A subdued session likely

The only real prison is fear, and the only real freedom is freedom from fear.

The bulls have been acting much more freely over the past few weeks, thanks largely to falling crude oil prices and relatively stable inflation. A good pick up in monsoon has also helped ease some of the concerns over food price inflation. And, though the latest IIP numbers were not spectacular, they were still better than the previous month's figures. A rally in global markets, led by the US, has also supported the resurgence in the overall sentiment.

This week hasn't been as good as the last few ones, but the bias remains positive in the near term. We expect the undertone to improve today after a two-day breather. However, the extended weekend coupled with subdued global markets could check further gains. The much-hyped SEBI Board meeting could disappoint the bulls due to lack of announcement on the P-Note issue, though the regulator has made it easier to raise money.

Inflation numbers will be released after the market closes today. The WPI-based inflation has crossed 12%, and is likely to inch up slowly. There is talk of it remaining in double-digits for a considerably longer period, before it starts coming down. A further drop in crude oil prices will surely help, though the Government has ruled out reduction in fuel prices as of now. The ongoing correction in global commodity markets and a good kharif harvest will come in handy.

All this will take a while though, and the market could remain range-bound with alternate bouts of buying and selling. Though the market may not test previous lows, one cannot completely rule out a sharp fall from current levels. Globally, things are still pretty bad in terms of slowing economic growth and persistent pain in the financials. On the local front too, macro-economic headwinds are still in place. For the day though, the market could turn buoyant after a slow start.

Asian stocks fell, led by financial companies, after condominium builder Urban Corp. filed for bankruptcy and Merrill Lynch said the credit crisis isn't over. Commodity producers gained after oil and metal prices rose.

The MSCI Asia Pacific Index lost 0.3% to 125.85 as of 10:45 a.m. in Tokyo, a third day of declines and set for the lowest close since September 2006. The index is down 20% this year.

The Nikkei 225 Stock Average in Tokyo ended the morning session down 39.16 points or 0.3% at 12,983.89. Hong Kong's Hang Seng Index was down 33 points or 0.2% at 21,259.

The Kospi in Seoul, the Straits Times in Singapore and the Taiex in Taiwan were nearly unchanged. The Shanghai Composite index in China was down 18 points or 0.7% at 2428.

US stocks ended lower on Wednesday, weighed down by a rebound in oil prices and lackluster retail sales, even as worries persist about the financial sector's health after Merrill Lynch downgraded several banks.

Major stock indices tried for a mid-afternoon comeback after oil prices trimmed gains, but a fresh wave of selling in financials took its toll late in the session.

The S&P 500 lost 3.76 points, or 0.3%, to 1,285.83. The Dow Jones Industrial Average fell 109.51 points, or 0.9%, to 11,532.96. The Nasdaq Composite Index slipped 1.99 points to 2,428.62.

Market breadth was negative. Ten stocks dropped for every nine that rose on the New York Stock Exchange. Wednesday's volume was light, with 1.2bn shares traded on the New York Stock Exchange.

Oil prices ended higher for the first time in four sessions after the US Energy Department reported declines in crude, distillate and gasoline supplies. US light crude oil for September delivery rose $2.99 to settle at $116 a barrel on the New York Mercantile Exchange after having touched a session high of $117.15 earlier.

Also, investors were tracking fighting between Russia and Georgia, which has continued despite an announced cease-fire on Tuesday. Georgia serves as an important hub for transporting fuel between Asia and Europe.

In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.93% from 3.90% late on Tuesday. In currency trading, the dollar was little changed versus the euro and slipped versus the yen. COMEX gold for October delivery rose $16.80 to $825 an ounce.

Earnings from Deere & Co. disappointed investors. Deere, the largest maker of tractors, fell 3.2% as higher materials costs and the housing slump hurt earnings. The S &P 500 Retailing Index declined the most since July 10 after the Commerce Department reported the first decrease in chain-store sales in five months.

Bank of America led a 4.1% drop in the KBW Bank Index.

General Motors (GM) shares slumped 7.6% after Moody's cut its debt rating deeper into junk territory and kept the outlook negative, which could imply another cut 12 to 18 months out.

Drug store chain CVS Caremark said it is buying Longs Drug Stores for $71.50 per share in cash or $2.7bn. The acquisition was announced late on Tuesday. CVS shares were barely changed and Longs Drug Stores rallied nearly 31%.

Thursday morning brings the weekly jobless claims report and the July reading on consumer prices (PPI). On the earnings front, Wal-Mart Stores and Urban Outfitters both report quarterly results.

European shares extended their losses. The pan-European Dow Jones Stoxx 600 index fell 2.5% to 284.44. The French CAC-40 fell 2.6% to 4,402.97, while the German DAX 30 lost 2.5% to 6,422.19. In London, the FTSE 100 closed down 1.6% to 5,448.60.

In the emerging markets, Brazil's Bovespa rose 0.1% to 54,573.18. The close was well off its 2% advance during the session, but it was enough to halt the index's string of declines that began Aug. 7. Mexico's IPC rose 0.9% to 26,877.07, its first advance in three sessions.

It was second straight trading session where the Indian bourses ended with a negative bias. Traders and investors were cautious ahead of SEBI verdict on P-Notes. Market witnessed see-saw trades through out the day.

After hitting an intra-day high of 15,272 in the afternoon trades, bulls were unable to hold on to their gains on back of selling pressure in the selling pressure in the index heavyweights like ICICI Bank, HDFC Bank, L&T and RCom. Sentiments continued to remain weak as even the European markets opened with a negative bias.

Finally, the benchmark Sensex slipped 119 points to close at 15,093 and Nifty ended 23 points lower to close at 4,529.

Purvankara gained by a percent to Rs200 after the company announced the launch of its 100% owned subsidiary, Provident Housing and infrastructure Limited.

Under Phase 1 alone, the affordable housing project will cover Bangalore, Chennai, Hyderabad, Coimbatore, and Mysore where 64,500 homes with a total built up area of 59.80 mn sq ft will be constructed over the next five years at a cost of about Rs80bn. The scrip touched an intra-day high of Rs207 and a low of Rs200 and recorded volumes of over 9,000 shares on BSE.

Shares of XL Telecom surged by over 2% to Rs213 after the company announced that it has signed an agreement with LDK Solar Co., Ltd.

Under the terms of the agreement, LDK Solar will deliver approximately 300 MW of multicrystalline silicon solar wafers to XL Telecom & Energy Ltd. over a five-year period, commencing in the first quarter of 2009 and extending through 2013. XL Telecom & Energy Ltd will, make a down payment representing a portion of the contract value to LDK Solar. The scrip touched an intra-day high of Rs222 and a low of Rs202 and recorded volumes of over 4,00,000 shares on BSE.

Shares of NMDC fell from its high and ended lower by half a percent to close at Rs.357 There were reports stated that the company NMDC Ltd and Rio Tinto Group, will jointly scout to acquire iron ore assets globally. The accord would be signed on August 18, 2008. NMDC on March 14 floated a tender seeking global partners to buy mines overseas. The equity structure of the venture will depend on the assets acquired. The scrip touched an intra-day high of Rs372 and a low of Rs350 and recorded volumes of over 1,00,000 shares on BSE.

Shares of MIC Electronics surged by over 2.5% to Rs131 after the company announced that the Latin American Football Corporation are looking to form a Joint venture with MIC Electronics Inc, USA called SLM (Sports LED Media).

The JV is poised to supply display systems to 50 Football Stadiums in South America and Europe. The total supplies are valued at US$50mn.

The stocks also attracted attention as SEBI approved its entry in the Future & Options space. The scrip touched an intra-day high of Rs140 and a low of Rs129 and recorded volumes of over 8,00,000 shares on BSE.

Tata Steel advanced by 1% to Rs610 after the company announced that through its wholly owned subsidiary, Tata Steel Global Holding Pte. Ltd., Singapore, signed a Joint Venture agreement with Vietnam Steel Corporation and Vietnam Cement Industries Corporation for a steel complex in Ha Tinh province in Vietnam.

The Company will have a stake of 65% in the above project and also have a stake of 30% in Thach Khe Iron Ore Joint Stock company which would undertake mining in the Thach Khe iron ore mine. The scrip touched an intra-day high of Rs622 and a low of Rs600 and recorded volumes of over 15,00,000 shares on BSE.

BILT edged higher by 0.3% to Rs33. Reports stated that the company would hike uncoated paper prices by Rs800/ton and coated paper prices by Rs1500/ton. The scrip touched an intra-day high of Rs35 and a low of Rs33 and recorded volumes of over 2,0,000 shares on BSE.

Tata Steel to build US$5bn plant in Vietnam (ET)

RIL and Vornado Realty Trust are teaming up to build and operate shopping centres in India (DNA)

HUL is partnering with Disney to design packaging strategy for its flagship brand 'Kissan Jam' (FE)

MTNL cuts broadband charges by up to 50% (ET)

Amtek Auto enters into a JV with US-based FormTech Industries to manufacture forged automotive components for passenger cars and CVs (ET)

IOC to finalize funding options for Paradip refinery (BL)

UB seeks shareholders approval to raise more debt to fund its loss-making airline subsidiary, Deccan Aviation (ET)
Hexaware to close its Gurgaon centre and shift employees to other centres (BL)

Firstsource arm gets ~US$30mn six-year deal from BTGS (BL)

Puravankara launches a 100% subsidiary for selling 64,500 homes worth Rs80bn in five southern cities, to be built over next five years (ET)

Titan to open 50 more exclusive stores by the end of current fiscal (BL)

BHEL sees a slow down in new order inflows for its power equipments (DNA)

BILT to raise prices of uncoated paper by 2% or Rs800/ton from September 1st (BS)

Orchid Chemicals has invested in US-based Diakron Pharma through a combination of services and cash (DNA)

Gujarat NRE claims Rs47.61bn as damages in a civil suit from Austral Coke (BS)

NMDC and Rio Tinto to jointly explore global and local iron ore reserves (BL)

JP Associates to invest Rs130bn for setting-up two cement manufacturing units, an aluminium production factory and a power plant in Madhya Pradesh (BL)

Zandu's investors back Emami's takeover bid (BS)

SCI to invest Rs12bn in offshore business by the end of the year (ET)

Man Industries may set-up a L-SAW greenfield plant in China (DNA)

Deccan Express Cargo inks deal with GMR Group for cargo hubs in Delhi and Hyderabad (FE)

Uttam Galva faces sales disruptions due to rains at its facility in Khopoli, Maharashtra (DNA)

HTMT Global Solutions has set aside Rs4.4bn for acquiring companies abroad (DNA)

XL Telecom ties-up with Chinese firm LDK Solar for supply of multi-crystalline solar wafers (BL)

Adlabs opens a multiplex in Gurgaon (ET)

JBF Auto to invest Rs2.45bn in Pune plant that will initially make skin panels for the JV between Tata Motors and Fiat (DNA)

MSP Steel and Power to invest Rs69bn for setting-up a steel and power plant in Madhya Pradesh (DNA)

Economy Front page

EAC projects a growth rate of 7.7% in 2008-09 for the economy (ET)

SEBI cuts timeline for rights issue to 43 days from earlier 109 days (ET)

SEBI revises pricing norms for QIP and preference share allotment to QIBs (ET)

Finance Ministry asks DoT to put the 3G policy on hold (ET)

Current account deficit may hit an all-time high of 3.2% of GDP in 2008-09 as per EAC (ET)

Farm growth likely to decline to 2% in 2008-09, as per EAC (ET)

Government plans relief package for ailing airlines (ET)

Petroleum Minister says that there is no scope for a decrease in domestic fuel prices (BS)

GSM operators add 6.7mn users in July 2008 (BS)

Finance Minister has asked PSU banks to not increase home loan rates (BS)
PSU banks seeks 9-9.5% interest from Government on the money owed to them under the farm-loan waiver scheme (BS)

Tea exports declined 29% in FY08, as per ICRA (BS)