Monday, March 24, 2008

Welcome back…Nothing stable

It’s one of the longest breaks the Indian markets have taken in recent years. Hope you are recharged for a choppy week ahead.
For the day, we expect a positive start but trading will turn choppy ahead of Thursday's F&O expiry.
So, one still needs to be wary. And, though select buying can be done in quality scrips volatility and uncertainty are here to stay. The next set of earnings will be crucial. Interest rates may not soften due to high inflation. The Indian economy will slow down in FY09. So, the fight between the bulls and bears will continue.
The Indian Market is likely to have a positive opening today as he global markets are in favor. On Wednesday, pared most of its initial gains on the back of heavy profit booking across the sectoral indices towards the final trading hours of the session. The domestic market opened with a bang and created a rally across the sectoral indices on the back of favoring cues from the global markets like interest rate cut by US Federal Reserve and better than expected strong performance from- Goldman Sachs Group and Lehman Brothers Holdings, the two major investment banks. But the market was unable to sustained at higher levels and gave up most of its initial gains on the back of long holiday. The BSE Sensex closed higher by 161.37 points at 14,994.83 and NSE Nifty grew by 40.95 points to close 4573.95. We expect that the market may remain choppy during the trading session.

On Friday, the US market closed in green. The Dow Jones Industrial Average (DJIA) closed higher by 261.66 points at 12,361.32. The S&P 500 (SPX) index grew by 31.09 points to close at 1,329.51 and NASDAQ Composite (RIXF) increased by 48.15 points to close at 2,258.11.

The Indian ADRS closed in positive. In technology sector, Wipro grew by (4%) along with Patni Computers by (3.75%), Satyam by (1.66%) and Infosys by (1.50%). In banking sector, HDFC bank and ICICI bank increased by (2.58%) and (1.21%) respectively. In telecommunication sector, Tata Communication and MTNL advanced by (3.47%) and (0.41%) respectively.

Today the major stock markets in Asia are trading firm. Taiwan Weighted is trading higher by 344.84 points at 8,869.83 along with Japan’s Nikkei trading up by 46.33 points at 12,528.90 and Singapore Strait Times trading at 2,891.02 up by 66.11 points. South Korea Seoul Composite is trading marginally higher by 7.26 points at 1,652.95.

The FIIs on Wednesday stood as net seller both in equity as well as debt. The gross equity purchased was Rs4,701.30 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs5,389.10 Crore and gross debt sold stood at Rs148.20 Crore. Therefore, the net investment of equity reported was (Rs687.80 Crore) and net debt was (Rs148.20 Crore).

The Wholesale Price index rose to an 11-month high of 5.92%. The WPI-based inflation increased sharply on account of spurt in prices across the board, with cereals (6.28%), milk (9.71%), vegetables (9.79%), dairy products (9.31%), cement (5.13%), iron and steel (20.87%) and edible oils (17.52%). By seeing this growth in inflation, the Indian government has reduced customs duty on rice and edible oils drastically to rein in their prices in domestic market. The customs duty on rice has been cut to nil from 70% earlier as well as duties on all crude and refined edible oils were also slashed from the existing levels of 52% and 75% to 20% and 27.5% respectively.


Today, Nifty has support at 4,471 and resistance at 4,708 and BSE Sensex has support at 14,623 and resistance at 15,312Buy : Ongc & Gail at dips

Buy : RIL & Relcap at dips

Buy : HLL & ITC

Buy : Geship & Balrampur

Buy : HDFC

Buy : Nalco

Dark Horse : Skumar , ONGC , Kohinoor , RIL , LT , ITC & HLL

Corporate Front Page

BSNL and MTNL get DoT approval to launch nationwide CDMA services

Coal India to invest Rs15bn to set up 28 washeries in its subsidiaries in the 11th plan

BHEL likely to invest Rs50bn over the next three years on its JV with NTPC and Nuclear Power Corporation

Time Warner promoted AOL may be selling its call centre business to the BPO arm of Essar group for US$100mn

NTPC to invest Rs44bn for setting up a 750MW coal-based thermal power project in Assam

Aban Offshore receives an order for rig deployment in the Middle East forUS$300mn

Maruti Suzuki to invest Rs90bn, mostly in non-vehicle manufacturing areas like R&D, logistics amongst others

GMR Infrastructure led consortium takes charge of Turkey’s Sabiha Gocken International airport for development

JSW Energy proposes to set up a 1,320MW power plant in Madhya Pradesh

Sun Pharmaceuticals gets FDA approval to market generic drug Cerebyx used during neuro-surgery

Ispat Industries promoted Global Steel Holdings signs up mining leases for iron ore and coal reserves in Brazil, Colombia and Mozambique

State owned NMDC in talks with Canada’s New Millennium Capital Corp for an US$3.5bn iron ore project

Telekom Malaysia to transfer its stake in Spice into a separate company, likely to be called Telekom International.

Cochin International Airport, which runs Kochi international airport, plans to raise Rs25bn through an IPO in 2009

Reliance Infrastructure plans strategic alliance with Indiabulls Real Estate for development of latter’s SEZ in Maharashtra

ArcelorMittal plans to develop coal mines; seeks JV with Coal India

Petronet LNG on the look out for stakes in Australian gas fields

Unitech may look to ‘monetize’ its upcoming hotel business within 2.5 years of operations; options include listing, sale of assets or hotel REIT

PNB expects to get Rs20bn from the government in the financial year beginning April for farm loan waiver

Power Grid Corp to get a US$600mn loan from the World Bank to strengthen its network

Elecon Engineering on look out for an acquisition in US or Europe in the range of Rs3-4bn

CALS Refineries, promoted by Spice group signs MoU with West Bengal Industrial Development Corp. and Haldia Development Authority for an Rs200bn refinery project in Haldia

Champagne Indage acquires Australian Vintage’s Loxton winery for Rs2.3bn

Blue Dart to increase warehousing capacity to 2mn sq.ft

Rajasthan government stops work on a Cairn India pipeline; says it would result in loss of tax revenues to the state

Amtek Auto to produce 5,000 railway wagons in a JV with a North American wagon supplier

Essar Communications Holdings arm to invest US$450mn to rollout telecom services in Kenya

Lehman Brothers and Deutsche Bank to invest US$500mn in Unitech SPV.

Ranbaxy suffers setback as a Canadian court upholds Pfizer patent for a molecule of cholesterol-lowering drug Lipitor

George Soros buys 2.5% stake in Indiabulls Real Estate for Rs2.8bn

Kribhco plans a Rs40bn power project in Bihar

Economic News

Inflation rises to eleven month high of 5.92%; government cuts import duty on edible oil and rice

DoT says all players can bid up to 10MHz of 3G spectrum rejecting TRAI’s recommendation on the same

Core sector growth halved to 4.2% in January with decline in crude production

Government may consider a proposal to levy 10% export duty on all grades of finished steel

Government proposes cess of up to 6% on coal with high ash content

India expected to attract FDI worth Rs1tn in mining exploration of gold and diamond

Sugar production in Uttar Pradesh is expected to drop by 15% to 7.2mn tons in current crushing season

Sixth Pay Commission recommendations are expected to be submitted to the finance ministry early next week

Non-food credit growth slows down to 21.8% during April-February 2007-08 compared with 29.6% a year ago

Central government staff may get a 50% pay hike

Fiscal deficit for quarter ended December declined to Rs776bn from Rs949bn a year ago

Domestic aviation growth in 2007 declines to 11.5% from more than 32% in the previous year

I&B Ministry considering TRAI proposals to lower license fees for DTH players from 10% to 6%.

Five SEZs projects get approval with four in the IT sector.

Insurance regulator IRDA may limit insurance companies’ investment in mortgage backed securities to 10%