Market may remain volatile

Euro zone debt worries remain in focus after a rout in global equities cast its long shadow on Indian stocks in the past few days. World stocks fell amid concern that a 110 billion-euro ($140 billion) rescue package for Greece will not be enough to keep Europe's most indebted nations from defaulting. The Group of Seven plans to hold a conference call on Friday, 7 May 2010, to discuss the Greek debt crisis.

Foreign funds dumped stocks worth a net Rs 3835.82 crore in three trading sessions from 5 May to 7 May 2010, according to data from the stock exchanges. The net outflow totaled Rs 4252.56 crore in the first few days this month, till 7 May 2010, probably due to redemption pressure for European funds in their home countries. The BSE Sensex lost 4.5% in the week ended Friday, 7 May 2010.

NSE's volatility index India VIX, a measure of traders' perception of near-term risks in the market based on options prices, jumped 12.48% on Friday, 7 May 2010, to 27.40. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

Hindalco Industries, Ranbaxy Laboratories and Kotak Mahindra Bank unveil their January-March 2010 quarter results on Tuesday, 11 May 2010. The board of Kotak Mahindra will also consider stock-split proposal along with the financial results. State Bank of India, Reliance Infrastructure, Reliance Power and DLF are scheduled to announce their results on Friday, 14 May 2010.

The fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1,290 companies rose 29.4% to Rs 42157 crore on 29.1% rise in sales to Rs 391885 crore in the quarter ended March 2010 over the quarter ended March 2009.

Reliance Industries (RIL) may extend gains after the Supreme Court on Friday, 7 May 2010, ruled in favor of the company on a gas dispute with Reliance Natural Resources (RNRL). The court ordered the two firms to renegotiate a deal based on government policy on gas utilization.

Shares of Talwalkars Better Value Fitness will debut on the stock exchanges on Monday, 10 May 2010. The company had priced the initial public offer at Rs 128 per share, at the top end of the Rs 123-128 per share price band. The IPO got strong response from investors, with foreign institutional investors (FIIs) making a beeline for the issue. The issue was subscribed 28.39 times.

Metal shares lead 4.5% Sensex slide

The market tumbled below 17,000 level as the Greece debt crisis made investors edgy about its impact on global economic recovery. Notwithstanding the assurance of funds from International Monetary Fund (IMF) to Greece, debt crisis haunted global markets and impacted other emerging markets including India in the form of high volatility.

FII outflow in May 2010 totaled Rs 981.90 crore, while inflow in the calendar year 2010 totaled Rs 29,023.90 crore (till 5 May 2010).

Fears of a fresh credit crunch in Europe threw global markets into disarray last week. European Central Bank President Jean-Claude Trichet on Thursday, 6 May 2010, rejected calls for more aggressive action to avert fiscal contagion in Southern Europe, shaking investors as he suggested the euro zone's monetary-policy makers have done all they can for now. Trichet offered only rhetorical support for Greece and Portugal, the two countries most at risk from high indebtedness and stagnant economic growth.

Back home, inflation based on food prices rose 16.04% in the year through 24 April 2010, slower than previous week's annual rise of 16.61%, the latest government data showed. Fuel prices inflation remained at elevated level. The fuel price index rose 12.69% in the year through 24 April 2010, same as a week ago. The primary articles index rose 13.93% in the year through 24 April 2010.

The fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1290 companies rose 29.40% to Rs 42,157 crore on 29.10% rise in sales to Rs 3,91,885 crore in the quarter ended March 2010 over the quarter ended March 2009.

Meanwhile, business at Indian service companies rebounded to a 21-month-high in April 2010 on new business and high input prices. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 62.1 in April, its highest since July 2008, and compared with 58.1 in March 2010.

A recent industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.

The BSE Sensex tumbled 789.60 points or 4.49% to 16769.11 in the week ended Friday, 7 May 2010. The S&P CNX Nifty slumped 259.95 points or 4.92% to 5,018.05 in the week.

The BSE Mid-Cap index fell 4.87% and the BSE Small-Cap index fell 5.40% in the week. Both these indices underperformed the Sensex.

The key benchmark indices ended a choppy trading session lower on Monday, 3 May 2010, as weak global stocks weighed on investors' sentiment. The BSE 30-share Sensex fell 172.63 points or 0.98% to 17,386.08. The S&P CNX Nifty declined 55.25 points or 1.05% to 5,222.75.

The key benchmark indices slumped on Tuesday, 4 May 2010, extending losses for the second straight day, as world stocks fell. The BSE 30-share Sensex fell 248.94 points or 1.43% to 17,137.14. The S&P CNX Nifty fell 74.25 points or 1.42% to 5,148.50.

The key benchmark indices extended losses for the third straight day on Wednesday, 5 May 2010, on continued worries over fiscal health of euro zone nations. Nevertheless, the market staged a strong intraday rebound after an initial sharp slide. The BSE 30-share Sensex fell 49.18 points or 0.29% to 17,087.96. The S&P CNX Nifty declined 23.60 points or 0.46% to 5,124.90.

The key benchmark indices ended a choppy trading session lower on Thursday, 6 May 2010, as debt worries in the euro zone weighed on investors' sentiment. The barometer index BSE Sensex fell below the psychological 17,000 level after flirting with that level throughout the day. The BSE 30-share Sensex fell 100.43 points or 0.59% to 16,987.53. The S&P CNX Nifty declined 34.05 points or 0.66% to 5,090.85.

The key benchmark indices extended losses on the last trading day of the week on Friday, 7 May 2010 as euro zone debt worries rattled global stocks. Except the Oil & Gas index, all the other sectoral indices on the BSE closed in the red. The BSE 30-share Sensex fell 218.42 points or 1.29% to 16,769.11. The S&P CNX Nifty declined 72.80 points or 1.43% to 5018.05.

All the Sensex stocks, barring Reliance Industries, ended the week in negative zone. Index heavyweight Reliance Industries (RIL) inched up 0.13%. A three member Supreme Court bench on Friday, 7 May 2010, ruled 2-1 in favour of the company on gas dispute with Reliance Natural Resources (RNRL). The court ordered the two feuding firms to renegotiate a gas contract which was first drawn up in 2005 as a part of a family settlement.

Supreme Court judge P Sathasivam declared that the brothers' MoU was not binding and that RIL and RNRL must renegotiate the gas contract in six weeks. The judge said that the government owned all the gas assets till they reached the users. He added that Production Sharing Contract (PSC) will override all the prior agreements and the MoU between the Ambani brothers is not binding. He also said that it was not feasible to restrain the government's power on gas and it is a natural asset which belongs to the people.

Justice B.Sudarshan Reddy then delivered dissent to Justice Sathasivam's verdict. At the end of both verdicts, the Chief Justice of India KG Balakrishnan supported Justice Sathasivam.

Earlier, the Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.

Shares of Anil Dhirubhai Ambani-controlled Reliance Natural Resources slumped 24.69%.

Metal shares bore the major brunt of last week's sell-off with the barometer for metal shares, the BSE Metal index slumping 9.64% to 17,664.76. Sterlite Industries (down 13.77%), Tata Steel (down 9.72%), Hindalco Industries (down 8.43%), were the major metal shares that tumbled.

Reliance Infrastructure (down 13.77%), Jaiprakash Associates (down 11.80%), DLF (down 8.42%), ICICI Bank (down 7.79%) and HDFC Bank (down 7.24%), were some of the major Sensex losers.

India's largest dedicated mortgage lender by market capitalisation Housing Development Finance Corporation (HDFC) fell 3.21%. Net profit rose 26.30% to Rs 926.38 crore on 8.10% decline in total income to Rs 2,899.32 crore in Q4 March 2010 over Q4 March 2009. HDFC's board approved a 5-for-1 stock split.

India's largest truck maker by sales Tata Motors fell 12.64%. Its total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009.

Tata Motors' domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137 units. Commercial vehicle sales in the domestic market rose 36% to 30,963 units. Passenger vehicle sales jumped 70% to 24,902 units. Passenger vehicle sales include distribution of Fiat cars by Tata Motors. Sales of the ultra-cheap car Tata Nano totaled 3,525 units in April 2010.

BSE Bulk Deals to Watch - May 7 2010

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/5/2010 504629 Anil Special SAMTUL INVESTMENTS LTD S 150000 18.45
7/5/2010 532995 Avon Corp VINODAMRAT LALNAAI B 329364 6.68
7/5/2010 531591 Bampsl Sec GIRRAJ PRASAD GUPTA B 421778 1.24
7/5/2010 590061 Brushman India CAPARO FINANCIAL SOLUTIONS LIMITED S 67197 7.61
7/5/2010 526652 Cals Ref DEUTSCHE BANK AG S 45000000 0.38
7/5/2010 533026 Chemcel Bio SUMAN GUPTA B 153039 8.15
7/5/2010 533026 Chemcel Bio SUMAN GUPTA S 153039 8.78
7/5/2010 533026 Chemcel Bio ACME FURNITURE PRIVATE LIMITE S 600000 8.38
7/5/2010 524388 Crazy Infotech SONATA SOLUTIONS PRIVATE LIMI S 370000 1.65
7/5/2010 531270 Dazzel Conf ARPIJAY FABRICATORS PRIVATE LIMITED B 30000 21.60
7/5/2010 590094 FARMAX IND WINNERS SALES PRIVATE LIMITED B 137551 130.52
7/5/2010 590094 FARMAX IND SANJEETKUMAR CHOURASIA S 144696 130.10
7/5/2010 590024 Fert & Chem Trv TRANSGLOBAL SECURITIES LTD. B 32894 53.05
7/5/2010 590024 Fert & Chem Trv A K G STOCK BROKERS PRIVATE LIMITED B 34914 52.11
7/5/2010 590024 Fert & Chem Trv MANSUKH SECURITIES & FINANCE LTD B 59613 52.45
7/5/2010 590024 Fert & Chem Trv ARUN KUMAR B 274818 53.76
7/5/2010 590024 Fert & Chem Trv TRANSGLOBAL SECURITIES LTD. S 32894 53.40
7/5/2010 590024 Fert & Chem Trv A K G STOCK BROKERS PRIVATE LIMITED S 34914 53.42
7/5/2010 590024 Fert & Chem Trv MANSUKH SECURITIES & FINANCE LTD S 59613 53.63
7/5/2010 590024 Fert & Chem Trv ARUN KUMAR S 274818 52.76
7/5/2010 532857 Glory Polyfilms TRANSGLOBAL SECURITIES LTD. B 304932 22.30
7/5/2010 532857 Glory Polyfilms TRANSGLOBAL SECURITIES LTD. S 301932 22.09
7/5/2010 532980 Gokul Refoils CREDO INDIA THEMATIC FUND LIMITED B 900000 75.00
7/5/2010 526717 Gopala Poly DIPAKKSHAH SHAH S 211000 6.49
7/5/2010 532775 GTL Infra GTL LTD B 4700000 40.76
7/5/2010 524019 Hydro S&S Inds SAR AUTO PRODUCTS LIMITED B 106302 58.88
7/5/2010 524019 Hydro S&S Inds BP FINTRADE PRIVATE LIMITED B 38699 59.88
7/5/2010 524019 Hydro S&S Inds BP FINTRADE PRIVATE LIMITED S 38774 60.15
7/5/2010 530255 KAY Power BAMPSL SECURITIES LTD B 130418 16.70
7/5/2010 530255 KAY Power BAMPSL SECURITIES LTD S 150633 15.90
7/5/2010 526015 Kemrock Inds OPG SECURITIES P LTD B 58199 692.85
7/5/2010 526015 Kemrock Inds OPG SECURITIES P LTD S 58199 693.31
7/5/2010 531602 Koffee Break TEJSINGH DHANSINGH RAMOLA B 500000 2.10
7/5/2010 531602 Koffee Break AZURA PROJECTS PRIVATE LIMITED B 800000 2.10
7/5/2010 531602 Koffee Break ACHALA ELECTRICALS PRIVATE LIMITED S 783963 2.01
7/5/2010 531602 Koffee Break RASHMIRSHAH S 500000 2.16
7/5/2010 531602 Koffee Break KARAN MUKESH SHAH S 500000 2.17
7/5/2010 531602 Koffee Break BABULAL B JAIN HUF S 500000 2.04
7/5/2010 531366 Kohinoor Broad S V ENTERPRISES S 579359 5.67
7/5/2010 508306 Ledo Tea VEENASHANTILALGANDHI B 8101 86.63
7/5/2010 508306 Ledo Tea M. D. BHOOLA & CO B 9824 86.14
7/5/2010 508306 Ledo Tea VEENASHANTILAL GANDHI S 4405 86.31
7/5/2010 508306 Ledo Tea M. D. BHOOLA & CO S 9359 86.62
7/5/2010 530745 LN Polyesters SRINIVASA RAO KANCHIRAJU B 300000 20.00
7/5/2010 530745 LN Polyesters SURENDAR REDDY GARLAPATI B 400000 20.00
7/5/2010 530745 LN Polyesters SUDDALA SRIDHAR B 300000 20.00
7/5/2010 530745 LN Polyesters PRABHAKAR REDDY SOLIPURAM S 1000000 20.00
7/5/2010 524000 Magma Fin SUNDEEP CREDITS PVT LTD B 203583 300.79
7/5/2010 524000 Magma Fin PR VYAPAAR PRIVATE LIMITED B 200000 299.66
7/5/2010 524000 Magma Fin SUNDEEP CREDITS PVT LTD S 235990 300.27
7/5/2010 590060 MK Exim NIRMALABENSURESHBHAIPARIKH B 21300 46.60
7/5/2010 590060 MK Exim BHARTIPARAG SHETH S 16500 46.61
7/5/2010 531834 Natura Hue Chem BALWANTSINGH BISHT B 33000 11.79
7/5/2010 523385 Nilkamal PADMAKSHI FINANCIAL SERVICES LIMITED B 155418 247.70
7/5/2010 523385 Nilkamal GKK CAPITAL MARKETS PRIVATE LI S 150000 247.79
7/5/2010 532789 Nissan Copper PRIME INDIA INVESTMENT FUND LIMITED B 265000 38.55
7/5/2010 532789 Nissan Copper IGFT PRIVATE LIMITED S 265000 38.55
7/5/2010 512097 Oregon Comm STATUS EQUITY AND FINANCE PVT B 4900 299.40
7/5/2010 512097 Oregon Comm KRUNAL GOPALDAS RANA B 19400 300.85
7/5/2010 512097 Oregon Comm MURLIMANOHAR LAHOTI B 4900 304.00
7/5/2010 512097 Oregon Comm VIDHI HOLDINGS PVT LTD B 5000 300.44
7/5/2010 512097 Oregon Comm KRUNAL GOPALDAS RANA S 22650 300.61
7/5/2010 532606 Parekh Alum CROSSEAS CAPITAL SERVICES PRIVATE LIMITED B 79070 293.84
7/5/2010 532606 Parekh Alum CROSSEAS CAPITAL SERVICES PRIVATE LIMITED S 79862 294.91
7/5/2010 531769 PFL Infotech SHYLENDER JINDAL B 53363 19.50
7/5/2010 531769 PFL Infotech ROOPLATAMANAKCHAND JAIN S 41863 19.50
7/5/2010 503873 Priyadarshini Spn JAG PAR SECURITIES LTD B 55595 34.14
7/5/2010 532709 Reliance Nat Res GENUINE STOCK BROKERS PVT. LTD. B 11078780 58.88
7/5/2010 532709 Reliance Nat Res OPG SECURITIES P LTD B 8598694 59.66
7/5/2010 532709 Reliance Nat Res GENUINE STOCK BROKERS PVT. LTD. S 11078780 59.04
7/5/2010 532709 Reliance Nat Res OPG SECURITIES P LTD S 8598694 59.86
7/5/2010 517500 Roto Pumps ALFA FISCAL SERVICES PVT LTD B 26534 124.91
7/5/2010 517500 Roto Pumps ALFA FISCAL SERVICES PVT LTD S 26534 125.21
7/5/2010 531099 Rubra Med VINITA K AGARWAL S 35000 36.45
7/5/2010 533056 SARK SYS SHREE VIHAR HOUSING & DEVELOPERS (P) LTD B 50013 37.65
7/5/2010 533056 SARK SYS LEONINE VANIJYA PRIVATE LIMITED B 77605 37.30
7/5/2010 531693 Shri Ganesh Spi VIJAYTUKARAM CHILE B 438481 9.24
7/5/2010 531373 Suave Hotels ACHALA ELECTRICALS PRIVATE LIMITED B 73685 40.58
7/5/2010 526133 Supertex Inds SHAISHIL TUSHARKUMAR JHAVERI B 620796 4.45
7/5/2010 526133 Supertex Inds PARAMESHWAR EXPORTS PRIVATE LIMITED S 902000 4.46
7/5/2010 526133 Supertex Inds SHAISHIL TUSHARKUMAR JHAVERI S 569074 4.45
7/5/2010 523455 Techtran Poly POTINENI KOTESWARA RAO B 100000 24.23
7/5/2010 523455 Techtran Poly NARESHCHAND JAIN B 58247 23.80
7/5/2010 523455 Techtran Poly NARESHCHAND JAIN S 58247 23.91
7/5/2010 530091 Zyden Gentec DISHA DHARMENDRA MADHANI S 200000 2.15
* B - Buy, S - Sell

NSE Bulk Deals to Watch - May 7 2010

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-MAY-2010,BLUECHIP,Blue Chip India Ltd,VIBRANT SECURITIES PVT. LTD.,BUY,300483,1.66,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,AJAYCHANDRAKANTPAWAR,BUY,125000,22.00,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,BP FINTRADE PRIVATE LIMITED,BUY,202817,22.59,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,EXCEL MERCANTILE PRIVATE LIMITED,BUY,259449,21.99,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,HANSAVIJAYJOGADIA,BUY,125000,22.00,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,INVENTURE GROWTH & SECURITIES LIMITED,BUY,142555,21.71,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,MAHESH MITTAL,BUY,400000,21.50,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,MAMTAMANGESHGURAV,BUY,125000,22.00,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,263921,22.41,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,RAJ FINVEST,BUY,1424055,22.08,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,SAAKSHI SHARES PVT.LTD.,BUY,960804,22.42,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,TRANSGLOBAL SECURITIES LTD.,BUY,284989,22.02,-
07-MAY-2010,HYDROS&S,Hydro S & S Ind. Ltd,BP FINTRADE PRIVATE LIMITED,BUY,89435,60.33,-
07-MAY-2010,HYDROS&S,Hydro S & S Ind. Ltd,SAR AUTO PRODUCTS LIMITED,BUY,70463,59.87,-
07-MAY-2010,PANORAMUNI,Panoramic Universal Limit,ANURADHA MEETAL,BUY,67396,208.49,-
07-MAY-2010,PARAL,Parekh Aluminex Limited,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,78936,294.51,-
07-MAY-2010,RNRL,Reliance Natural Resource,GENUINE STOCK BROKERS PVT LTD,BUY,20980946,58.65,-
07-MAY-2010,RNRL,Reliance Natural Resource,GLOBAL VISION SECURITIES PRIVATE LIMITED,BUY,11168376,60.69,-
07-MAY-2010,BLUECHIP,Blue Chip India Ltd,VIBRANT SECURITIES PVT. LTD.,SELL,328691,1.69,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,BP FINTRADE PRIVATE LIMITED,SELL,202813,22.57,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,EXCEL MERCANTILE PRIVATE LIMITED,SELL,259449,21.50,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,INVENTURE GROWTH & SECURITIES LIMITED,SELL,135550,22.19,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,KUVERA CAPITAL PARTNERS LLP A/C KUVERA FUND LIMITED,SELL,150000,22.50,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,263921,22.48,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,NATHOORAM NITYANAND TIMBERS (P) LTD.,SELL,315000,21.49,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,RAJ FINVEST,SELL,1348165,21.86,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,SAAKSHI SHARES PVT.LTD.,SELL,821036,21.52,-
07-MAY-2010,GLORY,Glory Polyfilms Limited,TRANSGLOBAL SECURITIES LTD.,SELL,281959,22.26,-
07-MAY-2010,HYDROS&S,Hydro S & S Ind. Ltd,BP FINTRADE PRIVATE LIMITED,SELL,110736,60.44,-
07-MAY-2010,PANORAMUNI,Panoramic Universal Limit,ANURADHA MEETAL,SELL,67396,199.66,-
07-MAY-2010,PARAL,Parekh Aluminex Limited,CROSSEAS CAPITAL SERVICES PVT. LTD.,SELL,78936,294.04,-
07-MAY-2010,RNRL,Reliance Natural Resource,GENUINE STOCK BROKERS PVT LTD,SELL,20980946,58.64,-
07-MAY-2010,RNRL,Reliance Natural Resource,GLOBAL VISION SECURITIES PRIVATE LIMITED,SELL,11168376,61.30,-

Judgement day: The rise of RIL

Today's major news

Gemini Communications buys Rosy Blue Wireless; the stock falls by 3.09%

Bank of India Q4 net profit dips 47.2% yoy; the stock slides 5.60%

JSW Steel April crude steel production up 20%; the stock declines 3.07%

Click here for more stories

Global signals

European stocks fell on the fifth straight day following the hefty sell off on the Wall Street and increasing concerns about a severe debt crisis in the euro zone. At the time of writing of report, FTSE 100 was trading lower by 0.55%.

All the major Asian indices closed in the negative territory on the second consecutive day. SGX Nifty closed 59 points lower.

US stock futures signal strong opening on the Wall Street after falling sharply in the previous session. Investors will eye April's US non-farm payrolls data, consumer credit data for March and unemployment rate for the month of April.

Indian indices

Indian indices continued its southbound journey on the fifth consecutive session. The global weakness and Supreme Court (SC)’s judgement in Reliance Industries (RIL)-Reliance Natural Resources (RNRL) gas case decided the course of today’s trade. The market witnessed heavy sell-off all through the day and the Sensex remained choppy through out the session. However, gains in Reliance Industries helped to curb some of its losses.

The SC’s decision on the dispute between Mukesh Ambani’s Reliance Industries and Anil Ambani’s Reliance Natural Resources over the supply of gas from the Krishna-Godavari basin was out today. The Supreme Court ruled in favour of RIL by 2:1.

SC judge Sathasivam declared that the brothers' memorandum of understanding (MoU) was not binding and that RIL and RNRL must renegotiate in six weeks. He said that the government owned all the gas assets till it reached the users. It added that production sharing contract (PSC) will overwrite all the prior agreements and the MoU between the Ambani brothers is not binding. The PSC dictates a price of $4.2 per mmbtu while RNRL wanted gas at $2.34 per mmbtu.

Tracking weak world equities, the 30-share Sensex opened 48 points lower at 16939 (this was also day’s high) and then continued its heavy fall. The Nifty broke its psychological 5000 mark in an intraday trade on global meltdown. The Supreme Court’s decision in RIL-RNRL gas case was in favour of RIL, lifted RIL and that helped the Sensex to curb some of its losses. However, in afternoon session, European indices dropping to 3-month lows, heavy selling in interest rate sensitive sectors like realty and banking stock, and continuous selling in Anil Dhirubhai Ambani Group (ADAG) stocks led the Sensex to touch the day’s low of 16684. The Nifty, breaching its psychological level during the day, created panic among the investors. At closing bell, the Sensex closed at 16769 lower by 218 points. The Nifty managed to close above 5000 to shut at 5018, 73 points lower.

Market sentiment

The market breadth was extremely negative as declining stocks outdid gaining stocks over four times. Of the 2,933 stocks traded on the BSE, 2,332 stocks declined, whereas only 537 stocks advanced. Sixty-four stocks remained unchanged.

Sectoral & stock screening

Overall, bears were in firm control. Only oil & gas sector drew investors interest, with BSE Oil & Gas gaining 0.69% led by Reliance Industries. Realty and banking sectors were hit the most, with BSE Realty and BSE Bankex down by 4.32% and 3.26% respectively. The remaining sectors slipped in the range of 0.44% to 2.31%.

On gainers’ list, Indian Hotels topped the chart, up by 2.53%, followed by Asian Paints surged by 2.47% and Reliance Industries gained by 2.27%. On losers’ list, ADAG led the losers list — Reliance Natural Resources slid the most by 22.82% after Supreme Court ruled the judgment against the company, followed by Reliance Power that fell by 8.97% and Reliance Infrastructure that shed 7.01%.

Viewing volumes

ADAG company and day’s biggest loser Reliance Natural Resources saw highest trading with over 10.68 crore shares changing hands on the BSE, followed by wind turbine major Suzlon Energy (0.79 crore shares), ADAG’s power utility Reliance Power (0.73 crore shares), India’s second largest developer Unitech (0.66 crore shares) and infrastructure company GTL Infrastructure (0.53 crore shares).

Greece’ worries continue to weigh

Domestic market started the first week of May month on disastrous note. The Indian bourses plunged for the second straight week tracking weak global cues due to lots of negative events such as China raising CRR, fraud case against Goldman Sachs, Australia imposing 40% tax on mining companies, worries of Greece' debt crisis that it could spread to other southern European nations such as Spain and Portugal and suspected trade glitch in the US markets. These negative occurrences dragged the market down across the globe overshadowing the upbeat data in the US and easing food inflation back home (coming down at 16.4% from 16.61%).

The Supreme Court (SC)’s decision on the dispute between Mukesh Ambani’s Reliance Industries and Anil Ambani’s Reliance Natural Resources over the supply of gas from the Krishna-Godavari basin was out today (May 7, 2010). The Supreme Court ruled in favour of RIL by 2:1.

SC judge Sathasivam declared that the brothers' memorandum of understanding (MoU) was not binding and that RIL and RNRL must renegotiate in six weeks. He said that the government owned all the gas assets till it reached the users. It added that production sharing contract (PSC) will overwrite all the prior agreements and the MoU between the Ambani brothers is not binding. The PSC dictates a price of $4.2 per mmbtu while RNRL wanted gas at $2.34 per mmbtu.

During the week, the market remained volatile as the Sensex swung over 852 points while the Nifty 294 points. In the week, the Sensex breached the significant 17000 levels and closed at 16796 lower by 790 points or (4.50%) while the Nifty also broke the crucial level of 5000 during last trading day in the week. However, the Nifty managed to close above 5000 to shut week at 5018, lower by 260 points or (4.93%).

On global front, continuous worries over Greece’ debt dragged the market down across the globe. All the major indices around the world closed lower over 3.5%. CAC 40 declined the most with losses of 6.83%.

Bears spared none, metal and realty scrips hitting the most with the BSE Metal down by 9.64% and BSE Realty shedby 9.52%. The remaining sectoral indices slipped between 0.57-5.82%.

Gainers’ in ‘A’ group list — BPCL that rose by 6.24%, followed by HPCL that surged by 6.13% and Everest Kanto that was up by 5.43%. Losers’ in ‘A’ list —Reliance Natural Resources that slid the most by 24.70% after Supreme Court ruled judgment against the company in RIL-RNRL gas dispute, followed by Gujarat NRE Coke that was down by 17.64% and Aban Lloyd that declined by 15.62%.

Foreign institutional investors (FIIs) tuned in to the net sellers after such a long time as Greece’ worries continue to hit the global markets, selling stocks worth Rs982 crore. Domestic institutional investors (DIIs) continued to be the net sellers, selling Rs778.90 crore worth of shares in the week.

In forthcoming week, index of industrial production (IIP) data for the month of March and inflation figures for the month of April along and earnings of major Indian Inc’s such as State Bank of India (SBI), Hindalco Industries, Reliance Natural Resources, Reliance Power and Reliance Infrastructure will be the key factor for market to determine its future path. However, on global front, mainly on how Greece’ bailout plan will go ahead and FIIs inflow will play significant role in deciding the markets course.

NSE's volatility index jumps 12.5%

The key benchmark indices extended losses on the last trading day of the week, with the market declining in all the five trading sessions this week as euro zone debt worries rattled global stocks. Index heavyweight Reliance Industries (RIL) bucked the weak market trend after a three member Supreme Court bench ruled 2-1 in favour of the company on gas dispute with Reliance Natural Resources (RNRL). The court ordered the two feuding firms to renegotiate a gas contract which was first drawn up in 2005 as a part of a family settlement. RNRL and other Anil Dhirubhai Ambani group (ADAG) shares slumped.

Except the oil & gas index, all the other sectoral indices on the BSE were in the red. The market breadth was weak. The BSE 30-share Sensex fell 218.42 points or 1.29%, up close to 85 points from the day's low and off close to 170 points from the day's high. Realty, banking, metal, pharma, capital goods and telecom stocks fell.

The Sensex has lost 789.60 points or 4.49% in the past five trading sessions from a recent high of 17558.71 on 30 April 2010.

Volatility was high today. The market trimmed losses after a weak start. The market came off the lower level amid immense volatility in mid-morning trade as shares of Reliance Industries (RIL) witnessed sharp swings when Supreme Court was delivering the verdict on the gas dispute between the two Ambani brothers. The market slipped again in early afternoon trade with the Sensex hitting a fresh intraday low. The market pared losses in afternoon trade. The market weakened again later.

NSE's volatility index India VIX, a measure of traders' perception of near-term risks in the market based on options prices, jumped 12.48% to 27.40. The volatility index rose for the fifth day in a row. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure ofthe market's expectation of volatility over the next 30 calendar days.

European market extended previous day's steep losses on Friday following a sell-off in US stocks on Thursday that was triggered by mounting concerns about a severe debt crisis in the euro zone. The key indices in UK, France and Germany were down by 0.38% to 2.6%.

Asian shares declined in choppy trade in the aftermath of a sell-off on Wall Street on Thursday and on escalating concerns that Greece's debt problems could spill over to other weaker European countries. The key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by between 0.16% to 3.10%.

Trading in US index futures indicated Dow could gain 68 points at the opening bell on Friday, 7 May 2010. Futures swung between gains and losses.

US stocks plunged 9% in the last two hours of trading on Thursday before clawing back some of the losses as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray. The Dow suffered its biggest ever intraday point drop 998.50 points. The massive intraday slide was rumored to have been caused by erroneous trades that showed some shares briefly fell to nearly zero. The Dow Jones Industrial Average dropped 347.80 points, or 3.20% to 10,520.32 at close of trade. The Standard & Poor's 500 Index fell 37.75 points, or 3.24% to 1,128.15. The Nasdaq Composite Index lost 82.65 points, or 3.44% to 2,319.64.

European Central Bank President Jean-Claude Trichet on Thursday rejected calls for more aggressive action to avert fiscal contagion in Southern Europe, shaking investors as he suggested the euro zone's monetary-policy makers have done all they can for now. Trichet offered only rhetorical support for Greece and Portugal, the two countries most at risk from high indebtedness and stagnant economic growth.

Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1272 companies rose 27.9% to Rs 41433 crore on 28.9% rise in sales to Rs 385708 crore in the quarter ended March 2010 over the quarter ended March 2009.

Meanwhile, business at Indian service companies rebounded to a 21-month-high in April 2010 on new business and high input prices. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 62.1 in April, its highest since July 2008, and compared with 58.1 in March 2010.

A recent industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.

Inflation based on food prices rose 16.04% in the year through 24 April 2010, slower than previous week's annual rise of 16.61%, the latest government data showed. Fuel prices inflation remained at elevated level. The fuel price index rose 12.69% in the year through 24 April 2010, same as a week ago. The primary articles index rose 13.93% in the year through 24 April 2010.

The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

The BSE 30-share Sensex fell 218.42 points or 1.29% to 16,769.11. The index shed 47.95 points at the day's high of 16939.58 in early trade. The Sensex lost 303.40 points at the day's low of 16,684.13 in afternoon trade.

The S&P CNX Nifty was down 72.80 points or 1.43% to 5018.05. It hit a low of 4,995.90.

BSE clocked turnover of Rs 4815 crore, higher than Rs 4492 crore on Thursday, 6 May 2010.

The BSE Mid-Cap index fell 2.54% and the BSE Small-Cap index fell 3.01%. Both the indices underperformed the Sensex.

Except BSE Oil & Gas index, all the rest sectoral indices on BSE declined. The BSE Realty index (down 4.32%), Bankex (down 3.26%), IT index (down 2.31%), Power index (down 2.22%), Metal index (down 2.09%), Healthcare index (down 2.07%), Auto index (down 1.6%), Consumer Durables Index (down 1.73%), PSU index (down 1.47%), underperformed the Sensex.

The BSE Oil & Gas index (up 0.69%), BSE Capital Goods index (down 1.01%) and FMCG index (down 0.44%) outperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On BSE, 2345 shares declined as compared to 537 shares that advanced. A total of 50 shares remained unchanged.

Among the 30-share Sensex pack, 25 declined while one rose.

Index heavyweight Reliance Industries (RIL) rose 2.27% to Rs 1033.85 after a favourable ruling on gas dispute with Reliance Natural Resources (RNRL). But, the stock came off the day's high of Rs 1060. The stock was the top gainer from the Sensex pack. The stock rose on heavy volume of 40 lakh shares on BSE.

Reliance Natural Resources (RNRL) slumped 22.82%. The stock declined on huge volume of 10.68 crore shares. Other energy stocks of Anil Dhirubhai Ambani group also slumped. Reliance Power fell 8.97%. Reliance Infrastructure was down 7.01% and was the top loser from the Sensex pack.

Supreme Court judge P Sathasivam declared that the brothers' MoU was not binding and that RIL and RNRL must renegotiate the gas contract in six weeks. The judge said that the government owned all the gas assets till they reached the users. He added that Production Sharing Contract (PSC) will override all the prior agreements and the MoU between the Ambani brothers is not binding. He also said that it was not feasible to restrain the government's power on gas and it is a natural asset which belongs to the people.

Justice B.Sudarshan Reddy then delivered dissent to Justice Sathasivam's verdict. At the end of both verdicts, the Chief Justice of India KG Balakrishnan supported Justice Sathasivam.

Earlier, the Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.

Shares of oil exploration firms were mixed after oil futures weakened for the third day in a row Thursday, dropping more than $9 a barrel in three days in three days. Oil's continued losses were prompted by accelerating weakness in the euro and global stock markets due to concerns over debt problems in Europe. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms. Cairn India fell 2.56%. India's second largest oil exploration firm by sales Oil India fell 1.04%. But, India's largest oil exploration firm by sales ONGC rose 0.23%.

Light, sweet crude for June delivery settled down $2.86, or 3.6%, at $77.11 a barrel on the New York Mercantile Exchange on Thursday.

The sharp slide in crude oil prices, however, lifted PSU OMCs. HPCL (up 0.63%), BPCL (up 1.96%) and Indian Oil Corporation (up 0.69%), rose. Fall in crude oil prices will reduce under-recoveries of state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at controlled prices.

The finance ministry has reportedly decided to pay Rs 14,000 crore to state-owned oil marketing companies (OMCs) as part compensation for selling kerosene and cooking gas below cost in 2009-10.

Interest rate sensitive banking shares extended recent losses on fears the Reserve Bank Interest of India may resort to further monetary tightening to counter soaring inflation. India's second largest private sector bank by net profit HDFC Bank fell 2.74%, with the stock falling for the fifth straight day. Its ADR fell 3.89% on Thursday.

India's largest private sector bank by net profit ICICI Bank fell 2.91%, with the stock falling for the fifth straight day. Its ADR fell 5.3% on Thursday.

India's biggest commercial bank in terms of branch network State Bank of India fell 3.61%.

India's largest mortgage lender by total income Housing Development Finance Corporation slipped 0.98%, with the stock falling for the third straight day. The company's board on 3 May 2010 approved a 5-for-1 stock-split.

India's largest FMCG maker by sales Hindustan Unilever rose 0.99% on defensive buying.

Pharma stocks fell on profit taking. Dr Reddy's Laboratories, Cipla, Ranbaxy Laboratories and Sun Pharmaceutical Industries fell by between 1.26% to 2.95%.

Capital goods stocks also fell on profit taking. SKF India, BEML, Larsen & Toubro, Bharat Heavy Electricals, Praj Industries fell by between 0.14% to 4.75%.

Telecom stocks extended recent fall on concerns high costs for acquisition of third-generation mobile spectrum licenses would impact earnings. India's largest cellular services provider by sales Bharti Airtel fell 1.56%. India's second largest listed cellular services provider by sales Reliance Communications lost 2.67%.

Realty stocks extended recent losses on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. Ackruti City, DLF, Sobha Dvelopers, Indiabulls Real Estate and Unitech fell by between 2.61% to 6.24%.

Most metal and mining stocks fell on recent steep slide in metal prices on the London Metal Exchange. Sesa Goa, Tata Steel, Hindalco Industries, Jindal Saw, National Aluminium Company, Jindal Steel & Power, Sterlite Industries, Steel Authority of India, Hindustan Zinc fell by between 0.36% to 5.88%.

IT pivotals fell on lingering worries about sovereign debt issues in the euro zone. Europe is the second largest market for Indian IT firms. India's third largest software services exporter Wipro fell 3.32%, with the scrip falling for the second straight day. Its ADR fell 3.66% on Thursday. India's second largest software services exporter Infosys declined 1.52% with the scrip falling for the second straight day. Its ADR fell 3.56% on Thursday. India's largest software services exporter TCS fell 3.21%.

Auto shares declined on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. India's largest small car maker by sales Maruti Suzuki India fell 0.19%, with the stock falling for the second straight day. Total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,034 units. The data was unveiled on 1 May 2010.

India's top truck maker by sales Tata Motors fell 6.4%, with the stock falling for the fifth straight day. The stock had hit a 52-week high of Rs 882.20 on 3 May 2010. Total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009. Domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137 units.

Bajaj Auto declined 0.21%. India's largest motorbike maker by sales Hero Honda Motors fell 0.24%.

But, India's largest tractor maker by sales Mahindra & Mahindra rose 0.76%. The company's total vehicle sales rose 13% to 26,043 units in April 2010 over April 2009. The company announced the monthly sales data during trading hours on Monday, 3 May 2010.

Reliance Natural Resources clocked the highest volume of 10.68 crore shares on BSE. Cals Refineries (9.44 crore shares), Suzlon Energy (79.44 lakh shares), Birla Power Solutions (76.36 lakh shares) and Reliance Power (73.21 lakh shares) were the other volume toppers in that order.

Reliance Natural Resources clocked the highest turnover of Rs 563.75 crore on BSE. Reliance Industries (Rs 414.45 crore), Engineers India (Rs 148.38 crore), Tata Steel (Rs 117.32 crore) and Sesa Goa (105.10 crore) were the other turnover toppers in that order.

Grey Market Premiums - May 7 2010

Company Name	Offer Price (Rs.)	Premium (Rs.)
Talwalkars Better Value Fitness Ltd.	128	18 to 19
Nitesh Estate	54	Discount
Tarapur Transformers	75	2.50 to 3
Mandhana Industries Ltd.	130	4 to 5
Tara Health Foods	180 to 190	Withdraw
Sutlaj Jal Vidhut Nigam (SJVNL)	26	2 to 2.50
Jaypee Infra	102	Discount

Market may slump at open on weak global stocks; RIL in focus

Debt worries in the euro zone and and a rout in US stocks on Thursday may pull domestic market sharply lower. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicate that the Nifty could fall 84 points at the opening bell. All eyes are on the Supreme Court's verdict gas tussle between the Ambani brothers. The Supreme Court is likely to pronounce a judgement on the gas dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) at 10:30 IST today, 7 May 2010. The RIL-RNRL gas dispute has been heard by a three-member Supreme Court bench led by the Chief Justice of India. The tussle relates to supply of gas to Reliance Natural Resources (RNRL) from the D6 block in the Krishna-Godavari eastern offshore fields of Mukesh Ambani-led Reliance Industries (RIL).

The dispute landed in the Supreme Court after seeing many twists and turns in lower courts. The two sides - RIL and RNRL had approached Supreme Court challenging a decision by the Bombay High Court. The Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.

Asian shares slumped again Friday as Wall Street's slide spooked already-jittery investors on escalating concerns that Greece's debt problems could spill over to other weaker European countries. The key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by between 0.95% to 3.74%.

US stocks plunged 9% in the last two hours of trading on Thursday before clawing back some of the losses as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray. The Dow suffered its biggest ever intraday point drop 998.50 points. The massive intraday slide was rumored to have been caused by erroneous trades that showed some shares briefly fell to nearly zero. The Dow Jones Industrial Average dropped 347.80 points, or 3.20% to 10,520.32 at close of trade. The Standard & Poor's 500 Index fell 37.75 points, or 3.24% to 1,128.15. The Nasdaq Composite Index lost 82.65 points, or 3.44% to 2,319.64.

European Central Bank President Jean-Claude Trichet rejected calls for more aggressive action to avert fiscal contagion in Southern Europe, shaking investors as he suggested the euro zone's monetary-policy makers have done all they can for now. Trichet offered only rhetorical support for Greece and Portugal, the two countries most at risk from high indebtedness and stagnant economic growth.

Back home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1202 companies rose 29.3% to Rs 40838 crore on 29.5% rise in sales to Rs 377114 crore in the quarter ended March 2010 over the quarter ended March 2009.

Meanwhile, business at Indian service companies rebounded to a 21-month-high in April 2010 on new business and high input prices. The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to 62.1 in April, its highest since July 2008, and compared with 58.1 in March 2010.

A recent industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.

Inflation based on food prices rose 16.04% in the year through 24 April 2010, slower than previous week's annual rise of 16.61%, the latest government data showed. Fuel prices inflation remained at elevated level. The fuel price index rose 12.69% in the year through 24 April 2010, same as a week ago. The primary articles index rose 13.93% in the year through 24 April 2010.

The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

The RBI at its annual policy review on 20 April 2010 said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

The key benchmark indices ended a choppy trading session lower on Thursday, 6 May 2010 as debt worries in the euro zone weighed on investors' sentiment. The barometer index BSE Sensex fell below the psychological 17,000 level. The BSE 30-share Sensex fell 100.43 points or 0.59% to 16,987.53.

As per provisional figures on NSE, foreign funds sold shares worth Rs 937.75 crore and domestic funds bought shares worth Rs 379.96 crore on Thursday.

Weak start likely on poor global cues

Headlines for the day:

Glenmark enters into licensing pact with Taro's US arm

SC verdict in RIL-RNRL case today

State inks MoU with JSL for 1320MW power plant

Events for the day:

Major corporate action

Ex-date for interim dividend of Bihar Tubes, Firstobject Technologies
Results: Bank of India, Cipla, Piramal Healthcare
For more events, log on to Sharekhan.com

Pre-market report

Global signals

The European shares fell sharply for the third consecutive session on Thursday to a more than two-month closing low, as fears of a contagion from Greece' debt crisis rattled investors' confidence.

The US stocks plunged 9% in the last two hours of trading on Thursday before clawing back some of the losses as a suspected trading glitch and fears of a new credit crunch in Europe threw markets into disarray.

In today's trade, the Asian markets were trading in the negative territory. At the time of writing this report, SGX Nifty was trading 120 points lower.

Indian markets

The global equities like US and Europe finished down, which clearly indicates that major concern over sovereign debt risks still remains far from resolved. However, the European Central Bank President said that the central bank did not discuss the option of buying euro zone government bonds during its meeting where it kept interest rates on hold at 1%. Following the path, the Asian markets were trading in the negative bias and declined 2.4% on an average. The Indian markets are likely to witness a lower start mirroring the weak global cues and end the day on a negative note.

The companies like Bank of India, Cipla, Piramal Healthcare, Torrent Power, Aditya Birla Nuvo, Oracle Financial Services will be watched as their results are to be announced later today. In the last four trading sessions of this week, the Sensex declined by 571 points.

The Supreme Court today will decide the dispute between Mukesh Ambani’s Reliance Industries (RIL) and Anil Ambani’s Reliance Natural Resources (RNRL) over the supply of gas from the Krishna-Godavari basin. The stocks will closely eyed

Commodity cues

In the commodity space, the crude oil prices fell sharply Thursday, a day after sinking to their lowest levels in over six weeks, as the US dollar continued to strengthen and stocks plummeted, amid the fallout from Greece's debt crisis, with the Nymex light crude oil for the June series declined by $2.86 per barrel, whereas in the metals space, the Comex Gold for the June series rose by $22.30 and the Comex Silver for the June series was down by $0.02 to a troy ounce respectively.

Daily trend of FII/MF investment in equities

On May 06 2010, the foreign institutional investors (FIIs) were the net sellers of the Indian stocks to the tune of Rs1389.10 crore, whereas the domestic mutual funds, on May 04, 2010, were the net sellers of the stocks to the tune of Rs442.80 crore.

Daily News Roundup - May 7 2010

The proposed joint venture between SAIL and POSCO is likely to be finalised by the month-end. (BL)

The Supreme Court to give its verdict on the gas supply and pricing dispute between Reliance Industries and RNRL today. (BL)

Maharashtra government to ask Tata Power to supply electricity to Reliance Infra till July 1. (ET)

Wipro is looking increase the authorized share capital of the company by creating additional equity shares. (BS)

ONGC Videsh and its partners will next week sign contracts for developing a giant oilfield in Venezuela. (BS)

HCC completed the acquisition of a 66% stake in Swiss construction firm Karl Steiner AG. (ET)

Tata Communications enters into partnership with Infinity Africa, expanding its services in Tanzania. (BS)

Glenmark's US unit enters into an exclusive license and supply agreement for a branded product with the US arm of Taro Pharmaceuticals. (BL)

Lanco Solar, the SPV of Lanco Infratech plans for a polysilicon and solar wafer manufacturing base in Ramdaspur village, near Cuttack District. (BL)

Moser Baer to raise Rs4bn debt for expanding solar power. (BS)

Aurobindo Pharma received approval for its abbreviated new drug Cyclobenzaprine tablets from the Canadian regulator, Health Canada. (BL)

Coal India expects to seal deals worth US$1.7bn with foreign firms this month for mining coal abroad.

EIH Ltd plans to buy out its joint venture partner for the global businesses for US$45mn. (BL)

Nagarjuna Agrichem plans to invest Rs3.5bn to set up an 8,000 ton greenfield manufacturing facility at the Visakhapatnam SEZ. (BL)

Ingersoll Rand plans to invest about US$100mn by 2013 to expand research activity and manufacturing capacity in India. (ET)

Ajmera Realty would acquire 36% stake in company Ultra Tech Property Developers Pvt Ltd. (BS)

ICI India plans to set up a new production facility "either in Tamil Nadu or Karnataka" to manufacture 70mn litres of decorative paints a year. (FE)

FY10 exports slip 4.7% to US$176.5bn. (BS)

Food inflation moderated further to 16.04% for the week ended April 24, (BS)

Wall of worries

The best thinking has been done in solitude. The worst has been done in turmoil.Thomas A. Edison.

Don't try to act too smart and curb your bravado as the mayhem triggered by the European debt turmoil shows no signs of abating. Prepare for another shakeout today, at least in the morning trades as risk aversion continues to reign supreme amid growing fears that the ongoing debt problems in Europe will upset the global economic recovery. The key Indian indices are likely to nose-dive at opening bell and the NSE Nifty is expected to test 4950, which is seen as a major support. Hopefully, there will be some recovery as the day wears on and the Nifty will end above the psychological 5000 mark.

Reliance and RNRL will be in focus today as the supreme court is likely to deliver the long-pending verdict in the gas dispute. Nobody has a clue what the final decision will be. But, since Reliance is an index bellwether any sharp movement in it definitely has a bearing on the sentiment. Overall, the trend looks weak unless global markets rebound. Don't take any aggressive bets and just stay put as the global situation is not conducive right now, though for India there aren't too many worries.

Europe's debt crisis and technical glitches in computer-driven trading sparked a massive selloff on Wall Street. The euro slid to a fresh 14-month low against the dollar, and investors fled to Treasuries, gold and other safe-haven investments. The Dow at one point was down almost 1,000 points. The blue chip US index recovered sharply but still ended over 3% down. The fact that the massive drop in the Dow intra-day was largely driven by some technical error should give some solace to the bulls. The monthly US jobs report will be out later today, and if estimates are anything to go by, it should show big improvement. That might potentially change things slightly after the recent mayham.

Coming to European markets, it wasn't such a bad scene though stocks did extend the recent slide after the ECB said it has no plans to buy debt to support countries in the euro zone under fiscal strains. Asian markets are down sharply with the Hang Seng and Shanghai pacing the slide.

Securities and futures regulators in the US say they are working with exchanges to examine 'unusual' trading activity during the day's massive sell-off.

Nasdaq OMX Group said late on Thursday that it will cancel all trades made earlier in the day between 2:40 p.m. Eastern time and 3 p.m. Eastern time which were "greater than or less than 60% away from the consolidated last print in that security at (2:40 p.m.) or immediately prior to that. Nasdaq said no technology or system issues were associated with trading in the afternoon that helped push US markets into an alarming nosedive. Nasdaq said the trades will be canceled "on the participant's behalf," and will affect numerous stocks.

Meanwhile, the Greek parliament has passed the tough Austerity Measures proposed by the government in return for the massive aid package from the EU and IMF. The crucial vote stirred immediate concerns about unrest among the thousands of protesters massed in Athens.

Markets in Europe nose-dived after the European Central Bank disappointed investors hoping for decisive action to contain the euro zone's debt crisis. In the UK, exit poll give Tories 307 seats, labour 255 and Lib Dems 59, leaving no partty in overall control of the House.

Results today: AV Birla Nuvo, Bank of India, Cipla, KPIT Cummins, NIIT, Novartis India, Oracle Financial, Panacea Biotec, Piramal Healthcare, SRF and Torrent Power.

FIIs were net sellers of Rs9.38bn in the cash segment on Thursday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs3.8bn. FIIs were net sellers of Rs13.89bn in the cash segment on Wednesday, as per the SEBI data.

US stocks plunged anew, but were quite a way off the intra-day lows, as panic gripped Wall Street amid mounting concerns that the European debt crisis is spiraling out of control and will hurt the global economic recovery.

The Dow plunged almost 1,000 points before recovering to close down 348 points, as erroneous trading in Procter & Gamble and several other stocks sparked a massive selloff.

Fears about the spread of the European debt crisis dragged on stocks through the early afternoon. But the selling picked up in intensity and the Dow reached its nadir in mid afternoon. The selling was a result of technical glitches that caused some stocks, including Dow component Procter & Gamble to plunge 37%. The consumer products maker recovered most of that loss by the close, ending just 2% lower.

But the faulty P&G trading was responsible for 172 of the 998.50 points that the Dow Jones industrial average lost at its worst, the biggest one-day point decline on an intraday basis in Dow Jones history. Accenture, 3M, Sotheby's and other stocks may have been impacted by similar problems.

Finally, the Dow ended down 3.2% at 10,520.32. The Dow's biggest one-day point decline on a closing basis was Sept. 29, 2008, when it fell 777.68, which had also been the previous intraday mark. The S&P 500 index slipped 38 points, or 3.2%. The Nasdaq composite dropped 83 points, or 3.4%.

The dollar rallied early versus the euro, with the European currency falling to its lowest level since March of 2009. But by late day, the dollar had turned lower. It also fell versus the Japanese yen.

U.S. light crude oil for June delivery dropped $2.86 to settle at $77.11 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery rose $22.30 to settle at $1,197.30 per ounce.

Treasury prices rallied, lowering the yield on the 10-year note to 3.40% from 3.55% on Wednesday.

The US market collapsed some major technical support levels, and could be in for more selling Friday. The key is to get Germany's vote in favor of the Greek aid package from the European Union. If that happens, that could help calm fears and stabilize the market. Friday's big April jobs report could end up being a non-event.

The CBOE Volatility (VIX) index, Wall Street's so-called fear gauge, closed at 34.16, its highest finish since May 4, 2009. Earlier, it had spiked as high as 40.71, a 62% jump and its biggest one-day surge since February 2007.

The run from the euro and into the dollar and US government debt was a classic flight to quality. The continued weakness of the euro will continue to be a big drag on the markets as it pummels dollar-traded commodities and also hurts companies that do a lot of business overseas. Europe and Greece, and specifically the fear of contagion, is what's driving the market lower.

The number of Americans filing new claims for unemployment fell to 444,000 last week from a revised 451,000 the previous week. Economists thought claims would fall to 440,000. Continuing claims, a measure of Americans who have been receiving benefits for a week or more, dropped to 4,594,000 from a revised 4,653,000 in the previous week. Economists expected 4,600,000 continuing claims.

The report was released one day ahead of the government's closely watched April jobs report, due out on Friday morning. That report is expected to show employers added 187,000 jobs to their payrolls after adding 162,000 in March, according to economists.

Retailers reported that April sales slowed from March's robust gains, with a majority of those reporting missing expectations.

Freddie Mac reported an $8 billion quarterly loss on Wednesday and also said it needs another $10.6 billion from the federal government. The company was put into conservatorship by the government during the height of the financial crisis in 2008, along with its sister company Fannie Mae.

European shares continued to slide, with the banking sector taking the bulk of the hammering, after the European Central Bank opted against buying bonds of euro-zone governments as it kept its key rate on hold.

Investors pushed stock prices lower on heightened worries that Europe's high budget deficits would lead to a fresh global financial crisis. As Greece looked to a $144 billion rescue from the International Monetary Fund and 15 other nations that use the euro to help cover its debt, some questioned if Portugal and Spain would eventually need to be bailed out as well.

The Stoxx Europe 600 index ended down 1.3% at 247.24, bringing week-to-date losses for the index to 4.9%.

The European Central Bank held interest rates at 1% on Thursday and ECB president Jean-Claude Trichet said that the prospect of a default within the euro zone is, for me, out of the question. Trichet also said that the ECB's Governing Council didn't discuss the option of purchasing euro-zone government bonds in the secondary market.

National Bank of Greece shares were up 3.8% and the Greek ASE Composite index rose 1% to 1,678.42.

The French CAC-40 index closed down 2.2% at 3,556.11 and the German DAX index ended the day down 0.8% at 5,908.26. With the UK general election taking place and the FTSE 100 index fell 1.5% to end at 5,260.99.

In the currency markets, the euro took a battering against the so-called "safe haven" Swiss franc

It was a day of wild swings and yet at the end of it all the Indian indices extended losses for the fourth straight session. "Markets ended on a weak note as the Greek storm continued to wreck havoc across the globe and concerns also escalated on Chinese government’s monetary tightening spree", says Amar Ambani, Vice President Research, IIFL. Sentiment was hit after the Shanghai Composite index in China lost over 4% today. The Nikkei in Japan and the Kospi in South Korea also fell sharply after a day’s break.

The NSE Nifty has slipped over 3.5% or 187 points and the BSE Sensex has lost 3.2% or 570 points in four days. On Thursday, the BSE Sensex lost 100 points to end at 16,988 and NSE Nifty fell 34 points to close at 5,091. Among the 30 components of Sensex, 21 ended in the negative terrain and 9 ended in the green.

Markets in Asia ended in the red; the Nikkei in Japan slipped 3.2%, Australia's S&P/ASX was down 2.1%, the Hang Seng index in Hong Kong was down 1% and Shanghai SE Composite dropped 4%.

On the other hand, European indices were trading with a slight positive bias, the DAX in Germany was up 0.3%, the CAC 40 index in France was up 0.2% and the FTSE in the UK was flat.

Among the BSE sectoral indices, the BSE Pharma index was top gainer; the index gained 1.4%, followed by BSE PSU index up 0.6%. However, the BSE Teck index was the major loser, down 1% and BSE Capital Goods index fell 1%. Even the Mid-Cap index slipped 0.5% and the Small-cap index ended almost unchanged.

Outside the frontline indices, the big losers in the broader market were Indian Bank, Praj Industries, Fin Tech and Rolta. On the other hand, gainers included Hindustan Copper, Ashok Leyland, Max India and Piramal Health.

Punjab National Bank (PNB) posted a net profit of Rs11.35bn for the quarter ended March 31, 2010 as compared to Rs8.65bn for the quarter ended March 31, 2009. Total Income has increased from Rs60.47bn for the quarter ended March 31, 2009 to Rs64.60bn for the quarter ended March 31, 2010.

Shares of PNB edged higher by 0.2% to end at Rs1044. The scrip opened at Rs1145 it touched an intra-day high of Rs1145 and a low of Rs1025 and recorded volumes of over 0.6mn shares on NSE.

Union Bank of India has posted a net profit of Rs5.93bn for the quarter ended March 31, 2010 as compared to Rs4.65bn for the quarter ended March 31, 2009. Total Income has increased from Rs38.48bn for the quarter ended March 31, 2009 to Rs40.54bn for the quarter ended March 31, 2010.

Shares of Union Bank of India fell 2.1% to end at Rs295. The scrip opened at Rs304 it touched an intra-day high of Rs306 and a low of Rs294 and recorded volumes of over 0.94mn shares on NSE.

Shares of Hindustan Zinc slipped by 1.2% to end at Rs1130 after reports stated that the company has cut price by 5.9% from May 6, 2010. The scrip opened at Rs1138 it touched an intra-day high of Rs1142 and a low of Rs1111 and recorded volumes of over 0.14mn shares on NSE.

Core Projects announced that the company had on April 15, 2010 launched and priced FCCBs for an aggregate amount of US$60mn (with an additional upsize option of US$15mn granted to the Sole Bookrunner being Standard Chartered Bank). The Company has informed that, the upsize option of US$15mn has been exercised by the Sole Bookrunner.

The FCCBs having a maturity of 5 years and 1 day are convertible at an initial conversion price of Rs271.80 per share (to be adjusted from time to time, as may be applicable). The issue of FCCBs is subject to customary closing conditions.

The stock slipped 0.8% to end at Rs250. The scrip opened at Rs252.6 it touched an intra-day high of Rs257.9 and a low of Rs248 and recorded volumes of over 0.15mn shares on NSE.

IRB Infrastructure emerged as the Preferred Bidder for the Project. The company had submitted its Bid with the National Highways Authority of India ("NHAI") for Design, Build, Finance and Operation of Six Lanning of Tumkur - Chitradurga section from km. 75.00 to km. 189.00 of NH-4 (approximately 114.00 km.) in the state of Karnataka under NHDP Phase V on BOT basis (the "Project"). The Project is on Premium basis with the concession period of 26 years and estimated cost of the Project is Rs12bn.

The company has to pay a premium of Rs1.4bn for the Project to the NHAI, in the first year".

The stock slipped by 2.6% to end at Rs274. The scrip opened at Rs284 it touched an intra-day high of Rs284 and a low of Rs272 and recorded volumes of over 0.73mn shares on NSE.

Gold ends higher amid strong dollar

Silver continues to turn pale

Precious metals ended mixed once again on Thursday, 06 May at Comex. Yellow metal ended substantially higher at Comex even as US equities and other commodities like oil plunged as European sovereign debt concerns failed to abate. However, silver prices tripped.

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 June delivery ended at $1,197.3 an ounce, higher by $22.3 (1.9%) an ounce on the New York Mercantile Exchange. It was a five-month high level for gold. It hovered around the $1,200 mark for the entire day. Gold for June delivery settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February. Last week, gold ended higher by 2.3%. For the month of April, gold ended higher by 6%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 9.1%.

On Thursday, July Comex silver futures ended lower by 2 cents (0.15%) at $17.15 an ounce. This is the lowest price for silver since mid March. Last week, silver ended higher by 2.4%. For the month of April, silver ended higher by 4.1%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 1%.

A bailout package worth some $146 billion for Greece was announced over the weekend, but it was not enough to restore investors' confidence about the euro-zone countries and the euro and investors again sought gold as a hedge against currency fears. In the midst of financial turmoil and on the eve of key votes in Europe on Greece's bailout package, US stocks almost collapsed today.

In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six currencies, rose by 0.5%. Most of the greenback's gain came against the euro, which remained weak in the wake of the European Central Bank's decision to keep its target interest rate unchanged at 1%, as expected. News that Greece passed planned austerity measures in a nonbinding preliminary vote failed to help the euro, too.

Among economic reports for the day, The Labor Department in US reported on Thursday, 06 May 2010 that the number of first-time applications for state unemployment benefits fell by 7,000 last week to a seasonally adjusted 444,000. Initial claims fell for the third straight week after filings bumped higher in early April due to administrative backlogs and seasonal distortions around the Easter holiday and the end of the quarter.

Separately, the Labor Department in US reported on Thursday, 06 May 2010 that the productivity of U.S. nonfarm businesses slowed in the first quarter from 6.3% to 3.6% annual rate. The 3.6% rise in productivity for the first quarter was better than the 3.1%.

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 June delivery closed higher by Rs 449 (2.6%) at Rs 17,763 per ten grams. Prices rose to a high of Rs 17,800 per 10 grams and fell to a low of Rs 17,295 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 161 (0.6%) higher at Rs 27,464/Kg. Prices opened at Rs 27,280/kg and rose to a high of Rs 27,610/Kg during the day's trading.

Crude continues to drop

Prices end lower in tandem with US equities

Crude oil ended substantially lower at Nymex on Thursday, 06 May 2010. Prices fell in tandem with US equities as European sovereign debt concerns failed to abate. Prices also fell due to a strong dollar and as energy department yesterday reported a more than expected build up in crude inventories for last week.

On Thursday, crude-oil futures for light sweet crude for June delivery closed at $77.11/barrel (lower by $2.86 or 3.6%). Prices have shed nearly 7% in the past three sessions. Last week, crude ended higher by 1.2%. For the month of April, crude rose 2.8%. For the first quarter of this year, crude rose by 5.5%. Year to date, crude is lower by 2.6%.

Prices are very much lower as compared to 3 July, 2008 settlement of $145.29 a barrel and an intraday high of $147.27 on 11 July, 2008, an all-time high. However, oil has also gained nearly 146% from a December 2008 nadir. That day prices settled at $33.87 a barrel following an intraday low of $32.40.

A bailout package worth some $146 billion for Greece was announced over the weekend, but it was not enough to restore investors' confidence about the euro-zone countries and the euro and investors again sought gold as a hedge against currency fears. In the midst of financial turmoil and on the eve of key votes in Europe on Greece's bailout package, US stocks almost collapsed today.

In the currency market on Thursday, the dollar index, which weighs the strength of the dollar against a basket of six currencies, rose by 0.5%. Most of the greenback's gain came against the euro, which remained weak in the wake of the European Central Bank's decision to keep its target interest rate unchanged at 1%, as expected. News that Greece passed planned austerity measures in a nonbinding preliminary vote failed to help the euro, too.

Among economic reports for the day, The Labor Department in US reported on Thursday, 06 May 2010 that the number of first-time applications for state unemployment benefits fell by 7,000 last week to a seasonally adjusted 444,000. Initial claims fell for the third straight week after filings bumped higher in early April due to administrative backlogs and seasonal distortions around the Easter holiday and the end of the quarter.

Separately, the Labor Department in US reported on Thursday, 06 May 2010 that the productivity of U.S. nonfarm businesses slowed in the first quarter from 6.3% to 3.6% annual rate. The 3.6% rise in productivity for the first quarter was better than the 3.1%.

In the weekly inventory report, EIA reported yesterday that crude-oil inventories rose 2.8 million barrels in the week ended 30 April. It included a 1.7 million increase in inventories in Cushing, Okla., the delivery point for Nymex oil. Market had expected crude stocks to increase by 1.54 million barrels. The report also showed that gasoline stockpiles rose by 1.2 million when the expectation was of a modest rise of 200,000 barrels. Refineries operated at 89.6% of their operable capacity.

Among other energy products on Thursday, gasoline for June delivery retreated 6 cents, or 2.9%, to $2.15 a gallon. Natural gas ended lower on Thursday following a report on natural-gas storages. The Energy Information Administration reported an increase of 83 billion cubic feet in the week ended 30 April. Natural-gas futures for June delivery retreated 6 cents, or 1.5%, to $3.92 per million British thermal units.

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. Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for May delivery closed lower by Rs 81 (2.2%) at Rs 3,543/barrel. Natural gas for May delivery closed at Rs 178.1, lower by Rs 1.4 (0.8%).

SGX Nifty Live Update - May 7 2010

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