Slide may continue

Market may slide further on account of weak Asian markets in morning trades and overnight fall in the US markets. Political uncertainties and continued selling pressure may also drag the domestic indices further down. The FIIs remained net sellers in equities for last couple of sessions may also weigh on the investors' sentiment. Key indices, the Nifty may get support at 4100 level and on the upside it could test higher levels at 4260. The Sensex has a likely support at 14,100 and may face resistance at 14,500.

US indices declined on Thursday as investors worried about the economic outlook after the head of the biggest U.S. mortgage company said the housing downturn could create a recession. While the Dow Jones slipped marginally at 13236, while the Nasdaq lost 11 points to close at 2542.

Indian ADRs had a mixed outing on the US bourses. Among the major losers VSNL, Rediff, HDFC Bank, Satyam, Wipro, MTNL, Patni Computers and Tata Motors shed over 1-3% each. While, Infosys, Dr Reddy's, Satyam gained marginally.

Crude oil prices gained marginally, with the Nymex light crude oil for October delivery moved up by 57 cents to close at $69.83 a barrel. In the commodity space, the Comex gold for December series lost 30 cents to settle at $668.40 a troy ounce.

No-clear issue...Markets Left to chance

Where observation is concerned, chance favors only the prepared mind - Louis Pasteur.

Be prepared for wild swings yet again and chances are you could get what you want at your price. With politics likely to dominate the headlines and the market movements coupled with anxiety over the contagion in the US subprime mortgages, the bulls and traders are in for a tough time. The Left parties have lobbed the ball in the Government's (read Congress') court over the Indo-US nuclear deal. It is now for the Government to announce its next move. Just like the mess in the US housing market, nobody has a clue what lies ahead. The moot question is who will blink first?

The Left parties have made it clear they will not budge. So, it obviously has to be the Government who has to take a step back. The uncertainty will continue to haunt the market for a while, which is not good for the bulls. As a result, we may see lot of fluctuations in the market over the next few days till the political storm subsides.

At the same time, we have to continue to keep one eye on the global markets and the developments in the US economy. The crisis there is still not over and going ahead we could get some more bad news from that front. So, it will be prudent for one to remain guarded and be selective in buying shares, which should be done at lower levels and that too in quality scrips only. Today, we expect another day of wild swings after a cautious to lower opening.

ABG Shipyard could gain as a financial daily reports that it is set to buy Western India Shipyard for Rs2bn. Mercator Lines is also likely to be in action as it considers an IPO of its Singapore subsidiary. Tata Steel and Essar Steel might attract some attention as Egypt has shortlisted the two Indian steel makers for building a $3bn plant in the north African country. Gillette India, P&G, Paradyne Infotech and Kalindee Rail Nirman will declare their results today.

Cairn India is likely to advance as it has reportedly received government approval for transporting its Rajasthan crude to Gujarat coast through a pipeline. Bajaj Auto plans to halt production of two wheelers at its four decade old Akurdi plant in Pune, in September. The plant made 350,000 vehicles in 2006 and 50,000 in 2007. Production could be shifted to the company's Waluj facility.

Shree Renuka Sugars could rise as it has completed the acquisition of the Ethanol plant of Dhanuka Petro-Chem located at Khopoli, Maharashtra. The company has also set up a wholly owned subsidiary in Sharjah International Free Zone for its overseas investments. ORG Informatics has signed an agreement with Belgacom NV/SA to acquire Belgacom's satellite based business. The acquisition will involve all the customer contacts and assets.

The Nasdaq slipped and the broader market struggled after remarks by CEO of troubled mortgage lender Countrywide Financial stoked worries about the ongoing turmoil in the credit and mortgage markets.

Countrywide Financial CEO Angelo Mozilo said the housing slump may slow consumer spending and lead to an economic contraction.

The Standard & Poor's 500 Index lost 1.57 points, or 0.1%, to 1,462.5. The Dow Jones Industrial Average ended unchanged at 13,235.88. The Nasdaq Composite Index slipped 11 points, or 0.4%, to 2,541.70.

Financial shares contributed the most to the drop after the Federal Reserve said outstanding US commercial paper fell 4.2% last week, the biggest decline in at least seven years. Commercial paper backed by assets led the fall as buyers fled debt linked to subprime mortgages.

US stocks had risen in the morning after Bank of America said it was making a $2bn investment in Countrywide Financial. But the advance was short-lived, and stocks turned lower in the afternoon.

Also adding to worries was news that the Fed injected $17.5bn in temporary reserves into the banking system.

But, losses were limited as energy producers rallied after the price of crude oil rose for a second day. About five stocks fell for every three that gained on the New York Stock Exchange.

In the Treasury market, the 10-year note ended little changed to yield about 4.64%. In currency trading, the dollar slipped versus the euro and rose versus the yen. COMEX gold for December delivery fell 30 cents to settle at $668.40 an ounce.

US light crude oil for October delivery rose 57 cents to settle at $69.83 a barrel on the New York Mercantile Exchange.

European shares closed slightly higher marking their fifth winning session in a row. The pan-European Dow Jones Stoxx 600 index rose 0.2% to 369.33. The German DAX 30 closed up 0.2% at 7,511.96 and the French CAC-40 added 0.1% to 5,523.33. The UK's FTSE 100 closed up 0.01% at 6,196.90.

Major Latin American markets closed higher. Brazil's Bovespa index erased losses after Moody's lifted the ratings on the government's foreign-and local-currency bond ratings to Ba1 from Ba2.

Mexico's IPC ended up 0.7% at 29,459.82 and Argentina's Merval rose 1.5% to 2,038.29. Chilean stocks, however, shed 0.1% at 3,206.79. In other emerging markets, the RTS index in Russia gained 0.6% at 1864 while the ISE National 30 index in Turkey rose 1.17% to 59,320.

Most Asian markets were down this morning between 0.3% to 1%. The Nikkei was down 53 points at 16,262 while the Hang Seng in Hong Kong fell 230 points at 22,736. The Kospi in Seoul dropped 20 points to 1778 and the Straits Times in Singapore slipped 36 points to 3334.

Political uncertainty had the better of the bulls on the Indian bourses today, and for a change the market players forgot about the crisis in the US subprime mortgage market and the turmoil in the global credit markets. The bulls ran for cover even as the CPI (M) asserted their pre-eminent position as the key allies of the Congress-led coalition Government. After a highly choppy day of trade, the key indices ended in the red despite a firm trend across global markets. The benchmark BSE Sensex closed at 14,163, down 85 points or 0.6% from the last close after touching a high of 14,554 and a low as 14,128.

Ambuja Cement gained by 2% to Rs132 after Holcim announced that it further purchased 3.9% of the company for $220mn at Rs154 per share and to further bid for 20% of Ambuja Cement. The scrip touched an intra-day high of Rs154 and a low of Rs131 and recorded volumes of over 1,00,00,000 shares on NSE.

L&T pared its gains however managed to end with marginal gains 0.3% to Rs2396 after the company announced that they have secured order worth $70mn. The scrip touched an intra-day high of Rs2468 and a low of Rs2360 and recorded volumes of over 13,00,000 shares on NSE.

Satyam Computer advanced by 1.3% to Rs422 after India's fourth- largest computer-services provider won a three year contract from KPN, a European telecommunications provider. The scrip touched an intra-day high of Rs429 and a low of Rs419 and recorded volumes of over 29,00,000 shares on NSE.

VSNL declined by 1% to Rs378. Reports stated that India's largest provider of overseas calls lost a tax appeal of as much as Rs10bn. The scrip touched an intra-day high of Rs395 and a low of Rs364 and recorded volumes of over 3,00,000 shares on NSE.

Hindustan Zinc slipped 2.7% to Rs676.The company announced that they have cut Zinc prices by Rs6,000. The scrip touched an intra-day high of Rs719 and a low of Rs670 and recorded volumes of 56,000 over shares on NSE.

After being on the receiving end in the previous trading session, select Realty stocks bounced back. Sobha gained 1.4% to Rs745, Ansal infrastructure advanced 2.2% to Rs252. However, DLF slipped 0.5% to Rs555, Akruti was up by 1.2% to Rs475 and Parsvnath lost 2.5% to Rs269.

FMCG stocks ended with smart gains as the index gained 1.1%. ITC gained 1.3% to Rs160, Tata Tea advanced 1% to Rs676, HLL was up by 0.6% to Rs197 and McDowell added 3% to Rs1302.

IT stocks also ended higher led by gains in the index heavy weights like Infosys, the scrip gained 1.2% to Rs1811, Satyam Computer rose 1.3% to Rs422, Financial Technology added 0.8% to Rs2032.

Cement stocks recorded smart gains after Holcim announced that it further purchased 3.9% of Ambuja Cement at a premium price of Rs154 compared to yesterday's close of Rs130.2, the scrip rose 2.04% to Rs132, ACC surged by 2.1% to Rs972, Kesoram Industries was up by 2% to Rs429 and Grasim added 0.8% to Rs2751.

Banking stocks witnessed selling pressure. SBI lost by over 3% to Rs1414, ICICI Bank was down by 2.5% to Rs824 and HDFC Bank slipped 1.6% to Rs1100. OBC, Corp Bank and Canara Bank were the major losers among the Mid-cap stocks.

Select Metal stocks also pared their gains. Tata Steel lost 1.7% to Rs559, SAIL was down by 0.5% to Rs141, Hindalco ended flat at Rs139. However, National Aluminum added 1.4% to Rs255.

Fund Activity:

FIIs were net buyers of Rs2.75bn (provisional) in the cash segment on Thursday and the local institutions pumped in Rs5.31bn. In the F&O segment, FIIs were net buyers at Rs9.49bn. On Wednesday, foreign funds pulled out Rs6.68bn from the cash segment. Mutual Funds were net buyers at Rs228mn on the same day.

Major Bulk Deals:

Sundram BNP Paribas has picked up Emkay Shares; CLSA Mauritius has sold Mahindra
Gesco; Sundaram MF has sold Royal Orchid Hotels; Prabhudas Lilladhar has purchased
SEL Manufacturing; Morgan Stanley has bought Shree Ram while UBS Securities has
sold the stock; Deutsche Securities has picked up Standard Industries while Bear
Stearns has sold it.

Lower Circuit:

LML, Atlanta, EC Network, Jaybharat Textile, Balasore Alloys, IOL Broadband, Anant
Raj Industries, Era Construction and Bag Films.

Upper Circuit:

Prism Cement, Kothari Products and Prakash Industries.

Delivery Delight (Rising Price & Rising Delivery):

Andhra Bank, Bank of Maharashtra, Birla Corp, ITC and Mahindra Gesco.

Abnormal Delivery:

GNFC, Hero Honda, ICICI Bank, Bajaj Auto and IDBI.

Major News & Announcements:

Govt to review fuel prices on Sept. 1: Oil Minister

Reliance Capital buys 26% of Victory transformer for Rs750mn

Accentia Technologies buys Thunga Software in all cash deal

Cairn gets right to buy land for pipeline – Reports

Grindwell Norton to sell stake in Lincoln Helios for Rs1bn

ICSA secures order worth Rs186mn

Standard Chartered to buy 49% stake in UTI Securities

L&T secures order worth $70mn

ITD Cementation secures Rs8.93bn order

Myanmar awards 3 deep water blocks to ONGC – Reports

Holcim buys 3.9% in Ambuja Cement for $220mn at Rs154 per share

Holcim announces open offer to buy another 20% in Ambuja Cements at Rs154/share

US Market ends flat

Comments from Countrywide's Chairman leave a nervous feeling among investors

Clear sense of nervousness ruled over US Market today, Thursday, 23 August, 2007 as the recession debate once again heated up and credit worries rekindled. Comments from the Chief Executive of USA's largest mortgage lender, Countrywide Financial, led to this nervousness.

The Dow Jones Industrial Average closed almost unchanged today at 13,235.88 marginally down by 0.25 points. Tech-heavy Nasdaq dropped 11.1 points to close at 2,541.7. S&P 500 lost 1.57 points to close at 1,462.5.

Sixteen out of thirty Dow stocks closed in the green today. IBM, H-P, AT&T and Mc Donalds were the main Dow winners. Boeing, Home Depot, General Motors and United Technologies were the Dow laggards.

Home-Depot led the team of the Dow laggards on reports that the company's $10.3 billion deal to sell Home Depot's wholesale supply division might fall apart.

Countrywide Financial, CEO, Angelo Mozilo telling a television channel that the housing slump will lead to a "recession" and that there is still a tremendous liquidity problem led indices reverse their course of direction.

Market welcomes Bank of America's equity stake in Countrywide

When market opened in the morning, the indices opened in the green. Indices rallied on news of Bank of America's $2 billion investment in Countrywide. The news initially helped ease the worst of fears about a possible credit crunch.

But soon after the nation's largest mortgage lender's CEO spoke about a significant decline in economic activity, it gave sellers an added excuse to take some money off the table.

Of the five sectors closing lower, Materials paced the way followed by Industrials and Financials. Technology sector closed in the green getting support from IBM and H-P. But Nasdaq closed in red as neither of them are listed on Nasdaq.

Among the Indian ADRs, all Indian ADRs ended in red today. ICICI Bank and HDFC Bank led the decliners. HDFC Bank dropped by 3.8% while ICICI Bank dropped by 2.3%. Rediff and Sify followed them dropping 1.7% and 2% respectively.

Crude rises snapping three sessions of fall

Crude oil future prices increased today. Drop in supplies of motor gasoline for week ended 17 August in yesterday's weekly inventory report was perhaps the main reason for this. Oil market also likely found some additional support today from news that some Mexican oil supplies will be delayed due to Hurricane Dean.

Crude-oil futures for light sweet crude for October delivery closed at $69.83/barrel (higher by $0.57/barrel or 0.82%) on the New York Mercantile Exchange. On a yearly basis, prices are 2.7% lower. .

Nearly 1.4 billion shares exchanged hands at the New York Stock Exchange, with advancing stocks running just ahead of decliners. At the Nasdaq, 1.6 billion shares were traded, with declining stocks outpacing advancers 9 to 5.

For tomorrow, investors will look for economic data to help set the tone of trading. July Durable Orders will be released at 8:30 ET and will be followed by July New Home Sales data at 10:00 ET

IT Training and Education market grows at rapid pace

 The Indian IT Training and Education market, which is currently dollar 656 million, is growing at a CAGR of 64 percent.

However, the Indian IT e-learning market, which is currently dollar 122 million, is growing at a CAGR (Compound Annual Growth Rate) of 73 percent, said Navug Mohnot, CEO of India QAI, while announcing education ventures in this space under the name — Edista.

QAI, the leading process consulting organisation, has decided to foray into this space in order to meet the growing need for IT training and education in the country.

Quoting interesting trends in IT education, he said 29 percent of all IT training is on demand: e-learning, as it meets just-in-time training requirements, has maximum reach and no geographical boundaries, offers homogeneity and consistency in content which can be easily upgraded.

Forseeing a huge potential in this space, QAI has launched The Edista learning, an on-demand, web enabled curriculum that offers learner centric online curriculum with real time collaboration, Singh said.

The Edista Testing Institute,which is launched in India, is aimed at addressing the fast growing software testing segment, he said. The Indian software testing segment market was two billion dollars and expected to grow at eight billion by 2008 while the size of the testing training market here was dollar 6.6 million and expected to grow at a CAGR of 50 percent.

The worldwide market for testing services is forecasted to grow to USD 13 billion by 2010 with 45-50 percent getting outsourced, Singh said, quoting a Nasscom-Gartner report on the issue.

The Edista Training Institute would soon be rolled out globally, including Asia Pacific region and Africa to meet this growing demand, he said.

QAI, which were market leaders in facilitating operational excellence in it, BPO and knowledge intensive organsations would leverage its capabilities to run the Edista Suite of Education Ventures, including Edista certifications.

QAI has certified over 25,000 professionals in software industry and over 4000 in the ITES space, Singh said adding that Edista would now be the aggregation of QAI's training and education practices with its own brand and identity.

The investment for e-learning would be Rs 4 crore spread over two years. Another Rs 4 to Rs 5 crore would be largely invested for sales, marketing and brand building while another 5 crore would be pumped into the testing institute.

Subprime woes erupt in US, but India, Japan hit most

 Though the US market is in the epicentre of sub prime crisis, Japan and India have been the worst affected.

A dipstick study into the movements of select Asian and European markets infers that Japan's Nikkei and India's Sensex have shed 12.4% and 10.13% respectively over the past one month; the American Dow Jones Industrial Average Index has only fallen 5.49% over the past one month.

Concerns over a crisis in the US sub prime lending market - where loans are offered to borrowers who do not qualify for market interest rates because of poor credit history - had sent global markets into a tailspin since the mid-week of July.

The current sub prime meltdown in the US is consequential to scores of sub-prime housing loan defaults that began in late 2006 and has continued into 2007. The sharp rise in sub prime credit defaults has caused several major sub-prime mortgage lenders to shut down or file for bankruptcy, leading to a general market downtrend and negative sentiment.

Though most equity analysts maintain that there would be `negligible indirect effect' of sub prime credit defaults on emerging and distant markets in Asia and Latin America, the cumulative impact has been drastic. For instance, since July 25, FIIs have sold around Rs 9741.40 crore in cash market and about Rs 3132.06 crore in the derivatives segment.

In terms of FII retreat, India, Taiwan, Korea and Thailand have been the worst affected markets in the world. China, even though with huge exposure to the US market, managed to log positive gains at 22% over the past one month.

Lalit Thakkar, director - research, Angel Broking opines that the sub prime fallout is a bigger burden for the US economy but the irony is that emerging markets have corrected more than American markets. "India receives sizeable FII inflows; within FIIs, we also get money from hedge funds.

While it has always been difficult to quantify how much influence hedge funds have on stock markets, the fact remains that time again, hedge funds owing to their over-leveraged positions have lead to liquidity issues," he adds.

According to analysts, the trouble starts when large-sized funds (with exposure to highly leveraged sub prime markets) start liquidating their holdings in emerging markets to make good their losses in a sinking sub prime market.

In the case of Chinese market, FIIs are not allowed to pull out money at their whims and fancies; there is a lock-in period for staying invested in that market. Japan has fallen more on accounts of yen instabilities while Dow and FTSE have fallen marginally because of timely central bank intervention, say analysts.

"Whenever hedge funds start making losses, they temporarily exit from profit-making destinations. This time round, it was more of an uninformed fear-led sell off from foreign institutions. One cannot blame them (hedge funds) as the risk premium on equity investments has been rising and there could have been tremendous pressures from investors to pull out of emerging markets," said Amitabh Chakraborty, president - equities, Religare Securities.

"Sub prime fears have clearly been factored in by Indian markets; In fact, politics has overtaken sub prime fears in Indian markets. If what we know is right, most FIIs would adopt a wait and watch approach till the government reaches a firm decision on the nuclear deal," said a senior official of an Honk Kong-based investment company.

Daily Technical Analysis

Nifty — The index opened on a positive note, but was unable to hold onto the opening session's gains. It declined throughout the session with high intra-day volatility.

Resistance — The index is facing stiff resistance around the 4263 level (high of 20 August 07). Yesterday's trading session saw a strong opening and index posted a
high around 4250 in opening trade, it failed to sustain higher levels. This suggests a level of 4263 is a stiff resistance level. Intra-day resistance is around 4166.

Support — The index has support around the 200dma at 4075, breaking below the 200dma could see the index exhibit weakness and decline to lower levels around 3971.The level of 3971 is [62% retracement level from the low of 3555 (5 March 07) to
the recent high of 4648 (24 July 07)].

Conclusion — Intra-day weakness can be expected below 4075, whereas a break above 4166 could see the index test 4250 levels.

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ESAB India, Banking, Information Technology, Ambuja Cement

Esab India
Cluster: Vulture's Pick
Recommendation: Buy
Price target: Rs575
Current market price: Rs484

Results ahead of expectations

Result highlights

• ESAB India's revenues grew by 35% to Rs87.3 crore in the Q2CY2007, which is ahead of our expectation.
• The operating profit grew by 36.8% to Rs21.7 crore in Q2CY2007 as against Rs15.8 crore in Q2CY2006. Consequently, the operating profit margin (OPM) also expanded by 30 basis points year on year (yoy) to 24.8%. The raw materials cost-to-sales increased by 130 basis points, while the staff cost-to-sales ratio increased by 290 basis points.
• The commissioning of a new plant at Chennai and capacity additions in its existing plants lead to an increased top line in Q2CY2007. The equipment division registered a whopping 65.5% growth in its revenues and the revenues from the consumables increased by 25.6%.
• The depreciation cost for the quarter increased by 26.7% as the company has commissioned its new plant.
• Elexvia group India B.V. along with Charter plc and ESAB Holding Ltd have made an open offer to the shareholder of ESAB India to acquire 30.78 lac shares (Fully paid up equity share of Rs10 each) at Rs426 per share. These represent 20% of the total fully paid up capital.
• For the first half of CY2007 the net sales grew by 32.1% to Rs168.5 crore and the bottom line grew by 36.4% to Rs26.4 crore, subsequently generating an earnings per share (EPS) of Rs17.2 per share.

---

SECTOR UPDATE

Banking

Q1FY2008 earnings review
In this sector update we have analysed the banks under our coverage based on certain parameters that we feel are important for the overall banking sector's performance going forward. We have also taken cognisance of the risks and positive triggers that the banking sector could face in the near to medium term. Based on our analysis we feel the risk/return ratio for banking stocks appears favourable for investors. We say so because we expect the USA to reduce rates in the near future and if that happens, the Reserve Bank of India (RBI) would not be able to sit on the sidelines for too long. A stable to falling interest rate scenario is generally best suited for the banking sector's performance. Hence, although we remain cautions in the near term, yet we feel the banking sector provides good investment opportunities after the recent correction. Our top picks in the banking sector remain State Bank of India in the public sector, and ICICI Bank and HDFC Bank in the private sector.

Information Technology

Concerns overdone
The tech sector has grossly underperformed the benchmark indices over the past few months. Going by the historic trend, the tech stocks tend to lag behind the overall markets in Q1. However, the underperformance has been much more pronounced this year, due to the added concerns related to the steep appreciation in the rupee, subprime issue and its possible fallout on the overall demand environment, and the slowdown in the earnings growth momentum (compounded annual growth rate [CAGR] over the next three years) on the back of technical issues such as higher tax rate in FY2010.

These issues are largely related to external environment and consequently, not in the control of the domestic tech companies. However, the concerns appear to be overblown and more than priced in the current valuations.

In fact, the premium commanded by the tech stocks over the Sensex valuations (on one year forward basis excluding tech stocks) have reduced from a high of around 120% in the mid of 2004 to a historic low of 20%. This appears to be an overdoing given the fact that one of the key concerns of rupee appreciation is under control now and the performance of the tech sector is not likely to impacted by the rising political risk in the country.

---

VIEWPOINT

Ambuja Cement

Holcim picks up 3.94% in Ambuja Cements
Continuing with the creeping acquisition of Ambuja Cements' shares, Holcim Mauritius has announced the acquisition of 6 crore equity shares of the company from its promoter and promoter companies (Narotam Sekhsaria, and Radha Madhav Investments and RKBK Fiscal Services). The acquisition has been carried out at a price of Rs154 per share and amounts to 3.94% of the equity capital of Ambuja Cements.

Hindustan Unilever

Till date, the southwest monsoon has been fairly widespread and normal. A favourable monsoon will significantly increase the rural income in the current year. This is particularly positive for HUL for whom the rural markets account for an estimated 50% of incremental growth. This will pave the way for a reasonable sales growth, besides even better profitability.

For the long-term, there is no doubt about its prospects. Increasing urbanisation, improving literacy level, expanding media reach, growing disposable income, changing attitudes and aspirations and a young and growing population all will ensure sustained growth.

Consider these: The per capita consumption of personal wash products in India is 0.5 kg compared to 1.1 kg in Brazil and 2 kg in USA, for fabric wash the figure is 2.6 kg in India compared to 7.2 for Brazil and 13.1 in USA.

The per capita consumption for other products is also currently very low. Toothpaste: 40 ml in India, 358 ml in Brazil and 299 ml in USA, shampoo: 16 ml in India, 444 ml in Brazil and 1,018 in USA, ice cream: 0.98 ltr in India, 1 ltr in Brazil and 22 ltr in the USA.

All these indicate very low level of penetration and tremendous growth prospects. High GDP growth and increase in per capita income is bound to more than proportionately increase demand for the company's products.

Valuation

In FY 2007 (ending December 2007) we expect the company to register sales and net profit of 13696.70 crore and Rs 1905.48 crore respectively. On equity of Rs 220.70 crore and face value Re 1 per share, EPS works out to Rs 8.3. The share price trades at Rs 196. P/E works out to reasonable 23.6.

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Asian Granito India falls below IPO price on debut

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Nagarjuna Fertilizers & Chemicals tops volume on BSE

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Market trades volatile

It was a volatile session for the markets amid political turmoil during the day. Sensex went down 85 points at 14163, swings 425 points during the day. Nifty down 38 points at 4115 swings 150 points during the day.

CNX Midcap Index down 0.66%, BSE Small-cap Index down 1.25%. BSE Bank Index down 2.2%, BSE Oil & Gas Index down 1.7%. Index Losers; ONGC down 3%, RIL down 1.26%, SBI down 3%, ICICI Bank down 2.5%

NSE Advance Decline ratio was at 1:2. Total market turnover at Rs 72394.95 cr vs Rs 66667.54 cr on Wednesday

Currency movements

Yen depreciates by 82 bps at 116.9 (has hit an intra-day low of 117.13). Rupee appreciates by 17 bps at 40.96

F&O snapshot

Huge unwinding of positions was seen during the day. Nifty Futures end at par vs 15-20 points discount seen during the day. Nifty Futures add 14.1 lakh shares (was around 35 lakh shares during the day).

Unwinding of long positions seen in Non-index stocks/ Other mid-caps especially Fertiliser stocks. Unwinding of long positions was also seen in index stocks like SBI, RIL, GMR Infra. Fresh shorts was seen in Index stocks like ICICI Bank, Cipla.

Cairn and Nalco sees addition of long positions

Unwinding of long positions.

Fertiliser stocks: Chambal Fert, Nagarjuna Fert, Oswal Chem, Bongaigaon and GNFC

Non-index stocks:: IFCI, IDBI, Praj, Punj Lloyd, JSW Steel, RPL,

Other mid-caps: Neyveli Lignite , Essar Oil, GMR Infra, Bharat Forge, IDFC, Indian Hotel

Index Stocks: R Comm, REL, SBI, Tata Steel, and Wipro

Short covering:

Index Stocks: ITC, Satyam, Infosys, Tata Motors, SAIL
Non Index Stocks: India Infoline, Reliance Capital, Idea, Andhra Bank, Alok Ind

Fresh shorts

ICICI Bank: Down 2.6%, Adds 1 lakh shares
PNB: Down 2.2%, Adds 2.8 lakh shares in OI
Cipla: Down 4.5%, Adds 9.3 lakh shares in OI
VSNL: Down 1.9%, Adds 2.7 lakh shares in OI

Global markets

Taiwan up 2.8%, Hang Seng up 2.7%, Indonesia up 2.65%, Nikkei up 2.6%
Korea up 2.3%, Straits Times up 1.5%

Deals back in news in US market

Dow ends day with a triple-digit gain with 28 components supporting it

Mergers and buyout news took centrestage today, Wednesday, 22 August, 2007, pushing the recent credit-crunch related news to the backside. The market also heaved a sigh of relief in the belief that the situation in the credit market is not so bad on getting news that top banks have borrowed money from the Fed's discount window after the rate cut. All three indices closed in the green.

The Dow Jones Industrial Average closed higher by 145.27 points to 13,236.13. The tech-heavy Nasdaq gained 31.5 points to settle at 2,552.8. S&P 500 gained 16.95 points to end at 1,464.07.

Twenty-eight of the 30 Dow stocks closed in green today. Alcoa, Caterpillar, Boeing and Du Pont were the main Dow winners. JP Morgan and CoCo Cola were the only two Dow laggards.

Reports that Rio Tinto has raised a record-breaking $40 billion to fund its proposed takeover of Alcan and Dubai World is reportedly investing $5 billion to buy a 9.5% stake in MGM Mirage were the prominent deal news that boosted investor confidence that all is not so bad in the US market.

All Indian ADRs end in green

Indices were in green for the entire day. Among other deal news, TD Ameritrade and E*Trade Financial reported that they might merge. Nymex Holdings confirmed it is in takeover talks. Nymex shares rose more than 6%.

Four big banks - Citigroup, JPMorgan Chase, Wachovia and Bank of America - said today they had borrowed $500 million each from the Federal Reserve's discount window. The discount window is how Wall Street describes the process of borrowing money from the Fed at its discount rate.

All Indian ADRs ended in green today. Satyam, Rediff, Infy, ICICI Bank and HDFC Bank were the top winners. Both Satyam and Rediff gained almost 4.5% today. The other three rose up by 2.5% -3.5%.

Crude stays below $70 as inventories rise

Crude oil futures fell to the lowest level in two months an eight-week low after Energy Department's weekly report showed an unexpected increase in inventories. Prices were also lower because Hurricane Dean weakened and is expected to dissipate by tomorrow morning.

Crude-oil futures for light sweet crude for October delivery closed at $69.32/barrel (lower by $0.16/barrel or 0.23%) on the New York Mercantile Exchange. On a yearly basis, prices are 4.6% lower. Futures fell as low as $68.63 during intraday trading.

Volume on the New York Stock Exchange neared 1.5 billion shares, with advancers beating decliners 4 to 1. At the Nasdaq, more than 1.8 billion shares were exchanged, and advancing stocks outpaced decliners by a more than 2-to-1 ratio.

For tomorrow, only a handful of notable companies are expected to report their results. On the economic front, Initial Claims will hit the wires at 8:30 ET.

Sensex ends down 85pts, SBI drops 3%

 Political uncertainty took its toll with the Sensex swinging over 400pts in a volatile session today.

The Sensex opened with a significant positive gap of 209 points at 14,458, and soon soared to a high of 14,555 - up 306 points from its previous close.

The index turned volatile in the noon session, and slipped into negative zone on reports that the central committee of CPM has endorsed the politburo call for cancelling the nuclear deal.

The index dropped to a low of 14,129 - down 426 points from the day's high. The Sensex finally ended with a loss of 85 points at 14,164.

The BSE Bankex dropped over 2% to 7225. The Oil & Gas index shed 1.7% to 7385, and the Healthcare index slipped over 1% to 3387. The FMCG index, however, moved up over 1% to 1862.

The market breadth was fairly negative - out of 2,665 stocks traded, 1,702 declined, 905 advanced and 58 were unchanged today.

INDEX MOVERS...

ACC surged 2% to Rs 972. Ambuja Cements gained 1.7% at Rs 133.

ITC rallied nearly 1.5% to Rs 161. Maruti and Satyam advanced 1.3% each to Rs 777 and Rs 423, respectively.

Infosys and Hindustan Unilever were up 1% each at Rs 1,808 and Rs 198, respectively.

...AND THE SHAKERS

Cipla slumped over 4% to Rs 168.

ONGC and SBI plunged 3% each to Rs 784 and Rs 1,415, respectively.

Reliance Energy and ICICI Bank dropped around 2.5% each to Rs 706 and Rs 826, respectively.

HDFC Bank shed 1.7% to Rs 1,100. TCS, Reliance Communications, Tata Steel, Ranbaxy and Reliance slipped around 1.5% each to Rs 1,008, Rs 487, Rs 560, Rs 349 and Rs 1,743, respectively.

Wipro was down over 1% at Rs 448.

MOST ACTIVE COUNTERS

SEL Manufacturing topped the value chart with a turnover of Rs 197.50 crore followed by Reliance (Rs 176 crore), Reliance Capital (Rs 145 crore), debutant Asian Granito (Rs 133.50 crore) and SBI (Rs 122.50 crore).

Nagarjuna Fertilisers led the volume chart with trades of around 2.12 crore shares followed by Asian Granito (1.42 crore), Tata Teleservices (1.40 crore), IFCI (1.19 crore) and SEL Manufacturing (1.11 crore).

Market Close: Political nervousness prevails!

Major Indices across the globe ended strong with Asian counter parts like Hang Seng which rallied to end up by 620 points and Nikkei by 415 points. Indian Indices were hit after the strong start due to political nervousness. Session started strong looking at its global peers with some buying in the heavyweights. Ranged session in green till the middle but saw a complete trend reversal as the political uncertainty on Indo US nuke deal jitters across the market. Investors were nervous and didn't knew whether to enter or exit the market. Sensex lost near to 400 points from the days high. Except for some Cement, FMCG and IT stocks all the sectors ended in red. Banking, Oil & Gas, PSU were the worst hit. News of Switzerland's Holcim open offer to acquire 20% more stakes in Ambuja Cement at Rs 154 per share saw some value buying in the cement sector. Mid and Small caps too succumbed to selling pressure.

Sensex closed down by 85 points at 14163.98. Weighing on the Sensex were losses in Cipla (167.8,-4 percent), ONGC (783.95,-3 percent), SBI (1415.05,-3 percent), Rel Energy (705.75,-3 percent) and ICICI Bk (825.8,-2 percent). Losses were restricted by gains in ACC (972.4,+2 percent), Guj Ambuja (132.75,+2 percent), ITC (160.7,+1 percent), Maruti (777.1,+1 percent) and Satyam (422.7,+1 percent).

Videsh Sanchar Nigam (VSNL) is one of the leading provider of international telecommunication services in the country. The company lost the Income-Tax Appellate Tribunal case and now has to pay a possible tax of Rs 1,000 cr to the Government as the order was passed by ITAT. The bench of ITAT informed that the company is liable to pay tax on an income of Rs 2,090 cr earned between 1995 and 2006. The tax effect of this order could be above Rs 1,000 cr. Though the order is only for the assessment year 1996-97, the bench?s conclusion will be binding for the subsequent years also, unless the Bombay High Court reverses the order. Therefore, the tax effect for the period between 1996-97 to 2005-06 including interest payable is estimated to be Rs 1,000 cr or higher. Due this the stock traded weak for the day and ended marginally down.

India's pharmaceutical industry seems to be in a race against time. According to McKinsey & Company's latest report, the country's pharma market is all set to provide the third largest growth opportunity globally. It is expected to triple in size and touch $20 bn by 2015, becoming one of the world's top 10 markets and is expected to grow at 12% annually. Several factors such as large private sector investments in health infrastructure, increase in the number of hospital beds, rise in the number of physicians, greater penetration of health insurance, rising prevalence of chronic diseases and aggressive market penetration by smaller companies will play a key role in the growth of the Indian pharmaceutical market. However, the pharmaceutical industry's concerns on drug pricing policies and product patent regulations could be the dampeners to ensure the 12% growth in the domestic growth. Mc Kinsey?s suggests that while the present generics industry will continue to dominate the pharmaceutical market, patented products will constitute close to 10% of the market in the next ten years. The pharma stocks ended in mixed for the day.

Technically Sepaking: Indices swung in between 400 Points. Declines outnumbered Advances in the ratio 1.8:1. Turnover of Rs 4779 Crs was good. Sensex has a Key Support at 14000-14050 and 13850-13870. Resistance seen at 14425-14440 and 14530-14570.

Market slips on political uncertainties

The market rose more than 2% on expectations that the global credit problem and local political worries may get resolved very soon. The Sensex resumed with a gap of 209 points at 14,458 tracking positive global cues and rallied sharply to touch the day's high of 14,555. Cement stocks led the rally with banking and metal stocks. However, the market received a major hit in the afternoon as the central committee of CPI (M) announced the party politburo's opposition to the Indo-US nuclear deal and authorised it to do whatever it can to block the deal. Quickly the Sensex entered in to the negative territory but recovered soon. The market remained choppy thereafter and zigzagged between positive and negative territory. The Sensex finally closed the session at 14,164, down 84 points, while the Nifty ended the session at 4,115, down 38 points.

The breadth of the market was weak. Of the 2,665 stocks traded on the BSE, 1,702 stocks declined, 905 stocks advanced and 58 stocks ended unchanged. Almost all of the sectoral indices ended weak while, the BSE FMCG index bucked the trend and closed in the green. The BSE Bankex index lost 2.21%, the BSE Oil & Gas index declined by 1.68% and the BSE PSU shed 1.47%.

Several heavyweights took a sharp tumble on selling pressure. Cipla shed 4.41% at Rs168, ONGC tumbled by 3.07% at Rs784, SBI dropped 2.94% at Rs1,415 and Reliance Energy declined by 2.59% at Rs706. Among the other major losers ICICI Bank slumped by 2.47% at Rs826, HDFC Bank lost 1.74% at Rs1,100, TCS slipped by 1.64% at Rs1,008, Reliance communication dipped 1.64% at Rs487 and Tata Steel shed 1.60% at Rs560. Select counters, however, ended in the green. ACC advanced by 2.02% at Rs972, Ambuja Cement added 1.72% at Rs133, ITC gained 1.45% at Rs161, Maruti Udyog moved up 1.36% at Rs777 and Satyam Computer gained 1.25% at Rs423.

Banking stocks declined on sharp selling pressure. Kotak Bank tumbled by 3.48% at Rs626, Centurion Bank of Punjab dropped 2.76% at Rs37, Fedral Bank shed 2.67% at Rs304 and Punjab National Bank lost 2.58% at Rs452.

Over 2.11 crore Nagarjuna Fertilisers shares changed hands on the BSE followed by Asian Granito (1.42 crore shares), Tata Teleservices (1.39 crore shares), IFCI (1.19 crore shares) and SEL Manufacturing (1.11 crore shares).

Value wise, SEL Manufacturing registered a turnover of Rs197 crore on the BSE followed by Reliance Industries (Rs175 crore), Reliance Capital (Rs144 crore), Asian Granito (Rs133 crore) and SBI (Rs122 crore).

Political worries puncture early rally

The market saw a complete trend reversal in late afternoon trading today, 23 August 2007. Boosted by strong Asian and European markets, the market was firm till early afternoon trade. It, however, faltered in afternoon trade on a sudden sell-off due to political uncertainties.

Volatility was intense throughout the day, with the market swinging between positive and negative zone

The BSE 30-share Sensex lost 84.68 points or 0.59% at 14,163.98. It had opened higher at 14,458.33 and advanced further to hit 14,544.93 as buying continued. From here, the benchmark index declined sharply to touch a low of 14,128.72.

At the day's high, the Sensex had gained 306.27 points. At the day's low, it had lost 119.94 points. The Sensex oscillated 426.21 points in the day.

From an all time high of 15,868.85 24 July 2007, the BSE Sensex is down 1704.87 points.

The S&P CNX Nifty slipped 38.20 points or 0.92% at 4,114.95. The Nifty August 2007 futures settled at 4113.80, a discount of 1.15 points as compared to spot closing.

The Central Committee of the CPI (M) today, 23 August 2007, endorsed the party Politburo's opposition to the Indo-US nuclear deal and authorised it to do whatever it can to block the deal. The Politburo had warned the government of serious consequences if it went ahead with negotiations with the International Atomic Energy Agency and Nuclear Suppliers Group.

If the communist allies of the ruling coalition decide to pull their support, the government will be reduced to a minority and that could trigger fresh elections.

The market breadth, indicating the overall health of the market, was strong on BSE till early afternoon session. But it turned weak later as small- and mid-caps succumbed to selling pressure. On BSE 1,749 shares declined as compared to 943 that rose, while 67 remained unchanged.

In the opening session, the market breadth was strong on BSE, with 1,129 shares advancing as compared to 271 that declined

The BSE Mid-Cap Index was down 0.88% to 6,105.11, while the BSE Small-Cap Index declined 1.25% to 7,424.39. Both these indices were sharply off from their day's high of 6,285.19 and 7,679.04, respectively

Most sectoral indices on BSE settled lower. The BSE Metal index (down 0.88% to 9,992.40), BSE Realty index (down 0.80% to 6,752.71), BSE PSU index (down 1.47% to 6,477.17), BSE Oil & Gas index (down 1.68% to 7,385.15), BSE Bankex (down 2.21% to 7,224.29), BSE Health Care index (down 1.15% to 3,386.60) and BSE Auto index (down 0.23% to 4,463.46), underperformed the Sensex.

BSE Consumer Durables (down 0.18% to 3,961.50), BSE TECk index (down 0.17% to 3,416.10), BSE FMCG Index (up 1.11% to 1,862.39), BSE IT index (up 0.18% to 4,356.28), BSE Capital Goods index (down 0.49% to 12,336.67) outperformed the Sensex.

The total turnover on BSE amounted to Rs 4779 crore as compared Rs 4404 crore on Wednesday, 22 August 2007. The NSE F&O turnover was Rs 56,000.15 crore as compared to Rs 51,749.7 crore on Wednesday, 22 August 2007.

Among the 30-member Sensex pack, 15 advanced while the other 15 slipped.

India's third largest pharma company in terms of sales Cipla slumped 4% to Rs 168.50 on 6.48 lakh shares, slipping sharply from the day's high of Rs 179.95. It was the top loser from the Sensex pack.

Banking and financial shares came under selling pressure. State Bank of India (down 3.10% to Rs 1412.80, off the session's high of Rs 1500), ICICI Bank (down 2.45% to Rs 826, off the session's high of Rs 869), HDFC Bank (down 1.27% to Rs 1105, off day's high of Rs 1159.70) ended in red.

Reliance Energy (down 2.60% to Rs 706) and ONGC (down 2.20% to Rs 791 were the other losers from the Sensex pack.

India's top car maker Maruti Udyog advanced 2.39% to Rs 785 on 2.05 lakh shares. It was the top gainer from the Sensex pack. Earlier this week a foreign brokerage recommended buy rating on the stock with a target of Rs 1050.

Cement stocks rose following Swiss cement major Holcim's open offer to acquire an additional 20% stake in Ambuja Cement, India's second largest cement producer by sales.

ACC (up 2% to Rs 972), UltraTech Cement (up 0.25% to Rs 855), Birla Corporation (up 6.83% to Rs 263.30), India Cements (up 3.90% to Rs 218.40), Ambuja Cement (up 1.15% to Rs 132), and Grasim Industries (up 0.85% to Rs 2749.95) ended higher.

Switzerland's Holcim today said it had acquired a 3.9% additional stake in Ambuja Cements from the founding families at Rs 154 share, in a deal worth $220 million.

FMCG stocks, considered as defensive in a volatile market held firm. ITC, the country's biggest cigarette manufacturer, advanced 2.27% to Rs 162 on its plans to set up small-format stores in rural areas, on the lines of its existing hypermarket chain Choupal Sagar, by early next year. It also plans to raise the number of its fruit and vegetable outlets to about 200 in three years. ITC also plans to operate 50 of the Choupal Fresh stores by March 2008 in Hyderabad, Pune and Chandigarh.

Other FMCG stocks Tata Tea (up 2.80% to Rs 690) and Hindustan Unilever (up 1.43% to Rs 199) rose. On Wednesday, 22 August 2007, the BSE FMCG index had gained 2.38% to 1841.90

Bharti Airtel, the country's largest listed mobile service provider, gained 1.22% to Rs 858 on reports it is looking to sell the management control of its passive infrastructure business, Bharti Infratel. As per reports, a clutch of private equity funds and Reliance Communications are in the race. Bharti Infratel is the largest tower infrastructure company in the country with over 40,000 towers.

India's largest engineering and construction firm by sales Larsen & Toubro was up 0.89% to Rs 2405.50 after company won a repeat order for construction of two ships from Netherlands's RollDock BV (erstwhile Zadeko Shipmanagement CV) of The Netherlands valued at over $70 million.

India's leading power equipment maker Bharat Heavy Electricals slipped off its day's high of Rs 1725, to settle 0.12% lower at Rs 1664.90. It had bagged contracts worth Rs 6500 crore for setting up power project units on Wednesday, 22 August 2007. The orders have been placed by Damodar Valley Corporation (DVC). The stock had lost 9.18% to Rs 1666.95 on 22 August 2007 from Rs 1765.45 on 23 July 2007.

Dr Reddy's Laboratories rose 1% to Rs 633. It had got an approval from the US Food and Drug Administration for cholesterol-lowering simvastatin tablets on Wednesday 22 August 2007. The stock lost 6.87% in the past month to Rs 626.75 on 22 August 2007.

IT stocks were mixed. Wipro (down 1.44% to Rs 447) and TCS (down 1.41% to Rs 1010), slipped. While Infosys (up 1.14% to Rs 1810), and Satyam Computers (up 0.84% to Rs 421), rose.

Reliance Industries (RIL), the country's top private sector entity by market capitalisation and oil refiner, slipped 1.73% to Rs 1737.80 on 9.92 lakh shares. It had moved in a range of Rs 1732.10– Rs 1809.95. As per reports, RIL will foray into solar power generation through pilot projects that will supply electricity to a few villages in Maharashtra. In the next 8-12 months, pilots will be launched in 38 villages in Maharashtra.

Among the side counters, Rasoi (up 20% to Rs 295.20), Emkay Shares (up 9.68% to Rs 110), Sanghi Industries (up 9.66% to Rs 73.80), International Combustion (up 8.24% to Rs 375) and Sahara Housing (up 9.97% to Rs 75) surged.

RT Exports (down 11.19% to Rs 26.20), Ginni Silk Mills (down 13.92% to Rs 25), Jai Corp (down 5% to Rs 5935.25), Era Construction (down 5% to Rs 492.65), and Saregama (down 9.98% to Rs 221.45) declined.

Real-estate stocks advanced on fresh buying after the recent sharp fall. Ansal API (up 2.20% to Rs 252.70), Indiabulls Real Estate (up 0.13% to Rs 460.50), Omaxe (up 9.81% to Rs 301), and Sobha Developers (up 1.83% to Rs 748.80) were up. The BSE Realty index had lost 16.56% to 6,806.90 on 22 August 2007 from 8,379.28 on 23 July 2007.

Three block deals of 23.07 lakh shares each were struck on the Bank of Maharashtra counter on BSE at average price of Rs 48.18 per share in opening trade. The stock slipped 0.10% to Rs 48.10 on high volume of 70.19 lakh shares.

Asian Granito India settled at Rs 94.75 on BSE, a discount of 2.3% over the IPO price of Rs 97. The stock debuted at Rs 100.15, hit a low of Rs 82.10 and high of Rs 103.35. On BSE, 1.42 crore shares changed hands in the counter. Asian Granito India's IPO had ended on 31 July 2007 with 4.51 times subscription.

Easun Reyrolle rose 1.25% to Rs 209.85 after the company's board approved raising long term funds. The funds will be raised in Indian and or international markets by issue of equity shares/GDRs/ADRs/FCCBs/convertible bonds.

BPO firm Firstsource Solutions was up 0.10% to Rs 70.55 on reports of it emerging as the front-runner to acquire US-based MedAssist Inc. which provides a range of healthcare and related services.

Birla Kennametal rose 4.55% to Rs 255 after its board of directors at its meeting held on 22 August 2007 approved the sub-division of each of 1 (one) existing share of Rs 10 each into 5 (five) shares of Rs 2 each. The company made this announcement after market hours on Wednesday, 22 August 2007.

Godfrey Phillips India was up 0.64% to Rs 1250. It turned Rs 25 per share ex-dividend from today. It has a face value of Rs 10 per share.

Grindwell Norton had declined 4% to Rs 142.75 after it decided to sell its stake in Lincoln Hellos India to its joint venture partner, Lincoln GmbH for Rs 100 crore.

ITD Cementation India surged 14.69% to Rs 462.95 its joint venture with its promoter, Italian-Thai Development Public Company, Thailand, was awarded a Rs 893-crore contract by the Delhi Metro Rail Corporation.

All the Asian markets, which opened before the Indian markets, settled higher. At its meeting today, the Bank of Japan left interest rates unchanged at 0.50%, the lowest among major economies. The BOJ had last raised interest rates in February 2007.

Hang Seng (up 2.77% at 22,966.67), Japan's Nikkei (up 2.61% at 16,316.32), Taiwan Weighted (up 2.82% at 8,732.84), Singapore's Straits Times (up 1.49% at 3,370.91), and South Korea's Seoul Composite (up 2.29% at 1,799.72) edged higher.

China's benchmark Shanghai Composite Index surpassed the 5,000-level for the first time today, 23 August 2007 as bullish investors snapped up blue chips on a strong outlook for corporate earnings. The Shanghai Composite Index settled 1.05% or 52.41 points higher to 5,032.49. It also hit an all-time high of 5,050.38 in intra-day trade. The Shanghai Composite Index has gained 88% since the beginning of the year.

All the European markets, opened after the Indian markets, were trading higher today. Key European indices in Germany, France and UK were up between 0.70% and 0.90%.

US stocks rose on Wednesday, 22 August 2007, as takeover activity resurfaced and credit markets stabilised, luring investors back into riskier assets such as equities.

The Dow Jones Industrial Average jumped 145.27 points, or 1.11%, to 13,236.13. Broader stock indicators jumped as well. The Standard & Poor's 500 index rose 16.95 points, or 1.17%, to 1,464.07, while the Nasdaq Composite index gained 31.50 points, or 1.25%, to 2,552.80.

Crude oil prices rebounded from lower levels on Thursday, 23 August 2007, as world stock markets rallied on hopes that the worst of the credit squeeze may be past and traders braced for supply delays in the wake of Hurricane Dean. US crude rose 29 cents to $69.55 a barrel, while Brent crude gained 16 cents to $68.86 a barrel.

Asian Markets open positive

Asian markets opened positive on Thursday (August 23) as worries regarding the credit crises took a pause. However, Japanese government bond futures fell in the early sessions of trade ahead of the Bank of Japan`s policy decision, which is to come later in the day.

Mitsubishi UFJ Financial Group and Macquarie Bank rose on easing credit concerns. BHP Billiton, the world`s largest miner, rose after it reported record profit.
Shares of Countrywide Financial jumped 20% after the company announced that Bank of America bought USD 2 billion of convertible preferred stock.

The Japanese benchmark index Nikkei, gained 392.26 points, or 2.47%, to trade at 16,293.60.

Hong Kong`s index Hang Seng gained 545.18 points, or 2.44%, to trade at 22,892.06.

China`s Shanghai Composite gained 17.84 points, or 0.36%, to trade at 4,997.91.

Taiwan`s index Taiex gained 229.51 points, or 2.70%, to trade at 8,722.97.

South Korea`s KOSPI gained 55.12 points, or 3.13%, to trade at 1,814.62.

Singapore`s Straits Times gained 77.36 points, or 2.33%, to trade at 3,398.86. (8.10 a.m, IST)

Market may remain firm

After displaying a solid pull-back in yesterday's trades the market is likely to show firm trend in early trades and may advance further on cooling US credit markets woes and falling oil prices. The market is also likely to get support from firm Asian markets which are up over 2% in current trades. However, the market may exhibit caution owing to lack of clarity and higher volatility. Among the indices, the Nifty could test higher levels at 4208 and 4240, and has a supports at 4060. The Sensex has a likely support at 14100 and may face resistance at 14500.

US markets shot up on Wednesday on speculation that the breakdown in credit markets won't hurt the economy. While the Dow Jones flared up by 145 points at 13,236, the Nasdaq moved up by 32 points at 2,553.

All the Indian floats had a field day on the US bourses. Rediff jumped 4.49%, HDFC Bank surged 4.26% and Satyam Computer moved up by 4.13% while Tata Motors, Wipro, Infosys, Patni Computer, VSNL, MTNL and Dr Reddy's Lab gained around 1-3% each.

Crude oil fell on Wednesday after a government report showed U.S. crude inventories rose unexpectedly last week, easing supply concerns. The US light crude oil for October delivery moved down by 31 cents at $69.26 a barrel. In the commodity segment, the Comex gold for December delivery gained by $2.50 to settle at $668.70 an ounce.

Deals back in news in US Market

 Dow ends day with triple digit gain with twenty-eight components supporting it

Mergers and buyout news took the centre stage today, Wednesday, 22 August, 2007 pushing the recent credit crunch related news to the backside. Market also heaved a sigh of relief thinking that the situation in credit market is not so bad when they heard that top for banks have borrowed money from Fed's discount window after the rate cut. All three indices closed in the green.

The Dow Jones Industrial Average closed higher by 145.27 points at 13,236.13. Tech-heavy Nasdaq gained 31.5 points to close at 2,552.8. S&P 500 gained 16.95 points to close at 1,464.07.

Twenty-eight out of thirty Dow stocks closed in the green today. Alcoa, Caterpillar, Boeing and Du Pont were the main Dow winners today. JP Morgan and CoCo Cola were the only two Dow laggards.

Reports that Rio Tinto has raised a record-breaking $40 bln to fund its proposed takeover of Alcan and Dubai World reportedly investing $5 bln to buy a 9.5% stake in MGM Mirage were the main deal news that boosted investor confidence that all is not so bad in the US market.

All Indian ADRs end in green

Indices rallied in the green for the entire day today. Among other deal news, TD Ameritrade and E*Trade Financial reported that they might merge. Nymex Holdings confirmed it is in takeover talks. Nymex shares rose more than 6%.

Four big banks - Citigroup, JPMorgan Chase, Wachovia and Bank of America said today that they had borrowed $500 million each from the Federal Reserve's discount window. The discount window is how Wall Street describes the process of borrowing money from the Fed at its discount rate.

Among the Indian ADRs, all Indian ADRs ended in green today. Satyam, Rediff, Infy, ICICI Bank and HDFC Bank were the top winners today. Satyam and Rediff, both gained almost 4.5% today. The other three rose up by 2.5% -3.5%.

Crude stays below $70 as inventories rise

Crude oil futures fell to lowest level in two months an eight-week low after Energy Department's weekly report showed an unexpected increase in inventories. Prices were also lower because Hurricane Dean weakened and is expected to dissipate by tomorrow morning.

Crude-oil futures for light sweet crude for October delivery closed at $69.32/barrel (lower by $0.16/barrel or 0.23%) on the New York Mercantile Exchange. On a yearly basis, prices are 4.6% lower. Futures fell as low as $68.63 during intraday trading.

Volume at the New York Stock Exchange neared 1.5 billion shares, with advancers beating decliners 4 to 1. At the Nasdaq, more than 1.8 billion shares were exchanged, and advancing stocks outpaced decliners by a more than 2-to-1 ratio.

For tomorrow, only a handful of notable companies are expected to report their results. On the economic front, Initial Claims will hit the wires at 8:30 ET.

Make hay while the sun shines

Keep your face to the sunshine and you will never see the shadow.

The local bulls are set to bask in the sunshine with global cues appearing fine for the moment. Investors abroad are betting that the Federal Reserve will effect a rate cut. Bank of Japan has kept its key rate steady at 0.5%.

But, the euphoria over the Fed rate cut may prove to be short lived. The American central bank will hold its next scheduled meeting on Sept. 18. That's too long a time period for the stock markets. In the interim, there could be more blood letting in the US subprime mortgage market or in other parts of the globe. Keep abreast of the developments in the global markets to gauge the impact on the local sentiment.

Investment guru Warren Buffett was quoted as saying "worsening credit and housing markets may provide some real investment opportunities." READ the article below

Today, thankfully things are looking up for the bulls, with markets across the world rising sharply. We expect a gap-up opening and a fine day for the bulls. Make hay but remain cautious as it will take time for things to stabilize completely.

Remember, locally we have an over-heated political situation to take care of as well. There has been no change in the stance taken by either the Prime Minister or the Left parties on the Indo-US nuclear deal. The communists are bent on having the deal scrapped/renegotiated while the PM is not willing to back down either.

Cement shares might come under some pressure amid reports that two Pakistani firms have received BIS certification to export cement to India. A third Pakistani cement manufacturer is likely to get the clearance shortly. Pharma companies could be in action as a McKinsey report says the Indian pharma industry could hit the $20bn mark by 2015.

VSNL could face fury of investors, as the Income-Tax Appellate Tribunal (ITAT) has ruled that the company is liable to pay tax on an income of Rs20.9bn earned between 1995 and 2006. ORG Informatics is likely to gain amid reports that it has bought the TV and telecom teleport assets of Belgium's national telecom operator, Belgacom.

US stocks rallied on Wednesday on the back of a string of M&A news. Investors were also betting that the Fed will cut its more widely tracked fed funds rate next month in a bid to quell the current turbulence in the credit markets.

The Standard & Poor's 500 Index rose 16.95 points, or 1.2%, to 1,464.07. The Dow Jones Industrial Average jumped 145.27 points, or 1.1%, to 13,236.13. The Nasdaq Composite Index advanced 31.50 points, or 1.3%, to 2,552.80.

Tuesday's meeting between Fed Chairman Ben Bernanke, Senator Dodd and Treasury Secretary Henry Paulson has raised hopes that the Fed will cut the fed funds rate next month. Although economists believe that the central bank is unlikely to make a cut ahead of the next policy meeting, according to a recent survey.

Treasury prices fell, raising the benchmark 10-year note yield to 4.63% from 4.59% late on Tuesday. In currency trading, the dollar slipped versus the euro and rose versus the yen. COMEX gold for December delivery rose $2.50 to settle at $668.70 an ounce. US light crude oil for October delivery fell 31 cents to settle at $69.26 a barrel on the New York Mercantile Exchange, erasing early gains after the government reported a surprise increase in crude oil supplies.

Dubai World, the investing arm of the Dubai government, will buy a 9.5% stake in MGM Mirage in a deal worth more than $5bn. NYMEX Holdings confirmed it has discussed selling itself with potential suitors, Reuters reported. NYMEX is the parent company of the New York Mercantile Exchange. And reports surfaced that brokerages TD Ameritrade and E*Trade are in merger talks.

Lehman Brothers said it is shuttering its subprime mortgage lending unit, which will result in 1,200 layoffs and a $25mn charge. HSBC said it is closing its Indiana mortgage unit, which will result in it cutting 600 jobs. Accredited Home Lenders said it won't take any more loan applications and that it will cut 1,600 jobs, due to the problems in the subprime mortgage lending market. Toll Brothers reported slumping earnings and warned about its outlook. However, the luxury homebuilder's earnings were nonetheless stronger than expected.

European shares advanced for a fourth straight session. The pan-European Dow Jones Stoxx 600 index rose 1.7% to 368.62, with miners leading the rally following BHP Billiton's robust annual results. The German DAX 30 rose 1% to 7,500.48, the French CAC-40 advanced 1.8% to 5,518.17 and the UK's FTSE 100 gained 1.8% at 6,196.00.

Latin American markets closed higher. Brazil's Bovespa jumped 3.9% to 51,744.56 for a fourth day of advances. The benchmark IPC in Mexico City ended 2.5% higher at 29,269.34. Argentina's Merval closed up 2.3% at 2.008.50 and Chile's IPSA added 2.4% to 3,210.71.

In other emerging markets, the RTS index in Russia was up 1.8% at 1853 while the ISE National 30 index in Turkey surged 3.9% to 58,632.

Asian markets were up sharply this morning. The Nikkei in Tokyo rallied 392 points to 16,293 while the Hang Seng in Hong Kong was up 563 points at 22,910. The Kospi in Seoul gained 47 points at 1807 and the Straits Times in Singapore rose 83 points to 3405.

The Morgan Stanley Capital International Asia Pacific Index added 2.3% to 148.20 as of 10:33 a.m. in Tokyo, extending a three-day, 5.7% rally. All 10 of the benchmark's industry groups advanced. An index of raw-material producers that includes BHP posted the biggest gains.

Honda Motor paced gains among Japanese exporters after the yen weakened against the dollar. Australia's S&P/ASX 200 Index rose 2.6%, recouping all of this month's losses. Benchmarks advanced in all markets open for trading.

Benchmark Sensex once again ended above the 14200 mark as value buying coupled with strong cues from the Asian and the European markets lifted the key indices higher. However, the broader market was not all that lucky, with the BSE Small-Cap index losing 0.3% and BSE Mid-Cap index rising just 0.4%.

Fertilizer stocks had an impressive session led by Chambal Fertilizer and Nagarjuna Fertilizer. On the other hand Sugar stocks had a bitter session as scrip's like Bajaj Hindustan and Balrampur Chini lost nearly 3% each. Realty stocks also were on the receiving end however, managed to close off their days low. Finally, the Sensex closed at 14,280, up 291 points. The NSE Nifty gained 78 points to finish at 4153.

ICICI Bank advanced by 2% to Rs846 after the Government approved a plan by the nation's most valuable lender to sell shares in an insurance and funds unit. The bank plans to sell a 24 percent stake in the unit for Rs2.14bn. The scrip touched an intra-day high of Rs852 and a low of Rs811 and recorded volumes of over 30,00,000 shares on NSE.

Siemens rallied by over 9% to Rs1229 as its German parent has announced its plans to double the size of Indian operations in the next three years. The scrip touched an intra-day high of Rs1238 and a low of Rs1127 and recorded volumes of over 2,00,000 shares on NSE.

Infosys advanced by 1.5% to Rs1788 after India's second-largest computer-services provider expanded into Latin America, setting up a software-development and sales unit in Monterrey, Mexico. The scrip touched an intra-day high of Rs1808 and a low of Rs1750 and recorded volumes of over 11,00,000 shares on NSE.

Reliance Industries advanced by 1.1% to Rs1766 after, Chairman Mukesh Ambani said the nation's most valuable company expects higher profit from processing crude oil into fuels. The scrip touched an intra-day high of Rs1793 and a low of Rs1715 and recorded volumes of over 43,00,000 shares on NSE.

Sterlite Optical gained by 1.5% to Rs209 after the company announced that they have started production of power transmission at new unit. The scrip touched an intra-day high of Rs211 and a low of Rs203 and recorded volumes of over 1,00,000 shares on NSE.

Diamond cable edged higher by 0.3% to Rs286 after the company announced that they have received Rs520mn transformer order. The scrip touched an intra-day high of Rs295 and a low of Rs285 and recorded volumes of over 14,000 shares on NSE.

Pharma stocks were in poor health. Cipla slipped by 1.1% to Rs175, Glaxo was down by 1.7% to Rs1118, Cadila declined by 2.3% to Rs302. However, Ranbaxy gained by 0.6% to Rs353.

Realty shares ended in the red, with the BSE Realty index down 0.55%. Parsvnath declined by 1.5% to Rs276, Sobha slipped by 0.2% to Rs740. However, Akruti Nirman was up 1% at Rs481.

Airline stocks were back in action after being on the sidelines. Air Deccan surged by over 6% to Rs141, operator of India's biggest low-fare carrier expects to become profitable in the first quarter of the year starting April 1, 2008. The company may also raise fares by between Rs500and Rs1,000 a ticket because of increasing costs. Jet Airways gained 2.3% to Rs755 amid reports that it is all set to fly to three new international destinations and Spice Jet also rose over 6% to Rs53.

Beaten out Metal stocks also were back with Sterlite Industries leading the pull back, the scrip was up by over 4% to Rs566, Tata Steel rose over 4% to Rs569, National Aluminum gained 1.5% to Rs252 and Hindustan Zinc added 3% to Rs694.

Fund Activity:

FIIs were net sellers of Rs6.36bn (provisional) in the cash segment on Wednesday while the local institutions pumped in Rs5.47bn. In the F&O segment, FIIs were net buyers at Rs11.48bn. On Tuesday, foreign funds pulled out Rs98mn from the cash segment. Mutual Funds were net sellers at Rs165mn on the same day.

Major Bulk Deals:

Principal India MF has bought Bosch Chassis while Sundaram MF has sold it; Deutsche Securities has picked up Geodesic Info; Merrill Lynch has purchased Prakash Industries.

Insider Trades:

GVK Power & Infrastructure Limited: HSBC investment (Singapore) Limited has sold in open market 90235 equity shares of the company on 16th August, 2007.

Nagarjuna Construction Co. Ltd: SBI Mutual fund under its various schemes has purchased from open market 200000 equity shares of the company on 16th August, 2007.

Lower Circuit:

LML, ETC Networks, Hindustan Oil Exploration, Jai Corp, Atlanta, Ganesh Forgings, IOL Broadband, Flawless Diamond, Era Construction, IID Forgings and Bag Films.

Upper Circuit:

Sujana Tower, XL Telecom, Yashraj Securities and Prakash Industries.

Delivery Delight (Rising Price & Rising Delivery):

ABB, Deccan Chronicle, Geodesic Info, Indian Hotels and Marico.

Abnormal Delivery:

Jet, Patni, Cranes Software, Bharat Electronics and Amtek Auto.

Major News & Announcements:

GAIL to invest Rs4.75bn equity in Dabhol Power project – Reports

Himatsingka Seide to sell 5.8mn shares to promoters

Indian oil to shut Barauni Refinery in October for maintenance

DLF wins order to develop township in West Bengal

Diamond Cables receives Rs520mn transformer order

Sterlite Optical starts production of power transmission in Uttarakhand.