Asian Markets Feels European Pain

Taiex lead losers pack with 4% fall, Hang Seng, Kospi follows with 3% loss

Stock markets in Asian region fell further to near five month low on Friday, 5 February 2010, as investors dumped riskier assets after rising sovereign debt problems in the euro zone and poor jobs data sent US and European stocks tumbling.

On Wall Street, stocks nosedived and closed near their lows Thursday, pressured by global debt fears and labor market uncertainty ahead of Friday's government jobs report. The Dow Jones Industrial Average plunged 268 points, or 2.6%, to 10,002. The S&P 500 lost 34 points, or 3.1%, to 1063 and the Nasdaq stumbled by 65 points, or 3%, at 2125.

On the economic front, the Labor Department said initial jobless claims rose by 8,000 to 480,000 in the final week of January. In other economic news, the Labor Department also said U.S. nonfarm productivity in the fourth quarter rose at a swifter-than-expected pace of 6.2%. Unit labor costs, meanwhile, fell 4.4% in the fourth quarter. The figure, which is watched as a measure of inflation and profit margins, was expected to decline only 2.5%. In separate release from the Census Bureau showed the factory orders growing at 1% in December.

In the commodity market, crude oil traded near $73 a barrel after falling yesterday as an increase in U.S. jobless claims raised concern fuel consumption may be slow to recover and a stronger dollar reduced demand for commodities.

Crude oil for March delivery was at $73.46 a barrel, up 32 cents, in electronic trading on the New York Mercantile Exchange at 3:18 p.m. Singapore time. It earlier fell as much as 33 cents, or 0.5 percent, to $72.81 a barrel.

Brent oil for March settlement was at $72.26 a barrel, up 13 cents, on the London-based ICE Futures Europe exchange at 3:19 p.m. Singapore time. It earlier fell as much as 50 cents, or 0.7 percent, to $71.63 a barrel. The contract declined $3.79, or 5 percent, to settle at $72.13 a barrel yesterday.

Gold fell to a three-month low in London as the dollar’s rally cut bullion’s appeal as an alternative investment. Gold for immediate delivery fell as much as $14.13, or 1.3 percent, to $1,049.57 an ounce and traded at $1,056.22 at 9:42 a.m. London time.

In the currency market, the US dollar rose in Asian trading Friday ahead of a key U.S. jobs report later in the session, getting a lift from safety-seeking investors as Asian equities markets sold off.

The Japanese yen softened slightly in afternoon trade against its major counterparts after surging up yesterday on growing concerns over the global economy. The unexpected rise in U.S. jobless benefit claims and growing fears about the sovereign debt crisis in Greece and other parts of Europe pushed the yen up sharply yesterday. Japan’s currency yen was quoted at 89.49 against the greenback.

The Hong Kong dollar was trading at HK$ 7.7718 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trades, the Aussie dollar fell to multi-month lows today as investors fretted about sovereign debt problems in Europe amid concerns strained budgets could force fiscal retrenchment in many developed nations. The Aussie hit a 4-month low at $0.8639, shedding two US cents overnight as risk appetite collapsed on worries about the health of the global economy. At the local close, the dollar was buying $0.867 US cents. The 2.1% drop against the US dollar was the biggest daily slide in over seven months.

In Wellington trades, the New Zealand dollar had a volatile session reacting to offshore markets after taking a pounding yesterday from worse-than-expected unemployment statistics. Investors were increasingly worried about the levels of sovereign, or government debt, in Europe. They were seen dumping shares and non-US dollar currencies. Non-farm payroll data due in the US tonight adds another uncertainty to the mix. The NZ dollar was US 69.01 cents at 5 pm from US68.83c at 8 am and US 69.80 cents at 5 pm yesterday. It fell to a five-month low of US 68.45 cents on Thursday night and spent today's session between around US 69 cents and US 68.58 cents.

The South Korean won declined 1.62% against the U.S. dollar Friday as fears about ballooning budget deficits in the euro-zone sparked a flight to safer assets. The South Korean won ended at 1,169.90 won to the greenback, down 19 won from Thursday’s close after the global concerns sent investors to flee to the safety of the U.S. currency. The Korean unit fell to as low as 1,177.50 won at one point, but its losses were trimmed later due to exporters' sale of the greenback.

The Taiwan dollar weakened against the greenback. The Taiwan dollar was trading lower against the US dollar at NT$ 32.0670, 0.0470 down from Thursday’s close of NT$32.0200

In equities, Asian equity markets tumbled Friday as heavy losses on Wall Street and heightened concerns over European sovereign debt prompted a sell-off across sectors.

In Japan, the share market tumbled to 7-week low, barely clinging to the 10,000 line, suffered by steep losses in Wall Street overnight on disappointing US jobs figures, escalating debt jitters in Europe, and a sharply strengthening yen. The Nikkei index stumbled 1.38% or 140.95 points in a week. At the closing bell, the Nikkei 225 Stock Average index was at 10,057.09, tumbled 298.89 points or 2.89%, after touching an intraday low of 10,036.33. The broader Topix of all First Section issues on the Tokyo Stock Exchange slumped 19.31 points, or 2.12%, to 891.78.

In Mainland China, the stock market tumbled with key indices breached the 3,000 line fist time since 30 October 2009, as investors abandoned riskier assets in a wake of triple digit slumps in Wall Street overnight on disappointing US jobs data and escalating debt jitters in Europe.

The benchmark Shanghai index registered weekly decline of 1.7% or 49.9 points. At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, tumbled 55.91 points, or 1.87%, to 2,939.40, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange slipped 252.34 points, or 2.07%, to 11,917.14. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, sank 2.04%, to 3,153.09.

On the economic front, China’s current-account surplus, the broadest measure of its trade balance, fell sharply in 2009, according to preliminary estimates by the State Administration of Foreign Exchange. The current-account surplus dropped to $284.1 billion, as compared surplus of $426.1 billion for 2008. The Ministry of Commerce Friday imposed preliminary duties of as much as 105.4% on US chicken products, saying the imports are hurting the domestic poultry industry.

In Hong Kong, the key benchmark indices fell on Friday, joining a global stock market rout, as broad based selling across the sector amid risk aversion after global markets plunged overnight on renewed concerns over global economic uncertainties. Selling was also intensified after unexpected rise in US jobless claims, cautious over Greece and other European nation’s debts, and sharp fall in commodity prices. The Hang Seng Index tumbled 676.56 points, or 3.33%, to 19,655.08, while the Hang Seng China Enterprise, which tracks the overall performance of 43 Mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, shrank 474.10 points, or 4.08%, to 11,131.78.

In Australia, the index fell sharply, ending a fourth consecutive week of losses on heavy selling across the sectors, hurt by falls in offshore markets and weaker commodity prices. Market participants pulling out money from risky asset after European and US share-markets plunged into the red overnight on concerns about the financial health of the Euro zone and unexpected rise in US jobless claim. The All Ordinaries registered weekly declines of 1.4% or 64.40 points. At the closing bell, the benchmark S&P/ASX200 index fell 107.50 points, or 2.33%, to 4,514.10, meanwhile the broader All Ordinaries shrank 111.60 points, or 2.4%, to 4,532.50.

On the economic front, the RBA issued its quarterly Monetary Policy Statement Friday in Sydney, saying that if the forecasts materialize, more interest rate hikes are possible. The RBA predicted modest increases in inflation and gross domestic product, along with a moderation in joblessness. The central bank forecasts underlying inflation will ease from about 3.25% through 2009 to 3% by mid 2010 and 2.5% by the end of 2010 before rising to 2.75% by the end of 2011 and into 2012. The bank previously forecast 2.25% inflation by the end of 2010.Gross domestic product is forecast to rise by 3.25% through 2010 and 3.5% through 2011.

In New Zealand, equities ended deep in the negative region on the last trading day of the week after inching up slightly yesterday despite loses in international markets. New Zealand benchmark index dipped sharply on Friday by almost 1.5%, reaching close to 3100; near its mid December 2009 lows after achieving a level close to 3300, early this year. NZ shares remained dull throughout the week except for edging forward yesterday. At the closing today, the NZX 50 lost 1.40% or 43.95 points to 3104.99. Meanwhile, the NZX 15 declined 1.69% or 96.04 points to close at 5592.69.

In South Korea, stocks closed lower as snowballing sovereign debt woes in Europe prompted skepticism over a fledgling global economic recovery. In a broad-based slump, the Korea Composite Stock Price Index (KOSPI) gave up 49.30 points or 3.05% to end at 1,567.12. Today’s steep losses pushed the key index back to the lowest level since it ended at 1,555.70 on 30 November 2009, after foreigners sold a net $293 billion in shares following three days of buying.

In Singapore, the key stock index tanked, driving the index to a fourth straight weekly losses on concerns the global recovery may falter on weak cues from Asian and European bourses and Wall Street overnight triggered by concerns over sovereign debt problems in Europe and U.S. unemployment. At the closing bell, the blue chip Straits Times Index was at 2,683.56, dropped 61.42 points or 2.24%. The gauge tumbled 2.1% or 58.2 points this week, its fourth week of decline.

In Taiwan, stock market flunked to five month low, by posting the biggest single day loss since 22 January 2008, as investors step up the selling activity following Wall Street losses on rising debt problems in Europe. All sectoral indices registered broad base losses. The benchmark Taiex share index followed the global cues by extending the losses for the fourth session, finishing the day lower by 324.21 points or 4.30% at 7217.83 – the biggest single day fall since 22 January 2008 when market tanked 528.54 points. It is also the lowest closing since 4 September 2009 when market finished the day at 7153.13.

On the economic front, Taiwan’s industrial production index jumped 47.34% year-on-year to reach 114.51 points in December last year, a historical high, thanks to the relatively low comparison base and the widely-reported economic recovery globally,.

According to statistics compiled by the statistics department under the Ministry of Economic Affairs (MOEA), the production index for the manufacturing industry also hit a historic-high record with an annual growth of 50.16% in the same month.

In Philippines, cautiousness and risk aversion once more ruled the Philippines stock market, with PSEi plummeting more than 2% following a two-day rebound. Market players remained jittery following the razor sharp losses on Wall Street overnight. Aside from that, investors remained pessimistic over the monetary board’s moves over the interest rates. Though the CPI figures released today, slightly eased for the first time in five months in January, it is still holding near an eight months high level, supporting the central bank's view that current policy settings were appropriate. At the final bell, the benchmark index PSEi plummeted 2.03% or 59.23 points to 2,855.64, while the All Shares index declined 1.68% or 31.22 points to 1,822.56.

In India, sustained selling pressure kept key benchmark indices suppressed throughout the day. World stocks fell as Europe’s sovereign debt, indications of weak US jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery. The barometer index slipped below the psychological 16,000 mark. The BSE 30-share Sensex was down 434.02 points or 2.68% to 15,790.93. The S&P CNX Nifty was down 126.70 points or 2.61% to 4718.65.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished slightly lower at 1247.90 while stock markets in Indonesia’s Jakarta Composite index gave up by 74.24 points ending the day lower at 2518.98.

In other regional market, European shares fell for the third straight day on Friday, as investors continued to fret about the health of Greek, Portuguese and Spanish finances ahead of the release of U.S. jobs data. The major European regional markets held up a bit better, with the German DAX index down 1.3% or 74.31 points at 5,459, the French CAC-40 index lost 2.4% or 89.29 points to 3,600 and the U.K. FTSE 100 index down 1.7% or 87.32 points to 5,052.

Sensex sheds 3.47% as euro zone fiscal woes curb risk appetite

The key benchmark indices tripped as as Europe's sovereign debt, indications of weak US jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery. The Sensex fell in 4 out of 5 trading sessions in the week ended Friday, 5 February 2010. The BSE Sensex fell below the psychological 16,000 mark.

Fiscal woes in Europe pushed global equities sharply lower on Friday 5 February 2010, as the cost of insuring Greece, Spain and Portugal's debt against default rose sharply. European Commission's endorsement Wednesday of Greece's deficit-cutting plan failed to assuage investor fears.

The BSE Sensex declined 567.03 points or 3.47% to 15,790.73 in the week ended 5 February 2010. The S&P CNX Nifty fell 163,40 points or 3.34% to 4718.65.

The BSE BSE Mid-Cap index fell 2.5% and the BSE Small-Cap index fell 1.93%. Both the indices outperformed the Sensex.

Chairman of the prime minister's economic advisory council C. Rangarajan on Friday said the government is no hurry to roll back economic stimulus measures in one go. He also said that efforts will be made in the budget later this month to lower the fiscal deficit. It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy and efforts will be made to bring down the fiscal deficit in the coming budget, Rangarajan said.

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%

Pronab Sen, the country's chief statistician, said on Wednesday the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.

Reserve Bank of India (RBI) governor D Subbarao has for the first time, said the nation may have to take some measures towards capital control in the short term to avoid stark economic imbalances after acknowledging in the past the role played by fund flows in worsening inflation, boosting asset prices and destroying industry competitiveness.

The RBI will target inflation in the coming months, Subbarao said on Monday. Subbarao also said it is important for the government to withdraw the stimulus and that the government and central bank would have to coordinate in withdrawing stimulus. He reiterated that the economy is back to growth and added that the challenge is to accelerate momentum.

The Reserve Bank of India (RBI) will adjust monetary policy outside of its quarterly review cycle only under extraordinary circumstances, a deputy governor Subir Gokarn said on Monday.

Meanwhile, the business activity among Indian services companies expanded at its fastest pace in 16 months in January 2010, rising for a second straight month on sharp increase in new work orders, a survey showed. The HSBC Markit Business Activity Index, based on a survey of 400 Indian firms, rose to 58.96 in January 2010, its highest since September 2008, after rising to 57.41 in December 2009.

Earlier this month, another data showed that manufacturing activity grew at its fastest pace in almost 1-1/2 years in January 2010, driven by a sharp rise in new export orders that are supporting a recovery in the industrial sector. The HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian companies, rose to 57.7 in January 2010, its strongest reading since August 2008 and up from 55.6 in December 2009.

Exports continued to rebound, rising an annual 9.3% in December to $14.6 billion, their second consecutive monthly rise, although the pace of annual growth was slower than the 18.2% registered in November. Imports increased by 27.2% in December from a year earlier to $24.75 billion while the trade deficit shrunk by a little over 28 percent to $76.24 billion for the April- December 2009 period.

India can gradually start raising interest rates as Asia's third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund (IMF) said in a report published on 4 February 2010 on its website. India's economy is one of the first in the world to recover and the central bank should take a gradual approach to ensure the recovery reaches its full potential, the IMF report said.

The International Monetary Fund sees the Indian economy coming back to potential by 2010-11 to log 8% growth from the current year's 6.75 per cent. Still, the IMF's assessment of GDP growth for the current fiscal is in contrast to the government's projection of more than 7% and the RBI's latest forecast of 7.5%

The two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST.

The advance estimates on economic growth for the current fiscal ending March 2010 will be released on Monday. It will be based on the provisional data for the first half of the year and partial data for third quarter and no data on the fourth quarter, which contributes the highest to the annual Gross Domestic Product.

As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government- owned entity to come out with a follow-on public offer (FPO). Its 17.1-crore share FPO will open on 19 February 2010 and will close on 23 February 2010. This will be followed by NMDC's FPO.

As per reports, in the next fiscal, the Government is likely to divest its stake in state-run firms such as Engineers India, Coal India through initial public offers (IPOs) and Power Grid and Sail through FPOs.

Emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks, as earnings and Greece's debt woes raised concerns that the global recovery may falter, the EPFR Global data indicated. Investors withdrew $516 million from Asian equities outside of Japan in the week ended 3 February 2010. Within Asia, China equity funds reported net outflows for the fifth time in six weeks while Indian funds lost $180 million, the most in 68 weeks

The key benchmark indices witnessed a divergent trend, with BSE Sensex closing flat and S&P CNX Nifty eking out small gains on Monday, 1 February 2010 after a strong intraday rebound triggered by upbeat economic data and higher monthly sales figures from two auto majors Maruti Suzuki and Mahindra & Mahindra. The BSE 30-share Sensex was down 1.93 points or 0.01% to 16,356.03 on that day.

Key benchmark indices declined reversing early gains on Tuesday, 2 January 2010 as investors turned cautious ahead of the opening of the large follow-on public offer (FPO) of state-run power generation firm NTPC on Wednesday, 3 February 2010. The BSE 30-share Sensex fell 192.59 points or 1.87% to 16,163.44 on Tuesday.

The key benchmark indices surged on Wednesday, 3 January 2010 on robust services sector data for January 2010 and firm global stocks boosted investor sentiment. The BSE 30-share Sensex rose 332.61 points or 2.06% to 16496.05 on that day.

Weak global cues casted their shadow on the domestic bourses on Thursday, 4 January 2010 which ended sharply lower following a late sell-off in index pivotals. The BSE 30-share Sensex was down 271.10 points or 1.64% to 16,224.95 on that day.

Sustained selling pressure kept key benchmark indices suppressed throughout the day on Friday, 5 February 2010. World stocks fell as Europe's sovereign debt, indications of weak US jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery. The BSE Sensex fell 431.58 points or 2.66% to 15,793.37 on that day.

Metal stocks declined on weak metal prices on London Metal Exchange. Hindalco Industries (down 6.21%), Tata Steel (down 3.26%), Sterlite Industries (down 2.13%), National Aluminium Company (down 4.8%) and Hindustan Zinc (down 7.52%), edged lower.

Index heavyweight Reliance Industries (RIL) fell 6.23%. As per reports RIL has submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.

India's largest power utility firm by sales NTPC fell 4.64%. NTPC's follow-on pubic offering (FPO) was fully bid on the last day of the issue on 5 February 2010. The FPO was subscribed 1.19 times. The FPO which opened for bidding on 3 February 2010 closed on Friday, 5 February 2010.

NTPC's FPO is the first public issue which is adopting the French Auction route to raise funds. Under the French Auction model, institutional buyers are free to bid above a certain floor price. The highest bidder gets preference during the allotment of shares

The government currently holds an 89.5% stake in NTPC and it plans to dilute 5% through the FPO. At the floor price, the government would mop up Rs 8286 crore

Rate sensitive realty shares dropped on fears a hike in interest rate following inflationary pressures in the domestic economy may crimp housing demand. DLF (down 7.02%), Indiabulls Real Estate (down 7.28%) and Unitech (down 7.19 %) edged lower.

IT pivotals declined following poor US economic data. US is a key market for Indian IT firms. India's second largest IT exporter by sales Infosys slipped 5.03%

India's third largest software services exporter Wipro declined 1%. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International.

India's largest IT exporter by sales Tata Consultancy Services fell 1.28%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.

The National Association of Software and Service Companies (Nasscom) has projected export revenue to grow 13% to 15% to $56-$57 billion in the year to March 2011, below the previous outlook for $60-$62 billion.

Markets to open at 11 AM tomorrow

The BSE & NSE is upgrading the capacity of capital market trading system by implementation of horizontally scalable architecture. Existing Trading system architecture will be revamped by using a distributed processing concept.

Towards this, the Exchanges are conducting a special live trading session on Saturday, February 06, 2010.

Market Timings for special live trading session on Saturday, February 06, 2010 will be between 11am and 12.30pm and the trades will be settled on the following Tuesday.

Block deal session opens on 11.00 AM and closes on 11.35 AM

Eurozone bears on prowl

Today's major news

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Sumeet Industries receives export order; the stock rises 3.02%

Click here for more stories

Post-market summary

Global signals

The European bourses hit the 10-week low after fresh worries over the global economy. At the time of writing this report FTSE 100 was down by 1.61%.

All the Asian indices closed 1-3% lower. SGX Nifty slid 148 points.

US stock futures opened lower, as investors remains cautious ahead of the key labour data and the Economic Cycle Research Institute's (ECRI) monthly inflation numbers.

Indian indices

Bears trampled the Indian markets second day on a trot, as global indices fell sharply on Eurozone debt fears. Taking lead from the extremely weak global sentiments, the BSE 30 benchmark index opened merely two points lower (which was also the day’s high) but extended the losses and breached the crucial 16000 level to touch the day’s low of 15725. The Sensex remained volatile throughout the session swinging 500 points in the process. At the finishing line, the Sensex closed at 15791, 434 points lower. Nifty also breached the 4800 level to close at 4719, 127 points lower.

Market sentiment

The market breadth, the number of advancing shares to declining shares, was extremely negative. Of the total 2,902 stocks traded on the BSE, 2,368 stocks declined, whereas only 487 stocks advanced. 47 stocks closed unchanged.

Sectoral & stock screening

All the sectors got drubbed during the day. Interest rate sensitive realty sector was hit the most and was down by 4.36% followed by the BSE Metal (metal index) that was down by 4.26%. The remaining indices fell in the range of 1.57-3.52%.
Bears hit all the Sensex stocks into red except Tata Power that was up 0.80%. On other hand Hindalco Industries (down 5.51%), Tata Steel (down 4.65%), Oil and Natural Gas Commission (down 4.54%), Jaiprakash Associates (down 4.46%), and Mahindra & Mahindra (down 3.93%) were hit the most.

Viewing volumes

Industrial finance company, IFCI saw highest trading with over 1.47 crore shares changing hands on the BSE followed by realty major Unitech (1.05 crore shares), wind turbine major Suzlon Energy (0.86 crore shares), Ispat Industries (0.64 crore shares) and Reliance Natural Resources (0.61 crore shares).

DB Realty fixes IPO price at Rs 468 per share

The IPO was subscribed 2.95 times

Real estate developer DB Realty has fixed the issue price of its initial pubic offer (IPO) at Rs 468 per share, at the lower end of its price band. Mumbai-based realty firm's Rs 1,500 crore initial pubic offer (IPO) that closed on 2 February 2010, was subscribed 2.95 times. The IPO remained open for bidding between 29 January 2010 and 2 February 2010. The price band of the IPO was set at Rs 468-486 per share.

Category wise, the qualified institutional buyers portion was subscribed 4.46 times and non institutional investors by 4.24 times. However, the retail category remained undersubscribed. Retail individual investors put in bids for 35.17 lakh shares as against 96.15 lakh shares reserved for them.

The Mumbai-based company had already received bids for Rs 270 crore towards the anchor investor portion of the IPO. The anchor investors to whom equity shares have been allocated pursuant to the offer include Janus, India Capital Fund, Prudential ICICI Life Insurance, Reliance Capital and India Equity Growth Fund.

The company plans to use the funds to build more homes and offices mainly in western India and to repay debt.

D B Realty focuses on residential, commercial, retail and other projects, such as mass housing and cluster redevelopment in and around Mumbai.

As per consolidated result, the company reported a net profit of Rs 145.79 crore on sales of Rs 464.43 crore in the year ended March 2009.

Hathway Cable & Datacom sets price band of Rs 240-265 a share

IPO to open for subscription on 9 February 2010

Hathway Cable & Datacom said today it has set the price band for its initial public offering (IPO) at Rs 240-265 a share. Hathway Cable and Datacom, a cable television services provider, is entering capital market with an initial public offering (IPO) of 2.77 crore equity shares of Rs 10 each on 9 February, 2010. The issue will close on 11 February 2010.

The company has proposed a public issue of 2 crore equity shares and an offer for sale of up to 72 lakh equity shares by shareholders Monet and MSPI Mauritius. The issue will constitute approximately 19.43% of the post-issue share capital of the company. The promoters' holding will be reduced to 66.55% from 77.37%.

The company is a leading cable television services provider in India as well as one of the leading cable broadband services providers. It offers analog and digital cable television services across 125 cities and towns and high-speed cable broadband services across 18 cities.

The objects of the fresh issue are to fund customer acquisitions; investment in the development of digital services and set top boxes; investment in the development of broadband infrastructure, capital expenditure and services; repayment of loans; and fund expenditure for general corporate purposes.

For the period of six months ended on September 2009, it has reported net loss of Rs 35.63 crore and total income of Rs 364.92 crore.

Market may extend losses on weak global stocks

Indian invesors will closely follow global developments after worries about fiscal woes in Europe pushed global equities sharply lower on Friday 5 February 2010, as the cost of insuring Greece, Spain and Portugal's debt against default rose sharply. European Commission's endorsement Wednesday of Greece's deficit-cutting plan failed to assuage investor fears. Adding to the pressure was a lack of fresh or reassuring news from European Central Bank President Jean-Claude Trichet at the ECB's press conference on Thursday 4 February 2010. Investors continue to worry that various euro-zone members will not be able to bring their budgets under control, jeopardizing its fragile economic recovery.

Expectations that the dollar carry trade, which fuelled a rally in emerging market stocks in the past one year, may pause for a while may further affect stocks. The carry transaction, where global fund managers borrowed dollar and converted it into currencies of countries they chose to invest in, had captured the imagination as the greenback weakened and the US Federal Reserve cut interest rate to battle recession. Investors, who have been banking on the cheap dollar to punt, are now feeling the jitters with the dollar beginning to harden against currencies like the euro. A stronger dollar means that they will have to convert more of other currencies to pay the interest on the dollar loan.

Closer home, the Centre of Statistical Organization (CSO) will, on Monday 8 January 2010 release advance estimates of GDP growth for 2009-10. It will be based on the provisional data for the first half of the year and partial data for third quarter and no data on the fourth quarter, which contributes the highest to the annual Gross Domestic Product. The advance estimate will facilitate in the making of the Union Budget, to be presented in Lok Sabha on 26 February 2010.

The government will announce the industrial output data for the month of December 2009 on Friday, 12 February 2010. The industrial output rose 11.7% in November 2009.

The government will also unveil data on some wholesale price indices for the year through 30 January 2010 viz. the food price index, the primary articles index and the fuel price index on Thursday, 11 February 2010. Food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week

The two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST

RIL drops nearly 4%

Sustained selling pressure kept key benchmark indices suppressed throughout the day. World stocks fell as Europe's sovereign debt, indications of weak US jobs data and a crash in commodity and energy prices raised fresh concerns over global economic recovery. US index futures reversed initial gains. The BSE 30-share Sensex was provisionally down 450.77 points or 2.78%, off 448.38 points from the day's high and up 48.75 points from the day's low. The barometer index slipped below the psychological 16,000 mark

The market breadth was extremely weak. Today's sell-off was wide-based with all sectoral indices on BSE edging lower. Auto shares declined after a government-appointed panel recommended additional duty on diesel-powered vehicles. Infrastructure stocks suffered a severe setback on fears of lower government spending on infrastructure after a lower-than-expected response to NTPC's follow-on public offer. Telecom stocks declined on reports the 3G auctions will be delayed.

Realty shares dropped on fears of hike in interest rates. Metal stocks declined as metal prices fell on the London Metal Exchange on Thursday, 4 February 2010. IT stocks fell for the second day in a row after an industry body cut the sector's export forecast for 2010/11. Index heavyweight Reliance Industries (RIL) fell below the Rs 1000 mark in volatile trade.

The market staged a recovery from lower level after an initial sharp setback as US index futures rose. However, the intraday recovery proved short-lived. The market weakened again in morning trade. Market stayed in a narrow range in early afternoon trade as stocks continued to remain under pressure. The market once again recovered from lower level in mid-morning trade. However, it weakened again later. Fresh selling at every small rise from level level pulled market near day's low in early afternoon trade. A weak start from European markets triggered a sell-off on the bourses in mid-afternoon trade. Sustained selling pressure in pivotals kept the market depressed in late trade.

Chairman of the prime minister's economic advisory council C. Rangarajan on Friday said the government is no hurry to roll back economic stimulus measures in one go. He also said that efforts will be made in the budget later this month to lower the fiscal deficit. It has been pointed out repeatedly that the process of exit must be gradual, coordinated and must not be sudden, should not disrupt the economy and efforts will be made to bring down the fiscal deficit in the coming budget, Rangarajan said.

India can gradually start raising interest rates as Asia's third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund (IMF) said in a report published on 4 February 2010 on its website. India's economy is one of the first in the world to recover and the central bank should take a gradual approach to ensure the recovery reaches its full potential, the IMF report said.

The International Monetary Fund sees the Indian economy coming back to potential by 2010-11 to log 8% growth from the current year's 6.75 per cent. Still, the IMF's assessment of GDP growth for the current fiscal is in contrast to the government's projection of more than 7% and the RBI's latest forecast of 7.5%

European shares fell for the third straight day on Friday, with banks extending losses made on the back of worries about the debt positions of Greece, Spain and Portugal. Key benchmark indices in UK, Germany and France were down by between 0.87% and 1.77%.

Asian shares plunged following an unexpected increase in US jobless claims and slide in commodities. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.87% to 4.30%.

China's GDP growth is expected to reach 11.5% in the first quarter while the pace of the consumer price index's rise could accelerate to about 2.5% compared with a year earlier, a Chinese government think tank said in a report carried by state media on Friday. The State Information Centre cited the continued impact of government stimulus policies and restocking of inventories of manufactured goods among the factors contributing to an acceleration of the economic recovery, the China Securities Journal reported.

China posted full-year GDP growth of 8.7% for 2009 while the quarterly rate accelerated to 10.7% in the fourth quarter from 9.1% in the third and 7.9% in the second.

In US market action on Thursday, the Dow briefly fell below the crucial 10,000 mark, as stocks suffered their worst losses in more than nine months. Escalating sovereign debt problems in Europe and an unexpected rise in jobless claims put investors on the defensive just ahead of Friday's crucial payrolls report.

The Dow Jones Industrial Average fell 268.37 points, or 2.61%, to 10,002.18. The Standard & Poor's 500 Index dropped 34.17 points, or 3.11%, to 1,063.11. The Nasdaq Composite index lost 65.48 points, or 2.99%, to 2,125.43.

US economic data on Thursday showed initial jobless claims rose by 8,000 last week to a seasonally adjusted 480,000. This is against economists' expectation of a drop of 10,000.

Meanwhile, the European Central Bank (ECB) and Bank of England (BOE) kept interest rates at record lows on Thursday as financial markets looked for guidance on growing eurozone debt problems.

The ECB maintained its main lending rate at 1% while the BoE rate stayed at 0.50%. Markets had widely anticipated the decisions and were far more concerned by debt-ridden Greece and other countries with soaring public deficits that have pushed the eurozone into its worst-ever crisis.

Emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks, as earnings and Greece's debt woes raised concerns that the global recovery may falter, the EPFR Global data indicated. Investors withdrew $516 million from Asian equities outside of Japan in the week ended 3 February 2010. Within Asia, China equity funds reported net outflows for the fifth time in six weeks while Indian funds lost $180 million, the most in 68 weeks

Trading in US index indicated the Dow could fall 10 points at the opening bell on Friday, 5 February 2010.

Closer home, the two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST.

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released on Thursday showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%

Pronab Sen, the country's chief statistician, said on Wednesday the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.

The advance estimates on economic growth for the current fiscal ending March 2010 will be released on Monday. It will be based on the provisional data for the first half of the year and partial data for third quarter and no data on the fourth quarter, which contributes the highest to the annual Gross Domestic Product.

As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government- owned entity to come out with a follow-on public offer (FPO). Its 17.1-crore share FPO will open on 19 February 2010 and will close on 23 February 2010. This will be followed by NMDC's FPO.

As per reports, in the next fiscal, the Government is likely to divest its stake in state-run firms such as Engineers India, Coal India through initial public offers (IPOs) and Power Grid and Sail through FPOs.

As per provisional closing, the BSE 30-share Sensex was down 450.77 points or 2.78% to 15,774.18. The index fell 499.52 points at the day's low of 15,725.43 in mid-afternoon trade. The Sensex declined 2.39 points at the day's high of 16,222.56 in early trade.

The S&P CNX Nifty was down 130.60 points or 2.70% to 4714.75, as per provisional closing.

The market breadth, indicating the overall health of the market, was extremely weak. On BSE, 2372 shares declined as compared with 510 that rose. A total of 53 shares remained unchanged.

The total turnover on BSE amounted to Rs 4488 crore as compared with Rs 4,463.32 crore on Thursday, 4 February 2010

Tata Power was the lone gainer from the 30-member Sensex pack. India's second largest private sector power generation firm by capacity gained 1.50% to Rs 1294.95, recovering from day's low on 1255.25 on bargain hunting.

ONGC (down 4.93%), ITC (down 2.31%), and Grasim (down 2.10%), edged lower from the Sensex pack

Metal stocks declined for the second straight session after LMEX, a gauge of six metals traded on the London Metal Exchange, lost 2.82% on Thursday, 4 February 2010.

India's largest private sector aluminium maker by sales Hindalco Industries slumped 5.54% to Rs 138.05 and was the top loser from the Sensex pack.

Tata Steel (down 4.74%), Sterlite Industries (down 2.16%), National Aluminium Company (down 4.38%), Sesa Goa (down 3.50%), and Hindustan Zinc (down 4.33%), edged lower

Index heavyweight Reliance Industries (RIL) fell 3.89% to Rs 979.70. The stock slipped to day's low of Rs 977.10 after falling below the Rs 1,000 mark in opening trade. As per reports RIL has submitted a $2 billion expression of interest for Value Creation Inc, a Canada-based private firm which holds oil sands assets.

India's largest power utility firm by sales NTPC fell 1.47% to Rs 204.50. NTPC's follow-on pubic offering (FPO) was fully bid by 15:00 IST on the last day of the issue today, 5 February 2010. Bids for 21.01 crore shares were place at Rs 209. The next highest number of bids were put at Rs 202, just above the floor price of Rs 201. Investors put in bids for 11.3 crore shares at Rs 202. The FPO which opened for bidding on 3 February 2010 closes on 5 February 2010.

NTPC's FPO is the first public issue which is adopting the French Auction route to raise funds. Under the French Auction model, institutional buyers are free to bid above a certain floor price. The highest bidder gets preference during the allotment of shares

The government currently holds an 89.5% stake in NTPC and it plans to dilute 5% through the FPO. At the floor price, the government would mop up Rs 8286 crore

India's largest private sector bank by net profit ICICI Bank lost 4.02%. The bank's American depository receipt (ADR) slumped 6.03% to $34.77 on the New York Stock Exchange on Thursday, 4 February 2010.

Auto stocks declined after the panel headed by Kirit Parikh, a former member of the nation's Planning Commission, suggested Rs 80,000 more should be charged as duty on vehicles fitted with diesel engines.

India's top truck maker by sales Tata Motors lost 2.64% after its American depository receipt (ADR) dived 8.45% to $14.41 on the New York Stock Exchange on Thursday, 4 February 2010.

India's largest tractor maker by sales Mahindra and Mahindra (M&M) fell 4.27%. India's top small car maker by sales Maruti Suzuki India shed 0.95%

IT pivotals declined for the second day on disappointing US economic data. US is a key market for Indian IT firms. India's second largest IT exporter by sales Infosys slipped 2.86%

India's third largest software services exporter Wipro declined 2.31%. As per recent reports, Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is in advanced talks to buy Nigeria-based skincare company, Tura International.

India's largest IT exporter by sales Tata Consultancy Services fell 2.58%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.

The National Association of Software and Service Companies (Nasscom) has projected export revenue to grow 13% to 15% to $56-$57 billion in the year to March 2011, below the previous outlook for $60-$62 billion.

Infrastructure stocks fell on fears of lower government spending on infrastructure after a lower-than-expected response to NTPC's follow-on public offer. Jaiprakash Associates (down 4.58%), Larsen & Toubro (down 1.39%), Bharat Heavy Electricals (down 3.47%), Gammon India (down 3.08%), GMR Infrastructure (down 5.62%), and Punj Lloyd (down 3.42%), declined.

Telecom stocks declined for the second running day weighed by reports the auction for the much awaited third-generation mobile-phone services may not be held by 31 March 2010

India's largest mobile services provider by sales Bharti Airtel fell 1.75%. India's second largest mobile services provider by sales Reliance Communications declined 0.55%.

The government had set 14 January 2010 as the tentative deadline to start taking bids for the airwaves as per its schedule announced in October last year. On 19 January 2010, Communications Minister Raja had told reporters in New Delhi the auction would be completed before the next fiscal year begins on 1 April 2010.

India's largest pharma company by market capitalisation Sun Pharmaceuticals Industries fell 2.54%. As per reports, the Supreme Court of Israel debarred the company from acquiring further stake in Israeli drug firm Taro.

Sun has been engaged in the legal tussle to take control of Taro after their $454-million merger deal in 2007 was unilaterally called off by the Israeli firm in 2008.

Ranbaxy Laboratories slumped 5.41% on reports the US drug regulator has asked the company to immediately assess whether its plants making drugs for the US market meet the required standards.

ARSS Infrastructure Projects IPO analysis

Focused on rail and road infrastructure

Of the Rs 2877.53-crore unexecuted order book, 41% comprises railway projects, 41% road projects, and 3% irrigation

Promoted by Subhash Agarwal of Bhubaneswar and his three brothers, ARSS Infrastructure Projects (AIPL) provides construction services for railway infrastructure, roads & highways and irrigation projects. Originally incorporated in May 2000 as ARSS Stones, the company changed its name to ARSS Infrastructure Projects in May 2005. Initially, it took up railway contracts mainly in and gradually expanded to zonal jurisdictions of East Coast Railway, South Eastern Railway, South East Central Railway, Southern Railway and North Western Railway. Its expertise in railway construction projects extends to earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, and linking of tracks. Over the years, it has diversified its field of activities into other construction segments such as development and construction of roads, highways, bridges, irrigation projects, and EPC activities for railways. AIPL has crusher plants at six locations in various districts of Orissa and necessary equipment required for quarrying and crushing granite stone to produce required sizes of rock products for railway track ballast or highway work or any other civil construction work.

Some of the standalone and joint venture projects currently being executed include the Rs 208- crore Cuttak-Paradeep Road construction and widening project, the Rs 261-crore rail infrastructure work for Jindal Steel & Power's Angul project, and construction of roadbed including minor & major bridges, facilities and general electrification works on the Haridaspur-Paradeep new broad-gauge (BG) line.

Strengths

Strong unexecuted order book of Rs 2877.53 crore as on 10 January 2010 and significantly diversified order book comprising 41% railway projects, 41% road projects, 3% irrigation projects, and balance others. Moreover, orders from government and government entities amounted to 87.5% of the order book as on January 10, 2010.

Has successfully executed over 86 projects involving construction of over 200 km of railway tracks, 300 km of roads & highways, 10 minor & major bridges and other general civil engineering works over nine years. Given the strong investment lined up in the country, both in the road sector as well as by the Railways including the dedicated rail freight corridor project, is well positioned to capitalise on it.

Has strong relationship with clients such as Rail Vikas Nigam, RITES, and various departments of the Orissa government. About 73.11 % of its order book as on 10 January 2010 comprised repeat orders.

Weaknesses

There are a number of pending litigations against the company and/or the promoters and group companies, including a criminal case.

Has expanded its presence and pursued orders outside Orissa like Chattisgarh, Rajasthan, Jharkhand, Haryana and Tamil Nadu. Still, contracts outside Orissa are limited.

Had negative cash flow from operating activities in the fiscal ended March 2008 (FY 2008) as also nine months ended December 2009.

Valuation

AIPL's revenue grew 99% to Rs 624.38 crore in FY 2009 and net profit was up by 90% to Rs 51.04 crore. The EPS for FY 2009 works out to Rs 33.9 and Rs 34.4 on post-IPO equity at the lower and upper price band, respectively. The P/E works out to 12.1 times and 12.9 times on the lower and upper price band, respectively. This is comparatively higher than players such as PBA Infrastructure and MSK Projects, which quote at P/E of 6.8 times and 10.8 times their FY 2009 earning. However, the offer is at a discount to J Kumar Infrastructure and Tantia Constructions which quotes at 12.3 and 13.7 times of their FY 2009 earning. But the scrip is offered at 9.3 times to 10.0 times the annualised EPS of 44.3 to 45.0 for the nine months ended December 2009 on the lower and upper band.

SGX Nifty plunges

4,718.00 -120.50

Daily News Roundup - Feb 5 2010

Israeli SC orders status quo in Sun-Taro battle, Sun Pharma asked not to buy additional Taro shares. (BS)

L&T, EADS in talks to revive defence joint venture. (ET)

M&M initiates talks with UK-based Triumph Motorcycles and Moto Guzzi, Italy to roll out premium bikes for the Indian market. (ET)

GTL plans to raise Rs14bn through non-convertible debentures to invest in green energy products and solutions for telecom infrastructure. (ET)

Reliance Capital Partners buys 3.4% stake in Fame India. (BS)

ACC net up 42% at Rs15.64bn as against Rs11bn in the year-ago period. (ET)

Ambuja Cements records a 12% fall in yearly consolidated net profit at Rs12.16bn as against Rs13.89bn. (ET)

Essar Oil plans to increase its number of petrol pumps to 2,000 in the next few months from 1,450 currently. (ET)

Dalmia Cement hikes its stake in OCL India from 21.7% to 45.4%. (BS)

Vishal Retail promoters and lenders to meet next week to sort out the differences over management changes and other modalities of the corporate debt restructuring (CDR) process. (BS)

Kiri Dyes plans to shift product manufacturing base of DyStar to India and China. (BS)

Advanta India acquired Crosbyton Seeds for US$13mn through its US subsidiary. (BS)

Aurobindo Pharma gets USFDA nod for Cetirizine Hydrochloride Solution used for treating allergies. (DNA)

Dr Reddy’s Labs will be debt free in three years. (DNA)

Hindustan Zinc cut zinc prices by Rs9,600 a tonne. (DNA)

ACC is aggressively looking at expansion and acquisitions. (DNA)

Era Infra to tie up funds for 2 projects by April. (DNA)

Essar Group says talks progressing on Shell units buy. (DNA)

Dalmia Cement posts 20.9% increase in sales for the month of January at 3.05 lakh tons as against 2.52 lakh tons in the same month last year. (BS)

L&T Finance to tap NCDs to raise Rs5bn. (BS)

The US drugs regulator has asked Ranbaxy to immediately assess the manufacturing practices at its plants. (ET)

BSNL lost the bid for managing telecom networks of the Ethiopian Telecommunications Corp, in the African nation. (ET)

Nasscom has predicted a gloomy 5.5% growth in India’s software and service exports this fiscal to US$49.7bn. (DNA)

Trai plans telecom tower policy by June, aims to curb mushrooming of cellsites in residential areas. (ET)

The government has raised the onetime entry fee for internet service providers licence by up to Rs1mn while extending the validity by five years. (ET)

Overseas borrowings dip to 4-year low at US$16.7bn in 2009. (ET)

Friday fright on the street

Be aware that a halo has to fall only a few inches to be a noose.

Brace for a gap-down opening as world markets are in a tizzy amid escalating concerns over the mounting debt problems in a few European nations. Whether the market manages to rebound remains to be seen as FIIs don’t seem to be in a mood to reverse their selling binge, at least for now.

Yesterday only we had warned against getting carried away with Wednesday’s rally. Unfortunately for the bulls, that prediction turned out to be a prophetic one. For those who heeded our advice though might have done better than most. Risk aversion has risen of late amid a spate of fresh worries from China’s tightening, to new restrictions for US banks to sovereign debt concerns in Europe.

For India, the big concern remains in the form of inflation and its ramifications on the stimulus-fueled recovery. The big event for India will be the Union Budget. Expectations are already building up. The Finance Minister has its task cut out with a yawning fiscal deficit staring him in the face. The 3G auction fiasco coupled with the lukewarm response to the NTPC FPO are only adding to his troubles.

Some key support levels could melt amid the world-wide crash. Nifty futures trading in Singapore are down over 2% as of now. The Nifty could find support at 4740-4750. If there is no improvement in Asian markets, it could even fall below 4700. If the market rebounds, which could be either today or next week, the Nifty is likely to meet resistance at around 4900.

Indian markets ended near day’s low on Tuesday reversing almost all the previous day’s gains. Benchmark indices remained under pressure right from the start, thanks to weak global cues and all round selling, as traders and investors seemed to be using every rise to offload their positions. Even though bulls did attempt a pull back in the afternoon trades, nevertheless it proved to be very short lived.

The realty, metals and the auto stocks witnessed profound selling throughout the day even the Mid-Cap and the Small-Cap stocks were not spared.

The BSE Sensex fell 271 points to end at 16,223 after touching a high of 16,500 and a low of 16,188. The Nifty fell 86 points to end at 4,845.

Equity markets in Asia ended in the red. The Nikkei in Japan was down 0.5%, while Australia's S&P/ASX ended higher by 0.5%. The Shanghai SE Composite was down 0.3% and Hang Seng index in Hong Kong was down 1.5%.

In Europe, stocks were trading red. The DAX in Germany was down 0.8% and the CAC 40 index in France was down 0.7%. The FTSE in the UK was down 0.7%.

Coming back to India, all the BSE sectoral indices ended in the red. The BSE Realty index was the top loser, shedding 4%, followed by the Metal index that was down 3.3% and the BSE Auto index was down 2.2%. The BSE Mid-Cap index fell 2% while BSE Small-Cap index ended lower by 1.6%.

Among the 30-components of Sensex 27 ended in the negative terrain and only ONGC, ITC and Hero Honda ended in the green. Hindalco, JP Associates, Tata Motors, DLF and Tata Steel were among the top losers.

Outside the frontline indices, the big losers in the broader market were JP Hydro, GMR Infra, Jai Corp and Videocon Ind. On the other hand, gainers included P&G, MMTC, Godrej Cons and Central Bank.

The annual rate of food inflation rose to 17.56% for the week ended January 23, 2010 as compared to 17.4% in the previous week.

However, on a week-on-week basis, the index for food articles group declined marginally by 0.1% to 286.5 from 286.7 for the previous week. Annual wholesale inflation picked up to 7.31% in December 2009 as compared with 4.78% in November, 2009.

ACC posted a net profit of Rs16.06bn up 32.5% for the year ended December 31, 2009 as compared to Rs12.12bn for the year ended December 31, 2008. Total Income has increased from Rs75.71bn for the year ended December 31, 2008 to Rs82.68bn for the year ended December 31, 2009.

While, the group has posted a net profit of Rs15.63bn for the year ended December 31, 2009 as compared to Rs10.99bn for the year ended December 31, 2008. Total Income has increased from Rs79.74bn for the year ended December 31, 2008 to Rs87.25bn for the year ended December 31, 2009.

The stock ended lower by 3% to end at Rs879, it opened at Rs890 hitting an intra-day high of Rs890 and an intra-day low of Rs849 recording volumes of over 0.14mn shares on BSE.

Dr. Reddy’s Labs announced that it doesn’t plan to sell a stake to GlaxoSmithKline Plc. The consideration of a share sale to Glaxo "was never there," CFO Umang Vohra was quoted as saying. "As of now there is no conversation of any financial stake that I am aware of."

Shares of Dr Reddy’s Labs ended higher by 0.5% to end at Rs1161. The stock hit an intra-day high of Rs1168 and intra-day low of Rs1135 recording volumes of over 74,000 shares on BSE.

Shares of Unichem Laboratories advancedby 1% to end at Rs347 after the company's Ghaziabad Formulationfacility has been recertified by Medicines & Healthcare ProductsRegulatory Agencies (MHRA), U.K.

The facility is recertified for both Medicines for Human as well as Veterinary use.

Shares of Kiri Dyes and Chemicals hit 52-week high and erased gains ending lower by 3.6% atRs809. The company announced that it has acquired world's leadingmultinational DyStar Group through its SPV Kiri Holding Singapore Pvt.Ltd.

Shares of Mounteverest Trading was locked at 5% upper circuit to Rs568.75 after the board of directors decided to allot 3 equity shares as bonus shares for every 1 equity share held by the shareholders on the record date. The scrip opened at Rs568.75 hitting an intra-day high of Rs568.75 and an intra-day low of Rs545 recording volumes of over 7,000 shares on BSE.

Shares of Advanta India shot up by over 4.5% to end at Rs530 after the company announced that its subsidiary, Advanta US Inc., has acquired 100% of the Assets and Business of Crosbyton Seed Company ("CSC") Crosbyton, Texas, USA.

Onmobile Global

Onmobile Global

Hindustan Dorr-Oliver

Hindustan Dorr-Oliver

Jaiprakash Power Ventures

We recommend a sell in the stock of Jaiprakash Power Ventures from a short-term perspective.

It is evident from the charts that the stock lost its bullish momentum in June 2009, encountering resistance at around Rs 100. Since then it has been on an intermediate-term downtrend, forming lower troughs and lower peaks.

It is also in a short-term downtrend since early January. It breached the 50 and 200-day moving averages in the recent times and is trading well below them. Furthermore, a 6-per-cent decline on February 4 reinforces the downtrend. The daily relative strength index has re-entered the bearish zone and the weekly RSI is slipping towards this zone in the neutral region. The daily moving average convergence and divergence indicator is declining in the negative territory. Our short-term forecast is bearish for the stock. We expect it to decline further until it hits our price target of Rs 59 in the approaching trading sessions. Traders with short-term perspective can consider selling the stock while maintaining stop-loss at Rs 69.

via BL

Crude slumps

Prices end almost 5% lower as dollar stays strong

Crude oil prices slumped on Thursday, 04 February 2010. Prices fell, as the dollar extended a strong rally on Thursday buoyed by debt problems in Europe and disappointing jobless claims data in US.

Strong economic reports generally tend to push crude prices higher on anticipation of higher demand in coming months and vice versa. The strong dollar further pushed crude price lower today.

On Thursday, crude-oil futures for light sweet crude for March delivery closed at $73.14/barrel (lower by $3.84 or 4.9%). It was the biggest percentage drop for crude in six months. Last week, crude ended lower by 2.4%. In January 2010, crude ended lower by 8.3%. On a year to date basis, crude is lower by 9.2%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.7%.

As per latest reports, Greece is struggling to curb budget deficits that are in excess of European Union limits. The euro weakened to its lowest level since June against the dollar after European Central Bank President Jean-Claude Trichet said the economic outlook is subject to “uncertainty.”

Among economic data expected for the day, the Labor Department in US reported on Thursday, 04 February 2010, that first-time filings for state unemployment benefits climbed to their highest level since mid-December last week. Market was expecting a drop in the number.

As per the report, initial claims rose 8,000 to stand at 480,000 for the week ended on 30 January, 2010. Market was expecting a figure around 450,000. The four-week moving average for initial claims, which smoothes out fluctuations in the weekly data, rose to 468,750, up 11,750. This is the highest level since the week ended 5 December 2009.

The Energy Department in US reported yesterday that crude oil inventories rose by 2.3 million barrels in the week ended 29 January 2010. Market was expecting a decline of 1 million barrels in crude stocks. In the weekly inventory report, the EIA also said inventories of distillate, which includes heating oil, fell by 948,000 barrels, while gasoline stocks fell by 1.3 million barrels. Market was expecting a buildup of 1.5 million barrels in gasoline stocks. The report also stated that refinery utilization fell to 77.7%, while it was expected to rise 0.25% to 78.75%.

Among other energy products on Thursday, March reformulated gasoline futures fell 8.6 cents, or 4.2%, to $1.95 a gallon and March heating oil declined 7 cents, or 3.5%, to $1.94 a gallon.

Also on Thursday, March natural-gas futures finished little changed at $5.42 per million British thermal units, as cold weather forecasts helped offset a smaller than expected drawdown in U.S. supplies. It earlier slumped 2% after the Energy Information Administration said natural gas in storage in the storage fell by 115 billion cubic feet in the week ended 29 January 2010 against an expectation of a drawdown of between 121 billion and 125 billion cubic feet.

Crude ended FY 2009 higher by 78%, the highest yearly gain since 1999. It reached a high of $82 earlier in October 2009 and hit a low of $33.98 on 12 February 2009. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 53.5% since then. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for February delivery closed Rs 161 (4.5%) lower at Rs 3,412/barrel. Natural gas for February delivery closed lower by Rs 5.8 (2.3%) at Rs 248.2/mmbtu.

Biggest drop for bullion metals in three months

Prices plunge as dollar extends a strong rally

Precious metals witnessed their biggest drop in three months on Thursday, 04 February 2010. Prices fell, as the dollar extended a strong rally on Thursday buoyed by debt problems in Europe and disappointing jobless claims data in US.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for April delivery ended at $1,063 an ounce, lower by $49 (4.4%) an ounce on the New York Mercantile Exchange. Last week, gold lost 0.6%. For January 2010, gold lost 1.2%. Year to date, gold has shed 3%.

On Thursday, March Comex silver futures ended lower by 84.2 cents (5.2%) at $15.475 an ounce. Last week, silver ended lower by 4.3%. In January 2010, silver shed 3.9%. Year to date in FY 2010, silver has dropped by almost 8.2%.

In the currency market on Thursday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.7%.

As per latest reports, Greece is struggling to curb budget deficits that are in excess of European Union limits. The euro weakened to its lowest level since June against the dollar after European Central Bank President Jean-Claude Trichet said the economic outlook is subject to “uncertainty.”

Among economic data expected for the day, the Labor Department in US reported on Thursday, 04 February 2010, that first-time filings for state unemployment benefits climbed to their highest level since mid-December last week. Market was expecting a drop in the number.

As per the report, initial claims rose 8,000 to stand at 480,000 for the week ended on 30 January, 2010. Market was expecting a figure around 450,000. The four-week moving average for initial claims, which smoothes out fluctuations in the weekly data, rose to 468,750, up 11,750. This is the highest level since the week ended 5 December 2009.

Precious metal prices have been slipping since last week due to impending worries from China front where tightening monetary policies are bothering investors due to shaky demand of metals in coming months.

Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.

Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.

At the MCX, gold prices for April delivery closed lower by Rs 495 (2.97%) at Rs 16,152 per ten grams. Prices rose to a high of Rs 16,644 per 10 grams and fell to a low of Rs 16,079 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 1,043 (4.08%) lower at Rs 24,498/Kg. Prices opened at Rs 25,577/kg and fell to a low of Rs 24,375/Kg during the day's trading.

SGX Nifty Live Update - Feb 5 2010

4,711.00 -127.50