Post Session Commentary - May 28 2008

The Indian Market is expected to open positive on the back of supportive global cues as the US market closed in green and crude oil prices slipped below $129 a barrel. On Tuesday, the domestic markets closed in negative after pairing all its initial gains as the profit booking at the final hours prevailed. The market opened with handsome gains and continued to show upbeat attitude till afternoon but was not able to sustain the momentum. Investors' cautious behavior led the market to take U turn after mid session and forced to close in red. The banking, oil & gas and reality stocks were not in favor as most selling was reported from these baskets. While IT stocks were in renown as investors were supporting this index. The BSE Sensex closed lower by 72.91 points at 16,275.59 and NSE Nifty fell by 15.25 points to close at 4,859.80. We expect that the market may remain volatile during the trading session.

Bond yields increased to fresh one-month highs on Wednesday as tight cash conditions and high inflation reduced investor demand for debt. The 10-year benchmark bond yield closed at 8.11% on Tuesday, which is highest since 29th April and also higher from Monday's close at 8.04%.

On Tuesday, the US market closed in green. The Dow Jones Industrial Average (DJIA) closed higher by 68.72 points at 12,548.35 along with NASDAQ advanced by 36.57 points to close at 2,481.24 and S&P 500 up by 9.42 points to close at 1,385.35.

Indian ADRs ended mixed. In technology sector, Satyam was higher by (3.36%) along with Wipro by (3.19%), Patni Computers by (1.96%) and Infosys by (1.90%). In banking sector, ICICI bank and HDFC bank dropped by (4.26%) and (1.94%) respectively. In telecommunication sector, MTNL slipped by (3.26%) and Tata Communication was up by (2.95%). Sterlite industries fell by (0.42%).

Today the major stock markets in Asia are trading in mixed. Japan's Nikkei is trading lower by 56.78 points at 13,836.53 along with Hang Seng index trading down by 25.82 points at 24,256.22 and Taiwan Weighted trading at 8,753.76 down by 24.63 points. However, Straits Times jumped by 10.75 points at 3,126.10 and Shanghai Composite was up by 14.37 points at 3,389.78.

The FIIs on Wednesday stood as net seller in equity and debt. The gross equity purchased was Rs2,144.800 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,259.90 Crore and gross debt sold stood at Rs14.90 Crore. Therefore, the net investment of equity reported was (Rs115.00 Crore) and net debt was (Rs14.90 Crore).

Today, Nifty has support at 4,763 and resistance at 4,931 and BSE Sensex has support at 16,020 and resistance at 16,564.

Sideway movement may continue

The market is likely to witness sideway movement on the back of strong intra-day volatile moves. Stocks across sectors along with heavyweights may gyrate sharply. Overnight marginal gains in the US indices and weakness in Asian markets in the morning trades may further dampen investors' sentiment. On the technical side, the Nifty has a stiff resistance at 4935 and a downside cap at 4835 while the Sensex could test higher levels of 16500 and has a likely support at 16200.

Among the major corporates, Tata Motors, IOC, Adani Enterprise, Godrej Industries, Mahindra and Mahindra, IVRCL, Monsanto, Pidilite Industries and Ucal Fuel are expected to announce their quarterly numbers today.

US indices registered steady gains on Tuesday with Dow Jones gaining 69 points to close at 12548 and the Nasdaq rising 37 points at 2481.

Indian floats largely had a mixed outing on the US bourses. Satyam Computer and Wipro were the major gainers and rose above 3% each followed by VSNL, which soared 2.95%. Infosys, Dr Reddy's and Patni Computer ended with steady gains. Among the laggards, Rediff and ICICI Bank slumped over 4% each while MTNL, Tata Motors and HDFC Bank were down over 1% each.

Crude oil prices in the US market slipped on Tuesday, with the Nymex light crude oil for July delivery falling by $3.34 to close at $128.85 a barrel. In the commodity space, the Comex gold for June series lost $19.20 to settle at $906.60 a troy ounce.

Lower crude price makes sends cheer at US Market

 A strengthening dollar pushes crude down by more than three dollars

A major drop in crude prices helped US market end modestly higher today, Tuesday, 27 May, 2008. Crude prices dropped by more than $3 today. Other than that there was a mixed bag of economic data in the market. Eight out of ten sectors ended the session in positive territory, led by technology sector. Energy was one of the two losers.

Among major economic news of the day, the Commerce Department reported today that sales of new homes climbed in April for first time in six months. But market anticipates that the gain was a rebound from a sharp drop the prior month and doesn't mark a turning point for the embattled housing market.

The Dow Jones industrial Average ended the day with a gain of 68.7 points at 12,548. The Nasdaq Composite Index, finished higher by 36.3 points at 2,481. S&P 500 finished higher by 9.4 points at 1,385.3.

Twenty out of thirty Dow stocks ended in the green today. Citigroup and IBM were the main Dow winners for the day. The decliners were led by General Motors, Chevron and Exxon Mobil.

Elsewhere, the Conference Board reported that U.S. consumer confidence extended its tumble in May to reach a 16-year-low, as inflation expectations reached a record on rising gas prices. The Consumer Confidence Index fell to 57.2 for May, which is less than the reading of 60 that was widely expected, and down from the prior month's 62.8.

Separately, San Francisco Fed President Yellen stated today that the Fed's rate policy and the fiscal stimulus will lift the economy, while total and core inflation will moderate in the next couple of years. Yellen also stated the financial markets are still far from normal.

Crude-oil futures fell after the dollar strengthened and also as traders took in profits. Crude-oil futures for light sweet crude for July delivery today closed at $128.85/barrel (lower by $3.34/barrel or 2.5%) on the New York Mercantile Exchange.

At the currency markets on Tuesday, the dollar extended gains against major rivals building on gains from weak German consumer confidence data earlier. The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.3% to 72.213.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

On the New York Stock Exchange, volume topped 1.1 billion, with advancing stocks edging ahead of those declining by almost 2 to 1. On the Nasdaq, nearly 760 million shares were exchanged, and advancers topped decliners, also by 2 to 1.

For tomorrow, the April durable orders report is the sole item on the economic calendar. The durable orders release measures the dollar volume of orders, shipments, and unfilled orders of durable goods (defined as goods whose intended lifespan is three years or more). Other than that, there are a few earning reports on the dock.

Market may open higher

The market is likely to open higher tracking positive global cues. In absence of any near term major domestic trigger with Q4 March 2008 results almost over, market is likely to dance in line with global cues.

Expiry of May 2008 futures & options series on Thursday, 29 May 2008 will keep the market volatile in the coming days. As per reports, rollover of Nifty positions from May 2008 series to June 2008 series stood at 45.63% and marketwide positions were 34%, as on 27 May 2008.

Meanwhile in a move which may dampen sentiment, market regulator Securities and Exchange Board of India (Sebi) has asked foreign instutional investors (FIIs) to give an undertaking that these investment tools are not issued to non-resident (NRIs) and resident Indians, who otherwise do not need the FII route. These was done to tighten the disclosure norms on offshore derivative instruments (ODIs).

Asian markets were trading mixed today, 28 May 2008. Hang Seng (down 0.11% at 24,256.22), Nikkei 225 Average (down 0.41% at 13,836.53), Seoul Composite (down 0.57% at 1,814.82), Taiwan Weighted (down 0.28% at 8,753.76) edged lower.

However, Shanghai Composite (up 0.43% at 3,389.78), and Straits Times (up 0.35% at 3,126.10) advanced.

US markets advanced yesterday, 28 May 2008, led by technology companies and further drop in crude oil prices. The Dow Jones industrial average advanced 68.72 points, or 0.55%, to 12,548.35. The S&P 500 index gained 9.42 points, or 0.68%, to 1,385.35, and the Nasdaq Composite index surged 36.57 points, or 1.50%, to 2,481.24.

Back home, weakness in the second half of the trading session dragged the market lower yesterday, 27 May 2008. The 30-share BSE Sensex fell 72.91 points or 0.45% at 16,275.59 and the broader based S&P CNX Nifty was down 15.25 points or 0.31% at 4859.80, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 496.61 crore yesterday, 27 May 2008. Domestic funds bought shares worth a net Rs 529.69 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 149.01 crore in the futures & options segment yesterday, 27 May 2008. They were net sellers of index futures to the tune of Rs 233.60 crore and bought index options worth Rs 319.12 crore. They were net sellers of stock futures to the tune of Rs 36.75 crore and bought stock options worth Rs 100.24 crore.

US crude fell 5 cents to $128.80 a barrel today, 28 May 2008, on weakening demand from Asia. Oil has been falling steadily every since it hit a record high $135.09 last week

Deep fall for precious metals

 Gold and silver prices witness sharp fall as the dollar strengthens and crude retreats from highs

After rising more than 3% last week, precious metals ended lower on Tuesday, 27 May, 2008 after crude prices fell below the $130 level and the dollar strengthened against its rivals. Gold prices dropped more than $18 today. Last week, crude oil's rally to a fresh record high above $133 a barrel boosted the precious metal's appeal as an inflation hedge. Oil has doubled in the past year, fueling concern inflation will accelerate.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for June delivery fell $17.9 (1.9%) to close at $907.9 ounce on the New York Mercantile Exchange. Early profit-taking was subsequently exacerbated by the sell-off in oil and another tentative dollar rally. Last week, gold prices ended higher by $25 (3%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce.

This year, gold prices have gained 8.5% for the till date against a 7.5% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery fell 82.5 cents (4.5%) to $17.465 an ounce. Silver has gained 16.2% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Tuesday, the dollar extended gains against major rivals building on gains from weak German consumer confidence data earlier. The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.3% to 72.213.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Among major economic news of the day, the Conference Board reported that U.S. consumer confidence extended its tumble in May to reach a 16-year-low, as inflation expectations reached a record on rising gas prices.

In the crude market on Tuesday, crude-oil futures fell below $130 a barrel to close at their lowest level in a week, with the market ignoring fresh threats to oil supply as traders took in profits from an almost 5% rise in oil prices last week. Crude oil for July delivery closed at $128.85 a barrel on the New York Mercantile Exchange, down $3.34, or 2.5% for the session.

Last week, crude oil rose till $135 after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply.

At the MCX, gold prices for June delivery closed lower by Rs 245 (1.9%) at Rs 12,543 per 10 grams. Prices rose to a high of Rs 12,852 per 10 grams and fell to a low of Rs 12,516 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 1106 (4.4%) lower at Rs 24,255/Kg. Prices opened at Rs 25,370/kg and fell to a low of Rs 24,204/Kg during the day's trading.

Strong dollar pressures crude

 Crude oil prices drop down below $130

Crude-oil futures fell on Tuesday, 27 May, 2008 after the dollar strengthened and also as traders took in profits. Last week, crude prices marked a new high almost everyday after traders speculated that crude supplies are not enough to meet the forthcoming hurricane season. Prices had increased almost everyday of the week.

Crude-oil futures for light sweet crude for July delivery today closed at $128.85/barrel (lower by $3.34/barrel or 2.5%) on the New York Mercantile Exchange.

Last week, crude prices closed higher by 5%. Price touched a high of $135.09 earlier during the week. For the year, crude is up by 29.5% till date. Prices have more than doubled on a yearly basis.

At the currency markets on Tuesday, the dollar extended gains against major rivals building on gains from weak German consumer confidence data earlier. The dollar index, which tracks the greenback against a basket of six major currencies, was up 0.3% to 72.213.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Among major economic news of the day, the Conference Board reported that U.S. consumer confidence extended its tumble in May to reach a 16-year-low, as inflation expectations reached a record on rising gas prices.

Natural gas prices turned lower late in Tuesday's trading session, after failing to reach the key $12 level. They had spent the bulk of the day moving higher. June natural gas fell 6 cents to close at $11.80 per million British thermal units. It hit a high of $11.98 earlier to mark the highest level the contract has ever reached on Nymex.

Against this backdrop, June reformulated gasoline fell by 2 cents to close at $3.38 a gallon, while June heating oil settled at $3.80 a gallon, down 7 cents.

Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude's biggest yearly gain in five years.

At the MCX, crude oil for June delivery closed at Rs 5,557/barrel, lower by Rs 121 (2.1%) against previous day's close. Natural gas for July delivery closed at Rs 516.7/mmbtu, lower by Rs 3.2/mmbtu (0.61%).

Play your game.cautiously

Avoid the crowd. Be the chess player, not the chess piece.

Bulls and bears are all out to try and checkmate each other. As expected, the bulls failed to sustain the buying momentum and the key indices tumbled from a day's high even as Asian markets closed mostly higher. A similar trading pattern may continue today and perhaps over the following two days.

Thursday's F&O expiry and the release of GDP and inflation data will determine the market's mood. On the global front, US stocks rose and Asian markets are mixed. Oil prices have softened a little and are hovering under $129 per barrel.

On the whole, the bulls still appear to be lacking in conviction in the wake of mounting worries over inflation and its impact on the economy (and even on politics). A weakening rupee coupled with the worsening fiscal situation are also worrisome.

FII inflows are yet to turn positive though domestic funds are providing some support. 'Stay cautious and sell into any rally' should be the ideal strategy. Having said that, select stock-centric buying can be done from a long-term perspective.

Lack of follow-up buying and continued sell-off by the FIIs contributed to the fall on Tuesday. The small-cap and mid-cap indices suffered even more. Market breadth too was highly negative. And, barring few defensive sectors like IT, FMCG and Pharma, other sectoral indices finished in the red. Banking was the biggest loser, followed by Real Estate and Oil & Gas shares.

Key Results Today: Adani Enterprise, Britannia, Emami, Godrej Industries, Harrison Malayalam, Hindustan Dorr Oliver, ICRA, IOC, IVR Prime, IVRCL Infra, JM Financial, M&M, Monsanto, Mundra Port, Pidilite, Tata Motors, Ucal Fuels and Visa Steel.

FIIs were net sellers of Rs4.97bn (provisional) in the cash segment on Tuesday while local institutions were net buyers of Rs5.3bn. Foreign funds were net buyers of Rs1.49bn in the F&O segment yesterday.

On Monday, FIIs offloaded Indian shares worth Rs11.15bn from the cash segment. Mutual Funds were net buyers of Rs516mn.

Asian stocks are mixed this morning as crude oil's decline and a drop in gold and copper prices weighed on raw-materials producers. BHP Billiton slumped the most in a week and Inpex Holdings declined. Canon climbed after Morgan Stanley advised investors to buy the stock.

The MSCI Asia Pacific Index was down 0.4% at 148.07 as of 10:52 a.m. in Tokyo, as about five stocks declined for three that gained. The benchmark index earlier rose 0.2%. An index of raw-materials shares decreased 1.2%, the biggest drop among the regional gauge's 10 industry groups.

Japan's Nikkei 225 Stock Average fell 0.3% to 13,848.64, led by an index of mining and energy companies. Oki Electric Industry Co. surged after the Nikkei newspaper said the company may sell its chip-making business to larger rival Rohm Co. this year.

US stocks advanced on Tuesday after crude oil futures retreated and a stronger dollar prompted investors to go for some bargain hunting after the market's worst weekly drop since February.

Stocks had been mixed to higher through the early afternoon as investors considered the drop in oil prices and mulled over the economic news, including reports showing a surprise rise in new-home sales and the worst drop in home sale prices in 20 years.

The S&P 500 added 9.42 points, or 0.7%, to 1,385.35. The Dow Jones Industrial Average rose 68.72 points, or 0.6%, to 12,548.35. The Nasdaq Composite Index jumped 36.57 points, or 1.5%, to 2,481.24.

Market breadth was positive. Two stocks gained for each that fell on the New York Stock Exchange.

US stocks had tumbled on Friday, on soaring crude oil prices and another weak housing market report ahead of the three-day holiday weekend. All markets were closed on Monday for Memorial Day.

April new-home sales rose 3.3% from a revised reading in the previous month, the government reported. The advance topped expectations, but kept sales near historically low levels.

Another housing report was more grim. The S&P/Case-Shiller national home price index slumped 14.1% in the first quarter, a record decline. A separate report showed that consumer confidence fell more than expected in April, touching a more than 16-year low.

Novellus Systems jumped the most in two weeks after RBC Capital Markets said it expects the company to top analysts' earnings estimates. Darden Restaurants posted its biggest rally since April 1 on Merrill Lynch's advice to buy the shares.

Lennar Corp. led gains in all five homebuilders in the S &P 500 Index after the government said new-house sales unexpectedly increased.

The Nasdaq climbed more than the blue chip indices thanks to strength in tech bellwethers such as Google and Oracle. Apple shares rose on continued anticipation about the late-June launch of the new version of its iPhone.

GM shares fell 1% after a Citi Investment Research downgraded the stock to "hold" from "buy" and cut its 12-month price target. This was part of a broader bearish note on the auto sector, amid weaker sales and surging commodity prices. Ford Motor also had its earnings estimates cut by Citi. Its shares fell 1%.

UBS shares plunged 13.3% after the company warned that it may have to take more writedowns on international real estate. The Swiss bank is also looking to raise almost $16bn in additional funds from shareholders.

US light crude oil for July delivery fell $3.34 to settle at $128.85 a barrel in New York, retreating as the dollar firmed up. A stronger US currency makes dollar-traded commodities like oil more expensive for international buyers.

The national average price for a gallon of regular unleaded gas rose to a record $3.937 from the previous day's record of $3.936, AAA reported.

Gold also retreated in response to the stronger dollar. COMEX gold for August delivery fell $17.80 to settle at $912.80 an ounce. Treasury prices fell, raising the yield on the 10-year note to 3.92% from 3.87% late on Friday.

European shares edged lower in a volatile session. The pan-European Dow Jones Stoxx 600 index lost 0.4% to 317.20. The UK's FTSE 100 closed down 0.5% at 6,058.50 and the French CAC-40 declined 0.6% to 4,906.56. Germany's DAX 30 inched 0.1% higher to 6,958.66.

In the emerging markets, the Bovespa in Brazil slid 0.9% to 70,992 while the IPC index in Mexico was up 0.3% at 31,414. The RTS index in Russia dived 1.9% at 2390 while the ISE National 30 index in Turkey gained 2.1% at 48,982.

Choppiness to continue

It was the fourth straight trading session where the bulls were unable to make a come back. After a steady start to the day, markets were unable to sustain as both the key indices lost ground in the second half of the trading session. The Nifty slipped over 70 points from days high again slipping below the 4,900mark and the benchmark Sensex slipped by over 230 points from days high.

It was again the weak European markets and selling pressure that dragged the markets to close in red. Finally, the BSE benchmark Sensex ended 72 points lower to close at 16,275 and the Nifty index slipped 15 points to close at 4,859.

Overall about 922 stocks advanced; 2,760 stocks declined while 81 stocks remained unchanged. Among the 50-Nifty 23 stocks ended in red and 27 stocks ended in green.

Petron Engineering surged by over 4% to Rs250 after the company announced that it received Letter of Award from Sichuan Fortune Project Management Co Ltd, China for erection work for two 330 MW Power Plants (Phase II) of M/s. Adani Power Project Ltd, at Mundra, Gujarat for a total estimated contract value of Rs430mn. The scrip touched an intra-day high of Rs260 and a low of Rs240 and recorded volumes of over 7,000 shares on NSE.

Aban Offshore advanced by over 4% to Rs4054 after the company said that it received a LoI for one well contract with Husky Oil China Ltd for the same rig Murmanskaya for a period of approximately 50 days. The scrip touched an intra-day high of Rs4089 and a low of Rs3914 and recorded volumes of over 1,00,000 shares on NSE.

Tata Comm edged higher by half a percent to Rs501 after the company announced that it would offer communication services in UAE along with Etisalat. The scrip touched an intra-day high of Rs505 and a low of Rs496 and recorded volumes of over 45,000 shares on NSE.

HDFC Bank ended lower by a percent to Rs1331. The company said that it has renewed contract with NCR to manage 2,000 ATMs. The scrip touched an intra-day high of Rs1368 and a low of Rs1318 and recorded volumes of over 10,00,000 shares on NSE.

Thermax gained 2% to Rs438 after the Company announced that it signed a protocol of agreement for an export order, for supply of Heat Recovery Steam Generator (HRSG).

The order value is about Euro 14.2mn. The scrip touched an intra-day high of Rs469 and a low of Rs425 and recorded volumes of over 1,00,000 shares on NSE.

Sita Shree Food advanced 2% to Rs43 after the company announced that it received 400 Metric ton orders from "Reliance Fresh", prevailing month to deliver Wheat flour and pulses which is increased about 250% from the last order of 160 MT. The scrip touched an intra-day high of Rs45 and a low of Rs42 and recorded volumes of over 25,00,000 shares on NSE.

Fertilizer stocks got a boost after media reports stated that FY09 fertilizer subsidy was seen at Rs95,013cr. Fertilizer stocks like Chambal Fertilizer surged by over 6.5% to Rs76, Nagarjuna Fertilizer advanced by over 2.5% to Rs45, National Fertilizer gained 2.2% to Rs47, Deepak Fertilizer was up by over 1.6% and RCF added 0.5% to Rs68.

Bajaj Finserv rallied by over 8% to Rs555 following reports that the company would take a final decision on setting up an asset management company (AMC) by October this year. The scrip touched an intra-day high of Rs617 and a low of Rs490 and recorded volumes of over 36,00,000 shares on NSE.

Corporate News

RIL Australia, a subsidiary of Reliance Industries, pays US$3.45mn in cash to acquire 49% stake in 4 exploration licenses of Uranium Exploration Australia Ltd. (BL)

OVL, subsidiary of ONGC has established commerciality of its Iranian asset, which is estimated to have 22tcf (trillion cu ft) of gas. (ET)

BHEL and Italian company in race for a Rs13bn order for supplying boilers to Neyveli Lignite. (BL)

Tata Steel gets mineral concession approvals from ministry of mines for two large mines in Jharkhand and Manipur. (DNA)

Omaxe is planning to raise Rs15bn in FY09 for various projects; promoters may dilute 5-10% stake via QIP. (DNA)

EKC is planning to invest Rs1.75bn in expanding capacities across plants in US, Dubai, China and India. (DNA)

PNB is keen to take a 51% stake in the proposed JV for setting up a bank in Bhutan. (BL)

SRF to acquire Thailand based tyre cord company for Rs1bn. (DNA)

Gujarat NRE Coke to raise fresh equity to fund its operations and expansion plans in Australia. (DNA)

BK Modi promoter of Spice Tele may sell its stake to AT&T or Etisalat. (ET)

Repro India to invest US$50mn to buyout digital printing solution firms abroad. (DNA)

Tesco in talks with Wadias, Parsvnath and Kalpataru Properties to enter the Indian market. (ET)

IT Department issues notice to Sesa Goa seeking information on the Vedanta deal. (ET)

DE Shaw raises its stake in Orient Express Hotel by ~2% to 7.6%. (ET)

GVK group is looking for opportunities in overseas airport development projects. (ET)

Jindal Drilling Singapore JV may explore opportunities for raising funds and listing. (BS)

Maytas Infrastructure wins contract for washery reject coal based power project. (BS)

Kirloskar Brothers gets order worth ~Rs1bn form Nuclear Power Corporation. (BS)

Elecon Engineering may acquire a European company. (BS)

Godrej Appliances plans to foray into selling chillers, deep freezers and other cold storage appliances. (BS)

Educomp Solution forms a 50:50 JV with Raffles Education. (BS)

Economic News

Fertilizer Ministry expects fertilizer subsidy to double in FY09 to Rs950bn. (ET)

The Government is considering an option of including cess or surcharge on income tax and corporate tax to bailout oil marketing companies. (BL)

The Government has eased the ban on cement export by allowing shipment through ports in Gujarat. (DNA)

India's crude oil import bill jumps over 40% to US$68bn in FY08. (ET)

Jet Airways, chairman Naresh Goyal expects aviation industry to incur losses in excess of US$2bn. (BS)

Nifty May 2008 futures at discount

Turnover in F&O segment rises

Nifty May 2008 futures were at 4851.90, at a discount of 7.90 points as compared to spot closing of 4859.80.

The NSE's futures & options (F&O) segment turnover was Rs 49,968.50 crore, which was higher than Rs 44,103.52 crore on Monday, 26 May 2008.

State Bank of India May 2008 futures were at discount at 1447.35 compared to the spot closing of 1474.40.

Cairn India May 2008 futures were near spot price at 299 compared to the spot closing of 298.50.

Housing Development & Infrastructure May 2008 futures were at premium at 751.50 compared to the spot closing of 741.10.

In the cash market, the S&P CNX Nifty lost 15.25 points or 0.31% at 4859.80.

Market sheds amid sharp volatility

The market recorded its fourth straight loss as players resorted to heavy selling on lack of liquidity support from foreign institutional investors, which have been offloading equities sharply in the past few sessions. Positive Asian indices also failed to lift the sentiment, as the Sensex drifted into negative territory in late morning trades after gaining 157 points in early trades to touch the day's high of 16,506. The sentiment turned extremely bearish in noon trades as sustained selling in heavyweights, Bankex, consumer durables, PSU and realty stocks dragged the index below the 16,300 mark to an intra-day low of 16,238. The Sensex, which gyrated 268 points during intra-day trades, finally ended the session with losses of 73 points at 16,276, while the Nifty dropped 15 points to close at 4,860.

The market breadth was exceedingly negative. Of the 2,763 stocks traded on the BSE 1,754 stocks declined, 930 stocks advanced and 79 stocks ended unchanged. Among the sectoral indices, BSE Bankex index dropped 2.33% at 7,755 followed by BSE CD index (down 1.90% at 4,386), BSE PSU index (down 1.72% at 7,212), BSE Realty index (down 1.55% at 7,226) and BSE Oil & Gas index (down 1.04% at 10,708) etc.

Among the laggards, SBI slumped 4.19% at Rs1,473, HDFC tumbled 2.08% at Rs2,519.75, ICICI Bank plunged 1.71% at Rs812.55, ONGC declined 1.34% at Rs884.35, Reliance Industries dipped 1.25% at Rs2,493, HDFC Bank crumbled 1.20% at Rs1,331. Satyam Computer Services however bucked the downtrend and advanced 3.29% at Rs499, while Cipla gained 3.04% at Rs205.05. Wipro and ITC ended with steady gains.

Bankex stocks continued to reel under sustained selling pressure. Oriental Bank plummeted 5.69% at Rs183.20, Bank of India tumbled 4.90% at Rs304.50, Bank of Baroda dropped 4.80% at Rs261.75, Indian Overseas Bank shed 4.69% at Rs124.10 and UBI declined 3.93% at Rs124.10. Federal Bank, Andhra Bank, Axis Bank and PNB slumped over 2-3% each. Among consumer durable stocks Gitanjali Gems, Bluestar, Videocon industries, Lloyd Element, Rajesh Export and Titan Industries shed 1-3% each.

Over 1.66 crore Chambal fertiliser shares changed hands on the BSE followed by IFCI (1.45 crore shares), Aishwarya Teelcom (1.41 crore shares), Ispat Industries (1.36 crore shares) and Nagarjuna Fertilisers (89 lakh shares).

NSE Bulk Deals to Watch - May 27 2008

 Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
27-MAY-2008,CHAMBLFERT,Chambal Fertilizers Ltd.,NEW VERNON INDIA LTD,BUY,2390000,76.01,-
27-MAY-2008,SITASHREE,Sita Shree Food Products,HARVESTDEAL SECURITIES LTD,BUY,110875,43.89,-
27-MAY-2008,TULSI,Tulsi Extrusions Limited,HARESH VITTHALDAS RAMI,BUY,190967,63.89,-
27-MAY-2008,SITASHREE,Sita Shree Food Products,HARVESTDEAL SECURITIES LTD,SELL,110875,43.96,-
27-MAY-2008,TULSI,Tulsi Extrusions Limited,HARESH VITTHALDAS RAMI,SELL,190967,64.28,-

BSE Bulk Deals to Watch - May 27 2008

 Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
27/5/2008 532975 AISHWARYA TE CHIRAG D MEHTA B 67222 107.27
27/5/2008 532975 AISHWARYA TE RUPA VIPUL SHAH B 60000 104.38
27/5/2008 532975 AISHWARYA TE KASHISH FINSTOCK B 100000 108.88
27/5/2008 532975 AISHWARYA TE RIPON KISHOR MALHOTRA B 58000 108.14
27/5/2008 532975 AISHWARYA TE HEMANT MADHUSUDAN SHETH B 150000 107.50
27/5/2008 532975 AISHWARYA TE PRABHUDAS LILLADHER PVT. LTD. B 356635 106.13
27/5/2008 532975 AISHWARYA TE N D NISSAR B 157469 105.06
27/5/2008 532975 AISHWARYA TE AURANGABAD AUTO ANCILLARY PVT LTD B 117806 106.50
27/5/2008 532975 AISHWARYA TE KAUSHIK SHAH SHARES SEC PL B 128671 104.90
27/5/2008 532975 AISHWARYA TE MAMTA ANIL JAJODIA B 71172 106.18
27/5/2008 532975 AISHWARYA TE ANIL KUMAR JAJODIA HUF B 56000 105.35
27/5/2008 532975 AISHWARYA TE GOLDSTAR FINVEST PVT LTD B 80000 106.07
27/5/2008 532975 AISHWARYA TE ASTUTE COMMODITIES AND DERIVATIVES PVT LTD B 64489 107.80
27/5/2008 532975 AISHWARYA TE MANISH V SARVAIYA B 159617 106.65
27/5/2008 532975 AISHWARYA TE KAUSHIK SHAH SHARES SEC PL S 128671 104.82
27/5/2008 532975 AISHWARYA TE MAMTA ANIL JAJODIA S 71172 109.70
27/5/2008 532975 AISHWARYA TE ANIL KUMAR JAJODIA HUF S 56000 108.48
27/5/2008 532975 AISHWARYA TE ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 64485 107.60
27/5/2008 532975 AISHWARYA TE MANISH V SARVAIYA S 159617 106.82
27/5/2008 532975 AISHWARYA TE CHIRAG D MEHTA S 67222 107.29
27/5/2008 532975 AISHWARYA TE RUPA VIPUL SHAH S 60000 106.05
27/5/2008 532975 AISHWARYA TE RIPON KISHOR MALHOTRA S 58000 102.98
27/5/2008 532975 AISHWARYA TE PREM MOHANLAL PARIKH S 92740 107.42
27/5/2008 532975 AISHWARYA TE PRABHUDAS LILLADHER PVT. LTD. S 356635 106.22
27/5/2008 532975 AISHWARYA TE N D NISSAR S 157469 105.00
27/5/2008 532975 AISHWARYA TE AURANGABAD AUTO ANCILLARY PVT LTD S 112806 105.85
27/5/2008 532946 BANG MARUTI SECURITIES LTD S 76539 257.01
27/5/2008 590076 CAMSON BIO VIVEK MUNDRA B 100000 118.12
27/5/2008 590076 CAMSON BIO S ABDUL AZEEZ S 129000 118.10
27/5/2008 531682 CAT TECHNOL NEWGEN INTERNATIONAL PVT. LTD. S 183686 9.01
27/5/2008 531863 GEEKAY FINAN LOTUS GLOBAL INVESTMENT LIMITED B 30727 67.55
27/5/2008 531863 GEEKAY FINAN CRESTA FUND LTD B 70000 66.33
27/5/2008 531137 GEMSTONE INV PREM M PARIKH B 25000 23.04
27/5/2008 531137 GEMSTONE INV BHAVESH PRAKASH PABARI S 76000 23.01
27/5/2008 511116 HFCL INFOTEL MANOHAR MANAK ALLOYS PVT.LTD B 148573 19.83
27/5/2008 511116 HFCL INFOTEL HEMANT PRAKASH KANUGO S 148573 19.83
27/5/2008 531602 KOFF BR PICT SANJIV RAMNIKLAL JOSHI HUF B 25000 22.06
27/5/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 43800 21.94
27/5/2008 513269 MAN INDUST I PRIYAL MANSUKHANI B 500000 103.15
27/5/2008 513269 MAN INDUST I JAGDISHCHANDRA J MANSHUKHANI S 500000 102.99
27/5/2008 526263 MOLDTEK TECH IMPERIAL CORPORATE FIN AND SER P S 59950 74.47
27/5/2008 521080 PASARI SPIN PRABHUDAS LILLADHER PVT. LTD. B 106642 13.28
27/5/2008 521080 PASARI SPIN PRABHUDAS LILLADHER PVT. LTD. S 106642 13.37
27/5/2008 521080 PASARI SPIN PASARI EXPORT LTD S 400000 13.00
27/5/2008 532692 RADHA MADHAV INDIASTAR MAURITIUS LIMITED S 272515 49.65
27/5/2008 532884 REFEX REFRIG HIMAT PURSHOTTAMBHAI JATANIA B 93000 215.00
27/5/2008 531898 SANGUINE MD CHINTAN BHAIDANI B 60000 28.00
27/5/2008 511607 SHLOKA INFO PARESH CHANDRAKANT DOSHI B 21031 51.07
27/5/2008 513530 STELCO STRIP SHIVA G GOLE B 50000 44.94
27/5/2008 531703 TRIBHVAN HSG CRESTA FUND LTD B 26000 80.12
27/5/2008 532948 TULSI EXTRU MINESH P GANDHI B 67686 64.00
27/5/2008 532948 TULSI EXTRU MINESH P GANDHI S 67686 64.12

Post Session Commentary - May 27 2008

Indian market took a U-turn after the mid session by pairing all its initial gains to close in red due to investors' protective attitude during the second half and the negative cues from European markets, which were trading lower. The domestic market opened with a bang tracking the favoring cues from the Asian Markets, but was not able to sustain the momentum and fell after mid session as investors took cautious approach to book their positions. Today Indian rupee declined by 0.78% to Rs42.89/USD. This led the IT sector to obtain support from the market. However, there was lack of support in banking, oil & gas and reality stocks, which adds on heavy selling pressure. The market breadth was negative as 992 stocks closed in green while 1760 stocks closed in red and 81 stocks remained unchanged.

The BSE Sensex closed lower by 72.91 points at 16,275.59 and NSE Nifty fell by 15.25 points to close at 4,859.80. The BSE Mid Cap and Small Cap closed down by 81.86 points and 108.12 points to 6,678.91 and 8,210.08 respectively.

Losers from the BSE are SBI (4.19%), HDFC (2.08%), ICICI Bank Ltd (1.71%), ONG Corp Ltd (1.34%), Reliance (1.25%), HDFC bank Ltd (1.20%), DLF Ltd (0.80%), Tata Steel (0.80%), Hindalco (0.48%) and JP Associates (0.42%).

The IT index ended up by 32.40 points to close at 4450.40. Major gainers are Satyam Comp (3.29%), Wipro Ltd (2.71%), I-flex (2.22%), HCL Tech (1.08%) and Tech Mahindra (0.98%).

The Banking index closed lower by 184.61 points at 7,754.64. Losers are OBC (5.69%), Bank of India (4.90%), Bank of Baroda (4.80%), Indian Overseas Bank (4.69%), SBI (4.19%), and Union Bank (3.93%).

The Reality index closed down by 113.99 points at 7,226.10. Losers are Pheonix Mill (4.71%), Unitech Ltd (4.21%), Penland Ltd (4.02%), Ananat Raj In (3.56%), and Ansal Infra (3.37%).

The Oil & Gas index decreased by 112.75 points at 10,707.90. Losers are Cairn India (2.98%), Reliance Pet (2.30%), ONG Corp Ltd (1.34%), Reliance (1.25%) and Reliance Nat Res (0.81%).

The Consumer durables index was down by 85.01 points to close at 4,385.96. Major losers are Gitanjali GE (3.45%), Blue Star L (2.1%), Videocon Ind (1.87%), Lloyd Ele En (1.77%), Rajesh Export (1.54%) and Titan India (1.10%).

Metal index closed lower by 72.44 points at 16,270.77, losers are Welspan Gujarat SR (4.87%), Jindal Steel (4.01%), Sh Precoated SR (3.52%), Ispat Indus (3.23%), Hindustan Zinc (1.91%), and Maharashtra Sea1.71%

Bank stocks lead market fall

Weakness in the second half of the trading session dragged the market lower today. The market sentiment was hit by reports which trickled in the market in afternoon trade that one of the options that the government may consider to bail out oil firms which are bleeding due to a surge in crude oil prices, was levying of a cess or surcharge on income tax and corporate tax.

Banking stocks were the worst sufferers in today's fall. State Bank of India slumped. Information technology stocks held firm.

Asian markets edged higher today, 27 May 2008, as bargain hunters scoured the market after five days of losses. Key indices in China, Japan, Hong Kong, Taiwan, South Korea and Singapore were up by 0.39% to 1.48%.

But European markets, which opened after Indian market, were mostly in the red. Key indices in France and Germany were down 0.42% to 0.53%. UK's FTSE 100 was up 0.11%. US markets were closed on Monday, 26 May 2008, for Memorial Day holiday.

The 30-share BSE Sensex fell 72.91 points or 0.45% at 16,275.59. The Sensex lost 110.58 at the day's low of 16,237.92, hit in the mid-afternoon trade. The market opened on an upbeat note tracking firm Asian stocks. Sensex climbed 157.85 points at day's high of 16,506.35, hit in early trade

The broader based S&P CNX Nifty was down 15.25 points or 0.31% at 4859.80. Nifty May 2008 futures were at 4851.90, a discount of 7.9 points against the spot closing.

The NSE's futures & options (F&O) segment turnover was at Rs 49,968.5 crore, higher than Rs 44103.52 crore on Monday, 26 May 2008. BSE clocked a turnover of Rs 5074 crore in the cash segment as against Rs 4,426.96 on Monday, 26 May 2008.

As per provisional data, foreign funds sold shares worth a net Rs 496.61 crore today. Domestic funds bought shares worth a net Rs 529.69 crore.

The market breadth, which was firmly positive earlier in the day, turned negative as the session proceeded, with 922 shares advancing on BSE as compared to 1760 stocks that declined. 81 stocks remained unchanged.

The BSE Mid-Cap index fell 1.21% to 6,678.91 and BSE Small-Cap index lost 1.30% to 8,210.08. Both the indices underperformed the Sensex.

Major Sensex losers were, Housing Development Finance Corporation (down 2.08% at Rs 2519.75), ONGC (down 1.34% at Rs 884.35), HDFC Bank (down 1.20% at Rs 1331.30) and DLF (down 0.80% at Rs 596.45).

Major Sensex gainers were, Cipla (up 3.04% at Rs 205.05), ITC (up 1.65% at Rs 209.10), Ambuja Cements (up 0.98% at Rs 97.60), NTPC (up 0.97% at Rs 177.40) and Reliance Infrastructure (up 0.86% at Rs 1259.30).

India's second largest listed telecom services provider by sales Reliance Communication (RCom) rose 1.57% at Rs 551.75 on reports the proposed deal between Reliance Communications and South Africa's MTN Group may involve an open offer by the South African telecom firm to the shareholders of Reliance Communications. The deal may result in a transfer of Anil Ambani's two-third equity stake in Reliance Communications to MTN shareholders, the reports added.

The RCom stock had tumbled 5.08% to Rs 543.20 on Monday, 26 May 2008, after the company said it was in merger talks with MTN.

India's largest private sector firm by market capitalization & oil refiner Reliance Industries fell 1.25% at Rs 2493.20.

The BSE Bankex underperformed the Sensex, falling 2.33% at 7,754.64. Oriental Bank of Commerce (down 5.69% at Rs 183.20), Bank of India (down 4.90% at Rs 304.50), Bank of Baroda (down 4.80% at Rs 261.75) and Axis Bank (down 2.96% at Rs 740.40), dropped.

India's largest commercial bank State Bank of India slumped 4.19% at Rs 1473.30, on concerns the bank's surprise hike of 25-50 basis points in deposit rates could put pressure on its operating profit margin in the short term. In an announcement made after market hours yesterday, 26 May 2008, State Bank of India said that two to three year term deposit rate will be raised to 8.75% from 8.5%, and five to ten year deposits would fetch 9% from 8.5%, effective from 1 June 2008. The hike in deposit rates is aimed at attracting more funds to meet aggressive growth targets

India's largest private sector bank by assets ICICI Bank declined 1.71% at Rs 812.55.

The BSE IT index outperformed the Sensex, gaining 0.73% at 4,450.40. Satyam Computer (up 3.29% at Rs 499), Wipro (up 2.71% at Rs 491.60), HCL Technologies (up 1.08% at Rs 299.05), TCS (up 0.81% at Rs 966.60), rose. However, India's second largest software exporter by sales Infosys Technologies fell 0.42% at 1878.55.

Among the mid-caps, Jyoti Structures (down 6.90% at Rs 132.15), BGR Energy (down 6.89% at Rs 379.80), Brigade Enterprise (down 6.88% at Rs 191.45), and Elecon Engineering Company (down 6.70% at Rs 125.40), slipped.

Among the small-caps, Confidence Petroleum (down 10% at Rs 17.65), Kirloskar Pneumatic Company (down 7.34% at Rs 394), Elantas Beck (down 6.97% at Rs 263.05), Emkay Share And Stock Brokers (down 6.89% at Rs 125) and Eicher Motors (down 6.79% at Rs 358.20), tumbled.

Bajaj Finserve clocked the highest turnover of Rs 208.92 crore on BSE. Reliance Capital (Rs 195.04 crore), Reliance Industries (Rs 159.70 crore), Aishwarya Telecom (Rs 150.44 crore) and Reliance Power (Rs 143.90 crore), were the other turnover toppers on BSE in that order.

Chambal Fertilisers and Chemicals registered the highest volume of 1.67 crore shares on BSE. IFCI (1.45 crore shares), Aishwarya Telecom (1.41 crore shares), Ispat Industries (1.36 crore shares) and Reliance Natural Resources (1.16 crore shares), were the other volume toppers on BSE in that order.

Cooking appliances maker Hawkins Cookers jumped 8.85% to Rs 183.95 after the company's board of directors recommended a liberal dividend of Rs 10 per share in a board meeting held on Monday, 26 May 2008.

Sandur Manganese and Iron Ores was locked at upper limit of 5% at Rs 1185.65 on sustained buying after the company's management guided a whopping 10-fold jump in net profit for the year ending March 2009, on 13 May 2008.

Automobile batteries maker Amara Raja Batteries jumped 0.90% at Rs 191 on reports the founders of the company have decided to form a holding corporation that will take under its wing five group companies and the newly formed Amara Raja Infra.

IT firm HTMT Global Solutions soared 0.11% to Rs 360 on reports the firm is planning to acquire a mortgage-specific company in the UK. The business process outsourcing (BPO) and IT services provider may invest more than $150 million for the buyout. HTMT has internal accruals of $110 million which will be used for the acquisition, the reports added.

Engineering firm Kirloskar Electric Company spurted 2.37% at Rs 188.05 on reports the firm has mounted a bid to acquire Germany's Lloyd Dynamowerke based on an estimated enterprise valuation of about $100 million.

Food products supplier Sita Shree Food Products advanced 2.25% to Rs 43.25 after the company said it had received orders from Reliance Fresh for 400 metric tonnes of wheat flour and pulses, higher from its previous order for 160 metric tonnes.

Industrial equipment maker Thermax jumped 1.92% to Rs 438.30 after the company said its boiler & heater business unit has received an export order worth 14.2 million euro for supply of heat recovery steam generator to an oil company in Europe.

Bhuwalka Steel Industries, which manufactures steel billets, gained 2.22% to Rs 83 after the company said it expects revenue of Rs 125 crore and rental income of Rs 12 crore a year, from redevelopment of a mill property in Bangalore.

Asian Markets Recovers From Yesterday Debacle

 Nikkei, Kospi Lead the Gain while Sensex, KLSE registered a fall

Asian Markets recovered from yesterday's mayhem, as investors snapped up beaten-down shares. However the trading in region remain thin as the markets in the U.S. and U.K. were closed yesterday. Japan's Nikkei and South Korean Kospi recorded a sharp recovery while Shanghai and Sydney posted modest gains.

Japan's Nikkei 225 was 1.5% higher at the end of the day closing at 13,893.31 The market has rebounded from a 2.3% decline in the previous session that left the benchmark at a two-week low. The Topix index added 1.8% to 1,368.25.

Commodity-related shares and financial stocks such as Commonwealth Bank eked out modest gains in Sydney. Australia's S&P/ASX 200 was up 0.1% to 5,714.40.

South Korea's Kospi benchmark index climbed into positive territory after six losing sessions. South Korea's Kospi firmed 1.4% to 1,825.23.

Taiwan's Weighted Price Index was up 0.8% to 8,778.39 and Singapore's Straits Times index added 0.6% to 3,121.29. Malaysia's KLSE Composite added fell 0.1% to 1,272.01.

Hong Kong's Hang Seng Index ended the day 0.6% higher at 24,282.04 and the Hong Kong China Enterprise index added 0.8% to 13,330.08.

China's Shanghai Composite was up 0.3% to 3,375.41 while the Shenzhen Composite added 0.9% reaching 1,082.32 levels.

In the afternoon trading India's Sensitive Index, or Sensex, was down by 0.4% to 16,279.17 and the broader S&P/CNX Nifty fell 0.2% to 4,864.05.

Meanwhile, crude oil for July delivery climbed 95 cents to $133.14 a barrel in electronic trading at midday in Tokyo.

In currencies, the yen was quoted at 103.32 yen at midday in Tokyo, compared with 103.35 yen there late Monday.

The European markets advanced in their morning session taking a cue from the upbeat action in Asia, and fueled by strong gains from wireless giant Vodafone Group and chipmaker Infineon Technologies and an advance for the mining sector.

Overall, the U.K. FTSE 100 index advanced 0.8% to 6,136.10 as investors returned from a long holiday weekend, while the French CAC-40 index rose 0.4% to 4,958.14.

The German DAX 30 index climbed 0.2% to 6,790.35 as the economy posted a robust growth in the first quarter of 2008. On the quarter, real gross domestic product rose 1.5%, after gaining 0.3% in the fourth quarter of 2007. The annual growth rate accelerated to 2.6% from 1.8% in the fourth quarter.

The data, which are adjusted for seasonal and calendar effects, are in line with preliminary GDP "flash" estimates the statistics office had published May 15.

Household spending, which has been sluggish for years, rose 0.3% on the quarter, adding 0.2 percentage point to the quarterly growth rate, the data showed.

On the quarter, investment in machinery and equipment surged 4.0%, which is above the 3.4% gain recorded in the previous quarter, the data showed.

A mild winter also buoyed construction spending, which gained 4.5% on the quarter, after declining 0.5% in October-December.

The sharp slowdown in U.S. economic growth and a stronger euro may also have left a mark on foreign trade, the data indicate. Net trade shaved 0.2 percentage points off Germany's quarterly growth rate, as exports rose 2.4% and imports increased 3.5%.

A strong build-up in inventories contributed 0.7% to GDP growth, the data showed.

Public consumption jumped 1.3% in the first quarter, after slipping 0.6% in the last three months of 2007.

Apart from this a composite indicator of French business confidence fell to 102 in May from 106 in April. The indicator reflects the level of positive business leader opinion on the overall output outlook, their own output outlook, past production, inventories and order books.

Nifty May 2008 futures below 4,900

 Reliance Industries May 2008 futures most active

Nifty May 2008 futures were at 4,878.35, a premium of 3.30 points as compared to spot closing of 4,875.05.

Nifty May 2008 futures are set for expiry on Thursday, 29 May 2008. As per reports, rollover of Nifty positions from May 2008 series to June 2008 series stood at 32% and marketwide positions were 18%, as on 23 May 2008.

The NSE's futures & options (F&O) segment turnover advanced to Rs 44103.52 crore, as compared to Rs 41,317.97 crore on Friday, 23 May 2008.

Reliance Industries May 2008 futures was at 2528.75, a premium as compared to spot price of 2525.90. It the most active contract with turnover of Rs 839.89 crore.

Cairn India May 2008 futures were at premium at 309.65 compared to the spot price of Rs 308.35.

However Tata Steel May 2008 futures were at discount at 876.50 compared to the spot price of Rs 877.15.

In the cash market, the S&P CNX Nifty lost 71.50 points or 1.45% at 4,875.05

Asian Markets Fall Sharply On The First Day Of The Week

Hang Seng, Shanghai Lead the fall amid of Negative Market

Asian stocks fell stridently on the first day of the week, with automotive shares leading declines in Tokyo after the yen firmed against the dollar, while shares of telecom companies fell in Hong Kong, sending the Hang Seng index lower, amid uncertainty of who will win in the looming telecom-industry reforms.

In Tokyo the markets tumbled down after the yen firmed against the U.S. dollar. The Nikkei 225 declined 2.3% to 13,690.19, while the Topix index fell 2.4% to 1,344.18.

China's Shanghai Composite Index eased 3.1% to 3,364.54 and the Shenzhen Composite Index was off 2.9% to 1,021.57. Australia's S&P ASX/200 was down 1.1% to 5,707 and South Korea's Composite Index gave up 1.5% to 1,800.58.

Hong Kong's Hang Seng Index ended the morning session 2.4% lower, shedding 587 points to 24,127.31. The Hang Seng China Enterprises Index, Hong Kong's benchmark for China stocks, was down 3% to 13,221.28.

Taiwan's Weighed Price Index fell 1.4% to 8,707 while Singapore's Straits Times index was down 0.9% to3,093.01; and Malaysia's nudged 0.3% lower at 1,270.97. Thailand's SET Index was down 2.4% and New Zealand's NZX-50 fell 0.4%.

In the afternoon trading India's Sensitive Index, or Sensex, was down by 2.4% to 16,414.81 and the broader S&P/CNX Nifty fell 1.5% to 4,872.95.

Meanwhile the crude oil rose for a second day in New York, after reaching a record last week, as militant attacks in Nigeria and declining output in Mexico increased the potential for supply disruptions.

The Movement for the Emancipation of the Niger Delta, Nigeria's main militant group, said it attacked a crude-oil pumping station operated by Royal Dutch Shell Plc. Oil output in Mexico, the third-largest supplier to the U.S., for April fell the most in more than 12 years as flows from its largest field declined.

Crude oil for July delivery rose as much as $1.08, or 0.8 percent, to $133.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $133.11 at 9:44 a.m. in London.

The July contract closed up $1.38, or 1.1%, to $132.19 on the New York Mercantile Exchange Friday.

In currencies, the yen was quoted at 103.30 against the U.S. dollar, up from 103.35 yen in late New York Friday and 104.04 late Thursday.

The downbeat tone in Asia follows a negative session for U.S. indexes Friday, with shares pressured by a report showing inventories of unsold U.S. homes surged to a 23-year high in April. Market activity remained subdued ahead of the three-day Memorial Day weekend.

The Dow Jones Industrial Average fell 145 points, The S&P 500 index fell 18 points, and the Nasdaq Composite fell 19 points.

European stocks edged lower in thin trade on Monday with markets in the U.K. and the U.S. shut for a holiday. In the morning trade the indices in Germany, France and Switzerland lost about 0.1% each in the morning trade. However at 9.12 GMT the German DAX 30 gained 0.2% to 6,957.02 while the French CAC 40 dropped 0.2% to 4,944.01.

On the economic front there is no significant release scheduled for the day.

Silly as it may sound - petrol prices may see huge hike

The government is believed to be considering decontrolling petrol prices, a move that may see rates being hiked by Rs 16-17 a litre, but diesel will continue to be sold at a subsidised price.

The relentless rise in international oil prices that last week touched an all-time high of 135 dollars a barrel has forced the government to mull options to save state-run firms, which expect a revenue loss of Rs 200,000 crore this fiscal on sale of petrol, diesel, domestic LPG and kerosene.

"One of the options being considered is deregulating petrol prices," an official said. "The country`s preferred auto fuel diesel will, however, continue to be subsidised even though a marginal Rs 2-3 a litre hike in prices may be announced."

Petrol is currently being sold at a loss of Rs 16.34 a litre and diesel at Rs 23.49 per litre.

Deregulating petrol price would mean that its prices would move in tandem with international prices.

He said the move is being considered after Finance Ministry declined Petroleum Ministry`s request for lowering customs duty on crude oil to zero from 5 per cent and that on petrol and diesel to 2.5 per cent from current 7.5 per cent.

Oil Ministry had also asked for lowering of excise duty on the two fuels but Finance Ministry is not obliging.

Petrol has negligible impact on inflation and so even if it is deregulated it would not contribute the 3-and-half year high inflation rate of over 8 per cent, he said.

Diesel on the other hand is used by transport industry and replicating the same for the fuel would have cascading effect on inflation.

However, deregulating petrol would lower the revenue losses by just Rs 20,000 crore. Half of the current estimates are on account of diesel rates.

Crude oil surges in early trade

 Prices of crude oil on futures market on Monday surged 2.66 per cent in the early trade tracking firm Asian market.

At 1015 hrs, August contract rose 2.66 per cent at Rs 5,756 per barrel on multi commodity exchange (MCX), June contract moved up 1 per cent at Rs 5,676 per barrel while July contract was marginally up by 0.96 per cent to Rs 5,668 per barrel.

Tight supply of crude oil amid the US summer demand put pressure on the prices in the domestic futures market.

Global crude prices are volatile due to weak dollar, speculative funds, reluctance by oil-producers to raise production and geo-political tension, oil experts said.

London's Brent North Sea crude July delivery was trading 33 cents up at 131.90 dollars a barrel. It touched a record over 135 dollars per barrel last week.

Oil Petroleum Exporting Countries (OPEC) secretary general Abdalla Salem el-Badri last week said that weakening dollar and speculators were responsible for surging prices.

NSE Bulk Deals to Watch - May 26 2008

 Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
26-MAY-2008,KIRIDYES,Kiri Dyes and Chemicals L,DIPAK RAMANBHAI RATHOD,BUY,80376,172.92,-
26-MAY-2008,MAXWELL,Maxwell Industries Ltd.,KAPIL JAYKUMAR PATHARE,BUY,1295750,18.80,-
26-MAY-2008,MAXWELL,Maxwell Industries Ltd.,SUNIL JAYKUMAR PATHARE,BUY,1295950,18.70,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,DIPAK RAMANBHAI RATHOD,BUY,139218,46.06,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,GOPAL TRADERS,BUY,83012,45.63,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,KASHISH FINSTOCK,BUY,121907,44.52,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,TRANSGLOBAL SECURITIES LTD.,BUY,134687,46.14,-
26-MAY-2008,KIRIDYES,Kiri Dyes and Chemicals L,DIPAK RAMANBHAI RATHOD,SELL,70376,174.90,-
26-MAY-2008,MAXWELL,Maxwell Industries Ltd.,PRASHANT JAIPAL REDDY,SELL,1295950,18.70,-
26-MAY-2008,MAXWELL,Maxwell Industries Ltd.,VINAY JAIPAL REDDY,SELL,1295750,18.80,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,DIPAK RAMANBHAI RATHOD,SELL,132637,48.28,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,GOPAL TRADERS,SELL,614482,47.22,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,KASHISH FINSTOCK,SELL,220734,45.51,-
26-MAY-2008,SITASHREE,Sita Shree Food Products,TRANSGLOBAL SECURITIES LTD.,SELL,134687,46.03,-

BSE Bulk Deals to Watch - May 26 2008

 Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
26/5/2008 532975 AISHWARYA TE SANJAY KUMAR YADAV B 54850 100.49
26/5/2008 532975 AISHWARYA TE KASHISH FINSTOCK B 100000 98.60
26/5/2008 532975 AISHWARYA TE CHIRAG MAHENDRA SHAH . B 123985 99.76
26/5/2008 532975 AISHWARYA TE N D NISSAR B 101761 97.78
26/5/2008 532975 AISHWARYA TE VIJAY Y NANVARE B 182058 99.31
26/5/2008 532975 AISHWARYA TE SANJAY KUMAR YADAV S 54850 98.10
26/5/2008 532975 AISHWARYA TE KASHISH FINSTOCK S 100000 99.75
26/5/2008 532975 AISHWARYA TE CHIRAG MAHENDRA SHAH . S 123985 99.82
26/5/2008 532975 AISHWARYA TE N D NISSAR S 101761 97.81
26/5/2008 532975 AISHWARYA TE VIJAY Y NANVARE S 182058 100.14
26/5/2008 531223 ANJANI SYNTH NARENDRA VALLABHJI BAHUVA B 62215 46.18
26/5/2008 590059 BIHAR TUBES GEOMATRIX HK LTD AC DUMAURITIUS CAPITAL LTD B 100000 171.50
26/5/2008 532271 CYBERMAT INF S V ENTERPRISES B 608633 6.00
26/5/2008 532271 CYBERMAT INF S V ENTERPRISES S 606695 6.00
26/5/2008 517973 DMC INTER J A FINANCIAL AND MANAGEMENT CONSULTANTS PVT. LTD. B 20000 12.70
26/5/2008 531863 GEEKAY FINAN CRESTA FUND LTD B 150000 67.04
26/5/2008 531863 GEEKAY FINAN NEELU SINGHAL S 25000 66.80
26/5/2008 511116 HFCL INFOTEL MANOHAR MANAK ALLOYS PVT.LTD B 136600 20.09
26/5/2008 511116 HFCL INFOTEL HEMANT PRAKASH KANUGO S 136600 20.08
26/5/2008 532100 INDOCITY INF ANIL JAIN HUF B 72000 5.58
26/5/2008 516078 JUMBO BAG LT VINAY JAIN S 99630 37.18
26/5/2008 516078 JUMBO BAG LT CHINTAN BHAIDANI S 58590 37.20
26/5/2008 514448 JYOTI RES AD UJJVAL DINESHBHAI PATEL B 22988 3.38
26/5/2008 521080 PASARI SPIN HARDIK M MITHANI B 100274 13.15
26/5/2008 521080 PASARI SPIN SPJSTOCK B 246308 13.04
26/5/2008 521080 PASARI SPIN HARDIK M MITHANI S 100274 13.24
26/5/2008 521080 PASARI SPIN SPJSTOCK S 251208 13.18
26/5/2008 521080 PASARI SPIN PASARI EXPORT LTD S 250000 12.96
26/5/2008 532692 RADHA MADHAV INDIASTAR MAURITIUS LIMITED S 192288 52.76
26/5/2008 502587 RAMA PUL PAP NARENDRA HIRABHAI MARAVIA B 52453 30.55
26/5/2008 502587 RAMA PUL PAP NARENDRA HIRABHAI MARAVIA S 52453 29.52
26/5/2008 532687 REPRO INDIA ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 58981 143.60
26/5/2008 532731 ROHIT FERRO GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 194306 167.57
26/5/2008 532961 SITA SHREE N D NISSAR B 174099 46.70
26/5/2008 532961 SITA SHREE KASHISH FINSTOCK S 209199 43.13
26/5/2008 532961 SITA SHREE N D NISSAR S 174099 46.66
26/5/2008 531088 TULIP STAR H MANISH MEHTA B 47000 237.67
26/5/2008 531249 WELL PACK PA DEVENDRA SURESH GUPTA B 60000 65.35
26/5/2008 531249 WELL PACK PA DEVENDRA SURESH GUPTA S 60000 66.00

Post Market Commentary - May 26 2008

Indian market ended on negative note due to the heavy selling pressure in metal, capital goods and banking stocks during the trading session led by weak cues from the global markets. Market tumbled since its initial bell tracking the unfavouring cues from the global markets like the surging crude oil price along with the sluggishness of US economic growth and increasing inflationary pressures that led the investors to take cautious approach to book their positions and pushed the market to bearish zone. Also the expiry of derivatives contract on coming Thursday also adds to the sentiments. From the sectoral front, the metal, capital goods, banking and reality stocks were not in favour due to lack of support. However, the IT stocks gave a bit of support to the market as some buying was seen from these baskets. The market breadth was negative as 667 stocks closed in green while 2043stocks closed in red and 48 stocks remained unchanged.

The BSE Sensex closed lower by 301.14 points at 16,348.50 and NSE Nifty fell by 71.5 points to close at 4,875.05. The BSE Mid Cap and Small Cap closed down by 176.34 points and 199.23 points to 6,760.77 and 8,318.20 respectively.

Losers from the BSE are J P Associates (5.58%), Ambuja Cement (5.38%), BHEL (5.21%), Reliance Comm Ltd (5.08%), ICICI Bank Ltd (4.29%), HDFC (3.92%), Maruti Suzuki (3.83%), ITC Ltd (3.70%), Grasim Industries Ltd (3.51%) and Hindalco (3.39%).

Metal index closed lower by 452.59 points at 16,343.21, losers are Sh Precoated (6.02%), Jindal Saw (5.20%), Welspan Gujarat SR (4.92%), Ispat Indus (3.82%), Jindal Steel (3.75%), Steel Authority (3.44%) and Sterlite In (3.44%).

The Capital Goods index was down by 358.74 points to close at 12,833.68. Major losers are Praj Ind Ltd (6.61%), BHEL (5.21%), Thermax Ltd (5.19%), Bharat Electr (5.18%), Alstom Proje (4.32%) and Kirloskar Br (3.50%).

The Banking index closed lower by 292.91 points at 7,939.25. Losers are Federal bank (6.09%), Kotak Bank (5.99%), Indian Overseas Bank (4.75%), Axis Bank (4.61%), ICICI Banl Ltd (4.29%), and Allahabad Bank (4.03%).

The Reality index closed down by 170.05 points at 7,340.09. Losers are Housing Development (4.76%), Ansal Infra (4.29%), Penland Ltd (4.24%), Akruti City (3.95%), and Sobha Dev (3.89%).

The Oil & Gas index decreased by 154.61 points at 10,820.65. Losers are Aban Offshore (5.99%), Essar Oil Ltd (3.83%), BPCL (2.88%), Reliance (2.12%) and Reliance Nat Res (1.79%).

Market slumps on weak global cues

The market continued to remain under the grip of a bear hug for the third straight session and crashed nearly 350 points during intra-day trades, as investors tracked weak international markets and rise in the global crude oil prices. Continuing from the yesterday's loss of 257 points, the Sensex resumed 180 points lower at 16,468 and lost more ground as trading progressed. The market witnessed a steep fall in early noon trades as selling in heavyweights, Bankex, capital good and metals dragged the index below the 16,300 mark to the day's low of 16,300. After lingering in the negative territory thereafter, the Sensex wrapped up the session at 16,349, down 301 points, while the Nifty shed 72 points to close at 4,875.

Market breadth was extremely weak. Of the 2,758 stocks traded on the BSE, 2,043 stocks declined while only 667 stocks advanced. The remaining 48 stocks ended unchanged. Except IT and Teck, all the sectoral indices finished in red. The BSE Bankex index was the major loser and declined 3.56% at 7,939 followed by the BSE CG index (down 2.72% at 12,834), the BSE Metal index (down 2.69% at 16,343) and the BSE PSU index (down 2.49% at 7,337).

Barring few select stocks, most frontline stocks faltered under the selling pressure. Among the major laggards JP Associates shed 5.58% at Rs224.40, Ambuja Cement dropped 5.38% at Rs96.65, BHEL slumped 5.21% at Rs1656, Reliance Communications declined 5.08% at Rs543.20, ICICI Bank fell 4.29% at Rs826.70, HDFC tumbled 3.92% at Rs2,573 and Maruti slipped by 3.83% at Rs759.85. Infosys, however, advanced 3.29% at Rs1,886 while Bharti Airtel, TCS and Satyam Computer ended with steady gains.

Among sectoral stocks, Bankex slipped sharply. Federal Bank tumbled 6.09% at Rs221.95, Kotak Bank lost 5.99% at Rs658.05, Indian Overseas Bank fell 4.75% at Rs130.20, Axis Bank declined 4.61% at Rs762.95 and Allahabad Bank shed 4.03% at Rs84.55. Capital goods stocks also bore the brunt and lost ground. Praj Industries, BHEL, Thermax, Bharat Electricals, Alstom, Punj Lloyd, Kirloskar Brothers, Elecon Eng, L&T and Lakshmi Machine crashed over 3-6% each.

Over 1.69 crore Ispat Industries shares changed hands on the BSE followed by IFCI (1.14 crore shares), Aishwarya Telecom (86.54 lakh shares), Spice Telecom (80.18 lakh shares) and RNRL (65.51 lakh shares).

Valuewise, Cairn India was the most actively traded counter on the BSE and registered a turnover of Rs180 crore followed by Reliance Industries (Rs148 crore), Reliance Capital (Rs145 crore), Bajaj Auto (Rs144 crore) and Reliance Power (Rs142 crore).

Sensex sheds 301 points on weak global cues

The market today extended last week's steep losses on weak cues from Asian markets. Banking, and capital goods stocks suffered the most in today's slide. Information technology stocks were star performers of the session.

As per provisional data, foreign funds sold shares worth a net Rs 1337.33 crore today. Domestic funds bought shares worth a net Rs 842.05 crore.

Asian stocks fell on Monday, 26 May 2008, as investors feared rising inflation and sluggish US economic growth would seriously dent consumer demand in the region's biggest export market. Key indices in China, Japan, Hong Kong, Taiwan, Singapore and South Korea were down by 0.60% to 3.13%.

But European markets, which opened after the Indian markets, were positive. Key indices in France and Germany were up by 0.08% to 0.25%. UK market is closed today on account of Spring Bank holiday.

On Friday, 23 May 2008, the US markets declined on concerns about a worsening housing recession and rising crude oil prices. The Dow Jones industrial average plunged 145.99 points, or 1.16%, to 12,479.63. The S&P 500 index declined 18.42 points, or 1.32%, to 1,375.93, and the Nasdaq Composite index fell 19.91 points, or 0.81%, to 2,444.67.

The 30-share BSE Sensex was down 301.14 points or 1.81% at 16,348.50. The index lost 348.76 points at day's low of 16,300.88, hit at the fag end of the session.

The broader based S&P CNX Nifty was down 71.5 points or 1.45% at 4875.05. Nifty futures were at 4878.35, a premium of 3.3 points against the spot closing.

The NSE's futures & options (F&O) segment turnover was at Rs 44103.52 crore, higher than Rs 41317.97 crore on Friday, 23 May 2008. BSE clocked a turnover of Rs 4134 crore in the cash segment as against Rs 5,389.63 on Friday, 23 May 2008.

The market breadth was poor on BSE with 667 shares advancing as compared to 2043 stocks that declined. 48 stocks remained unchanged.

The BSE Mid-Cap index fell 2.54% to 6,760.77 and BSE Small-Cap index fell 2.34% to 8,318.20. Both the indices underperformed the Sensex.

India's biggest listed cellular services provider by market share Bharti Airtel advanced 3.15% at Rs 863.15 after the company decided to disengage from the ongoing talks with the South African telecom major, MTN, to explore the possibility of a merger between the two emerging markets telecom giants

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 1.17% at Rs 2524.85. The stock recovered from the day's low of Rs 2490.

India's second largest listed telecom services provider by sales Reliance Communication shed 5.08% to Rs 543.20 after the company entered into negotiations with South Africa's MTN Group for a possible merger after MTN's merger deal with Bharti Airtel collapsed.

Other major Sensex losers were, Jaiprakash Associates (down 5.58% at Rs 224.40), Ambuja Cements (down 5.38% and Maruti Suzuki (down 3.83% at Rs 759.85).

The BSE Bankex underperformed the Sensex, falling 3.56% to 7,939.25. Federal Bank (down 6.09% at Rs 221.95), Kotak Mahindra Bank (down 6% at Rs 658.05), Indian Overseas Bank (down 4.75% at Rs 130.20), Axis Bank (down 4.61% at Rs 762.95), HDFC Bank (down 2.60% at Rs 1,347.45) and State Bank of India (down 2.26% at Rs 1,537.70), slipped.

India's largest private sector bank by assets ICICI Bank fell 4.29% at Rs 826.70.

The BSE Capital Goods index underperformed the Sensex, falling 2.72% at 12,833.68. Bharat Heavy Electricals (down 5.21% at Rs 1,656.10), Punj Lloyd (down 3.81% at Rs 320.90) and Larsen & Toubro (down 3.34% at Rs 2,749.65), tumbled.

Information technology (IT) stocks rose after the Indian rupee had fellen 0.14% to 42.755 against the dollar in morning deals. However, the domestic curency recovered to trade at 42.55 per dollar in afternoon trade. The BSE IT index outperformed the Sensex, gaining 1.77% at 4,418. Infosys Technologies (up 3.29% at Rs 1,886.40), TCS (up 2.69% at Rs 958.80), HCL Technologies (up 1.28% at Rs 295.85) and Satyam Computer (up 0.25% at Rs 483.10), rose.

However, India's third largest software exporter by sales Wipro fell 0.43% at Rs 478.65.

Cairn India clocked the highest turover of Rs 180.52 crore on BSE. Reliance Industries (Rs 148.18 crore), Reliance Capital (Rs 145.46 crore), Bajaj Auto (Rs 144.40 crore) and Reliance Power (Rs 142.14 crore), were the other turnover toppers on BSE in that order.

Ispat Industries registered a highest volume of 1.69 crore shares on BSE. IFCI (1.11 crore shares), Aishwarya Telecom (86.54 lakh shares), Spice Communication (80.18 lakh shares) and Reliance Natural Resources (65.51 lakh shares), were the other volume toppers on BSE in that order.

Commercial vehicles maker Eicher Motors rose 20% to Rs 384.30 on reports truck maker Volvo had inked a final agreement to set up a new truck and bus joint venture with the company. Some other reports suggested that Eicher Goodearth, part of the promoter group, was considering buying back 13.12% of the company's shares at Rs 691.68 each.

Private sector lender Bank of Rajasthan surged 13.77% to Rs 116.05 after it scheduled a board meet on 31 May 2008 to consider issue of bonus shares.

Engineering firm Crompton Greaves gained 2.31% to Rs 237.35 after posting 47.4% surge in net profit to Rs 103.07 crore on 17.1% increase in net sales to Rs 1159.53 crore in Q4 March 2008 over Q4 March 2007.

Auto parts maker Federal-Mogul Goetze (India) rose 1.76% at Rs 75.35 after it said its board will meet on 3 June 2008 to consider a rights issue.

Relentless selling in realty, oil & gas and metal stocks spooked sell-off in late trade on Friday, 23 May 2008. The 30-share BSE Sensex settled 257.47 points or 1.52% lower at 16,649.64 and the broader based S&P CNX Nifty was down 78.9 points or 1.57% at 4,946.55, on that day.

The key benchmark indices suffered losses in the week ended Friday, 3 May 2008 with the BSE Sensex plunging 785.30 points or 4.50% to 16,649.64 and the S&P CNX Nifty sliding 211.15 points or 4.09% to 4,946.55 .

Inflation based on the whole price index rose 7.82% in the year through 10 May 2008, marginally lower than 7.83% rise in the previous week, government data released on Friday, 23 May 2008, showed. Meanwhile, inflation for the year through 15 March 2008 was revised upwards to 8.02% compared to provisional figure of 6.68%.

A strong finish for precious metals

 Gold prices end 3% higher for the week

Precious metals ended higher on Friday, 23 May, 2008 and posted good gains for the week after crude oil prices remained strong and the dollar weakened. Ealier this week, crude oil's rally to a fresh record high above $133 a barrel boosted the precious metal's appeal as an inflation hedge. Oil has doubled in the past year, fueling concern inflation will accelerate.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for June delivery rose $7.5 (0.8%) to close at $925.8 ounce on the New York Mercantile Exchange. For the week, gold prices ended higher by $25 (3%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce.

This year, gold prices have gained 10.4% for the till date against a 7.8% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery gained 26 cents (1.5%) to $18.29 an ounce. Silver has gained 22.2% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Friday, the dollar slipped modestly against its major counterparts on the heels of strength in oil prices, but the greenback remained in relatively narrow ranges in quiet trading ahead of Monday's U.S. and U.K. holidays. The dollar index, which measures the U.S. unit against a basket of six major currencies, was at 71.976, down from 72.147.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Among major economic news of the day, resales of U.S. houses and condos dropped 1% to a seasonally adjusted annualized rate of 4.89 million from 4.94 million in March.

In the crude market on Friday, crude for July delivery closed up $1.38 at $132.19 a barrel to gain almost 5% for the week as concerns about the upcoming Atlantic hurricane season sent June prices for natural gas closer to $12 per million British thermal units.

Earlier during the week, crude oil rose after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply. Last week, crude-oil futures rallied to a fresh record high near $128 a barrel as Goldman Sachs raised its second-half-of-the-year forecast for oil prices by 32% to $141.

A strong finish for precious metals

 Gold prices end 3% higher for the week

Precious metals ended higher on Friday, 23 May, 2008 and posted good gains for the week after crude oil prices remained strong and the dollar weakened. Ealier this week, crude oil's rally to a fresh record high above $133 a barrel boosted the precious metal's appeal as an inflation hedge. Oil has doubled in the past year, fueling concern inflation will accelerate.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for June delivery rose $7.5 (0.8%) to close at $925.8 ounce on the New York Mercantile Exchange. For the week, gold prices ended higher by $25 (3%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce.

This year, gold prices have gained 10.4% for the till date against a 7.8% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery gained 26 cents (1.5%) to $18.29 an ounce. Silver has gained 22.2% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Friday, the dollar slipped modestly against its major counterparts on the heels of strength in oil prices, but the greenback remained in relatively narrow ranges in quiet trading ahead of Monday's U.S. and U.K. holidays. The dollar index, which measures the U.S. unit against a basket of six major currencies, was at 71.976, down from 72.147.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Among major economic news of the day, resales of U.S. houses and condos dropped 1% to a seasonally adjusted annualized rate of 4.89 million from 4.94 million in March.

In the crude market on Friday, crude for July delivery closed up $1.38 at $132.19 a barrel to gain almost 5% for the week as concerns about the upcoming Atlantic hurricane season sent June prices for natural gas closer to $12 per million British thermal units.

Earlier during the week, crude oil rose after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply. Last week, crude-oil futures rallied to a fresh record high near $128 a barrel as Goldman Sachs raised its second-half-of-the-year forecast for oil prices by 32% to $141.

Rally in crude oil

 Crude oil and natural gas end week higher by 5% and 7% respectively

Crude-oil futures rose on Friday, 23 May, 2008 after the dollar weakened and also after traders speculated that crude supplies are not enough to meet the forthcoming hurricane season. Prices had increased almost everyday of the week.

Crude-oil futures for light sweet crude for July delivery closed at $132.19/barrel (higher by $1.38/barrel or 1.06%) on the New York Mercantile Exchange. During intraday trading, it touched a high of $133.69. Price touched a high of $135.09 earlier during the week.

For the week, crude prices closed higher by 5%. For the year, crude is up by 32% till date. Prices have more than doubled on a yearly basis.

At the currency markets on Friday, the dollar slipped modestly against its major counterparts on the heels of strength in oil prices, but the greenback remained in relatively narrow ranges in quiet trading ahead of Monday's U.S. and U.K. holidays. The dollar index, which measures the U.S. unit against a basket of six major currencies, was at 71.976, down from 72.147.

Among major economic news of the day, resale of U.S. houses and condos dropped 1% to a seasonally adjusted annualized rate of 4.89 million from 4.94 million in March.

During the week, the Energy Department reported that crude supplies fell by 5.4 million barrels to 320.4 million for the week ended 16 May. Prior to that, supplies had climbed more than 12 million barrels in the past four weeks. Market was expecting a rise of 900,000 barrels for the latest week.

Natural gas for June delivery climbed as high as $11.87 per million British thermal units on the New York Mercantile Exchange. That's the highest level that contract has ever reached on the exchange. It closed up 15.7 cents, or 1.3%, to $11.857. It ended the week higher by 7%.

EIA reported earlier that stockpiles were 3 billion cubic feet below the five-year average, compared with a 3 billion-cubic-foot surplus a week earlier. Supplies were down 302 billion cubic feet, or 16 percent, from a year earlier.

Against this backdrop, June reformulated gasoline closed at $3.396 a gallon Friday in New York, up 6 cents for the day and 5.4% higher for the week. June heating oil fell by 8.44 cents, or 2.1%, to end at $3.8656 a gallon, but it's still up 4.4% for the week.

Losses in the US Market

 Strong crude pieces throughout the week send stocks tumbling

The last week that ended on Friday, 23 May, 2008 was mainly dominated by the crude oil and a plethora of economic news. Soaring oil prices were mostly to blame, but renewed concerns about the state of the financial sector and growing concerns about inflation pressures also played a part in dictating the market's fate this week. Unlike stocks, oil prices kept moving higher this week, touching $135.09 at their high before settling at $131.82 on Friday.

The Dow Jones Industrial Average lost 507 points for the week. Tech - heavy Nasdaq lost 84 points. S&P 500 lost 50 points. In percentage terms the three indices lost 3.9%, 3.4% and 3.3% respectively.

Among major economic news hitting the week, existing home sales in April fell 1.0% from March to an annualized rate of 4.89 million units. That was better than expected. It marked a decline of 3.6% from six months ago when October sales computed to an annualized rate of 5.06 million units. In the five months leading up to October, existing home sales fell 17.2%.

Separately, weekly initial claims and the leading indicators reports were encouraging from an economic standpoint, yet they were overshadowed by inflation concerns tied to a less than pleasing Producer Price Index, the jump in oil prices and some sobering statements in the minutes from the 30 April FOMC meeting.

The FOMC released the minutes from its 30 April meeting around 2:00 ET, which sent stocks tumbling. The 2008 inflation outlook was increased, as was the unemployment rate forecast. Also, as per Fed, real GDP growth is expected to range from 0.3% to 1.2% this year. The Fed previously forecast growth between 1.3% and 2%.

The Fed also announced that it expects unemployment will "increase significantly," raising its 2008 forecast to 5.6% from 5.25%. In addition, inflation risks have increased, with the Fed raising its core-inflation forecast to between 2.2% and 2.4% from between 2% and 2.2%.

Earnings reports were mostly better than expected, but the market's response was mixed. Hewlett-Packard and Analog Devices topped their respective earnings estimates.

From a sector standpoint, there wasn't much leadership. Even the energy sector dropped more than 2% as worries about demand destruction in the face of such high energy prices curtailed the bullish enthusiasm toward the sector. The financial sector plummeted more than 6% as many firms cut earnings estimates for a number of investment banks and arguments were made that the worst is not over for the sector. The transportation sector was the other big casualty.

Supply concerns and speculative interest were heralded as the main drivers of oil prices. Crude-oil futures for light sweet crude for July delivery closed at $132.19/barrel (higher by $1.38/barrel or 1.06%) on the New York Mercantile Exchange. During intraday trading, it touched a high of $133.69. For the week, crude prices closed higher by 5%. For the year, crude is up by 32% till date. Prices have more than doubled on a yearly basis.

Worries refuse to go away

Reality is that which refuses to go away when I stop believing in it.

Even as bulls were getting to believe that the worst is behind them, fresh worries seem to have set in. The bulls are likely to remain under pressure given the weak global markets and growing inflation worries. More volatility is seen ahead of Thursday's F&O expiry and the announcement of GDP numbers on Friday.

A weakening rupee and crude above $130 per barrel are major negatives for the market. Further monetary tightening is not ruled out if inflation remains stubbornly high. Political concerns following the BJP's victory in Karnataka and the Left front's repeated threats to the Government over its economic policies may also weigh down the sentiment. It's time to be cautious and selective.

Today, we expect another weak opening as most Asian markets are sharply down following the lower finish on Wall Street on Friday. The trend may turn sideways and choppy later on as the US markets are shut today and investors may remain guarded prior to the derivative settlement and announcement of inflation and GDP numbers.

Bajaj Auto and Bajaj Finserv will be listed today. Bajaj Auto was demerged into three entities - Bajaj Holdings & Investments, new Bajaj Auto and Bajaj Finserv. Bajaj Holdings, formerly Bajaj Auto, now functions as an investment company. The new Bajaj Auto focuses on the auto business, while Bajaj Finserv is engaged in wind energy generation, insurance and finance.

FIIs were net sellers of Rs6.5bn (provisional) in the cash segment on Friday while local institutions were net buyers of Rs7.5bn. In the F&O segment, foreign funds were net sellers of Rs11.19bn. On Thursday, FIIs were net sellers of Rs5.51bn in the cash segment. Mutual Funds were net sellers of Rs922mn.

Key Results Today: eClerx, Elecon Engineering, Ess Dee Aluminium, Everest Kanto, HTMT Global, JMC Projects, Kalpataru Power, Omaxe and Shriram Transport.

Asian stocks fell for a fifth day today as rising oil prices sparked concern that higher costs will hurt consumer spending and erode corporate profits. Toyota slumped the most in four days in Tokyo and Samsung had its biggest drop in a week in Seoul. Nissan retreated after Merrill Lynch cut its rating on the stock.

The MSCI Asia Pacific Index lost 0.9% to 149.18 as of 9:59 a.m. in Tokyo, extending a four-day, 2.5% decline. The benchmark's five-day retreat is its longest since March 5.

The Nikkei 225 Stock Average declined 1.8% to 13,752.98. Japanese shares also fell after the dollar retreated against the yen, renewing concerns that exporters' profits will be eroded. Stock benchmarks slipped in other markets open for trading.

US stocks tumbled on Friday, as soaring oil prices and weak housing sector reports prompted investors to cash out ahead of a three-day holiday weekend. All financial markets are closed on Monday for Memorial Day.

All the major stock indices declined on the week as well, as record-high fuel prices heightened worries over the strength of consumer spending. Thursday was an exception, with stocks moving higher as oil prices fell.

The Dow Jones Industrial Average fell 145 points, or 1.2%, to 12,479. The S&P 500 index fell 18 points, or 1.3%, to 1,375 while the Nasdaq Composite gave up 19 points, or 1%, to 2,444.

For the week, the Dow was down 4.2%, the S&P 500 lost 3.6% and the Nasdaq dropped 2.7%.

The run-up in oil prices and weak housing market reports kept investors on tenterhooks. Also, stocks continued to see a pullback in the wake of the recent rally, after a good run between mid-March and mid-May.

Stocks opened weak on Friday and then turned even lower following the mid-morning release of the April existing-home sales report from an industry trade group.

The National Association of Realtors reported that the inventory of unsold homes jumped 10.5% to 4.55mn in April, an uncomfortably high level, said Lawrence Yun, chief economist for the real estate trade group.

Trading volumes were light ahead of the three-day weekend, with 1.1bn shares exchanging hands on the NYSE and 737mn trading on the Nasdaq stock market. Declining issues topped gainers by nearly three to one on both exchanges.

US light crude oil for July delivery rose $1.38 to settle at $132.19 a barrel in New York. Oil rose nearly 5% last week from $126.04 on May 16. A day before, it briefly touched a record high of $135.09 in electronic trading.

Oil has been spiking over the last few weeks on a mix of global supply concerns and the impact of the weak dollar, which makes dollar-traded commodities less expensive for international investors.

The national average price for a gallon of regular unleaded gas rose to a record $3.875 from the previous day's record high of $3.831 per gallon, AAA reported.

COMEX gold for August delivery rose $7.60 to settle at $930.60 an ounce. The dollar fell versus the euro and yen. Treasury prices rallied, lowering the yield on the 10-year note to 3.87% from 3.91% late on Thursday.

GM shares fell 5%. The auto giant said it expects to take a $1.8bn hit and cut production by another 230,000 vehicles in the second quarter due to the now-settled strike at American Axle & Manufacturing Holdings.

Shares of Ford shed 4% after it gave a vivid indication of the extent of the challenges facing the automotive industry in the US, backing away from its oft-stated goal of turning a profit in 2009.

Yahoo shares rose 0.7% after the company pushed back its annual shareholder meeting from July 3 to the end of July as it faces a proxy campaign led by billionaire investor Carl Icahn.

Stocks in Europe ended Friday at their lowest closing level this month, as oil prices resumed their upward path after a one-day hiatus and investors closed positions before long weekends in the US and the UK. The pan-European Dow Jones Stoxx 600 dropped 1.7% to 319.03 in a broad-based retreat. Germany's DAX 30 slipped 1.8% to 6,944.05, while the French CAC 40 dived 1.9% to 4,933.77 and the UK's FTSE fell 1.5% to 6,087.30.

In the emerging markets, the Bovespa in Brazil dropped 1.2% to 71,451 while the IPC index in Mexico was down 0.6% at 31,068. The RTS index in Russia added 0.1% at 2435 while the ISE National 30 index in Turkey slid 2.3% to 48,764.

Oil, Inflation to drive sentiment

Weak global cues, accelerating inflation and declining industrial growth dampened the sentiments on Dalal-Street on Friday. After bouncing back in the early trades, the benchmark Sensex closed below the 16,700 mark and the Nifty ended below the 4950 level. Except for the Pharma index all the other major BSE Sectoral indices ended in the red.

Even the midcap and smallcap stocks lost momentum in afternoon trade. Both the Mid-Cap and the Small-Cap indices lost over a percent each. Finally, the BSE benchmark Sensex ended 257 points lower to close at 16,649 and the Nifty index slipped 78 points to close at 4,946.

Overall about 809 stocks advanced; 1,909 stocks declined while 72 stocks remained unchanged. Among the 50-Nifty 35 stocks ended down and 14 stocks ended in green.

RCom slipped by 2% to Rs572 after the company said that it added 1.62mn users in April. The scrip touched an intra-day high of Rs594 and a low of Rs570 and recorded volumes of over 11,00,000 shares on NSE.

The PSU refinery stocks gained momentum after media reports stated that the Indian oil minister wants Rs10 per liter increase in petrol and Rs5 per liter increase in diesel. Stocks like HPCL surged by over 3.5% to Rs242, BPCL spurted by over 3.5% to Rs359 and IOC added 3% to Rs420.

Hilton Metal Forging dropped by over 10% to Rs32 after in a bulk deal on Thursday Deutsche International sold 67,000 shares of the company at an average price of Rs37. The scrip touched an intra-day high of Rs35 and a low of Rs32 and recorded volumes of over 73,000 shares on BSE.

IndiaBulls Real Estate declined by over 4% to Rs490. Reports stated that the company has paid its UK listed entity Rs4.5bn more than estimated by independent valuers. The scrip touched an intra-day high of Rs522 and a low of Rs477 and has recorded volumes of over 7,00,000 shares on NSE.

After hitting an intra-day high of Rs113, Idea lost ground and ended flat at Rs107. There were reports stating that Providence Equity Partners acquired 20% in Idea Cellular unit for US$640mn. The scrip touched an intra-day high of Rs113 and a low of Rs106 and recorded volumes of over 92,00,000 shares on NSE.

Spice Tele advanced by 2% to Rs44 after the company announced that it would invest upto US$300mn in networks. The company also said that they are in talks for Infrastructure-sharing and also expects to get airwaves in Andhra Pradesh. The scrip touched an intra-day high of Rs45 and a low of Rs44 and recorded volumes of over 25,00,000 shares on NSE.

IDBI fell by over 2% to Rs95. The company said that it is looking to seal an acquisition this year and is looking at both private and public sector banks for this purpose. The scrip touched an intra-day high of Rs99 and a low of Rs94 and recorded volumes of over 5,00,000 shares on NSE.

Tata Elxsi surged by over 8% to Rs202 as reports stated that the company would triple manpower on overseas design orders. The scrip touched an intra-day high of Rs209 and a low of Rs187 and recorded volumes of over 99,000 shares on NSE.

Bank of Maharashtra gained by 1% to Rs47 following the reports that the bank opened its 1,377th branch in India. The scrip touched an intra-day high of Rs48 and a low of Rs47 and recorded volumes of over 74,000 shares on NSE.

ONGC slipped by 2 percent to Rs902. According to reports, the company refused to accept oil bonds as payment for its crude oil sales to PSU refiners. The scrip touched an intra-day high of Rs938 and a low of Rs898 and recorded volumes of over 7,00,000 shares on NSE.

Corporate News

Bharti Airtel drops talks with MTN on differences over holding structure. (FE)

RPower, GMR Infra plan to bid for Singapore power plants.(BS)

Reliance Industries may begin drilling in the KG block in the current year.(BL)

Cipla close to clinching a long term manufacturing and supply deal with Australian drug maker Sigma Pharmaceuticals for OTC products.(BS)

GMR Infrastructure may partner Petronas to jointly bid for oil blocks in India.(Mint)

Reliance Communications close to acquiring ailing London based virtual network operator Vanco.(FE)

SAIL agrees to pay 40% higher price for its coking coal procurement from Coal India in 2008-09.(BL)

Hindustan Unilever has hiked prices between 3-28% over the past one and a half months.(DNA)

Two Chinese companies along with BHEL are in race for the Rs24bn EPC contract for 600MW Haldia thermal venture of CESC.(ET)

NBC Universal acquires 26% stake in NDTV Network for US$150mn.(BL)

Videocon is studying an invitation from GE to bid for its appliances division which is up for sale.(BS)

Infosys Technologies says it is actively looking for acquisitions in Europe.(BL)

M&M appoints a team for two wheeler foray.(BS)

AV Birla group in talks with Accor of France to bring its budget hotel brand Formule-1 to India.(ET)

ICICI Bank to go slow on its retail assets expansion; to refocus on corporate loans.(Mint)

ONGC and Oil India will together save around Rs 13bn annually with the petroleum ministry allowing them to pay royalty on the final price.(BS)

Sterlite Industries on look out for partners for its proposed 5mn ton steel pant in Orissa.(FE)

Jain Irrigation Systems Rs5.5bn capacity expansion plan to be executed by 2010-11.(DNA)

Coal India will invite bids for developing 26 closed mines through JVs.(ET)

Uttar Pradesh power regulator issues notice to Lanco Infratech over Anpara project.(BS)

Honda plans to roll out a non-100 cc bike and another scooter before the end of this year.(DNA)

Apollo Tyres to invest Rs20bn in next three years on expansion.(Mint)

Vedanta Resources in talks with steel producers from Europe, Japan and India; seeks an ally for steel JV.(TOI)

Housing Development and Infrastructure to bid for 10 NELP VII blocks.(DNA)

RPG Cellucom plans to add 500 stores in India by March 2009. (ET)

Power Finance Corp bids to raise Rs2bn through sale of bonds.(DNA)

NMDC may review iron ore exports in order to increase domestic availability.(BS)

City Union Bank has proposed a JV with Sri Lanka based Hattan National Bank. (DNA)

Rolta is learnt to be close to acquiring a US-based IT firm.(ET)

Volkswagen plans to roll out its lowest priced car 'UP!' for Rs0.3mn in India by 2010-11.(ET)

Dalmia Cement is likely to invest Rs11bn more to its expansion. (DNA)

Economic News

Farm debt waiver has been enhanced to Rs717bn.(BL)
Government allocated start-up spectrum to new telecom players in AP.(ET)
Communications Minister A Raja suggests foreign telecom companies would be permitted to bid for 3G spectrum.(BS)
Relief package for PSU oil marketing companies who are facing financial crunch due to continued surge in global crude oil prices is expected sometime soon.(BL)
Uttar Pradesh government decides to sell its equity in all the sugar mills of the UP State Sugar Corporation.(FE)
DoT calls a meeting with operators on May 28th to discuss allocation and pricing of 3G spectrum bands.(BS)
Government may lift the ban on rice exports to select African nations.(ET)
Government says 3G telecom services, which enable faster data connectivity, will be rolled out before January next year.(FE)
Government unlikely to relax overseas borrowing regime.(BS)
Companies that source service from associate firms would have to pay service tax before they make adjustments for payments in their books.(ET)