EXCLUSIVE! - Cholamandalam DBS

EXCLUSIVE! - Cholamandalam DBS

Pre Market Watch - Feb 18 2008

The Indian Market is likely to have a positive opening due to favoring cues from the global markets. On Friday, the market closed on a firm note by posting good gains. The market opened on weak note but the market got the momentum towards the mid session to pare all its initial losses. The market also got the momentum as the India''s wholesale price index rose 4.07% in the 12 months to 2 February 2008, marginally lower than 4.11% last week. The BSE Sensex closed higher by 348.62 points at 18,115.25 and NSE Nifty grew by 100.9 points to close at 5,302.90. We expect that the market may trade higher during the trading session. From the stock specific, Reliance Power may gain investors confidence as the company is planning to come out with bonus issue of shares.

On Friday, the US market closed mixed. The Dow Jones Industrial Average (DJIA) closed lower by 28.77 points at 12,348.21. Nasdaq fell by 10.74 points to close at 2321.80 and S&P 500 index closed higher by 1.13 points to close at 1,349.99.

Indian ADRS ended mixed. In technology sector, Satyam grew by (2.75%) while Wipro fell by (2.12%) along with Infosys by (0.94%). In banking sector, ICICI bank and HDFC bank increased by (2.04%) and (0.60%) respectively.

The major stock markets in Asia are trading firm. Japan''s Nikkei is trading higher by 174.72 points at 13,797.28 along with Hang Seng is trading up by 152.01 points at 24,300.44 and Taiwan Weighted is trading at 7,924.54 up by 48.17 points.

The FIIs on Friday stood as net seller in equity while the net buyer in debt. The gross equity purchased was Rs2,572.30 Crore and the gross debt purchased was Rs4,513.50 Crore while the gross equity sold stood at Rs3,755.50 Crore and gross debt sold stood at Rs2,132.80 Crore. Therefore, the net investment of equity reported was (Rs1,183.10 Crore) and net debt was Rs2,380.70 Crore.

Today, Nifty has support at 5,226 and resistance at 5,407 and BSE Sensex has support at 17,912 and resistance at 18,513.

Market may head higher

The market may head higher as the sentiment may be boosted after Reliance Power,, on Sunday evening 17 February 2008, announced bonus issue for its shareholders to compensate the losses they suffered when the company was listed a week ago. The company’s board will meet on Sunday, 24 February 2008, to decide bonus ratio. Most Asian markets were trading higher today.

Most Asian markets were trading higher today, 18 February 2008. Japan's Nikkei (up 1.28% at 13,797.28), Hong Kong's Hang Seng (up 0.63% at 24,300.44), Taiwan's Taiwan Weighted index (up 0.61% at 7,924.54), Singapore's Straits Times index (up 0.46% at 3,103.01). However South Korea's Seoul Composite index slipped 0.06% at 1,693.75

US markets ended Friday’s, 15 February 2008 trade on mixed note after economic reports offered bleak views on everything from manufacturing to consumer sentiment. The Dow Jones industrial average declined 28.77 points, or 0.23%, to 12,348.21. The S&P 500 index gained 1.13 points, or 0.08%, to 1,349.99. The Nasdaq Composite index was down 10.74 points, or 0.46%, to 2,321.80.

Back home, the 30-share BSE Sensex jumped 348.62 points or 1.96% at 18,115.25 on Friday, 15 February 2008. The broader CNX S&P Nifty was up 100.90 points or 1.94% at 5302.90 for the day.

The market ended its four week loosing streak to posting gains for the week ended Friday, 15 February 2008 as global markets rallied following an unexpected rise in US retail sales in January 2008. The BSE Sensex surged 650.36 points or 3.72% to 18,115.25 in the week ended Friday, 15 February 2008. S&P CNX Nifty rose 182.55 points or 3.56% to 5,302.90 in the week.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 261.20 crore on Friday, 15 February 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 138.66 crore on that day.

FIIs were net buyers to the tune of Rs 174.42 crore in the futures & options segment on Friday, 15 February 2008. They were net buyers of index futures to the tune of Rs 205.57 crore and sold index options worth Rs 5.29 crore. They were net sellers of stock futures to the tune of Rs 40.30 crore and bought stock options worth Rs 14.44 crore.

India's wholesale price index rose 4.07% in the 12 months to 2 February 2008, marginally lower than the previous week's rise of 4.11%, government data released on Friday, 15 February 2008 showed.

Grey Market - V-Guard, Rural Electrification

Rural Electrification 90 to 105 24 to 26


GSS America InfoTech 400 to 440 Discount


On Mobile Global 440 20 to 25


Bang Overseas 207 7 to 10


Shri Ram EPC 300 Discount


IRB Infra 185 12 to 15


Manjushree Extrusion 45 5 to 7


Tulsi Extrusions 85 10 to 15


V. Guard Ind. 80 to 85 8 to 10

KNR Constructions Listing

KNR Constructions will list today. Grey Market Price is at a discount - However, looking at the firm market, it may recover on listing

Daily Call - Feb 18 2008

Daily Call - Feb 18 2008

Morning call - Feb 18 2008

Market Grape Wine :

Out House :

Markets at a support of 17786 & 17917 levels with resistance at 18282 & 18491 levels .

Buy : RIL & RelCap

Buy : JSW & Sail

Buy : SBIN & IciciBank

Buy : Titan & Neyvelli

Buy : MRPL & EssarOIL

Buy : IBullsReal & Ibulls

Buy : Hdfc & HdfcBank

Buy : Bharti & Adalbs

Dark Horse : RPower , RELCAP , Adlabs , EssarOIL , Neyvelli , RIL , Sbin , & Aban

Trading Calls - Feb 18 2008

Nifty 5303 Sup 5200 Res 5450

Buy Canara Bank (305) SL 300 Target 315, 317

Buy Gail (428) SL 423
Target 438, 441

Buy Sesa Goa (3153) SL 3130 Target 3190, 3200

Buy Bharat Forge (286) SL 282 Target 294, 297

Sell NIIT Tech (128) SL 132 Target 120, 118

The power of hope!

I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be. – Thomas Jefferson.

A week after its disappointing listing, there is some hope for Reliance Power investors. In a desperate attempt to boost investor confidence and shore up the Ambani brand, the Anil Dhirubhai Ambani Group is using all the power available. A board meeting on Feb 24 will consider issue of bonus shares to all investors, excluding the promoters
We see a positive opening today on the back of a firm trend across Asian markets. Wall Street emerged unscathed despite some negative news. However, other world markets actually closed in the red on bleak US economic reports. This week may be critical for the bulls. It remains to be seen if they can continue the momentum of last week or will cave in once again to any fresh onslaught from the bears.

Among other news, UTV will make a strategic announcement with a large media entity later today. Meanwhile, reports suggest that US media giant Disney is keen on raising its stake in the Indian entertainment and media company.

Ess Dee Aluminium will also be in action amid reports that it is likely to acquire India Foils from the Anil Agarwal promoted Madras Aluminium. Canara Bank is also expected to do well as the RBI has allowed fresh buying by overseas investors.

TVS Motor will be on the backfoot after the Madras High Court restrained the company from making and selling the 125 cc bike, Flame. The court passed the order on a suit filed by Bajaj Auto.

Sesa Goa is likely to gain amid reports that Japanese steelmakers, led by Nippon Steel Corp., have reportedly agreed to a 65% increase in annual iron ore prices. Shares of KNR Constructions Ltd. will get listed on the bourses today.

The bulls showed admirable resilience last week after a week start. The Sensex and the Nifty gained more than 3.5% each, buoyed by short-covering and a rebound in global equity markets. The recovery process may continue in the lead up to the budget.

Last week's rally was led mainly by short covering. The key indices have to sustain the positive momentum for a few more days to qualify the current rally as a fresh intermediate up-trend. Though the sell-off by the FIIs has tapered off, the same may resume on any fresh bad news on the US economy.

Remember the proverb 'one swallow doesn't make a summer'. Be careful in interpreting last week's rebound, lest one will have to repent later. Wait for some more positive signals before jumping to any conclusions regarding the market's direction. At the same time, long-term investors may consider picking up quality stocks at current levels, albeit at a gradual pace.

Next week will again be a big one, as the Government will announce the Railway Budget and Union Budget for FY09. Historically, our market witnesses a small pre-budget rally. This hasn't been the case so far due to global concerns. The tradition may resume as we still have a few days to go before the B-day. But, for that to happen, we should not get any further bad news from the US, which is a bit too much to ask for given the outlook for the world's biggest economy.

FIIs were net buyers of Rs2.61bn (provisional) in the cash segment on Friday. Local institutions were net buyers of Rs1.39bn. In the F&O segment, FIIs were net buyers of Rs1.74bn. On Thursday, foreign funds pulled out Rs11.83bn from the cash segment.

Most Asian markets are trading up this morning despite the fresh set of negative economic reports emanating from the US. The Nikkei in Tokyo was up 174 points at 13,797 while the Hang Seng in Hong Kong gained 248 points to 24,396. The Kospi in Seoul added 17 points to 1711 and the Straits Times in Singapore rose 30 points to 3118. The Shanghai Composite in China was up 50 points at 4548 and the Taiex in Taiwan gained 87 points at 7963.

US stocks ended lower on Friday but managed to register weekly gains after declines in US consumer confidence and factory activity in the New York region revived worries about the threat of a recession.

The Dow Jones Industrial Average dropped 28.8 points, or 0.2%, to 12,348.2, giving the blue-chip index a weekly jump of 1.4%. The S&P 500 reversed course in the final moments of trade, to finish mostly flat at 1,349.99, a gain of 1.4% from the prior week.

The Nasdaq Composite shed 10.74 points, or 0.5%, to 2,321.8, giving the technology-laden index a 0.7% rise on the week.

Trading was fairly quiet ahead of the long holiday weekend. All financial markets in the US will be shut on Monday for the Presidents' Day holiday. On Tuesday, reports are due on consumer prices, housing starts and building permits. Also, quarterly earnings are due from Wal-Mart and Hewlett-Packard.

The New York Empire State index, a regional manufacturing report, showed a surprise reading of -11.7 versus forecasts for a positive reading of 7. A negative reading suggests contraction in the sector.

In addition, the University of Michigan's February consumer sentiment index showed a bigger-than-forecast drop to 69.6 from 78.4 in the previous month. Economists had forecast a fall to 76.5.

Industrial production almost stagnated, according to another government report that showed flat capacity utilization in January. And finally, January import and export prices jumped from the previous month, according to another report.

FGIC Corp., one of the largest bond insurers in the world, asked to be split in two, possibly separating its municipal bond business from more troubled exposures that have been hit hard by the mortgage crisis.

Leading US electronics retailer Best Buy cuts its full-year earnings forecast, citing weaker-than-expected revenue growth in January.

Market breadth was negative. On the NYSE, decliners beat advancers 9 to 7 on volume of 1.5bn shares. On the Nasdaq, losers beat winners 9 to 5 on volume of 2.03bn shares.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.78% from 3.8% late on Thursday. In currency trading, the dollar fell versus the yen and euro. US light crude oil for March delivery rose 4 cents to settle at $95.50 a barrel in New York.

Gold futures ended lower. Gold for April delivery dropped $4.70 to end at $906.10 an ounce.

Platinum futures extended their record-breaking run, spurred by persistent worries about supply disruptions in South Africa. Platinum for April delivery soared as high as $2,079.90 an ounce, beating the previous record set on Thursday. The contract finished up $57.80 at $2,063.70 an ounce. Platinum futures soared $179.70, or nearly 10%, this week from last Friday's closing level of $1,884.

Stocks in Europe closed sharply lower. The pan-European Dow Jones Stoxx 600 index dropped 1.9% to 317.46. The UK's FTSE 100 shed 1.5% to 5,791.20, the French CAC-40 fell 1.9% to 4,767.28 and the German DAX 30 slid 1.8% to 6,835.18.

Most emerging markets too ended in the red. The Bovespa in Brazil was down 0.9% to 61,271 while the IPC index in Mexico fell 1.35% to 28,744. The RTS index in Russia slipped 1.8% to 1989 while the ISE National-30 index in Turkey plunged nearly 3% to 55,322.

Not another manic Monday

On Friday bulls extended their gains to third straight trading session tracking firm cues from the Asian and European markets also buying momentum in the large cap stocks towards the end lifted the nifty index to close above the 5,300 mark. Finally, the 30-share Sensex closed at 18,115 surging 348 points. The NSE Nifty closed at 5,302 adding 100 points.

Overall about 1,988 stocks advanced, 759 stocks declined while 46 stocks remained unchanged. Among the BSE 30 index 25 stocks advanced while 5 stocks declined.

Igarashi Motors rallied by over 13% to Rs77 after the company announced that it agreed to venture with Robert Bosch. The scrip touched an intra-day high of Rs78 and a low of Rs68 and recorded volumes of over 86,000 shares on NSE.

Refinery stocks continue to be in demand as Government hiked petrol and diesel prices by Rs2 per litre and Re1 per litre respectively. IOC surged by 4.5% to Rs561, HPCL gained 3.5% to Rs309 and BPCL added 1% to Rs469.

Telecom stocks also ended with gains. Report stated that DOT planned to change spectrum usage charges levied on telecom companies, to a fix percentage of revenue for each category circles. Rcom gained 0.5% to Rs612, Bharti Airtel gained 0.6% to Rs882, Idea advanced 3.5% to Rs112 and Tata Communication added 1.1% to Rs508.

Hanung Toys gained 3% to Rs204 after the company announced that it opened their first Retail store for soft toys in Delhi on February 14, 2008. The scrip touched an intra-day high of Rs209 and a low of Rs191 and recorded volumes of over 12,000 shares on NSE.

Bhushan Steel was down 0.3% to Rs1035. The company announced that it proposed to execute MOU with wholly owned Undertaking / Govt. of Madhya Pradesh for setting up manufacturing facilities in the state of Madhya Pradesh for 1 MTPA Coke Oven Plant and 5 MTPA Cement Plant, with the total investment of approximately Rs40bn in phases. The scrip touched an intra-day high of Rs1055 and a low of Rs988 and recorded volumes of over 43,000 shares on NSE.

Cadila gained 1.7% to Rs251 after the company announced that it introduced an NDDS product 'Nudoxa' for the treatment of various cancers. One of the critical drugs used in chemotherapy, Nudoxa heralds a new approach in cancer therapy. With chemotherapy being a common mode of treatment in cancers, there has been a long standing need for a drug that is stable and long lasting with reduced toxicity and side effects. The scrip touched an intra-day high of Rs254 and a low of Rs245 and recorded volumes of over 6,000 shares on NSE.

News Snippets:

Coal India would have to spend Rs18bn for import of 200mn tons of coal in the 11th plan.(BS)

Jindal Power, a subsidiary of the BC Jindal group, plans 4,500MW generation capacity in four years.(BS)

Gammon India sets up a logistics company and plans to invest Rs3bn in the first year.(Mint)

Ambuja Cements to invest Rs35bn on capacity expansions; total production capacity seen at 25mn tons pa in two years.(TOI)

Reliance Industries has completed 94% of drilling for production of natural gas from its KG-D6 block.(ET)

Jindal Saw would invest Rs3.5bn to expand its seamless tube business.(DNA)

NTPC to expand generation capacity to 55,000MW by end of 11th plan; aims to produce 75,000MW by 2017.(BL)

Rural Electrification Corp seeks a partner an infrastructure firm to enter electricity distribution.(ET)

The Government withdraws the facility to SBI to use its rights issue bonds for meeting the mandatory SLR requirements.(FE)

Canada has asked a Ranbaxy subsidiary to withdraw its generic painkiller from the market due to safety concerns.(BS)

Tech Reliance, the IT arm of Reliance Communications is likely to have an alliance with Accenture.(DNA)

Tata Advance Systems forms an alliance with EADS to bid for Indian Army’s US$1bn advanced tactical communications systems.(FE)

Emami may acquire an overseas firm in the hair care segment for Rs6bn.(DNA)

Tata group has tied-up with US helicopter firm Sikorsky to manufacture chopper cabins in India.(TOI)

L&T Infotech, the IT arm of L&T, says would acquire a US firm in the manufacturing vertical for US$300mn within a year.(BL)

GAIL India studying the possibility of floating a subsidiary to set up CNG outlets along the highways where it has its pipelines.(BS)

Maharashtra Seamless will set up billet plant.(DNA)

Shell to expand capacity of its LNG import terminal at Hazira to 3.5mn tons over the next few months.(FE)

Hindustan Construction Company and Dabur plan to foray into wine business.(TOI)

Canara Bank plans to foray into broking business.(ET)

Binani Cement acquires a plant in Dubai.(BL)

Economic Front Page

Government says the issue of granting of SLR status to oil bonds under consideration.(FE)

CMIE revises down GDP growth estimate to 8.9% for FY08 from 9.1%.(BL)

Drug price regulator to focus on pricing trends of 74 bulk drugs that come under government notified price controlled list.(BS)

Auction of telecom spectrum legally possible, says Finance Ministry.(BL)

Income Tax department suggests differential dividend distribution tax on companies in its pre budget suggestions to CBDT.(BS)

Finance Ministry is planning to withdraw the Rs300 per ton export duty on iron pellets.(ET)

The Government is considering a sovereign investment fund with an initial corpus of US$5bn to acquire companies abroad.(ET)

Textiles and apparel exports grew marginally by 1.5% in CY07 as against 9% last year.(BS)

Iron ore exports drop by 2.6% in the eight months to November to 53mn tons.(BL)

The Government is preparing the largest agricultural debt relief package, worth Rs320bn; proposals may be unveiled in forthcoming budget.(Mint)

Sugar production is estimated to have decline by 0.9mn tons in the first quarter of 2007-08.(ET)

The Government will allow companies to raise funds abroad against the value of their investments in shares of listed group companies.(FE)

The Government is likely to review the banking cash transaction tax.(ET)

Commerce Ministry is not in favour of an across-the-board cut in the basic customs duty and has called for selective cuts on certain imported products.(BS)

Today's Pick - Tata Communications

We recommend a buy in Tata Communications from a short-term perspective. It is clearly evident from the charts of this company that it had been on a medium-term uptrend between August 2007 and early January 2008 (from a low of Rs 360 to a 52-week high of Rs 783). However, the stock reversed direction from this peak and has been on a downtrend since then. This downtrend got arrested around Rs 450 level, recently. Supported by positive divergence in the daily momentum indica tor, the stock is currently in a short-term up-trend since the trough at Rs 450. The daily momentum indicator has entered the neutral region from the bearish zone and the weekly momentum indicator has bounced up from 40 levels. We notice a crossover in the daily moving average convergence divergence, which indicates establishment of bullishness. We are bullish on the stock in the short-term. We expect it to continue further to our target price of Rs 595 in the short-term. Investors with a short-term perspective can buy the stock with stop loss at Rs 445.

Via Businessline

Precious metals end week down

Gold prices fall as sellers step in before extended holiday weekend

Bullion metals ended lower on Friday, 15 February, 2008. The drop in precious metal prices was mainly witnessed due to the sell-off that was spurred for the early close of many markets on Friday and the close of all markets for the Presidents' Day holiday on Monday, 18 February. Silver prices ended lower for the day.

Gold generally moves in the opposite direction of the U.S. currency. Gold, as a dollar-denominated commodity, suffers from dollar strength.

Comex Gold for April delivery fell $4.7 (0.5%) to close at $906.1 an ounce on the New York Mercantile Exchange. On 30 January, 2008 prices had hit a high of $941 in the after hours trading. This year, prices have gained 9% till date. In January, prices gained 11%, the highest monthly gain since April 2006.

For the week, gold prices suffered a loss of $16.2/ounce (1.8%). Last week, gold prices closed higher by $8.8 (0.96%) against previous close of $913.5.

Comex Silver futures for March fell by 13.8 cents (0.8%) to $17.118 an ounce. Silver has gained 13.5% in 2008. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years. In January this year itself, prices climbed 14%.

U.S. stocks fell on Friday after reports showed confidence among U.S. consumers fell to a 16-year low and manufacturing in New York contracted this month for the first time in almost three years.

Gold had been dropping since this week after the Group of Seven officials meeting in Tokyo over the last weekend said they supported the International Monetary Fund's effort sell its gold reserves in order to invest in higher-yielding assets. The IMF is the third largest holder of gold in reserves after the U.S. Federal Reserve and the German central bank.

As per the London-based World Gold Council, the global gold demand dropped to 843 metric tons from 1,013.4 tons in the last three months of 2007. Buyers from India, the world's biggest user, reduced purchases by 64% in the last quarter to 83.9 tons. About 68% of gold demand last year came from jewelers and jewelry use dropped 17% in that time.

Gold might rebound in the coming week on speculation a slowing economy will spur the Federal Reserve to lower borrowing costs in the U.S, boosting the appeal of the precious metal as an alternative investment to the dollar.

Crude ends week 4% higher

Prices are almost $8 more than this month’s low

Crude prices ended higher for the week that ended on Friday, 15 February, 2008. Prices ended higher by $3.7 (4%). Price rose and fell initially earlier in the week but the movement was restricted to one dollar or a little more than that.

Prices rose during the week due to a couple of factors. In the earlier part of the week, threat by Venezuelan President to cut off oil supplies to US and shutdown of a refinery by Valero Energy were the major reasons for this rise. Venezuela is South America's second largest oil producer and one of the world's top exporters to the U.S.

In the second half of the week, price rose after EIA’s weekly inventory report showed that crude stockpiles for last week rose less than expected.

For the week ending Friday, 08 February, crude-oil futures for light sweet crude for February delivery closed at $95.5/barrel (higher by $0.5) on the New York Mercantile Exchange for the day. Prices fell to $93.29 during intra day trading. Earlier in February, prices slipped to $87/barrel.

As per the weekly inventory report by EIA on Wednesday, U.S. crude inventories rose for a fifth week, up 1.1 million barrels to 301.1 million barrels in the week ending 8 February. Market was expecting a rise of 2 million barrels. U.S. crude imports averaged 9.7 million barrels per day last week, down 777,000 barrels per day from the previous week. U.S. refineries operated at 85.1% of their operable capacity last week, up from the previous week's 84.3%.

In a monthly report released this week, EIA said the world oil market is poised to ease over the next two years with production increases offsetting moderate growth in oil demand.

Last week, two ministers of Organization of Petroleum Exporting Countries (OPEC) hinted that the cartel might go for a production cut in its next meeting at March, 2008. At its 1 February meeting at Vienna, OPEC members decided to keep current output levels unchanged.

An eventful week for US Market

Market manages to eke out some gains despite cautious comments coming from Fed Chairman

Lots of events dominated the US during the week that ended on Friday, 15 February, 2008. But the best part was that indices registered gains for the week after, each shedding more than 4% last week. Market closed higher in the first three days of the week but slipped in the later two.

The Dow Jones Industrial Average gained 166 points for the week. Tech - heavy Nasdaq gained 17 points. S&P 500 added 18.7 points.

On Monday, 11 February, it was reported that effective 19 February, 2008, Bank of America and Chevron will be added to the Dow Jones Industrial Average in place of Altria Group and Honeywell respectively. But on that very day, another Dow component AIG led to Dow’s downslide.

AIG was a major drag on the market on Monday after the company clarified its prior disclosures regarding CDOs saying that it has yet to determine the decline in value of its portfolio, and is still accumulating market data to update its valuation. The stock slipped by 12% and Dow would have ended the day higher, if not for AIG.

But the biggest news of the week was on Tuesday, 12 February, when it came to light that Warren Buffett's Berkshire Hathaway has made an offer to several flagging bond insurers. Berkshire Hathaway has sent an offer to reinsure the municipal bond holdings of Ambac, MBIA and FGIC. Berkshire offered to take a liability of $800 billion, adding $5 billion of its resources. Berkshire pledged there would be no distribution or management fees taken for 10 years. Dow ended the day higher by more than 100 points.

On 13 February, Wednesday, good earnings reports and encouraging retail sales data help market close higher for third straight day. The Dept. of Commerce said January retail sales grew by 0.3%, and also grew by 0.3% excluding autos. Market was in fact expecting a decrease of 0.3% for retail sales, and rise of 0.2% when excluding autos. With regard to earnings, Coca-Cola and Applied Materials topped expectations. Dow and Nasdaq ended the day higher by 179 points and 54 points respectively.

On Thursday, 14 February, Federal Reserve Chairman, Ben Bernanke expressed his worries about the US economy in the near term. Though market opened modestly higher in the morning, sellers took position quite soon after Bernanke’s testimony.

Bernanke alluded to the possibility the U.S. is nearing a recession and continued to emphasize downside risks to the economy. He clearly indicated that the Fed will likely continue to ease interest rates, if required. The Fed Chairman stated that financial companies will likely face further write-downs. Market ended its winning steak and market gave up all of its Wednesday’s gains.

On Friday, 15 February, market once again ended lower after a couple of disappointing economic reports and cautious guidance. Best-Buy lowered its 2008 forecast, as the Minneapolis-based electronics retailer cited soft customer traffic in January. The disappointing economic reports included lowest reading in a New York region manufacturing survey since May 2003 and the lowest consumer sentiment reading reported by the University of Michigan since February 1992.

Though Dow was more than 100 points down earlier during the day, it managed to shed off most of its loss while going into close. A buying spree in the financial sector helped market in making this turnaround.

Yahoo's board met over last weekend and concluded that the $44.6 billion offer from Microsoft "substantially undervalues" the company and "is not in the best interests" of the company and its shareholders.

On the economic front during the week, Jobless claims report for the week ended 9 February came in. The figure fell to 348K from the previous reading of 357K. The number was basically in-line with expectations. Separately, the December trade deficit fell to $58.8 billion from $63.1 billion.

Executive Summary

For the week, indices registered modest gains. DJIx and S&P 500, each closed up by almost 1.4%. Nasdaq closed up by 0.75%. Market closed higher during the first three days of the week, but closed lower in the last two days. Crude prices ended the week almost 4% higher.

After gaining for three straight days, market ended with losses on Thursday after Bernanke alluded to the possibility that the U.S. is nearing a recession and continued to emphasize downside risks to the economy. He clearly indicated that the Fed will likely continue to ease interest rates, if required. Other than that, a couple o discouraging economic reports took out some steam from the market on Friday.

For the year, Dow, Nasdaq and S&P 500 are down by 7%, 12.5% and 8% respectively. The market is closed Monday, 18 February in observance of Presidents Day.

Oil Price Hike

Oil Price Hike

Reliance Industries

Reliance Industries