiments on higher advance tax payments by companies for the September 2009 quarter. The 50-unit Nifty tested the iconic 5,000 mark on Thursday, 17 September 2009, but retreated to close some points below that level

According to numbers reported by newspapers, advance tax payments improved by as much as six times for some firms compared with the previous quarter. The robust advance tax payouts indicate that the economic recovery is underway.

Investor sentiment was also boosted as fears of interest rate hike receded after the Reserve Bank of India governor said the central bank will not unwind its accommodative monetary policy until the economy is back on high-growth track. Rising inflationary pressures due to a surge in food prices had stoked worries that the central bank may raise rates as early as next month at a quarterly policy review.

Data released by the government on Thursday, 17 September 2009, showed the headline inflation entered the positive territory after a gap of 13 weeks. Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week's annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

The cabinet on Thursday extended limits on stocks that can be held by traders of sugar, vegetable oils, lentils and rice until September 2010. The move is aimed at keeping a lid on prices of those commodities.

The BSE 30-share Sensex rose 477 points or 2.93% to 16,741.30 in the week ended Friday, 18 September 2009. The S&P CNX Nifty rose 146.5 points or 3.03% to 4,976.05 in the week.

The BSE Mid-Cap index rose 249.62 points or 4.22% to 6,171.23. The BSE Small-Cap index 272.37 points or 3.84% to 7,373.64. Both the indices outperformed the Sensex.

Trading for the week began on a subdued note. The key benchmark indices snapped preceding six days' gains on Monday, 14 September 2009, as world stocks fell on the eve of the first anniversary of the collapse of US investment back Lehman Brothers. The BSE 30-share Sensex fell 50.11 points or 0.31% to 16,214.19. The S&P CNX Nifty fell 20.95 points or 0.43% to 4808.60.

The key benchmark indices resumed their upward march on 15 September 2009, after taking a breather on Monday, 14 September 2009, on reports of higher advance tax payment by some top Indian firms. A survey showing an improvement in business confidence in India also boosted sentiments. The BSE 30-share Sensex rose 240.26 points or 1.48% to 16,454.45. The S&P CNX Nifty was up 83.90 points or 1.74% to 4892.10.

The key benchmark indices surged to their highest level in nearly 16-months on 16 September 2009, tracking firm global stocks. Metal, banking, auto and cement stocks led the rally. The BSE 30-share Sensex rose 222.59 points or 1.35% to 16,677.04. The S&P CNX Nifty rose 66.30 points or 1.36% to 4958.40.

The key benchmark indices scored small gains in choppy trade on 17 September 2009, extending recent strong gains, on firm global cues. IT and auto stocks rose even as realty stocks fell. The BSE 30-share Sensex rose 34.07 points or 0.2% to 16,711.11. The S&P CNX Nifty rose 7.15 points or 0.14% to 4965.55.

The key benchmark indices registered small gains again on Friday, 18 September 2009, as a recovery in European markets triggered an intraday rebound on the domestic bourses. The BSE 30-share Sensex rose 30.19 points or 0.18% to 16,741.30. The S&P CNX Nifty rose 10.50 points or 0.21% to 4976.05.

Index heavyweight Reliance Industries (RIL) fell 1.97% after the company sold a large number of treasury shares held by a trust for about Rs 3,188 crore. The Petroleum Trust, which owns the treasury stocks that were created seven years ago because of the merger of Reliance Petroleum with RIL, on Thursday, 17 September 2009, sold 1.5 crore equity shares of RIL through block deals on the bourses at Rs 2125 per share. The financial impact of the transaction will be reflected in the consolidated statements, RIL said.

RIL did not say for what it would use the funds for. However, reports suggested that the company may buy an unspecified petroleum asset overseas where energy assets have fallen in value since the collapse of oil price last year.

RIL has fixed 29 September 2009 as the record date for shareholders of Reliance Petroleum (RPL) to receive equity shares of RIL under a merger scheme.

Reliance Infrastructure rose 6.42% on reports the order book of the company is likely to cross $7 billion-mark over the medium term, as investment in the infrastructure sector emerges key to the sustenance of GDP growth in the country.

India's largest private sector bank by net profit ICICI Bank rose 0.92%. The bank has reportedly finalised sale of Point Of Sale (PoS) terminals to First Data Corporation for $ 80 million. Meanwhile, ICICI Bank has reportedly paid lower tax of Rs 501 crore in in the second installment against Rs 575 crore paid last year.

India's largest bank by net profit and branch network State Bank of India spurted 11.65% on optimism about Q2 September 2009 results. Chairman O.P. Bhatt, on 8 September 2009, had said the bank's earnings are likely to grow 30-35% in Q2 September 2009 over Q2 September 2008. State Bank of India has reportedly paid Rs 1838 crore in advance tax in the second installment as against Rs 1500 crore paid last year.

Axis Bank rose 1.23% on reports the private sector bank has raised $720 million through a qualified institutional placement (QIP) cum global depositary receipt (GDR). The bank has priced its QIP cum GDR issue at Rs 906.70 per share. The issue is likely to result in an equity dilution of about 10.5%.

Metal shares rose on hopes recovering industrial activity across the globe will boost demand for metals. Steel Authority of India (up 4.33%), Ispat Industries (up 5.27%), Hindalco Industries (up 10.91%), JSW Steel (up 7.81%), National Aluminium Company (up 4.93%), and Bhushan Steel (up 5.91%), rose.

World's eighth biggest steel maker by output Tata Steel climbed 10.42%. As per reports, its European unit, Corus will soon restart its plant in South Wales on the back of rise in demand. The unit was shut in December 2008 as part of its plan to reduce production by 30%.

Auto stocks rose on hopes of strong sales in the upcoming festive season. India's top small car maker by sales Maruti Suzuki (India) rose 11.84%. India's largest tractor maker by sales Mahindra & Mahindra rose 7.95%.

India's second largest two-wheeler maker by sales Bajaj Auto rose 14.36% on reports it has paid advance tax of Rs 170 crore in the second installment this year, much higher than Rs 50 crore in the corresponding period last year.

India's largest truck maker by sales Tata Motors jumped 8.71%. Tata Motors is reportedly planning to sell about 10-15 % in subsidiary Tata Motors Finance to raise funds to reduce debt. The company has a huge debt largely related to the purchase of Ford Motor's marquee brands Jaguar Land Rover last year, for which it took a loan of $3.2 billion and other debt to keep the loss-making unit running.

As per reports, the government will release pay arrears to government employees under the second and final installment ahead of big festivals in October 2009. The payout would boost demand for cars and motorcycles.

Car sales in India rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans, data released by the industry body Society of Indian Automobile Manufacturers on 8 September 2009, showed. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units.

IT stocks gained on strong US economic data. US industrial production rose 0.8% in August 2009, better than expected, and the data for the prior month was revised to a 1% gain double the 0.5% originally reported. US is the biggest market for Indian IT firms.

India's largest software services exporter by sales Tata Consultancy Services rose 4.32% on reports the company is eyeing six-seven IT outsourcing deals worth over $100 million each in Latin America. The stock also rallied on jump in advance tax in second installment.

India's third largest software services exporter by sales Wipro rose 2.85%. The company won a three-year outsourcing contract from All Nippon Airways, Japan's No.2 carrier.

India's second largest software services exporter by sales Infosys Technologies rose 4.32%. Infosys still finds the business situation quite challenging and decision making by clients continues to be slow, Chief Operating officer S D Shibulal said on Tuesday. He also said last month's outsourcing contract from oil and gas major British Petroleum Plc was worth $116 million over five years.

Cement stocks rose on bargain hunting after recent losses. ACC (up 9.22%), Grasim Industries (up 6.07%), and Ultratech Cement (up 6.07%), rose. Cement makers recently cut prices by Rs 3 per 50 kilogram bag in Mumbai.

The government has provided a thrust to the infrastructure sector in the Union Budget 2009-2010 which may keep cement demand strong. The government has set a target of spending $20 billion a year on road construction.

Market gains on the fourth straight day; Sensex, Nifty at 16-month high

The key benchmark indices posted small gains in choppy trade as a recovery in European stocks triggered intraday rebound on the domestic bourses. The market extended gains for the fourth day in a row. The BSE 30-share Sensex rose 30.19 points or 0.18%, up close to 135 points from the day's low and off close to 25 points from the day's high. The BSE Sensex and S&P CNX Nifty achieved their highest closing level in nearly 16 months.

Cement and auto stocks rose even as banking stocks fell. The market breadth was marginally positive after moving between negative and zone during the day.

As per provisional data, foreign funds today, 18 September 2009, bought equities worth a net Rs 1,486.08 crore. Taking an opposite stance, domestic funds offloaded stocks worth a net Rs 505.38 crore

The Sensex has jumped 527.11 points or 3.25% in four days to 16,741.30 on Friday, 18 September 2009, from its close of 16,214.19 on Monday, 14 September 2009.

The market was volatile today. After an initial slide caused by weak Asian stocks, the market soon cut losses. The market moved in a narrow range in mid-morning trade. The market weakened again in early afternoon trade. The market cut losses after hitting fresh intraday low in afternoon trade. The intraday recovery gathered steam later. The market pared gains after hitting a fresh intraday high in lat trade.

The next major trigger for the market is Q2 September 2009 results next month. The market remains closed on Monday, 21 September 2009, for a public holiday.

After a strong revival since 15 August 2009, rains weakened again last week. The South West monsoon rains were 41% below average in the week to 16 September 2009, the government-run India Meteorological Department (IMD) said on Thursday. Total rainfall since 1 June 2009, the start of the season, was 21% below average because of exceptionally dry spells earlier in the season, IMD said. More than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.

On the flip side, fears of hike interest rates have receded after recent comments by the Reserve Bank of India governor that the central bank will not unwind its accommodative monetary policy until the economy is back on high-growth track. Rising inflationary pressures due to a surge in food prices had stoked worries that the central bank may raise rates as early as next month at a quarterly policy review.

RBI deputy governor Shyamala Gopinath on Thursday said it was too soon for the central bank to unwind its accommodative monetary policy even though the economy has shown signs of resilience. Inflation based on wholesale prices could hit 6% by March 2010, RBI deputy governor K.C. Chakrabarty said on Friday.

Data released by the government on Thursday showed the headline inflation entered the positive territory after a gap of 13 weeks. Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week's annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

Meanwhile, market expectations of strong Q2 results were tempered after a news agency quoted an unnamed government official as saying on Thursday that the government expects only a marginal improvement in corporate advance tax in second quarter. Media reports had on Wednesday, 16 September 2009, indicated a surge in advance payment by top Indian firms that raised expectations of strong Q2 September 2009 results.

As per reports, State Bank of India, India's biggest commercial bank by branch network, has paid Rs 1838 crore in advance tax in the second installment as against Rs 1500 crore paid last year. HDFC Bank paid Rs 425 crore advance tax against Rs 315 crore last year. But, ICICI Bank paid lower tax of Rs 501 crore against Rs 575 crore last year.

Larsen & Toubro paid Rs 210 crore as against Rs 150 crore last year. Reliance Industries paid Rs 1157 crore in advance tax against Rs 683 crore paid in last year. But, Tata Steel paid a sharply lower advance tax of Rs 400 crore Rs 1000 crore paid in last year.

Software major TCS has reportedly paid Rs 220 crore as against Rs 81 crore. Tractor major Mahindra & Mahindra paid Rs 112 crore as against Rs 17.5- crore. Tata Motors paid advance tax of Rs 130 crore in the second installment, much higher than Rs 60 crore last year. Tata Power Company paid Rs 75 crore as against Rs 14 crore in last year.

Meanwhile, the initial public offer (IPO) of the private sector ship builder, Pipavav Shipyard, was subscribed 8.21 times at 17:00 IST on last day of issue today, 18 September 2009. The company has already allotted 1.52 crore shares to anchor investors at the top-end of the Rs 55-Rs 60 price band.

European equities edged higher, reversing early losses. Key benchmark indices in France, UK and Germany were up by between 0.05% to 0.12%.

But most Asian stocks fell as Japanese consumer financing company Aiful Corp. sought to reschedule its debt payments and as metal prices declined. Aiful Corp. said it will try to reschedule debt payments after the financial crisis hurt its ability to raise money. Key benchmark indices in Hong Kong, Japan and Singapore fell by between 0.67% to 0.92%. But key benchmark indices in South Korea and Taiwan rose by between 0.25% to 0.66%.

China's Shanghai Composite ended 3.19% lower, led by steel counters as a slew of upcoming new share issues sparked profit-taking. The steel sector was hit hard by reports the United States might impose extra heavy duty on Chinese-made steel tubes, sparking fresh worries over a possible escalation of the Sino-US trade dispute.

China will stick to its pro-growth economic policies in the coming period of time as the economic recovery is not yet stable, the ruling Communist Party said on Friday, 18 September 2009

US index futures reversed initial losses. Trading in US index futures indicated Dow could rise 8 points at the opening bell today, 18 September 2009.

US markets snapped their winning streak on Thursday, 17 September 2009 after making fresh highs this week. The markets got a boost from an encouraging Philadelphia Fed report earlier in the day but then gave up gains to end in the red. The Dow Jones Industrial Average was down 7.79 points, or 0.1%, to 9,783.92. The S&P 500 index fell 3.27 points, or 0.3%, to 1,065.49, and the Nasdaq Composite Index lost 6.40 points, or 0.3%, to 2,126.75.

In economic news, the Philadelphia Fed said its manufacturing gauge rose to 14.1 in September 2009 from 4.2 in August 2009. This is its first back-to-back monthly gain since October and November of last year.

Initial jobless claims unexpectedly fell last week, dropping by 5,000 coming in at 5,45,000. Continuing claims climbed to 6.23 million from 6.10 million. Another report showed housing starts and permits rose in August 2009 to their highest level since November 2008.

The BSE 30-share Sensex rose 30.19 points or 0.18% to 16,741.30, its highest closing since 22 May 2008. The Sensex rose 53.92 points at the day's high of 16,765.03 in late trade. The barometer index fell 101.06 points at the day's low of 16,610.05 in afternoon trade.

The S&P CNX Nifty was up 10.40 points or 0.21% to 4975.95, its highest closing since 22 May 2008. Nifty September 2009 futures were at 4982, at a premium of 5.95 points as compared to the spot closing of 4976.05. Turnover in NSE's futures & options (F&O) segment was Rs 69,288.12 crore, sharply lower than Rs 83,762.65 crore on Thursday, 17 September 2009.

BSE clocked a turnover of Rs 6272 crore, lower than Rs 9401.72 crore on Thursday 17 September 2009. Turnover had surged on Thursday due to large block deals on Reliance Industries (RIL)

The market breadth, indicating the overall health of the market, was positive after moving between negative and positive zone in intraday trade. On BSE, 1437 shares rose as compared with 1336 that declined. A total of 79 shares remained unchanged.

Among the 30-member Sensex pack, 18 rose and rest declined.

Indian stocks have risen sharply this year on increased global risk appetite triggered by hopes of a recovery in the global economy after a setback from a financial sector crisis. There is a huge amount of liquidity in the global financial system which is a the result of the global policy response to the crisis following the collapse of Lehman Brothers a year ago. Central banks across the world have slashed policy rates in the past one year to revive economic growth.

The Sensex is up 7093.99 points or 73.53% in calendar year 2009 as on 18 September 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8,580.90 points or 105.15% as on 18 September 2009. FII inflow in the calendar year 2009 totaled Rs 45,022.70 crore (till 16 September 2009).

Coming back to today's trade, the BSE Mid-Cap index rose 0.45% and the BSE Small-Cap index rose 0.77%. Both the indices outperformed Sensex.

The BSE Auto index (up 2.1%), the BSE Realty index (up 1.29%), the BSE Healthcare index (up 0.89%), the BSE Power index (up 0.77%), the BSE Oil & Gas index (up 0.47%), the BSE Teck index (up 0.4%), the BSE Capital Goods index (up 0.32%), outperformed the Sensex.

The BSE Metal index rose 0.18% and matched the Sensex's performance. The BSE Bankex (down 1.17%), the BSE PSU index (down 0.16%), the BSE FMCG index (down 0.03%), the BSE Consumer Durables index (down 0.01%), the BSE IT index (up 0.17%), underperformed the Sensex.

Auto stocks rose on hopes of strong sales in the upcoming festive season. India's top small car maker by sales Maruti Suzuki rose 5.23%. India's largest tractor maker by sales Mahindra & Mahindra rose 1.75%.

Bajaj Auto rose 3.14%, extending recent strong gains, on reports it has paid advance tax of Rs 170 crore in the second installment this year, much higher than Rs 50 crore in the corresponding period last year.

But, India's largest truck maker by sales Tata Motors fell 1.19%. Tata Motors is reportedly planning to sell about 10-15 % in subsidiary Tata Motors Finance to raise funds to reduce debt. The company has a huge debt largely related to the purchase of Ford Motor's marquee brands Jaguar Land Rover last year, for which it took a loan of $3.2 billion and other debt to keep the loss-making unit running.

As per reports, the government will release pay arrears to government employees under the second and final installment ahead of big festivals in October 2009. The payout would boost demand for cars and motorcycles.

Car sales rose 26% to 120,669 units in August 2009 over August 2008 boosted by new launches and availability of cheaper loans, data released by the industry body Society of Indian Automobile Manufacturers on 8 September 2009, showed. Sales of trucks and buses rose 18.5% to 40,624 units and motorcycle sales rose 26% to 611,173 units.

Index heavyweight Reliance Industries (RIL) rose 0.59% to Rs 2098.70 rose recovering after 4.45% slide on Thursday when a large treasury share sale by the company in the secondary market weighed on the counter. But the stock was off the day's high of Rs 2113. Petroleum Trust on Thursday sold 1.5 crore equity shares of RIL through block deals on the boruses at Rs 2125 per share. The financial impact of the transaction will be reflected in the consolidated statements, RIL said. The stock hit a high of Rs 2113 and a low of Rs 2069.70.

Reliance Industries on Tuesday said that it has fixed 29 September 2009 as the record date for shareholders of Reliance Petroleum (RPL) to receive equity shares of Reliance Industries under a merger scheme.

Oil exploration stocks were mixed after recent rally in crude oil prices. India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) rose 0.1%. As per recent reports, ONGC's Russian unit has substantially cut oil production due to increase in cost. Cairn India fell 1.34%. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.

US crude futures ended slightly lower on Thursday, as demand worries amid high inventories offset positive economic data. On the New York Mercantile Exchange, October 2009 crude settled down 4 cents, or 0.06%, at $72.47 a barrel.

PSU OMCs rose as crude dropped after a recent rally. BPCL and HPCL rose by between 0.46% to 3.11%. Indian Oil Corporation (IOC) rose 0.64%. The company's board approved a liberal 1:1 bonus issue on Monday, 14 September 2009.

The government on Tuesday issued bonds worth over Rs 10,306 crore to three oil marketing PSUs to compensate them for the losses incurred on account of selling petroleum products below market price. While bonds worth Rs 6,207.06 were issued to IOC, Rs 2,033.99 crore worth bonds were given to HPCL and Rs 2,065.28 crore worth of bonds were given to BPCL.

Banking stocks were mixed after higher advance tax payment by some top banks in the second installment this fiscal. India's second largest private sector bank by net profit HDFC Bank fell 1.3% as its ADR fell 0.51% on Thursday.

India's largest private sector bank by net profit ICICI Bank fell 3.35% as its ADR fell 2.99% on Thursday. The bank has reportedly finalised sale of Point Of Sale (PoS) terminals to First Data Corporation for $ 80 million.

But, India's largest bank by net profit and branch network State Bank of India rose 1.69% on optimism about Q2 September 2009 results. Chairman O.P. Bhatt on 8 September 2009 said the bank's earnings are likely to grow 30-35% in Q2 September 2009 over Q2 September 2008. The stock was volatile.

Axis Bank rose 0.28% in volatile trade on reports the private sector bank has raised $720 million through a qualified institutional placement (QIP) cum global depositary receipt (GDR). The bank has priced its QIP cum GDR issue at Rs 906.70 per share. The issue is likely to result in an equity dilution of about 10.5%.

Telecom stocks were mixed. India's largest telecom player by sales Bharti Airtel rose 2.18%. The company on Friday said it would charge 50 paisa per minute for local and national calls on its network, heating up competition in a market that already has some of the world's cheapest tariffs.

Meanwhile, South African President Jacob Zuma on Thursday said a proposed merger deal between Bharti and South African telecom giant MTN was held up by legal problems in India. South Africa's communications regulator earlier had said it might not grant approval for the proposed alliance between Bharti and MTN this year.

Bharti and MTN have been in negotiations since 25 May 2009 on a $23 billion cash and share-swap deal aimed at an eventual full merger. The deadline for the talks has been extended twice, most recently the deadline was put back another month to 30 September 2009.

India's second largest telecom player by sales Reliance Communications fell 1.49%. As per recent reports the company has initiated talks with its overseas lenders to revise the terms of the $1 billion unsecured external commercial borrowings, or ECBs, which the company raised in 2007.

The government plans to hold a much-awaited auction on 7 December 2009 to sell airwave spectrum bands to the country's mobile operators for use in third-generation wireless services, the Department of Telecommunications said on Monday.

The auction for 3G spectrum will allow operators a chance to offer mobile-phone access to high-speed Internet, video downloads and other 3G services in the world's second-largest wireless market by subscribers. The move is also expected to earn the government billions of dollars in revenue in a year when it is expected to borrow a record amount to bridge its fiscal deficit.

The government said it will issue a notice inviting applications from interested bidders on 26 October 2009, with the final date for receiving the applications set for 13 November 2009.

Realty stocks rose on reports demand for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and a recovery in the job market. Realty market had slumped last year amid a global credit crunch and buyers fearing job losses. Omaxe, DLF, Ackruti City and Unitech rose by between 0.54% to 4%.

India's largest engineering & construction firm by sales Larsen & Toubro rose 0.47% on higher advance tax payment.

Reliance Infrastructure rose 4.47% on reports the order book of the company is likely to cross $7 billion-mark over the medium term, as investment in the infrastructure sector emerges key to the sustenance of GDP growth in the country.

Among capital goods stocks, Punj Lloyd, SKF India, Thermax, ABB, rose by between 0.37% to 5.56%.

India's largest power equipment maker by sales Bharat Heavy Electricals was flat at Rs 227505. As per recent reports the company has won an order worth Rs 1300 crore for an upcoming Vallur Thermal Power project at Ennore in Tamil Nadu. The power project is being set up by a joint venture between NTPC and the Tamil Nadu Electricity Board (TNEB).

Cement stocks rose on bargain hunting after recent losses. ACC, Grasim Industries, Ultratech Cement rose by between 0.5% to 3.27%. Cement makers recently cut prices by Rs 3 per 50 kilogram bag in Mumbai.

The government has provided a thrust to the infrastructure sector in the Union Budget 2009-2010 which may keep cement demand strong.

Select construction shares rose on government's thrust on infrastructure. Higher government spending on infrastructure sector in the Union Budget 2009-2010 to provide a stimulus to the economy, may result in increase order flow for construction. Hindustan Construction Company, Nagarjuna Construction Company and Jaiprakash Associates, Gayatri Projects rose by between 1.06% to 13.20%.

The government has set a target of spending $20 billion a year on road construction.

Some FMCG pivotals fell on worries over scanty rains this year. FMCG firms derive substantial revenue from the rural sector. Marico, Nestle India, ITC, Britannia Industries fell by between 0.3% to 1.67%.

IT stocks gained on strong US economic data. US is the biggest market for Indian IT firms. India's largest software services exporter by sales Tata Consultancy Services rose 0.67% on recent reports the company is eyeing six-seven IT outsourcing deals worth over $100 million each in Latin America. The stock also rallied on jump in advance tax in second installment.

India's second largest software services exporter by sales Infosys rose 0.12% as its ADR rose 1.26% on Thursday. Infosys still finds the business situation quite challenging and decision making by clients continues to be slow, Chief Operating officer S.D. Shibulal said on Tuesday. He also said last month' s outsourcing contract from oil and gas major British Petroleum Plc was worth $116 million over five years.

India's third largest software services exporter by sales Wipro rose 0.37% as its ADR rose 1.91% on Thursday. The company recently won a three-year outsourcing contract from All Nippon Airways, Japan's No.2 carrier.

Metal stocks fell as industrial metals fell on Friday on the global commodities marekts, weighed down by the dollar's rebound, weaker global equities and persistent worries over increasing stockpiles and thin demand. Hindustan Zinc, JSW Steel, Steel Authority of India fell by between 0.55% to 1.09%.

India's largest steel maker by sales Tata Steel fell 0.59%. As per reports its European unit, Corus will soon restart its plant in South Wales on the back of rise in demand. The unit was shut in December 2008 as part of its plan to reduce production by 30%.

Domestic steel makers raised prices of flat steel products such as plates and sheets, mainly used in manufacturing automobiles, refrigerators and washing machines, by about 3-5% from 1 September 2009, in line with international prices.

Tata's Steel sales from Indian operations rose 25% to 4,92,000 tonnes in August 2009 over August 2008. The local operations contribute about a quarter of the group's total annual global capacity of 30 million tonnes, which includes Corus, Europe's second-largest steelmaker.

India's largest copper maker by sales Sterlite Industries fell 1.29% on profit taking after recent gains. The company on 11 September 2009 said it had raised its open offer price for bankrupt US copper miner Asarco by a fifth to $2.565 billion. Sterlite, a unit of India-focused mining company Vedanta Resources, has been facing off with Mexican miner Grupo Mexico for the assets of Asarco, which has been under bankruptcy protection since 2005.

Dr Reddy's Laboratories jumped 3.63% to Rs 865.45 on reports UK-based GlaxoSmithKline Plc is in talks to buy a 5% stake in the Hyderabad-based drug maker. It hit an alltime high of Rs 900.

Cals Refineries clocked highest volume of 3.56 crore shares on BSE. Ispat Industries (1.92 crore shares), Reliance Natural Resources (1.36 crore shares), K S Oils (1.25 crore shares), Maars Software International (1.13 crore shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 183.15 crore on BSE. Jaiprakash Associates (Rs 165.79 crore), Reliance Industries (Rs 160.79 crore), Reliance Capital (Rs 152.67 crore) and Tata Steel (Rs 150.33 crore) were the other turnover toppers in that order.

Daily Grey Market Premiums - Sep 18 2009

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)
Jindal Cotex	75	4 to 4.50	--
Globus Spirits Ltd.	100	4 to 5	--
Oil India	1050	35 to 37	--
Pipavav Shipyard	55 to 60	3 to 4	1700 to 1800
Thinksoft Global	120 to 130	6 to 7	1600 to 1800
Euro Multi Vision	70 to 75	4 to 4.50	1500 to 1700

Pre Session Commentary - Sep 18 2009

Today domestic markets are likely to open negative as majority of Asian markets like Nikkei, Hang Seng and Strait times have opened with blood bath. There is selling pressure across the globe as US markets had pared some gains at high levels despite better than expected macro economic data. Today domestic markets are likely to trade negative.

On Thursday, the market erased most of its initial gains to end the volatile session on the flat note as profit booking emerged during the trading. Shares of Reliance Industries contributed to drag the market lower as it closed with loss of more than 4%. Investors took calculative steps on fears of rise in interest rates that over looked the RBI’s statement that the central bank will not hike interest rates before economic recovery will come on track. Fears of rise in rates surfaced on account of increasing inflationary pressure. India’s inflation came in at 0.12% in week ended 5th September 2009, as against -0.12% in the previous week. Earlier during initial trading, market exhibited gains on positive global cues as Asian market ended in with good gains and European markets were in green. However rally was brief and selling pressure lugged the domestic bourses. The BSE Sensex ended around 6,700 level and NSE Nifty closed around 4,960 mark.

The BSE Sensex closed marginally higher by 34.07 points at 16,711.11 and NSE Nifty ended slightly up by 7.15 points at 4,965.55. BSE Mid Caps and Small Caps closed with gains of 16.70 and 9.39 points at 6,143.62 and 7,317.50 respectively. The BSE Sensex touched intraday high of 16,820.02 and intraday low of 16,636.55.

On Thursday, US markets closed flat. Market participants finally broke the three consecutive gains to book some profits at higher level. Despite some profit booking pressures losses were contained and therefore major benchmark indices ended flat. At macro economic level, Philadelphia Fed Index for September showed that it hit a two-year high of 14.1, which was better than expected. Housing starts hit an annualized rate of 598,000, which was spot on with the consensus forecast. More impressive was that the August rate marked the best pace since November 2008. Building permits came in at an annualized rate of 579,000, which is just below the rate of 583,000 that was widely expected, but it still marked the best pace this year. In other economic news, initial jobless claims for the week ending Sept. 12 totaled 545,000. Though that marks an uncomfortable level of claims, it wasn''t as bad as the 557,000 initial claims that were expected. It also marked a drop of 12,000 from the previous week. Meanwhile, continuing claims climbed to 6.23 million from 6.10 million. Crude oil futures for the month of October delivery ended flat at $72.44 per barrel on New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed lower by 4.79 points at 9,783.92. NASDAQ index lost by 6.40 points at 2,126.75 and the S&P 500 (SPX) also declined by 3.27 points to close at 1,065.49 points.
Indian ADRs ended mixed on Thursday. In the banking space, ICICI Bank was down 2.99% and HDFC Bank was down 0.51%. In the telecom space, MTNL was up 0.8% and Tata Communication was up 1.34%. In the IT space, Satyam Computers was down 1.65%, while Infosys was up 1.26%, Wipro was up 1.91% and Patni Computers was up 2.83%. In other sectors, Sterlite Industries was down 2.54%, Tata Motors was down 0.15% while Dr Reddy''s Labs was up 0.58%.

The FIIs on Thursday stood as net buyers in equity and debt. Gross equity purchased stood at Rs 3,608.90 Crore and gross debt purchased stood at Rs 548.30 Crore, while the gross equity sold stood at Rs 2,435.00 Crore and gross debt sold stood at Rs 116.70 Crore. Therefore, the net investment of equity and debt reported were Rs 1,173.90 Crore and Rs 431.60 Crore respectively.

On Thursday, Indian Rupee closed at 48.15./16 per dollar, 0.17% stronger than its previous close at 48.23./24. Heavy capital inflow and also sustained weakness in green back against other international currencies helped the local currency gain strength.

On BSE, total number of shares traded were 59.32 Crore and total turnover stood at Rs 9,401.72 Crore. On NSE, total number of shares traded were 115.90 Crore and total turnover was Rs 24,159.70 Crore.

Top traded volumes on NSE Nifty – Unitech with total volume traded 52818047, followed by Suzlon Energy with 34674687, Hindalco with 26905479, Reliance with 16579451 and Tata Steel with 12448005 shares.

On NSE Future and Options, total number of contracts traded in index futures was 668696 with a total turnover of Rs 16,013.11 Crore. Along with this total number of contracts traded in stock futures were 834922 with a total turnover of Rs 27,737.41 crore. Total numbers of contracts for index options were 1499322 with a total turnover of Rs 37,088.55 Crore and total numbers of contracts for stock options were 85457 and notional turnover was Rs 2,923.59 Crore.

Today, Nifty would have a support at 4,902 and resistance at 4,975 and BSE Sensex has support at 16,610 and resistance at 16,796

Market may snap last three days gains on weak Asia

The key benchmark indices may snap last three days gains on weak Asia. India's weak annual monsoon so far this year may further dent investor sentiment.

After a strong revival since 15 August 2009, rains weakened again last week. The South West monsoon rains were 41 % below average in the week to 16 September 2009, the government-run India Meteorological Department said on Thursday. Total rainfall since 1 June 2009, the start of the season, was 21 % below average because of exceptionally dry spells earlier in the season, it said. More than two-thirds of the people live in villages and 60 % of the farm land depends on the annual rains.

Meanwhie, data released by the government on Thursday showed the headline inflation entered the positive territory after a gap of 13 weeks. Inflation based on the wholesale price index rose 0.12% in the year through 5 September 2009 compared to previous week's annual decline of 0.12%. A surge in food price index was responsible for the rise in the headline inflation.

The Reserve Bank of India's deputy governor Shyamala Gopinath hinted on Thursday it was too soon for the central bank to unwind its accommodative monetary policy even though the South Asian economy has shown signs of resilience.

Earlier this week, RBI governor Duvvuri Subbarao sounded a harsher stance. Reserve Bank of India governor that the central bank will not unwind its accommodative monetary policy until the economy is back on high-growth track. Rising inflationary pressures due to a surge in food prices had stoked worries that the central bank may raise rates as early as next month at a quarterly policy review.

Meanwhile, market expectations of strong Q2 results were tempered after a news agency quoted an unnamed government official as saying on Thursday that the government expects only a marginal improvement in corporate advance tax in second quarter.

Media reports had on Wednesday, 16 September 2009, indicated a surge in advance payment by top Indian firms that raised expectations of strong Q2 September 2009 results. As per reports, State Bank of India, India's biggest commercial bank by branch network, has paid Rs 1838 crore in advance tax in the second installment as against Rs 1500 crore paid last year. HDFC Bank paid Rs 425 crore advance tax against Rs 315 crore last year. But, ICICI Bank paid lower tax of Rs 501 crore against Rs 575 crore last year.

Larsen & Toubro paid Rs 210 crore as against Rs 150 crore last year. Reliance Industries paid Rs 1157 crore in advance tax against Rs 683 crore paid in last year. But, Tata Steel paid a sharply lower advance tax of Rs 400 crore Rs 1000 crore paid in last year.

Software major TCS has reportedly paid Rs 220 crore as against Rs 81 crore. Tractor major Mahindra & Mahindra paid Rs 112 crore as against Rs 17.5- crore. Tata Motors paid advance tax of Rs 130 crore in the second installment, much higher than Rs 60 crore last year. Tata Power Company paid Rs 75 crore as against Rs 14 crore in last year.

Meanwhile, the initial public offer (IPO) of the private sector ship builder, Pipavav Shipyard, was fully subscribed within an hour of opening of the issue on Wednesday, 16 September 2009. The IPO was subscribed 3.57 times on second day of the issue on Thursday. The company has allotted 1.52 crore shares to anchor investors at the top-end of the Rs 55-Rs 60 price band.

Asian stocks fell today as Aiful Corp. sought to reschedule its debt payments and metal prices declined. Aiful Corp. said it will try to reschedule debt payments after the financial crisis hurt its ability to raise money. The key benchmark indices in China, Hong Kong, Japan and Singapore fell by between 0.18% to 1.23%. The key benchmark indices in South Korea and Taiwan rose by between 0.07% to 0.26%.

The US markets snapped their winning streak on Thursday, 17 September 2009 after making fresh highs this week. The markets got a boost from an encouraging Philadelphia Fed report earlier in the day but then gave up gains to end in the red. The Dow Jones Industrial Average was down 7.79 points, or 0.1%, to 9,783.92. The S&P 500 index fell 3.27 points, or 0.3%, to 1,065.49, and the Nasdaq Composite Index fell 6.40 points, or 0.3%, to 2,126.75.

In economic news, the Philadelphia Fed said its manufacturing gauge rose to 14.1 in September 2009 from 4.2 in August. This is its first back-to-back monthly gain since October and November of last year.

Initial jobless claims unexpectedly fell last week, dropping by 5,000 coming in at 5,45,000. Continuing claims climbed to 6.23 million from 6.10 million.

A report showed housing starts and permits rose in August to their highest level since November 2008.

Back home, the key benchmark indices scored small gains in choppy trade on Thursday, extending recent strong gains, as global stocks rose. The BSE 30-share Sensex rose 34.07 points or 0.2% to 16,711.11 its highest closing since 22 May 2008.

As per the provisional figures on NSE, foreign funds bought shares worth Rs 2759.46 crore and domestic funds bought shares worth Rs 186.24 crore on Thursday.

Morning Brief - Sep 18 2009

Morning Brief - Sep 18 2009

Copper drops

Prices shed gains as inventories soar

Copper prices slipped on Thursday, 17 September, 2009 at Comex and LME. Prices fell today following two previous sessions of rise. Prices slipped due to rising inventories at LME.

At USA, copper futures for December delivery fell 3 cents (1%) to 2.9 a pound. Copper fell 0.7% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended lower by $35 (0.6%) at $6,385 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

After August, it was the eighth straight monthly gain for copper. Prices gained 23% in the second quarter. On a year to date basis, prices are higher by 95.5%.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

As per latest report, stockpiles tallied by the London Metal Exchange expanded for a 14th day to 323,225 metric tons yesterday, the highest level since 26 May, 2009. Copper inventories in Shanghai climbed for a seventh week last week to a two-year high of 97,396 tons.

The dollar, which has served as a safe-haven asset over the past year because of its low yield, fell earlier today. But then, it reversed its course. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by 0.4%.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

At the MCX, copper for November delivery closed at Rs 308.25/Kg. The closing price was Rs 5.05/Kg (1.61%) lower than previous closing price. Prices rose to a high of Rs 313.2/ Kg and fell to a low of Rs 307.35/Kg during the day's trading.

Among other metals traded in the LME on Thursday, lead rose 1.2% to $2,320 a ton and zinc fell 0.3% to end at $1,830 a ton. Nickel rose 1.7% to end at $17,599. Aluminium rose 0.7% to $1,940 a ton.

Daily News Roundup - Sep 18 2009

Reliance Industries-owned Petroleum Trust gained Rs31.9bn through the sale of 15mn treasury shares of RIL at Rs2,125. (BL)

Gas allocation for Ratnagiri Gas & Power Pvt Ltd’s from Reliance Industries KG-D6 block has been more than doubled to 5.67mmscmd. (BL)

NTPC will invest Rs177bn in the current financial year to add 3,300 MW of generation capacity. (BL)

ONGC expects to complete awarding contracts for B-193 cluster of marginal fields by early November. (BL)

Mahindra Satyam is close to getting back multi-million multi-year contracts from Telstra and Merrill. (BS)

Ten days after the West Bengal Government cancelled land allotment to Infosys and Wipro, the Government has now offered alternative plots of 45 acres each to the two IT majors. (BL)

Wipro is eyeing about Rs7bn from Government projects in the current fiscal. (BL)

HCL Technologies has bagged IT infrastructure management contracts worth US$113mn from Energy Future Holdings Corp (EFH), a Texas-based, privately-held energy company and Oncor, a listed subsidiary of EFH. (BL)

Patni targets 6% revenue from domestic market by 2012. (BS)

SBI is looking at acquisitions of up to US$1bn in UK and expected to maintain a 40% growth rate in its UK business. (BS)

Thermax has bagged an order for the turnkey project worth Rs10bn for supply of a 270 MW power plant being set up by a Hyderabad-based infrastructure company. (BL)

Hero Honda has decided to expand its Haridwar manufacturing facility after resolving issues with the State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd (Sidcul) to retain its hold over the 94 acres of vacant land. (BS)

Nalco aims to scale up its annual business turnover from Rs60bn at present to Rs100bn in the next five years. (BS)

Ranbaxy Laboratories has entered into an in-licensing agreement with South Korea’s Medy-Tox Inc for marketing its anti-ageing cosmetic product Neuronox in India. (BL)

Alstom and its consortium partners have signed a contract worth Rs5.6bn with Bangalore Metro Rail Corporation Ltd (BMRCL) to supply signalling system for the first two lines of the new Bangalore metro system. (BS)

SBI plans to increase share of its profit from overseas operation to 10% as against 8% currently. (ET)

Bharti-MTN deal stalled by Indian law, says President of South Africa. (FE)

ACC has planned a capex of Rs14bn to expand its capacity to 30mtpa by 2010 end. (ET)

ACC to raise Rs3bn to retire debt. (ET)

South Africa based Millicom rejects BSNL bid; Bharti Airtel still in fray. (ET)

Axis Bank has opened its QIP and GDR issue to raise up to US$1bn. (ET)

Raymond has announced plans to enter real-estate business to capitalize on surplus land. (ET)

HCL Technologies has bagged two five year contracts worth US$110mn. (ET)

Glaxo may pick up 5% in Dr.Reddy’s for Rs7.3bn. (ET)

ABG Shipyard may revise Great Offshore bid price. (ET)

Century Textile moves Bombay High Court against Bombay Dyeing over a land dispute. (ET)

IDFC and Kribhco buy 5% each in Indian commodity exchange jointly promoted by Indiabulls and MMTC. (ET)

Aban Offshore plans to raise Rs44.2bn via ADR, GDR or QIP issue. (ET)

Dabur plans to launch OTC drugs. (BS)

AIG to sell its 26% stake in Tata AIG life insurance JV to its Indian partner. (FE)

Coal India to get prospecting license for Mozambique coal blocks soon. (BS)

Genpact and Blackstone are the frontrunners to buy majority stake in WNS. (ET)

UBS in talks with Genpact Cognizant to sell captive IT business and KPO operations in India. (ET)


Inflation for week ended September 5 stood at 0.12%; in positive after 13 weeks. (ET)

Divestment PSU to continue says PM. (ET)

CERC announces tariff norms for renewable energy sector. (ET)

CNIE has raised it FY10 GDP forecast to 5.9% from 5.8%. (ET)

RBI issues draft norms for REPO in corporate debt securities. (FE)

Rainfall deficit has increased from 20% in early September to 21% on September 16. (BL)

Steel imports in July surged 94% to 561,000 tons against 289,000 tons. (BL)

The World Bank has agreed to provide a US$3bn loan for developing national highways in India. (BS)

Government extends stock limits on sugar, pulses, rice and oil seeds upto September 2010. (ET)

As per the US Foreign Agricultural Service, rice output in India will decline 7% more than forecast next year because of a drought in the main growing regions. (BS)

And miles to go…

If all difficulties were known at the outset of a long journey, most of us would never start out at all.

We’ve bounced back from the bear market lows to reclaim a milestone. But, we are still a long way away from the all-time highs. The question now is how would the journey ahead be? There are no easy answers, though on the whole, the mood seems to be upbeat. The real test for all will be when the steroid (stimulus) is gradually withdrawn. For now, everything looks bright and beautiful so may as well enjoy it.

All the bad news seems to have been discounted and the concerns are being overlooked temporarily. The fact is we went down hard and have rebounded. The worry is whether the ascent can continue at the same pace without major reversals. Stocks could gain further ground if the pace of liquidity gush persists. Among the potential headwinds are: inflation, interest rates, uncertainty over the external environment and lofty valuations.

Today, we see another day of stock taking and consolidation. Global cues too are indecisive. Our advice is don’t get too euphoric. Avoid undue risks and enjoy the long weekend. The upcoming earnings season should provide an opportunity to assess and evaluate. The advance tax numbers do point to a healthy states of affairs for India Inc over the year-ago period. But, in most cases this could be a result of cost cutting and not due to any meaningful gains on the demand side. That will take some more time to materialise. As always there will be surprises, both negative and positive. So, brace yourself for some volatility in the near term at least.

US stocks ended slightly down on Thursday as sales from FedEx and Oracle missed analysts’ estimates. Investors struggled to balance hopes for an economic recovery with fears that equities have surged too far, too fast.

The Dow Jones Industrial Average lost 8 points, or 0.1%, at 9,783.92 after ending the previous session at its highest point since last Oct. 6. The S&P 500 index fell about 3 points, or 0.3%, at 1,065.49 after ending the previous session at its highest point since Oct. 3 of last year.

The Nasdaq Composite lost 6 points, or 0.3%, at 2,126.75 after closing at its highest point since last Sept. 26.

The three major US indexes have ended higher in 8 of the last 10 sessions.

US stocks surged to almost one-year highs on Wednesday on continued optimism about the economy. Thursday brought new reports supporting hopes that a recovery is holding firm, but investors turned cautious after the recent spurt.

US stocks have surged over the last six months as investors have welcomed a string of improving economic news and better than expected corporate earnings. Since bottoming at a 12-year low in March, the Dow has gained about 50% and the S&P 500 is up 58%, as of Wednesday's close. Since bottoming at a six-year low, the Nasdaq has advanced 68%.

Trading could be volatile and volume could be higher through the quarterly options expiration on Friday when stock index futures and options, and individual stock futures and options all expire at the same time.

The number of Americans filing new claims for unemployment fell last week to 545,000 from a revised 557,000 in the previous week, the Labor Department reported Thursday morning. Economists forecast that claims would rise modestly. Continuing claims, a measure of Americans who have been filing claims for unemployment for a week or more, rose to 6.23 million versus forecasts for a rise to 6.1 million.

A rise in apartment construction helped push August housing starts to the highest point in roughly nine months, the Commerce Department reported. Starts rose 1.5% to an annual unit rate of 598,000 from a revised 589,000 in July, the government said. That was in line with economists' forecasts.

Building permits, a measure of builder confidence, rose 2.7% to 579,000 from a revised 564,000 in July.

The Philadelphia Fed index rose to a 27-month high in September, adding to other evidence that the manufacturing sector is recovering. The index, a regional read on manufacturing, rose to 14.1 in September from 4.2 previously. Economists thought it would rise to 8, on average.

FedEx said fiscal first-quarter earnings fell 53% from a year ago, meeting the forecast it issued last week. The package delivery firm reported weaker earnings that met forecasts on lower revenue that was shy of expectations. Shares fell 2.2%.

Oracle reported weaker quarterly revenue that missed forecasts late on Wednesday. The software maker also reported higher quarterly earnings of 30 cents per share that were in line with forecasts. Shares fell 2.8%.

American Airlines parent AMR said it raised $2.9 billion, including cash and financing. The airline also said it will shift some flights to more profitable hubs such as Chicago and New York and away from St. Louis and other places. Shares rose almost 20%.

The dollar hit a fresh 9-month low against the euro and bounced after hitting a 7-month low against the yen. The falling greenback has been lifting dollar-traded commodities including oil and gold lately, but prices were muted on Thursday.

US light crude oil for October delivery fell 4 cents to settle at $72.47 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $6.70 to $1,013.50 an ounce after settling Wednesday at a record high of $1,020.20.

Treasury prices gained, lowering the yield on the benchmark 10-year note to 3.40% from 3.46% on Wednesday.

European shares rose for third straight session and the tenth time in eleven days. After gaining 1.4% in the previous session, the pan-European Dow Jones Stoxx 600 rose 0.5% to 246.15, another fresh 2009 high.

Advancers far outnumbered decliners in London, Frankfurt and Paris, with gainers in particular in the aviation sector.

The UK's FTSE 100 index rose 0.8% to 5,163.95, the German DAX index climbed 0.5% to 5,731.14 and the French CAC-40 index was up 0.6% to 3,835.27.

It was a momentous day for the Indian markets as NSE Nifty hit the 5,000 levels for the first time since May 23, 2008. Bulls were indeed in high spirits in the morning trades led by firm global cues and buying witnessed all over. However, the joy was very short lived as index heavyweight Reliance Industries fell over 5% dragging the index by 103 points single handedly. Sentiments further got a hit after inflation broke in to positive territory fir the first time in 13-weeks.

The BSE Sensex fell nearly 110 points while, the NSE Nifty gave away nearly 40 points from their respective intra-day high’s.

Aviation stocks were in the linelight led by Jet Airways on speculation taxes on jet fuel may be cut. Shares of Jet Airways shot up by over 18% to end at Rs315, Kingfisher Airlines rallied by over 12% to end at Rs53 and Spice Jet surged over 7% to end at Rs33.6.

The BSE Sensex advanced 34 points or 0.2% at 16,711 after touching a high of 16,820 and a low of 16,636. The index opened at 16,686 against the previous close of 16,677. The NSE Nifty was up 7 points to shut shop at 4,965.

In Asia, the Nikkei in Japan gained by 1.7% at 10,443 while Australia's S&P/ASX ended higher by 1.4% at 4,714. The Hang Seng index in Hong Kong gained 1.7% at 21,768. Shanghai SE Composite in China gained by 2% at 3,060.

In Europe, stocks were in the green. The FTSE in the UK was up 0.9%, The DAX in Germany was up 0.6% and the CAC 40 index in France gained 0.6%.

Coming back to India, among the BSE sectoral indices, the Teck index was the top gainer, gaining 2%, followed by the IT index that was up 2%. The BSE Auto index up 1.5% and the BSE Bankex index was up 0.8%.

The BSE Mid-Cap index gained 0.3% and the BSE Small-Cap index gained 0.2%.

Among the 30-components of Sensex, 22 stocks ended in the green and 8 ended in the negative terrain. Among the major gainers were Hindalco, ACC, JP Associates, Bharti, Maruti and Grasim.

On the other hand, Reliance Industries, Tata steel, ITC, NTPC and Hero Honda were among the major laggards.

Outside the frontline indices, the big gainers in the broader market were Jet Airways, Proctor & Gamble, Essar Oil, HCL Tech and Indian Hotels. On the other hand, losers included EIH Ltd, EKC, Godrej Ind, IFCI and LIC Housing Fin.

India’s Inflation broke in to the positive terrain for the first time in over 12 months. The annual rate of inflation stood at 0.12% for the week ended August 5, 2009 over as compared to -0.12% for the previous week July 29, 2009 and 12.42% during the corresponding week August 06, 2008 of the previous year. The government announced that it revised inflation for week ended July 11 to -0.63% from -1.17%.

Reliance Industries announced that Petroleum Trust sold 10.5mn equity shares of the Company. Reliance Industrial Investments and Holdings Ltd, a wholly owned subsidiary of Reliance, is the sole beneficiary of the Trust.

The Trust will realize approximately Rs31.88bn, at an average price of about Rs2,125 per share. The shares are carried in the books at a cost of Rs158 per share by the Trust.

Petroleum Trust is a special purpose vehicle created for Reliance Industries holding in the earlier Reliance Petroleum when the company merged the latter with itself some seven years ago. The stake of the Trust rose again when IPCL merged with RIL.

DSP Merrill Lynch Limited and Citigroup Global Markets India Private Limited acted as joint arrangers for the seller.

Shares of Reliance Industries lost over 4.5% to Rs2086. The stock opened at Rs2169 and made an intra-day high of Rs2204 and a low of Rs2070. Total traded volumes stood at 10.2mn shares.

BHEL plans to spend Rs15.9bn to expand capacity to produce equipment capable of generating 20,000MW by March 2012.

Shares of BHEL ended flat at Rs2275. The stock opened at Rs2294 and made an intra-day high of Rs2314 and a low of Rs2265. Total traded volumes stood at 0.13mn shares.

Shares of Bharati Shipyard surged by over 2.6% to Rs214 after the company picked up an additional 3.01% stake, raising its holding to 22.48% for an amount of ~Rs3.05bn on acquiring its 22.48% stake in Great Offshore.

Bharati acquired 1.11mn shares at an average Rs558.81 per share through Dhanshree Properties Pvt. Ltd, a Bharati Shipyard unit, for a total of Rs624mn.

ABG Shipyard had proposed an open offer of Rs520 per share on August 5, 2009 for Great Offshore to lift its 7.87% stake.

Shares of Petronet LNG gained by 2.5% to Rs76.2 after the company announced its plans to raise Rs50bn in debt to build power plants. The company plans to borrow money from overseas and local banks by the end of 2010, Managing Director P. Dasgupta said. The company may raise an additional Rs20bn in 2011, selling shares to existing investors.

Petronet’s planned power plants will be built adjacent to its import terminals at Dahej in Gujarat state in western India and Kochi in the southern state of Kerala.

The plants will have the capacity to generate 1,200MW of electricity and may be completed in 2012.

Shares of Thermax advanced by 3.5% to end at Rs525 after the company announced its entry into the independent power producer segment by bagging an order worth Rs10.01bn for the turnkey supply of a 270 MW power plant being set up by a Hyderabad based Infrastructure Company.

The boilers for this project will be manufactured by Thermax using the circulating fluidized bed combustion (CFBC) technology Licensed from Babcock & Wilcox, USA.

Shares of Raymond were locked at 10% upper circuit to end at Rs204.85 after the company announced that the board of directors approved the proposal for commencement of Realty Development as new business.

Shares of Alstom Projects surged over 4% to Rs544 after the company and its *consortium partners have signed a signaling equipment and services contract worth Rs1.87bn with the Bangalore Metro Rail Corporation Ltd (Â"BMRCL") for the first two lines of the new Bangalore metro system in India.

(*The consortium is led by ALSTOM Projects India Ltd and composed of ALSTOM Transport SA (ATSA), Thales Security Solutions and Services and Sumitomo Corporation).

The contract also has a provision for BMRCL to exercise a firm option of value Rs1.41bn (out of which Alstom’s share is Rs500mn) within 15 days of the base contract coming into effect.