Oil tops $130 over future supply worry

Oil climbed to a life-time high above USD130 a barrel on Wednesday, driven higher by a combination of long-term production worries and a near-term focus on tight fuel stocks.

A US government report later on Wednesday was expected to show crude inventories rose for a fifth straight week.

Stocks of refined products were also forecast to have increased slightly, but the market is concerned distillates, which include heating oil and gasoline, could run short.

US crude hit a peak of USD130.47 before easing to USD129.71 by 1328 GMT, up 73 cents. London Brent gained USD1.16 to USD129.

"This market refuses to lie down," said Robert Laughlin of MF Global. "There is fresh length coming into the market even at these lofty levels."

Investors have been drawn in by a weak US currency, which has made dollar-denominated commodities relatively cheap for holders of other currencies.

The dollar slid to a one-month low against a basket of currencies on Wednesday as the euro was pushed higher by expectations of higher euro zone interest rates.

Speaking to Reuters during a visit to Venezuela, OPEC Secretary General Abdullah al-Badri said the soft dollar was one of the factors that could keep pushing oil higher.

The Organization of the Petroleum Exporting Countries (OPEC) has kept official policy unchanged, but its biggest producer Saudi Arabia has raised production and other members have overcome problems that had reduced supplies.

Tanker tracker Petrologistics said on Wednesday OPEC`s oil output in May had risen by 700,000 barrels per day (bpd) compared with April.

Extra OPEC crude has had little impact as the market has instead focused on short-term refinery problems, which are symptomatic of chronic underinvestment.

Diesel consumption has led the energy complex higher after last week`s earthquake in China increased the need for fuel to make up for disruption of other supplies.

The perception available oil will struggle to keep up with demand for the foreseeable future has led to a series of bullish price forecasts from investment banks and influential investors.

Billionaire T. Boone Pickens said on Tuesday he expected oil to hit USD150 a barrel this year after Goldman Sachs said earlier this month a barrel of crude could reach USD200 by 2010.

Oil has risen from below USD20 in early 2002.

Company Background - Reliance Capital

Reliance Capital is one of India's leading and fastest growing private sector financial services companies. It ranks among the top three private sector financial companies and banking groups in terms of net worth. Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking and other activities in financial services.

Consequent to the mutual agreement between Mukesh Ambani and Anil Ambani, Reliance Industries became part of Mukesh Ambani and Reliance Capital, Reliance energy became part of Anil Ambani, who has rechristined his group as Anil Dhirubhai Ambani group. Accordingly, now Reliance Capital is a part of the Reliance - Anil Dhirubhai Ambani Group.

The company intended to access the capital market as part of the resource raising programme, which materialised in the year 1990 and active operations commenced soon after its maiden public issue of equity shares aggregating Rs 20 crore in April 1990. In Jan.'1995, it came out with a rights-cum-public issue at a premium of Rs 130, aggregating Rs 600 crore to strengthen the company's equity base and meet its long-term working capital requirements.

The company was granted approval by the Securities and Exchange Board of India (SEBI) to act as an Approved Intermidiary under the provisions of SEBI's Securities Lending Scheme, 1997.

During 1998-99, the company disinvested part of its holding in Reliance Share and Stock Brokers and Reliance Land. These companies have accordingly ceased to be subsidiary of the company.

At present RCL has four wholly-owned subsidiaries. Reliance Capital Asset Management is the investment manager of Reliance Capital Mutual Fund, Reliance Capital Trustee Co, is the trustee company of the Reliance Capital Mutual Fund, Reliance General Insurance Company Ltd and Reliance Life Insurance Company Ltd.

The company has shifting its focus from a traditional NBFC to a special purpose vehicle and venture capital outfit developing infrastructure projects and investing in infotech, media, Internet and biotech startups, will help it boost its performance in the coming years. The company's fee-based activities include a packaged deal offer to the corporates besides like issue management, underwriting, corporate advisory, corporate valuation, restructuring of operations, privatisation, divestment, mergers and acquisitions.

RCL has also obtained approval from the Reserve Bank of India (RBI) and Insurance Regulatory and Development Authority (IRDA) for financial participation in the insurance sector. It has firmed up plans to enter both life and general insurance categories, and accordingly has floated the two companies Reliance General Insurance Company and Reliance Life Insurance Company.

In 2006, The company has risen over Rs.2,200 Crores through preferential issue of equity shares/warrants at a price of Rs.228 per Share, to strengthen its financial position, and to generate long-term resources for accelerating its future growth plans.

The Hon'ble High court of Gujarat has approved the Scheme of amalgamation and arrangement of Reliance Capital Ventures Ltd with the Company. The scheme of amalgamation envisages a share exchange of Ratio of 5 (five) equity shares of the face value of Rs.10/- each of the company, for every 100 (one hundred) equity shares of the face value of Rs.10/-each of RCVL.

The company along with its affiliate Reliance Land Private Limited, acquired a controlling stake in Adlabs Films Ltd, a leading company engaged in the entertainment sector, through a preferential allotment of share, and by making an open offer. The company and Reliance Land Private ltd became promoters of Adlabs Films Ltd

In November 2006, The company has agreed to acquire 100% Equity share Capital of Travelmate Services (India) Private ltd, subject to necessary regulatory approvals. The proposed acquisition will mark the immediate entry of the company into the exciting growth area of Money Changing and money transfer, in one the world's fastest growing, and most under-served markets.

Company Background - Reliance Industries

In the year 1966 the RIL was founded by Shri Dhirubhai H.Ambani, it was started as a small textile manufacturer unit. In May 8th, 1973 RIL was incorporated and conformed their name as RIL in the year 1985. Over the years, the company has transformed their business from manufacturing of textiles products into a petrochemical major. RIL is the largest private-sector enterprise in India in terms of revenues, profits, net worth, assets and market capitalization. It's operations capture value addition at every stage, from the production of crude oil and gas to polyester, polymer and chemical products, and finally to the production of textiles. The company operates mainly in India but has business activities and customers in more than 100 countries around the world. It has production facilities at three major locations in India and a further four locations in Europe. It also has exploration and production interests in India, Yemen and Oman.

The company has set up a texturising / twisting facilities in 1979, RIL has also set up plants for Polyester Staple Fiber (PSF) in 1986 and for Linear Alkyl Benzene (LAB) & Purified Terephthalic Acid (PTA) in 1988. RIL has setup a petrochemical facility to produce HDPE and PVC at Hazira, Gujarat in technical collaboration with DuPont and BF Goodich respectively. The Hazira petrochemical plant was commissioned in 1991-92.

In the year 1995-96, the company entered the telecom industry through a joint venture with NYNEX, USA and promoted Reliance Telecom Private Limited in India. Reliance became the first corporate in Asia to issue bonds in the U.S at the year of 1996-97. The company commissioned an 80,000 tonne bottle grade PET chip plant at Hazira manufacturing complex. Reliance's PET chips has been accepted internationally due to their high quality during the year 1997-98 and in the same year Reliance Industries Planned to invest around Rs. 5000 crores (US $ 1,250 million) in building two world-scale plants at the site of the Jamnagar refinery in Gujarat. In 1998-99, RIL introduced packaged LPG in 15 kg cylinders under the brand name Reliance Gas. In 1999-2000, RIL commissioned the world's largest 1.4 million tonnes per annum Paraxylene (PX) plant at its new integrated petrochemicals complex at Jamnagar which was planned at 1997-98. Reliance Petroleum Limited (RPL) was amalgamated with Reliance Industries Ltd in the year 2002-03.

The merger places Reliance in the reckoning for a place in the Fortune Global 500 list of the world's largest corporations. During the year the company has also amalgamated Indian Petrochemicals Corporations Limited (IPCL), which leads to compete from a stronger base in the global market. Reliance discovered natural gas in the very first exploration well it drilled in the deep-water exploration block KG-D6 in the Krishna-Godavari basin off Andhra Pradesh. In 2004-05, RIL acquired the polyester major, Trevira GmbH, headquartered in Frankfurt, Germany which has the capacity of 130,000 tonnes per annum of polyester staple fibers, polyester filament yarns and polyester chips.

As of 2007 across the globe, RIL is largest producer of polyester fiber and yarn, 4th largest producer of Paraxylene (PX) and Purified Terephthalic Acid (PTA), 6th largest producer of Mono Ethylene Glycol (MEG) and 7th largest producer of Polypropylene (PP). Gujarat State Petronet Ltd (GSPL) and Reliance Industries Ltd (RIL) have signed a gas transportation agreement to transport 11 million standard cubic meters per day (MSCMD) of natural gas from Bhadbhut in Bharuch to RIL's refinery and petrochemical complex in Jamnagar. Similarly, Gujarat State Petroleum Corporation Ltd (GSPC) has signed a gas transportation agreement with Reliance Gas Transmission and Infrastructure Ltd (RGTIL) for transportation of 3.5 MSCMD of natural gas from its largest K-G basin discovery at Kakinada to Gujarat.

The Maharashtra state government has given the final nod to Reliance Industries Limited (RIL) to set up two captive power plants in Maharashtra - each of 1100 MW capacity - to meet the requirement of special economic zones, malls and other commercial setups and company assured the state of gas supply to Mahgenco's Uran unit. Reliance Industries Ltd plans to invest between Rs 25,000 crore to Rs 30,000 crore in a pipeline grid that covers main gas transport trunk lines supplemented by spur lines crisscrossing four major States initially, followed by a pan-India network and it stretching about 10,000 km across the country. Reliance Industries is entering the supply-deficient hospitality business and is in talks with big international names such as Walt Disney, Ritz Carlton and Four Seasons for managing some of their hotels, it is also looking to set up hotels with themes, such as those run by Disney in the US. Having entered consumer retail and special economic zones in the last two years, Reliance considers hospitality a natural complement to its existing businesses.

The company has signed a letter of intent with NOVA Chemicals on May 2008, to form 51:49 a joint venture in the area of building and construction. This proposed new joint venture between RIL and NOVA Chemicals would be a technological partnership for deploying green building and construction technologies to design, engineer, fabricate and build a range of high-efficiency structures for the Indian sub-continent. Reliance Industries Ltd plans to investment Rs 17,000 crore in oil and gas exploration over the next few years; The Company has already invested Rs 9,000 crore in exploration so far. RIL is also considering surrendering seven exploration blocks awarded to it by the Government.

NSE Bulk Deals to Watch - May 21 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
21-MAY-2008,BIRLAPOWER,Birla Power Solutions Ltd,GOPAL TRADERS,BUY,12224,31.43,-
21-MAY-2008,HDIL,Housing Development and I,P R B SECURITIES PRIVATE LTD,BUY,1094141,837.62,-
21-MAY-2008,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,6335111,33.53,-
21-MAY-2008,ITI,ITI Ltd.,RAHUL DOSHI,BUY,101554,42.63,-
21-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,PAWAN BHIMSARIA,BUY,93029,161.23,-
21-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,RASHI EQUISEARCH PVT. LTD.,BUY,55444,153.31,-
21-MAY-2008,MAXWELL,Maxwell Industries Ltd.,KAPIL JAYAKUMAR PATHARI,BUY,944065,18.75,-
21-MAY-2008,MAXWELL,Maxwell Industries Ltd.,SUNIL JAYAKUMAR PATHARI,BUY,1095950,18.75,-
21-MAY-2008,ZICOM,Zicom Electronic Security,GKK CAPITAL MARKETS PVT LTD,BUY,140000,171.77,-
21-MAY-2008,ADLABSFILM,Adlabs Films Limited,BARCLAYS CAPITAL MAURITIUS LIMITED,SELL,249245,722.96,-
21-MAY-2008,BIRLAPOWER,Birla Power Solutions Ltd,GOPAL TRADERS,SELL,222224,31.51,-
21-MAY-2008,HDIL,Housing Development and I,P R B SECURITIES PRIVATE LTD,SELL,1130141,839.41,-
21-MAY-2008,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,5858981,33.54,-
21-MAY-2008,ITI,ITI Ltd.,RAHUL DOSHI,SELL,74979,42.64,-
21-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,PAWAN BHIMSARIA,SELL,93029,161.02,-
21-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,RASHI EQUISEARCH PVT. LTD.,SELL,69233,153.44,-
21-MAY-2008,MAXWELL,Maxwell Industries Ltd.,VINAY JAYAPAL REDDY,SELL,2040015,18.75,-

BSE Bulk Deals to Watch - May 21 2008

Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
21/5/2008 522273 AHMEDA STEEL LOLABEN ARVINDBHAI CHINAI B 21850 22.25
21/5/2008 532975 AISHWARYA TE SHETTY MANISH NARAYANBHAI B 80421 117.82
21/5/2008 532975 AISHWARYA TE PREM MOHANLAL PARIKH B 100000 114.82
21/5/2008 532975 AISHWARYA TE N D NISSAR B 552201 116.10
21/5/2008 532975 AISHWARYA TE DIPAK R RATHOD B 55000 117.07
21/5/2008 532975 AISHWARYA TE RAVINDRA THIMMAPPA SHETTY B 62500 116.79
21/5/2008 532975 AISHWARYA TE SMITE VILAS MARATHE B 160362 116.78
21/5/2008 532975 AISHWARYA TE AMU SHARES AND SEC LTD B 66754 114.99
21/5/2008 532975 AISHWARYA TE SANDEEP S SABOO S 100000 115.51
21/5/2008 532975 AISHWARYA TE N D NISSAR S 552201 116.13
21/5/2008 532975 AISHWARYA TE DIPAK R RATHOD S 55000 118.41
21/5/2008 532975 AISHWARYA TE RAVINDRA THIMMAPPA SHETTY S 62500 116.28
21/5/2008 532975 AISHWARYA TE SMITA VILAS MARATHE S 160362 116.93
21/5/2008 532975 AISHWARYA TE AMU SHARES AND SEC LTD S 66754 115.11
21/5/2008 532975 AISHWARYA TE SHETTY MANISH NARAYANBHAI S 83329 118.25
21/5/2008 532975 AISHWARYA TE VINOD SHOKEEN S 85001 115.65
21/5/2008 532975 AISHWARYA TE PREM MOHANLAL PARIKH S 100000 115.05
21/5/2008 504629 ANIL SP STEL ANUSHA RAVI JAISWAL B 20000 23.00
21/5/2008 504629 ANIL SP STEL ANUSHA RAVI JAISWAL S 20000 23.09
21/5/2008 531223 ANJANI SYNTH ARVIND KALYANJI RAMBHIA B 186853 48.22
21/5/2008 531223 ANJANI SYNTH ARVIND KALYANJI RAMBHIA S 186853 46.18
21/5/2008 530355 ASIAN OILFIE ROCKLINE CONSTRUCTION CO NG B 520000 189.99
21/5/2008 530355 ASIAN OILFIE CONSOLIDATED SECURITIES LTD S 400000 189.87
21/5/2008 531932 C G IMPEX PRAFULLABEN AMRUTBHAI SONI S 43523 19.11
21/5/2008 531067 CONTIL I LTD SAURBH MOHAN B 27200 9.66
21/5/2008 524388 CRAZY INFOTE RELIGARE FINVEST LTD S 600000 8.45
21/5/2008 532271 CYBERMAT INF EDELWEISS ESTATES PRIVATE LIMITED B 3688541 5.95
21/5/2008 532271 CYBERMAT INF ASTUTE COMMODITIES AND DERIVATIVES PVT LTD B 745045 6.04
21/5/2008 532271 CYBERMAT INF EDELWEISS ESTATES PRIVATE LIMITED S 3015309 6.02
21/5/2008 532271 CYBERMAT INF ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 780044 5.97
21/5/2008 504000 ELPRO INTERN JUPITER ASSET MANG AC JUPITER INDIA FUND B 25000 694.05
21/5/2008 504000 ELPRO INTERN JUPITER ASSET MANG AC JUPITER PAF INVESTMENT LTD S 25000 694.05
21/5/2008 531137 GEMSTONE INV BHAVESH PRAKASH PABARI S 50000 23.09
21/5/2008 532283 KASHYAP TEC AMRUT SEC.LTD S 2084473 2.01
21/5/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 93834 24.03
21/5/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 63978 22.94
21/5/2008 531602 KOFF BR PICT UNIVERSAL CREDIT S 30191 23.33
21/5/2008 522298 MICRO FORGE KRISHNARAJ SANJAY KILACHAND B 100000 15.57
21/5/2008 521030 NAKODA TEXT CREDIT CAPITAL ASSET MANAGEMENT CO. LTD ACC DISCOVERY STOCK FUND B 100000 55.50
21/5/2008 531273 RADHE DEVELO RAVI VASANTBHAI PAWAR S 55000 128.78
21/5/2008 532972 SANKHYA INFO CHANDRA SHEKHAR KAPOOR B 46846 190.93
21/5/2008 532972 SANKHYA INFO CHANDRA SHEKHAR KAPOOR S 44796 191.18
21/5/2008 531626 SILVER SMITH A.L.JAIN OVERSEAS PVT LTD B 23500 32.50
21/5/2008 531626 SILVER SMITH DECENT FINANCIAL SERVICES PVT LTD S 56250 32.46
21/5/2008 508976 SPANC TELESY BEEJAY INV AND FIN CONS PVT LTD S 97000 157.00
21/5/2008 532966 TITAGARH WAG OPG SECURITIES PVT LTD B 148943 807.43
21/5/2008 532966 TITAGARH WAG OPG SECURITIES PVT LTD S 148943 808.11
21/5/2008 524038 VENLON ENTER RAMESH V MATHRANI B 200000 4.80
21/5/2008 524038 VENLON ENTER CHANDRU DAULAT DATWANI S 200000 4.80
21/5/2008 526586 WIM PLAST LT RAJIV ARORA B 40354 71.06

Post Session Commentary - May 21 2008

The Indian market made a smart recovery after the mid session to close with marginal gains. After a weak start backed the unfavoring cues from the global markets like the surging crude oil prices above $129 barrel as well the rising inflation, the domestic market made a smart turnaround to gain some momentum after the mid session on the back of selective buying across the counters. This was also supported by the by the Asian stocks that ended mixed and the European Market, which is trading green. Irrespective of the selling pressures, the oil and gas stocks shines through out the trading session as most buying interest was seen from these baskets. The metal and capital goods stocks also joined the rally while banking and pharma stocks witnessed selling pressure. The market breadth was positive as 1710 stocks closed in green while 1009 stocks closed in red.

The BSE Sensex closed marginally higher by 12.98 at 17,243.16 and NSE Nifty also increased by 12.7 points to close at 5,117.65. The BSE Mid Cap and Small Cap closed up by 41.99 points at 7148.05 and 130.37 points at 8,788.98 respectively. The BSE Sensex touched intraday high of 17,293.34 and intraday low of 17,041.63.

Gainers from the BSE are Tata Steel (3.09%), Mahindra & Mahindra (2.66%), Reliance (2.53%), BHEL (2.03%), Grasim Industries (1.57%), Tata Motors (1.55%), TCS Ltd (1.18%) and ITC Ltd (1.13%).

Losers from the BSE are HDFC Bank (3.46%), HDFC (3.13%), HUL (2.34%), NTPC (2.15%), Cipla Ltd (2.02%), ICICI Bank (1.77%), Ambuja Cement (1.61%) and Raqnbaxy Lab (1.35%).

The Oil & Gas index closed higher by 263.19 points at 11,432.80. Gainers are Reliance Natural Res (5.04%), Aban Offshore (4.95%), Essar Oil Ltd (4.75%), Reliance Petroleum (3.99%), Reliance (2.53%) and BPCL (1.99%).

The Metal index advanced by 213.31 points to close at 17,390.28. Gainers are Gujarat Nre C (6.28%), Nat Aluminum Co (4.62%), Tata Steel (3.09%), Hindustan Zinc (3.07%), Ispat Industries (2.40%) and Welspan Gujarat (1.88%).

The Capital Goods index inclined by 106.60 points to close at 13,670.08. Major gainers are Kirloskar Br (15.04%), Praj Industries Ltd (11.26%), Punj LLoyd (3.30%), Alstom Proj (3.30%), Areva (3.26%), BHEL (2.03%), and Thermax Ltd (1.26%).

The Bankex index fell by 123.95 points to close at 8,639.90 as HDFC Bank (3.46%), Union Bank (2.83%), Kotak Bank (2.71%), Bank of India (2.53%), CBOP (1.25%), Punjab National Bank (1.18%) and Allahabad bank and Indian Overseas bank (0.55%) closed in negative territory.

The Pharma index closed lower by 24.15 points at 4,245.69. Losers are Glenmark Pharma (3.87%), Sterl Biotec (3.17%), Cipla Ltd (2.02%), Sun Pharma (2.00%), Niholas Pirmal (2.00%), and Aurbindo Pharma (1.53%).

Volatile market ends buoyant

The market wiped out losses of over 150 points incurred in the first half, after a strong bout of buying in Tisco, Mahindra & Mahindra and Reliance Industries triggered wide-spread buying in the market. It was a highly volatile trading session, with the Sensex opening 164 points lower at 17066 following weakness in Asian indices and crashing to the day's low of 17042 on relentless selling. The market was on a recovery path thereafter--the Sensex witnessed a sharp turnaround in the afternoon as gains in heavyweights, oil & gas, metal and public sector stocks propelled the index to an intra-day high of 17293. After gyrating 250 points during intra-day trades, the Sensex closed up 13 points at 17243. The Nifty also ended 13 points higher at 5118.

The market breadth ended in positive. Of the 2,795 stocks traded on the BSE 1,710 stocks advanced, 1,009 stocks declined and 76 stocks ended unchanged. Among the sectoral indices, the BSE Oil & Gas index led the pack and gained 2.36% at 11,433 followed by the BSE Metal index (up 1.24% at 17,390) and the BSE PSU index (up 0.98% at 7,727). The CG index, auto index and realty index ended with steady gains. The rest of the sectoral indices ended in negative territory.

Tata Steel was the star performer amongst the heavyweights and the stock soared 3.09% at Rs922.25. Among the other major gainers, Mahindra & Mahindra advanced 2.66% at Rs670, Reliance Industries jumped 2.53% at Rs2,667.90, BHEL rose 2.03% at Rs1,771.70, Grasim moved up by 1.57% at Rs2,323.10, Tata Motors advanced 1.55% at Rs688.85 and TCS added 1.18% at Rs963.95. However, HDFC Bank, HDFC and HUL inched lower.

Oil stocks were in demand and scaled higher. RNRL soared 5.04% at Rs113.60, Aban Offshore flared up 4.95% at Rs4,050, Essar Oil added 4.75% at Rs261.20, RPL gained 3.99% at Rs192.90 and BPCL was up 1.99% at Rs356.05. In the metal pack, Gujarat NRE zoomed 6.28% at Rs159, NATCO shot up by 4.62% at Rs538, Hindustan Zinc rose 3.07% at Rs752 and Ispat gained 2.40% at Rs34.10.

Over 2.15 crore IFCI shares changed hands on the BSE followed by RNRL (1.49 crore shares), Ispat (1.40 crore shares), Aishwarya (1.39 crore shares), Chambal Fertilizers (1.24 crore shares) and RPL (1.04 crore shares)

Small-cap, mid-cap indices outperform Sensex

The market ended with small gains in a choppy trading session. The market came off lower level from an initial fall tracking recovery in stocks in China and Hong Kong and firm European markets.

Oil & gas stocks rose, boosted by record crude oil prices. Banking and consumer durables stocks declined. Metal stocks were mixed.

Oil prices continued their steady rise and surged to a record high near $130 a barrel on Tuesday, 20 May 2008, stoking fears of global inflation.

The 30-share BSE Sensex rose 12.98 points or 0.08% at 17,243.16. Sensex gained 63.16 points at day’s high of 17,293.34, hit in late trade. The market had dropped in early trade tracking weak global markets and record high oil prices. Sensex lost 188.55 points at day’s low of 17,041.63 touched in early trade.

The broader based S&P CNX Nifty was up 12.7 points or 0.25% at 5,117.65. Nifty May 2008 futures were at 5123.90, at a premium of 6.25 points as compared to spot closing of 5117.65.

The BSE clocked a turnover of Rs 7077 crore today as compared to a turnover of Rs 5940.08 on Tuesday 20 May 2008. The NSE's futures & options (F&O) segment turnover was Rs 39,481.17 crore which was higher than Rs 33,290.93 crore on Tuesday, 20 May 2008.

The market breadth was strong on BSE with 1,710 shares advancing as compared to 1,009 that declined. 76 remained unchanged.

Among the 30-member Sensex pack, 16 declined while the rest gained.

As per the provisional figures on NSE, foreign institutional investors (FII)'s sold shares worth Rs 776.63 crore and domestic funds bought shares worth Rs 452.66 crore today 21 MAy 2008.

The BSE Mid-Cap index rose 41.99 points or 0.59% to 7,148.05 and BSE Small-Cap index rose 130.37 points or 1.51% to 8,788.98. Both these indices outperformed Sensex.

BSE Power (down 0.06% to 3,302.92), BSE TecK index (down 0.06% to 3,532.39), BSE FMCG index (down 0.07% at 2,483.31), BSE IT index (down 0.31% to 4,453.35), BSE Consumer Durables index (down 0.53% to 4,681.20), BSE Health Care index (down 0.57% at 4,245.69), BSE Bankex (down 1.41% at 8,639.90) underperformed Sensex.

BSE Oil & Gas index (up 2.36% to 11,432.80), BSE Metal index (up 1.24% to 17,390.28), BSE PSU index (up 0.98% to 7,726.71), BSE Capital Goods index (up 0.79% at 13,670.08), BSE Auto index (up 0.4% at 4,782.90), BSE Realty index (up 0.14% at 7,904.88), outperformed Sensex.

Oil & gas stocks rose as crude rose to a record high near $130 a barrel on Tuesday, 20 May 2008. BPCL (up 1.99% to Rs 356.05), Indian Oil Corporation (up 0.63% to Rs 408.25), ONGC (up 0.26% to Rs 938.70) edged higher.

India’s largest private sectors firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 2.53% to Rs 2,667.90. Reportedly, the government has confiscated the company’s five blocks in the Kerala-Konkan (KK) basin after it failed to meet the minimum work programme.

Metal stocks were mixed. National Aluminium Company (up 4.62% to Rs 538), Tata Steel (up 3.09% to Rs 922.25), Sterlite Industries (up 0.55% to Rs 945.10) edged higher. Hindalco Industries (down 0.9% to Rs 197.25), Steel Authority of India (down 0.71% to Rs 182.55) edged lower.

Banking stocks declined. India’s largest private sector bank in terms of net profit ICICI Bank declined 1.77% to Rs 911.25.

HDFC Bank, India's second largest private sector bank in terms of net profit, declined 3.46% to Rs 1,413.90. The Reserve Bank of India has approved the Scheme of Amalgamation of Centurion Bank of Punjab with HDFC Bank. The Scheme of Amalgamation will come into effect from 23 May 2008.

India’s largest commercial bank State Bank of India (SBI) rose 0.37% to Rs 1,661.55. The bank today said it would resume tractor and farm equipment loans with immediate effect, having earlier suspended new loans because of rising defaults.

Consumer durables stocks declined. Blue Star (down 2.22% to Rs 449), Titan Industries (down 0.97% to Rs 1,200.60), Videocon Industries (down 0.07% to Rs 410.05) edged lower.

Mahindra & Mahindra (up 3.09% to Rs 670), Bharat Heavy Electricals (up 2.03% to Rs 1,771.70), Grasim Industries (up 1.57% to Rs 2,323.10), Tata Motors (up 1.55% to Rs 688.85), Tata Consultancy Services (up 1.18% to Rs 963.95), ITC (up 1.13% to Rs 228.45), ACC (up 1.05% to Rs 689.60) edged higher from the Sensex pack.

HDFC (down 3.13% to Rs 2,688.20), Hindustan Unilever (down 2.34% to Rs 236.10), NTPC (down 2.15% to Rs 182), Cipla (down 2.02% to Rs 204), Ambuja Cements (down 1.61% to Rs 107.10 edged lower from Sensex pack.

India’s largest telecom services provider by market share Bharti Airtel declined 0.74% to Rs 822.65. As per reports Bharti Airtel has forged an exclusive alliance with Indian Oil Corporation (IOC) that will enable the telco to access 18,000 retail outlets and 5,500 Indane cooking gas distributors of the oil giant. The deal also envisages that Airtel can use IOC outlets to sell its products, collect bills, set up PCO facilities and even open Bharti retail outlets on an exclusive basis.

IFCI clocked the highest volume of 2.15 crore shares on BSE. Reliance Natural Resources (1.49 crore shares), Ispat Industries (1.4 crore shares), Aishwarya Telecom (1.39 crore shares) and Chambal Fertilisers and Chemicals (1.24 crore shares) were the other volume toppers in that order.

Housing Development and Infrastructure clocked the highest turnover of Rs 400.61 crore shares on BSE. Cairn India (Rs 321.86 crore), Reliance Industries (Rs 266.57 crore), Reliance Petroleum (Rs 199.02 crore) and Mundra Port & Special Economic Zone (Rs 192.43 crore) were the other turnover toppers in that order.

European markets were mixed. Key benchmark indices in France, Germany were down by between 0.53% to 0.58%. While UK’s FTSE 100 rose 0.33% to 6,212.

Asian shares were mixed. Shares in China and Hong Kong rose after an initial slide. Key benchmark indices in Hong Kong and China rose between 1.16% to 2.93%. Key benchmark indices in Japan, South Korea, Singapore and Taiwan were down by between 0.26% to 1.65%.

Sensex shed 204.76 points or 1.17% at 17,230.18 on Tuesday, 20 May 2008, on concerns the Reserve Bank of India (RBI) may further tighten policy to fight high inflation after RBI governor Y V Reddy said inflation rate was totally unacceptable and the official data underestimates the actual rise. The wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% n 6 November 2004.

Further, a steep increase in upward revision in inflation rate for the week ended 8 March 2008, to 7.78% from the provisional 5.92%, came as a rude shock to marketmen. According to retail brokerage Sharekhan, the steep upward revision in inflation rate is a cause for concern, as prices of many commodities have not been updated for varied periods. Moreover, a sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review.

With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity scrips such as cement and steel. Cement maker ACC said earlier this months that its margins will be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures.

The government recently imposed export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. The government had earlier banned export of cement and non-basmati rice. On 7 May 2008, the government ordered suspension in futures trading in channa, refined soyoil, potato and rubber for four months.

Earnings downgrade amid rising input and interest costs and drying up of global liquidity due to credit crisis, remain major concern for the Indian stock market.

Nonetheless, the structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. A CLSA report says India’s infrastructure development is set to accelerate, backed by greater private sector participation and improved finances of government and public sector enterprises. Rating agency Crisil in its outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Given the continued inflow to unit linked insurance plans (Ulips) and equity linked savings schemes (ELSS) of mutual funds, stock-specific buying will continue depending on fundamentals of individual stocks. Insurance firms are now a major player in the Indian stock market given the huge mop up in Ulips in recent years. It was buying support from domestic funds which had aided the recent recovery on the bourses.

Meanwhile, as per recent reports, ELSS which offer tax benefit are catching the fancy of small savers. ELSS funds saw their collective assets jump more than nine times to about Rs 16000 crore in three years ending March 2008. In 2005 the investment limit eligible for income tax breaks was raised ten times to Rs 1,00,000 rupees for ELSS funds. Systematic investment plan (SIP) are said to be driving inflows into ELSS funds.

Trading Calls - Mundra Port

Buy Mundra Port SL - 765 for Target - 1015

Market may extend fall on weak global cues

The market may edge lower extending Tuesday (20 May 2008)’s slide on negative cues from global markets. Asian shares dropped today, 21 May 2008, as growing inflation worries and weak earnings from two top US retailers fuelled concerns about slowing consumer spending in the world's top economy, hitting US shares on Tuesday, 20 May 2008. Key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were down by between 0.33% to 1.8%. Oil prices hit a fresh record near $130 a barrel.

Sensex shed 204.76 points or 1.17% at 17,230.18 on Tuesday, 20 May 2008, on concerns the Reserve Bank of India (RBI) may further tighten policy to fight high inflation after RBI governor Y V Reddy said inflation rate was totally unacceptable and the official data underestimates the actual rise. The wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% n 6 November 2004.

Further, a steep increase in upward revision in inflation rate for the week ended 8 March 2008, to 7.78% from the provisional 5.92%, came as a rude shock to marketmen. According to retail brokerage Sharekhan, the steep upward revision in inflation rate is a cause for concern, as prices of many commodities have not been updated for varied periods. Moreover, a sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review.

With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity scrips such as cement and steel. Cement maker ACC said had said earlier this months that its margins will be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures.

The government recently imposed export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. The government had earlier banned export of cement and non-basmati rice. On 7 May 2008, the government ordered suspension in futures trading in channa, refined soyoil, potato and rubber for four months.

Earnings downgrade amid rising input and interest costs and drying up of global liquidity due to credit crisis, remain major concern for the Indian stock market.

Nonetheless, the structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. A recent CLSA report says India’s infrastructure development is set to accelerate, backed by greater private sector participation and improved finances of government and public sector enterprises. Rating agency Crisil in its outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Given the continued inflow to unit linked insurance plans (Ulips) and equity linked savings schemes (ELSS) of mutual funds, stock-specific buying will continue depending on fundamentals of individual stocks. Insurance firms are now a major player in the Indian stock market given the huge mop up in Ulips in recent years. It was buying support from domestic funds which had aided the recent recovery on the bourses.

Meanwhile, as per recent reports, ELSS which offer tax benefit are catching the fancy of small savers. ELSS funds saw their collective assets jump more than nine times to about Rs 16000 crore in three years ending March 2008. In 2005 the investment limit eligible for income tax breaks was raised ten times to Rs 1,00,000 rupees for ELSS funds. Systematic investment plan (SIP) are said to be driving inflows into ELSS funds.

Global indices may impact

The market is likely to witness volatility during intra-day trades and may succumb to selling pressure amid overnight weakness in the US indices and the bearish sentiment among the Asian indices in the ongoing trades. Among the key domestic indices, the Nifty could get support at 5060 and a slip below this level may see it dip further to 5000. On the upside, the index has a key resistance at 5168. The Sensex has a likely support at 17085 and could test higher levels of 17370.

US indices ended weak on Monday amid a fresh rise in crude oil prices. The Dow Jones dropped by 199 points to close at 12829 whereas the Nasdaq ended 24 points lower at 2492.

All Indian floats too witnessed selling pressure and ended at lower levels. HDFC Bank tumbled over 4.64% at $104.19, Patni Computer declined 3.88% at $12.89, ICICI Bank was down by 3.24% at $43.05, Infosys slipped 2.61% at $44.32 and Dr Reddy's lost 2.24% at $14.86 while Satyam, Wipro, Tata Motor, MTNL, VSNL and Rediff lost more than 1% each.

Crude oil prices moved up, with the Nymex light crude oil for June delivery rising by $2.02 to close at $129.07 a barrel. In the commodity space, the Comex gold for June 2008 series added $14.40 to settle at $920.20.

Daily trend of FII investment in equities
On May 17, 2008, FIIs were net buyers of stocks to the tune of Rs57 crore (purchases worth Rs2,882.70 crore and sales of Rs2,825.60 crore).

Morning Call - May 21 2008

Market Grape Wine :

In House :

Nifty at a support of 5056 and 4990 with a resis of 5140 and 5170 .

CASH :

Buy: Hind zinc on dips 715 with a Tgt of 745 with a S/L of 706

Sell : Abb on aboves 1051 with a Tgt 1002 with a S/L of 1051

F&O :

Buy ; Jpassosiate above 252 with a Tgt of 265 with a S/L of 248

Buy : Rpower above 431 with a Tgt of 450 with a S/L of 423



Out House :

Markets at a support of 17017 & 16876 and resistance at 17313 & 17373 levels .

Buy : Satyam & INFY at dips

Buy : RPL at dips

Buy : RPower

Buy : BombayDye

Buy : Coreproject at dips

Buy : HDIL & GujNre

Buy : Cairn

Dark Horse : HDIL , Cairn , CORE, INFY ,Emami , GujNRE & Unitech

Inflation worries and rising oil take toll on US Market

Crude prices nearing $130 and a bunch of disappointing news at financial sector push market down

US market ended the day with substantial losses today, Tuesday, 20 May, 2008. A higher-than-expected core inflation reading together with all time high crude prices soured market sentiments today. Financials turned out to be the biggest laggards and weighed on the market for the entire day. Seven out of ten sectors ended the session in negative territory, led by the telecom and financials sector. Energy, materials and utilities were the only sectors to end in the green.

Crude-oil futures closed above $129 a barrel for the first time ever today. Crude oil rose for a third straight session after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply. A strengthening of the euro against the dollar added to the gains. The dollar fell after the International Monetary Fund said the U.S. housing slump still poses serious risks to financial markets.

The Dow Jones industrial Average ended the day with a loss of 200 points at 12,828. The Nasdaq Composite Index, finished lower by 23.83 points at 2,492.26. S&P 500 finished lower by 13.23 points at 1,413.4.

Twenty-eight out of thirty Dow components ended the day in red. The financial stocks – AIG, JP Morgan, Citigroup and American Express were the topmost losers. The energy stocks – Exon Mobil and Chevron turned out to be the only two Dow winners.

The Dow also came under pressure today after one of its main components Home Depot acted as the largest drag with a decline of 5.5%, which was the largest one-day loss in more than five years. Market are disappointed with the home improvement retailer's 66% drop in net income, though the results were good enough to top analysts' low expectations.

Inflation concerns were fueled today once again after a report showed wholesale prices outside of food and energy rose the most in about 17 years. Core producer prices, which exclude food and energy, rose a higher-than-expected 0.4% in April, or 3% year-on-year - the fastest rise since late 1991. The April Producer Price Index (PPI) rose 0.2%. Market expected the opposite, forecasting a 0.4% rise in PPI and a 0.2% rise in core-PPI.

Financials too were under pressure following a number of reasons. First and foremost, Goldman Sachs and Morgan Stanley had their second quarter earnings estimates cut at Lehman Brothers. AIG was also under selling pressure after the company said it will raise a total of $20 billion, up from its previous plan to raise $12.5 billion. Also, Oppenheimer analyst was reported to have said that the credit crisis will extend well into 2009, and may go on even longer.

Crude-oil futures for light sweet crude for June delivery today closed at $129.07/barrel (higher by $2.02/barrel or 1.6%) on the New York Mercantile Exchange. Price touched a high of $129.6 earlier during the day. The June contract expired today. The more-active July futures contract rose $2.26 (1.8%) to settle at $128.98 a barrel.

Trading volumes reached 1.2 billion shares exchanging hands on the New York Stock Exchange, with decliners outpacing gainers by 2 to 1. On the Nasdaq stock market, 844 million shares traded, with 17 shares falling for every 11 gainers.

For tomorrow, the weekly crude oil inventory report is due from the Energy Information Administration. The minutes from the Federal Open Market Committee's April policy meeting are due midafternoon.

Trading Calls - May 21 2008

Nifty (5105) Supp 5020 Res 5170

Sell Infosys (1887)
SL 1907 Target 1845, 1837

Sell BHEL (1735)
SL 1755 Target 1695, 1685

Sell REL Cap (1361)
SL 1381 Target 1321, 1311

Buy Ranbaxy (511)
SL 506 Target 522, 525

Buy HDIL (842)
SL 832 Target 862, 866

Grey Market - Anu's Labs, Gokul Refoils

Gokul Refoils 175 to 195 15 to 17

Anus Laboratories 200 to 210 38 to 40