Market runs out of steam after rallying for 5 weeks in a row

Key benchmark indices ran out of steam after five–week rally to edge lower in truncated week ended Thursday, 14 August 2008. Poor industrial growth, fall in car sales after 33-months and rebound in crude oil prices from a 3-month low, led the fall. The BSE Sensex and the S&P CNX Nifty settled below their psychologically important levels of 15,000 and 4,500 respectively. Market remains closed on Friday, 15 August 2008 on account of Independence Day.

The barometer index BSE Sensex declined 443.64 points or 2.92% to 14,724.18 in the week ended Thursday, 14 August 2008. The S&P CNX Nifty lost 98.80 points or 2.18% at 4,430.70 in the week.

The BSE 30-share Sensex is down 5562.81 points or 27.42% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6482.59 points or 30.56% away from its all-time high of 21,206.77 struck on 10 January 2008.

The BSE Mid-Cap index fell 63.55 points or 1.07% to 5,823.42 in the week ended Thursday, 14 August 2008. The BSE Small-Cap index slipped 71.30 points or 0.99% to 7,110.44 in the week.

Foreign institutional investors (FII)’s bought shares worth Rs 986.10 crore in the August 2008 (till 13 August 2008). FIIs sold shares worth Rs 26,315.90 in the calendar year 2008. Mutual funds sold shares worth Rs 228.60 crore in August 2008 (till 12 August 2008).

Trading for the week began on an upbeat note with the market logging gains on Monday, 11 August 2008, on positive global cues and slide in crude oil prices. The BSE 30-share Sensex rose 336.10 points or 2.22% to 15,503.92 and the S&P CNX Nifty rose 90.90 points or 2.01% to 4620.40, on that day.

Key benchmark indices ended sharply lower on Tuesday, 12 August 2008, led by heavy selling in metal, banking and IT shares, on poor industrial output data. The BSE 30-share Sensex fell 291.79 points or 1.88% to 15,212.13 and the S&P CNX Nifty fell 68.15 points or 1.47% to 4552.25, on that day.

Weak global markets played the spoilsport on Wednesday, 13 August 2008. The BSE 30-share Sensex fell 119.01 points or 0.78% to 15,093.12 and the S&P CNX Nifty slipped 23.2 points or 0.51% at 4529.05, on that day.

Market extended losses for the third straight day on Thursday, 14 August 2008 after a rebound in crude oil prices rekindled fears of inflationary pressure. The BSE 30-share Sensex declined 368.94 points or 2.44% to 14,724.18 and the S&P CNX Nifty lost 98.35 points or 2.17% at 4,430.70 on that day.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries was up marginally by 0.17% to Rs 2275.30 in the week. As per reports, the Bombay High Court on Tuesday, 12 August 2008 once again adjourned the hearing on a dispute between the company and Reliance Natural Resources (RNRL) till 21 Aug 2008. The dispute is about, which firm has the rights over gas supplies and at what price.

Worlds sixth largest steel maker Tata Steel declined 4.14% at Rs 616.20. The company’s Singapore unit signed a joint venture agreement with Vietnam Steel Corp and Vietnam Cement Industries to build a steel complex in the Southeast Asian country.

India’s largest aluminium manufacturer in terms of sales Hindalco Industries shed 4.37% to Rs 135.80. The company’s board will meet on 14 August 2008 to determine the price and other terms and conditions of the proposed rights offering. As per reports, Hindalco will set rights issue price at Rs 96 per share.

India’s largest engineering and construction firm by outstanding order book position Larsen & Toubro dropped 3.53% to Rs 2660.55 even as the company said its consortium has bagged engineering, procurement and construction orders worth Rs 3,816 crore from the steel and zinc industry.

NTPC was down 0.98% to Rs 181.65. On 11 August 2008, the company signed a memorandum of understanding with NHPC, Power Finance Corporation and Tata Consultancy Services for incorporation of a joint venture company to set up and operate a power exchange at national level.

Shares of frontline telecom services providers fell. Reliance Communications (down 3.34% to Rs 423.90), Bharti Airtel (down 3.63% to Rs 819.30), and Idea Cellular (down 3.37% to Rs 86.15), edged lower. Reportedly, in a move that may delay the rollout of 3G services in the country the finance ministry has said it was not consulted on the financial implications of the 3G policy guidelines.

Shares of top three banks edged lower on expectations that inflation might continue its uptrend. State Bank of India (down 4.32% at Rs 1458.20), ICICI Bank (down 4.98% at Rs 673.25), HDFC Bank (down 6.26% at Rs 1175.20), declined.

Shares of three IT pivotals outperformed the Sensex during the week as Indian rupee weakened against the US dollar. Infosys (down 1.86% to Rs 1689.45), Satyam Computer Services (down 1.12% to Rs 411.90), and Tata Consultancy Services (down 2.34% to Rs 831.45) slipped.

India’s third largest software services exporter Wipro slumped 4.31% to Rs 429.15, underperforming the Sensex.

Auto pivotals were mixed on reports the government might not soften retail fuel prices despite fall in global crude oil prices. Maruti Suzuki India (down 2.69% to Rs 650.55), Hero Honda Motors (down 4.27% to Rs 785.15) and Tata Motors (down 2.69% to Rs 432.25) edged lower.

However Mahindra & Mahindra (rose 1.22% to Rs 583), Bajaj Auto (up 0.45% to Rs 561.85), gained.

On 11 August 2008, Vishal Information Technologies (VITL) settled at Rs 194.15 on BSE, a premium of 29.43% over the initial pubilc offer (IPO) price of Rs 150. VITL provides IT-enabled services (ITeS) in the areas of data digitisation, e-publishing and digital library.

The Bombay Stock Exchange (BSE) on Wednesday, 13 August 2008, revised a list of group ‘A’ companies which will come in effect from 25 August 2008. BSE has decided to include 23 scrips from group B to group A. These include Bajaj Auto, Bajaj Finserv, Balrampur Chini, BGR Energy, Blue Star, Future Capital Holdings, Indiabulls Securities, Jubilant Organosys, KSK Energy, IRB Infrastructure, Jain Irrigation, Marico, Mphasis, Mundra Port, NDTV, NMDC, Onmobile Global, Opto Circuits, Patni Computer, Rural Electrification, REI Agro, Shree Renuka Sugars and Sterling Biotech.

Simultaneously, BSE shifted 22 scrips from group A to group B. These include ABG Shipyard, Central Bank, Andhra Bank, Ansal Properties, Brigade Enterprises, Deccan Aviation, Dish TV, Engineers India, Great Offshore, HMT, IndusInd Bank, Jindal Saw, LMW, Maytas Infra, Nagarjuna Fertiliser, Rajesh Exports, Reliance Industrial Infrastructure, Shree Precoated Steels, Sobha Developers, TV 18 India and Vijaya Bank and Moser Baer (India).

National Stock Exchange will add 39 stocks in its futures & options segment from 21 August 2008. They are ABG Shipyard, Akruti City, Asian Paints, Balaji Telefilms, Concor, Core Projects, Deccan Chronicle, Dish TV, Everonn, Firstsource, GSPL, GTL Infrastructures, HCL Infosystems, Indiabulls Real Estate, ICSA, KLG Systel, KS Oils, MIC Electronics, Mindtree Consulting, Mercator Lines, Monnet Ispat, MRF, Nava Bharat Venturs, Noida Toll, Opto, Orbit Corp, Prism Cem, PTC, Reliance Ind Infra, Sintex, SREI, Thermax, Torrent Power, TV18, UCO Bk, UTV, Voltamp, Walchandnagar

On Wednesday, 13 August 2008, Securities & Exchange Board of India (Sebi)’s chairman C B Bhave said a review of participatory notes (PNs) was taken but no decision was taken by the board. Market men were expecting Sebi to relax restrictions on PNs.

Marketmen were anticipating that Sebi may extend the period for unwinding PNs, on underlying derivatives from 18 months to 24 months. PNs are issued by foreign institutional investors registered in India to unregistered overseas investors. In October 2007, Sebi had also restricted issuance of PNs in the spot segment to 40% of assets under custody and expectation was that it might raise the cap to 45% from 40%.

Sebi also slashed the time period of rights issues to 43 days from current 109 days. Sebi has also changed the pricing rules with issue of shares by companies to qualified institutional buyers (QIB) in light of volatile markets. A QIB issue will now be based on the average share price of the previous two weeks, rather than a choice of an average of two weeks or six months, whichever is higher. The market regulator has also extended the deadline for companies reporting consolidated results to two months from the quarter-end from one month now.

Releasing the Economic Outlook for 2008-09, the Prime Minister’s Economic Advisory Council (EAC) on Wednesday, 13 August 2008, projected a lower GDP growth rate of 7.7% during 2008-09 mainly on account of lower agriculture and industrial growth, and adverse fallout of global developments. The EAC had earlier in January 2008 projected a growth rate 8.5% for 2008-09.

Car sales recorded a dip in sales for the first time in 33 months as interest rates, inflationary pressures and hike in fuel prices dented demand. Passenger car sales declined 1.7% to 87,724 units in July 2008 over July 2007, according to data released by the Society of Indian Automobile Manufacturers.

Relentless monetary tightening by the RBI has finally started to catch up with industrial growth. A slowdown in the manufacturing sector pulled down India's industrial growth in June 2008 to 5.4% from 8.9% a year ago. This is however higher than 4.1% growth as per revised figures in May 2008. The index of industrial production (IIP) went up 5.2% in Q1 June 2008 compared to 10.3% in Q1 June 2007.

Banking, realty shares lead 369-point Sensex fall

The market extended losses for the third session in a row as a bounce back in crude oil prices stroked fears of increase in inflationary pressures. Investors were also cautious ahead of the release of the inflation data for the year through 2 August 2008 after trading hours today.

A disappointment due to no decision by the market regulator Securities & Exchange Board of India (Sebi) on participatory notes (PNs) at its board meeting yesterday, 13 August 2008, also contributed to the fall on the bourses.

Stocks of interest rate sensitive sectors suffered the most on fears that a rise inflation pressures may provoke the central bank to raise interest rates yet again. IT stocks rose as the rupee weakened against the dollar.

The government will meet its fiscal deficit target for 2008/09 despite the pay increase for government workers, Finance Minister P Chidambaram said after the government today, 14 August 2008, approved the Sixth Pay Commission recommendations. He said the wage increase had been factored in while preparing the budget for 2008-09. The Sixth Pay Commission had in March 2008 submitted its report to the government, recommending an average 28% hike for central government staff and defence personnel.

The BSE 30-share Sensex declined 368.94 points or 2.44% to 14,724.18. The index lost 406.46 points at day’s low of 14,686.66 hit in late trade. At day’s high of 15,033.28, the index lost 59.84 points at the onset of the trading session.

The S&P CNX Nifty was down 98.35 points or 2.17% to 4430.70. Nifty August 2008 futures were at 4434.90, a premium of 4.2 points as compared to spot closing.

The BSE Mid-Cap index was down 1.79% to 5,823.42 and the BSE Small-Cap index was down 1.65% at 7,110.44.

BSE clocked a turnover of Rs 4851 crore as against Rs 5,076.33 on 13 August 2008. NSE’s futures & options turnover amounted to Rs 47,643.15 crore as compared to Rs 43,947.06 crore Wednesday, 13 August 2008.

The market breadth was weak on BSE with 811 shares advancing as compared to 1849 that declined. 70 shares remained unchanged.

Sensex has lost 779.74 points or 5.02% from a recent high of 15503.92 hit on 11 August 2008. The barometer index is down 5562.81 points or 27.42% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 6482.59 points or 30.56% away from its all-time high of 21,206.77 struck on 10 January 2008.

Top Sensex losers were, DLF (down 8.66% at Rs 501.10), Jaiprakash Associates (down 7.74% at Rs 172.30), Reliance Infrastructure (up 7.72% at Rs 985.45), and HDFC (down 5.21% at Rs 2288.35).

India’s largest aluminium manufacturer in terms of sales Hindalco Industries fell 2.69% to Rs 135.80 ahead of a meeting of a committee of directors today, 14 August 2008 to determine the price and other terms and conditions of the proposed rights offering.

Banking shares witnessed major sell off on fears of further monetary tightening by the central bank. India’s largest private sector bank by market capitalisation ICICI Bank slipped 5.25% at Rs 673.25. Kotak Mahindra Bank (down 6.28% at Rs 613.25), Axis Bank (down 3.45% at Rs 700.15), HDFC Bank (down 3.45% at Rs 1,175.20), declined. The BSE Bankex underperformed the Sensex, falling 5.07% to 6,902.96.

India’s largest commercial lender State Bank of India fell 6.24% at Rs 1,458.20. The bank got approval from the finance ministry to merge associate State Bank of Saurashtra with itself.

Realty shares tumbled on major selling by funds. Indiabulls Real Estate (down 13.86% at Rs 303.95), Housing Development Infrastructure (down 7.54% at Rs 431.35), and Unitech (down 6.82% at Rs 169.35), slumped. The BSE Realty index was down 7.97% at 5,163.53.

Software stocks moved up as the rupee weakened to a four-week low against the dollar. Infosys Technologies (up 3.95% at Rs 1,689.45), Satyam Computer (up 1.39% at Rs 411.90), and TCS (down 0.41% at Rs 831.45), moved up. However, India’s third largest software exporter by sales Wipro fell 1% at Rs 429.15 after hitting an intra-day high of Rs 442.90. Strong dollar bodes well for software exporters as they derive more than half of their revenue in dollar terms.

World’s sixth largest steel maker Tata Steel rose 0.94% at Rs 616.20 after the company said it has signed a joint venture deal with Vietnam Steel Corp and Vietnam Cement Industries to build an integrated steel plant in the country at $5 billion. The company made this announcement during trading hours yesterday, 13 August 2008 when the stock rose 0.41% to 610.45.

State-run oil refiners slipped as higher oil prices raised concerns of higher subsidy bills. Hindustan Petroleum Corporation (down 6.44% at Rs 223.10), Indian Oil Corporation (down 2.64% at Rs 440.55), and Bharat Petroleum Corporation (down 2.08% at Rs 316.15), slipped.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 2.80% at Rs 2275.30.

Private sector oil explorer Cairn India rose 1.89% at Rs 245.25 as crude oil rose to $116 a barrel. Cairn benefits from higher oil prices.

Software products maker Subex jumped 12.23% to Rs 111.50. The stock is rallying from past two sessions on market buzz that a large firm is buying shares of the company from the open market, aiming at a complete takeover. However, the promoters of Subex, in a media interview today, denied knowledge of any entity accumulating the stock from open market. The stock has gained 33.98% to Rs 99.35 on 13 August 2008 from Rs 74.15 on 11 August 2008.

Reliance Capital clocked a highest turnover of Rs 266.32 crore on BSE. Vishal Information Technologies (Rs 231.77 crore), Reliance Industries (Rs 210.33 crore), Reliance Natural Resources (Rs 186.80 crore), Larsen & Toubro (Rs 161.54 crore), were the other turnover toppers on BSE.

Reliance Natural Resources reported a highest volume of 1.87 crore shares on BSE. Vishal Information Technologies (92.35 lakh shares), Infrastructure Development Finance Corporation (84.02 lakh shares), Landmark property Development Company (80.27 lakh shares), and IFCI (77.37 lakh shares), were the other volume toppers on BSE.

There was no relaxation by Sebi on participatory notes at its board meeting yesterday, 13 August 2008. Marketmen were anticipating that Sebi may extend the period for unwinding PNs, on underlying derivatives from 18 months to 24 months. PNs are issued by foreign institutional investors registered in India to unregistered overseas investors. In October 2007, Sebi had also restricted issuance of PNs in the spot segment to 40% of assets under custody and expectation was that it might raise the cap to 45% from 40%

European shares held firm. Key indices in UK, France and Germany were up 0.41% to 1.10%. Asian stocks were mixed today, 14 August 2008. Key benchmark indices in Japan and China were down by 0.38% to 0.51%. However, key indices in Singapore, Hong Kong, Taiwan, and South Korea were up by 0.17% to 0.61%.

US stocks fell on Wednesday, 13 August 2008, as persistent concerns about the credit crisis hurt bank shares while a rebound in oil prices and weak outlooks at some retailers raised anxieties about consumer spending. The Dow Jones industrial average fell 109.51 points, or 0.94%, to 11,532.96, while the Standard & Poor's 500 Index slipped 3.76 points, or 0.29%, to 1,285.83. The Nasdaq Composite Index was down 1.99 points, or 0.08%, at 2,428.62.

The Indian stock market remains closed on Friday, 15 August 2008, on account of Independence Day

Pre Session Commentary - Aug 14 2008

The Indian Market is expected to have negative opening on weak global cues as US markets closed on downbeat note and Asian markets are trading lower. On Wednesday, the Indian market closed with losses on the back of intense profit booking that was seen in key stocks ahead of SEBI meeting scheduled on 13th August to review the regulatory framework governing P-notes. Weak cues from European markets also dampened investor sentiment. The domestic market opened weak tracking cues from the global markets. Market slipped further to continue in negative territory. Further it continued to lose ground till the end of session. Investors were cautious on SEBI meet on participatory notes. NSE Nifty ended below 4,600 mark and BSE Sensex below 15,100 level. From the sectoral front, interest sensitive sectors like Bank and Realty along with Capital goods and Consumer Durables were under selling pressure while IT, Pharma and FMCG stocks gained the ground. The BSE Sensex closed lower by 119.01 points at 15,093.12 and NSE Nifty ended down by 23.20 points at 4,529.05. The BSE Mid Caps closed with losses of 6.16 points at 5,929.37 while Small Caps closed with gains of 9.35 points at 7,229.77.

We expect that market may remain voaltile during the trading session. Also, the inflation number for the week ended 26th July 2008, due to be released today evening will be a major concern for the market.

SEBI meeting was scheduled yeasterday to review the regulatory framework governing P-notes. SEBI has brought down the timeline for rights issue of shares. Rights issues could now be completed in just 43 days after filing, instead of the existing 109 days.

On Wednesday, the US market was closed lower with loss in economic sector led fresh worries about the financial sector and rise in crude oil. Crude prices rallied 2.9% to $116.31 per barrel after U.S. government data showed that crude stockpiles unexpectedly declined and gasoline inventory levels posted a steep drop.

The Dow Jones Industrial Average (DJIA) closed lower by 109.51 points at 11,532.96 along with S&P 500 index closed down by 3.76 points at 1,285.83 and NASDAQ closed at 2,428.62 lower by 1.99 points.

Indian ADRs ended mixed. In technology sector, Infosys ended higher by (0.88%) while Patni Computers dropped by (2.38%) along with Wipro by (1.06%) and Satyam by (0.97%). In banking sector, HDFC bank and ICICI bank lost (4.02%) and (1.96%) respectively. In telecommunication sector, MTNL gained (1.35%) while Tata Communication ended down by (0.87%). However, Sterlite industries increased by (3.61%).

Today the major stock markets in Asia are trading Mixed. Japan’s Nikkei is trading lower by 39.16 points at 12,983.89 along with Hang Seng index trading down by 27.67 points at 21,265.65, Taiwan Weighted trading at 7,282.27 dropped by 10.07 points and Singapore''s Straits Times is flat at 2,811.45. However, Seoul Composite gained 2.38 points at 1,565.1.

The FIIs on Wednesday stood as net seller in equity and net buyer in debt. The gross equity purchased was Rs2,636.50 Crore and the gross debt purchased was Rs354.50 Crore while the gross equity sold stood at Rs3,020.80 Crore and gross debt sold stood at Rs0.00 Crore. Therefore, the net investment of equity reported was (Rs384.30) Crore and net debt was Rs354.50 Crore.

The Indian rupee on Wednesday ended at 42.65/66 per dollar, off a low of 42.77, its weakest since July 29, and 0.7% weaker than 42.37/38 at close on Tuesday

Today, Nifty has support at 4,445 and resistance at 4,598 and BSE Sensex has support at 14,795 and resistance at 15,368.

Market may extend fall as Sebi takes no decision on PNs

The market may extend last two days’ fall with Sebi taking no decision on participatory notes (PNs) at its board meeting on Wednesday, 13 August 2008. But traders may refrain from taking large positions ahead of a long weekend. The market remains closed on Friday, 15 August 2008, on account of Independence Day.

Some expectations were that Sebi may extend the period for unwinding PNs, on underlying derivatives from 18 months to 24 months. PNs are issued by foreign institutional investors registered in India to unregistered overseas investors. In October 2007, Sebi had also restricted issuance of PNs in the spot segment to 40% of assets under custody and expectation was that it might raise the cap to 45% from 40%.

The government will today, 14 August 2008, release inflation data for the year through 2 August 2008, after trading hours. Inflation based on the wholesale price index rose 12.01% in 12 months to 26 July 2008, slightly above the previous week's annual rise of 11.98%. It was the highest reading in 13 years.

US stocks fell on Wednesday, 13 August 2008, as persistent concerns about the credit crisis hurt bank shares while a rebound in oil prices and weak outlooks at some retailers raised anxieties about consumer spending. The Dow Jones industrial average fell 109.51 points, or 0.94%, to 11,532.96, while the Standard & Poor's 500 Index slipped 3.76 points, or 0.29%, to 1,285.83. The Nasdaq Composite Index was down 1.99 points, or 0.08%, at 2,428.62.

Asian stocks were mixed today, 14 August 2008. Key benchmark indices in Hong Kong, South Korea and Taiwan were up by between 0.02% to0.1%. Key benchmark indices in China, Japan and Singapore were down by between 0.03% to 0.8%.

US crude oil for September 2008 delivery gained $2.99 to settle at $116 a barrel on Wednesday, 13 August 2008, after the latest US inventory report showed declines in oil and gasoline stockpiles.

Sebi on Wednesday, 13 August 2008, slashed the time period of rights issues to 43 days from current 109 days. Sebi has also changed the pricing rules with issue of shares by companies to qualified institutional buyers (QIB) in light of volatile markets. A QIB issue will now be based on the average share price of the previous two weeks, rather than a choice of an average of two weeks or six months, whichever is higher.

The market regulator has also extended the deadline for companies reporting consolidated results to two months from the quarter-end from one month now

Profit taking after a recent solid surge pulled the barometer index BSE Sensex down 410.80 points or 2.64% to 15,093.12 on Wednesday, 13 August 2008, from a recent high of 15503.92 hit on 11 August 2008.

As per provisional data released by the stock exchanges, foreign funds on Wednesday, 13 August 2008, sold shares worth a net Rs 915.58 crore. Domestic funds bought shares worth a net Rs 226.12 crore.

Trading Calls - Aug 14 2008

Nifty (4529) Sup 4480 Res 4595

Buy APIL (438) SL 433
Target 450, 453

Buy Satyam (406) SL 401
Target 416, 419

Buy Rolta (309) SL 304
Target 320, 322

Sell JSW Steel (765) SL 772
Target 752, 749

Sell Indian Bank (121) SL 124
Target 115, 113

A subdued session likely

The only real prison is fear, and the only real freedom is freedom from fear.

The bulls have been acting much more freely over the past few weeks, thanks largely to falling crude oil prices and relatively stable inflation. A good pick up in monsoon has also helped ease some of the concerns over food price inflation. And, though the latest IIP numbers were not spectacular, they were still better than the previous month's figures. A rally in global markets, led by the US, has also supported the resurgence in the overall sentiment.

This week hasn't been as good as the last few ones, but the bias remains positive in the near term. We expect the undertone to improve today after a two-day breather. However, the extended weekend coupled with subdued global markets could check further gains. The much-hyped SEBI Board meeting could disappoint the bulls due to lack of announcement on the P-Note issue, though the regulator has made it easier to raise money.

Inflation numbers will be released after the market closes today. The WPI-based inflation has crossed 12%, and is likely to inch up slowly. There is talk of it remaining in double-digits for a considerably longer period, before it starts coming down. A further drop in crude oil prices will surely help, though the Government has ruled out reduction in fuel prices as of now. The ongoing correction in global commodity markets and a good kharif harvest will come in handy.

All this will take a while though, and the market could remain range-bound with alternate bouts of buying and selling. Though the market may not test previous lows, one cannot completely rule out a sharp fall from current levels. Globally, things are still pretty bad in terms of slowing economic growth and persistent pain in the financials. On the local front too, macro-economic headwinds are still in place. For the day though, the market could turn buoyant after a slow start.

Asian stocks fell, led by financial companies, after condominium builder Urban Corp. filed for bankruptcy and Merrill Lynch said the credit crisis isn't over. Commodity producers gained after oil and metal prices rose.

The MSCI Asia Pacific Index lost 0.3% to 125.85 as of 10:45 a.m. in Tokyo, a third day of declines and set for the lowest close since September 2006. The index is down 20% this year.

The Nikkei 225 Stock Average in Tokyo ended the morning session down 39.16 points or 0.3% at 12,983.89. Hong Kong's Hang Seng Index was down 33 points or 0.2% at 21,259.

The Kospi in Seoul, the Straits Times in Singapore and the Taiex in Taiwan were nearly unchanged. The Shanghai Composite index in China was down 18 points or 0.7% at 2428.

US stocks ended lower on Wednesday, weighed down by a rebound in oil prices and lackluster retail sales, even as worries persist about the financial sector's health after Merrill Lynch downgraded several banks.

Major stock indices tried for a mid-afternoon comeback after oil prices trimmed gains, but a fresh wave of selling in financials took its toll late in the session.

The S&P 500 lost 3.76 points, or 0.3%, to 1,285.83. The Dow Jones Industrial Average fell 109.51 points, or 0.9%, to 11,532.96. The Nasdaq Composite Index slipped 1.99 points to 2,428.62.

Market breadth was negative. Ten stocks dropped for every nine that rose on the New York Stock Exchange. Wednesday's volume was light, with 1.2bn shares traded on the New York Stock Exchange.

Oil prices ended higher for the first time in four sessions after the US Energy Department reported declines in crude, distillate and gasoline supplies. US light crude oil for September delivery rose $2.99 to settle at $116 a barrel on the New York Mercantile Exchange after having touched a session high of $117.15 earlier.

Also, investors were tracking fighting between Russia and Georgia, which has continued despite an announced cease-fire on Tuesday. Georgia serves as an important hub for transporting fuel between Asia and Europe.

In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.93% from 3.90% late on Tuesday. In currency trading, the dollar was little changed versus the euro and slipped versus the yen. COMEX gold for October delivery rose $16.80 to $825 an ounce.

Earnings from Deere & Co. disappointed investors. Deere, the largest maker of tractors, fell 3.2% as higher materials costs and the housing slump hurt earnings. The S &P 500 Retailing Index declined the most since July 10 after the Commerce Department reported the first decrease in chain-store sales in five months.

Bank of America led a 4.1% drop in the KBW Bank Index.

General Motors (GM) shares slumped 7.6% after Moody's cut its debt rating deeper into junk territory and kept the outlook negative, which could imply another cut 12 to 18 months out.

Drug store chain CVS Caremark said it is buying Longs Drug Stores for $71.50 per share in cash or $2.7bn. The acquisition was announced late on Tuesday. CVS shares were barely changed and Longs Drug Stores rallied nearly 31%.

Thursday morning brings the weekly jobless claims report and the July reading on consumer prices (PPI). On the earnings front, Wal-Mart Stores and Urban Outfitters both report quarterly results.

European shares extended their losses. The pan-European Dow Jones Stoxx 600 index fell 2.5% to 284.44. The French CAC-40 fell 2.6% to 4,402.97, while the German DAX 30 lost 2.5% to 6,422.19. In London, the FTSE 100 closed down 1.6% to 5,448.60.

In the emerging markets, Brazil's Bovespa rose 0.1% to 54,573.18. The close was well off its 2% advance during the session, but it was enough to halt the index's string of declines that began Aug. 7. Mexico's IPC rose 0.9% to 26,877.07, its first advance in three sessions.

It was second straight trading session where the Indian bourses ended with a negative bias. Traders and investors were cautious ahead of SEBI verdict on P-Notes. Market witnessed see-saw trades through out the day.

After hitting an intra-day high of 15,272 in the afternoon trades, bulls were unable to hold on to their gains on back of selling pressure in the selling pressure in the index heavyweights like ICICI Bank, HDFC Bank, L&T and RCom. Sentiments continued to remain weak as even the European markets opened with a negative bias.

Finally, the benchmark Sensex slipped 119 points to close at 15,093 and Nifty ended 23 points lower to close at 4,529.

Purvankara gained by a percent to Rs200 after the company announced the launch of its 100% owned subsidiary, Provident Housing and infrastructure Limited.

Under Phase 1 alone, the affordable housing project will cover Bangalore, Chennai, Hyderabad, Coimbatore, and Mysore where 64,500 homes with a total built up area of 59.80 mn sq ft will be constructed over the next five years at a cost of about Rs80bn. The scrip touched an intra-day high of Rs207 and a low of Rs200 and recorded volumes of over 9,000 shares on BSE.

Shares of XL Telecom surged by over 2% to Rs213 after the company announced that it has signed an agreement with LDK Solar Co., Ltd.

Under the terms of the agreement, LDK Solar will deliver approximately 300 MW of multicrystalline silicon solar wafers to XL Telecom & Energy Ltd. over a five-year period, commencing in the first quarter of 2009 and extending through 2013. XL Telecom & Energy Ltd will, make a down payment representing a portion of the contract value to LDK Solar. The scrip touched an intra-day high of Rs222 and a low of Rs202 and recorded volumes of over 4,00,000 shares on BSE.

Shares of NMDC fell from its high and ended lower by half a percent to close at Rs.357 There were reports stated that the company NMDC Ltd and Rio Tinto Group, will jointly scout to acquire iron ore assets globally. The accord would be signed on August 18, 2008. NMDC on March 14 floated a tender seeking global partners to buy mines overseas. The equity structure of the venture will depend on the assets acquired. The scrip touched an intra-day high of Rs372 and a low of Rs350 and recorded volumes of over 1,00,000 shares on BSE.

Shares of MIC Electronics surged by over 2.5% to Rs131 after the company announced that the Latin American Football Corporation are looking to form a Joint venture with MIC Electronics Inc, USA called SLM (Sports LED Media).

The JV is poised to supply display systems to 50 Football Stadiums in South America and Europe. The total supplies are valued at US$50mn.

The stocks also attracted attention as SEBI approved its entry in the Future & Options space. The scrip touched an intra-day high of Rs140 and a low of Rs129 and recorded volumes of over 8,00,000 shares on BSE.

Tata Steel advanced by 1% to Rs610 after the company announced that through its wholly owned subsidiary, Tata Steel Global Holding Pte. Ltd., Singapore, signed a Joint Venture agreement with Vietnam Steel Corporation and Vietnam Cement Industries Corporation for a steel complex in Ha Tinh province in Vietnam.

The Company will have a stake of 65% in the above project and also have a stake of 30% in Thach Khe Iron Ore Joint Stock company which would undertake mining in the Thach Khe iron ore mine. The scrip touched an intra-day high of Rs622 and a low of Rs600 and recorded volumes of over 15,00,000 shares on BSE.

BILT edged higher by 0.3% to Rs33. Reports stated that the company would hike uncoated paper prices by Rs800/ton and coated paper prices by Rs1500/ton. The scrip touched an intra-day high of Rs35 and a low of Rs33 and recorded volumes of over 2,0,000 shares on BSE.

Tata Steel to build US$5bn plant in Vietnam (ET)

RIL and Vornado Realty Trust are teaming up to build and operate shopping centres in India (DNA)

HUL is partnering with Disney to design packaging strategy for its flagship brand ‘Kissan Jam’ (FE)

MTNL cuts broadband charges by up to 50% (ET)

Amtek Auto enters into a JV with US-based FormTech Industries to manufacture forged automotive components for passenger cars and CVs (ET)

IOC to finalize funding options for Paradip refinery (BL)

UB seeks shareholders approval to raise more debt to fund its loss-making airline subsidiary, Deccan Aviation (ET)
Hexaware to close its Gurgaon centre and shift employees to other centres (BL)

Firstsource arm gets ~US$30mn six-year deal from BTGS (BL)

Puravankara launches a 100% subsidiary for selling 64,500 homes worth Rs80bn in five southern cities, to be built over next five years (ET)

Titan to open 50 more exclusive stores by the end of current fiscal (BL)

BHEL sees a slow down in new order inflows for its power equipments (DNA)

BILT to raise prices of uncoated paper by 2% or Rs800/ton from September 1st (BS)

Orchid Chemicals has invested in US-based Diakron Pharma through a combination of services and cash (DNA)

Gujarat NRE claims Rs47.61bn as damages in a civil suit from Austral Coke (BS)

NMDC and Rio Tinto to jointly explore global and local iron ore reserves (BL)

JP Associates to invest Rs130bn for setting-up two cement manufacturing units, an aluminium production factory and a power plant in Madhya Pradesh (BL)

Zandu’s investors back Emami’s takeover bid (BS)

SCI to invest Rs12bn in offshore business by the end of the year (ET)

Man Industries may set-up a L-SAW greenfield plant in China (DNA)

Deccan Express Cargo inks deal with GMR Group for cargo hubs in Delhi and Hyderabad (FE)

Uttam Galva faces sales disruptions due to rains at its facility in Khopoli, Maharashtra (DNA)

HTMT Global Solutions has set aside Rs4.4bn for acquiring companies abroad (DNA)

XL Telecom ties-up with Chinese firm LDK Solar for supply of multi-crystalline solar wafers (BL)

Adlabs opens a multiplex in Gurgaon (ET)

JBF Auto to invest Rs2.45bn in Pune plant that will initially make skin panels for the JV between Tata Motors and Fiat (DNA)

MSP Steel and Power to invest Rs69bn for setting-up a steel and power plant in Madhya Pradesh (DNA)

Economy Front page

EAC projects a growth rate of 7.7% in 2008-09 for the economy (ET)

SEBI cuts timeline for rights issue to 43 days from earlier 109 days (ET)

SEBI revises pricing norms for QIP and preference share allotment to QIBs (ET)

Finance Ministry asks DoT to put the 3G policy on hold (ET)

Current account deficit may hit an all-time high of 3.2% of GDP in 2008-09 as per EAC (ET)

Farm growth likely to decline to 2% in 2008-09, as per EAC (ET)

Government plans relief package for ailing airlines (ET)

Petroleum Minister says that there is no scope for a decrease in domestic fuel prices (BS)

GSM operators add 6.7mn users in July 2008 (BS)

Finance Minister has asked PSU banks to not increase home loan rates (BS)
PSU banks seeks 9-9.5% interest from Government on the money owed to them under the farm-loan waiver scheme (BS)

Tea exports declined 29% in FY08, as per ICRA (BS)

Morning Call - Aug 14 2008

Market Grape Wine :

In House:

Nifty at a support of 4455 and 4410 levels with resistance at 4575 and 4634 levels .

Buy : Titan above 1247 target 1280 s/l of 1235

Buy : GACL above 88.5 target 94 s/l of 84.5

Buy : in F&O Rolta above 311 target of 325 s/l of 304

Sell : LITL below 327 target 310 s/l of 335

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Out House:

Wish u All in Advance a very Happy Independence Day . JAI HIND .

Markets at a support of 14909 & 14786 levels with resistance at 15251 & 15451 levels .

Markets to remain choppy and volatile maintain strict stop loss .

Buy : Aptech & Noida at dips

Buy : Infy & Wipro at dips

Buy : Coreproject at dips

Buy : Adalbs at dips

Buy : OPTO at dips

Buy : RelCap

Buy : IBreal

Buy : SBIN & Kotak

Dark Horse : Kotak , Core , OPTO , Noida , RIL , Chambal , & EssarOil

Time Technoplast

Time Technoplast

Dividend Stocks

Dividend Stocks

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Corporation Bank

Corporation Bank

United Breweries

United Breweries

IIP Numbers, Panacea Biotec

IIP Numbers, Panacea Biotec

Bharati Shipyard

Bharati Shipyard

Eveninger - Aug 13 2008

Eveninger - Aug 13 2008

SBI, L&T August 2008 futures at premium

Turnover drops

Nifty August 2008 futures were at 4562, at a premium of 32.95 points as compared to spot closing of 4529.05. NSE's futures & options (F&O) segment turnover was Rs 43947.06 crore, which was lower than Rs 52461.81 crore on Tuesday, 12 August 2008.

State Bank of India (SBI) August 2008 futures were at premium at 1562 compared to the spot closing of 1553.40.

Larsen & Toubro (L&T) August 2008 futures were at premium at 2792.95 compared to the spot closing of 2787.95.

Reliance Natural Resources August 2008 futures were near spot price at 104 compared to the spot closing of 103.90.

In the cash market, the S&P CNX Nifty lost 23.20 points or 0.51% at 4529.05.