Missed a day...relax!

Slow down and enjoy life. It's not only the scenery you miss by going too fast - you also miss the sense of where you are going and why.

We missed joining in the global rally. Relax, there is no point expecting some fast gains. A smart opening may be in the offing. Use the same to book some profit. We see the indices settling lower from their opening levels. Settlement for stocks bought on October 27 and October 28, 2008 will be done today.

Meanwhile, the Fed played to the market gallery and cut key interest rates by 50 basis points. How low can it go from 1% is the big debate. This move by the Fed raises hopes of a repo rate cut in the near term. To boost to the mood, inflation has fallen to 10.68 pc and it won't be long before it reaches single digit. The cooling crude prices too add to the comfort.

Reports indicate that inflation numbers may be declared once a month starting next calendar year. Chances are the data will be more realistic as a host of prices would be added and changes would be made to the base year. Liquidity pumping could gain further momentum if recent reports are to be believed. A financial daily stated that the government is considering converting funds impounded under the market stabilization scheme (MSS) into regular borrowing. Such a move, if it does happen, could allow banks to lend to other borrowers instead of the lending to the government.

FIIs, who still have a substantial holding in the Indian market continue to remain net sellers. Reports state they may have sold less than 20 of their holdings so far. And imagine, that has crashed the indices to these levels.

The Finance Minister P Chidambaram will meet the heads of public sectors banks and financial institutions, on Nov 4 to review their performance for the second quarter ended September 2008.

Sterlite Industries could see action as it is showing renewed interest to acquire Asarco, says a report.

Assurances have reportedly come in from TCS and Infosys that they will not retrench any of their employees.

US stocks gained as easier credit and a report showing the economy shrank at a slower pace than expected in the third quarter brought some cheer.

The Dow Jones added 190 points, or 2.1%. The Standard & Poor's 500 index rose 2.6% and the Nasdaq was up 2.5%.

In other global news, the US Gross domestic product, fell at an annual rate of 0.3% in the third quarter after growing at a 2.8% rate in the second quarter. The drop was not as bad as expected bringing some relief to the market. Exxon Mobil reported a profit of $14.83 billion, the biggest quarterly profit in US history.

American Express announced that it will cut 7,000 jobs, or more than 10% of its staff, amid the ongoing credit crisis. The dollar fell against the euro and gained versus the yen.

US light crude oil for December delivery fell $1.54 to close at $65.96 a barrel on the New York Mercantile Exchange. COMEX gold for December delivery fell $15.50 to settle at $738.50 an ounce.

Bharti Airtel, BL Kashyap,Bombay Ray, DCB, DLF,GTL Infra, GVK Power,Hindalco, HPCL,India Cement,ING Vysya, IVRCL,Kesoram, Maytas,Nestle, Onmobile, PNB,Power Grid,Puravanakara, Ranbaxy, RCom,Shoppers Stop,Tata Motors and Unitech will report results today.

F&O expiry and speculations of the US FEDs decision on the interest rate kept the Indian markets highly volatile. After extending gains in the early trades key indices witnessed wild gyrations throughout the trading session. Alternate bouts of buying and selling often tossed the Indian bourses in the positive and negative terrain. Finally, the BSE benchmark Sensex gained 36 points or 0.4% to close 9,044 and the NSE Nifty index was up 12 points to close at 2,697.

Alok Industries reported net sales of Rs6.98bn for the quarter ended 30 September 2008, a jump of 50.21% over the corresponding quarter of the previous year (Rs4.64bn). Sales for the six months ended 30 September 2008 stood at Rs12.41bn - a 40.50% increase over the same period of the previous fiscal (Rs8.83bn)

Export Sales for the second quarter stood at Rs2.61bn, representing a 29.67% increase over the Rs2.01bn achieved during the quarter ended 30 September 2007. At a cumulative level, export sales for the half-year ended 30 Sep 2008 reached Rs4.59bn - an increase of 18.02% over the figure reported for the six months ended 30 September 2007 (Rs3.89bn). The stock ended lower by 2.3% to Rs17.7 after hitting an intra-day high of Rs19 and a low of Rs17 and recorded volumes of over 2,00,000 shares on BSE.

Educomp rallied by over 6% to Rs2026on the back of huge volumes. The scrip touched an intra-day high of Rs2400 and a low of Rs1830 and recorded volumes of over 7,00,000 shares on BSE.

L&T pared all its gains and ended with losses, the stock was down 1.5% to Rs763. According to reports, the company would set up heavy engineering facility in Oman to manufacture high-pressure heat exchangers and reactors. The scrip touched an intra-day high of Rs815 and a low of Rs751 and recorded volumes of over 8,00,000 shares on BSE.

M&M advanced by 8% to Rs302 after reports stated that the company would spend Rs3bn towards the brand building and promotion for launching vehicles in US.

The company also came out with its quarterly results.

The gross revenues and other income for the quarter ended 30th September 2008 grew by 19.1% to Rs77.41bn from Rs65.02bn in Q2 last year. The profit before exceptional items and tax for the quarter is Rs6.23bn as compared to Rs6.94bn in Q2 of FY08.

During the period there was also an exceptional profit of Rs331mn that accrued to the group out of the private placement of shares by group subsidiaries, Mahindra Retail Pvt Ltd and Mahindra Residential Developers Ltd. The consolidated profit after tax for Q2 after deducting minority interests is Rs3.73bn as against Rs3.92bn earned in Q2 previous year.

Reliance Capital gained by 2.5% to Rs635. According to reports, the company awaits an approval from NHB and RBI for its housing finance and consumer finance business. The scrip touched an intra-day high of Rs665 and a low of Rs620 and recorded volumes of over 21,00,000 shares on BSE.

Markets players would keep a close track of the overnight developments in the US markets specially the decision of the Federal Reserve on interest rates. Avoid any fresh buying unless you want to pick up stocks for the long term. Thursday being a holiday, you never know how global markets shape up as we open on Friday morning.

SAIL looking for new iron ore mines and renewal of its existing mines (FE)

Sterlite Industries is showing renewed interest to acquire Asarco (ET)

Telenor acquires 60% stake in Unitech’s telecom arm for Rs61.2bn (ET)

Tata Chemical postpones its expansion plans by atleast six months (DNA)

Political unrest in Sri Lanka has created hurdles for NTPC’s 500MW imported coal-based power project (FE)

Strides Arcolab to roll out 32 anti-cancer products over the next six months (BL)

Videocon Industries is looking at repositioning brands (BL)

Hinduja Foundries to set-up fourth foundry at Toopran with an outlay of Rs1.5bn (BL)

HCL Infosystems bagged a multi-year contract from Delhi Police (BL)

Religare promoters to hike stake via rights issue to 73% (BS)

Essar Steel is mulling a cut in production, if government doesn’t bring back the import duty on steel coming into India (DNA)

Hindustan Zinc keeps zinc and lead prices unchanged (BS)

IOB to raise Rs11bn through bonds issue (ET)

NDTV signs an exclusive distribution deal with ITV to launch its new channel (BS)

TCS and Infosys assures Karnataka government that they will not retrench any of their employees (BL)

Turkcell in talks to acquire 51% stake in Datacom Solutions (ET)

DoT plans to cap number of operators in each circle (FE)

EGoM defers its final decision on IT sops for SEZ units (FE)

Petroleum ministry asks finance ministry to issue Rs150bn of additional oil bonds (FE)

Fed cuts benchmark rate by 0.5% to 1% and reduces the discount rate to 1.25% (BL)

India’s inflation for the week ended October 18 falls to 10.68% from 11.07% in the previous week (ET)

Government in discussion with exporters on an incentive package for sustaining export growth (ET)

Government exploring a proposal to cut custom duty on ATF to 2.5% (ET)

RBI allows NBFC’s to raise funds by issuing perpetual debt instruments (FE)

Government is planning to capitalize banks by subscribing to preference shares (DNA)

Government is examining possibilities of cut in fuel prices (DNA)

Jyothy Laboratories Ltd

Jyothy Laboratories Ltd

Sesa Goa - BUY

We recommend a buy in Sesa Goa from a short-term perspective. It is evident from the charts of Sesa Goa that it has been on an intermediate-term downtrend from its early May high of Rs 220. Since then, the stock has been forming lower troughs and lower peaks. While trending down, the stock penetrated key support levels at Rs 132 and Rs 100 one after another. However, the stock recently found support in the support band between Rs 60-65, recording a 52 week low of Rs 63.60 and bounced up sharply. The stock has almost gained 20 per cent from this low, reinforcing the bullish momentum. The daily relative strength index (RSI) which is hovering in the bearish zone, is displaying positive divergence and the weekly RSI is recovering from the oversold area. Furthermore, the moving average convergence and divergence is also displaying positive divergence. We are bullish on the stock from a short-term horizon. We expect the stock to move up further until it hits our price target of Rs 90 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining stop-loss at Rs 75.

ICICI Bank

ICICI Bank

Navneet Publications

Navneet Publications

FII sell on Muharat trading day as well

FIIs, who have been in a savage selling spree for quite sometime now, sold a net Rs 69 crore even in the one-hour Muhurat trading on Tuesday.

So far this month, FIIs have been net sellers for Rs 16,890 crore, bringing their total net sales to $12.65 billion this year.

US Market gives up gains in final minutes

Dow slips back below the 9,000 mark

US Market reversed all its gains in the final minutes of trading today, Wednesday, 29 October, 2008. Though the market started on a negative note, it pared almost all of its losses within first couple of hours of trading following a stronger than expected durable goods order. But then, again in the post lunch hours, the Dow has slipped back in the red.

But then, there was a big rally post Federal Reserve’s decision about cutting fed fund rate by half percentage point. Dow was up by more than 200 points. But in the final few minutes of trading, sellers came to the forefront and the Dow slipped back to the red. The main reason for this sell-off was after traders became concerned about financial health of GE. Seven out of ten sectors ended in the red today.

The Dow Jones Industrial Average ended the day down by 74 points, to 8,990. The Nasdaq Composite Index, finished higher by 7 points at 1,557. S&P 500 finished lower by 10 points at 930.

Chevron and GM were main Dow winners today while P&G was a main Dow laggard.

The FOMC cut the fed funds rate by 50 basis points to 1% today, which was widely expected. The discount rate was cut 50 basis points to 1.25%. The action was unanimously approved, with the Fed citing increased economic risks and improving inflation expectations.

The Fed said today that the pace of economic activity has "markedly" slowed as consumer expenditures declined, while inflation pressures are expected to moderate due to the drop in commodity prices and weaker economic prospects. The FOMC believes that over time this action, along with the Fed's other measures, will help promote moderate economic growth.

Separately, the Fed established temporary currency swap lines with the central banks of Brazil, Mexico, South Korea and Singapore. The move is meant to improve liquidity and complement the Fed's current swap lines with 10 other central banks.

The Commerce Department at US reported on Wednesday, 29 October, 2008 that demand for US made durable goods registered a stronger than expected 0.8% gain in September. Market was expecting a 0.1% decline in orders.

It was mainly the demand for airplanes that lifted orders for U.S. A 6.3% increase in orders for transportation goods offset weak demand in other sectors in September. Excluding transportation, orders fell 1.1%. Excluding civilian aircraft, orders fell 0.3%.

However, orders in August were revised down sharply to a 5.5% decline from a 4.5% decline earlier. Durable-goods orders have risen in four of the past five months, but are still down 2.7% from April's level.

Among major earning reports for the day, Procter & Gamble reported a 9% rise in first-quarter profit but also lowered the bottom end of its earnings forecast for fiscal 2009.

In the currency market on Wednesday, the dollar index, a measure of dollar against a basket of six major currencies, tumbled as much as 2.8%. Expectations about an interest rate cut by Fed weakened the dollar today. The weak dollar helped commodity prices rise. Gold and crude prices rose today after a long time.

Crude prices rose today and closed above the $67/barrel. The weak dollar and energy department’s weekly inventory report were the main reasons for the rise in crude prices. There were also reports in the market that OPEC was thinking about another production cut. Crude-oil futures for light sweet crude for December delivery closed at $67.5/barrel (higher by $4.77 or 7.6%) on the New York Mercantile Exchange. Prices earlier touched a high of $68.2.

More than 1.6 billion shares traded on the New York Stock Exchange and 1.2 billion traded on the Nasdaq. Advancers topped decliners nearly 2 to 1on the NYSE, and by roughly 4 to 3 on the Nasdaq

The advance third quarter GDP report and weekly initial jobless claims data are the main economic reports due before Thursday's opening bell. Other than that, earning reports will dominate the day.

NTPC, SBI, ICICI Bank, Tata Power, Sun Pharma, Asian Paints, Tata Tea, Tata Communications, M&M Finance, Nagarjuna Constructions, United Breweries

NTPC, SBI, ICICI Bank, Tata Power, Sun Pharma, Asian Paints, Tata Tea, Tata Communications, M&M Finance, Nagarjuna Constructions, United Breweries, GSPL, Union Bank of India

Your Ad Here

BHEL

BHEL

ITC

Your Ad Here

ITC

Punj LLoyd

Punj LLoyd

US Fed cuts rate by 50 bps

The Federal Reserve on Wednesday, October 29, cut a key interest rate by 50 basis points (bps) in an attempt to revive an economy ailing from the most severe financial crisis in recent times.

The central bank slashed its target for the federal funds rate, the interest banks charge on overnight loans, to 1%, a low last seen in 2003-2004. The cut marked the second half-point reduction in the funds rate this month. The Fed slashed the rate by that amount in a coordinated move with foreign central banks on Oct. 8.

Further rate cuts would make it very inexpensive for banks to borrow from one another. The Fed is hoping that low rates, along with efforts to increase liquidity, will spur greater lending and borrowing, unfreezing credit markets thereby boosting its economy.

Turnover surges

RIL, L&T November 2008 futures at premium

Nifty November 2008 futures were at 2738, at a premium of 40.95 points as compared to spot closing of 2697.05. NSE's futures & options (F&O) segment turnover was Rs 54223.24 crore, which was higher than Rs 46002.30 crore on Monday, 27 October 2008.

Reliance Industries (RIL) November 2008 futures were at premium at 1216.50 compared to the spot closing of 1215.

Larsen & Toubro (L&T) November 2008 futures were at premium at 756 compared to the spot closing of 752.

Infosys Technologies November 2008 futures were at discount at 1318.95 compared to the spot closing of 1324.

In the cash market, the S&P CNX Nifty gained 12.45 points or 0.46% at 2697.05.

Precious metals end sharply higher

Rate cut pressures dollar down thereby making bullion metals shine

Gold prices ended higher on Wednesday, 29 October, 2008. This was due to the dollar that remained relatively weak. Silver prices also rose today. A weak dollar increases the appeal of precious metals as a hedge against inflation.

Earlier last week, gold prices had slipped to lowest levels in thirteen months as it fell below $700 level. A strong dollar was the main reason behind this. 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. Losses in equity markets had also forced traders to sell gold. Since past couple of weeks, precious metals, mainly gold, had dropped as traders tried to gain back some of the money that had lost in other markets.

On Wednesday, Comex Gold for December delivery rose $13.5 (1.8%) to close at $755 an ounce on the New York Mercantile Exchange. Prices rose to a high of $775.3 earlier during the day. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (27%) since then. Last week, gold prices ended lower by 7.3%.

This year, gold prices have lost 9.1% till date. The dollar index has gained 10.2% this year. For the third quarter ended September, 2008, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.

On Wednesday, Comex silver futures for December delivery rose $1.1015 cents (12%) to $9.805 an ounce. Last week, silver fell 0.4%. Till date, silver has lost 30% this year. Silver had ended month and quarter of September 2008 with a loss of 10%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. The metal also had gained for seven straight years.

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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies. Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices and vice versa.

In the currency market on Wednesday, the dollar index, a measure of dollar against a basket of six major currencies, tumbled as much as 2.8%. Expectations about an interest rate cut by Fed weakened the dollar today.

In the crude market on Wednesday, crude for December delivery rose by almost $5 to end at $67.5 a barrel on the New York Mercantile Exchange.

Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the latest move, the Federal Reserve has cuts its target bank lending rate to 1% from 5.25% in September, 2007. The Fed did it in eight steps.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for December delivery closed higher by Rs 212 (1.8%) at Rs 12,177 per 10 grams. Prices rose to a high of Rs 12,370 per 10 grams and fell to a low of Rs 11,931 per 10 grams during the day’s trading.

At the MCX, silver prices for December delivery closed Rs 849 (5.2%) higher at Rs 17,135/Kg. Prices opened at Rs 16,350/kg and rose to a high of Rs 17,315/Kg during the day’s trading.

Crude registers sudden jump

Prices rise by almost $5 on inventory report and weak dollar

Crude prices rose today on Wednesday, 29 October, 2008 and closed above the $67/barrel. The weak dollar and energy department’s weekly inventory report were the main reasons for the rise in crude prices. There were also reports in the market that OPEC was thinking about another production cut. Last week, OPEC had decided on a production cut. The decision, however, failed to perk up crude prices as traders still remained extremely worried that an ongoing recession will curtail demand for energy in the coming months.

On Wednesday, crude-oil futures for light sweet crude for December delivery closed at $67.5/barrel (higher by $4.77 or 7.6%) on the New York Mercantile Exchange. Prices earlier touched a high of $68.2. Prices reached a high of $147 on 11 July but have dropped almost 51% since then. Last week, prices dropped by 11% after shedding 7.5% in the week prior to that. On a yearly basis, crude price is lower by 30%. For this year in 2008, crude prices have dropped 31%.

The U.S. Energy Information Administration reported that crude supplies climbed 500,000 barrels to 311.9 million for the week ended 24 October, 2008. They've climbed 21.7 million barrels in five weeks.

EIA also reported that motor gasoline supplies unexpectedly fell for the first time in five weeks, down 1.5 million barrels for the week ended Oct. 24 to total 195 million barrels. Supplies of the fuel had climbed 17.8 million barrels is the past four weeks. But they are still 2% below the year-ago level. And distillate stocks, which include heating oil, rose 2.3 million barrels to 126.6 million.

The report also stated that demand for petroleum products was down 7.8% over the last four-week period, compared with the same time a year ago. It averaged almost 18.9 million barrels per day during the period. Of that, motor gasoline demand averaged 8.9 million barrels per day, down 3.4% from the same time a year ago.

OPEC officials decided last Friday at its meeting at Vienna that OPEC will pare production by 1.5 million barrels a day w.e.f 1 November, 2008. The official production quota is currently 28.8 million barrels, and it will be cut by 1.5 million in November.

Last week, the Centre for Global Energy Studies said that global oil demand may fall for the first time in 15 years in 2008 and stagnate next year.

Earlier this month, in the latest monthly prediction, the Organization of the Petroleum Exporting Countries said that global oil consumption will grow 550,000 barrels a day this year compared with a year ago, down 330,000 barrels from last month's forecast. Total consumption will stand at 86.5 million barrels a day. For the next year, demand will grow 800,000 barrels a day, down 100,000 barrels from OPEC's September prediction.

The Energy Information Administration, the statistics arm of the U.S. Energy Department, also lowered its growth outlook for this year's global oil consumption by 350,000 barrels from a month ago.

For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.

Against this background, November reformulated gasoline rose 3.7% to end at $1.533 per gallon, while November heating oil climbed 2.8% to close at $2.001 per gallon on Nymex.

Prices for natural gas rallied along with their energy peers. November natural-gas futures gained 4.6% to close at $6.469 per million British thermal units.

At the MCX, crude oil for November delivery closed at Rs 3,408/barrel, higher by Rs 158 (4.8%) against previous day’s close. Natural gas for November delivery closed at Rs 339/mmbtu, higher by Rs 22.3/mmbtu (7.4%).

The U.S. Energy Information Administration will offer its weekly update on natural gas tomorrow, Wednesday, at 10. am E.T.