Alchemist - BUY

We recommend a buy in Alchemist from a short-term trading perspective. It is apparent from the charts of Alchemist that it was on a medium-term downtrend from its early August high of Rs 105 to September low of Rs 71.

However, after taking support at around Rs 70 recently, the stock bounced up sharply. On October 1, the stock surged 6 per cent, breaking through the medium-term down trendline. Moreover, the stock's surge has also penetrated the 21-, 50-, 200-day moving averages compression conclusively. We notice very high volume over the past 6 weeks.

The daily relative strength index is on the verge of entering in to the bullish zone from the bearish region. The moving average convergence and divergence is signalling a buy. We are bullish on the stock from a short-term perspective and expect it to move up until it hits our price target of Rs 100 in the forthcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 84.

Market may resume weak

The market may exhibit cautious trend after taking a strong dip on Thursday. Also major Asian gauges like the Hang Seng index, the Kospi index, Straits Times and the Jakarta index have declined in current trades and may drag down the indices in early trades. Among the local indices, the Nifty has an intra-day support at 3900 and on a break below 3900 the next support is at 3850. On the upside there is a resistance at 4000. The Sensex has a likely support at 12900 and may face resistance at 13150.

US indices declined on Thursday, as frozen credit markets and weak economic reports amplified jitters ahead of the House vote on the $700 billion bank rescue plan. The Dowjones lost 348 points to close at 10483 while the Nasdaq ended 93 points lower at 1977.

However, Indian ADRs were largely weak on the US bourses. Infosys dropped over 5% while MTNL, Rediff, Satyam, Wipro, VSNL, Dr Reddy's, Tata Motors, ICICI Bank, Patni Computer and HDFC Bank were down around 1-4% each. ICICI Bank and VSNL, however, ended with modest gains.

Crude oil prices in the global market moved down, with the Nymex light crude oil for November series sliding by $4.56 at $93.97 a barrel. In the commodity segment, the Comex gold for December delivery lost $43 to settle at $844.30 an ounce.

Daily Call - Oct 3 2008

The US Senate did pass the bail out package on Wednesday, as expected. But the bill now needs to be passed by the House of Representatives before President Bush can sign this. Chances of this bill being passed are brighter than last time, but never the less, uncertain. If the bill is not passed, there could be deep gashes in the indices and the credit markets will further squeeze and Gold could make a comeback.

The US markets closed in the red and the Asian ones have followed suit. The weakness is not so much a comment on the chances of the package being cleared but on the very weak economic data that showed de-growth in manufacturing and rise in unemployment claims. There is going to be severe curtailment in the Q3 GDP from the 2.8% seen in Q2 and recession is almost knocking on the doors in the US. Those who are fully invested should buy the 3800 Put for October, while those who are sitting on cash can consider buying a call in the Nifty

A difference in opinion!

Honest differences are often a healthy sign of progress – Mahatma Gandhi.

After two days of strong gains and a welcome break, (thanks to Gandhi Jayanthi) the bulls would love to walk ahead if not run. But, like the Mumbai climate this morning, everything seems pretty hazy. The newsflow is quite mixed. While the US Senate has done its bit by passing both, the nuke deal and the $700bn bank bailout plan, the overnight crash on Wall Street and weakness in other global markets could play spoilsport.

Should one invest now or wait for sharper dips. There is a clear difference in opinion all around. However, we can't progress much debating on the same. Revisiting bear periods of the past may make one believe that the markets could see some upsurge this month and thereafter further pain before finding its bottom. But leave the future aside because we have to worry first for today.

We expect our market to soften at the opening bell. The key indices may turn choppy later in the day, as the global cues will continue to determine the overall market trend. The sentiment will remain jittery due to the uncertainty surrounding the US and other key global economies. What might add to the nervousness will be the inflation numbers and anxiety over the latest quarterly numbers.

Despite the US Senate passing the sweetened financial rescue package, there are concerns as to whether the Bush government's much-hyped measure will be able to avert a recession. With weekly jobless claims soaring to a 7-year high, and factory orders slumping to a 2-year low, the concerns seem to be legitimate. What's worse, some key industrialised economies in Europe and Japan too are staring at a recession. We also have to deal with the choked credit markets. As far as India is concerned, the macro picture remains far from pretty.

In Asian markets, Japan's benchmark Nikkei index sank below the 11,000 level for the first time three years, as export-related stocks and resource shares take a beating. Markets in China and South Korea closed for national holidays.

US stocks tumbled on Thursday, as rising jobless claims and slumping factory orders revived recession fears amid heightened concerns over the frozen credit markets and the fate of the $700bn bank bailout plan.

The S&P 500 Index fell 46.78 points, or 4%, to 1,114.28. The Dow Jones Industrial Average declined 348.22 points, or 3.2%, to 10,482.85. The Nasdaq Composite Index slipped 92 points or 4.5% to 1,976.72.

Market breadth was negative. Almost 14 stocks retreated for each that rose on the New York Stock Exchange.

News of rising weekly jobless claims ahead of Friday's key monthly employment report suggests that the world's biggest economy is now on a slippery road toward a consumer-led recession, said some analysts.

There are still concerns about whether or not the House will pass the financial rescue bill and, even if it does, whether it will be effective. A vote on the bill is expected on Friday. The House shot down the original version on Monday.

Billionaire investor Warren Buffett said that it is crucial to the global economy that the US bailout plan gets cleared by the Congress and added that the $700bn plan may not be enough.

Credit markets remained tight, with two closely watched measures of bank lending jitters at record highs. Treasury prices jumped, lowering the corresponding yields, as investors sought less risky places to put their money.

Weekly jobless claims soared to a seven-year high, alarming investors ahead of Friday's big monthly report. And factory orders slumped to a two-year low.

GE shares slid after the company sold $12bn in common stock Thursday at $22.25 per share, a 9% discount to Wednesday's closing price. The stock failed to benefit from late Wednesday news that Warren Buffett's Berkshire Hathaway will buy $3bn in preferred stock.

Oil prices continued to retreat on bets that slower global growth will keep hitting demand for oil. US light crude oil for November delivery fell $4.56 per barrel to settle at $93.97 a barrel on the New York Mercantile Exchange.

Gasoline prices fell for the 15th day in a row, according to a nationwide survey of credit card activity. COMEX gold for December delivery fell $43 to settle at $844.30 an ounce. In currency trading, the dollar gained against the euro and fell against the yen.

Stocks in Europe ended lower on Thursday. The pan-European Stoxx 600 index, after early gains, ended the session with a 1.4% loss to 254.24. UK's FTSE 100 dropped 1.8% to 4,870.34, while the French CAC-40 shed 2.3% to 3,963.28 and Germany's DAX 30 traded down 2.5% at 5,660.63.

The European Central Bank (ECB), as expected, left its key interest rate unchanged at 4.25% on Thursday.

US Republicans decision of considering a new version of bailout package and buying in the IT, banking, FMCG and select telecom stocks coupled with firm cues from the European markets lifted the BSE benchmark Sensex to close above the 13k mark. The BSE benchmark Sensex gained 205 points to close at 13,065 and the NSE Nifty index gained 29 points to close at 3,950.

Among the 30 components of the Sensex, 24 stocks ended in the green and 6 stock ended with negative bias. Infosys, HDFC Bank, ICICI Bank and HDFC were among the major gainers. However, among the top losers were, Reliance Industries, L&T and DLF.

Among the BSE Sectoral indices, BSE IT index (up 4%), BSE Bankex index (up 3.2%), BSE Consumer Durables index (up 3%) and BSE FMCG index (up 1.5%).

Gremach Infra was locked at 10% upper circuit at Rs54.8 after the company announced that it has found coal in Mozambique. The scrip touched an intra-day high of Rs54.8 and a low of Rs50.1 and recorded volumes of over 65,000 shares on BSE.

Omaxe fell from its high, on the back of profit booking, The stock fell 3% to close at Rs93. The company announced that M/s. Omaxe Infrastructure and Construction Pvt. Ltd, a subsidiary of the company secured a contract for development and construction of township for the new zinc smelter plant at Dariba, Udaipur of Hindustan Zinc Ltd.

Total Built-up Area for the township is 4,50,000 Sq.Fit in a 12.5 Acre Plot and the total Contract Value is Rs907.1mn.

The scrip touched an intra-day high of Rs99 and a low of Rs90 and recorded volumes of over 99, 000 shares on BSE.

Shares of XL Telecom surged by over 12% at Rs141 after 1.9% of its equity traded in a single transaction.

~358,370 shares were sold at Rs136.5 per piece on the BSE. The scrip touched an intra-day high of Rs143 and a low of Rs126 and recorded volumes of over 4,00,000 shares on BSE.

Shares of Alfa Laval surged by over 3% to Rs745 after the company announced that it won an order worth 150mn Swedish Krona (SEK) for three thermal evaporation systems from Vedanta Aluminum Ltd for their expansion project in India. The scrip touched an intra-day high of Rs755 and a low of Rs731 and recorded volumes of over 2,000 shares on BSE.

Aftek gained by 1.5% to Rs33 after reports stated that the board of directors of the company would consider spinning off real estate and infrastructure business. The scrip touched an intra-day high of Rs34 and a low of Rs33 and recorded volumes of over 2,00,000 shares on BSE.

Shares of Moser Baer rallied by over 3% to Rs112 after the company announced that secured customer sales orders worth US$500mn for solar modules. The scrip touched an intra-day high of Rs117.9 and a low of Rs109 and recorded volumes of over 19,00,000 shares on BSE.

Shares of Panacea Biotec gained by 2% to Rs244 after the company announced that that it entered into a strategic alliance with PharmAthene, Inc., Annapolis, MD, US, that includes a strategic equity investment by the company through its wholly-owned subsidiary, Kelisia Holdings Ltd., of US$13.1mn in exchange for the purchase of common stock and warrants in PharmAthene.

The company's subsidiary has agreed to purchase ~3.73mn shares of PharmAthene common stock at a negotiated price of US$3.50/share. The scrip touched an intra-day high of Rs246 and a low of Rs230 and recorded volumes of over 11,000 shares on BSE.

Market may drift lower on weakness in Asian stocks

The market may edge lower tracking weakness in global markets. Caution may prevail ahead of the release of the weekly inflation data by the government after trading hours. US Senate's nod for the Indo-US nuclear deal may lift shares of equipment makers for nuclear power plants.

Asian stocks dropped today, 3 October 2008, on fears that the global economy will worsen even if the US Congress passes a $700 billion bank rescue bill. Key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were down by between 0.5% to 2.1%. Stock markets in China and South Korea were closed.

US stocks plunged on Thursday, 2 October 2008, as the number of people filing for unemployment benefits hit a seven-year high and another report showed steep drop in factory orders in August 2008.

European Central Bank President Jean-Claude Trichet said on Thursday, 2 October 2008, that Europe's economy was weakening.

The US Senate on Wednesday, 1 October 2008, passed the government's financial rescue plan after the House of Representatives rejected it in its original form. The House is expected to vote on the revised bill on Friday, 3 October 2008.

Meanwhile, the India-US nuclear deal on Wednesday, 1 October 2008, secured the approval of the US Senate which overwhelmingly voted a bill rejecting all the killer amendments and paving the way for its implementation. The landmark civil nuclear cooperation agreement, entered into between Prime Minister Manmohan Singh and US President George W. Bush in 2005, secured 86 votes while 13 Senators voted against it. The legislation, which has already been cleared by the House of Representatives, will now head to the White House for Mr. Bush signing it into a law.

The Indian government will today, 3 October 2008, release the weekly inflation data after trading hours. Inflation based on the whole price index rose 12.14% in year through 13 September 2008. Last month, central bank governor Duvvuri Subbarao said inflation was showing signs of moderating but it was too early to conclude whether this was a trend.

As per provisional data released by the stock exchanges, foreign funds sold shares worth a net Rs 274.90 crore on Wednesday, 1 October 2008. Domestic funds bought shares worth a net Rs 48.65 crore.

Foreign institutional investors (FIIs) have been pulling out their investments from India and other emerging markets to shore up resources to beat the global liquidity crunch. In India, FIIs sold shares worth a net Rs 8278.10 crore last month. The outflow has reached Rs 36707.50 crore in calendar year 2008.

With the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India. However, there is not data available on the quantum of hedge funds' investment in India.

The next major trigger for the market is Q2 September 2008 results. IT bellwether Infosys kickstarts the reporting season on 10 October 2008

Bullion metals register big drop

Strong dollar pushes precious metals to lowest levels in two weeks

Bullion metals ended lower on Thursday, 02 October, 2008. The yellow metal dropped today after the dollar strengthened once the US Senate passed the revised $700 bailout plan. Silver prices also fell today.

On Thursday, Comex Gold for December delivery lost $43 (4.8%) to close at $844.3 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then.

Gold prices ended 5.5% higher for month of September, 08. Prior to this, gold had lost 8.8% in August, 2008. In July, 2008, it ended lower by $11 (1.1%). For the year, gold has lost 2.9% till date in FY 2008.

For the third quarter, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.

On Thursday, Comex silver futures for December delivery fell $1.65 (12.9%) to $11.12 an ounce. Silver had ended month and quarter of September 2008 with a loss of 10%. It ended August with a loss of 2.4% and July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. Till date, silver has lost 7% this year. The metal also had gained for seven straight years.

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. 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 and vice versa.

At the currency markets on Thursday, the dollar strengthened after the Senate approved the revised plan on Wednesday night to stabilize the financial industry, just two days after the House of Representatives rejected the original package. By a vote of 74-25, senators authorized the Treasury Secretary to buy bad assets from companies' books, allowed the Federal Deposit Insurance Corp (FDIC) to raise its deposit-insurance cap to $250,000 from $100,000, extended several tax breaks and required government agencies to modify troubled mortgages.

The dollar rose against the euro, and the British pound. The dollar index, which tracks the value of the greenback against other major currencies, rose 1.2%.

Among economic news of the day at Wall Street, the Commerce Department at US reported today, Thursday, 02 October, 2008 that demand for U.S. factory goods dropped at the fastest rate in two years in August, 2008. The drop was due to the much lower orders for metals, machinery and vehicles. Factory orders fell 4%, worse than the 3% drop expected. Actual Orders had risen 0.7% in July, revised down from the 1.3% estimate given a month ago.

Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

Crude continues to plunge

Strong dollar and demand concerns push crude prices further lower

Crude oil prices fell by almost $5 on Thursday, 02 October, 2008 after the dollar strengthened putting pressure on several dollar denominated commodities across the market. Prices also softened on overall global energy demand concerns and after energy department yesterday reported buildup in crude supplies for the first time in six weeks..

Crude-oil futures for light sweet crude for November delivery closed at $93.97/barrel (lower by $4.56 or 4.6%) on the New York Mercantile Exchange. Prices fell to a low of $93.88 during intra day trading. Prices reached a high of $147 on 11 July but have dropped 40% since then.

At the currency markets on Thursday, the dollar strengthened after the Senate approved the revised plan on Wednesday night to stabilize the financial industry, just two days after the House of Representatives rejected the original package. By a vote of 74-25, senators authorized the Treasury Secretary to buy bad assets from companies' books, allowed the Federal Deposit Insurance Corp (FDIC) to raise its deposit-insurance cap to $250,000 from $100,000, extended several tax breaks and required government agencies to modify troubled mortgages.

The dollar rose against the euro, and the British pound. The dollar index, which tracks the value of the greenback against other major currencies, rose 1.2%.

Yesterday, the EIA wing of the Energy Department had reported that at US, crude supplies rose for the first time in six weeks, by 4.3 million barrels for the week ended 26 September. They stood at 294.5 million barrels. Crude supplies had fallen a total of 15.7 million barrels in the prior five weeks. Refinery activity climbed as the Gulf of Mexico continued to recover from Hurricanes Gustav and Ike. Refinery utilization was at 72.3% compared with 66.7% of capacity a week earlier.

The report also showed that demand for petroleum products over the last four weeks has averaged 19 million barrels per day, down 7.1% from the same time a year ago. Of that, motor gasoline demand has averaged almost 8.9 million barrels per day, down 4.5% from the same time a year ago.

For the third quarter of the year crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%.

Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down.

Against this background, November reformulated gasoline fell 10.5 cents to end at $2.255 a gallon and November heating oil dropped 13.7 cents to finish at $2.7095 a gallon.

Prices for natural gas sank after the EIA reported a bigger-than-expected climb in last week's supplies in storage. Natural-gas inventories rose by 87 billion cubic feet for the week ended 26 September. November natural gas futures fell 24.7 cents, or 3.2% to close at $7.481 per million British thermal units.

Asian indices open negative

Asian markets opened negative on Friday, October 3, on rising concerns over the U.S. economy.

Toyota Motor Corp., the world`s second-largest automaker, lost 4.6% after U.S. factory orders dropped the most in two years in August. Rio Tinto Group, the world`s third-largest mining company, declined 4.7% as commodity prices tumbled.

Japanese benchmark index Nikkei fell 157.78 points, or 1.41%, to trade at 10,996.98.

Hong Kong`s Hang Seng index tanked 392.81 points, or 2.16%, to trade at 17,818.30.

Taiwan`s Taiex index fell 96.14 points, or 1.69%, to trade at 5,607.58.

South Korea`s Kospi index fell 20.02 points, or 1.39%, to trade at 1,419.65.

Singapore`s Straits Times lost 44.37 points, or 1.88%, to trade at 2,319.23. (7.55 a.m., IST)

RBI to Banks - tell us how much you are losing!

The Reserve Bank of India (RBI), concerned over the crisis in overseas markets, has asked commercial banks to provide data on their exposure to "troubled financial entities", two newspapers said on Thursday.

The RBI has asked banks to furnish details of their exposure to Wachovia Corporation, Fortis, American International Group Inc, Washington Mutual and Lehman Brothers Holdings Inc, the newspapers said.

"We have sent letters to the chief executive officers of all banks seeking information on their exposure to the troubled financial entities," a senior Reserve Bank of India official said, according to one daily.

It said the RBI was also planning a special audit of ICICI Bank, the country's largest private sector bank, to assess whether it has any exposure to these entities and the possible impact on its profit and loss account.

On Tuesday, the RBI joined ICICI Bank to reassure investors and customers about the financial health of India's second biggest lender, saying ICICI was well capitalised and has enough cash to meet depositor demand.

Separately, another daily reported that some large foreign institutional investors (FIIs) told the Securities and Exchange Board of India (SEBI), the country's stock market regulator, that they have not been aggressively short-selling ICICI's stock.

At a meeting convened by SEBI Chairman C B Bhave, quite a few of the FIIs said they had been buying ICICI's stock, it quoted a person familiar with the development as saying.

ICICI Bank's shares ended up 3.1 per cent at 551.45 rupees on Wednesday after hitting its lowest in more than two years on Tuesday. The markets are shut on Thursday for a local holiday.

SEC extends ban on short selling

With the Senate passing the USD 700-billion bailout package, American market regulator Securities and Exchange Commission has extended the ban on short selling to allow time for the rescue Bill to be enacted into a legislation.

The current ban would expire on the third business day after enactment of the legislation. However, the order would expire in no case later than October 17, SEC said in a statement on Wednesday.

In September, the American regulator had taken a temporary emergency action to prohibit short-selling in financial companies to protect the integrity and quality of the securities market as well as strengthen investor confidence.

"We have carefully re-evaluated the current state of the markets and we remain concerned about the potential of sudden and excessive fluctuations of securities prices generally and disruption in the functioning of the securities markets that could threaten fair and orderly markets," SEC said in the latest statement.

This order would be extended beyond its currently scheduled expiration, to allow time for completion of work on the anticipated passage of legislation, it added.

Short-selling means borrowing a security from a broker and selling it with the understanding it must be bought back and returned to the broker. Investors use this to make profit from falling price of the stock.

Last month, in a move to strengthen investor confidence, the market regulators in the UK and the US had halted short-selling in 799 financial stocks with effect from September 19.

Crude drops again

Crude supplies register buildup for the first time in six weeks

Crude oil prices fell by almost $2 on Wednesday, 01 October, 2008 after energy department reported buildup in crude supplies for the first time in six weeks. Prices also softened on overall global energy demand concerns.

Crude-oil futures for light sweet crude for November delivery closed at $98.89/barrel (lower by $1.78 or 1.8%) on the New York Mercantile Exchange. Prices fell to a low of $95.95 during intra day trading. Prices reached a high of $147 on 11 July but have dropped 34% since then.

The EIA wing of the Energy Department reported today, Wednesday, 01 October, 2008 that at US, crude supplies rose for the first time in six weeks, by 4.3 million barrels for the week ended 26 September. They stood at 294.5 million barrels. Crude supplies had fallen a total of 15.7 million barrels in the prior five weeks. Refinery activity climbed as the Gulf of Mexico continued to recover from Hurricanes Gustav and Ike. Refinery utilization was at 72.3% compared with 66.7% of capacity a week earlier.

EIA also reported that motor gasoline supplies also climbed - for the first time in ten weeks, up 900,000 barrels in the latest week to stand at 179.6 million barrels. But after dropping 38.4 million barrels in nine weeks, supplies of the fuel were 9.7% below the year ago level. Distillate inventories, which include heating oil, fell for a fifth week in a row, down 2.3 million to 123.1 million. They're 8.1% below the year-ago level and in five weeks, have tallied a decline of 9.7 million barrels.

The report also showed that demand for petroleum products over the last four weeks has averaged 19 million barrels per day, down 7.1% from the same time a year ago. Of that, motor gasoline demand has averaged almost 8.9 million barrels per day, down 4.5% from the same time a year ago.

For the third quarter of the year that ended yesterday, crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Before that, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%. For the year, prices are still up by 3.4%.

Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down.

Against this background, November reformulated gasoline fell 9.8 cents to close at $2.36 a gallon, and November heating oil shed 4.8 cents to end at $2.8469 a gallon.

Approval Of U.S Bailout Plan Failed To Cheer Asian Markets

Nikkei Touch 3 Year Low While Sydney Came Back In Red

The stock markets across the Asian region closed mixed after the U.S. Senate approved a revised bailout package to rescue the U.S. financial system. However, concerns about a global slowdown persisted after the Institute for Supply Management said Wednesday that activity in the U.S. manufacturing sector contracted at a much faster pace than expected in September, with the index of activity in the sector falling to its lowest level in almost seven years. Additionally, major automakers around the world reported sluggish U.S. sales in September.

U.S. stocks closed yesterday's volatile session modestly lower after seeing considerable weakness early in the day. The Dow closed down 0.2% at 10,831, the S&P 500 dropped 0.5% to 1,161, and the Nasdaq shed 1.1% to 2,069.

Oil prices eased US$0.29 to trade at US$98.24 a barrel by 3:08 a.m. ET. The contract for November delivery finished Wednesday's U.S. session at US$98.53 a barrel, down US$2.11 on higher U.S. inventory data. November crude-oil futures rose as much as $1.53 to $97 a barrel in electronic trading, after falling $1.78 to $98.89 a barrel Wednesday on the New York Mercantile Exchange.

In the currency market, the U.S. dollar eased to the upper 105-yen levels in late Tokyo deals, down from the lower 106-yen range seen in early trade and late Wednesday.

The Australian dollar closed at a 14-month low. The Aussie finished the session at US$0.7867-0.7871, down almost one U.S. cent from Wednesday's close of US$0.7962-66, marking the first session finish below US$0.79 in two weeks.

The New Zealand dollar gave away some of its gains after the U.S. Senate passed the revised U.S. bank bailout package. The kiwi finished the local session at US$0.6725, down from US$0.6746 in early trade, but was up from US$0.6703 late Wednesday.

The South Korean won tumbled to a 65-month low against the U.S. dollar. The won finished the local session at 1,223.5 a dollar, down 36.5 won from Wednesday's close of 1,187.0 a dollar, as offshore investors and importers bought the dollar.

The Japanese stock market closed sharply lower after it rebounded yesterday, ending a four-day losing streak. The market started off higher, but turned lower soon after the U.S. Senate approved a revised rescue package for the beleaguered U.S. banks.

The benchmark Nikkei 225 Average ended the day 1.9% lower at 11,154.76, its lowest finish in more than three years, while the broader Topix index lost 2.2% to 1,076.97. Both benchmarks had advanced earlier in the day.

On the economic front, the monetary base in Japan climbed 0.9% on year in September to 88.37 trillion yen, the Bank of Japan said Thursday. That followed a 0.2% annual decline in August and a 0.7% fall in July. On a seasonally adjusted basis, the monetary base soared 15.8% on year in September, standing at 89.398 trillion yen. That followed a 5.7% annual increase in August.

Meanwhile, the Ministry of Finance said that Japanese investors purchased a net 114.8 billion yen in foreign stocks for the week ended 26 September 2008. They also bought a net 361.0 billion yen in foreign bonds and notes during the same period. Meanwhile, foreign investors sold a net 236.8 billion yen in Japanese stocks, and they also unloaded a net 1.1 trillion yen in Japanese bonds and notes.

In Hong Kong, the Hang Seng Index finished 1.1% higher at 18,211.11, after sliding as low as 17,631.70 earlier in the day. The Hang Seng China Enterprises Index ended up 2.9% at 9,331.05.

The Australian stock market finished volatile trading session lower after it ended a four-day losing streak on Wednesday. The market started off firm, but turned lower after the U.S. Senate passed a revised rescue plan.

The benchmark S&P/ASX 200 index closed down 33.5 points or 0.7% at 4,761.1 after surging 4.22% on Wednesday. The broader All Ordinaries index lost 40.4 points or 0.8% to finish at 4,774.1.

On the economic front, Australia's trade surplus was A$1.36 billion in September, far above the consensus forecast that called for a surplus of A$200 million. It also represented the largest surplus since June 1997. Exports rose 6% to A$24.61 billion, while imports declined 2% to A$23.25 billion.

The New Zealand stock market closed higher, extending gains for the second consecutive trading session. The market started off higher, despite a weak lead form Wall Street, and finished the session in positive territory though most of the regional markets turned weak following news that the U.S. Senate has voted in favor of a bailout plan. The benchmark NZX 50 index closed up 44.68 points or 1.38% at 3,232.64 and the broader NZX All Capital index advanced 45.75 points or 1.40% to finish at 3,260.62.

On the economic front, New Zealand's commodity export price index fell by the most in 21 years in September, led by dairy, aluminium and beef, ANZ National Bank said in a report. The index dropped 4.9% from August when it fell 3.3%. Prices declined 1.9% from a year earlier.

The South Korean stocks closed lower for the fifth straight trading session on Thursday, as growing concerns over the global economy offset the positive outcome of a vote Wednesday in the U.S. Senate on the revised U.S. financial sector bailout bill. The benchmark Korea Composite Stock Price Index or KOSPI fell 20.02 points or 1.39% to finish at 1,419.65.

Stock markets on mainland China are closed this week for National Day holidays, while Indian markets were also closed on the account of National holiday.

Elsewhere, Taiwan's Taiex gave up 1.1% to 5,703.72 while Singapore's Straits Times Index also wavered between gains and losses, and was recently up 0.2% at 2,363.60.

In other regional market, European shares climbed after the U.S. Senate approved a revised $700 billion rescue plan for the financial sector and UBS said that it would report a quarterly profit, as investors wait for a decision on interest rates from the European Central Bank.

In the opening trade, the U.K. FTSE 100 index rose 0.9% to 5,005.91, the French CAC-40 index advanced 1.1% to 4,100.63 and the German DAX 30 index traded up 0.9% at 5,856.43.

Turnover drops

Nifty October 2008 futures at premium

Nifty October 2008 futures were at 3969, at a premium of 18.25 points as compared to spot closing of 3950.75. NSE's futures & options (F&O) segment turnover was Rs 47,733.85 crore, which was lower than Rs 56,549.63 crore on Tuesday, 30 September 2008.

Reliance Industries October 2008 futures were at premium at 1920 compared to the spot closing of 1906.70.

Reliance Capital October 2008 futures were at premium at 1142.10 compared to the spot closing of 1141.10.

Larsen & Toubro October 2008 futures were near spot price at 1216 compared to the spot closing of 1216.10.

In the cash market, the S&P CNX Nifty rose 29.55 points or 0.75% at 3950.75.

BSE Bulk Deals to Watch - Oct 1 2008

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
1/10/2008 520155 ABG INFRALOG DEUTSCHE SECURITIES MAURITIUS LIMITED B 120513 247.00
1/10/2008 520155 ABG INFRALOG MACQUARIE BANK LIMITED S 120603 246.99
1/10/2008 532870 ANKIT METAL GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 737000 43.25
1/10/2008 532870 ANKIT METAL MORGAN STANLEY MAURITIUS COMPANY LIMITED S 737000 43.25
1/10/2008 531530 BETALA GLO S CHHOTALAL R BHANDERI B 9511 7.94
1/10/2008 531530 BETALA GLO S SONIA GULATI S 10170 7.87
1/10/2008 521244 CHITRA.SPIN. RAMESH BABU P B 50420 4.41
1/10/2008 521244 CHITRA.SPIN. RAMESH KORITALA S 45565 4.41
1/10/2008 526550 COUNTRY CLUB GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 284508 258.00
1/10/2008 526550 COUNTRY CLUB MORGAN STANLEY MAURITIUS COMPANY LIMITED S 284508 258.00
1/10/2008 513059 G.S. AUTO SPJSTOCK B 64201 77.14
1/10/2008 513059 G.S. AUTO HARDIK M MITHANI S 47823 75.43
1/10/2008 513059 G.S. AUTO SPJSTOCK S 63350 78.46
1/10/2008 531863 GEEKAY FINAN KAMAL KUMAR KESWANI S 25000 43.35
1/10/2008 522217 GUJ APO IND AJITKUMAR TRIBHOVANDAS PATEL B 166467 145.80
1/10/2008 522217 GUJ APO IND PATEL AJITKUMAR TRIBHOVANDAS HUF S 166467 145.80
1/10/2008 532081 K SERA SERA S V ENTERPRISES B 969286 21.54
1/10/2008 532081 K SERA SERA S V ENTERPRISES S 1015286 21.61
1/10/2008 532899 KAVERI SEED INDIA EMERGING INFRASTRUCTURE PVT LTD B 156875 175.96
1/10/2008 532899 KAVERI SEED DIWAKAR BHAGWATI GANDHI S 91000 175.10
1/10/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 54509 40.05
1/10/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 35000 39.37
1/10/2008 532045 NEXXOFT INFO CHETAN VAGHJIBHAI SHAH B 85150 41.30
1/10/2008 532045 NEXXOFT INFO MUKESH HIRALAL DOCTARIA B 87612 41.28
1/10/2008 532045 NEXXOFT INFO MANOJ H.MEHTA S 44192 41.27
1/10/2008 532045 NEXXOFT INFO YRAVIPRASAD S 50000 41.30
1/10/2008 531996 ODYSSEY CORP ANNUANILAGRAWAL S 46801 30.18
1/10/2008 532904 SUPREME INFR MAVI INVESTMENT FUND LTD. B 163809 63.49
1/10/2008 513216 UTTAM GALVA PANKAJ RAJKUMAR SUREKA S 665246 30.28
1/10/2008 518051 VINAY CEME L JASMIT SINGH B 417000 42.80
1/10/2008 533011 VISHAL INFO HIRENKUMARPARSHOTTAMBHAIPATEL S 64551 325.28
1/10/2008 517498 WEBEL SL ENE NOVEL APARTMENTS PRIVATE LIMITED B 65259 225.74
1/10/2008 517498 WEBEL SL ENE SOHANLALCAGARWAL S 50000 226.00
1/10/2008 532788 XL TEL ENE GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD B 358415 136.50
1/10/2008 532788 XL TEL ENE MORGAN STANLEY MAURITIUS COMPANY LIMITED S 358415 136.50

NSE Bulk Deals to Watch - Oct 1 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
01-OCT-2008,EVERONN,Everonn Systems India Lim,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,168888,343.60,-
01-OCT-2008,RAJSREESUG,Rajshree Sugars & Chem,RAJSHREE PATHY,BUY,418886,50.50,-
01-OCT-2008,EVERONN,Everonn Systems India Lim,MACQUARIE BANK LIMITED,SELL,168888,343.60,-
01-OCT-2008,RAJSREESUG,Rajshree Sugars & Chem,SBI MUTUAL FUND,SELL,423000,50.50,-

IT Spending to fall

IT spending by global financial institutions may shrink by a fifth in 2009 as large entities such as Bear Stearns, Lehman Brothers, Merrill Lynch and Wachovia Corp become victims of the worsening credit crisis in the US.

The financial services sector is the biggest spender on technology worldwide and Indian service providers rely on the sector to earn over a third of their revenues.

Research firm Celent estimates IT spending on products and services by global financial institutionss to grow at 5.9 per cent to $362.4 billion in 2008 and to $386.8 billion in 2009.

"As of today, 20 per cent of the IT budgets for 2009 will be cut," said Mr Sudin Apte, analyst and head of for Forrester Inc's India operations. Consolidation and disappearance of some large entities from the financial services arena would lead to budget cuts.

"There will be immediate scrutiny of new discretionary projects and compliance will become a key as government plans a bail-out package. As a result, there will be more spending on compliance," Mr Apte said.

Recently Forrester said 40 per cent of the large businesses in North America and Europe have reduced their overall IT budgets for 2008 in reaction to a slowing economy.

About half of the financial services clients surveyed by Forrester have slashed their IT budgets for 2008.
'Worse than expected'

"The crisis is turning out to be worse than expected and I guess that some 600-800 small and medium banks in the US will go out of business as the credit flow dries up," said Mr Phaneesh Murthy, CEO of iGATE Corp.

"As a result of this credit squeeze and consolidation, I think there will be a 15-20 per cent cut in IT budgets of financial services sector for 2009," Mr Murthy added.
Slowdown

Celent estimates indicate that IT spending by financial institutions has already slowed down in past two years. IT spending stood at $342.1 billion in 2007, a year-on-year increase of 5.9 per cent, but lower than 8.7 per cent growth achieved in 2006.

"I guess there would be a moderate cut of 10-15 per cent because of consolidation and reduction in scale" Mr S.Sabyasachi, research director at neoIT, an offshore advisory firm.

Transformational and business process reengineering projects could take a back-seat as financial institutions look to efficiency to cut their costs, Mr Sabyasachi added

Post Session Commentary - Oct 1 2008

The Indian market closed on a positive note after dwindling at the initial stage. The market made a smart recovery from the initial fall on the expectations of a new bail out plan in US to deal with the financial crisis. The US Senate will vote today i.e. on, 1 October 2008, on a new version of the $700 billion financial sector bailout package. Additionally, the US Senate is all set to take up the vote on the Indo-US Civil Nuclear agreement today, which also gave a further boost to the market. From the sectoral point, the IT scrips remained the centre of attraction of the investors as most buying was seen from this basket due to decline of rupee versus dollar that touched fresh 5 year low to 47.23 at the initial stage of the session. Along with this, the bankex scrips also attracted investor's confidence as the Finance Minister yesterday stated that the Indian banks are well capitalized and regulated and also added that "The Indian market is a sound, attractive and well regulated market,". The BSE Sensex closed above 13,000 level and the NSE Nifty above the 3950 mark. The market breadth was positive as 1476 stocks closed in green while 1123 stocks closed in green and 73 stocks remained unchanged.

The BSE Sensex closed higher by 195.24 points at 13,055.67 and NSE Nifty ended up by 29.55 points at 3,950.75. The BSE Mid Caps and Small Caps closed with gains of 25.87 points and by 29.33 points at 4,824.16 and 5,606.80 respectively. The BSE Sensex touched intraday high of 13,203.86 and intraday low of 12,697.30.

Gainers from the BSE Sensex are Satyam Comp 7.47%, JP Associates 7.02%, HDFC Bank 5.26%, Grasim Inds 4.63%, Tata Power 4.46%, Infosys Tech 4.03%, ICICI Bank 3.10% and Tata Steel 3.07%.

Losers from the BSE Sensex are DLF 2.03%, Reliance Inds 2.01%, Tata Motors 1.44%, Reliance Infra 1.11%, M&M 0.53%.

The IT index closed with handsome gains of 122.82 points at 3,217.90. Scrips that gained are Satyam Comp 7.47%, Patni Comp 7.43%, HCL Tech 5.87%, Infosys Tech 4.03%, Finance Tech 3.20%, Rolta India 3.18% and Mosear Baer 2.94%.

The BSE Bank index closed in green with gains of 209.43 points at 6688.28. As HDFC Bank (5.26%), Federal Bank (4.65%), Bank of baroda (4.52%), Indus Ind bank (4.06%), Punjab national Bank (4.02%) and Oriental Bank (4.01%) all closed in positive territory.

The Consumer Durables index gained 86.27 points to close at 3,015.45. The only gainers are Videcon Industries (13.87%) and Titan Industries (0.38%) while Gitanjali GE (2.10%) and Blue Star L (1.26%) were the losers in the index.

The BSE Capital Goods index closed with marginal gains of 11.78 points at 10,592.13. Major gainers are As Usha Martin (15.05%), Gammon India (7.13%), Alstom Project (4.95%), BEML Ltd (2.77%), Crompton Greaves (2.43%) and Punj Lloyd (1.64%).

The BSE Oil & Gas index closed down by 99.73 points at 8939.55 as Reliance natural resource (2.11%), Reliance Industry (2.01%), Reliance petroleum (1.99%), Essar oil (1.63%), HPCL (0.80%) and IOC ltd (0.62%) ended in negative territory.

The BSE Reality index closed lower by 81.56 points at 3,427.21. Losers are Mahindra Lifespace Developers (6.47%), Indiabulls reality (5.08%), Orbit Co (4.62%), Anant Raj Industries (4.42%), Omaxe Ltd (3%) and Ansal Infrastructure (2.94%).

The BSE Metal index surged by 59.59 points to close at 9051.65. Major gainers are Welspun Gujrat SR (5.43%), Tata Steel (3.07%), Jindal Steel (2.70%), Jindal SAW (1.81%), NMDC Ltd (1.80%), Hindustan Zind (1.15%) and Hindalco Industries (0.87%).

Volatile but buoyant

The market wiped out a loss of over 163 points incurred in the first half after a strong bout of buying led by information technology (IT)and banking stocks triggered a wide-spread buying. The Sensex started the day 147 points higher at 13,007 following weakness in Asian indices and crashed to the day's low of 12,697 on relentless selling. While the market recovered thereafter, the Sensex witnessed a sharp turnaround in afternoon as gains in heavyweights, IT, banking and consumer durable stocks propelled it to an intra-day high of 13,204. After gyrating 507 points during the intra-day trades, the Sensex gained 195 points to close at 13,056, while the Nifty ended 30 points higher at 3,951.

The market breadth was positive. Of the 2,672 stocks traded on the BSE, 1,476 stocks advanced whereas 1,123 stocks declined. Seventy three stocks ended unchanged. The BSE IT index led the pack and gained 3.97% followed by BSE Bankex (up 3.23%) and BSE CD (up 2.95%).

Satyam Computer Services was the star performer among the heavyweights and the stock soared 7.47% at Rs318.75. Among other major gainers, JP Associates advanced 7.02% at Rs118.90, HDFC Bank jumped 5.26% at Rs1,294, Grasim Industries rose 4.63% at Rs1,765.70 and Tata Power moved up by 4.46% at Rs946.50. Infosys Technologies advanced 4.03% at Rs1,453.90, ICICI Bank gained 3.10% at Rs551.45 and Tata Steel added 3.07% at Rs438.65. However, Larsen & Toubro, DLF and Reliance Industries inched lower.

Over 1.23 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (0.81 crore shares), JP Associates (0.71 crore shares), Chambal Fertilisers and Chemicals (0.55 crore shares) and Ispat Industries (0.49 crore shares).

Sensex garners 460 points in two days

The key benchmark indices extended yesterday's gains as investors bet US lawmakers would approve a bailout package for the US financial sector. The BSE 30-share Sensex advanced 195.24 points. With today's rise, Sensex has gained 459.82 points in last two trading sessions. The market remains closed tomorrow, 2 October 2008, on account of Gandhi Jayanti

IT pivotals surged as the rupee dropped to a fresh five-year low against the dollar. Banking stocks gained. Satyam Computer Services and Jaiprakash Associates rose more than 7% each. HDFC Bank rose more than 5%. The market breadth was positive on BSE.

European shares were mixed France's CAC 40 and UK's FTSE 100 rose between 0.04% to 1.35%. Germany's DAX fell 0.53%.

The BSE 30-share Sensex rose 195.24 points or 1.52% to 13,055.67. The index shed 163.13 points at the day's low of 12,697.30, hit in mid-morning trade. The Sensex rose 343.43 points at day's high of 13,203.86, in mid-afternoon trade.

The S&P CNX Nifty was up 29.55 points or 0.75% to 3,950.75.

BSE clocked a turnover of Rs 4,315 crore today as compared to a turnover of Rs 5,179.86 crore on 29 Setember 2008.

Nifty October 2008 futures were at 3969, at a premium of 18.25 points as compared to spot closing of 3950.75. NSE's futures & options (F&O) segment turnover was Rs 47,733.85 crore, which was lower than Rs 56,549.63 crore on Tuesday, 30 September 2008.

The BSE Sensex is down 7,231.32 points or 35.64% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 8,151.10 points or 38.43% below its all-time high of 21,206.77 struck on 10 January 2008.

As per the provisional figures on BSE, the foreign institutional investors (FII)s sold shares worth Rs 274.90 crore and domestic funds bought shares worth Rs 48.65 crore today, 1 October 2008.

The BSE Mid-Cap index was up 0.54% at 4,824.16 and BSE Small-Cap index was up 0.53% at 5,606.80.

BSE IT index (up 3.97% to 3,217.90), BSE Bankex (up 3.23% to 6,688.28), BSE Consumer Durbles index (up 2.95% to 3,015.45), BSE Teck index (up 2.6% to 2,612.17) outperformed Sensex.

BSE Realty index (down 2.32% to 3,427.21), BSE Oil & Gas index (down 1.1% to 8,939.55), BSE Capital Goods index (up 0.11% to 10,592.91), BSE Auto index (up 0.35% to 3,687.73), BSE Metal index (up 0.66% to 9,051.65), BSE HealthCare index (up 1.05% to 3,710.89), BSE Power index (up 1.08% to 2,284.70), BSE Power index (up 1.08% to 2,284.70), BSE PSU index (up 1.11% to 6,315.43) and BSE FMCG index (up 1.4% to 2,190.94) underperformed Sensex.

The market breadth was positive on BSE with 1476 shares advancing as compared to 1123 that declined. 73 shares remained unchanged.

India's largest private sector company by market capitalization and oil refiner Reliance Industries fell 2.01% to Rs 1,907.25. The stock came off from the session's high of Rs 1,986.50.

IT stocks gained. The BSE IT index rose 3.97% to 3,217.90. Satyam Computer Services (up 7.47% to Rs 318.75), Infosys (up 4.03% to Rs 1,453.90), Wipro (up 2.78% to Rs 349.10), Tata Consultancy Services (up 1.24% to Rs 671) edged higher.

The Indian rupee dropped to a fresh five-year low in early trade today, 1 October 2008 on worries foreign investors would continue to sell their local investments amid a spreading global financial crisis.

Banking stocks rose. BSE Bankex rose 3.23% to 6,688.28. HDFC Bank (up 5.26% to Rs 1,293.65), ICICI Bank (up 3.1% to Rs 551.45) and State Bank of India (up 2.44% to Rs 1,501.45) edged higher.

Jaiprakash Associates (up 7.02% to Rs 118.90), Tata Power Company (up 4.46% to Rs 946.50), Grasim Industries (up 4.63% to Rs 1,765.70), edged higher from the Sensex pack.

DLF (down 2.03% to Rs 345.25), Tata Motors (down 1.44% to Rs 339.25), Reliance Infrastructure (down 1.11% to Rs 781.50) edged lower from the Sensex pack.

India's largest tractor maker by sales Mahindra & Mahindra fell 0.53% to Rs 506.55. The stock came off from the session's high of Rs 506.55. The firm has reportedly created a trust, which would hold 8.7% stake in the company after the merger of two of its subsidiaries - Punjab Tractors and Mahindra Holding Finance - with itself. The trust has already acquired 4.96% stake in the parent company, added reports.

India's largest car maker by sales Maruti Suzuki India gained 1.54% to Rs 697.70 after the company reported 5.3% rise in sales to 71,000 units in September 2008 over September 2007.

Reliance Natural Resources clocked the highest volume of 1.23 crore shares on BSE. IFCI (81.85 lakh shares), Jaiprakash Associates (71.52 lakh shares), Chambal Fertilisers & Chemicals (55.87 lakh shares) and Ispat Industries (49.59 lakh shares) were the other volume toppers in that order.

Reliance Capital clocked the highest turnover of Rs 400.63 crore on BSE. Reliance Industries (Rs 280.48 crore), ICICI Bank (Rs 246.37 crore), Axis Bank (Rs 235.23 crore) and State Bank of India (Rs 178.03 crore) were the other turnover toppers in that order.

The US Senate will vote on Wednesday, 1 October 2008, on a new version of the $700 billion financial sector bailout package, rekindling hopes that the credit crisis can be stemmed before claiming yet more banks and causing further damage to the global economy. US stock futures were in red. Nasdaq futures were down 14.50 points and Dow Jones futures were down 86 points.

Meanwhile, the US accounting regulators lent a hand Tuesday, 30 September 2008, to struggling financial institutions facing the possibility of big write-downs on mortgage assets. The Securities and Exchange Commission, in junction with the Financial Accounting Standards Board, issued guidelines under "fair value" accounting rules for financial firms trying to peg the value of hard-to-trade assets on their balance sheets.

Fair value accounting has been blamed for exacerbating the meltdown in the US banking system, forcing investment and commercial banks to write down well over $100 billion in assets.

Asian markets were trading mixed today, 1 October 2008. Japan's Nikkei and Taiwan's Taiwan Weighted Average rose between 0.78% to 0.96%. Taiwan stocks rose after Taiwan's government announced a two-week ban on all short selling to support the market. However, South Korea's Seoul Composite was down 0.58%. Stocks markets in China, Hong Kong and Singapore were closed today, 1 October 2008 for various holidays.

Global money markets remained in near paralysis after London interbank offered rates shot to record levels on Tuesday, 30 September 2008, as banks remained wary of lending to each other. The central banks of Japan and Australia kept injecting extra funds into their markets on Wednesday, 1 October 2008, and overnight dollar borrowing costs stayed near 6% in Asia -- three times the Federal Reserve's target for overnight rates.

France, Belgium and Luxembourg have this week poured 6.4 billion euros ($9 billion) into Franco-Belgian bank Dexia to avoid defaults on its loans, and France promised new bank measures to help depositors. Dutch-Belgian banking and insurance group Fortis, partially nationalized earlier this week, halted $4 billion worth of asset sales to China's Ping An and Deutsche Bank.

Meanwhile, with the end of third quarter of the calendar year 2008 on Tuesday, 30 September 2008, hedge fund are bracing for heavy redemption amid US financial sector crisis which has already spread to Europe. Investors in hedge funds are usually allowed to exit funds only on the final day of the financial quarter. Large-scale investor redemption in hedge funds may trigger further selling by foreign funds in India. Hedge funds mainly operate through the participatory notes route in India.

The United States Senate will take up the India-US nuclear deal bill for a debate and vote after on Wednesday (early Thursday morning IST).

India's current account deficit jumped to $10.72 billion in Q1 June 2008 as compared to a deficit of $6.3 billion Q1 June 2007, as oil import bill has grown faster than income from software services exports and remittances from the Indian diaspora. The current account in the balance of payments measures the net position of a country's exports and imports of goods and services.

The Bombay Stock Exchange (BSE) will launch exchange-traded rupee futures today, 1 October 2008. In August 2008, the National Stock Exchange of India (NSE) kicked off exchange-traded currency futures trading.

US light crude for November 2008 delivery rose 81 cents to $101.45 a barrel today, 1 October 2008 buoyed by hopes that Washington would find a way to pass a rescue plan to head off a deep recession in the United States and abroad.

October Snaps September Losing Streak

Asian Markets Starts The Last Quarter of 2008 With Positive Closing

The stock markets across the Asian region closed higher, except for South Korea, snapping a six-day losing streak. Speculation that the U.S. Senate will approve a $700 billion bank rescue plan to revive the credit markets boosted Asian investor sentiment. The stock markets in China, Hong Kong, Indonesia, Malaysia and Singapore remained closed on account of public holidays.

Yesterday on Wall Street the stocks rebounded following its biggest sell-off in years on Monday. The Dow jumped 485 points or 4.7% to finish at 10,850 after falling nearly 7% on Monday to its lowest close in nearly three years. The S&P 500 index gained 58 points or 5.3% to finish at 1,164, and the Nasdaq composite index climbed 98 points or 5.0% to end at 2,082.

Oil prices held steady above $101 a barrel in Asia on Wednesday. By 4:23 a.m. ET, oil was quoted at $101.86 a barrel, up $1.22. The contract for November settlement rose by $4.27 to settle at $100.64 a barrel on the New York Mercantile Exchange on Tuesday.

In the currency market, the U.S. dollar was trading in the lower 106-yen levels in late Tokyo deals, flat with its levels in early trade, but higher compared to the upper 104-yen range late Tuesday in Tokyo.

The Australian dollar closed at a two-week low as the multi-government rescue of yet another European bank encouraged traders to sell the euro and buy the US currency. The Aussie finished the session at US$0.7962-0.7966, down from Tuesday's close of US$0.8045-0.8048, recording the weakest close since September 16 when it finished at US$0.7886-0.7890.

The New Zealand dollar finished a quiet trading session at US$0.6703, flat with its opening quote at US$0.6702 and Tuesday's local close of US$0.6700.

The South Korean won rebounded from a 64-month low against the U.S. dollar on revived hopes that U.S. lawmakers will salvage a rejected bailout plan for the troubled financial sector. The won finished the session at 1,187 a dollar; up from Tuesday's close of 1,207.0 a dollar, recording its first gain in eight sessions. The won has lost about 21% against the dollar so far this year.

Coming back to Asian equities, the Japanese stock market rebounded Wednesday, but gains were limited due to weaker-than-expected tankan survey data released by the Bank of Japan. Exporters gained on the back of a weaker yen. The benchmark Nikkei 225 Index closed up 108.40 points or 0.96% at 11,368.26, ending a four-day losing streak. The broader Topix Index of all First Section issues gained 13.72 points or 1.3% to finish at 1,101.13.

The Bank of Japan's tankan corporate sentiment survey report showed that Japanese business sentiment has turned pessimistic for the first time in five years. Investors turned cautious after the headline diffusion index fell to minus 3 in September, recording the first negative result since June 2003. The index stood at 5 in the second quarter. The outlook survey for the fourth quarter was projected as minus 4.

Among other economic reports released today, the average cash earnings for workers in Japan dropped 0.3% on year compared to analysts' expectations for a flat reading and a 0.3% annual increase in July. Meanwhile, Japanese auto sales declined at a slower pace of 5.3% year-over-year in September compared to a sharp 14.9% fall in August.

The Australian stock market closed sharply higher, ending a four-day losing streak. Stocks started off firm, tracking a rebound on Wall Street overnight, and extended gains after Australia's regulator cleared BHP's bid for Rio. The benchmark S&P/ASX 200 index closed up 194.1 points or 4.2% at 4,794.6, recouping most of the losses that it posted on Tuesday. The broader All Ordinaries index jumped 183.2 points or 4.0% to finish at 4,814.5.

In economic news, manufacturing activity fell for a fourth straight month in September. The Australian Industry Group-PricewaterhouseCoopers Australian performance of Manufacturing Index rose 0.2 index points to 47.2 points in September.

Meanwhile, preliminary estimates for September indicated that the commodity prices index rose by 0.5% in SDR terms, following a revised 2.0% increase in August, according to the Reserve Bank of Australia.

The New Zealand stock market closed sharply higher, reversing most of Tuesday's losses. The benchmark NZX 50 index closed up 97.74 points or 3.16% at 3,187.96 after losing as much as 3.18% on yesterday. The broader NZX All Capital index jumped 100.40 points or 3.12% to finish at 3,214.87.

The South Korean market pared early gains and closed volatile session slightly lower. The Korea Composite Stock Price Index or Kospi closed down 8.39 points or 0.58% at 1,439.67, extending losses for the fourth straight trading session.

On the economic front, South Korea's trade deficit narrowed to US$1.9 billion in September from US$3.81 billion a month before, mainly due to falls in crude oil and raw material prices, according to a government report. Exports rose 28.7% from a year earlier, while imports shot up 45.8%, the Ministry of Knowledge Economy said Wednesday.

Meanwhile, the National Statistical Office announced that the Consumer Price Index increased 5.1% on year in September, slower than the 5.6% recorded in the previous month.

In India, a bout of volatility was witnessed on the bourses in mid-afternoon trade, with the key benchmark indices paring gains. The BSE 30-share Sensex closed up 196.24 points or 1.52% to 13,055.67. The S&P CNX Nifty closed up 0.78% to 3,951.7

Markets in China, Hong Kong, Indonesia, Malaysia, Singapore, the Philippines and Pakistan were closed for public holidays.

Elsewhere, Taiwan's Taiex closed up by 0.78% to 5,746.01 while Thailand Set plunged by 0.35% to 594.45.

In other regional market, European shares started the last quarter of the year on an upbeat note Wednesday, with deal hopes helping the mining sector and banks advancing amid fresh hopes that a U.S. bailout plan will succeed after all.

In the opening trade, the U.K. FTSE 100 index rose 1.2% to 4,961.39, the French CAC-40 index advanced 0.4% to 4,047.11 and the German DAX 30 index inched up 0.1% to 5,835.11. At 10.53 GMT, the U.K. FTSE 100 index was hovering around the same level as it was up by 1.2% to 4,960.81, the German DAX 30 index lost 0.4% to 5,805.34 and the French CAC-40 index gained 0.3% to 4,044.28.

On the economic front there was slew of economic events. Starting with Germany, the retail sales posted their biggest rise in nearly two years in August, offering a ray of light to Europe's largest economy as it battles to avoid recession.

Total sales including cars and turnover at gas stations rose by 4.6 percent on the month in August. The monthly rise, which followed two sizeable falls in the previous two months, was the biggest since December 2006 -- a month of unusually high spending that preceded a 3% rise in sales tax in January 2007. If we exclude December 2006, the monthly increase in August in German retail sales was the biggest since March 1998. On the year, sales fell by 0.6 percent in August.

In U.K, the manufacturing sector contracted much more sharply than expected in September, as activity levels wilted to their lowest level for 17 years. Data from market sources showed that the Purchasing Managers Index for the U.K's manufacturing sector dropped to a reading of 41.0 in September from a downwardly revised 45.3 in August - the lowest reading since the series began in 1992.

Meanwhile, the U.K's services output rose 0.6% on the month in July but stagnated in the quarter to July - the first time there was no quarterly growth in production since 2002. The 0.6% monthly rise in output comes after services output declined 0.5% in June and 0.4% in May. In the three months to June, services output had increased 0.2% and it climbed 0.4% in the quarter to May.

Looking at the whole region the unemployment rate showed an increased in August in the countries signaling that declining economy is starting to translate into lay-offs.

According to the latest employment survey by Euro stat the seasonally adjusted unemployment rate has ticked up to 7.5% from the 7.4% rate in the previous three months, once July's reading has been revised up from the 7.3% previously estimated. Spanish labour market has suffered the largest impact from the crisis as the construction boom has come to an end, which has produced local unemployment to rise to 11.3% in August from 8.3% in August 2007. On the bright side, Germany, the largest EU economy, shows a rather healthy labour market, with its unemployment rate falling to 7.2% in August, from 7.3% in July.

Manufacturing activity in the euro zone contracted for the fourth straight month in September, as production and new orders fell at the sharpest rate since the fourth quarter of 2001. The PMI for the euro zone's factory sector fell to 45.0 in September from 47.6 in August. Output shrank faster than expected in Germany, France, Italy and Spain, adding to fears that the euro zone is already in recession and that the downturn is set to be deeper than expected.

Looking ahead the day is scheduled to release MBA weekly mortgage application data, which will be followed by ADP employment change for the month of September. In the evening we have statistics on the construction spending which will be followed by ISM manufacturing survey for the September.

Daily Call - Oct 1 2008

After producing the worst point fall in history on Monday, Dow again dived into the record books on Tuesday to produce the third highest point rise ever recorded. The rebound has run its course and to move the US markets or our Indian markets from here, it will need some action on the ground. The fact that our markets would be closed for Gandhi Jayanti and Id tomorrow, punters may like to take their profits.


The regulators in India were on full alert on Tuesday, and rightly so, to stem the rot in the aftermath of US slide. This propelled our banks further. With the result season now just a few days away, stocks will cease to move as a class and may begin to move on Individual results. Take your profits early in the day and postpone any shopping plans.

Pre Session Commentary - Oct 1 2008

Today the Market would open in green as the US market showed some sign of relief and also the major Asian markets have opened on positive note. The House of Representatives have also decided for a reviewed bail out plan to be disclosed on the end of the week. One could see some positive momentum today as the over all atmosphere of the domestic financial industry looks good on the back of assertion from the Finance minister as well as the RBI about the financial industry's strength and resilience.

On Tuesday, the market opened with a brutal loss, but later during the post mid session it recovered enough to end in the green territory. The optimism in the market was seen after the Asian markets started recovering from their opening trade loss. Further, the European market also showed some sign of relief as CAC 40, FTSE and many other indices opened in positive note and also ended in green. This positive influence was further augured by the assertion from the Finance minister and RBI about the resilience of Indian financial sector. The RBI further clarified about the ICICI bank's liquidity strength in its current account with the RBI to meet the requirements of its depositors. The banks have also borrowed a whopping Rs.90,075 Crore from the RBI through the LAF so as to meet their liquidity requirements. Besides, banks have also urged RBI to relax its CRR and Repo rate and infuse more money in the liquidity stricken financial industry. Therefore during the day Bankex was leading the sectoral indices with a gain of 4.92% followed by Realty and CG at 3.02% and 2.96% respectively. During the trading session we expect the market to remain range bound.

The BSE Sensex closed with a phenomenal gain of 264.68 points at 12,860.43 and NSE Nifty ended down by 135.2 points at 3,850.05. The BSE Mid Caps and Small Caps closed with gains of 68.96 points and 24.44 points at 4,798.29 and 5,577.47. The BSE Sensex touched intraday high of 12,995.20 and intraday low of 12,153.55.

On Tuesday, the US market gained some momentum and closed in green after a heavy blood bath on the previous day. The positive momentum in the US market was backed by some news that the Congress is still working on some bail out plan to rescue the current crisis. Crude oil for November delivery closed at $100.64 per barrel on the New York Mercantile Exchange, up $4.27, or 4.4%, after falling as low as $97.80.

The Dow Jones Industrial Average (DJIA) was up by 485.21 points at 10,850.66 along with NASDAQ index which was up by 98.60 points at 2,082.33 and the S&P 500 (SPX) was also higher by 58.35 points to close at 1,164.74 points.

Indian ADRs ended in green. In technology sector, Wipro was up by (9.79%), Patni Computers was up by (5.08%). In banking sector HDFC Bank and ICICI Bank grew by (7.74%) and (9.46%). In telecommunication sector, Tata Communication and MTNL grew (5.74%) and (11.57%). Sterlite Industries increased by (6.88%).

Today the major stock markets in Asia opened in green following the trend of the US market which also closed in green. Hang Seng index is trading up by 135.53 points at 18,016.21. Followed by, Japan''s Nikkei which was up by 77.54 points at 11,337.40 and Singapore''s Straits trading is closed due to local holiday.

The FIIs on Tuesday stood as net buyers in equity and debt. Gross equity purchased stood at Rs3394.60 Crore and gross debt purchased stood at Rs308 Crore, while the gross equity sold stood at Rs3007.70 Crore and gross debt sold stood at Rs138.20 Crore. Therefore, the net investment of equity and debt reported were Rs387 Crore Rs169.80 Crore respectively.

On BSE, total number of shares traded were 30.03 crores and total turnover stood at Rs5,179.86 Crore. On NSE, total volumes of shares traded were 63.59 crores and total turnover was Rs14793.95 Crore.

Top traded volumes on NSE Nifty – ICICI Bank with total volume of 21452818 shares followed by Suzlon Energy 21379313 shares, Unitech 14207104 shares, SAIL 12961546 shares and Reliance Petro 11293997 shares.

On NSE Future and Options, total number of contracts traded in index futures was 1025921 with a total turnover of Rs18738.96 Crore. Along with this total number of contracts traded in stock futures were 1034688 with a total turnover of Rs15239.54 Crore. Total number of contracts for index options was 1046757 and total turnover was Rs21747.05 Crore and total number of contracts for stock options was 51755 and notional turnover was Rs824.09 Crore.

Today, Nifty would have a support at 3,850 and resistance at 4,205 and BSE Sensex has support at 12,550 and resistance at 13,115.

Daily News Roundup

M&M creates a trust that will hold 8.7% stake in the company post merger with Punjab Tractors and Mahindra Holding Finance (ET)

RIL to sell KG oil at US$5 discount to Brent (BS)

Cipla, GSK and FDC to be affected by NPPA's move to cut prices of three bulk drugs (ET)

RCOM plans to spend Rs300bn on capacity expansion in FY09 (BS)

BHEL wins order worth Rs9.9bn for setting-up a 500MW thermal power plant in Rajasthan (BS)

SAIL and L&T ink JV for setting up captive power plants (ET)

JSW Steel may increase capacity of its Vijaynagar plant to 16mtpa in phases (DNA)

BEL plans Rs5.7bn capex over the next two years (BS)

NMDC may raise iron ore prices by 50-55% for long-term contracts (DNA)

Ambuja Cements plans to invest nearly Rs16bn in captive power generation (BL)

Ashok Leyland sets up a JV with US-based John Deere to make construction equipments (BL)

ONGC to invest Rs350mn on expansion of Desalter plant at Nawagam near Kheda (FE)

HUL has raised prices of 'Lux' soaps by 5-8% in Q2 FY09 (DNA)

IOC expects its oil import cost to increase by 70% to US$45bn in current fiscal (mint)

RCOM will participate in 3G and wireless auctions (ET)

IDEA Cellular rolls out operations in Bihar (ET)

Lanco Group gets LoI to build Vizhinjam International Transhipment Terminal Port (DNA)

Dabur India's Gulf plant will start production of personal care products by December 2008 (BL)

BEL wins Rs1bn order for voting machines from the Election Commission (BL)

Shriram EPC looks to offload 40% stake in Singapore JV (mint)

Dishman Pharma to foray into global oncology market (DNA)

Systema to invest over US$1.5bn on expansion of Shyam Telelink's network (ET)

Polaris to buy US Insurance firm SEEC Inc in an all-cash deal (ET)

PSTL to invest Rs2bn over next 18 months to modernize 250 theaters in South India (ET)

Economic Front Page

India and France sign agreement on civil nuclear cooperation (BL)

India's fiscal deficit at US$25bn in the first five months already at 87.7% of the full-year target for FY09 (ET)

Oil companies cut ATF prices by 5.4% (BL)

Direct tax receipts in April-September 2008 rises by 29.3% yoy to Rs1,500bn (mint)

Government is considering a proposal to increase FDI to 100% in single-brand retail and allow 51% FDI in multi-brand retail for electronic goods, computers, sports goods and watches (BS)

Petroleum Minister wants Cairn and ONGC to lay oil pipeline to Gujarat (FE)

Forex reserves increases by just US$2.2bn in Q1 FY09 (ET)

Steel prices could soften further by US$150/tone (BS)

October-December sugar supply seen at over 5.1mn tone (ET)

India's wheat and rice production likely to grow by 7% and 8% respectively by 2012 (ET)

The mines ministry wants the export duty on iron ore to be rolled back (ET)

India's iron ore export may fall 33% on demand slowdown from China (mint)

Don't take anything for granted!

Most human beings have an almost infinite capacity for taking things for granted.

Things we take for granted are no longer the same. Money, for example, is not only getting dearer, but is also hard to come by. Global credit markets are choked as banks are refusing to lend to each other amid fears of more pain going ahead. Liquidity has emerged as the key variable. Several closely watched measures of bank lending have hit all-time highs, as lenders continued to hoard funds. Only a substantial easing of the cash crunch can pull the global markets out of the current mess.

For that to happen, the US Congress must pass the Bush government's bailout plan in some form or the other. The Senate will take up a new bill on Wednesday for a vote. A positive outcome here will go a long way in reviving the credit markets and restore investor confidence in financial markets. Until that happens, one must remain careful and keep a close watch on developments underway globally, especially in the US.

At the same time don't lose sight of local factors, like tight liquidity conditions, a weak currency, worsening deficits, persistent FII outflows, high inflation and hardening interest rates. The upcoming quarterly results will throw more light on how India Inc. is coping with the multiple headwinds so far.

Today, we expect a higher opening on the back of the rebound across global markets and hope of the bank rescue plan passing the litmus test in the US Congress. Given that the markets will be shut on Thursday and the level of uncertainty, we advise all to stay cautious and alert and refrain from taking undue risks. After all, you can't take anything for granted!

US stocks staged a strong come back on Tuesday, a day after the Dow Jones Industrial Average posted its biggest ever point loss in the wake of the rejection of the bank bailout plan by the House of Representatives.

The blue chip index jumped by nearly 500 points on hope that the Congress will eventually pass a toned down version of the government's US$700bn rescue plan.

The Dow surged by 485.21 points, or 4.7%, to 10,850.66, a level that has the blue-chip index down 6% from the end of August, and 4.4% for the third quarter. Of the Dow's 30 components, all but one ended higher, with blue-chip financials pacing the advance.

The S&P 500 Index climbed 58.34 points, or 5.3%, to 1,164.73, with the broad-market index off 9.2% for the month, and 9% for the quarter. Financials led gains that stretched across all 10 of the index's industry groups.

The Nasdaq Composite index jumped 98.60 points, or 5%, to finish at 2,082.33, leaving the technology-laden index with a monthly loss of 12%, and a quarterly decline of 9.2%.

Trading volume was moderate following Monday's crash. On the New York Stock Exchange, advancers beat decliners 4 to 1 on volume of 1.62bn shares. On the Nasdaq, winners topped losers by more than 3 to 2 on volume of 2.43bn shares.

Meanwhile, a closely watched measure of the housing sector showed that home prices in July fell by the largest rate ever, although the pace of monthly declines slowed.

The Chicago PMI, a key manufacturing report, fell to 56.7 in September from 57.9 in the prior month. However, the decline was smaller than economists were expecting. Any reading over 50 suggests growth.

The September consumer confidence index topped forecasts, the Conference Board reported. It climbed to 59.8 from a revised 58.5 in August, surprising economists who thought it would fall to 55.

US light crude oil for November delivery rose US$4.27 to settle at US$100.64 per barrel on the New York Mercantile Exchange. On Monday, oil prices plunged US$10.52 a barrel in the second-biggest one-day plunge ever.

Gasoline prices fell for the 13th day in a row, according to a nationwide survey of credit card activity. COMEX gold for December delivery fell US$13.60 to settle at US$880.80 an ounce. In currency trading, the dollar fell against the euro and gained against the yen.

European shares closed higher on Tuesday after the previous session's bruising, but ended the third quarter down roughly 12% after a month of staggering events in the financial sector.

After a 5.5% drop on Monday, the pan-European Dow Jones Stoxx 600 index ended 1.8% higher at 256.01, with miners and drug makers advancing. European stocks shook off early losses on Tuesday on hopes a US government rescue plan could still be implemented.

The UK's FTSE 100 rose 1.7% to 4,902.45 and the French CAC-40 advanced 2% to 4,032.10. Germany's DAX 30 edged up 0.4% to 5,831.02.

In the emerging markets, the Bovespa in Brazil soared by 7.6% to 49,541 while the IPC index in Mexico climbed 3.9% to 24,888. The RTS index in Russia rose by nearly 1.5% to 1211 and the ISE National 30 index in Turkey gained 1.6% to 45,472.

Markets ended with healthy gains reversing early losses. The bounce back came after Finance Minister P Chidambaram and SEBI assured investors whose worries resurfaced after the rejection of much-awaited US$700bn package.

The rally was led by banking and realty stocks. ICICI Bank was the biggest gainer among the 30-components of Sensex. Finally, the BSE benchmark Sensex recovered over 700 points and the NSE Nifty index recouped nearly 210 points from their respective day's low.

Sensex gained 264 points to close at 12,860 and the NSE Nifty index gained 71 points to close at 3,921.

Areva T&D gained by 1.6% to Rs1423 after reports stated that GE Consumer and Areva have jointly announced a strategic alliance. The scrip touched an intra-day high of Rs1438 and a low of Rs1322 and recorded volumes of over 28,000 shares on BSE.

Shares of Dena Bank gained by over 4% to Rs41.1 after the company announced that it has raised Lower Tier II Bonds (Series X) Capital funds to augment long term resources of the Bank and to meet its future Capital Adequacy Ratio requirements in the nature of Debentures on Private Placement Basis for an amount of Rs3bn including Green shoe option.

The scrip touched an intra-day high of Rs41.9 and a low of Rs36.5 and recorded volumes of over 16,00,000 shares on BSE.

Shares of Panacea Biotech gained by 5% to Rs241 after 0.5mn shares changed hands in two block trades.

About 499,760 shares were sold on the BSE and 500,000 shares on the NSE at an average price of Rs222 per share. The scrip touched an intra-day high of Rs242 and a low of Rs214 and recorded volumes of over 5,00,000 shares on BSE.

Zee News advanced by over 2% to Rs40 after almost 1mn equity shares of the company changed hands at an average price of Rs39.3 on the NSE. The scrip touched an intra-day high of Rs40.9 and a low of Rs36.7 and recorded volumes of over 13,00,000 shares on NSE.

Compact Disc has announced that iMedia Ventures Ltd content developer offered to invest US$10mn the expansion projects of CDI. This debt has been offered at 2.5% per annum over LIBOR inclusive of withholding tax or other applicable taxes for a period upto 10 years.

iMedia Ventures have also shown keen interest in buying 15% equity in CDI. Both these offers will be considered in the next meeting of the board of directors of the company to be held during the third week of October, 2008.

Compact Disc dropped by over 11% to Rs43 touching an intra-day high of Rs45.8 and a low of Rs39 and recorded volumes of over 2,00,000 shares on BSE.

BHEL surged by over 5% to Rs1586 after the company announced that it won order worth Rs9.9bn to set up thermal sets of 259MW in Rajasthan. The scrip touched an intra-day high of Rs1621 and a low of Rs1430 and recorded volumes of over 6,00,000 shares on BSE.

M&M creates a trust that will hold 8.7% stake in the company post merger with Punjab Tractors and Mahindra Holding Finance (ET)

RIL to sell KG oil at US$5 discount to Brent (BS)

Cipla, GSK and FDC to be affected by NPPA's move to cut prices of three bulk drugs (ET)

RCOM plans to spend Rs300bn on capacity expansion in FY09 (BS)

BHEL wins order worth Rs9.9bn for setting-up a 500MW thermal power plant in Rajasthan (BS)

SAIL and L&T ink JV for setting up captive power plants (ET)

JSW Steel may increase capacity of its Vijaynagar plant to 16mtpa in phases (DNA)

BEL plans Rs5.7bn capex over the next two years (BS)

NMDC may raise iron ore prices by 50-55% for long-term contracts (DNA)

Ambuja Cements plans to invest nearly Rs16bn in captive power generation (BL)

Ashok Leyland sets up a JV with US-based John Deere to make construction equipments (BL)

ONGC to invest Rs350mn on expansion of Desalter plant at Nawagam near Kheda (FE)

HUL has raised prices of 'Lux' soaps by 5-8% in Q2 FY09 (DNA)

IOC expects its oil import cost to increase by 70% to US$45bn in current fiscal (mint)

RCOM will participate in 3G and wireless auctions (ET)

IDEA Cellular rolls out operations in Bihar (ET)

Lanco Group gets LoI to build Vizhinjam International Transhipment Terminal Port (DNA)

Dabur India's Gulf plant will start production of personal care products by December 2008 (BL)

BEL wins Rs1bn order for voting machines from the Election Commission (BL)

Shriram EPC looks to offload 40% stake in Singapore JV (mint)

Dishman Pharma to foray into global oncology market (DNA)

Systema to invest over US$1.5bn on expansion of Shyam Telelink's network (ET)

Polaris to buy US Insurance firm SEEC Inc in an all-cash deal (ET)

PSTL to invest Rs2bn over next 18 months to modernize 250 theaters in South India (ET)

Economic Front Page

India and France sign agreement on civil nuclear cooperation (BL)

India's fiscal deficit at US$25bn in the first five months already at 87.7% of the full-year target for FY09 (ET)

Oil companies cut ATF prices by 5.4% (BL)

Direct tax receipts in April-September 2008 rises by 29.3% yoy to Rs1,500bn (mint)

Government is considering a proposal to increase FDI to 100% in single-brand retail and allow 51% FDI in multi-brand retail for electronic goods, computers, sports goods and watches (BS)

Petroleum Minister wants Cairn and ONGC to lay oil pipeline to Gujarat (FE)

Forex reserves increases by just US$2.2bn in Q1 FY09 (ET)

Steel prices could soften further by US$150/tone (BS)

October-December sugar supply seen at over 5.1mn tone (ET)

India's wheat and rice production likely to grow by 7% and 8% respectively by 2012 (ET)

The mines ministry wants the export duty on iron ore to be rolled back (ET)

India's iron ore export may fall 33% on demand slowdown from China (mint)

Intra-day volatility still exist

Intra-day volatility may see the market swing both ways and hold back the local players from taking fresh positions. The market may open positive following overnight gain in the US markets and mixed Asian indices in morning trades. As the overall sentiment remains bearish, the market may not slip from positive to negative. The Nifty may witness resistance at 3950 on the upside while the near-term support at 3900 is seen on the downside. The Sensex has a likely support at 12600 and could witness resistance at 13000.

US indices finished on a positive side on Tuesday. While the Dow Jones ended in positive at 10851 advanced by 485 points, the Nasdaq up by 99 points at 2082.

Among the Indian ADRs on the US bourses. Except Rediff rest of all were performing in positive territory, from which VANL was leading by 19.24%, followed by Infosys advanced 13.49%, HDFC Bank gain 11.57%, Satyam moved up by 9.79% and Wipro gains 9.46% at Rs9.72. While, ICICI Bank, Patni Computer, MTNL, Tata Motors and Dr Reddy closed with the gain of about 3-5% each.

In the commodity segment, the Comex gold for the December declined $13.60 to settle at $880.80 an ounce. The Nymex light crude oil for October delivery gained $4.27 to close at $100.64 a barrel.

Bullion metals fall with strong dollar

Gold registers first quarterly drop in almost a year

Bullion metals ended considerably lower on Tuesday, 30 September, 2008 after dollar rallied against the euro and other major currencies reducing the precious metal's appeal as a hedge against inflation. Silver prices also declined. With today's fall, gold also registered the first quarterly drop in price in almost a year.

On Tuesday, Comex Gold for December delivery fell $13.6 (1.5%) to close at $880.8 an ounce on the New York Mercantile Exchange. On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly since then.

Gold prices ended 5.5% higher this month of September, 08. Prior to this, gold had lost 8.8% in August, 2008. In July, 2008, it ended lower by $11 (1.1%). For the year, gold has gained 6.3% till date in FY 2008.

For the third quarter that ended today, gold prices ended lower by 5.1%. It was the first quarterly loss for the yellow metal since the second quarter in FY 2007. Prior to that, the yellow metal ended second quarter with a marginal gain of 0.7%. For first quarter prices gained 10.7%.

On Tuesday, Comex silver futures for December delivery fell 75 cents (5.8%) to $12.275 an ounce. Silver ended month and quarter of September 2008 with a loss of 10%. It ended August with a loss of 2.4% and July 2008 with a gain of 3%. For the second quarter, it had gained a paltry 1.4%. Silver had gained 16% in Q1. Till date, silver has gained 7.4% this year. The metal also had gained for seven straight years.

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. 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 and vice versa.

At the currency markets on Tuesday, the dollar climbed the most ever against the 15-nation European currency as France and Belgium led a state-backed rescue of Dexia SA, the world's biggest lender to local governments. Major U.S. equity indexes rebounded from the worst plunge since October 1987 after lawmakers sought to repair a $700 billion financial rescue plan voted down yesterday.

Earlier this year, the weakening dollar and higher global demand for raw materials had led to records this year for commodities including gold. Gold reached a record in March as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. The Federal Reserve halted cuts to its target bank lending rate in April, after slicing it in seven steps to 2% from 5.25% in September.

Gold had witnessed the greatest annual gain in twenty eight years by gaining $200/ounce (31%) in FY 2007 as lower interest rates had sent the dollar tumbling, and crude-oil prices rose to a record. Silver had climbed 16% in FY 2007. In 2006, silver had jumped 46% while gold gained 23%.

At the MCX, gold prices for December delivery closed lower by Rs 288 (2.1%) at Rs 13,272 per 10 grams. Prices rose to a high of Rs 13,690 per 10 grams and fell to a low of Rs 13,235 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed Rs 847 (4.04%) lower at Rs 20,109/Kg. Prices opened at Rs 21,000/kg and fell to a low of Rs 20,019/Kg during the day's trading.

Crude manages to climb back to $100

Prices drop by more than 28% during the third quarter

Crude oil prices managed to climb back to the $100 level on Tuesday, 30 September, 2008 but registered substantial losses for the third quarter that ended today. Prices rose today after U.S. lawmakers said they intend to salvage a $700 billion bank-rescue package that may avert an economic slowdown.

Crude-oil futures for light sweet crude for November delivery closed at $100.64/barrel (higher by $4.27 or 4.4%) on the New York Mercantile Exchange. Prices fell to a low of $97.8 during intra day trading. Yesterday, prices had slipped by almost $11 on overall global meltdown. Prices reached a high of $147 on 11 July but have dropped 32% since then.

For the third quarter of the year that ended today, crude prices ended lower by 28%. This was the biggest quarterly drop since 1991. Prior to today, crude prices had gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. For the month of September, prices registered drop of 13%. For the year, prices are still up by 5.2%.

Investors are concerned that a prolonged credit crisis would further undermine an already waning demand for energy as global growth slows down.

At the currency markets on Tuesday, the dollar climbed the most ever against the 15-nation European currency as France and Belgium led a state-backed rescue of Dexia SA, the world's biggest lender to local governments. Major U.S. equity indexes rebounded from the worst plunge since October 1987 after lawmakers sought to repair a $700 billion financial rescue plan voted down yesterday.

Against this background, November reformulated gasoline rose 9.6 cents to finish at $2.4577 a gallon, but it was 18.4% lower for the month. November heating oil gained 10.6 cents to end at $2.8947 a gallon, losing 9% for the month.

Natural gas futures advanced on speculation U.S. lawmakers will pass a $700 billion government bailout plan for the financial industry, preventing a further weakening of the economy and preserving energy demand. Natural gas for November delivery gained 21.7 cents (3%) to settle at $7.438 per million British thermal units. It was 6.4% lower for the month. Gas fell 44% in the third quarter, the first decline since the second quarter of 2007 and the biggest quarterly drop since the three months ended March 2001.

At the MCX, crude oil for September delivery closed at Rs 4,744/barrel, higher by Rs 106 (2.3%) against previous day's close. Natural gas for October delivery closed at Rs 354.5/mmbtu, higher by Rs 10.2/mmbtu (2.9%).