Emmbi Polyarns IPO Analysis

The IPO of Emmbi Polyarns appears unsuitable for conservative investors. Despite the company's relatively healthy margins and reasonable potential for growth in the flexible packaging business, the asking price for the offer appears high. The company's relatively small size and the scale of the proposed capacity expansion also peg up execution risks.

At the offer price of Rs 40-45 per share, the price would discount its annualised six-month 2009-10 earnings by 12-14 times on the pre-offer equity and by 29-32 times, on post-offer equity base.The expansion project would, thus, be crucial to justify the offer price. The stock's status as a small-cap and its limited scale of operations may make premium valuations difficult to attain.

Volume-driven business

Emmbi Polyarns' business revolves around the plastic packaging solutions. The company makes flexible intermediate bulk containers or jumbo bags, technical textiles, flexible tanks, woven sacks, container liner, anti-corrosive packaging and car covers. The user industries include chemicals, agri-processors and consumer products.

Barring a few products, the business of Emmbi Polyarns is mainly volume-driven. The company is in the process of entering new technical textile applications, which hold potential for higher margins, based on demand potential in the overseas markets.

The company has been supplying to established consumer and industrial companies such as Tata Chemicals, Godrej Industries and ITC. It has historically enjoyed operating margins in the 12-14 per cent range, while margins earned by competitors are around 8-10 per cent, claiming that it is able to price in raw material cost increases to its clients. However, whether it will be able to maintain margins with an over four-fold expansion in capacity planned now, is open to question.

Niche products such as flexible tanks, woven sacks and liners compensate for the wafer-thin margins earned by the jumbo bag business. The wide range of applications for flexible packaging make for reasonable growth potential. However, the sector is quite fragmented and features considerable competition. Plans to foray overseas would expose the company to global competition.

Expansion plans

Emmbi Polyarns is raising money to expand its facilities for flexible packaging from 5,000 tonnes per annum to 17,800 mtpa. The first phase, of expanding to 8,600 mtpa is due for completion in May 2010, while second phase (the bulk of expansion) due by December 2010 is in the initial stages of implementation. The project is to be fully funded by equity.

Financials

The company has managed sales growth CAGR of 38 per cent in the last three years. From no exposure to the overseas markets in 2006, the share of exports to total revenues now stands at 58 per cent. However, despite the growth rates, the company's revenue base remains relatively small, even in the context of the fragmented packaging industry. For the six months ended September 2009, the company clocked net profits of Rs.1.21 crore on net sales of Rs. 23.2 crore.

As the company attempts to drive larger volumes, margins may be sensitive to sharp swings in raw material prices .

Prices of inputs closely follow crude oil and appear to be upward bound currently. The spot prices of LDPE and HDPE, for instance, have appreciated by over 50 per cent from their November 2009 lows, though prices are still below the 2007-08 levels.

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V-Guard Industries

Investors with a medium-to-long term horizon can buy the stock of V-Guard Industries (V-Guard) due to the high potential of the consumer durables business and the discounted valuation of the stock. At Rs 84, the stock trades at 12 times its trailing one-year earnings. Comparable peers in both cables and consumer durables trade at 13-20 times.

From manufacturing voltage stabilisers, V-Guard has diversified into agricultural pumps, water heaters, UPS, fans, domestic wiring cables and low-tension (LT) power cables. Increasing presence in the semi-urban and rural markets has helped it record a robust 24 per cent five-year compounded annual sales growth. With rising copper prices, the company is considering price hikes to maintain margins.

Last April, the company commenced commercial production at two new power cable facilities, one of which is in Uttaranchal. It plans to expand capacity by setting up a factory in the South, land for which has already been acquired.

Strong revenue growth

For the nine months ended December 2009, the company reported a 35 per cent growth in sales, buttressed by a 41 per cent growth in the electro-mechanical division (PVC insulated and low-tension power cables, water heaters and fans) .

About 30 per cent of the company's revenues (domestic wires: LT power cables- 5:1) are from the cables division. V-Guard now concentrates only on the retail segment (domestic wiring for individual houses and small and mid-sized projects) for its power cable sales; hence, there is no need to worry about the slow pick-up in capex activities in the core infra sectors.

The company's commissioning of the cable factory in Kashipur, Uttaranchal, is expected to give it a presence in the northern market. This factory makes building wire cables (two lakh coils per month at optimum capacity). V-Guard has also begun work in the newly set up LT cable factory at Coimbatore last year. The company had by December-end spent close to Rs 40 crore on these two projects (a total of Rs 44.78 crore was the estimated outlay on these projects at the time of the initial public offer).

V-Guard brand fans and water heaters are well recognised in the consumer markets of the South. The company's stabiliser sales come mainly from the semi-urban regions where the demand for voltage stabilisers is still high due to frequent power outage and voltage fluctuations. Though there is a risk of the new-age electronic items with in-built stabilisers slowly eating into the market, the company's focus on the Tier-II and Tier-III cities and diversified product lines will help sustain sales growth over the long term. The company has a network of 170 distributors and over 200 service centres pan-India.

An eye on margins

Copper is the main raw material . Sharp price corrections in copper in 2008 impacted the company's operating profit margins and in the December '08 quarter, the company's OPM dipped to a low of 5 per cent (on inventory devaluation and fall in realisation). However, the company booked all copper-related inventory losses in that quarter and has been seeing margins improving ever since.

For the nine-months ended December '09, operating margins stood at 12 per cent, up from the 9 per cent reported in the same period last year. From its lows of $2810/tonne on the London Metal Exchange in December '08, copper's price has risen to $7367/tonne now, a 162 per cent rally (still 17 per cent below its July '08 peak). Prices look likely to remain firm on tight supply conditions and rising Chinese imports.

The company's margins are susceptible to sharp price shifts in copper. Over the short term, however, margins may be held around the prevailing levels or may rise, with the company considering price hikes following similar moves by the competitors.

Financials

Net profits (before considering taxes and exceptional items) fell 16 per cent in FY-09 over the previous year. This was mainly on copper prices peaking in the mid-year and bottoming out in December. Sharp price shifts over a short period saw margins crumble as realisations could not match up with costs. However, for the nine months ending December '09, the company's net profit grew close to 70 per cent at Rs 19.38 crore on a sales growth of 35 per cent. The debt-to-equity ratio stands at a low 0.2, giving the company leeway to leverage for expansion plans.

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NTPC FPO Analysis

NTPC is one of the better bets among power stocks. Though it has grown at a sedate pace over the last five years, NTPC is likely to deliver better earnings growth over the next decade.

Our valuations, on an estimated fair price-to-book-value of 3, support a price of Rs 204 a share with a built-in upside of 20 per cent.

Investors can consider subscribing to the follow-on public offer (FPO) if it is priced at Rs 204 or below. At current market price of Rs 214, the stock is trading a 17 times its estimated FY11 earnings. NTPC may increase its capacity by a third by the end of 2012 after we account for possible delays in execution. The Central Electricity Authority estimates that NTPC may add 10,020 MW to its current capacity of 31,144 MW in the same period.

On current reckoning, the company may end the current Plan period achieving 62 per cent (13,940 MW) of its targeted capacity. This would be higher than its previous Plan period addition of 7155 MW, allowing for higher topline expansion over the next three years.

Equipment delays and execution risks continue to be major hindrances, though. Delays in ongoing projects and the high proportion of cash in the book (Rs 20/share) continue to weigh on its Return on Equity (ROE). Delays in some of the upcoming projects would also entail a loss of the 0.5 per cent additional ROE incentive on tariffs proposed by the Central Electricity Regulatory Commission (CERC) to encourage timely execution.

However, NTPC may still manage some improvement in ROE over the next few years, given the recent increase in regulated tariffs proposed by the CERC. New merchant capacities expected to be commissioned at Korba (500 MW) and Farakka (500 MW) may also aid higher ROEs.

Upside due to regulatory changes such as sale of unallocated power through the merchant route also holds potential for better returns over the short-to-medium term.

Business

NTPC, a public sector utility, is the largest player in the power sector with around 31,144 MW of capacity under its belt, including 2294 MW owned through JVs.

The company is amongst the better operating utilities, given that it contributed 28.5 per cent of the total electricity generated in the country last year, with only 19 per cent of the total capacity.

It has been consistently maintaining its plant load factor (91.4 per cent as of March 09) and plant availability factor (92 per cent as of March 09) at higher than normative levels and thereby earning incentives.

Funding: Comfortable

A comfortable funding position is the biggest strength for the company, even as private players grapple with financial closure.

The company has a debt: equity ratio of 0.64 per cent for the year ended March 2009, thanks to a high equity contribution in the earlier projects.

However, with the normative debt-equity fixed currently at 70:30, the company may witness increase in leverage and large proportions of cash (equity) may continue to lie unutilised, waiting to be invested.

The increase in debt is not a threat as the interest component will be passed through to customers. For the year ended March, 2009, the average borrowing costs stood at a moderate 7.2 per cent for the company.

NTPC had Rs 17,431 crore in free cash as of Septmber 2009, enough to comfortably fund the equity for more than 15,000 MW of the planned 25,000 MW capacity (in addition to 17,900 MW which are in various stages of commissioning). Given that internal accruals continue to be high, the free cash will only grow further. This may come in handy for the company to finance its backward integration into coal mining and to fund acquisition of mining assets.

The company also has Rs 11, 400 crore of One Time Settlement Scheme bonds issued against receivables.

NTPC intends to invest more than Rs 40,000 crore in the next two years, in addition to the current Rs 30,613 crore deployed in capital work-in-progress. Stable cash flows

NTPC's profit grew at a rate of 9.6 per cent compounded annually over the period 2004-09. During the same period, power output grew at a modest annual rate of 6.7 per cent.

However, with newer capacities coming up over the last 18 months and existing plants operating at higher levels, NTPC's profit after tax growth has improved — for the nine months ended December 31, 2009, improved by 11 per cent year-on-year. Unlike private power producers, NTPC is largely dependent on domestic sources of coal from Coal India and its projects carry negligible fuel risk.

The company has signed a new coal supply agreement with Coal India in May, 2009 for the next 20 years for 12 out of the existing 15 power plants with a penalty clause if there is short delivery (trigger level at 90 per cent).

NTPC also has captive mines which are expected to be operational by FY12. Overseas acquisitions of coal mines, along with committed coal linkages may also reduce the dependence on imports.

In FY09, imports made up a little over 4 per cent of the company's coal consumption. Availability of gas from the KG basin would improve the load factors for the company.

Enhancing the value chain

The power trading arm of NTPC is the second largest in terms of market share in short-term trading. It also holds a minor stake in Power Trading Corporation, the largest power trader.

The company is already a seasoned player in operation and maintenance of power projects and is taking up projects for renovation and modernisation and life extension for third parties.

While the company is planning to diversify its fuel mix, most of its hydro projects are delayed and may be commissioned only in the Twelfth Plan. It has formed a JV with NPCIL for 2,000 MW of nuclear power and is also diversifying into renewable sources.

The company has recently formed a JV with BHEL for engineering and a forgings and casting JV with Bharat Forge to reduce equipment delays.

Other concerns

While the stricter operational norms mandated by CERC augur well for an efficient utility such as NTPC, CERC has discontinued advances against depreciation and disallowed the pass through of tax on income , which could pose a downside to tariffs.

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Educomp Solutions

Investors with a two-year horizon can buy the shares of Educomp Solutions, an education solutions provider, considering a revenue model that ensures sustainable revenue streams and the rapid addition in schools that adopt its products and services.

At Rs 704, the share trades at 19 times its likely 2010-11 per share earnings. At these levels, the valuations seem attractive due to the superior growth and margin expansion that the company has been able to achieve in its key school learning solutions business. These valuations are also at a substantial discount to historic valuations enjoyed by the stock. Between 2006 and 2009, the company's revenues grew at a compounded annual rate of 125.6 per cent to Rs 637 crore, while net profits grew by 112.2 per cent to Rs 132.9 crore.

In the recent December quarter, Educomp's revenues grew by 37.2 per cent over the same period last year to Rs 260.1 crore, while net profits grew by over 92 per cent (including other income of Rs 15.8 crore) to Rs 61.2 crore.

Smart learning solutions, a business that generates over 75 per cent of revenues for Educomp, comprise two segments — smart class and ICT solutions. Smart class segment, which enjoys over 60 per cent operating (EBIT) margin, has increased contribution over the last couple of years.

This segment involves delivering interactive and innovative multi-media content based on curriculum of various boards and across classes in schools. About 2,574 schools and around 2.9 million students currently use the services of Educomp's smart class offering.

Contracts are usually signed with schools for a five-year period, which creates a sustainable revenue stream for the company. There is an ever increasing focus across private schools on developing newer and interactive pedagogical tools to deliver content to students; this is further reinforced by the fact that Educomp is increasingly getting orders from tier-II and -III cities.

In the three quarters of FY10, this segment alone has grown by over 75 per cent for the company. The ICT solutions division, which caters to computerisation efforts of state government schools, has also been getting robust order inflows.

This is a low margin business as it is hardware-intensive. There is also competition from players such as NIIT and Everonn Education. But it has still managed to win orders from state governments, the most recent ones being from Andhra Pradesh, Tripura and Haryana.

The other divisions such as online learning, catering to overseas students, joint ventures with overseas print and educational institutions are all generating revenues, but are still in the capex phase and would turn profitable only over the next two-three years.

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DB Realty IPO Analysis

Investors can avoid the initial public offer of the Mumbai-based real-estate developer, DB Realty, for now. Presence in the Mumbai market, which is perennially in short supply of usable land, besides the company's participation in lucrative Transferable Development Right (TDR) projects, no doubt provide scope for ramping up earnings.

However, lack of an operational track record and a high asking price act as dampeners to this offer. The company's annualised earnings for FY-10, on a post issue equity base, works out to about Rs 5. At the offer price of Rs 468-486, the price earnings multiple is way above larger peers such as Ackruti City, HDIL and Orbit Corporation.

If the company is able to complete its ongoing projects for the next couple of years and generate TDRs from some of these projects, the offer price (at the higher end) would work out to about 15 times its expected consolidated per share earnings for FY-12.

Investors may bide their time and consider picking the stock after the company demonstrates its execution capabilities. Paying a marginal premium, then, may still be worth it for a Mumbai play.

The company and offer

DB Realty develops residential, commercial and retail properties besides undertaking mass housing and cluster redevelopment projects, in and around Mumbai. The last-mentioned category provides alternative land to developers; called TDRs, such land can either be developed or sold as such to third-parties.

The company plans to raise Rs 1500 crore through this offer primarily for construction and development of projects. At the offer price, the company's full market-cap would be about Rs 11,000 crore.

Quick ramp-up

DB Realty is now developing 19.5 million sq. ft of projects. Apart from ongoing projects, 19.3 million sq. ft of projects are in the pipeline and another 22.2 million sq. ft of forthcoming projects for which the company is yet to seek approvals for development.

Though the promoters have a background in real estate, DB Realty, as a company, is yet to make a mark in the property development business and does not have any completed projects to its credit since its inception in 2007.

While it incurred losses in the first two years, it turned in profits of Rs 146 crore (sales Rs 464 crore) by FY-09. However, close to half the revenues in FY-09 and the first half of FY-10 came from sale of TDRs, while the rest from partly booking revenues on ongoing projects.

While a quick ramp up by a company at a nascent stage of operation may appear impressive, it is not unusual for Mumbai realty players to quickly convert the lucrative TDRs in to cash.

Given its less-established operational background, the above project pipeline would warrant a close look on the execution and marketing front.

From the 11 ongoing projects of 19.5 million sq. ft, the company would generate TDRs of 10.9 million sq.ft. from mass housing projects. TDRs on forthcoming projects are negligible. While the market for TDRs has traditionally been lucrative, this market too nose-dived on changed regulations in September 2008 (which qualified more buildings for redevelopment), which ensured higher supply of TDRs.

This stream of revenue could, therefore, witness volatility, the reason why stocks of TDR-focussed players such as HDIL trade at a discount to peers such as DLF and Unitech.

Of the 11 ongoing projects with saleable area of 19.5 million sq. ft, only 50 per cent (coming from 3 projects) would be completed by FY-12. Ramp-up in revenues on timely sale of residential projects, could nevertheless be significant with about Rs 2000 crore of estimated revenues accruing over the next two years.

The high operating profit margins of over 50 per cent in FY-09 could, however, taper down to more normal 30-35 per cent, similar to peers, as the company's generation of TDRs decline.

Related transactions

Some of DB Realty's related party transactions also add other grey areas to the IPO. The company, for instance, has over Rs 200 crore of interest-free loans and advances granted to group and associate companies, including the group's hospitality ventures.

This amount was around Rs 400 crore as of March 2009, as much as 50 per cent of the company's net worth then.

Similarly, significant corporate guarantees for credit facilities extended to other companies under the same managements and in unrelated businesses such as telecom are risks for a sector that is working-capital intensive and in the early stages of growth.

The offer is open from January 29 to February 02.

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Jobs, healthcare reforms remain top priority for Obama

The unfinished agenda of reversing the slide in the job market and pending healthcare reforms were the highlights of US President Barack Obama's maiden State of the Union Address. He vowed to press ahead with his plan to overhaul the nation’s healthcare system and called on Congress to pass a package of tax cuts and spending to stimulate the world's largest economy and create millions of new jobs. "Jobs must be our No. 1 focus in 2010, and that is why I am calling for a new jobs bill tonight," Obama told lawmakers from the podium in the chamber of the House of Representatives. Obama appealed to US lawmakers to take another look at his administration's healthcare reform proposal, while acknowledging that the plan is in a bit of a limbo at the moment. He also touched upon the ballooning budget deficit, saying that the government must tackle it. The deficit will hit US$1.35 trillion in 2010, the Congressional Budget Office has predicted. Obama’s speech before a joint session of Congress was devoted mostly to economic concerns, particularly the loss of more than 7 million jobs since the start of the recession in December 2007. Many of the steps he outlined on Wednesday have also been proposed previously. Support for Obama has weakened since he took office and a new Wall Street Journal/NBC poll has found that Americans think that he has focused too much attention on the now-stalled health-care overhaul and not enough on the economy.

Aqua Logistics extends IPO period, prunes price band

The recent reversal in the stock market forced Mumbai-based supply chain company Aqua Logistics Ltd. to extend its issue subscription period to February 2. Aqua Logistics also trimmed its price band to Rs200 to Rs225 per share from Rs220 to Rs230 a share, following insufficient demand. The company was planning to raise around Rs1.5bn. Aqua Logistics had opened for subscription on January 25, and was supposed to close its book on January 28. As of 5 pm on that day, only 55% of the book had been subscribed. According to reports, qualified institutional buyers (QIBs) subscribed to only around 10% of the book, while high net worth individuals (HNIs) reportedly subscribed to around 72%. Saffron Capital Advisors and Centrum Capital are the book-running lead managers to the issue.

The development is reminiscent of the days in January 2008 when a slew of companies had to defer their issues in the face of investor apathy after extending their subscription period and slashing the price band. Emaar MGF and Wockhardt hospitals were among the prominent ones. There are a few concerns about the fate of some of the other primary market issues, which are either open for subscription, or will open for bidding shortly. Thangamayil Jewellery, Syncom Healthcare and DB Realty are open for subscription, while Vascon Engineers IPO is fully subscribed. DB Realty has already received commitments from anchor investors for over Rs2.7bn.

Power Grid Corp Board clears FPO plan

Power Grid Corporation of India Ltd. announced that its Board of Directors, at its meeting held on January 25, granted an in-principle approval to the Follow on Public Offering (FPO). The issue will be equivalent to 10% of the paid up equity share capital from domestic / external market for augmenting resources of Company to fund its investment programme. This will be subject to approvals by Government of India and approvals as required for FPO. The issue will happen sometime in September and will be of around Rs35bn. The Government of India currently holds 86.36% stake in the company, while the remaining 13.64% is held by public. The company's Board also considered the investment approval for 'Immediate evacuation System for Nabinagar TPS' (1000 MW) at an estimated cost of Rs2.15bn, with commissioning schedule of within 28 months from the date of investment approval. Last week, NTPC and REC received Board approvals and plan to mobilise around Rs140bn via FPOs. Both these FPOs will hit the market in early next month. The Cabinet had earlier asked all listed profitable PSUs to have public shareholding of at least 10% in each of them. There are 17 listed PSUs which have public holding less than 10%

Govt to miss April deadline on GST rollout

The UPA government’s proposed comprehensive indirect tax reform, goods and services tax (GST), will miss its scheduled rollout from April 1, 2010, a temporary setback to creation of a unified national market for goods and services in the country. "Because of the difficulties in passing the required constitutional amendment bill in the budget session , it will not be practical to introduce GST on April 1, 2010 . New dates for GST implementation will be decided in April," Chairman of the Empowered Committee of State Finance Ministers and West Bengal finance minister Asim Dasgupta said after an hour-long meeting of the panel with the union Finance Minister Pranab Mukherjee. Dasgupta’s admission is a clear indication that the implementation of the new regime may be postponed by an year to April 1, 2011, as a number of states may not be willing for even a mid-year roll-out.

Weekly Stock Picks - Jan 31 2010

Buy Cummins

Buy Allahabad Bank

Buy DLF

Buy Educomp

Buy SBI

Weekly Newsletter - Jan 31 2010

With most earnings and the much-awaited RBI policy out of the way, the market could attempt to claw its way back gradually after the recent slump. So, there is a fair chance that Friday's late rebound could spill over into Monday's session, at least early on. A reversal in FII selling and improvement in the global sentiment will be crucial to sustain any meaningful advance from here on. The market will also focus on the primary market as the NTPC FPO opens next week. A slew of other issues - IPOs, FPOs and QIPs - are also lined up over the next few weeks. One will have to examine their fate as well.

The release of Q4 US GDP data - which is expected to be strong - and its impact on world equity markets could sway the mood early next week. Also eagerly awaited will be the monthly US jobs data and other key economic reports from other parts of the world. Meanwhile, US President Obama is due to unveil a US$33bn package of tax credits on Friday. The plan is part of his promise to boost job creation. Concerns over possible sovereign debt default in Europe and the overhang of Chinese monetary tightening will however continue to cast a shadow on world markets.

Back home, monthly sales numbers will be announced by auto and cement companies. On the whole, things might not get worse from here in the run up to the Union Budget. Volatility is expected to prevail though as policymakers consider exit from emergency crisis-fighting measures amid growing threat of inflation and high fiscal deficit. The main indices could continue to be rangebound and choppy. Technically, the Nifty is likely to trade in a range of 4800-5000 in the near term. The broader market might also make a comeback after losing the momentum in the recent drubbing. But, one has to be very careful of what one is buying in this space.

Food inflation climbs again: Govt data

India's food prices at the wholesale level climbed in the second week of January but is still much lower than the near 20% it touched in the initial days of December, data released by the Government showed. The index for Food Articles group rose by 0.4% to 286.7 in the week ended January 16, 2010 compared to 285.6 in the previous week. The annual, point-to-point inflation in Food Articles inched up to 17.40% from 16.81% in the previous week, the Commerce & Industry Ministry said in a statement.

The WPI for the Primary Articles group rose by 0.3% to 285.5 from 284.6 in the previous week. Inflation in the Primary Articles group stood at 14.66% in the week under review versus 13.93% in the preceding week. Inflation in the Primary Articles group was at 10.96% during the week ended January 17, 2009. The index for Non-Food Articles group rose by 0.1% to 258.2 from 257.9 for the previous week. Inflation in the Non-food Articles space rose to 11.53% from 10.40%, while that in Minerals group remained static at -5.18%.

Meanwhile, the index for the Fuel & Power group rose by 0.1% to 350.6 from 350.4 in the previous week. Inflation in the Fuel & Power group declined to 5.70% in the week ended January 16 from 6.34% in the week ended January 9, the Commerce Ministry data showed.

Inflation for the Fuel & Power group was at (-) 0.93% during the corresponding week of the previous year. Inflation in Mineral Oils group increased to 8.66% in the middle of January from 9.78% in the previous week. At the same time, inflation in the Electricity group stood unchanged at 1.95%, the Commerce Ministry data revealed.

The benchmark monthly inflation, as measured by the Wholesale Price Index (WPI), was 7.31% in December, compared with 4.78% rise in November and 6.15% a year ago. In September it stood as low as 0.5%.

RBI hikes CRR by 75 bps; policy rates left unchanged

The Reserve Bank of India (RBI) never ceases to surprise the markets. It did it again on Friday. As against the consensus expectations of a 50 basis points (bps) hike in the cash reserve ratio (CRR), the RBI hiked it by a wider than anticipated 75 bps to 5.75%. At the same time, the RBI left all other policy rates unchanged. So, the reverse repo has been kept static at 3.25%, as is the repo rate, which remains at 4.75%. The bank rate also stays steady at 6%. The central bank also raised the FY10 GDP forecast, to a much stronger 7.5% from 6% earlier. Inflation target for the current fiscal year has also been hiked to a substantially higher 8.5%, from 6.5% earlier.

The RBI has scaled down the annual non-food credit growth target to 16% from 18% earlier. Money supply (M3) estimate has also been pared to 16.5% from 17% earlier. The projection for deposit growth has been scaled down to 17% from 18% earlier. The 75bps hike in the CRR will suck out Rs360bn from the banking system. The central bank has been receiving about Rs1 lakh crores in excess liquidity from banks over the past several months. The CRR increase will be executed in two stages, the RBI said. The first 50bps hike will be done with effect from Feb. 13 while the balance 25bps will come into effect from Feb. 27.

Jain Irrigation Systems

Jain Irrigation Systems

Hyderabad Industries

Hyderabad Industries

Market Review - Jan 29 2010

Market Review - Jan 29 2010

BSE Bulk Deals to Watch - Jan 29 2010

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
29/1/2010 517356 ACI Infocom ALOK GUPTA S 160120 13.65
29/1/2010 531881 Arvind Chem PRASHANT MAHADEV KAMBLE B 104924 16.47
29/1/2010 531881 Arvind Chem PRASHANT MAHADEV KAMBLE S 104919 16.48
29/1/2010 513333 Bhuwalka Steel AFJALBHAI KASAMBHAI LAKHANI B 40001 51.80
29/1/2010 513333 Bhuwalka Steel ASARAFBHAI MAJIDBHAI PANCHA B 40000 48.40
29/1/2010 513333 Bhuwalka Steel AFJALBHAI KASAMBHAI LAKHANI S 40001 48.40
29/1/2010 513333 Bhuwalka Steel ASARAFBHAI MAJIDBHAI PANCHA S 40000 51.80
29/1/2010 531590 Bilpower NIKUNJ ALLOYS AND STEEL PRIVATE LIMITED B 80000 186.56
29/1/2010 511607 Birla Shloka TOUCHSTONE FINVEST SERVICES PRIVATE LIMITED B 100000 49.81
29/1/2010 511607 Birla Shloka ARIHANT SEC & INVESTMENT B 120385 48.90
29/1/2010 511607 Birla Shloka NIRAJ HARSUKHLAL SANGHAVI B 84301 47.93
29/1/2010 511607 Birla Shloka DEVKANT SYNTHETICS INDIA PVT. B 322538 49.96
29/1/2010 511607 Birla Shloka ARIHANT SEC & INVESTMENT S 120385 49.55
29/1/2010 511607 Birla Shloka NIRAJ HARSUKHLAL SANGHAVI S 84301 49.91
29/1/2010 532363 Compulearn J V STOCK BROKING PRIVATE LIMITED B 112393 19.65
29/1/2010 532363 Compulearn J V STOCK BROKING PRIVATE LIMITED S 107994 19.78
29/1/2010 531147 Enkei Castalloy NEEPA K SHAH B 71294 90.00
29/1/2010 511668 Fact Enterprise J V STOCK BROKING PRIVATE LIMITED S 28272 20.70
29/1/2010 590024 Fert & Chem Trv TRANSGLOBAL SECURITIES LTD. B 144756 59.73
29/1/2010 590024 Fert & Chem Trv OPG SECURITIES P LTD B 35391 58.68
29/1/2010 590024 Fert & Chem Trv ANGEL INFIN PRIVATE LIMITED B 34195 60.86
29/1/2010 590024 Fert & Chem Trv LATIN MANHARLAL SEC.PVT.LTD. B 37492 61.62
29/1/2010 590024 Fert & Chem Trv WALLFORT FINANCIAL SERVICES LTD B 50000 64.31
29/1/2010 590024 Fert & Chem Trv TRANSGLOBAL SECURITIES LTD. S 144756 59.61
29/1/2010 590024 Fert & Chem Trv OPG SECURITIES P LTD S 35391 58.62
29/1/2010 590024 Fert & Chem Trv ANGEL INFIN PRIVATE LIMITED S 31695 60.59
29/1/2010 590024 Fert & Chem Trv LATIN MANHARLAL SEC.PVT.LTD. S 37492 61.84
29/1/2010 514167 Ganesh Poly SABANA MASARIYA B 50000 37.25
29/1/2010 532909 Grabal Alok PINKY EXHIBITORS PRIVATE LIMITED B 330000 60.00
29/1/2010 532909 Grabal Alok HSBC BANK (MAURITIUS) LIMITED S 325000 60.00
29/1/2010 509597 Hardcastle & Waud SUVA BOTHRA B 3173 609.31
29/1/2010 500183 Himachal Futur PILOT CONSULTANTS PRIVATE LIMITED B 2510000 15.16
29/1/2010 532658 Indo Asian Fuse PKR HITECH INDUSTRIAL COPORATION LLP B 260000 61.00
29/1/2010 532658 Indo Asian Fuse VPM INDUSTRIAL CORPORATION LLP S 260000 61.00
29/1/2010 523844 Invicta Meditek RAMACHANDRAN V B 110000 6.01
29/1/2010 523844 Invicta Meditek CHELLIAH JAYASEELA PANDIAN S 94150 6.01
29/1/2010 531398 Inwinex Pharma PRITI NARESH KHEMKA B 6000 31.79
29/1/2010 531398 Inwinex Pharma CHIMANLAL MANEKLAL SECURITIES PVT.LTD B 5000 31.79
29/1/2010 531398 Inwinex Pharma BP FINTRADE PRIVATE LIMITED B 14380 31.79
29/1/2010 531398 Inwinex Pharma CHIMANLAL MANEKLAL SECURITIES PVT.LTD S 5000 31.79
29/1/2010 531398 Inwinex Pharma BP FINTRADE PRIVATE LIMITED S 16478 31.77
29/1/2010 524731 Jenburkt Pharma RISHI KAJARIA B 76294 49.95
29/1/2010 524731 Jenburkt Pharma ASHA AGGARWAL B 53193 47.64
29/1/2010 524731 Jenburkt Pharma MUKESH KUMAR HUF B 28087 49.46
29/1/2010 524731 Jenburkt Pharma ASHA AGGARWAL S 53193 50.17
29/1/2010 524731 Jenburkt Pharma SN SHRS AND STCK BROKERS P.LTD S 38500 48.97
29/1/2010 524731 Jenburkt Pharma MUKESH KUMAR HUF S 28087 47.07
29/1/2010 590111 MASTER M NARSIMHA RAO B 29000 51.00
29/1/2010 590111 MASTER TEJANA GAVENKATA AMBICA RAMASUDARSANPERLA S 29000 51.00
29/1/2010 517554 Midpoint Soft VINOD SHARES LTD B 6400 23.57
29/1/2010 517554 Midpoint Soft VINOD SHARES LTD S 6400 23.57
29/1/2010 533080 MOLDTK PLA SUNITA DUGAR B 73882 54.81
29/1/2010 533080 MOLDTK PLA BHARGAVI ATUL JAIN B 62836 55.46
29/1/2010 533080 MOLDTK PLA RAHUL DOSHI B 48001 57.76
29/1/2010 533080 MOLDTK PLA PRABHUDAS LILLADHAR PVT LTD B 92035 56.14
29/1/2010 533080 MOLDTK PLA NARESH CHAND JAIN B 46022 56.98
29/1/2010 533080 MOLDTK PLA Naman Securities & Finance Pvt. Ltd. B 63712 57.87
29/1/2010 533080 MOLDTK PLA CHIMANLAL MANEKLAL SECURITIES PVT.LTD B 69051 56.65
29/1/2010 533080 MOLDTK PLA BP FINTRADE PRIVATE LIMITED B 49552 58.15
29/1/2010 533080 MOLDTK PLA SUNITA DUGAR S 63882 57.12
29/1/2010 533080 MOLDTK PLA BHARGAVI ATUL JAIN S 62836 55.31
29/1/2010 533080 MOLDTK PLA PRABHUDAS LILLADHAR PVT LTD S 92034 56.38
29/1/2010 533080 MOLDTK PLA NARESH CHAND JAIN S 46022 56.95
29/1/2010 533080 MOLDTK PLA Naman Securities & Finance Pvt. Ltd. S 54712 57.63
29/1/2010 533080 MOLDTK PLA CHIMANLAL MANEKLAL SECURITIES PVT.LTD S 66051 56.15
29/1/2010 533080 MOLDTK PLA BP FINTRADE PRIVATE LIMITED S 49542 58.09
29/1/2010 531996 Odyssey Corp RAMDULARI AGRAWAL B 25000 35.89
29/1/2010 531996 Odyssey Corp R VENKATACHALAM S 114469 35.95
29/1/2010 531496 Omkar Overseas SONAL NISHITH SHAH B 30000 46.92
29/1/2010 531496 Omkar Overseas PRANALI COMMODITIES PVT.LTD B 100000 46.92
29/1/2010 531496 Omkar Overseas PRASHANT SHANKARLAL AGARWAL S 75000 46.95
29/1/2010 531496 Omkar Overseas VIJAY VELJIBHAI PADHARIA S 48200 46.90
29/1/2010 511702 Parsharti Inv KRUPA SANJAY SONI B 18520 35.72
29/1/2010 511702 Parsharti Inv BHAVESH SHANTILAL TRIVEDI B 30000 34.60
29/1/2010 511702 Parsharti Inv PRADEEP RAMPRASAD SANDHIR HUF B 38371 36.10
29/1/2010 511702 Parsharti Inv AXIOM CAPITAL ADVISORS PRIVATE LIMITED B 40271 36.22
29/1/2010 511702 Parsharti Inv KRUPA SANJAY SONI S 17987 35.06
29/1/2010 511702 Parsharti Inv GAURAV AERI S 20000 37.60
29/1/2010 511702 Parsharti Inv PREMILA MAHENDRA SHAH S 28371 36.10
29/1/2010 511702 Parsharti Inv AXIOM CAPITAL ADVISORS PRIVATE LIMITED S 40271 34.98
29/1/2010 502587 Rama Pulp MAHIPAT IWDARMAL MEHTA B 42747 31.42
29/1/2010 590077 Ranklin Sol CH VISHNU VARDHAN B 56100 54.50
29/1/2010 590077 Ranklin Sol SATYANARAYANA VARAPRASAD GARIKIPATY S 25500 54.39
29/1/2010 533083 RISHABHDEV PALENI VELMUDALIAR B 375727 11.88
29/1/2010 533083 RISHABHDEV ARIHANT SEC & INVESTMENT B 224464 11.88
29/1/2010 533083 RISHABHDEV PALENI VELMUDALIAR S 375727 11.66
29/1/2010 533083 RISHABHDEV ARIHANT SEC & INVESTMENT S 224464 11.71
29/1/2010 533083 RISHABHDEV ADARSH PATWARI S 200000 11.78
29/1/2010 533083 RISHABHDEV SARSWATI VINCOM LTD S 137295 11.82
29/1/2010 502445 Rohit Pulp B.M.GANDHI SEC.PVT.LTD. B 20350 49.36
29/1/2010 506172 Sampada Chem SUNIL BHAGWATLAL DALAL S 29150 46.25
29/1/2010 521206 Samtex Fashions GUPTA SHARON B 45000 33.79
29/1/2010 521206 Samtex Fashions KUMAR GUPTA HEMANT B 45118 33.80
29/1/2010 530025 Samyak Intl KUKKEHALLI NAYANA HEGDE B 39900 21.57
29/1/2010 530025 Samyak Intl MOHAN DEVKISHAN JHANWER HUF S 31987 21.15
29/1/2010 531645 Southern Ispat BHARTIA STOCK BROKING PVT. LTD. B 100000 39.91
29/1/2010 531645 Southern Ispat TRADELINK EXIM (INDIA) PVT LTD B 105000 39.94
29/1/2010 533121 THINKSOFT A K G STOCK BROKERS PRIVATE LIMITED B 68211 445.87
29/1/2010 533121 THINKSOFT A K G STOCK BROKERS PRIVATE LIMITED S 68211 446.52
29/1/2010 590093 TRIMURTHI DR BEKAE PROPERTIES PRIVATE LIMI B 400000 5.60
29/1/2010 531249 Well Pack Papers PANDYA YAMINIBEN M B 25637 422.30
29/1/2010 531249 Well Pack Papers LAXMAN DHIRUBHAI PARMAR B 40961 431.43
29/1/2010 531249 Well Pack Papers PANDYA YAMINIBEN M S 24580 424.37
29/1/2010 531249 Well Pack Papers LAXMAN DHIRUBHAI PARMAR S 35971 441.57
29/1/2010 590013 XPRO India IPRO CAPITAL LIMITED B 100000 31.50
29/1/2010 590013 XPRO India GCC INVESTMENT & TRADING CO LTD S 100000 31.50
* B - Buy, S - Sell

NSE Bulk Deals to Watch - Jan 29 2010

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
29-JAN-2010,20MICRONS,20 Microns Limited,VIKING INDUSTRIES PRIVATE LIMITED,BUY,9538,43.34,-
29-JAN-2010,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,260091,1155.54,-
29-JAN-2010,BHARTISHIP,Bharati Shipyard Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,BUY,177918,281.83,-
29-JAN-2010,BHARTISHIP,Bharati Shipyard Limited,MBL & COMPANY LTD.,BUY,167122,285.47,-
29-JAN-2010,BILPOWER,Bilpower Limited,NIKUNJ ALLOYS & STEEL PRIVATE LIMITED,BUY,80000,186.61,-
29-JAN-2010,HIMACHLFUT,Himachal Fut Comm Ltd,PILOT CONSULTANTS PRIVATE LIMITED,BUY,2994370,14.98,-
29-JAN-2010,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,3719650,48.14,-
29-JAN-2010,ITI,ITI Ltd.,OM INVESTMENTS,BUY,116718,52.19,-
29-JAN-2010,SELMCL,SEL Manufacturing Company,NIKON FINLEASE PVT. LTD,BUY,90666,89.54,-
29-JAN-2010,SREINTFIN,SREI Infrastructure Finan,ASHIKA CREDIT CAPITAL LIMITED,BUY,600000,70.32,-
29-JAN-2010,THINKSOFT,Thinksoft Global Ser Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,75297,446.34,-
29-JAN-2010,20MICRONS,20 Microns Limited,VIKING INDUSTRIES PRIVATE LIMITED,SELL,73538,53.29,-
29-JAN-2010,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,260091,1156.33,-
29-JAN-2010,AUSTRAL,Austral Coke & Projects L,SICOM LTD,SELL,1869600,7.91,-
29-JAN-2010,BHARTISHIP,Bharati Shipyard Limited,MBL & COMPANY LTD.,SELL,167122,285.68,-
29-JAN-2010,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,3709681,48.12,-
29-JAN-2010,ITI,ITI Ltd.,OM INVESTMENTS,SELL,116718,52.24,-
29-JAN-2010,SELMCL,SEL Manufacturing Company,NIKON FINLEASE PVT. LTD,SELL,90666,89.68,-
29-JAN-2010,SREINTFIN,SREI Infrastructure Finan,PCA INDIA INFRASTRUCTURE EQUITYOPEN LIMITED,SELL,940972,69.69,-
29-JAN-2010,SREINTFIN,SREI Infrastructure Finan,PRUDENTIAL ASSET MANAGEMENT (SINGAPORE) LTD A/C PCA INDIA IN,SELL,1000000,69.25,-
29-JAN-2010,THINKSOFT,Thinksoft Global Ser Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,75134,446.26,-

Monetary policy suspense over; market rebounds

Global Signals

European shares rose early on Friday, bouncing back after their worst sell-off in the year, led by the banking sector as investors await US GDP numbers to gauge the health of the global economy.

US stock index futures pointed to a flat to higher open on Wall Street on Friday, with futures for S&P 500 SPc1 up by 0.2%, Dow Jones DJc1 futures up by 0.1% and Nasdaq 100 NDc1 futures up by 0.4% at 0817 GMT.

Asian markets closed in negative zone as a stronger yen pressured the exporters.

Indian indices

The market witnessed a correction in opening trades, as weak Asian markets, and flat US and European indices dampened the sentiment. The Sensex resumed on a negative note at 16253, as trading progressed, the Sensex slipped significantly in the afternoon with selling in heavyweights, fast moving consumer goods (FMCG) and metal stocks dragging the index to the day's low of 15982. The markets seemed to have absorbed the cash reserve ratio (CRR) hike announced by the RBI earlier in the day. The central bank had announced a 75 basis point hike in CRR, which will be implemented in two phases; 50 basis points hike from February 13 and another 25 basis point rise from February 27. The last hour of the trading session witnessed hectic activity, before selective buying saw the Sensex end in the green with a gain of 51 points at 16390. The Nifty, too, after a mixed outing, moved up 15 points to close at 4882.

Sensex Sentiment

However, the broader market was positive. Of the 2,887 stocks traded on the BSE, 1,471 stocks declined, 1,354 stocks advanced and 62 stocks ended unchanged.

Sectoral & Stock Screening

The interest sensitive sectors, banking and reality gained the most with the BSE Bankex and BSE Realty up by 2.99% and 2.60% respectively. The BSE CG, BSE Power, BSE PSU and BSE Oil & Gas were the other notable gainers while BSE FMCG, BSE Metal and BSE Teck ended weak.

Buying was led by ICICI Bank, which notched up gains of 5.29% to Rs830.40. Among the other gainers Bharat Heavy Electricals advanced 3.10% to Rs2,406.45, State Bank of India added 2.72% to move to Rs20.58, DLF moved up by 2.54% to Rs332.80, HDFC Bank jumped by 2.25% to Rs1,630.85, JP Associates gained 1.81% to Rs137.70 and Sun Pharmaceutical Industries was up by 1.58% to Rs1469.45. However, Hindustan Unilever lost 4.44% to quote at Rs244.10 and Wipro was down 3.80% to trade at Rs647.40. Tata Motors, Tata Steel, Bharti Airtel, ITC, Sterlite Industries, Tata Power and Reliance Communications were down 1-2% each.

Viewing volumes & turnovers

Realty major Unitech saw highest trading with over 1.36 crore shares changing hands on the BSE followed by IFCI (1.33 crore shares), Suzlon Energy (92 shares), Rashtriya Chemicals and Fertilisers (81 lakh shares) and Ispat Industries (77 lakh shares).

Value-wise, State Bank of India registered a turnover of Rs249.46 crore on the BSE followed by ICICI bank (Rs207 crore), Aban Offshore (Rs202 crore), Tata Steel (Rs176 crore) and HDIL (Rs121 crore).

News Headlines

Highlights: Third quarterly review of the Reserve Bank of India FY2010 annual policy.
Lupin’s Q3 bottom line up at Rs160.6 crore; the stock gains 0.90%.
Aditya Birla Nuvo’s Q3 profit soars 19.62 times; the stock gains 0.36%.
National Thermal Power Corporation's power exchange likely to be operational next fiscal; the stock lost 0.67%.
Disappointing Q3 numbers drag Bank of India’s stock down by over 4%; the stock loses 1.62% for the day.

Market gains for the second straight day

The key benchmark indices staged a strong intraday rebound albeit in choppy trade, extending gains for the straight second day, as European stocks and US index futures rose. Closer home, investors also heaved a sigh of relief as the central bank kept key interest rates unchanged at a quarterly policy review. There was also an increase in economic growth forecast for the current fiscal year from the central bank. State Bank of India chairman O P Bhatt said he did not see any upward pressure on lending rates in the next six months.

The BSE 30-share Sensex rose 51.09 points or 0.31%, up close to 375 points from the day's low and off close to 35 points from the day's high. Banking, realty and capital goods stocks gained. Index heavyweight Reliance Industries (RIL) edged higher. But FMCG and metal stocks fell.

The Reserve Bank of India at its quarterly monetary policy review today raised banks' cash reserve ratio (CRR) by 75 basis points to suck out excess liquidity from the banking system. Soon after the announcement at about 11:15 IST, the BSE Sensex fell below the psychological 16,000 mark in mid-morning trade. It soon regained that mark.

Intraday volatility on the bourses was high today. The market edged lower at the onset of the trading session tracking weak Asian stocks. The market cut losses in morning trade on the eve of the central bank's policy announcement. A bout of volatility was witnessed as the market cut losses after an initial steep fall triggered by the central bank's decision to raise the CRR. The market weakened again in early afternoon trade. The market once again pared losses in afternoon trade. The market slipped into the red after turning positive for a brief period in mid-afternoon trade. The market regained positive zone later.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, declined for the second day in a row after a steep rise on Wednesday, 27 January 2010. It declined 3.08% to 26.13. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days

Stocks had recovered slightly on Thursday, 28 January 2010, after a steep fall in the preceding six trading sessions. The BSE 30-share Sensex rose 17.05 points or 0.1% to 16,306.87 on Thursday, 28 January 2010. Earlier, from a high of 17,641.08 on 18 January 2010, the Sensex had lost 1,351.26 points or 7.65% to 16,289.82 on Wednesday, 27 January 2010.

At a press conference after the policy review RBI chief D Subbarao said interest rate rise would have had unpredictable impact on liquidity and said it is important to absorb predictable amount of liquidity before taking other steps.

The Reserve Bank of India (RBI) hiked the cash reserve ratio (CRR) by 75 basis points in two stages to 5.75% to absorb excess liquidity from the banking system. The first phase of 50 basis points CRR hike is effective from 13 February 2010 and the second stage effective from 27 February 2010. The two-phased CRR hike will soak Rs 36000 crore from the banking system. The CRR is the percentage of deposits which banks must keep with the central bank.

The central bank kept the key policy rates viz. the repo rate, the reverse repo rate and the bank rate unchanged.

Finance secretary Ashok Chawla said the Reserve Bank of India (RBI) has taken a balanced view on managing economic recovery and prices. He added that cash reserve ratio hike was appropriate and adequate, but said interest rate are unlikely to go up after the RBI's policy review. He agreed that food inflation was a matter of concern and added that economic growth was on track.

Though the inflationary pressures in the domestic economy stem predominantly from the supply side, the consolidating recovery increases the risks of these pressures spilling over into a wider inflationary process, RBI said in its third quarter review today. The central bank lifted its wholesale price index inflation forecast for the end of the fiscal year in March 2010 to 8.5% from its earlier forecast of 6.5%, but said it expected inflation to moderate starting in July 2010, assuming a normal monsoon and global oil prices holding at current levels.

It also lifted its forecast for GDP growth in the current year to 7.5%, from an earlier target of 6%, and said that the current rate of growth is likely to be sustained in the financial year that ends in March 2011.

The RBI joins other central banks in Asia in taking steps to start unwinding ultra-loose monetary policy. On Thursday, the Philippines raised a short-term lending rate, and this month China started to tighten policy by raising banks' reserve requirements and accepting higher yields at bill auctions. Australia was the first Group of 20 country to begin raising rates as the global economy recovers from its worst downturn since the Great Depression. The Reserve Bank of Australia has raised its key cash rate by 75 basis points since October 2009.

The Reserve Bank of India called on the government to get its fiscal house in order and said monetary policy would be ineffective unless the government rolls back its borrowing, which is on track to hit a record Rs 4.5 lakh crore ($96.9 billion) this fiscal year.

There are expectations of higher tax rates and massive disinvestment in the coming Budget to help reduce the huge fiscal deficit from 6.8% of GDP this year to 3% over the next five years. Finance minister Pranab Mukherjee will reportedly package his higher indirect tax rates as an exit from the fiscal stimulus of 2008-09 and a return to the path of fiscal responsibility.

Meanwhile, the UPA government's proposed comprehensive indirect tax reform, goods and services tax (GST), will reportedly miss its scheduled rollout of 1 April, 2010, a temporary setback to creation of a unified national market for goods and services in the country, but experts say this will give more time to the centre and states to prepare a more robust framework.

RBI today said a consolidating economy recovery will encourage the central bank to clearly and explicitly shift its monetary policy stance from 'managing the crisis' to 'managing the recovery'. A growing confidence in the recovery justifies in moving further in reversing the crisis-driven expansionary stance, it said. The central bank said its policy instruments are all currently at levels that are more consistent with a crisis situation than with a fast-recovering economy. It is, therefore, necessary to carry forward the process of exit from the monetary policy further, the central bank said

The central bank also simultaneously said the economic recovery is yet to fully take hold. Strong anti-inflationary measures, while addressing one problem, may precipitate another by undermining the recovery, particularly by deterring private investment and consumer spending, it said. The Reserve Bank of India said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.

With regard to capital inflows, the central bank said the inflows so far have been absorbed by the current account deficit. However, sharp increase in capital inflows, above the absorptive capacity of the economy, may complicate exchange rate and monetary management, it said

European shares rose on Friday, bouncing back after their worst sell-off in a year, led by the banking sector as investors await US Q4 December 2009 GDP numbers to gauge the health of the global economy. The key benchmark indices in France, Germany and UK rose by beween 0.79% to 0.95%.

The US economy likely grew at its fastest pace in nearly four years in the fourth quarter as businesses made less aggressive cutbacks on inventories, a US government report is expected to show later in the global day

Meanwhile, there were signs on Friday that the economic backdrop is improving in the UK, with the Nationwide Building Society stating that UK house prices rose 1.2% in January, bringing an annual increase to 8.6%.

Also, the GfK NOP Consumer Confidence Index rose by two points this month to negative 17, according to research carried out by GfK NOP on behalf of the European Commission.

Asian shares fell on Friday, weighed down by tech stocks after lacklustre sales outlooks from some sector heavyweights and as worries about the fiscal health of Greece and Portugal undermined investor confidence. The key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan fell by between 0.16% to 2.44%.

SouthGobi Energy made a disappointing debut in Hong Kong, falling 13.2% from its IPO price, hurt both by poor market sentiment and by its failure to stand out from other already-listed coal plays.

Japan's industrial production rose and unemployment fell in December, signaling a continued recovery, while central bankers considered the threat to the economy from exchange rates.

US index futures reversed early losses. Trading in US index futures indicated Dow could rise 14 points at the opening bell on Friday, 29 January 2010.

US stocks dropped on Thursday as poor outlooks from Motorola and Qualcomm dented optimism in the technology sector while worries about Greece's fiscal health dragged on sentiment. The Dow Jones industrial average fell 115.70 points, or 1.13%, to end at 10,120.46. The Standard & Poor's 500 Index lost 12.97 points, or 1.18%, to 1,084.53. The Nasdaq Composite Index declined 42.41 points, or 1.91%, to close at 2,179.00.

The government data showed new orders for durable goods, or long-lasting manufactured goods such as washing machines and refrigerators, edged higher in December, and the number of workers filing claims for jobless benefits fell last week, signalling that the US economy remains on the path to recovery. However the jobless claims were more than estimated.

The US Senate on Thursday backed Ben Bernanke for a second four-year term running the Federal Reserve, the world's most powerful central bank, despite deep misgivings over his perceived policy missteps. Bernanke survived a revolt by lawmakers angry at big banks and their regulators, including the Fed. He still faces acute political pressure to ease economic strains at a time when the US central bank is showing divisions over how much support the economy needs.

US President Barack Obama welcomed the Senate vote and said he looked forward to working with Bernanke going forward.

Meanwhile, top policymakers warned on Thursday the world economy is not out of the woods and a global recovery is still far from secure, urging caution as central banks work on withdrawing critical support. China's Vice Premier Li Keqiang, the man tipped to become the country's next premier, said there were still "twists and turns" ahead as the world pulls out of recession, echoing calls to caution from bankers and other leaders at the annual World Economic Forum in the Swiss ski resort of Davos.

Bankers, however, warned also of the risk of pulling out too late, potentially leading to distortions in competition.

Closer home, the BSE 30-share Sensex rose 51.09 points or 0.31% to 16,357.96. The Sensex rose 83.44 points at the day's high of 16390.31 in late trade. The Sensex fell 324.79 points at the day's low of 15,982.08 in mid-morning trade.

The S&P CNX Nifty gained 14.80 points or 0.3% to 4,882.05. Nifty February 2010 futures were at 4,886.75, at a premium of 4.70 points as compared to the spot closing of 4,882.05. Turnover in NSE's futures & options (F&O) segment was Rs 92,503.91 crore, much lower than Rs 1,66,193.03 crore on Thursday, 28 January 2010.

The BSE Mid-Cap index rose 1.01% and the BSE Small-Cap index rose 1.2%. Both the indices outperformed the Sensex.

Most of the sectoral indices on BSE were in green. Banking sector index Bankex (up 2.99%), BSE Realty index (up 2.6%), BSE Capital Goods index (up 1.26%), BSE Power index (up 1.12%), BSE PSU index (up 1.05%), BSE Oil & Gas index (up 0.43%), BSE Auto index (up 0.37%), and BSE Consumer Durables index (up 0.34%), outperformed the Sensex. BSE FMCG index (down 1.86%), BSE Metal index (down 1.56%), BSE IT index (down 0.76%), underperformed the Sensex.

The market breadth, indicating the overall health of the market, turned positive. The breadth was weak earlier in the day. On BSE, 1464 shares advanced as compared with 1385 that fell. A total of 63 shares remained unchanged.

Among the 30 share Sensex pack, 17 fell and rest rose.

BSE clocked a turnover of Rs 5679 crore, higher than Rs 5007.43 crore on Thursday, 28 January 2010.

Index heavyweight Reliance Industries (RIL) rose 0.88% to Rs 1046.55. The stock came off the day's low of Rs 1018. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

Rate sensitive banking shares jumped after RBI kept interest rates steady. India's largest private sector bank by net profit ICICI Bank jumped 5.29%. Its ADR fell 2.42% on Thursday. India's largest bank by net profit and branch network State Bank of India rose 2.72%. SBI chairman O P Bhatt said deposit rates may not go up immediately but there is no room for deposit rates to come down. India's second largest private sector bank by net profit HDFC Bank rose 2.25%. Its ADR fell 2.29% on Thursday.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 3.1%. Bharat Heavy Electricals said on Wednesday it would sign an agreement with the Madhya Pradesh state utility to jointly set up a 1,600 megawatts thermal power plant in the central Indian state.

Among other capital goods stocks, Siemens, ABB, Thermax, BEML and Praj Industries rose by between 1.49% to 4.29%.

But, India's largest engineering and construction firm by sales Larsen & Toubro fell 0.43%. The government is reportedly considering selling its stakes in the firm in tranches to state-run financial institutions.

Rate sensitive realty shares reversed early losses after RBI kept interest rates unchanged. Ackruti City, Indiabulls Real Estate, Unitech, Housing Development & Infrastructure, rose by between 1.28% to 4.5%.

India's largest realty player by sales DLF rose 2.54%. The company's net profit rose 26.04% to Rs 224.43 crore on 109.03% rise in sales to Rs 887.16 crore in Q3 December 2009 over Q3 December 2008. The company announced the Q3 result after market hours on Wednesday.

Shares of India's largest cigarette maker by sales ITC fell 1.67%. The government is reportedly considering selling its stakes in consumer goods maker ITC in tranches to state-run financial institutions. The company posted 26.67% rise in net profit to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on 22 January 2010.

India's largest FMCG major by sales Hindustan Unilever fell 4.44%. The company's net profit rose 5.4% to Rs 649 crore in Q3 December 2009 over Q3 December 2008.

Among other FMCG stocks, Tata Tea, United Spirits, Nestle India and Britannia Industries fell by between 0.68% to 2.28%.

Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 3.59% on Thursday, 28 January 2010. India's largest private sector steel maker by sales Tata Steel fell 2.83%. The company's net profit surged 155.6% to Rs 1191.75 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours on Thursday. The stock had rallied 4.8 % on Thursday after forecast-beating third-quarter results.

Tata Steel will report consolidated third-quarter results, to include the Corus numbers, next month. The Indian operations account for a quarter of the group's annual global capacity of about 30 million tonnes.

Steel Authority of India (Sail) fell 2.57%. Sail on Wednesday reported a 99% jump in its net profit at Rs 1,675.55 crore in Q3 December 2009 over Q3 December 2008.

India's largest non-ferrous metal firm by capacity Sterlite Industries India fell 1.43%. The company's net profit slumped 77.16% to Rs 46.59 crore on a 39.83% increase in sales to Rs 3611.99 crore in Q3 December 2009 over Q3 December 2008. The stock had lost 4.04% on Wednesday.

India's largest private sector aluminum maker by sales Hindalco Industries fell 0.54%. The company's net profit fell 21.60% to Rs 427.10 crore on a 29.56% increase in sales to Rs 5286.10 crore in Q3 December 2009 over Q3 December 2008.

National Aluminium Company fell 0.2%. The company's net profit declined 29.3% to Rs 155.18 crore in Q3 December 2009 over Q3 December 2008.

NTPC fell 0.67%. The company's net profit rose 5.06% to Rs 2364.98 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours today.

IT stocks extended recent losses on fears the Obama administration's bank reform plan will crimp outsourcing demand. India's largest IT exporter by sales Tata Consultancy Services fell 0.67%. India's second largest IT exporter by sales Infosys lost 0.71% as its ADR fell 3.84% on Thursday. India's third largest software services exporter Wipro fell 3.8% as its ADR fell 2.26% on Thursday. Wipro said on Wednesday it signed a multi-year outsourcing deal with British American Tobacco Plc, the world's second-biggest cigarette maker.

Stocks from interest rate sensitive auto sector were mixed after RBI's quarterly monetary policy review. India's largest tractor maker by sales Mahindra and Mahindra (M&M) fell 0.34%. The stock had slumped 5.64% on Wednesday after Monday's over 5% slide

M&M's net profit surged 849% to Rs 413.70 crore on a 56.32% rise in sales to Rs 4478.70 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Monday, 25 January 2010. Meanwhile, the company on Monday also approved a 2-for-1 stock split.

India's top truck marker by sales Tata Motors fell 2.92% ahead of its Q3 December 2009 earnings today, 29 January 2010. India's top small car maker by sales Maruti Suzuki India rose 0.3%.

India's largest motorbike maker by sales Hero Honda Motors rose 1.38%. After market hours on 25 January 2010, the company reported a 78.34% rise in net profit to Rs 535.77 crore on a 32.72% rise in sales to Rs 3814.42 crore in Q3 December 2009 over Q3 December 2008.

State Bank of India clocked the highest turnover of Rs 255.18 crore on BSE. ICICI Bank (Rs 212.81 crore), Aban Offshore (Rs 210.96 crore), Tata Steel (Rs 177.16 crore) and Housing Development & Infrastructure (Rs 125.61 crore) were the other major turnover toppers in that order.

Cals Refineries clocked the highest volume of 2.34 crore shares on BSE. Unitech (1.36 crore shares), IFCI (1.33 crore shares), Hindustan Fertiliser & Chemicals (1.19 crore shares) and Suzlon Energy (0.92 crore shares) were the other volume toppers in that order.

RBI Policy - CRR Hike

RBI Policy - CRR Hike

Grey Market Premium - DB Realty, Vascon Engineering, Jubilant Foodworks

Company Name	Offer Price (Rs.)	Premium (Rs.)	Kostak (Rs. 1 Lac Application)
Jubilant Food Works	135 to 145	19 to 21	--
Infinite Computer	165	30 to 32	--
Birla Shloka	45 to 50	Discount	--
Aqua Logistics	200 to 225	Discount	2050 to 2100
Syncom Healthcare	65 to 75	4.50 to 5	1950 to 2000
Thangamayil Jewellery	70 to 75	3 to 3.50	1850 to 1900
Vascon Engg.	165 to 185	12 to 13	1900 to 1950
D. B. Realty	468 to 486	18 to 19	1800 to 1900
Emmbi Polyarns	40 o 45	4 to 4.50	1800 to 2000

Market may fall on weak Asian stocks; RBI's quarterly monetary policy eyed

The market may fall on weak Asian stocks taking cue from weak close for US stocks on Thursday after more Americans than estimated filed unemployment-benefit claims. Investors may remain cautious ahead of Reserve Bank of India's quarterly monetary policy due to be announced today.

The annual food price inflation accelerated for the first time in four weeks, with the Reserve Bank of India (RBI) looking set to tighten its monetary policy today, 29 January 2010 to prevent it spilling over to the broader economy.

Economists widely expect a 50-basis point rise in banks' cash reserve ratio (CRR), the proportion of deposits lenders must keep with the RBI in cash. The food price index rose 17.40 % in the 12 months to 16 January 2010, higher than an annual rise of 16.81 % in the previous week, data released on Thursday showed. The fuel index rose to an annual 5.70 %, lower than an annual rise of 6.34 % in the previous week. Higher food prices following a bad harvest of summer-sown crops are expected to keep headline inflation elevated.

The economy grew 7.9 % in the quarter through September, its fastest in 18 months, while industrial production grew in November at its fastest pace in more than two years at 11.7 %.That growth, however, has largely been fuelled by government stimulus spending and cheap credit following policy rate cuts totaling 425 basis points between October 2008 and April 2009.

Inflation and a high fiscal deficit are major risks to India's ambitious plan to return economic growth back to the 9 percent a year level seen between 2005/06 and 2007/08

The Reserve Bank of India on Thursday released its macroeconomic report, implying strongly that growth was returning to the economy and that the central bank's focus was now on taming inflation.

It also said there is a possibility of high food prices spilling over to other parts of the economy, a day before it is expected to tighten policy at its quarterly review of monetary policy.The central bank said the possibility of surge in capital inflows along with the domestic liquidity condition may also affect inflationary conditions.

There are expectations of higher tax rates and massive disinvestment in the coming Budget to help reduce the huge fiscal deficit from 6.8% of GDP this year to 3% over the next five years. Finance minister Pranab Mukherjee will reportedly package his higher indirect tax rates as an exit from the fiscal stimulus of 2008-09 and a return to the path of fiscal responsibility.

Meanwhile, the UPA government's proposed comprehensive indirect tax reform, goods and services tax (GST), will reportedly miss its scheduled rollout from 1 April, 2010, a temporary setback to creation of a unified national market for goods and services in the country, but experts say this will give more time to the centre and states to prepare a more robust framework.

Among prominent results, Tata Motors, Reliance Infrastructure, Sun Pharmaceutical Industries and NTPC will announce their Q3 result today.

Asian stocks fell on Friday after more Americans than estimated filed unemployment-benefit claims, the yen appreciated and metal prices tumbled. The key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 0.4% to 1.72%. But, China's Shanghai Composite rose 0.89%.

Japan's industrial production rose and unemployment fell in December, signaling a continued recovery, while central bankers considered the threat to the economy from exchange rates.

US stocks dropped on Thursday as poor outlooks from Motorola and Qualcomm dented optimism in the technology sector while worries about Greece's fiscal health dragged on sentiment. Stocks added to losses during the regular session following news that US Federal Reserve Chairman Ben Bernanke was confirmed by the US Senate. The Dow Jones industrial average fell 115.70 points, or 1.13%, to end at 10,120.46. The Standard & Poor's 500 Index lost 12.97 points, or 1.18%, to 1,084.53. The Nasdaq Composite Index declined 42.41 points, or 1.91%, to close at 2,179.00.

The government data showed new orders for durable goods, or long-lasting manufactured goods such as washing machines and refrigerators, edged higher in December, and the number of workers filing claims for jobless benefits fell last week, signalling that the US economy remains on the path to recovery. However the jobless claims were more than estimated.

Closer home, the key benchmark indices closed with small gains on Thursday, 28 January 2010 in what was a choppy trading session, halting last six days' steep losses. Firm global stocks supported domestic bourses. The BSE 30-share Sensex rose 17.05 points or 0.1% to 16,306.87 on that day.

As per provisional figures on NSE, foreign funds sold shares worth Rs 2813.06 crore and domestic funds bought shares worth Rs 1979.58 crore on Thursday.

Patel Engineering

Patel Engineering

Sensex may open lower

Headlines for the day

BHEL inks JV for 1,600-Mw unit

HPCL may set up Rs 25,000-crore oil refinery

Tata Steel net up, forms JV with Nippon Steel

Tata Tea net falls 77%

Gitanjali to set up 35 new outlets

Events for the day

Major corporate action:

Ex-date for interim dividend of HCL technologies and Sundaram Claytone

Syncom Healthcare Ltd, Vascon Engineers Ltd and Thangamayil Jewellery Ltd IPO closes today

DB Realty IPO opens today

Quarterly RBI monetary policy review today

Results today: Max India, Glenmark Pharma, Reliance Power, Educomp Solutions, NTPC, BEML, Siemens, Rashtriya Chemicals, Tata Motors, Power Finance Corporation, Balrampur Chini, Divis Lab, GE Shipping, Oracle, IOC, P&G, Titan Industries, Sun Pharma, GTL, Bharat Electronics, PTC India, Reliance natural, Moserbaer, Aditya Birla Nuvo, Tata Chemicals, MMTC, Lupin and Bhushan Steel

Pre-market report

Global signals

European Markets closed lower on Thursday, as banking & commodities stocks fell the most. FTSE 100 closed 1.37% lower at 5146.

On Thursday, US markets closed lower as poor outlooks from Motorola and Qualcomm dented the sentiments. Nasdaq closed lower by 1.91% to closed at 2179.

Among the Asian indices, all the Asian indices are trading in negative territory in morning trade except Shanghai Composite. At the time of writing of this report, SGX Nifty is trading 89 points lower.

Indian markets

Following the weak global markets, the domestic indices are expected to open lower and may remain volatile as quarterly RBI monetary policy review to come out today.

Among the local indices, the Nifty could test the 4900-4950 range on the up side, while on the down side it could find support at 4850 and 4800. While the Sensex is likely to get support at 1620 and may face resistance at 16500.

Indian ADR's

All the Indian ADRs trading on the US bourses closed lower except Satyam Computers that surged by 0.82%. On other hand MTNL fell the most with loss of 5.42%

Commodity cues

In the commodity space, wherein the Crude oil prices recorded marginal gain, with the Nymex light crude oil for March series rise by $0.15 to settle at $73.79 a barrel.

In the metals space, Comex Gold for April series declines by $1.20 to settle at $1084.50 to a troy ounce.

In the metals space, Comex Silver for March series declines by $0.23 to settle at $16.21 to a troy ounce.

Daily trend of FII/MF investment in equities

On January 28, 2010, FIIs were the net sellers of the Indian Stocks in the tune of Rs1919.80 crore (with the gross purchase of Rs2957.10 crore and gross sales of Rs4876.90 crore).

While the Domestic mutual funds, on January 25, 2010, were the net sellers of the stocks in the tune of Rs157.50 crore (with gross purchase of Rs726.50 crore and gross sales of Rs883.90 crore).

Daily News Roundup - Jan 29 2010

RIL leases gasoline storage in the Caribbean. (BS)

BHEL inks JV with Madhya Pradesh Power Generation Company Ltd for 1,600MW unit. (BS)

NTPC chalks out ambitious expansion plan in Gujarat. (FE)

Tata Steel forms JV with Nippon Steel for production and sales of automotive cold-rolled flat products at Jamshedpur. (ET)

HPCL plans Rs250bn investment for 15mtpa refinery. (ET)

HCL Tech inks US$50mn deal with UK-based Meggitt to provide engineering services. (BS)

Cairn India to supply Rajasthan crude to IOC. (BL)

DOCOMO can get controlling stake in JV if Tata Teleservices fails to meet targets. (ET)

Essar Steel to double retail outlets and add new products. (BL)

SREI-led consortium buys 57% in DPSC for Rs1.72bn. (ET)

Havells buys Standard Electricals for Rs1.2bn. (ET)

Aptech acquires Maya Academy for Rs760mn. (ET)

Ceat mulls entry into OTR tyre maintenance business in the next fiscal. (BL)

Graphite India to set-up 50MW plant at Durgapur. (BL)

LMW to make parts for aerospace and defense sectors. (BL)


Spectrum usage fees go up by 20% from January 1, 2010. (ET)

Government boosts PDS grain flow to fight against inflation. (ET)

Decline in farm output may pull down GDP growth in Q3 FY10 to 6-6.5%, says Pronab Sen, the Chief Statistician of India. (ET)

Food Inflation eased to 16.81% for the week ended January 9, 2010. (BL)

Trai moots plan to charge operators for phone number allocations. (BL)

Government to start 3G auction on February 25, 2010. (BS)

Trigger in RBI's hands

You live and learn. At any rate, you live.

There is no time to live with the gains of yesterday. A positive close came in after six successive days of losses. The little smiles could get wiped out early this morning as most global markets are down. Asian stock markets got off to a shaky start after the overnight fall on Wall Street. However, the Shanghai Composite has recovered and is trading just in the green.

We expect a weak start and the Nifty could slip below 4800. Hopefully, some semblance of buying will give support; else the Nifty could drop to as low as 4650-4680. Resistance is expected between 4900 and 4950. We do not rule out the possibility of a rebound above 5000, if the RBI hikes only the CRR and if the global mood changes for the better in coming sessions.

Volatility is likely to remain elevated in the near term due to global jitters and relentless selling by the FIIs. The spate of primary market issues, especially from the Government could also cause a few temporary hiccups. Going further ahead, speculation over the Budget will take precedence and one hopes the UPA doesn’t disappoint this time.

Results Today: Aditya Birla Nuvo, Alok Industries, Amtek Auto, Amtek India, Anant Raj Industries, Apollo Tyres, Arvind, Balrampur Chini, BEML, BEL, Bhushan Steel, Bombay Rayon, Chennai Petro, Cinemax, Deccan Chronicle, Divi's Lab, Educomp, Essar Shipping, Essel Propack, FT, Gateway Distriparks, GHCL, Gillette India, Glenmark Pharma, GE Shipping, GTL, GNFC, Gulf Oil, IOC, Kalpataru Power, Karnataka Bank, Karur Vysya Bank, Lupin, Man Industries, Max India, MMTC, MTNL, Moser Baer, NFL, Nirma, NTPC, Oracle Financial, Orchid Chemical, Panacea Biotec, PFC, P&G, PTC India, RCF, Reliance Infra, RNRL, RPower, Siemens, Simplex Projects, Simplex Infra, Sobha Developers, Sun Pharma, Sundram Fasteners, Tanla, Tata Chemicals, Tata Comm, Tata Motors and Titan.

FIIs were net sellers in the cash segment on Thursday at Rs28.13bn on a provisional basis. The local funds were net buyers of Rs19.79bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs20.68bn. As per the SEBI figures, FIIs were net sellers of Rs19.19bn in the cash segment on Wednesday.

Global investors hit 2010’s first wall of worry during late January as gloomy earnings forecasts, angst about China’s monetary tightening and the deteriorating finances of countries ranging from Greece to Japan triggered a global selloff of equities and, to a lesser extent, the riskier debt classes. Fund flows for the week ending Jan. 27 mirrored this uncertainty and flight to safety, with outflows from several major equity fund groups hitting multi-week highs.

Emerging Market Equity Funds posted their first week of net outflows in 12 weeks. BRIC Equity Funds saw net redemptions for the first time since early September. China Equity Funds saw their first inflows since mid-December.

Overall, investors pulled over $9 billion out of EPFR Global-tracked Equity Funds while committing $4.8 billion to all Bond Funds tracked.

Meanwhile, US Senate has cleared the way to confirm Ben S. Bernanke for the Second Term as the chairman of the Federal Reserve.

The BSE Sensex ended at 16,306.87, up 17 points or 0.1% from the previous close. It touched a high of 16,524.69 and a low of 16,182.14

The worst of the storm is over, US President Barack Obama said in his maiden State of the Union Address on Wednesday. Those soothing words, along with the Federal Reserve's move to maintain status quo on its monetary policy helped most global markets recover from the recent sell-off.

Unfortunately, the Indian market was caught in a whirlwind of F&O expiry and jitters ahead of tomorrow's RBI meet even as food inflation snapped a three-week losing streak and results continued to pour in. The turnover hit a new record high of Rs1.9 lakh crores, partly due to the derivative settlement.

At the end of a highly volatile day, the BSE Sensex ended at 16,306.87, up 17 points or 0.1% from the previous close. It touched a high of 16,524.69 and a low of 16,182.14. That translates into an intra-day swing of about 340 points.

The NSE Nifty closed at 4867.25, up 0.3% over the last close. It touched a high of 4929.90 and a low of 4824.95.

Even the broader market finished mixed, with the BSE Small-Cap index down 0.2% and the BSE Mid-Cap index up 0.2%.

In terms of the sectors, the ones that took the biggest hit in Wednesday's drubbing rallied today. Real Estate and Metals were among the top three sectoral winners today, along with Pharma. BSE indices for Banking, Power, Oil & Gas, IT, Auto and PSU also rose.

Within the Sensex, the notable gainers were Tata Steel, Wipro, DLF, Sun Pharma, HDFC and Grasim. Among the other gainers were Maruti, M&M and Reliance Industries.

Bucking the positive trend were stocks like Bharti Airtel, RCOM, L&T, Jaiprakash Associates, Hindustan Unilever, ACC and Hindalco.

Outside the main indices, the leading gainers were OBC, Cals Refinery, Crompton Greaves, Karuturi Global, Max India, BOB, Torrent Power, Tube Investment, Gujarat NRE Coke, Geodesic, Pantaloon Retail, Koutons Retail, Torrent Pharma, AIA Engineering, Bharat Forge and Sintex Industries.

The big losers in the broader market included the likes of Aban Offshore, Indo Tech Transformers, Cranes Software, Deccan Chronicle, NALCO, Everest Kanto, IOB, Praj Industries, Essar Shipping, Kalpataru Power and Subex.

A firm trend across Asia and the overnight advance on Wall Street were the major driving force behind today's rebound. Things appeared to stabilise a bit today globally after the recent stormy sessions.

Volatility escalated due to the F&O expiry as also due to the near-term uncertainties over the outcome of the RBI policy meeting and global developments. The Nifty crossed 4900 but could not sustain above that level. The Nifty will find it tough to surpass 5000 unless FIIs turn buyers again and global mood improves.

FIIs were net sellers in the cash segment on Wednesday at Rs22.12bn on a provisional basis. In the F&O segment, the foreign funds were net sellers at Rs7.49bn. As per the SEBI figures, FIIs were net sellers of Rs9bn in the cash segment on Monday.

The RBI is expected to hike CRR at its policy meeting tomorrow, though there are a few analysts who expect a small increase in the reverse repo rate as well. What the central bank says in its outlook for the coming quarters will be keenly followed. The market could stage a meaningful recovery if the RBI does not spring a nasty surprise.