Recovery on the Street!

Business and life are like a bank account – you can’t take out more than you put in. – William Feather.

Its déjà vu time for central banks in the developed world, as they ramp up efforts to calm nervous financial markets amid mounting fears of double-dip recession. The Bank of England surprised markets with a fresh round of monetary stimulus despite inflation running high. ECB’s outgoing president Jean Claude Trichet unleashed a couple of liquidity boosting programs to relieve tension in the European credit markets. Eurozone authorities have shown readiness to recapitalise banks as the region's sovereign debt crisis threatens to spiral out of control.



In the US, President Barack Obama is trying hard to sell his jobs plan, calling it an insurance against another recession. US Senate will vote on the Obama jobs bill and the controversial currency bill next week. But, before that, all eyes will be on Friday’s jobs data.

The opening is likely to be a positive one following a three-day rally on Wall Street and recovery in European stocks. Asian markets are in good shape as well. The banking pack could see some buying for the day.

For our markets, the crucial event will be the RBI’s policy meeting on Oct. 25. Pressure is building on the RBI to take a pause. Corporate results will also start pouring in shortly.

The trading pattern on Wednesday turned out to be quiet irrational as the Nifty slipped below 4800 levels in afternoon despite a gap up opening. However, as long as the Nifty holds its previous trough of 4711, the double bottom remains in place with immediate target seen at 4980.

FIIs were net sellers of Rs 10bn (provisional) in the cash segment on Wednesday, according to NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 3.22bn on the same day.

FIIs were net sellers of Rs 4.63bn (provisional) in the F&O segment on Wednesday, according to NSE web site.

The foreign funds were net sellers of Rs 9.66bn on Tuesday, as per final SEBI data. Mutual Funds were net sellers of Rs 952mn on the same day.

Global Data To Watch Today: Bank of Japan's monetary policy meeting, UK PPI, Germany's industrial production, US jobs report and unemployment rate and Federal Reserve Bank of Atlanta president Dennis P. Lockhart's speech.

After threatening to cut supplies, Reliance Industries has withdrawn the notice for suspension of natural gas supplies to four fertiliser plants in Uttar Pradesh.

Maruti has fixed production targets at 30-40% higher for October, compared to September when it produced 73,000 cars.

The DoT is known to have cleared a showcause notice to Idea Cellular on cancellation of its telecom licence in Punjab.

Mundra Port and Special Economic Zone has emerged as the sole bidder for Chennai port’s Rs36.8bn mega container terminal project.

The DoT has asked its legal wing to examine the 3G roaming agreements between Bharti Airtel, Vodafone and Idea Cellular.

Essar Power has earmarked an investment of US$8bn in the next three years for setting up thermal power projects in India.

Bahrain-based telecom firm Menatelecom has awarded WiMAX managed services contracts to Tech Mahindra and Huawei Technologies for the year 2012-13.

NMDC Ltd has lined up capex of Rs24.5bn for various mining projects. The proposed investments will take NMDC’s capacity to 50mtpa.

The Government will declare revised guidelines for upcoming coastal-based ultra mega power projects in the next three or four months to factor in the unforeseen escalation in fuel costs.