Analysts expecting another sharp drop in markets today

Taking a cue from the continued decline in US equities, the Indian equity market could witness another sharp decline on Monday, say analysts. The weakness could persist for the next two to three trading sessions, they add. The Dow Jones Industrial Average dipped 208 points, or 1.54%, to end at 13,265.47 on Friday.
Indices across the world had plunged on Friday after US markets crashed on Thursday. The Sensex—the benchmark index of the Bombay Stock Exchange (BSE)—shed 3.4% to close at 15,234.57 as foreign institutional investors (FIIs), the single most influential force in the markets, started selling.
FIIs were net sellers of equities worth Rs1,475 crore on Friday, while domestic institutional investors took this opportunity to buy shares (they were net buyers of equities worth Rs727 crore).
This was a sharp reversal of the trend witnessed so far this month. Until 26 July, the FIIs had made net investments of about $10 billion (Rs40,500 crore), while domestic institutions were net sellers of more than $2 billion worth of equities. Foreign portfolio fund managers, analysts say, are trying to cut short their exposure to riskier assets such as emerging markets equities.
Looking pensive: Investors standing outside the Bombay Stock Exchange react as the benchmark index shed 3.4% on Friday. Indices across the world fell after US markets declined the previous day.
Ketan Karani, head of research at Kotak Securities Ltd, says FII inflows could moderate in the next few weeks. “The ripple effect of problems in US financial markets will continue in our market. The liquidity in our market will dry up if the money flow from US investors slows down,” he adds.
But Lalit Thakkar, head of research at Angel Broking Ltd, says the correction period in the market will not last long. “There is no doubt that all the Asian markets will open weak on Monday morning. However, the fall will not be as steep as witnessed on Friday’s trade,” Thakkar adds. “FIIs currently own about 20% of the Indian equity market. India is still one of the strongest markets in terms of corporate earnings growth. It is very unlikely that this negative sentiment among FIIs will continue for long.”
Trading volumes on Friday’s session were very high, say technical analysts, pointing out that this signals an immediate risk. “When the market falls sharply on heavy volumes, it indicates severe weakness,” says Vinit Birla, a technical analyst at Mumbai-based Pranav Securities. Short positions built up by speculators will add to the downward trend.
“There is strong short build-up in many blue-chip counters and heavily on the index. This indicates fresh losses on Monday. The weakness will continue for three to four trading sessions. We see 14,700 as the downside for the Sensex. At that level, the index could start a positive rally to recover lost ground. In the case of Nifty, 4,310 is the downside,” he said.
Another Mumbai-based technical analyst who did not wish to be identified says a recovery rally could start in Asian markets after a few trading sessions. However, he expects plenty of volatility in the market. “I would advise taking a neutral position in a market such as this. The Nifty futures are trading at about 40 to 45 points discount. There is huge short build-up on the index. The Nifty could get support at 4,380 levels. If the Nifty breaks below 4,320, it could create panic leading to margin calls. This could accentuate the sell-off,” he adds

How long before a bounce back?

It took 33 trading sessions for the Bombay Stock Exchange’s benchmark Sensex index to recoup all the losses from its last big fall, a 4% or 540 point decline on 28 February.
Investors will be hoping that this time around, the recovery from Friday’s 3.4% or 542 point decline will be equally swift.
The February fall was triggered by the Shanghai stock market and spread to the Dow Jones Industrial Average (DJIA) amid fears that the fallout of US subprime mortgages would spread to the rest of the economy. This time, the DJIA started off the decline and has fallen some more since the Sensex closed on Friday.
There have been four major corrections, not counting the present one, in the bull run that began four years ago. The first occurred on 17 May 2004, when worries about a change of government and a global scare about rising interest rates led to an intra-day fall of 793 points in the Sensex. Although local factors exacerbated the situation, the fall occurred in emerging markets across the world, the MSCI Emerging Markets Free Index losing 8.7% in May that year. That time, the Sensex bounced back to its pre-17 May levels as early as 24 May, but it fell after that and it wasn’t till 23 July 2004 that it closed above the closing level of 14 May, some 50 trading sessions later.
The next panic attack was a more muted one, in March and April 2005, when fears about the high US current account deficit and the impact of rising oil prices took its toll on the Sensex. This time, the benchmark index fell a comparatively tame 220 points on 15 April, but this was a different sort of correction, with the markets grinding lower over an extended period. For instance, from its close of 6,746 on 16 March, the Sensex fell to a closing low of 6,118 on 18 April and it was only by 3 June that the index was able to regain all the ground lost since 16 March.
A year later, on 15 May 2006, the Sensex plummeted by 462 points, followed by a gut-wrenching 826 point drop on 18 May. It was only on 26 September that the Sensex closed above 12,285, the level at which it had closed on 12 May, some 90 trading sessions later. This time, the ostensible reason for the fall was the higher-than-expected inflation in the US, which would mean the US Federal Reserve would continue to raise interest rates.
Every one of these corrections came from a scare, either that global growth would falter, which explained the panic attacks of February-March this year and March 2005, or that interest rates will rise and liquidity diminish, which was the reason behind the May 2004 and May 2006 sell-offs.
On each one of these occasions, the trigger occurred ove-rseas, although it’s true that the May 2004 panic was made worse by the induction of a government at the Centre that was supported by Left parties. And finally, on each occasion, the markets bounced back and went on to make new highs.
The current global economy has often been described as a not-too-hot, not-too-cold Goldilocks economy and every time there’s a threat that growth may slow (the economy becomes too cold) or that interest rates may rise (it becomes too hot) the markets get nervous. Also, merely counting the days after a big crash to recover may not give the true picture. On several occasions, the market had started falling well before the big crash happened. For instance, in 2004, the Sensex had made a new high of 6,249 as early as January and it was able to reach that level only on 30 November. In effect, a bear market prevailed from January to November, punctuated by the crash in May.
Similarly, the Sensex reached a high of 12,671 on 11 May 2006, a peak it was able to regain only on 13 October. And this year, the index went up to 14,723 on 9 February and it was only on 2 July that it was able to cross that peak. Seen from that perspective, the question to really ask is how long it will take for the all-time high of 24 July to be surpassed.

Britannia Industries

Britannia Industries

Centurion Bank

Centurion Bank

Dr Reddy's Labs

Dr Reddy's Labs

HDFC

HDFC

Infoedge Ltd

Infoedge Ltd

Central Bank Subscription Details

Qualified Institutional Buyers (QIBs) - 89.1157 times

Non Institutional Investors - 69.5761 times

Retail Individual Investors (RIIs) - 16.2027 times

OVERALL - 62.07 times

Technicals for the Week

Technicals for the Week

ITC Ltd

ITC Ltd

IDEA Cellular

IDEA Cellular

Weekly Stock Ideas

Buy Pantaloon at Rs517 with SL of Rs509 and Target of Rs540, 545

Buy IDFC at Rs127 with SL of Rs122 Target of Rs135, 139

Buy Renuka Sugars at Rs629 with SL of Rs620 and Target of Rs650, 655

Buy Cummins at Rs381 with SL of Rs373 and Target of Rs395, 400

Buy Tata Power at Rs702 with SL of Rs686 and Target of Rs730, 735

Weekly Newsletter

Absolutely speaking...Fourth largest fall for the Sensex
The global meltdown saw Indian shares recording its fourth biggest fall in absolute terms on Friday. In case you need comfort, in percentage terms, the fall ranks much lower at 64. Concerns that a worsening US housing market may curb growth in the US market triggered a sell-off among most global markets. Sectoral indices were all in the red. The biggest losers were realty, oil & gas and capital goods.

After falling to a low 15,159.68 points, The Sensex closed 542 points lower at 15,234.57 while the Nifty ended 175 points down at 4445.20.

Select stocks managed to shine. ITC, Ranbaxy Laboratories and Ambuja Cements were the Sensex gainers. Losers on the Sensex included Tata Steel (down 7.37 per cent), BHEL (4.74 per cent), Reliance Communications (4.70 per cent), Hindalco (4.62 per cent) and HDFC Bank (4.43 per cent).

Declines on the BSE stood at 1,951 while advances were at 570. On the NSE declines were at 993 while advances stood at 143.

Following is a list of the Top 5 falls for the Sensex

1. May 18, 2006: Sensex fell by 826 points (6.76 per cent) to close at 11,391.
2. April 28, 1992: Sensex fell 570 points (12.77 per cent) to close at 3,870. This was due to the Harshad Mehta scam.
3. May 17, 2004: Sensex fell 565 points, its third biggest fall ever, to close at 4,505. Ruling NDA government lost power. Trading was suspended as the Sensex hit the lower circuit twice before regaining some ground at close.
4. July 27, 2007: Sensex fell 542 points to close at 15,234.57. Global meltdown following fears of US housing market slump.
5. May 15, 2006: The market fell by 463 points to 11,822 points.

Auto…A billion dollar acquisitions club in sight

There is no official word regarding Tata Motor’s planned bid for Ford’s marquee British brands - Jaguar and Land Rover. The question may well get answered when Tata Motors meets the media on Tuesday to announce their results. In fact, the other short-listed Indian candidate for the deal is Mahindra & Mahindra (M&M). Earlier, reports had stated that two Indian companies (Tata Motors and M&M) would be competing with several private equity firms like TPG Capital, Cerberus Capital Management, Ripplewood Holdings and One Equity Partners for purchasing Jaguar and Land Rover from Ford.

And to add to the auto buzz in India, reports say French carmaker Renault is in talks with two-wheeler major Bajaj Auto for a possible project to build economy vehicles costing around $3,000. The alliance will set up new platform at a new site. The cars and goods carriers made would be sold in India as well as abroad.

"Merger & acquisition (M&A) deals in the sector worth more than $515mn from 17 deals so far this year is almost equal to the value and volume of deals done by the sector in the whole of last year." said Bundeep Singh Rangar, Chairman, IndusView Advisors, the India-focused cross-border advisory firm. "Between Tata Motors and Mahindra & Mahindra, whoever walks away with the deal, the moment will be historic as it will mark the automotive sector’s entry into the elite billion dollar acquisitions club." said Rangar

The other reason why this deal will be significant is that it will further reinforce the prominence of the Indo-U.K. merger & acquisitions deal activity which has already seen the country’s two of the largest deals - the acquisition of Hutchison Essar Ltd India’s second largest GSM mobile service provider by the U.K.’s Vodafone Group Plc and the acquisition of the U.K.’s largest steel maker Corus Group Plc by India’s Tata Steel Ltd.

Aspirations have seen over 5,000 luxury cars added to the Indian roads in 2006, up from 3,000 in 2005 and just 1,000 in 2004, according to estimates. It’s just a matter of time, expect the global luxury car brands Volkswagen, Lamborghini, Rolls Royce Phantom, Bentley, Porsche, Aston Martin and Ferrari roll out their India plans in full steam.

And all fall down!

Are you lost or incomplete?
Do you feel like a puzzle, you can't find your missing piece?

Wall Street came crumbling down after long. US stocks fell on signs of further weakness in the housing sector. The domino effect came into play into the Asian as well as European Marekts with most of the Asian markets closing deep in the red. Habit of staging a record close almost everyday, finally took a toll on the bulls as they appear to be lost at the peaks on Dalal Street.

Bulls across the globe fell in a heap as Bears struck back in style dragging the key indices lower for the first time in last six weeks. China's stock market was a survivor in the global carnage and gained around 7% for the week. After May's record high , the government hiked the stock trading tax to cool speculation, causing shares to plunge. But better-than-expected corporate profits announced in recent days have reignited the bull run.

Key Indices in India fell the most in four months on concerns that U.S. housing slump will slow growth i the world's biggest economy and prompt investors to shun riskier assets. Tata Steel, Grasim,Gujarat Ambuja Cement and Hindalco were among the major losers for the week dragging the BSE 30-share Sensex down by 330 points or 2.1% to close at 15235. NSE Nifty fell 121 points or 2.6% to close at 4445.

Unwinding of positions on account of F&O expiry, turmoil in global equity markets, profit booking and jitters ahead of the RBI meet on credit policy spoiled the game for the bulls. Though, the rates are expected the stay unchanged, RBI has often in the past has thrown up plenty of surprises.

Selling was seen in Cement, Banking, Metal, Mid-Cap, Auto and Capital Good stocks. While FMCG stocks bucked the negative trend led by gains in ITC and HLL. While some stability returned in the technology stocks after the Indian Rupee fell from its nine year high of 40.19.

Cement companies were under pressure amid news reports that trade practices regulator MRTPC has ordered an investigation into an alleged price cartelisation by top 14 cement manufacturers. Cement socks also were badly beaten up frontline stock ACC lost over 10% to Rs990, Gujarat Ambuja declinwed over 7% to Rs125, Grasim lost over 5% to Rs2849 and Mangalam Cement slipped 5% to Rs163.

Some action was seen in Technology stocks, as Rupee ended its six weeks of gain after the stocks on the bourses tumbled sharply over the week. Indian Rupee fell 0.5% to 40.53 against the Dollar. Infosys was in the limelight after the company won a seven-year, US$250mn contract from Philips. Finally the scrip added 1% over the week. However, other IT stocks didn't fared well, Wipro lost over 2.2% to Rs493, TCS was down by 2% to Rs153.

Drop in prices on metal prices on LME dragged the metal stocks lower on Dalal Street. Tata Steel, SAIL and JSW Steel were among the major losers within the metal pack. Index Heavyweight Tata Steel plunged by over 9.5% to Rs647, the scrip was the second biggest loser among the 30-scrip's of Sensex, SAIL was also down by over 5.5% to Rs147 and Jindal Steel lost 0.2% to Rs3892.

ITC stood firm amid volatile week on expectations that strong Q1 growth in cigarettes sales will continue to drive the profits. ITC posted Q1 profit at Rs7.83bn (up 20%) and sales at Rs33.25bn (up 16.6%), above our expectations. ITC rose 5.4% during the week and was the top gainer among the 30-scrips of Sensex and Hindustan Unilever rose over 1.3% to Rs196. HUL was in the limelight after the company announced last week that the company is considering a buyback later this month. On Sunday, HUL will announce its half yearly financial results.

Profit booking was seen in Capital Good stocks. After a terrific run up in last couple of weeks, we saw some cooling off, as investors judged the current rally as excessive. L&T was among the top loser, the scrip lost over 2% to Rs2424, Siemens dropped over 4.3% to Rs1285 and Punj Lloyd fell by 2.5% to Rs265.

Having good cards is not enough. You should know to play them well.

The crash has finally come and as expected it was more to do with the global meltdown. Could Friday be termed as signs for things to come? Bulls and bears will have a lot of pondering to do over the weekend. But again a lot depends on global factors which are to an extent beyond our control. Investors will closely watch the developments of the RBI's meet on Tuesday. Though indices took a severe beating on Friday, concerns on valuations will continue.

Expectations of a quick 1000 point gain to 16K may have died down for the time being. In fact, today's fall suggest that market could fall below the 15K level briefly before staging a bounceback. The FII activity will be of utmost importance. Any pipe-burst in the FII flow could temporarily put the brakes on the march upwards. In times like these, earnings momentum and any positive development may be ignored by the markets. During the run-up, most negative news were also ignored.

The indices could well stage a smart bounce back on Monday. Only another global meltdown can keep the bears in control. Among the major firms announcing their earnings next week include, BEML, BHEL, Easun Reyrolle, HPCL, i-Flex, GE Ship, IB Real Esate, Hindalco, Tata Motors, Jet Airways, Nagarjuna Const, Tata Steel, Unitech, FT, and SUN TV. Market players will closely watch RIL earnings on Saturday and HUL's numbers expected on Sunday evening. India Infoline estimates RIL PAT to be up by 12.8% to Rs29.1bn and Net sales to be up 12.3% to Rs275bn.

Just yesterday, 23-year-old Shivani Singh was basking in the glow of a dividend cheque worth Rs 1,000 from her mutual fund investment. That the additional income was tax-free added to the joy she felt about investing smartly. But the joy turned into a worry overnight after the morning papers showed that the net asset value (NAV) of her mutual fund was now lower than the price at which she bought the scheme. After calling her fund agent, she came to know that since NAVs of all schemes fell after they issued dividends, there was no cause for concern. But that did not convince her as she believed that something was amiss.

Ms Singh is not alone. Many first-time investors like her don't realise that receiving dividends from mutual funds is unlike receiving the same from shares. In the case of mutual funds, part of the investment is actually paid back as the dividend, resulting in a reduction of the pre-dividend value of the investment.

The truth is that people like Ms Singh must understand various mutual fund scheme options, before trusting blindly on agents. Here are some simple questions, which new investors would do well to ask before they chose a dividend or growth scheme.

How is a dividend scheme different from a growth scheme?
Mutual funds generally provide their investors an option to invest their money either in a growth scheme or a dividend scheme. Dividend schemes are further classified as dividend payout and dividend reinvestment schemes. However, investing in dividend schemes does not imply that the mutual fund would distribute its share of profit as dividends. Getting a share of the profit has always been the privilege of shareholders. In case of mutual funds, those investing in the units are mere buyers of a financial product sold by the fund house. Investors gain only if the value of the stocks held by the fund appreciates over a period of time.

Dividend payout & dividend re-investment scheme
Since mutual fund dividend is nothing but the part payment of the investor's money back to him, its NAV deflates to the same extent as and when the fund pays dividend. That is the reason why the NAV of the dividend scheme is always lower compared with the NAV of the growth scheme of the same fund.

Dividend payout scheme
Say you have invested Rs 10,000 in a fund where a unit of face value Rs 10 is currently quoting at a NAV of Rs 40. This would give you 250 units in the fund. Let's say in six months, the NAV becomes Rs 50 and your investment is now worth Rs 12,500. Now, if the fund declares a dividend of 20% on face value, you would end up getting Rs 500 (250 units * Rs 2) as dividend. But post-dividend, the NAV will decline proportionately to Rs 48/- per unit. If you sell all your units now, you will receive Rs 12,000 (250 units * Rs 48). Thus, the total return in your hands would add up to same sum of Rs 12,500/- (Rs 12,000 + Rs 500).

Dividend reinvestment
Under this option, the fund does not repay the dividend to investors. Instead, the dividend is used to purchase additional units of the fund at the NAV arrived at after the declaration of dividend. To continue with the above example, the NAV of the fund declines to Rs 48 post-dividend. However, since you have opted for reinvestment of dividend, the dividend amount of Rs 500/- shall be used by the fund to allocate additional 10.42 units (Rs 500 divided by Rs 48) to you. The total number of units that you would now have would be 260.42 (250 units+10.42 units). Redemption of these units at the revised NAV of Rs 48/- would again end up giving the same returns of Rs 12,500 (260.42 units * Rs 48).

What is a growth option?
In this case, the earnings are ploughed back into the fund rather than distributing it to the investors. You can encash the profits only at the time of redemption. Unlike the dividend reinvestment option, the number of units will also remain constant throughout the period of investment. However, the NAV of the fund would always be higher vis-?-vis the other two options, thereby ensuring that you get the same returns as your peers from the other two options. In this example, as the NAV went up from Rs 40 to Rs 50 per unit, you would get Rs 12,500 (250 units * Rs 50) if redeemed at this price, thereby booking a profit of Rs 2,500. If you stay invested, the NAV would either increase or decrease from the level of Rs 50/-.

So when do I opt for a growth scheme and when for a dividend?
If you are sitting on idle cash and looking for a long-term investment option, then go for a growth scheme. But if you are looking for a steady cash flow and cannot afford to tie up your money for long, dividend payout is the one to opt for.

It has been proven empirically that in the long run, markets don't disappoint despite the fluctuations in the short run. This, however, is for investors who are willing to stay invested for at least five years.

However, if you are looking for a steady cash flow and cannot afford to tie up your money for a long time, the dividend payout is the one to opt for. Just remember though that declaring dividends is always the prerogative of the fund house and investment in mutual funds does not carry a guarantee card for periodic dividends.

RBI’s monetary policy review holds key

With most of the frontline companies having already declared their Q1 June 2007 results, the market will closely watch the monetary policy review of RBI due on Tuesday, 31 July 2007. RBI is likely to keep rates steady. However, it remains to be seen whether the central bank will raise cash reserve ratio (CRR) to suck out excess liquidity in the banking system.

The 30-share BSE Sensex lost 330.98 points or 2.13% to 15,234.57 in the week ended 27 July 2007, on profit booking. The S&P CNX Nifty lost 120.85 points or 2.6% to 4,445.20 in the week. Prior to this, the market had been posting weekly gains since the past six weeks.

Latest Data released on Friday, 27 July 2007, showed India's wholesale price index rose 4.41% in the 12 months to 14 July 2007, higher than the previous week's 4.27% due to increase in food prices. The inflation is within the central bank's medium-term target of 4-4.5% and annual target of 5% for this fiscal. The Finance Minister, P Chidambaram, hinted recently that high crude oil and food prices did not necessary mean that money policy would be tightened further.

Among the frontline companies - Bharat Heavy Electricals, Bharat Electronics, Mahindra & Mahindra, Cairn India and i-flex Solutions, will declare their June 2007 quarter results in the coming week

Gujarat Mineral Development Corporation, India Cements, Balkrishna Industries, Bharati Shipyard, Dredging Corporation of India, Gitanjali Gems, India Infoline, Indiabulls Real Estate, Nagarjuna Construction Company, Wanbury, Asian Electronics, Development Credit Bank, Ashapura Minechem, Parsvnath Developers, Birla Corporation, Financial Technologies (India), Provogue (India), Madhucon Projects, Sterling Biotech and United Phosphorous, will also declare their result

Oil prices have held firm above $75 a barrel on fears of tight summer supplies would offset a fresh wave of risk aversion that struck US equities and dragged oil down a day ago. Any sharp rise from these levels, may dampen the sentiment

Sensex sheds 331 points

The market edged lower, last week, due to a sharp fall in a single trading session on Friday, 27 July 2007, that was caused by setback in Asian and US stocks. Earlier, the market remained firm for a better part of the week as renewed buying was witnessed due to good Q1 June 2007 results. FII inflows remained robust.

The 30-share BSE Sensex lost 330.98 points or 2.13% to 15,234.57 in the week ended 27 July 2007. The S&P CNX Nifty lost 120.85 points or 2.6% to 4,445.20 in the week.

Profit taking was witnessed in small-cap and mid-cap shares after their recent solid surge. BSE Small-Cap index shed 261.67 points or 3.2% to 7,926.45 in the week. BSE Mid-Cap index lost 237.75 points or 3.48% to 6,598.32 in the week.

A good rollover was witnessed to the August 2007 series from the July 2007 series when the July 2007 contracts expired on Thursday, 26 July 2007. According to one brokerage report, overall 83% positions have got rolled to August 2007 from July 2007. A good rollover of 73% was witnessed in index futures as well. Institutional investors rolled over short positions in Nifty following the hedging of their positions in the cash market

FIIs inflow in three trading sessions from Monday, 23 July 2007, to Wednesday, 25 July 2007, totaled Rs 2322.40 crore. Mutual funds sold shares worth a net Rs 468.70 crore in four trading session from Monday, 23 July 2007 to Thursday, 26 July 2007.

Trading for the week began on an upbeat note. Sensex surged 166.65 points or 1.07% to 15,732.20, an all time closing high on Monday, 23 July 2007. Shares from the auto, real estate, and capital goods sectors were at the forefront of the rally.

Shares rose in China as well on that day. Shanghai Composite jumped 3.81% to 4,213.36, even as the central bank raised borrowing costs, effective Saturday, 21 July 2007, in the latest of a series of moves aimed at capping inflation and preventing the world's fourth-largest economy from overheating.

The market extended its winning steak to firth straight session on Tuesday, 24 July 2007, helped by steady buying interest for capital goods, power and IT stocks. Sensex rose 62.72 points to 15,794.92, an all time closing high.

The market remained weak throughout the day on Wednesday, 25 July 2007, as correction set in after five straight days of rally. Sensex lost 95.59 points to 15,699.33. Weakness in global markets triggered profit taking.

Short covering ahead of expiry of July 2007 derivatives contracts aided 77-point surge in Sensex on Thursday, 26 July 2007. Two index heavyweights Reliance Industries and Infosys led rally on that day.

Weak Asian and US markets spooked domestic bourses on Friday, 27 July 2007, as Sensex plunged 541.74-point, or 3.4%, to 15,234.57, registering its biggest rout in a single trading session in nearly four months. Stocks across Asia fell after the US market dropped 2.3% on Thursday, 26 July 2007, on signs of further weakness in the US housing market and deteriorating conditions for corporate buyouts. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down between 2.4% to 4%

Reliance Energy surged extending its solid rise witnessed since mid-June 2007 on hopes that the company may win the 4,000- megawatt Sasan power project in Madhya Pradesh as it was the second best bidder after Lanco. The empowered group of ministers (E-GoM) headed by power minister Sushil Kumar Shinde, on Tuesday, 24 July 2007, decided to scrap the allotment of the 4,000- megawatt Sasan power project in Madhya Pradesh to the lowest bidder, the Lanco-Globeleq consortium. E-GoM declared Lanco’s bid as void ab-initio (invalid from the outset). However, E-GoM did not take any decision on awarding the Rs 20,000-crore project to REL or invite fresh bids.

India’s largest cigarette manufacturer ITC surged nearly 9% in a single trading session on Wednesday, 25 July 2007, on market talks it may announce demerger of its agri business. The stock extended gains on Friday, 27 July 2007, when it reported a forecast beating 20% growth in net profit in Q1 June 2007. The company unveiled its results during trading hours on Friday, 27 July 2007.

Car major Maruti Udyog rose nearly 4% on Thursday, 26 July 2007, when it beat forecast by reporting a 35.1% growth in net profit in Q1 June 2007 over Q1 June 2007 during trading hours.

Ranbaxy Laboratories, India's largest pharma firm by sales, jumped nearly 10% on Thursday, 26 July 2007, after it reached an agreement with GlaxoSmithKline (GSK) to end their litigation in the US on Valtrex (valacyclovir hydrochloride tablets) used in the treatment of herpes.

NTPC, India’s largest power generation company, firmed up after it signed an MoU with Asian Development Bank for setting up a joint venture company to undertake renewable power generation. The company made this announcement after trading hours on Monday, 23 July 2007.

Hindustan Unilever (HUL) surged on Monday, 23 July 2007, after its parent announced after market hours on 20 July 2007 it is considering a plan to buy its own shares on 29 July 2007. HUL will also declare financial accounts for the second quarter and half year ended 30 June 2007 on that day.

Index heavyweight Reliance Industries (RIL) edged higher on reports it may seek foreign partner for its deep-water exploration blocks off the country's east coast. The stock hit record high of Rs 1948 on Thursday, 26 July 2007. Reports indicate that global oil firms, including Chevron, have shown interest in partnering RIL for its Cauvery oil & gas assets

Oil exploration major ONGC extended gains after reported an 11.9% growth in net profit to Rs 4610 crore in Q1 June 2007 over Q1 June 2006, due to fall in subsidy sharing burden. The company unveiled results on 25 July 2007.

Cement stocks plunged after their recent rally following reports on Tuesday, 24 July 2007, that Monopolies & Restrictive Trade Practices Commission (MRTCP) had ordered a probe into the business practices of 14 leading cement manufacturers.

ICICI Bank drifted lower despite posting a 25% rise in net profit in Q1 June 2007 to Rs 775.08 crore over Q1 June 2006, riding on increased fee-based income and retail lending. Total operating income rose 46.9% to Rs 9,281.42 crore in Q1 June 2007 over Q1 June 006. The results were announced on 21 July 2007.

UTI Bank lost ground after it priced its GDR issue at a discount to the ruling market price. It announced before market on 23 July 2007 that it had priced its offering of 14.13 million GDRs, aggregating $ 218.07 million. Each GDR, representing one underlying share, was priced at $15.43 and will be listed on the London Stock Exchange. This represents a discount of 1.7% to the closing price of the Bank's GDR on 20 July 2007.

Real-state developer Housing Development and Infrastructure settled at Rs 558.60 on BSE on Tuesday, 24 July 2007, a modest premium of 11.72% over the price of Rs 500 per share. The stock debuted at Rs 567.50. The stock also debuted in NSE's F&O segment with a lot size of 400. The HDIL IPO was subscribed 6.6 times

Debutante Suryachakra Power Corporation settled at Rs 22.82, on Monday 23 July 2007, a premium of 14.1% over the IPO price of Rs 20. The stock debuted at Rs 30. The Suryachakra IPO had closed on 29 June 2007 with 2.18 times subscription.

BSE, on Monday, 23 July 2007, announced that it is shifting 45 scrips to trade-to-trade segment with effect from Friday, 27 July 2007. The stocks transferred to trade-to-trade segment include B.A.G. Films, BSL, Dharamsi Morarji Chemical, Isibars, Pearl Engineering Polymers, V.I.P. Industries and Southern Ispat among others.

Meanwhile, a development that could increase domestic liquidity is the approval given by the Cabinet Committee on Economic Affairs on Thursday, 26 July 2007, to public sector companies enjoying Navratna and Miniratna status to invest up 30% of their surplus funds in equity mutual funds. The total surplus of central PSUs in 2005-06 was estimated at about Rs 2,39,500 crore, according to public enterprises survey. This means that about Rs 70,000 crore may flow to equity mutual funds. However, investments would be allowed only in public sector mutual funds.

Emerging markets-dedicated funds saw their second best inflows ever in the week ending 18 July 2007, after setting their all-time high just the previous week. Inflows to emerging markets equity funds exceeded outflows by $3.3 billion in the week ended 18 July 2007. More than half of this net inflow - a record high of $1.8 billion went to funds dedicated to Asia ex-Japan.

Global index provider FTSE Group (FTSE) and Indian infrastructure specialist, Infrastructure Development Finance Company (IDFC) on Tuesday, 24 July 2007, the FTSE IDFC India Infrastructure Index Series which will represent the performance of Indian companies listed on NSE or BSE, generating the majority of their revenue from infrastructure.

Bowing to pressure from Left-backed trade unions, the Employees Provident Fund (EPF) board on Monday, 23 July 2007 agreed to continue paying 8.5% interest rate to its nearly four crore subscribers for fiscal 2006-07 as well. The EPF has a corpus of Rs 94,000 crore including pension fund.

Data released on Friday, 27 July 2007, showed India's wholesale price index rose 4.41% in the 12 months to 14 July 2007, higher than the previous week's 4.27% due to increase in food prices