Turnover surges

Jindal Saw, SBI December 2009 futures at premium

Nifty December 2009 futures were at 5,159.30, at a premium of 11.35 points as compared to the spot closing of 5,147.95. Turnover in NSE's futures & options (F&O) surged to Rs 69428.98 crore from Rs 58040.99 crore on Monday, 7 December 2009.

Jindal Saw December 2009 futures were at premium at 991.80 compared to the spot closing of 987.10.

State Bank of India (SBI) December 2009 futures at premium at 2,313.10 compared to the spot closing of 2,307.

IFCI December 2009 futures were near spot price at 57.30 compared to the spot closing of 57.15.

In the cash market, the S&P CNX Nifty rose 81.25 points or 1.60% at 5,147.95.

Asian markets witness Tuesday twilight

Sydney, Seoul, Shanghai, Hang Seng finish lower while Sensex, Strait Times edge higher

Stock markets in Asian region tanked on Tuesday, 8 December 2009, as investors were both relieved that the United States was not about to accelerate an upturn in the global interest rate cycle, but concerned about the outlook for the world’s biggest economy and Asia's leading export market.

On Wall Street, stocks closed mixed but largely flat, after Federal Reserve Chairman Ben Bernanke indicated that the central bank expected a slow pace of economic recovery and plans to maintain low rates for an extended period. The Dow Jones Industrial Average added 1 point to close at 10,390. The S&P 500 lost 3 points, or 0.3%, at 1103, while the NASDAQ declined 5 points, or 0.2%, at 2190.

In the commodity market, crude oil fell for a fifth day as the dollar clawed higher against the euro, damping demand for commodities as an alternative investment.

Crude oil for January delivery fell as much as 40 cents, or 0.5%, to $73.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $73.68 a barrel at 4:13 p.m. Singapore time.

Brent crude oil for January settlement on the London-based ICE Futures Europe exchange was at $76.47 a barrel, up 4 cents, at 4:13 p.m. Singapore time. Yesterday, the contract dropped $1.09, or 1.4%, to $76.43 a barrel, the lowest settlement since 13 November 2009.

Gold rose for the first time in four days as a 5.6% decline from last week’s record price renewed buying interest in the metal. Gold for immediate delivery strengthened as much as 0.9% to $1,169.03 an ounce and traded at $1,160.89 at 1:32 p.m. in Singapore. February-delivery gold on the New York Mercantile Exchange’s Comex unit fell 0.2% to $1,161.40 an ounce.

In the currency market, the U.S. dollar traded modestly weaker against most major currency rivals in Asian trading as investors continued to mull the likelihood of a rate hike by the U.S. Federal Reserve.

The Japanese currency strengthened for second day after Bernanke’s remarks tore speculation for an early US rate increase. The yen was quoted at 88.85 against greenback from 89.51 on 7 December.

The Hong Kong dollar was trading at HK$ 7.7504 against the dollar. Actually the Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar edged off lows on Tuesday, aided by a softer US dollar, as investors revived bets of US interest rates staying at zero for some time. At the local close, the dollar was trading at $US0.9127, from a low of $US0.9054 struck offshore, to be marginally down from $US0.9155 seen here at yesterday’s close.

In Wellington trade, the New Zealand dollar consolidated in its domestic session today after rising off lows on Monday night. The NZ dollar was US71.47c at 5pm from US71.71c at the same time yesterday. It fell as far as US70.80c on Thursday night but its recovery was helped by the Bernanke remarks.

The South Korean won closed at 1,155.10 won to the U.S dollar, down 1.8 won from Monday's close of 1,153.30.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.2330, 0.0470 up from Monday’s close of NT$32.2800.

In equities, Asian markets ended mostly lower, with Japanese stocks snapping a six-session winning streak as exporters dropped on the yen's renewed strength.

In Japan, shares market finished the session lower snapping six days of long winning streak as investors took a breather following weak cues from Wall Street after US Federal Reserve Chairman Ben Bernanke indicated that the central bank expected a slow pace of economic recovery and plans to maintain low rates for an extended period. At the closing bell, the Nikkei 225 Stock Average index was at 10,140.47, eased 27.13 points or 0.27% from its previous close, while the broader Topix of all First Section issues on the Tokyo Stock Exchange lost 2.23 points, or 0.25%, to 896.70.

On the economic front, Japan's government unveiled 7.2 trillion yen ($80.59 billion) on economic stimulus measures, as it looks to avoid a return to recession ahead of upper house elections in mid-2010. Hatoyama’s first stimulus plan includes 3.5 trillion yen to help regions, 600 billion yen for employment and 800 billion yen on environmental initiatives, the Cabinet said today in a statement in Tokyo.

Ministry of finance said Japan Current account surplus rose 42.7% year on year to 1.39 trillion yen in October 2009 as worldwide government stimulus spending spur demand for exports.

The data from cabinet office showed that leading index rose by eighth consecutive moth to a score of 89.7 in October. At the same time, the coincident index stood at 94.3, up from 93.2 in the preceding month. Lagging index stood at 84.8, up from 83.1 in the previous month.

Japan’s M2 money stock was up 3.3% on year in November, the Bank of Japan said on Tuesday, standing at 759.3 trillion yen. That followed the revised 3.4% gain on year in October to 757.4 trillion yen.

M3 money stock was up 2.4% on year to 1,057.7 trillion yen, matching the previous month's gain. M1 money stock was up an annual 1.1% to 479.9 trillion yen after adding 1.2% on October.

In Mainland China, share market tumbled with broad based sell off across the sector, as investors were cautious about US economic prospects in 2010 after the Federal Reserve's chief warned the US economy would continue to struggle. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, dropped 35.23 points, or 1.06%, to 3,296.66, while the Shenzhen Component Index on the smaller Shenzhen Stock Exchange decreased 0.86% or 121.23 points, to 13,930.28. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, dropped 1.22%, to 3,624.02.

On the economic front, the Chinese government announced Monday at the three-day annual Central Economic Work Conference that next year the country should coordinate efforts to maintain stable and comparatively fast economic growth and speed up the transformation of the economic development mode.

In Hong Kong, the stock market widened losses throughout the session to closed lower enduring losses for third day in row amid comments from Fed Chairman Bernanke, with financials and properties shares witnessed steep sell off on news that Dubai World is struggling to restructure debt and on persistent worries about the possible bubble in the Hong Kong property market. HSBC holding plummeted the most in Hong Kong on news debt restructuring by Dubai state-run companies may almost double to $46.7 billion, as more of the emirate’s businesses can need help making payments.

At the closing bell, the Hang Seng Index stumbled 264.44 points, or 1.18%, to 22,060.52, meanwhile the Hang Seng China Enterprise, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, fell 206.20 points, or 1.54%, to 13,152.10.

In Australia, the stock market gave up morning gains to finish the session edged lower amid relatively quiet trading with benchmark All Ordinaries extended losses for third consecutive day. Financials, retailers, and healthcares stocks led the declines. Shares of banks and financials tumbled on worries higher interest rate may increase bad debts. 2.2% pullback in crude oil prices overnight triggered selling in energy stocks. At the closing bell, the benchmark S&P/ASX200 index stumbled 5.9 points, or 0.13%, to 4,670.6, meanwhile the broader All Ordinaries retracted 8.70 points, or 0.19%, to 4,686.4.

On the economic front, the statistics bureau of Australia reported today a seasonally adjusted current account deficit of A$16.183 billion in the third quarter ended September, following a revised deficit of A$13.133 billion in the June quarter.

Meanwhile, the National Australia Bank's latest monthly business survey showed business confidence rose three index points to a reading of plus 19.2 in November. Business conditions eased by 1.5 points to a reading of plus 10.3 points in November.

In New Zealand, benchmark index ended flat, however in the negative region, registering the third consecutive session in the red region. The NZX50 ended almost flat in the negative region, down 0.04% or 1.27 points to 3137.31. The NZX 15 inched up 0.11% or 6.05 points to close at 5686.41.

On the economic front, New Zealand’s total manufacturing activity, measured by seasonally adjusted sales volumes fell 1.4% in the September 2009 quarter. However, excluding meat and dairy product manufacturing, volumes rose 1.0%. At the total sales level, meat and dairy product manufacturing was the dominant industry, with a 7.1% drop in volumes in the September 2009 quarter driving the overall decline. Manufacturers of wood products and basic metals are showing signs of recovery from a slump to 15 year lows in total manufacturing activity, but it is still a mixed bag.

Also, New Zealand’s total building work fell 6% in the three months through September, extending its decline for a seventh quarter amid a slump in new construction permits. The total value of building work put in place fell to a seasonally adjusted $2.57 billion in the third quarter.

In South Korea, stocks closed lower as investors took profits following the sixth straight session of gains. The benchmark Korea Composite Stock Price Index (KOSPI) shed 4.87 points 0.3% to 1,627.78.

In Singapore, stocks market finished the session higher after trading in narrow range throughout the day, amid mixed lead from Wall Street overnight, with City Development led the rally following rating upgrade from brokerage firm. Rise in commodities metals and crude oil prices in Asian trade supported the shares of commodity related companies. Banks shares end in green as short covering emerged in late hour. At the closing bell, the blue chip Straits Times Index was at 2,805.50, rose 8.52 points or 0.3%.

In Taiwan, stock market in Taiwan finished flat as gains in tourism sector was followed by losses in the financial sector. Taiwan’s exports that touched a 13-month high represented the first positive export growth in 14 months limiting the losses of the session. The benchmark Taiex share index parted from the one month high status, by finishing the day lower by 6.93 points or 0.09% at 7768.71.

On economic front, Taiwan’s consumer price index or CPI fell 1.59% year-on-year in November after a revised fall of 1.87% in October, the tenth straight fall in the CPI. According to the Directorate General of Budget, Accounting and Statistics, on a monthly basis, the CPI fell 0.75% in November. For the first eleven months of 2009, the CPI declined by 0.92% year-on-year.

The wholesale price index or WPI increased 1.01% month-on-month, taking the annual rise to 0.84%. In October, the WPI fell a revised 6.21% annually. During the first eleven months of the year, the WPI decreased 9.92% over the same period of the previous year.

On the other hand, Taiwan’s exports jumped 19.4% year-on-year to US$20.02 billion in November, a 13-month high, also representing the first positive export growth in 14 months.

In Philippines, the disquiet created by President Gloria Macapagal-Arroyo’s declaration of martial law in Maguindanao continued to turn investors down away from the Philippines stock market. Worries over asset price inflation due to the record low interest rate also weighed down investors sentiment. At the concluding bell, the benchmark index PSEi tumbled 1.13% or 34.56 points to 3,012.07, while the All Shares index declined 1.05% or 20.08 points to 1,876.00.

In India, the key benchmark indices extended gains in late trade on rebound in European markets and higher US index futures. The BSE Sensex closed up 244.54 points or 1.44% to 17,227.68. The S&P CNX Nifty closed higher 81.25 points or 1.60% to 5147.95.

Elsewhere, Malaysia’s Kula Lumpur Composite index finished lower at 1261.46 while stock markets in Indonesia’s Jakarta Composite index inched up 0.13 points ending the day higher at 2483.89.

In other regional market, European shares edged lower, with miners and telecoms adding pressure, as comments from the Federal Reserve's chairman raised uncertainty over the prospects for the U.S. economy. Amid these mixed messages, regional European equity markets were also showing small moves. The U.K. FTSE 100 index declined 0.1% to 5,304.17, the German DAX index gained 0.2% to 5,797 and the French CAC-40 index traded 0.1% higher at 3,845.

Godrej Properties IPO Review

Capitalizing on the brand

The company is a relatively a small player compared with most listed players and is unlikely to be able to perform against the broad industry trend

Godrej Properties (GPL), part of Godrej group and a subsidiary of Godrej Industries, is one of the leading real estate development companies in India with focus on development of residential, commercial and township projects.

GPL initially concentrated its operations in the Mumbai metropolitan region and later expanded to include nine other cities such as Pune, Bengaluru, Kolkata, Hyderabad, Ahmedabad, Mangalore, Chandigarh, Chennai and Kochi. As of October 31, 2009, GPL had completed a total of 23 projects comprising 16 residential and 7 commercial projects, aggregating approximately 5.13 million square feet (sq ft) of developable area.

Origianlly incorporated as Sea Breeze Construction and Investments on February 8, 1985 by Mohan Khubchand Thakur and Desiree Mohan Thakur, the company came into the fold of Godrej Group in 1987 and subsequently in 1989 it became a subsidiary of Godrej Industries (formerly Godrej Soaps). Godrej Industries will hold about 69.43% of the post-issue share capital of GPL.

GPL's total land reserves stand at 391.04 acres, aggregating to approximately 82.74 million sq ft of developable area and 50.21 million sq ft of saleable area, which includes ongoing projects and forthcoming projects. The aforesaid land reserves include 64.23 acres, which are in the process of being aggregated but do not include the land ( of about 185 acres in Mohali, Bengalore and Hyderabad) from Godrej Group for which is has signed MoU for developing the owned land in various regions of the country.

The company completely out-sources construction work and has an agreement with Larsen & Toubro for all its project across the country.

The company plans to raise Rs 462.06 crore to Rs 499.78 crore (at the lower and upper price band). The object of the issue is to part finance acquisition of development rights, to meet construction costs, repayment of loans and general corporate purposes. Of the total issue proceeds, the company proposes to utilize about Rs 203 crore towards part funding acquisition of land development rights for its forthcoming projects at Ahmedabad (Godrej Garden City), Kalyan Township, Pune Township of Rs 132 crore, Rs 20 crore and Rs 51 crore, respectively. Similarly, about Rs 75 crore will be utilized to meet construction cost of its forthcoming project at Chandigarh (Godrej Eternia) and about Rs 172 crore for repayment of loans.

Strengths

The company has good track record in project execution and delivery. The good market response for the company's ongoing residential projects reflected by a high level of bookings and customer advances ensures sustained cash flow, paving the way for smooth completion of the on going projects. The company has sold about 1.02 million sq ft out of 1.26 million sq ft of saleable area of its ongoing projects, which have been launched. This excludes the Godrej Prakriti project at Kolkata, which was launched October 2009 end.

The business model of the company is joint development with landowners rather than outright purchase of land parcels. Of the total land bank (saleable area of 50.21 million sq ft), the share of joint development is about 76.77%, with tracts of land owned either in its own name or its subsidiaries is just 3.91%. Of the balance, land for which it has sole development rights is 19.12%, and land subject to private acquisition being 0.2%. The joint development model involves less upfront cash outflow and avoids investment getting stuck in land in case of downturn. This will also help the company to ramp up fast its portfolio with a lower strain on resources. This will also help the company to roll out projects with in prime locations at marketable places.

Has a strong parentage of the Godrej group, which is one of the oldest and reputed corporate houses of the country. As part of the Godrej group, the company naturally gets joint development rights for sizeable land parcels owned by various group companies as well better leverage of its brand name with others. As per company sources, Godrej & Boyce owns about around 3,500 acres of land in Vikrohli, a suburb of Mumbai. Of this about 1,000 acres is suitable to development. Moreover, being part of the group, the company could leverage on the strong and trusted brand of Godrej. This will facilitate its entry into new markets relatively easier. Further the association with the Godrej group will also facilitate attracting financial and intellectual resources on reasonable terms.

Weaknesses

After being hit by a downturn on falling demand in the latter half of FY 2009, the realty market is gradually seeing demand for the residential segment. But the commercial segment is yet to fully come out of woods. Also, the residential realty market is still driven by customers with pricing and location playing crucial roles in buying decisions, given the increased supply in most micro markets of the country.

In realty projects undertaken through joint development , the company's economic interest ranges from 10% to 79%, varying from project to project as it has to bear the entire cost of construction and give part of the constructed space to the land partner or share the profit arising out of gross sales minus cost of construction and other expenses. Given this business model, the company's profitability/ margin largely depends on its ability to contain construction cost and other expenses as well as pricing as against developing realty projects from its owned land, bought outright at relatively lower cost, which will push up margin in the long term/ bullish times.

Commercial realty projects warrant huge cash outflow, unlike residential projects, where the customer will pay at the time of booking as well as after crossing each milestone. Godrej Properties' high exposure to commercial projects will result in high funding requirements. The share of commercial projects in the total saleable area was just 24% in the completed projects, but has zoomed to 36% in ongoing projects, and is set to leap to 63% of the forthcoming projects. This is a cause for concern, considering the sluggishness in the commercial realty sector.

Limited residential projects slotted for completion over the next one-two years. Of the total estimated residential saleable area of 20.71 million sq ft, just 1.41 million sq ft is to be completed by 2011. Of the 11.40 million sq ft of commercial saleable area about 5.01 million sq ft is scheduled to be completed by 2012.

The company is more likely to go for a lease model for commercial projects developed o the land of group companies such as one planned on the land in Vikrohli. This calls for higher capital investment on the part of the company despite providing sustained revenue over a period of time.

Of the total developable area, about 3.05 million sq ft is under litigation. There are about 21 litigations against the company including two criminal proceedings.

Valuation

The company is relatively a small player compared to most of the already listed players and is unlikely to be able to perform against the broad industry trend. Though the sector has witnessed some stability and signs of pickup in certain residential segments, overall it still faces a lot of uncertainties. Moreover, there are many new issues lined up from this sector, which will continue to increase supply even when the sector itself remains out of fancy.

Sales of Godrej Properties were lower by 10% to Rs 205.26 crore in the fiscal ended March 2009. With operating margin shrinking sharply to 34.3% from 52.7% in corresponding previous period, the operating profit fell by sharp 41% to Rs 70.42 crore. But facilitated by higher other income inflated on account of stake sale in selects special purpose vehicles (SPVs), the company has managed to report higher net profit (after minority interest) of Rs 75.63 crore, a rise of 1%. The EPS for the fiscal ended March 2009 was Rs 10.8 and the PE at the lower price band works out to 45.3 times FY 2009 earnings and at the upper price band it works out to 48.9 times its FY 2009 earnings. In comparison, Parsvnath Developers and Puravankara Projects are quoting at a PE of 19.3 and 14 times of their FY 2009 earnings.

On valuation front, the company is priced at an enterprise value per million sq ft of Rs 51 crore at the lower price band and at Rs 54 crore at the upper price band. This is factoring in the total land bank of the respective companies. However, taking into consideration only land under development/ construction, the EV/ millon sq ft of GDL at the lower price band is Rs 132 crore and that at the upper price band is Rs 140 crore. In comparison, Parsvnath Developers quotes

Nifty surges to 18-month closing high

The key benchmark indices surged after the government today, 8 December 2009, said it will seek parliamentary approval to spend an extra Rs 25725 crore for the fiscal year to end-March 2010. The BSE Sensex jumped 244.54 points or 1.44%, up close to 265 points from the day's low.

The Sensex jumped well above the psychological 17,000 mark after falling below that level for a brief period in early afternoon trade. The barometer index had settled below the psychological 17,000 mark on Monday, 7 December 2009. The Sensex attained its highest closing level in 1-1/2 month. The 50-unit S&P CNX Nifty attained its highest closing level in more than 18 months. Metal, banking, IT and realty stocks gained. The market breadth was strong.

Energy giant Reliance Industries (RIL) rose close to 2.5% on reports the company is in talks with more than a dozen banks to ready a $8-10 billion war chest for the acquisition of LyondellBasell

Intraday volatility on the bourses was quite high. The market surged in early trade as bargain hunting emerged after a recent slide in share prices. The market pared gains in mid-morning trade. It strengthened once again in early afternoon trade. The market gave up almost its entire intraday gains by afternoon trade. The Sensex slipped into the red for a short while in afternoon trade. A solid intraday rebound took the Sensex to a fresh intraday high in mid-afternoon trade. The market extended gains in late trade.

The Sensex had lost 215.13 points or 1.2% in four trading sessions to settle at 16,983.14 on Monday, 7 December 2009, from a recent high of 17198.27 on 1 December 2009.

India's fiscal deficit for the current fiscal year ending in March 2010 will be around the targeted 6.8% of gross domestic product, a senior finance ministry official said on Tuesday. The official said that direct tax receipts would exceed expectations while total tax receipts will meet target.

The government does not need to borrow more than planned to fund its additional proposed expenditure, Finance Minister Pranab Mukherjee said on Tuesday. The government said on Tuesday it will seek parliamentary approval to spend an extra Rs 25725-crore ($5.5 billion) for the fiscal year to end-March 2010. The gross additional expenditure would be Rs 30943 crore, of which 5217 crore would be met through savings, the government said. The government will spend an extra Rs 3000 crore on fertiliser subsidies and Rs 3460 crore on food subsidies. The government would also spend Rs 800 crore on an equity infusion in state-run carrier Air India.

The government will complete share sales through public offers in three state companies by the end of March 2010, the finance minister said on Tuesday. Divestment of 5% each in NTPC and Rural Electrification Corp and 10 % in unlisted Satluj Jal Vidyut Nigam is under implementation, Pranab Mukherjee said. The Finance Minister said there is a need to adhere to fiscal prudence as early as possible.

Capital inflows into India reflect investor confidence in the economy, the Reserve Bank of India (RBI) governor D Subbarao said on Monday at a televised panel discussion, although measures to control them could not be ruled out in case there was a surge in foreign funds that needed to be contained. "Going ahead should there be a surge of capital flows, I think we cannot rule out active capital management," Subbarao said. The RBI governor said he is not willing to debate at this time on the instruments or timing, as this will depend on how the situation evolves.

"In the medium term, task is to improve absorptive capacity of the economy. But going forward calibrating reserves roughly corresponding to current account deficit is the task," Subbarao said. C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said in the discussion that inflows in the current year would be manageable. Rangarajan had said late last month that India could absorb as much as $100 billion of capital flows in 2009/10, well above a projected $57-$60 billion.

Securities & Exchange Board of India (Sebi) chairman C B Bhave on Monday said in an a newspaper interview that overseas fund flows into Indian stock markets were manageable and foreign portfolio investors should be allowed smooth entry and exit to boost equity investments.

India's food price inflation is a supply-side issue and monetary policy is an inefficient tool to rein it in, Subbarao said on Monday. The food price index rose 17.5% in the 12 months to 21 November 2009.

Meanwhile, the government has partially lifted the ban on rice and wheat exports by allowing organic varieties of these grains for overseas sale, two separate statements on the trade ministry website showed on Monday.

The initial public offer (IPO) of JSW Energy, a part of Sajjan Jindal-led JSW Group, was subscribed 1.48 times by 16:00 IST on the second day of issue today. The price band for the IPO is Rs 100 to Rs 115. The issue closes on Wednesday, 9 December 2009.

Meanwhile, Russia and India stressed their strategic partnership on Monday, agreeing to boost military ties and cooperate in the civilian use of nuclear technology. The two delegations signed agreements on "military-technical cooperation", for the period 2011-12 and agreed that Russia would build more nuclear reactors in India.

Stocks in Dubai again slumped on Tuesday, 8 December 2009, as the debt woes of one of the emirate's key investment companies continued to reverberate. On the Dubai Financial Market, the DFM Index was recently down 6.23% at 1636.15. Leading the decliners by value was Emaar, a government-related entity engaged in property development, including the Burj Tower, the world's tallest building, set to open early in January 2010.

Meantime, the general index in Abu Dhabi dropped 3.2%. Markets in the Arab states have been roiled for almost two weeks since the emirate's Dubai World holding company sought a six-month delay in payments on $60 billion of debt.

European shares fell in a volatile trade on Tuesday, led lower by banks and miners, as US Federal Reserve Chairman Ben Bernanke's comments on the outlook for the economy prompted investors to stay cautious. The key benchmark indices in France, Germany and UK were down by between 0.55% to 1.12%.

Industrial production in Great Britain was unchanged in October from the previous month, the Office for National Statistics reported Tuesday. Compared to the same month last year, production fell 8.4%. Economists had forecast a 0.4% monthly rise and a 7.7% year-on-year decline. Manufacturing output was also flat on the month, marking a 7.8% fall from the level seen in October 2008. Economists had forecast a 0.4% monthly rise and a 7.2% annual fall.

Most Asian stocks declined on Tuesday after Bernanke said the US economy faces formidable headwinds. The key benchmark indices in China, Hong Kong, Japan, South Korea, Taiwan Indonesia fell by between 0.09% to 1.18%. But, key benchmark indices in Indonesia and Singapore rose by between 0.01% to 0.3%.

The Japanese government today unveiled a 7.2 trillion yen ($81 billion) economic stimulus package, aimed at countering problems threatening the country's flagging economic recovery, such as the yen's strength and deflation.

US index futures fell in volatile trade. Trading in US index futures indicated Dow could fall 43 points at the opening bell on Tuesday, 8 December 2009.

US stocks ended little changed on Monday as investors paused to gauge prospects for the US economic recovery and interest rates after Bernanke said the economy faced "formidable headwinds." The Dow Jones industrial average was up 1.21 points, or 0.01 % at 10,390.11. The Standard & Poor's 500 Index was down 2.73 points, or 0.25%, at 1,103.25. The Nasdaq Composite Index was down 4.74 points, or 0.22 % at 2,189.61.

The BSE Sensex rose 244.54 points or 1.44% to 17,227.68, its highest closing since 17 October 2009. The Sensex rose 254.65 points at the day's high of 17237.79 in late trade. The Sensex fell 19.03 points at the day's low of 16,964.11 in early trade.

The S&P CNX Nifty rose 81.25 points or 1.6% to 5,147.95, its highest closing since 16 May 2008. Nifty December 2009 futures were at 5,159.30, at a premium of 11.35 points as compared to the spot closing of 5,147.95. Turnover in NSE's futures & options (F&O) surged to Rs 69428.98 crore from Rs 58040.99 crore on Monday, 7 December 2009.

BSE clocked a turnover of Rs 4937 crore, higher than Rs 4763.47 crore on Monday, 7 December 2009.

The market breadth, indicating the overall health of the market was strong. On BSE, 1865 shares advanced as compared with 949 that declined. A total of 78 shares remained unchanged.

Among the 30-member Sensex pack, 27 rose while the rest fell.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7580.37 points or 78.57% in calendar year 2009, as on 8 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 9067.28 points or 111.11% as on 8 December 2009.

Coming back to today's trade, the BSE Mid-Cap index rose 1.31% and the BSE Small-cap index rose 1.38%. Both the indices underperformed the Sensex.

All the sectoral indices on BSE rose. The BSE Realty index (up 3.27%), the BSE Consumer Durables index (up 2.29%), the BSE Metal index (up 2.15%), the BSE Teck index (up 1.84%), the BSE Oil & Gas index (up 1.73%), the BSE IT index (up 1.46%), outperformed the Sensex.

The BSE Healthcare index (up 0.12%), the BSE Auto index (up 0.72%), the BSE PSU index (up 0.73%), the BSE Capital Goods index (up 1.16%), the BSE FMCG index (up 1.18%), the BSE Power index (up 1.32%), the BSE Bankex (up 1.34%), underperformed the Sensex

India's largest private sector firm by market capitalisation Reliance Industries (RIL) rose 2.33% to Rs 1080.25. The stock was volatile. It hit a high of Rs 1084.05 and a low of Rs 1050.10. Reliance Industries is reportedly in talks with more than a dozen banks to ready a $8-10 billion war chest for the acquisition of LyondellBasell, the world's third-largest petrochemical company that has filed for bankruptcy in the US.

The RIL stock had tumbled 3.07% on Monday after bonus shares issued by the company were admitted to trading. The company has issued one fully paid bonus equity share for every one existing fully paid equity share of Rs 10 each.

Banking shares rose in a volatile trade on hopes of financial sector reforms. India's largest private sector bank by net profit ICICI Bank 1.28% to Rs 872.05 on reports the bank is in discussions to sell its entire 27% holding in software-services provider 3i Infotech. Its ADR fell 4.08% on Monday, 7 December 2009. The stock hit a high of Rs 877.40 and a low of Rs 852.35.

India's second largest private sector bank by net profit HDFC Bank rose 1.8% to Rs 1829.85 even as its ADR fell 0.98% on Monday. The stock hit a high of Rs 1836 and a low of Rs 1780.10.

But India's largest bank by net profit and branch network State Bank of India fell 0.76%. The UPA government last week cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill seeks to bring the government's holding in the country's largest public sector bank on a par with other public sector banks at 51 %. Currently, the Union government holds 59% stake in SBI. At present, the stake of the promoter, that is Government of India, cannot fall below 55 %.

India's largest mortgage lender by total income Housing Development Finance Corporation (HDFC) rose 1.22% on bargain hunting after recent losses triggered by investor worry a dual interest rate scheme on home loans introduced by the company would hit margins.

HDFC, last week, announced a dual-rate loan scheme under which a borrower will be charged a fixed rate up to March 2012 and a floating rate thereafter. For a 20-year loan of Rs 30 lakh, a borrower will pay a fixed rate of 8.25% up to March 2012 and then a floating rate that's 500 basis points below the prime lending rate (PLR) - the institution's benchmark rate. Currently, the PLR is 13.75%.

IT stocks rose on a weaker rupee. India's second largest software services exporter Infosys Technologies rose 2.1% to Rs 2440.10 even as its ADR fell 1.54% on Monday. The stock came off the day's low of Rs 2380. Infosys Technologies is reportedly partnering the Council of Scientific and Industrial Research for its open source drug discovery project that focuses on an efficient way to look for tuberculosis drugs.

India's third largest software services exporter Wipro rose 1.58% even as its ADR fell 0.98% on Monday. India's largest software services exporter Tata Consultancy Services (TCS) was flat.

The Indian rupee fell on Tuesday after a firmer start as oil refiners bought dollars, following the US unit's rise the previous day. The partially convertible rupee was at 46.68/71 per dollar, weaker than Monday's close of 46.56/57. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Metal stocks rose on strong domestic demand. Hindalco Industries rose 2.56%. The company hiked product prices by Rs 3000 a tonnes, with effective from 1 December 2009. Steel Authority of India, National Aluminum Company, Sterlite Industries and Hindustan Zinc rose by between 0.72% to 1.88%.

Tata Steel, the world's eighth-largest steelmaker by sales, rose 2.2% after the company said on Monday its sales rose 34.5% to 498,000 tonnes, in November 2009 over November 2008.

The company on 4 December 2009 announced a partial closure of Corus' Teesside Cast Product (TCP) plant in north England, after four companies stopped buying metal from it. Operations will be suspended at the end of January 2010 forcing the loss of 1,700 jobs around 600 fewer than envisaged earlier, Tata Steel said in a statement.

Realty shares rose on bargain hunting. Omaxe, DLF, Indiabulls Real Estate, Unitech and Sobha Developers, rose by between 0.39% to 4.78%.

FMCG shares rose on bargain hunting. ITC, Hindustan Unilever, Marico, Tata Tea rose, United Spirits by between 0.56% to 3.69%.

India's largest engineering and construction firm by sales Larsen & Toubro rose 1.14% after the company said before market hours today that it got orders worth Rs 844 crore.

Among other capital goods stocks, Thermax, SKF India, Praj Industries, Bharat Heavy Electricals rose by between 0.12% to 4.74%.

Construction shares rose on government's thrust on the infrastructure sector. Era Infra Engineering, Punj Lloyd, Valech Engineering, Hindustan Construction Company and Gayatri Projects rose by between 0.2% to 2.95%.

The government has set a target of spending $20 billion a year on road construction.

Cement stocks rose on bargain hunting after recent losses. Recent reports suggested a second wave of cement price hike is likely within a fortnight. After prices were up by Rs 5-10 for a 50 kg bag in the last week of November in western and southern India, prices rose by Rs 8-11 a bag in the Mumbai region on 2 December 2009. The next set of price rises would happen in the north which is enjoying comparatively stable prices till now vis-a-vis the south and the west, reports suggest.

India's largest cement producer by capacity ACC rose 0.92%. The company's cement shipments fell 4.04% to 1.66 million tonnes in November 2009 from 1.73 tonnes in November 2008.

India's largest dam builder Jaiprakash Associates rose 2.26% The company posted 48.77% jump in its cement sales to 1.03 million tonnes in November 2008 over November 2008.

Aditya Birla Group's cement shipments rose 15.3% to 2.93 million tonnes in November 2009 over November 2008. Aditya Birla Group last month said it was combining its cement operations under group firm UltraTech Cement to make India's largest cement firm. UltraTech Cement rose 1.17%.

India's largest thermal power generator by sales NTPC rose 1.45% on hopes of government stake divestment in the firm. Among other power stocks, Reliance Power, Reliance Infrastructure, Torrent Power rose by between 1.03% to 1.87%.

India's largest mobile services provider by sales Bharti Airtel rose 4.05% extending Monday's more than 2% rise. Bharti Airtel sees revenue pressured in the short term amid an intense price war in the country's wireless sector, director Akhil Gupta said on Monday.

India's second largest mobile services provider by sales Reliance Communications rose 2.25% on bargain hunting. Reliance Communications under reported its revenue to the telecoms regulator during 2006/07 and 2007/08, the communications minister A Raja said on Monday.

Mobile operators including Bharti Airtel, Vodafone Essar and Reliance Communications are locked in a tariff war, raising concerns about telecom firms' profitability. The price war is aimed at grabbing new users as new firms enter the market.

Auto stocks rose on the back of robust sales figures for November 2009. India's second largest bike maker by sales Bajaj Auto rose 0.67%. The company's total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008. Motorcycles sales jumped 84% to 2.42 lakh units.

India's top truck maker by sales Tata Motors rose 2.78%. The company's total sales zoomed 65.49% to 54,108 units in November 2009 over November 2008.

Tata Motors' total passenger vehicle sales in the domestic market grew by 44.52% at 20,706 units last month, against 14,327 units in the same month last year. Exports jumped by 86.64% at 3,994 units, compared with 2,140 units in the same month last year, it added.

India's top tractor marker by sales Mahindra & Mahindra (M&M) rose 0.63%. Mahindra & Mahindra will reportedly launch its first truck under a joint venture (JV) with Navistar, North America's largest commercial truckmaker, next month. The company's domestic auto sales soared 105.1% to 21,387 units in November 2009 over November 2008. M&M sold a total of 22,587 vehicles (domestic plus exports) in November 2009 as against 11,515 vehicles sold in November 2008.

But, India's largest small car maker by sales Maruti Suzuki India fell 0.45%. The company's total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.

India's largest motorcycle maker by sales Hero Honda Motors fell 0.14%. The company's total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.

Car sales in India rose an annual 61% to 1,33,687 in November 2009 over November 2008, boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said on Tuesday. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data from the Society of Indian Automobile Manufacturers showed.

IFCI clocked highest volume of 1.98 crore shares on BSE. Suzlon Energy (1.45 crore shares), Shiva Cement (1.36 crore shares), Unitech (1.13 crore shares), Mahindra Satyam (0.84 crore shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 146.91 crore on BSE. Rain Commodities (Rs 144.44 crore), JSW Steel (Rs 131.23 crore), Suzlon Energy (Rs 123.68 crore) and Housing Development & Infrastructure (Rs 122.29 crore) were the other turnover toppers in that order.

Daily Grey Market Premiums - Dec 8 2009

Company Name	Offer Price (Rs.)	Premium (Rs.)
Cox & Kings India	330	12 to 14
MBL Infra	165 to 180	2 to 3
JSW Energy Ltd.	95 to 110	-5 to -6 (Discount)
Godrej Properties	490 to 530	15 to 17
D. B. Corp.	--	8 to 10

SGX Nifty Live Update - Dec 8 2009

5,056.00 -4.00

Daily News Roundup - Dec 8 2009

United Breweries Ltd (UBL) and Heineken NV ended an almost two-year-long dispute over partnership and agreed to permit UBL to brew and market the Heineken brand in India. (BS)

Private equity firms Apax Partners, Carlyle and KKR have shown interest in buying ICICI’s 27% stake in 3i Infotech. (ET)

OVL and Mittal may set up refinery in Nigeria as Indian companies look at sourcing liquefied natural gas (LNG) from African nations. (BS)

ONGC is interested in acquiring a stake in Ghana’s giant Jubilee oilfield, but the African nation has exercised its first right of refusal on the stake sale. (BS)

M&M plans to raise around Rs20bn long-term debt for its Chakan commercial vehicle project. (BL)

ABB Ltd has bagged an order worth Rs5bn from Bangalore Metro Rail Corporation Ltd for power related works. (FE)

RIL is in talks with banks for a US$8-10bn war chest for the acquisition of Lyondell Basell, the world’s third-largest petrochemical company. (ET)

Tata Steel standalone sales during November 2009 grew 35%yoy to 0.4mn tones. (FE)

Reliance Mediaworks has partnered with US-based In-Three for converting 2D films and videos into the 3D format. (ET)

Wockhardt has received permission to sell its nutrition division to US-based Abbott for nearly Rs6.5bn. (ET)

Suzlon Energy subsidiary REpower Systems, Germany, has signed a Rs8.6bn contract with enXco, a California-based renewable energy company for supplying 70 wind turbines. (BL)

Mahindra to roll out heavy truck in January 2010. (BS)

Opto Circuits is looking at a capex of around Rs2bn in the next one and half years for setting up manufacturing units in Vizag and Malaysia. (BS)

Essar Group is close to acquiring X-cite, a retail chain of consumer durables. (ET)

Cipla has received Income tax notices demanding around Rs201m, for allegedly over-pricing two drugs. (ET)

JSW Energy is expected to commission its 240MW Kutehr hydropower project in Himachal Pradesh by December 2015. (BS)

IOC expects revenue loss of Rs270-280bn for selling fuels below cost price by the end of their current financial year, in March 2010. (BS)

EdServ Softsystems is planning to raise US$25mn either through a GDR or an FCCB issue by the first quarter of FY10. (BS)

The government plans to expand the country’s National List of Essential Medicines (NLEM), which was last revised in 2003. (BS)

FDI investments for the month of October grew 56% yoy to US$2.3bn (FE)

Food price index was up 17.47% in the 12 months period ended November, 21. (FE)

The government has cleared 17 FDI proposals worth Rs45.5bn (FE)

The government will seek US$2bn of additional funds from the World Bank for highway development, road transport & highways (ET)

Petroleum ministry has sought oil bonds worth over Rs200bn for state-run oil marketing companies. (ET)

Uneasy feeling!

The general remedy for those who are uneasy without knowing the cause is change of place.

The bulls seem to be looking for some change and appear to have gone on an early Christmas holiday. Global stocks have struggled lately in making much headway amid some concerns about pricey valuations and the strength of the economic recovery. The markets are a bit nervous as economic rebound could spring a surprise, leading to an early exit from easy money policy. What is also making the markets jittery is a possible reversal in the trend in fund flows. For lack of other triggers, all eyes are fixed on how the dollar behaves and what happens to US interest rates.

Friday’s strong jobs data has set the cats among the pigeons. It remains to be seen how upcoming data unfolds, both in the US and elsewhere. Talking of data, Indian market will react to the latest IIP on Friday.

We expect a cautious to positive start and another sideways trading session. There might be a bounce back if the global trend improves. That in turn could force the bears to cover their shorts. Overall, the market will remain rangebound amid uncertainty over the near-term outlook.

FIIs were net sellers in the cash segment on Monday at Rs1.91bn on a provisional basis. The local funds were net sellers of Rs1.85bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers at Rs8.15bn. FIIs were net buyers of Rs4.45bn in the cash segment on Friday. FIIs' net investments in Indian stocks this year have crossed $16bn. Mutual Funds were net sellers of Rs957mn in the cash segment on Friday.

The dollar extended its gains on Monday, hitting a one-month high following a sharp rally on Friday after US employment data came in far better than expected. That report has re-ignited fears that the Federal Reserve could hike interest rates sooner than expected.

Fed chief Ben S. Bernanke says that the US central bank will raise interest rates to keep inflation under control, but that time could be far away. With the US economy still very fragile and unemployment so high, inflation is not a pressing problem right now, Bernanke said in a talk to a group of economists in Washington.

Back home, the Reserve Bank of India (RBI) Governor D Subbarao said on Monday that food inflation is a supply-side phenomenon and monetary policy is an ineffective instrument to rein in growth in such prices. Still, if food inflation persists for a long time, it could hamper inflation expectations, Subbarao said in Mumbai. "Certainly, then monetary policy has to come in," he added.

Gold prices fell on Monday, extending Friday’s correction, while oil prices dipped and base metals retreated amid some strength in the dollar. Meanwhile, President Obama has backed a House proposal to spend leftover TARP funds on stimulus spending and create new jobs. The Japanese government has today unveiled a 7.2 trillion yen ($81bn) economic spending package.

US stocks closed mixed on Monday at the end of a choppy session which was affected by a slight recovery in the dollar, falling oil and gold prices and comments from Fed chairman Bernanke that eased worries about higher interest rates.

The Dow Jones Industrial Average was barely changed, at 10,390.11. The S&P 500 index lost 3 points, or 0.3%, to 1,103.25. The Nasdaq Composite index shed 5 points, or 0.2%, to 2,189.61.

Stocks were pretty volatile as investors weighed Bernanke's comments, the direction of the dollar and commodity markets in the aftermath of last week's big payrolls report. Stocks had gained on Friday at the end of a bumpy session following a better-than-expected November jobs report.

That report was another strong sign that the world's largest economy had turned a corner, but it also raised questions about whether the Fed will need to raise interest rates faster than has been expected. Such concerns kept the market nervous on Monday morning, sending the dollar higher and dollar-traded commodities lower as investors avoided riskier assets.

But in the afternoon, Bernanke seemed to downplay the likelihood of a rate hike, saying in a speech at the Economic Club of Washington that it is too soon to say whether the slowly-germinating recovery will last. The Fed has kept short-term interest rates at historic lows near zero for a year and is expected to continue to do so to support the recovery. Bernanke also said the central bank will make money on the trillions it has pumped into the economy over the last two years.

Bank stocks were among the big decliners, with the KBW Bank Sector index losing 1.6%. Railroads, trucks and airlines slipped too, with the Dow Jones Transportation average losing 1%.

The Obama administration is expected to cut the cost of the bank bailout plan by almost 60%, in a move that could help trim the ballooning deficit. The White House is expected to announce in coming days that it will slash the cost of the Troubled Asset Relief Program (TARP) by $200 billion, bringing the long-term cost to $141 billion. The money not used for the TARP could be used toward creating a new national jobs program or for paying down the deficit.

Americans borrowed less in October, for a record ninth straight month, according to a Federal Reserve report. Consumer credit fell at an annual rate of $3.51 billion in October after falling at an $8.77 billion annual rate in September. Economists had forecast a rise to a $9.3 billion annual rate.

COMEX gold for February delivery fell $5.50 to settle at $1,164 an ounce. Gold closed at an all-time high of $1,218.30 an ounce last week. Dollar-traded gold tumbled as the dollar firmed up.

The dollar gained versus the euro and slipped against the yen, causing dollar-traded oil prices to slide.

US light crude oil for January delivery fell $1.74 to settle at $73.93 a barrel on the New York Mercantile Exchange.

Treasury prices rose, lowering the yield on the 10-year note to 3.42% from 3.47% late on Friday.

European shares edged lower, paced by weakness in banks. The pan-European Dow Jones Stoxx 600 index, which posted gains of 2.7% last week, took a breather, closing down 0.5% at 247.88.

The UK's FTSE 100 index fell 0.2% to 5,310.66, while Germany's DAX index lost 0.6% to 5,784.75 and the French CAC-40 index slipped 0.2% to 3,840.05.

Unlike Dhoni's boys, the Indian market was unable to triumph in their quest for breaking out of a range. The NSE Nifty continued its struggle to breach the year's high of 5182 which has acted as a hurdle for the bulls for the past few weeks.

The Sensex started off the new trading week on a flat note on the back of mixed cues from the Asian markets. However, as the day progressed bears tightened their grip on the bourses. Selling was seen in Metals, Realty and Oil & Gas stocks. As a result the Nifty and the Sensex fell below 5100 and 17000, respectively.

Weak opening in the European markets further dampened the sentiment. Just as one thought worries regarding Dubai's debt problems were starting to ease, it was back to haunt traders and investors. The Dubai DFM General Index slipped 6.1% from day's high after reports stated that the Dubai's government will not sell any assets to meet the obligations of Dubai World.

The BSE Sensex slipped 118 points to end at 16,983 after touching a high of 17,176 and a low of 16,943. The index opened at 17,106 against the previous close of 17,101. The NSE Nifty was down 42 points to shut shop at 5,066.

In Asia, the Nikkei in Japan was up 1.4%, while Australia's S&P/ASX ended lower by 0.5%. Shanghai SE Composite in China gained 0.5% and Hang Seng index in Hong Kong was down 0.8%.

In Europe, stocks were in the red. The FTSE in the UK was down 0.5%, The DAX in Germany was down 0.5% and the CAC 40 index in France gained 0.7%.

Coming back to India, among the BSE sectoral indices, the Metal index was the top loser, shedding 3.2%, followed by the Realty index that was down 2.5% and the BSE Oil & Gas index was down 2%. The BSE Mid-Cap index slipped 0.8% and the BSE Small-Cap index was up 0.5%.

Bucking the negative trend were, BSE Capital Goods index up 0.7% and BSE Teck index up 0.3%.

Among the 30-components of Sensex, 20 stocks ended in the red and 10 ended in the positive terrain. Sterlite Industries, Tata Steel, Hindalco, RIL, DLF and M&M ended in the negative terrain. Among the major gainers were Bharti Airtel, HDFC, L&T, HDFC Bank and Hero Honda.

Outside the frontline indices, the big losers in the broader market were Tata Comm, Godrej Industries, Tulip and REC Ltd. On the other hand, gainers included Piramal Health, Cummins India, Indian Hotels and GSPL.

Shares of Reliance Power slipped by 3.5% to end at Rs145 after the Allahabad High Court quashed the Uttar Pradesh government's earlier notification allowing the use of emergency powers to buy land for the Dadri power project, side-stepping a provision inviting objections from land owners.

However, the company denied media reports that a provincial court has stopped the acquisition of land for a gas-fired power project being built by the company in northern India, Jayarama Chalasani, CEO of Reliance Power Ltd., said.

ABB won an order worth Rs5.06bn from Bangalore Metro Rail Corporation Limited (BMRCL) to provide power solutions for a planned metro network in Bangalore, India’s leading technology hub.

Shares of ABB have shot up from days low and ended higher by 0.4% at Rs735. The scrip opened at Rs739 it touched an intra-day high of Rs745 and a low of Rs731 and recorded volumes of over 0.16mn shares on BSE.

Andhra Pradesh Power Generation Corporation Limited has placed an order on BHEL for the country’s first Phase Shifting Transformer valued at Rs270mn, the order entails installation of an indigenously-developed Phase Shifting Transformer, to be installed at APGENCO’s Kothagudem Thermal Power Station (KTPS) Stage-VI.

Shares of BHEL have edged higher by 0.3% to end at Rs2214. The scrip opened at Rs2210 it touched an intra-day high of Rs2235 and a low of Rs2201 and recorded volumes of over 0.1mn shares on BSE.

Suzlon overseas unit, REpower Systems AG, announced the signing of a delivery agreement with limited condition precedent for up to 143.5MW with the American Company enXco - an EDF Energies Nouvelles Company.

The 70 REpower MM92 turbines (each with a rated power of 2.05MW and rotor diameter of 92.5 meters) are intended for a wind farm project in the West Coast market for delivery in mid-2011.

Shares of Suzlon Energy surged over 5% to end at Rs83. The scrip opened at Rs80 it touched an intra-day high of Rs83.85 and a low of Rs79.05 and recorded volumes of over 10.8mn shares on BSE.

Heineken N.V. announced it has signed a new shareholders' agreement with United Breweries Limited and agreed the key terms for the brewing and distribution of the Heineken brand in India. The new agreement creates a strong partnership that will drive growth in one of the world's fastest growing and most exciting beer markets.

Shares of United Breweries surged 4.7% to end at Rs191.50. The scrip opened at Rs187 it touched an intra-day high of Rs201 and a low of Rs169 and recorded volumes of over 0.68mn shares on BSE.

Shares of Adhunik Metaliks shot up by over 7% to end at Rs104 after the company received final approval from Ministry of Environment & Forests, Government of India for diversion of forest land in village-Deojhar, Kulum and Mahadebnas of Barbil Tahasil in Keonjhar district of Orissa for mining of Iron Ore out of its captive mine.

Market may fall on weak Asia

The market may extend Monday (7 December 2009)'s fall on weak Asia after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces formidable headwinds. US stocks ended on a flat note on Monday.

Capital inflows into India reflect investor confidence in the economy, the Reserve Bank of India (RBI) governor Duvvuri Subbarao said on Monday at a televised panel discussion, although measures to control them could not be ruled out in case there was a surge in foreign funds that needed to be contained.

India's food price inflation is a supply-side issue and monetary policy is an inefficient tool to rein it in, Reserve Bank Governor Duvvuri Subbarao said on Monday. India's food price index rose 17.5 % in the 12 months to 21 November 2009.

C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said in the discussion that inflows in the current year would be manageable. On Monday, the head of India's market regulator said in an a newspaper interview that overseas fund flows into Indian stock markets were manageable and foreign portfolio investors should be allowed smooth entry and exit to boost equity investments.

In mid-November, the finance minister said India had the tools to deal with an influx of foreign flows if they became disruptive, but said they were not yet a concern. Foreigners have so far bought a net of about $16 billion of Indian stocks this year.

Last week, the trade minister said foreign direct investment flows into India were $18 billion in April-October, the first seven months of the 2009/10 fiscal year

Meanwhile, the government has partially lifted the ban on rice and wheat exports by allowing organic varieties of these grains for overseas sale, two separate statements on the trade ministry website showed on Monday.

The initial public offer (IPO) of JSW Energy, a part of Sajjan Jindal-led JSW Group, was oversubscribed shortly after the bidding for the IPO commenced at 10:00 IST on Monday 7 December 2009, data on NSE showed. The issue was subscribed 1.25 times on Monday. The price band for the IPO is Rs 100 to Rs 115. The issue will close on 9 December 2009.

India's largest steel maker by sales Tata Steel may see action after company said on Monday its sales rose 34.5 % to 498,000 tonnes, in November 2009 over November 2008.

ICICI Bank India's second-largest lender by operating income may see action on reports bank is in discussions to sell its entire 27 % holding in software-services provider 3i Infotech.

Energy giant Reliance Industries reportedly is in talks with more than a dozen banks to ready a $8-10 billion war chest for the acquisition of LyondellBasell, the world's third-largest petrochemical company that has filed for bankruptcy in the US..

Meanwhile, Russia and India stressed their strategic partnership on Monday, agreeing to boost military ties and cooperate in the civilian use of nuclear technology. The two delegations signed agreements on "military-technical cooperation", for the period 2011-12 and agreed that Russia would build more nuclear reactors in India.

Most Asian stocks declined on Tuesday after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy faces “formidable headwinds.” The key benchmark indices in China, Hong Kong, Japan, South Korea and Taiwan fell by between 0.17% to 1.17%. But, the key benchmark indices in Indonesia and Singapore rose by between 0.11% to 0.18%.

The Japanese government unveiled a 7.2 trillion yen ($81 billion) economic stimulus package amid signs the recovery and Prime Minister Yukio Hatoyama's popularity are waning.

U.S. stocks ended little changed on Monday as investors paused to gauge prospects for the U.S. economic recovery and interest rates after Federal Reserve Chairman Ben Bernanke said the economy faced "formidable headwinds." The Dow Jones industrial average was up 1.21 points, or 0.01 % at 10,390.11. The Standard & Poor's 500 Index .SPX was down 2.73 points, or 0.25 %, at 1,103.25. The Nasdaq Composite Index was down 4.74 points, or 0.22 % at 2,189.61.

Back home, the key benchmark indices fell in volatile trading on Monday, 7 December 2009 on weak European stocks and lower US index futures. The BSE Sensex fell 118.40 points or 0.69% to 16,983.14, falling below 17,000 mark on that day.

As per provisional figures on NSE, foreign funds sold shares worth Rs 191.50 crore and domestic funds sold shares worth Rs 185.25 crore on Monday.

Little change for red metal

Rising stockpiles and fluctuating dollar try to impact the prices

Copper prices fell slightly at Comex on Monday, 07 December, 2009. Prices dropped for the third straight day today. Prices fell on speculation that the dollar will turn strong in the next few days. Rising stockpiles and weak demand outside China are also causing prices to soften in recent times.

At USA, copper futures for March delivery ended lower by 2.85 cents (0.9%) to 3.209 a pound. Earlier, price fell by almost 2.5%. Last week, copper ended higher by 3.6%. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 122%.

On the London Metal Exchange, copper for delivery in three months ended lower by $41 (0.6%) at $6,999 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

In the currency market on Monday, the dollar headed strongly up initially. But then, the dollar erased its gains against the euro after Bernanke's speech. It earlier rose to the highest levels versus the euro in more than a month, extending Friday's rally in the wake of a surprisingly strong U.S. employment report for November. The dollar index, which measures the strength of the dollar against a basket of six other currencies, then fell by almost 0.4%. Year to date, the dollar index has dropped by almost 7%.

The dollar erased its gains after Bernanke said at midday the central bank will eventually have to raise interest rates, but he emphasized that that time could be far away as the economy faces "headwinds."

Also, as per latest reports, copper inventories monitored by the London Metal Exchange are up 33% this year to 452,550 tons. Rising stockpiles and weak demand outside China are also causing prices to soften in recent times.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

At the MCX, copper for February delivery closed at Rs 330.25/Kg. The closing price was Rs 1.4/Kg (0.42%) lower than previous closing price. Prices rose to a high of Rs 331/ Kg and fell to a low of Rs 329.25/Kg during the day's trading.

Among other metals traded in the LME on Monday, lead dropped 0.5% to $2,354 a ton and zinc dropped 0.2% to end at $2,365 a ton. Nickel was little changed at $16,005. Aluminium fell 0.5% at $2,138 a ton.

Precious metals shed more glitter

Yellow metal drops for second consecutive day

Bullion metal prices ended lower for the second straight day on Monday, 07 December, 2009. Prices continued to drop after dropping for first time in last Friday after a long time. Prices fell today as the dollar headed up earlier during the day before Fed Chairman Ben Bernanke gave his speech.

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

On Monday, gold for December delivery ended at $1,160 an ounce, lower by $8.8 (0.8%) an ounce on the New York Mercantile Exchange. During intra day trading, gold fell to a low of $1136.3. Last week, gold shed 0.5%.

Gold ended November, 2009 higher by 13%. Before that, for the third quarter it ended higher by 8.7%. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year. On a year to date basis, gold price is higher by 31.8%.

On Monday, December Comex silver futures ended lower by 27 cents (1.5%) at $18.225 an ounce. Last week, silver ended higher by 1%.

In the currency market on Monday, the dollar headed strongly up initially. But then, the dollar erased its gains against the euro after Bernanke's speech. It earlier rose to the highest levels versus the euro in more than a month, extending Friday's rally in the wake of a surprisingly strong U.S. employment report for November. The dollar index, which measures the strength of the dollar against a basket of six other currencies, then fell by almost 0.4%. Year to date, the dollar index has dropped by almost 7%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for February delivery closed lower by Rs 110 (0.62%) at Rs 17,584 per ten grams. Prices rose to a high of Rs 17,650 per 10 grams and fell to a low of Rs 17,535 per 10 grams during the day's trading.

At the MCX, silver prices for March delivery closed Rs 23 (0.08%) lower at Rs 28