Investors heave a sigh of relief as Sensex recovers from 3-year trough

Key benchmark indices gained as investors mopped up battered blue chip stocks. IT, metal stocks and index heavyweight Reliance Industries led the rally. FMCG, realty and auto stocks were weak. The BSE 30-share Sensex rose 127.90 points, or 1.56%, off close to 280 points from the day's low.

The BSE Sensex had slumped 1,436.82 points or 14.91% to 8,197.92 on Thursday, 5 March 2009, from a recent high of 9,634.74 on 13 February 2009. It was the lowest closing level of the barometer index in more than three years.

Volatility was high today. After hitting a 4-month low at the onset of the trading session on weak global markets, Indian stocks staged a smart bounce back soon. The recovery gathered steam with the Sensex moving from green to red. After the strong rebound, the market slipped into the red again. Trade was choppy in afternoon trade.

The market surged in mid-afternoon trade on gains in European markets, which opened after Indian market. It extended gain in late trade on higher US index futures.

But a sustained selling by foreign funds amid the global financial sector crisis, a dire state of the global economy, slowdown in the domestic economy, weak rupee and uncertainty about the earnings outlook of India Inc continues to weigh on investor sentiment. That sentiments remains edgy is evident in from the continued weakness in the broad market - both the BSE Small and BSE Mid-cap indices were in the red today.

Chief economic adviser to the finance ministry Arvind Virmani today said the economic slowdown will continue until September 2009. He is, however, optimistic that the government will able to meet its fiscal responsibility targets.

The infrastructure sector output grew 1.4 %in January 2009 from a year earlier, below an unrevised 2.3% rise in December 2008, government data showed on Friday. Output rose an annual 3.6% in January 2008. The infrastructure sector accounts for 26.68% of India's industrial output.

On the flip side, lower interest rate have helped automobile sales rebound in the past few months. The stimulus packages announced by the government since December 2008 has started having some positive impact.

Meanwhile, volatility in the rupee and global commodity prices have added to the woes of India Inc. The slide in the rupee will increase in the cost of servicing overseas debt to the extent of the rupee's slide unless the company (which has overseas borrowings) has adopted an effective hedging strategy.

Foreign institutional investors (FIIs) have pressed heavy sales this year. FII outflow in February 2009 totaled Rs 2707 crore. FII outflow in calendar year 2009 totaled Rs 9128.30 crore (till 5 March 2009). Globally, investors are pulling out money from hedge funds, forcing hedge fund managers to dump assets. As per the proisional figures on NSE, FIIs sold shares worth Rs 274.68 crore and domestic funds bought shares worth Rs 298.94 crore today, 6 March 2009.

At the same time, global banks and insurers are selling assets after amassing $1.2 trillion of credit losses and writedowns since the start of 2007. More recently, fears have intensified about the exposure of Western European banks and companies to deteriorating economic conditions in Eastern Europe.

Domestic institutional investors (DIIs) have been absorbing selling by foreign funds.

However, due to political uncertainty, investors are unlikely to build large positions with general election to be held in mid-April 2008 to mid-May 2009. More so at a time when it is highly unlikely that either Congress or BJP comes to power on its own i.e. without the support of other smaller/regional parties.

The market may recover if a coalition led either by Congress or BJP comes to power. But the recovery will be subject to BJP or Congress led coalition coming to power without a support from the Left front which is against key economic reforms. The market will then look for whether the new government which comes to power undertakes second generation reforms that could bring India back on a strong growth path witnessed in five years between 2003 and 2008.

European shares recovered after an initial slide in cautious trade ahead of the influential US monthly job data. Key benchmark indices in France, Germany and UK were up by between 0.41% to 0.8%.

Asian stocks slipped on Friday led by financial stocks following overnight steep slide in US stocks. Caution also prevail ahead of what is likely to be a dismal US non-farm pay report for February 2009 later in the day. Key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore were down by between 0.3% to 3.5%. But Taiwan's Weighted index rose 0.35%.

Trading in US index futures indicated the Dow could fall 49 points at the opening bell on Friday, 6 March 2009. Earlier, the futures moved between red and green.

US stock indexes on Thursday fell to their lowest levels in more than 12 years, with notable declines in Citigroup (it dipped below $1 for the first time ever) and General Motors.

The global credit crisis sparked by a US housing slump has caused almost $1.2 trillion of losses at financial institutions worldwide. Mortgage delinquencies in the US climbed to the highest level on record, the Mortgage Bankers Association said on Thursday, 5 March 2009. More than 6,00,000 Americans filed claims for jobless benefits for the fifth-straight week, the worst performance since 1982, Labor Department figures showed on Thursday.

The BSE 30-share Sensex was up 127.90 points, or 1.56%, to 8,325.82. At the day's low of 8,047.17, the Sensex lost 150.75 points in early trade. At the day's high of 8,347.74, Sensex rose 149.82 points in late trade.

The S&P CNX Nifty was up 43.45 points, or 1.69%, to 2,620.15. It had hit a low of 2,539.45 in early trade, its lowest since 20 November 2008.

The Sensex is down 1,321.49 points or 13.69% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 339 points or 11.45% in calendar 2009 from its close of 2,959.15 on 31 December 2008.

The BSE clocked a turnover of Rs 3,329 crore, lower than Rs 3,423.79 crore on Thursday, 5 March 2009.

Nifty March 2009 futures were at 2616, at a discount of 4.15 points as compared to the spot closing of 2620.15. Turnover in NSE's futures & options (F&O) segment increased to Rs 48,734.94 crore from Rs 46,285.97 crore on Thursday, 5 March 2009.

The market breadth, indicating the overall health of the market, was weak on BSE with 1,005 shares advancing as compared with 1,445 that declined. A total of 66 shares remained unchanged.

The BSE Mid-Cap index (down 0.65%) and BSE Small-Cap index (down 0.83%) underperformed the Sensex.

The BSE IT index (up 3.05%), the BSE TECk index (up 2.44%), the BSE Oil & Gas index (up 1.76%), outperformed the Sensex.

The BSE Capital Goods index (up 1.54%), the BSE Power index (up 1.34%), the BSE Metal index (up 1.32%), the BSE Consumer Durables index (up 0.91%), the BSE PSU index (up 0.88%), the BSE Bankex (up 0.24%), the BSE Healthcare index (up 0.16%), the BSE Auto index (down 0.63%), the BSE Realty index (down 0.89 %), the BSE FMCG index (down 1.73%), underperfomed the Sensex

From the 30 share Sensex pack, 22 stocks rose while rest fell. Jaiprakash Associates, ONGC, Reliance Infrastructure, NTPC, Bharti Airtel, Larsen & Toubro rose by between 2.04% to 4.27%.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 1.87% to Rs 1.170.55. The stock came off the day's low of Rs 1,118.05, on bargain hunting after a recent steep slide.

The combined crude processing at its two export-focused plants at Jamnagar in Gujarat dived 12.1% to 6,68,450 barrels per day (bpd) in January 2009 over January 2008, data during trading hours on Thursday showed. Reliance commissioned its new 5,80,000 bpd plant in December 2008, turning Jamnagar into the world's biggest refining complex with capacity of 1.24 million bpd.

The board of Reliance Industries on Monday, 2 March 2009, approved the absorption of its unit Reliance Petroleum (RPL) and set a share swap ratio giving it direct control of the world's largest refinery complex. Reliance Industries said it would issue one share for every 16 held in RPL, which runs a refinery.

Outsourcing focussed IT firms surged in late trade on a recent steep slide in the rupee. India's third largest software services exporter, Wipro rose 3.37% even as its ADR fell 3.36% on Thursday. India's largest software services exporter by sales TCS rose 3.84%. India's second largest software services exporter Infosys Technologies rose 3.08% even as its ADR fell 4.73% overnight. But, India's fifth largest IT major by sales HCL Technologies rose 1.19%.

Satyam Computer Services surged 20% after company received approval from Securities and Exchange Board of India to kickstart a process to sell a 51% stake, in a move likely to attract more bidders. Satyam said it expects to soon invite expressions of interest from qualified investors, with more than $150 million in net assets, under a global bidding process.

Geodesic spurted 15.34% to Rs 52.25 after the company said it will buyback up to 25% of equity at a maximum price of Rs 75 per share

Zensar Technologies gained 4.76% after the company said it secured a multi million dollar deal from a UK based utility firm.

The rupee inched up on Friday as stronger shares bolstered hopes capital outflows may steady, but ended down 1% for the week in which it hit a record low as deepening global woes cast a pall over riskier assets. The partially convertible rupee ended at 51.63/65 per dollar, 0.25% stronger than Thursday's close of 51.76/78. On Tuesday, 3 March 2009 the rupee had dropped to an all-time low of 52.20. The rupee has declined sharply in the past few days.

A weak rupee boosts revenues of IT firms in rupee terms as IT companies earn a lion's share of revenue from exports. The rupee is down 5.7% so far in 2009.

The Indian rupee was higher on Friday as a weak dollar overseas boosted sentiment and on gains in the domestic share market. The partially convertible rupee was at 51.70 per dollar, stronger than its previous close of 51.76/78. On Tuesday 3 March 2009, the rupee had hit a record low of 52.20. The rupee has declined sharply in the past few days. A weak rupee boosts revenues of IT firms in rupee terms as IT companies earn a lion's share of revenue from exports.

But there have been concerns of cut back in technology spend by global firms amid a recession in the US economy and due to the global financial sector crisis. IT firms derive a lion's share of revenue from exports to US.

India's largest FMCG major by sales Hindustan Unilever fell 2.65%, extending the losses for the second straight day after foreign brokerage JPMorgan Chase & Company cut its rating on the stock to 'underweight' from 'neutral', citing weakening growth and increasing competition.

Other FMCG stocks, REI Agro, ITC, Nestle India fell by between 1.61% to 5.12%.

Rate sensitive realty stocks fell on recent reports falling interest rates have failed to revive housing demand. DLF, Indiabulls Real Estate and Housing Development & Infrastructure , Phoenix Mills fell by between 0.94% to 4.86%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

India's largest car maker by sales Maruti Suzuki India fell 2.77% on reports it could slash the price of its largest-selling model, Alto, as it looks to take on rival Tata Motors's Rs 1-lakh car Nano.

India's largest commercial vehicle maker by sales Tata Motors fell 0.57% as Moody's Investors Service downgraded the corporate family rating of Tata Motors to B3 from B1. The outlook remains negative. The rating change reflects Tata Motor's limited financial flexibility, high gearing as well as imminent refinancing risk in the context of weak market conditions in India and overseas Moody's said.

But, India's largest tractor maker by sales Mahindra & Mahindra rose 1.78% after the company bought back foreign-currency convertible bonds worth $6.5 million at a discount.

Metal stocks reversed early losses supported by China's plans to boost spending. Hindalco Industries, National Aluminum Company, Steel Authority of India, Tata Steel, Sterlite Industries India fell by between 0.22% to 4.38%. China is the world's largest consumer of a number of industrial commodities. It is the world's biggest consumer of copper.

Fears of rising defaults in a weakening economy and hopes that lower lending rates will revive sluggish loan growth triggered volatility in bank stocks.

India's largest private sector bank by net profit ICICI Bank fell 0.11% to Rs 269.30. It hit a high of Rs 284.25 and a low of Rs 252.75. ICICI Bank today said it has cut rates on new home loans by 0.25% to 0.5%. Its American Depository Receipts (ADR) fell 12.26% on Thursday, 5 March 2009.

India's second largest private sector bank by operating income HDFC Bank gained 0.05% to Rs 801.10. It hit a high of Rs 828.45 and a low of Rs 774. Its ADR fell 7.67% overnight.

India's largest bank in terms of assets and branch network State Bank of India rose 0.67%. The bank has reduced deposit rates by 40 to 50 basis points across maturities. The new rates would be effective from 9 March 2009.

India's largest dedicated housing finance firm by operating income HDFC rose 6.4% to Rs 1223.35 after 36.42 lakh shares or 1.28% equity changed hands in six different block deals on BSE and NSE combined.

Dewan Housing Finance Corp rose 10% after the company said its board approved raising Rs 105 crore via a rights issue.

Wall Street Finance soared 17.79% on reports Reliance Capital is set to take a controlling stake in the company.

Despite a steep cut in policy rates by Reserve Bank of India (RBI) since October 2008, there has not been a commensurate reduction in lending rates by banks as fears of rising bad loans have made them cautious in increasing advances/lending. One reason why banks have not fully passed on the central bank rate cuts to customers is because higher bond yields are pushing up their funding costs. Bond yields and bond prices are inversely related.

Bond yields were little changed in thin trade on Friday with sentiment cautious ahead of the Rs 12000-crore debt auction. The market sentiment was hurt after the central bank set a lower cut-off price of Rs 107.60 at the buyback auction of the 7.99% government bonds maturing in 2017, below market expectations of Rs 107.80, late on Thursday.

Between 19 December 2008 and 13 February 2009, commercial banks lent only Rs 8091 crore to firms, one-tenth of the Rs 86978 crore lent in the same period a year earlier, as per the latest RBI data.

India's largest drug maker by sales Ranbaxy Laboratories fell 2.15%, falling for the second straight day on reports the Australian drug regulator is investigating allegations by US drug regulators that one of Ranbaxy's plants falsified data for drug approvals. A recent investigation by the US food and drug administration had found that Ranbaxy Laboratories had falsified data and test results of medicines manufactured at its Himachal Pradesh facility in India to obtain marketing approval in the United States.

Other healthcare stocks, Piramal HealthCare, Panacea Biotech, Pfizer, Novartis India fell by between 0.27% to 8.74%.

Wockhardt rose 1.9% on reports foreign drug firms are vying a significant stake in Wockhardt's biotechnology business.

KEC International was locked at 5% upper limit at Rs 121.60 on bagging three orders aggregating to Rs 365 crore.

Alphageo India surged 4.61% on bagging an order worth Rs 39.01 crore.

Satyam Computer Services clocked the highest volume of 2.48 crore shares on BSE. ICICI Bank (1.52 crore shares), Cals Refineries (92.57 lakh shares), Unitech (81.79 lakh shares) and Jaiprakash Associates (73.26 lakh shares) were the other volume toppers in that order.

ICICI Bank clocked the highest turnover of Rs 411.03 crore on BSE. HDFC (Rs 410.04 crore), Reliance Industries (Rs 236.59 crore), Reliance Capital (Rs 159.71 crore) and Educomp Solutions (Rs 117.39 crore) were the other turnover toppers in that order.

Crude drops again

Prices fall as traders anticipate extremely weak job report

Crude prices fell on Thursday, 05 March, 2009 as traders panicked about tomorrow's impending job report which is expected to show drastic layoffs in USA's job market in almost last sixty years. Prices fell as traders thought that this is going to curb energy demand in coming months.

On Thursday, crude-oil futures for light sweet crude for April delivery closed at $43.61/barrel (lower by $1.77 or 3.9%) on the New York Mercantile Exchange. Last week, crude ended higher by 12%. For the month of February, crude prices had ended higher by 1.5%.

Prices reached a high of $147 on 11 July, 2008 but have dropped almost 69% since then. Year to date, in 2009, crude prices are higher by 2.7%. On a yearly basis, crude prices are lower by 69%.

US stocks were back in the red since the very start on Thursday, 05 March, 2009. Financial sector put immense pressure on stocks as Citigroup shares dropped below $1 for the first time ever. Economic reports that checked in were mixed in nature.

The EIA had reported yesterday that U.S. crude inventories, excluding those in the Strategic Petroleum Reserve, fell by 700,000 barrels in the week ended 27 February, 2009. Market was expecting an increase of 2.2 million barrels. U.S. refiners operated at 83.1% of their operable capacity last week, up from the 81.4% a week ago. The EIA also reported gasoline inventories rose by 200,000 barrels, and distillate stockpiles, which include diesel and heating oil, rose 1.7 million barrels.

Prices had been sliding since past couple of months after fear gripped the US economy that US banks might be nationalized.

OPEC has been trying to cut production consistently in order to step up prices from their current low levels. There has been conflicting reports in the market regarding the fact that OPEC is likely to reduce output in March, 2009. OPEC has already agreed to cut cartel quotas by 4.2 million barrels a day since September, equivalent to about 5% of global oil demand. The cartel is supposed to meet on 15 March at Vienna.

April reformulated gasoline fell 5% to $1.3127 a gallon, and April heating oil dropped 4.5% to $1.1598 a gallon.

April natural gas for April delivery fell 5.8% to end at $4.088 per million British thermal units. EIA reported today that U.S. natural gas inventories fell by 102 billion cubic feet in the week ended 27 February, 2009. At 1,793 billion cubic feet, stocks were 270 billion cubic feet higher than last year at this time and 218 billion cubic feet above the five-year average.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for March delivery closed at Rs 2,290/barrel, higher by Rs 13 (0.6%) against previous day's close. Natural gas for February delivery closed at Rs 215/mmbtu, lower by Rs 3.5/mmbtu (1.6%).

NTPC

We recommend a sell in National Thermal Power Corporation (NTPC) from a short-term trading perspective. It is apparent from the charts that the stock was on an intermediate-term uptrend from its October 2008 low of Rs 113 to its January 2009 high of Rs 192. However, it reversed direction after encountering significant resistance at around Rs 192. From this resistance level, the stock has been on a medium-term downtrend. On March 5, the stock conclusively penetrated its 50-day moving average as well as the intermediate-term up trendline by tumbling 3.8 per cent. The volume was above average during the decline. The daily relative strength index is on the verge of entering into the bearish zone from the neutral region. Moreover, the moving average convergence and divergence indicator is signalling a sell and is on the brink of entering the negative territory. Taking into the consideration, the penetration of the up trendline, we are bearish on the stock. We expect the stock to decline until it hits our price target of Rs 155 in the approaching trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 181.

Selling spree continues

The market took a sharp dip after an initial surge and continued moving southwards, as shares across sectors came under the grip of relentless selling pressure.

The session was marked with extreme volatility. After a firm opening at 8535, around 89 points above its previous close of 8446, the markets failed to capitalise on the gains and drifted into the negative territory in the afternoon. Heavyweights as well as banking, gas & oil, power, FMCG and capital goods stocks contributed to the fall and dragged the index to an intra-day low of 8167. Sensex finally closed ended 2.94% or 249 points lower at 8198, while Nifty pared 69 points to 2577.

Market breadth was extremely negative with losing stocks outnumbering the gainers by a wide margin. Of the 2,468 stocks traded on the BSE, 1,679 stocks declined, whereas 703 stocks advanced. Eighty stocks ended unchanged. Among the sectoral indices, BSE Bankex shed 4.15% followed by BSE Oil & Gas (down 3.71%), BSE Power (down 3.26%) and BSE FMCG (down 3.26%).

Of the 30 stocks trading in Sensex basket, only five stocks managed to close in the positive territory. Among the major losers, Ranbaxy Laboratories tumbled by 9.27% at Rs144.40, ICICI Bank plunged 5.17% at Rs269.60, Tata Power slumped 5.07% at Rs640.10, Reliance Industries dropped 5% at Rs1,149.10, HDFC Bank shed 4.54% at Rs800.70, Hindustan Unilever lost 4.50% at Rs230.05 and Bharat Heavy Electricals declined by 3.84% at Rs1,284.30. Other frontline stocks were down by 1-3% each. Sun Pharmaceutical Industries however bucked the downtrend and rose 2.19% at Rs997.60 while JP Associates at Rs66.70, Tata Consultancy Services gained 0.42% at Rs463, Wipro advanced 0.19% at Rs206.25 and Sterlite Industries at Rs245.50 was up around 0.04% each.

Over 86.85 lakh shares of Satyam Computer Services changed hands on the BSE followed by Punjab National Bank (81 lakh shares), Unitech ( 78 lakh shares), ICICI Bank (77

Turnover surges

SBI March 2009 futures at discount

Nifty March 2009 futures were at 2558, at a discount of 18.70 points as compared to the spot closing of 2576.70. Turnover in NSE's futures & options (F&O) segment increased to Rs 46,285.97 crore from Rs 40,624.43 crore on Wednesday, 4 March 2009.

State Bank of India (SBI) March 2009 futures were at discount at 917 compared to the spot closing of 934.35.

Oil & Natural Gas Corporation March 2009 futures were at discount at 648.70 compared to the spot closing of 650.05.

Reliance Industries March 2009 futures were at discount at 1147.65 compared to the spot closing of 1149.80.

In the cash market, the S&P CNX Nifty lost 68.50 points or 2.59% at 2576.70.

Asian Markets closes mixed

Investors booked profits following a rally yesterday buoyed by expectations of additional economic stimulus measures from China

Stock markets in Asian region closed mixed on Thursday, 5 March 2009, after investors booked some profits following a rally yesterday buoyed by expectations that China, the world's third largest economy, will announce additional economic stimulus measures. While assurances from China's Premier Wen Jiabao helped some markets extend the rally on Thursday, more sobering news on the global economy restricted big gains.

Stocks on Wall Street closed higher on Wednesday, despite foreboding unemployment numbers in the U.S., as an assist from China lifted the blue-chip indices off of multiyear lows. The Dow Jones Industrial Average rose 149.82 points, or 2.2%, to 6875.84, and the S&P 500 climbed 16.54 points, or 2.4%, to 712.87. The Nasdaq added 32.73 points, or 2.5%, to 1353.74.

Positive sentiment came after reports that the Chinese government will announce further stimulus measures, sending the Shanghai Composite Index higher by 6.1%, and after promising numbers on the Asian nation's economy. The official purchasing managers' index rose to 49.0 in February from 45.3 in January, according to the China Federation of Logistics and Purchasing. Although the index still indicates contraction, it's approaching the point, 50, of no change and is well above a record low of 38.8 last November.

In the commodity market, crude oil snapped its gaining streak of three days in New York, after extending yesterday's surge in the morning session, as China said it will significantly increase investment in 2009 to boost its economy, potentially draining ample supplies of the fuel.

Oil climbed 9% yesterday after an official said Chinese Premier Wen Jiabao may announce new measures to spur expansion, adding to a 4 trillion Yuan ($585 billion) spending plan. A U.S. government report yesterday showed an unexpected decline in crude-oil inventories last week as OPEC cut production. Crude oil supplies fell 757,000 barrels to 350.6 million barrels in the week ended 27 February 2009, the Energy Department said in a report yesterday.

Crude oil for April delivery fell $1.09 cents, or 2.40%, to $44.99 a barrel at 10:09 a.m. London time on the New York Mercantile Exchange. Yesterday, futures rose $3.73 to $45.38.

Brent crude oil for April settlement decreased $1.32 cents, or 2.86%, to settle at $44.80 a barrel on London's ICE Futures Europe exchange at 10:09 a.m.

Gold staged a modest bounce on Thursday after falling for eight days to a three-week low, but the rally lacked strength as the metal's safe-haven appeal appears to have waned in the wake of a rise in equities. Spot gold was at $US912.20 an ounce in Asian trade, up 0.61% from its notional close on Wednesday, when it fell as low as $US900.95, the lowest since 10 February 2009.

In the currency market, the Japanese yen was quoted at 99.4 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7585 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trades, the Australian dollar ended the local session higher on Thursday as investor sentiment rose on a fresh stimulus plan for China's economy. At the closing bell, the Australian dollar was at $US0.6433, up from Wednesday's close of $US0.6326. During the day, the unit moved between $US0.6415 and $US0.6497

In Wellington trades, the NZ dollar ended the day at US50.20c. The currency rose today, as investors felt more comfortable with the global economic outlook as they anticipated China will stimulate its economy more.

The South Korean currency fell against the U.S. dollar after reversing its four days losing streak yesterday. The local currency ended at 1568 won against the U.S. dollar, down 17 won from Wednesday's close of 1,551 won.

Foreign exchange trading by banks in South Korea fell at the fastest rate in almost 11 years last quarter due to increased currency market volatility; the central bank was quoted as saying by Yonhap News Agency – the national news agency.

The daily foreign exchange turnover averaged US$44.2 billion in the October-December period, down 22.5% from three months earlier and the sharpest quarterly drop since the first quarter of 1998, according to the Bank of Korea (BOK). For all of 2008, however, the daily trading volume rose 19.6% on-year to $55.4 billion, slowing from a 53.4% gain in 2007, it added.

The Taiwan dollar strengthened further as it was trading at NT$ 34.9620 up by NT$ 0.105 from yesterday's close of NT$35.067

Philippines peso climbed to a six-day high level against the greenback in early trading hours. The dollar-peso pair that closed Wednesday's North American session at 48.61 is currently trading at 48.6850.

Coming back in equities, in Japan, equities gained for the second day in a row on Thursday. The regional markets rose sharply on short covering, led by automakers, exporters, shipping companies and construction and machinery stocks linked to the Chinese-economy. Japanese Nikkei 225 Stock Average index advanced 142.53 points, or 1.95%, to 7,433.49, while the broader Topix added 9.51 points, or 1.30%, to 741.55.

On the economic front, combined pretax profits at Japanese companies plummeted 64.6% on the year to 5.05 trillion yen in the October-December period of 2008 to mark the fourth straight quarter of decline, according to data released Thursday by the Ministry of Finance.

In Mainland China, shares markets closed the day higher than the previous closing as a 6-decade-high fiscal deficit budget was announced. The benchmark Shanghai Composite Index rose 1.04% or 22.97 points to close at 2221.08. The Shenzhen Component Index was up 0.18 %, or 14.59 points to 8242.28.

Chinese Premier Wen Jiabao announced at the opening of the parliament's annual session on Thursday morning a 950 billion Yuan (139.1 billion U.S. dollars) deficit budget, which was close to 3 percent of the country's gross domestic product (GDP).

The deficit budget is nearly three-fold of the previous record high deficit, which is 319.8 billion Yuan in 2003, but economists said it remained an expansion in a safe range and it would be necessary to spend even more if the country's economic growth further weakened in the second quarter of this year. The total fiscal deficit in 2008 was only 180 billion Yuan.

In Hong Kong, stock markets in Hong Kong turned lower, after ending the four days of losing streak on yesterday. The early gains were wiped out after Chinese Premier Wen Jiabao failed to announce new stimulus measures in a key address, dealers said. Wen said that he was confident China would still achieve growth of about 8% this year, but did not announce fresh measures on top of the 4 trillion Yuan or HK$4.53 trillion stimulus plan unveiled last year.

The Hang Seng Index ended slumped by 119.91 points, or 0.97%, to 12,211.24 - its lowest close since 27 October 2008 when market closed at 11015.84. The Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, declined 47.62 points, or 0.69% to 6,900.75

In Australia, Stock market in Australia snatched its four days of losing streak, ushering an improvement in manufacturing index of China and a triple-digit gain on Wall Street overnight. Commodity and oil prices also climbed higher, while gold prices staged a modest bounce after falling for eight days. Australia's market regulator extended a ban on the short selling of financial securities until 31 May 2009 supported the gains.

The benchmark S&P/ASX200 gained of 22.10 points or 0.7% ending the day at 3,188.40 – first positive closing since 26 February 2009. The broader All Ordinaries added 22.9 points or 0.7% closing at 3,148.80 – recovering from the lowest close since August 2003.

In a market related news, the Australian Securities and Investments Commission has extended the ban on short selling of financial stocks in place to 31 May 2009 in order to ease selling pressure on bank and investment stocks amid the global financial crisis. The ban was imposed on 22 September 2009, amid sharp drops in global banking stocks as the financial crisis gathered pace. Regulators in the US and UK imposed similar bans at the time and have since lifted them.

In New Zealand, share market continues its upward journey with the benchmark index up almost 1%. At the closing bell, the benchmark NZX50 advanced 0.89% or 22.058 points to close at 2491.401. The NZX 15 rose 1.14% or 52.893 points to 4709.409.

On the economic front, New Zealand's seasonally adjusted total wholesale trade sales decreased 2.3% ($526 million) for the December 2008 quarter. This is the second consecutive quarterly fall in total sales, after a 1.0% ($237 million) decrease in the September 2008 quarter. Part of the sales decrease this quarter was due to a reclassification of some activity from primary product food wholesaling to manufacturing.

The largest contributors to this quarter's decrease were falls in metal and mineral wholesaling, down 19.1% ($197 million); electrical and electronic equipment wholesaling, down 11.4% ($121 million); and primary product food wholesaling, down 5.0% ($100 million).

Meanwhile, the economic downturn continues to impact on new vehicle sales in New Zealand with February passenger car registrations of 3,795 down 28% in January and also down by a massive 38.5% in February 2008. According to the motor industry association, commercial vehicle registrations of 1,263 fared slightly better with this number up on January but down 37% on the same month last year.

In South Korea, stock market closed the marginally lower, snapping its two days of gains, as banks stocks tumbled due to their exposures to ailing shipbuilders. The Korea Composite Stock Price Index decreased by 1.08 point or 0.1% closing the day at 1,058.18.

On the economic front, South Korea's export-based economy is continuing to suffer due to the global financial crisis and ensuing recession, but the government will use all possible measures to help the nation make a turnaround, Seoul's finance minister said today.

Adding more to the gloom, South Korea's vehicle production skidded 15.2% in February as a global recession ravaged demand, an industry group said Thursday. Production of cars, trucks and buses dropped to 237,356 vehicles last month, marking the ninth consecutive monthly decline, according to statistics released by the Korea Automobile Manufacturers Association

In another development, credit card spending in South Korea slowed sharply in the first two months of the year as consumers tightened their belts amid an economic downturn. The Credit Finance Association said that the nation's total credit card bills stood at 47.99 trillion won ($31.2 billion) in the January-February period, up 5.2 percent from the same period last year. The annual increase rate was 9.1 percent for December and 18.1 percent for all of 2008, it said. The drastic slowdown in the use of plastic comes as a big blow to credit card companies that are suffering from a surge in overdue bills stemming from the slumping economy.

In Philippines, the stock market continued to take an uphill for the third consecutive day, overshadowing the dismal inflation figures, buoyed by the positive sentiments of investors, ahead of the monetary policy meeting of the Philippines monetary board today. The benchmark index PSEi soared 2.03% or 38.38 points to 1,924.30, while the All Share index climbed 1.76% or 21.40 points to 1,233.84

In Taiwan, stock market travel faster on the road of recovery, as after a Wall Street rally and as China's stimulus package triggered strong buying in tourism issues including hotel operator Formosa Hotel. The main Taiex share index continued upward momentum as it added 95.78 points or 2.11% at 4,637.20, posting the highest closing since 7 January 2009 when market spurted to 4789.84

On the economic front, Taiwanese businesses are expected to continue to reduce their work forces in the second quarter of this year, after the number of jobs in the economy fell by a net of nearly 120,000 over the previous two quarters. According to survey results released by the Council of Labor Affairs (CLA) conducted during 9-23 January among 3,025 businesses with 30 employees or more.

In another economic release, according to the statistics compiled by the ITRI (Industry & Technology Intelligence Services) of the Department of Industrial Technology, under Ministry of Economic Affairs, despite of the Big Three automakers teetered, with Saab also filing for bankruptcy and Opel feeling insecure due to GM`s woes, and the construction sectors in the USA and Spain reportedly battered, the hand tool makers in Taiwan still managed to turn out products valued at NT$59.26 billion or US$1.7 billion in 2008, a 0.4% growth, with its exports, however, dropping slightly by 0.7% annually to NT$55.7 billion.

Though hand toolmaker are showing some profits it should come as no surprise that Taiwan's automotive industry including both assembled vehicles and auto parts is shifting into lower gear. In the fourth quarter of 2008, output in the industry plunged by 14.7% from the same period of 2007 to NT$88.28 billion US$2.59 billion, according to the government-sponsored Industry & Technology Intelligence Services of the Industrial Economics & Knowledge Center (IEK-ITIS) under the Industrial Technology Research Institute.

In India, a surprise cut in policy rates by the Reserve Bank of India (RBI) failed to lift spirits on the bourses with the Sensex tumbling to its lowest level in more than four months. Sustained selling by foreign funds, weak rupee and weak European markets weighed on the sentiment.

The BSE 30-share Sensex closed down 248.57 points, or 2.94%, to 8,197.92. At the day's low of 8,166.97, the Sensex lost 279.52 points in mid-afternoon trade; it's lowest since 27 October 2008. The S&P CNX Nifty was down 68.50 points, or 2.59%, to 2,576.70.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.27% or 2.31 points to 869.24, while Indonesia's Jakarta composite decreased by 1.316 points or 0.10% to 1,288.07. In Thailand, the Thai Stock exchange fell 0.75 points or 0.18% to 417.11.

In other regional market, European shares declined on Thursday, as oil producers gave back some of the previous session's sharp gains, with interest rate decisions from the European Central Bank and the Bank of England on tap later in the session.

On a national level in Europe, the U.K. FTSE 100 index dropped 0.6% to 3,622.84, the German DAX 30 index declined 1% to 3,849.43 and the French CAC-40 index fell 0.6% to 2,660.19.

BSE Bulk Deals to Watch - March 5 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
5/3/2009 531923 DHAMPURE SGR MADHUKOCHER B 47418 13.00
5/3/2009 533055 EDSERV SOFT MAJESTIC SALES PROMOTION P LTD S 87105 70.87
5/3/2009 531137 GEMSTONE INV RAJESHPRAVINBHANUSHALI S 40683 23.20
5/3/2009 530263 GLOBAL CAP M UNIFLEX CARRYING CO. PVT. LTD S 122200 17.60
5/3/2009 505576 GOLDCRES FIN JYOTI J MEHTA B 137978 16.00
5/3/2009 505576 GOLDCRES FIN GENTEEL TRADING CO PVT. LTD. S 137848 16.00
5/3/2009 511728 KZLEASING SURESHBHAI NANJIBHAI JOSHI B 40000 59.08
5/3/2009 511728 KZLEASING ISHITA COTTON INDUSTRIES LIMITED B 35000 58.61
5/3/2009 511728 KZLEASING SAPNA NAINESH JATNIA B 16000 58.55
5/3/2009 511728 KZLEASING KARAN MAHESHKUMAR HADVANI B 36217 58.52
5/3/2009 511728 KZLEASING JYOTIKABEN MAHESHBHAI HADVANI B 17000 58.50
5/3/2009 511728 KZLEASING SURESHBHAI NANJIBHAI JOSHI S 40000 58.50
5/3/2009 511728 KZLEASING DIVYA STOCK BROKING LTD S 25000 58.53
5/3/2009 511728 KZLEASING KARAN MAHESHKUMAR HADVANI S 19604 58.54
5/3/2009 532313 MAHINDRALIFE FIDELITY INVESTMENT MANAGEMENT HK LTD AC FID FUND MAURITIUS LTD B 507000 92.00
5/3/2009 532313 MAHINDRALIFE MORGAN STANLEY MAURITIUS COMPANY LIMITED S 507269 92.00
5/3/2009 508989 NAVNEET PUBLICATIONS (I) LTD. INTERACTIVE TECHNOLOGIES PVT L B 500000 38.05
5/3/2009 508989 NAVNEET PUBLICATIONS (I) LTD. ANJALEE EXIM PRIVATE LIMITED S 500000 38.05
5/3/2009 532461 PUNJAB NATBK THE CHILDREN INVST FD MAGT UK LLP THE CHILDRENS INVT MASTER FUND S 8166000 292.10
5/3/2009 523523 RAINBOW PAPE MANOJ CHHAGANLAL RATHOD HUF B 70100 35.00
5/3/2009 531626 SILVER SMITH B K NARULA HUF B 31330 8.65
5/3/2009 532887 SUJANATOWER BLACKSTONE ASIA ADVISORS LLC AC INDIA FUND INC S 460000 8.44
5/3/2009 531390 UPSURGE INVS BHANUMATIDHARAMRAJGIRI S 415000 10.12

NSE Bulk Deals to Watch - March 5 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
05-MAR-2009,EDSERV,Edserv Softsystems Limite,BP FINTRADE PRIVATE LIMITED,BUY,190792,71.01,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,DKG SECURITIES PVT. LTD.,BUY,130000,71.97,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,HARBUX SINGH SIDHU,BUY,70236,71.15,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,MULTIPLIER S AND S ADV PVT LTD,BUY,145139,70.65,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,NIRMAN MANAGEMENT SERVICES,BUY,469210,70.69,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,SARAVANA STOCKS PRIVATE LIMITED,BUY,100000,70.60,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,BUY,72050,70.60,-
05-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,BUY,128275,1567.51,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,ARTISTIC FINANCE PVT. LTD.,BUY,600000,8.45,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,COMET HOLDINGS LTD,BUY,600000,7.95,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,FINANCIAL & MANAGEMENT SERVICES LTD.,BUY,405053,7.95,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,JAI MAA VINIMAY PVT LTD,BUY,276455,7.95,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,MERLIN HOLDINGS PVT LTD.,BUY,267518,8.33,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,BP FINTRADE PRIVATE LIMITED,SELL,190816,71.24,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,HARBUX SINGH SIDHU,SELL,80236,70.60,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,HS FII INVESTMENTS LIMITED,SELL,281449,70.60,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,MULTIPLIER S AND S ADV PVT LTD,SELL,145192,70.94,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,NIRMAN MANAGEMENT SERVICES,SELL,362355,70.73,-
05-MAR-2009,EDSERV,Edserv Softsystems Limite,VIJIT ASSET MANAGEMENT PRIVATE LIMITED,SELL,72050,70.60,-
05-MAR-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD,SELL,127975,1568.42,-
05-MAR-2009,EMAMILTD,Emami Limited,AMITABH GOENKA,SELL,441000,202.00,-
05-MAR-2009,PNB,Punjab National Bank,TCI CYPRUS HOLDING LTD,SELL,2578881,296.45,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,BLACKSTONE ASIA ADVISORS,LLC,SELL,1710767,8.33,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,CITIGROUP GLOBAL MKTS MAURITIUS PVT LTD- SELL CODE,SELL,855440,7.95,-
05-MAR-2009,SUJANATOW,Sujana Tower Limited,SHANTI GESTION A/C SHANTI INDIA,SELL,367000,8.18,-

Post Session Commentary - March 5 2009

Indian market tanked more than 2.5% to its lowest in more than four months as rate cut by the central bank late on Wednesday was not enough to bring back confidence. On 4th March 2009, the RBI announced the slash in repo and reverse repo rates, each by 50 basis points with immediate effect. Along with this, drop in inflation number for the week ended 21st Feb 2009, to 3.03% was also unable to bring any sign of recovery. Further, uncertainty over health of global economy also dampened the sentiments.

The domestic market opened on positive note tracking firm cues from the markets all over the world The US stock markets break the five session of loosing streak and closed higher on Wednesday, after the Federal officials announced details of the mortgage-rescue plan to stem mortgage defaults. However, shortly after positive opening, benchmark indices surrounded by the negative sentiments that interest rates cut by the RBI failed to motivate the economy. Further, benchmark indices continued to extend its losses on significant selling pressure over the ground. Incessant Sharp slide was clogged only on the closing of trading. Most of the Asian markets also came off the day's high to close lower and European stocks are also trading lower. BSE Sensex ended around 8,200 mark and NSE Nifty closed below 2,600 level. From the sectoral front, most of the indices ended in red and among those heavy selling was contributed mainly by Bank, Oil & Gas, Power, FMCG, Capital Goods, PSU and Metal stocks. BSE Mid Cap and Small Cap stocks also followed the same trend. However, Consumer Durable index was in limelight as witnessed most of the buying from this basket.

Among the Sensex pack 25 stocks ended in red territory and 5 in green. The market breadth indicating the overall health of the market remained extremely negative as 1686 stocks closed in red while 699 stocks closed in green and 85stocks remained unchanged in BSE.

The BSE Sensex closed lower by 248.57 points at 8,197.92 and NSE Nifty ended down by 68.50 points at 2,576.7. BSE Mid Caps and BSE Small Caps ended with losses of 45.25 points and 54.16 points at 2,603.11 and 2,936.01 respectively. The BSE Sensex touched intraday high of 8,535.03 and intraday low of 8,166.97.

Losers from the BSE Sensex pack are Ranbaxy Lab (9.27%), ICICI Bank (5.17%), Tata Power (5.07%), Reliance (5%), HDFC Bank (4.54%), HUL (4.5%) and NTPC Ltd (3.84%).

Gainers from the BSE Sensex pack are Sun Pharma (2.19%), JP Associates (1.91TCS Ltd (0.42%), Wipro Ltd (0.19%) and Sterlite Industries (0.04%).

Inflation slipped seven year low to 3.03% for the week ended February 21 as against 3.36% reported in the previous week. This fall was mainly due to lower prices of food items such as fruits, vegetables, tea and some manufactured items. The annual inflation was at 3.36% in the week before and at 5.69% in the corresponding week last year.

On 4th March 2009, the Reserve Bank of India announced the cut in repo and reverse repo rates, each by 50 basis points with immediate effect. Along with this, the repo, the rate at which the RBI lends short-term funds to banks, currently stands at 5% from 5.5% and the reverse repo, the rate at which the RBI borrows from banks, at 3.5% from 4%.

On the global markets front the Asian markets which opened before the Indian market, ended mixed after losing initial gains. Sentiments turned weak as there was no declaration of awaited additional stimulus package by China. Shanghai Composite and Nikkei 225 ended up by 22.97 and 142.53 points at 2,221.08 and 7,433.49 respectively. However, Hang Seng, Straits Times index and Seoul Composite ended lower by 119.91, 25.70 and 1.08 points at 12,211.24, 1,518.64 and 1,058.18 respectively.

European markets which opened after the Indian market are trading in red. In London FTSE 100 is trading lower by 51.33 points at 3,594.54 and in Frankfurt the DAX index is trading down by 58.48 points at 3,832.42.

The BSE Bank index lost (4.15%) or 161.49 points at 3,728.22 on fears of rising defaults in a weakening economy. Losers are Kotak Bank (7.54%), Axis Bank (6.74%), Yes Bank (5.22%), ICICI Bank (5.17%) and Karnataka (4.69%).
The BSE Oil & Gas index closed with decrease of (3.71%) or 216.99 points at 5,625.26. Scrips that lost are Aban Offshore (9.84%), Reliance Nat Res (7.31%), Reliance (5%), Reliance Pet (5%) and HPCL (2.41%).

The BSE Power index also lost (3.26%) or 54.41 points to close at 1,615.49. Suzlon Energy (5.23%), Tata Power (5.07%), Siemens Ltd (4.28%), GVK Power (4.20%) and NTPC Ltd (3.84%) ended in red.

The BSE FMCG index ended lower by (3.26%) or 63.49 points to close at 1,886.73. HUL (4.50%), Britania (3.89%), ITC Ltd (3.57%), Colgate Palm (1.84%) and United Spr (1.76%) ended in positive territory.

The BSE Capital Goods index ended down by (2.63%) or 148.12 at 5,476.75 on worries that a slowing economy will crease orders. Losers are Gammon Indi (7.03%), Alstom Proje (6.54%), Everest Kant (6.01%), Suzlon Energy (5.23%) and Praj Indus (5.13%).

The BSE Consumer Durables stocks gained (0.52%) or 7.69 points to close at 1,482.18. Gainers are Videocon Ind (1.68%), Titan Ind (1%) and Rajesh Export (0.22%).

Canara Bank lost 4.14%. The bank has slashed the interest rates for the housing loans as well as the vehicle loans and the domestic term deposits effective from March 11. For home loans up to Rs30 lakh, the interest rate would be at 8.25% for the first one year while 9.25% for the next 48 months. While the BPLR minus 2.50% subject to a minimum of 10% thereafter.

JSW Steel dropped 0.34%. The company has reported a growth of 8.5% in Steel production in February 2009 compared to that of corresponding month in the last fiscal year. However, the production in February rose 3% from January.

Ranbaxy tumbled 9.27% despite securing USFDA approval for Quinapril+HCTZ Tablets. The company has received an approval from the USFDA for its Abbreviated New Drug Application (ANDA) and Quinapril Hydrochloride & Hydrochlotothiazide (Quinapril + HCTZ) Tablets, 10mg/12.5mg, 20 mg/12.5mg and 20mg/225mg.

Infosys Technologies fell 1.26% to Rs. 1,208.50 after foreign broker Wachovia Capital Markets slashed rating on the stock to ''underperform'' from ''market perform''.

ICICI Bank plunged 5.17%. S&P has lowered their credit rating to A-1 from A-1+ on ICICI's $375 million Bank of America-backed commodity paper program as ICICI commercial paper holders will be paid directly by Bank of America on maturity.

Sensex at 3-year closing low; RELIANCE tumbles

A surprise cut in policy rates by the Reserve Bank of India (RBI) failed to lift spirits on the bourses with the Sensex tumbling to 3-year closing low. Sustained selling by foreign funds, weak rupee and weak European markets weighed on the sentiment. Bond prices gave up initial gains which also weighed on equities. The BSE 30-share Sensex was down 248.57 points, or 2.94%, off close to 340 points from the day's high.

Index heavyweight Reliance Industries (RIL) led the decline. FMCG, banking and capital goods stocks also declined.

After opening on a positive note on higher Asian stocks and the Reserve Bank of India's latest effort to boost liquidity, the market soon slipped into red as sustained selling by foreign funds and a weak rupee weighed on the sentiment. A sharp slide was witnessed in morning trade as some Asian markets came off the day's peak as there was no announcement of an additional stimulus package by China which the investors were expecting.

The market extended losses in early afternoon trade. It came off the day's low in afternoon trade. The market tanked to the fresh day's low in mid-afternoon trade as European shares dropped in early trade. A bout of volatility was witnessed in the last 40 minutes of trade as day trades squared positions.

Heavy selling by foreign funds has dampened investor sentiment. FII outflow in February 2009 totaled Rs 2707 crore. FII outflow in calendar year 2009 totaled Rs 8519.30 crore (till 4 March 2009). Globally, investors are pulling out money from hedge funds, forcing hedge fund managers to dump assets. At the same time, global banks and insurers are selling assets after amassing $1.2 trillion of credit losses and writedowns since the start of 2007. More recently, fears have intensified about the exposure of Western European banks and companies to deteriorating economic conditions in Eastern Europe.

Domestic institutional investors (DIIs) have been absorbing selling by foreign funds. Yet, at a time of sustained selling by foreign funds, a recovery or stability of the rupee is vital. A weak rupee will dissuade foreign funds from making aggressive buying of Indian shares.

The Instanex FII Index fell 2.83% to 184.20, its lowest level since 28 October 2005, marginally outperforming the Instanex DII 15 Portfolio which was down 2.97%. The Instanex FII Index tracks the price performance of the portfolio of listed Indian equity shares owned by FIIs. Instanex DII 15 Portfolio tracks the price performance of the portfolio of listed Indian equity shares owned by DIIs.

The rupee's recent sharp slide, meanwhile, has added to the woes of those Indian firms which have borrowed overseas. The slide in the rupee will increase in the cost of servicing overseas debt to the extent of the rupee's slide unless the company (which has overseas borrowings) has adopted an effective hedging strategy.

The Reserve Bank of India (RBI) after the market hours on 4 March 2009, announced cut in repo rate and reverse repo rate by 50 basis points each, with immediate effect. It is expected that the reduction in the policy interest rates will further encourage banks to provide credit for productive purposes at viable interest rates, RBI said in a release. RBI said it will continue to maintain ample liquidity in the system.

Meanwhile, the wholesale price index rose 3.03% in the 12 months to 21 February 2009 below the previous week's annual rise of 3.36% government data showed on Thursday.

According to a domestic brokerage, the latest RBI rate cut will set the ball rolling for lower interest rates in the economy and increase credit flow to individuals and the corporate sector. The latest rate cut brings the reverse repo to 3.5%, identical to the rate at which banks mobilize savings deposits. The lower repo rate in turn could dissuade banks from parking surplus funds with the RBI and increase lending, it notes. Banks have been parking large sums of money with RBI through the repo window.

European shares fell in early trade on Thursday ahead of interest rate decisions in Britain and the euro zone. The key benchmark indices in France, Germany and UK were down by between 1.99% to 2.52%. The European Central Bank and the Bank of England are holding policy meeting today.

The Bank of England may cut its benchmark interest rate by a half percentage point to 0.5% while European Central Bank will probably cut its rate by a half-point to 1.5%.

Asian stocks were mixed after China's Premier Wen Jiabao pledged to significantly increase investment in the world's third-largest economy and said 8% growth target for this year is within reach. Key benchmark indices in China, Japan and Taiwan rose by between 0.89% to 2.11%. But key benchmark indices in Hong Kong South Korea and Singapore fell by between 0.1% to 1.66%.

Trading in US index futures indicated the Dow could fall 87 points at the opening bell. Earlier, the futures were mildly higher.

US markets rebounded off 12-year lows on Wednesday after the Obama administration launched its mortgage-rescue plan to stem mortgage defaults. The market shrugged off a bleak beige-book report. According to the Fed's beige book, the Fed does not expect a significant economic recovery until late 2009 or early 2010. The Dow Jones industrial average gained 149.82 points, or 2.2%, to 6,875.84. The S&P 500 index rose 16.54 points, or 2.4%, to 712.87.

The BSE 30-share Sensex was down 248.57 points, or 2.94%, to 8,197.92, its lowest closing since 2 November 2005. At the day's low of 8,166.97, the Sensex lost 279.52 points in mid-afternoon trade. At the day's high of 8,535.03 Sensex rose 88.54 points in early trade.

The S&P CNX Nifty was down 68.50 points, or 2.59%, to 2,576.70, its lowest closing since 20 November 2008.

The Sensex is down 1,449.39 points or 15.02% in calendar 2009 from its close of 9,647.31 on 31 December 2008. The S&P CNX Nifty is down 382.45 points or 12.92% in calendar 2009 from its close of 2,959.15 on 31 December 2008. The Instanex FII Index has fallen 16.56% in 2009 so far.

The BSE clocked a turnover of Rs 3416 crore, higher than Rs 2868.60 crore on Thursday, 4 March 2008.

Nifty March 2009 futures were at 2558, at a discount of 18.70 points as compared to the spot closing of 2576.70. Turnover in NSE's futures & options (F&O) segment increased Rs 46,285.97 crore from Rs 40,624.43 crore on Wednesday, 4 March 2009.

The market breadth, indicating the overall health of the market turned weak in contrast to a strong breadth earlier in the day. On BSE, 715 shares advanced as compared with 1,703 that declined. A total of 69 shares remained unchanged.

The BSE Mid-Cap index (down 1.71%) and BSE Small-Cap index (down 1.81%) outperformed the Sensex.

The BSE Consumer Durables index (up 0.52%), the BSE Realty index (down 0.84%), the BSE IT index (down 1.07%), the BSE Auto index (down 1.07%), the BSE TECk index (down 1.41%), the BSE Healthcare index (down 1.56%), the BSE Metal index (down 1.77%), the BSE PSU index (down 2%), the BSE Capital Goods index (down 2.63%), outperformed the Sensex.

The BSE Bankex (down 4.15%), the BSE Oil & Gas index (down 3.71%), the BSE Power index (down 3.26%), the BSE FMCG index (down 3.26%), underperfomed the Sensex.

From the 30 share Sensex pack, 25 stocks fell while rest gained.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) fell 5% to Rs 1,149.10 after combined crude processing at its two export-focused plants at Jamnagar in Gujarat dived 12.1% to 6,68,450 barrels per day (bpd) in January 2009 over January 2008. Reliance commissioned its new 5,80,000 bpd plant in December 2008, turning Jamnagar into the world's biggest refining complex with capacity of 1.24 million bpd.

The board of Reliance Industries on Monday, 2 March 2009, approved the absorption of its unit Reliance Petroleum (RPL) and set a share swap ratio giving it direct control of the world's largest refinery complex. Reliance Industries said it would issue one share for every 16 held in RPL, which runs a refinery.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation fell 1.9% after foreign brokerage Goldman Sachs said the government took $20 billion cash from the company without consulting minority shareholders.

Banking stocks extended recent sharp slide as fears of rising defaults in weakening economy offset hopes a further fall in interest rates may boost lending growth and gains in American Depository Receipts (ADRs) overnight. India's largest private sector bank by net profit ICICI Bank fell 5.17%. Its American Depository Receipts (ADR) rose 4.04% on Wednesday, 4 March 2009. India's second largest private sector bank by operating income HDFC Bank slipped 4.54%. Its ADR rose 3.86% overnight.

India's largest bank in terms of assets and branch network State Bank of India fell 2.4%. The bank has reduced deposit rates by 40 to 50 basis points across maturities. The new rates would be effective from 9 March 2009.

Despite a steep cut in policy rates by Reserve Bank of India (RBI) since October 2008, there has not been a commensurate reduction in lending rates by banks as fears of rising bad loans have made them cautious in increasing advances/lending. One reason why banks have not fully passed on the central bank rate cuts to customers is because higher bond yields are pushing up their funding costs. Bond yields and bond prices are inversely related.

Between 19 December 2008 and 13 February 2009, commercial banks lent only Rs 8091 crore to firms, one-tenth of the Rs 86978 crore lent in the same period a year earlier, as per the latest RBI data.

Nonetheless, lower interest rate have helped automobile sales rebound in the past few months. The stimulus packages announced by the government since December 2008 has started having some positive impact.

Meanwhile, bond yields recouped most of the initial losses triggered by the surprise RBI rate cut. The benchmark 10-year bond yield fell to an intraday low of 6.23%, but pared the fall to 6.42%, two basis points below Wednesday's close. The yields pulled back as investors positioned themselves for a $2.3 billion bond sale on Friday, 6 March 2009. A record government borrowing programme for the year staring 1 April 2009 is weighing on bond prices.

India's largest FMCG major by sales Hindustan Unilever slumped 4.5% after foreign brokerage JPMorgan Chase & Company cut its rating on the stock to 'underweight' from 'neutral', citing weakening growth and increasing competition. Other FMCG stocks, REI Agro, Britannia Industries, ITC, Tata Tea, Nestle India, fell by between 0.35% to 4.92%.

But Marico rose 1.29% as one of the promoters increased his stake in the company.

Capital goods stocks fell on worries a slowing economy will crimp orders. ABB, Larsen & Toubro, Bharat Heavy Electricals, Praj Industries, Thermax, Punj Lloyd fell by between 0.13% to 5.18%.

Rate sensitive realty stocks dropped on reports falling interest rates have failed to revive housing demand .DLF, Indiabulls Real Estate and Unitech fell by between 0.17% to 5.04%. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

Outsourcing focussed IT firms edged higher on a weaker rupee. India's third largest software services exporter Wipro rose 0.19%. Its ADR gained 7.09% on Wednesday. India's largest software services exporter by sales TCS rose 0.42%.

But India's second largest software services exporter Infosys Technologies fell 1.26% after its Chief Financial Officer V. Balakrishnan said in an interview to a news agency that the company is seeing a slowdown in getting new outsorcing contracts even though are no large-scale cancellations. Its ADR had gained 4.33% overnight.

The partially convertible rupee was at 51.77 per dollar, weaker than its previous close 51.53/55. The rupee has declined sharply in the past few days. A weak rupee boosts revenues of IT firms in rupee terms as IT companies earn a lion's share of revenue from exports.

But there have been concerns of cut back in technology spend by global firms amid a recession in the US economy and due to the global financial sector crisis. IT firms derive a lion's share of revenue from exports to US.

India's largest drug maker by sales Ranbaxy Laboratories slumped 9.27% on reports the Australian drug regulator is investigating allegations by US drug regulators that one of Ranbaxy's plants falsified data for drug approvals.

A recent investigation by the US food and drug administration had found that Ranbaxy Laboratories had falsified data and test results of medicines manufactured at its Himachal Pradesh facility in India to obtain marketing approval in the United States.

Other healthcare stocks, Dr Reddy's Laboratories, Pfizer, Biocon, Cipla, Wochardt fell by between 0.14% to 3.27%.

Metal stocks fell on profit taking after recent jump supported by China's plans to boost spending. Hindalco Industries, Steel Authority of India, Tata Steel, Sterlite Industries India fell by between 1.91% to 2.94%. China is the world's largest consumer of a number of industrial commodities. It is the world's biggest consumer of copper.

As per reports, China will boost spending in areas including infrastructure and manufacturing on top of the 4 trillion yuan stimulus package unveiled in November 2008.

Auto shares fell after recent gains due to jump in February 2009 vehicle sales. TVS Motor Company fell 1.71%. Its two wheeler sales rose 13% to 1,07,301 units in February 2009 over February 2008.

India's largest commercial vehicle maker by sales Tata Motors fell 2.66% As per recent reports the company plans to bring the Nano, the world's cheapest car, to Europe by 2011. Tata Motors will begin selling the Rs 1-lakh car Nano in India in April 2009.

Recently, Tata Motors reported improved vehicle sales. Tata Motors' total domestic sales for the month of February 2009 at 42,493 units, were the highest in the last 4 months. Domestic commercial vehicle sales at 23,454 units were the highest since September 2008 and domestic passenger vehicle sale at 19,039 units were was the highest since May 2008. The total domestic sales, however, declined 15% in February 2009 over February 2008.

But, India's largest car maker by sales Maruti Suzuki India fell 1.96%. Maruti during trading hours on Monday 2 February 2009 reported 24.1% rise in sales to 79190 units in February 2009 over February 2008.

India's largest tractor maker by sales Mahindra & Mahindra fell 1%. Recent reports said the company is looking to grow business from the defence sector through global partnerships. Recently, M&M recorded 10.8% growth in total volumes to 29,017 units in February 2009 over February 2008.

But India's largest motorcycle maker by sales Hero Honda Motors rose 0.99%. Hero Honda's sales rose 24% to 3,29,055 units in February 2009 over February 2008.

Tata Power Company tumbled 5.07% on reports the company may face difficulties repaying $850 million debt used to buy stakes in two Indonesian mines as coal prices decline.

Satyam Computer Services clocked the highest volume of 86.88 lakh shares on BSE. Unitech (78.05 lakh shares), ICICI Bank (77.83 lakh shares), Cals Refineries (70.55 lakh shares) and Jaiprakash Associates (68.36 lakh shares) were the other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 316.40 crore on BSE. Akruti City (Rs 221.20 crore), ICICI Bank (Rs 216.14 crore), ICICI Bank (Rs 216.14 crore), HDFC (Rs 202.74 crore) and State Bank of India (Rs 162.47 crore) were the other turnover toppers in that order.

Market may start buoyant

The benchmark indices, Sensex and Nifty, are expected to commence on a firm note and witness significant rally during intra-day trades, as international markets backed by firm US and Asian indices may help the sentiment remain buoyant. On the technical front, the Nifty could test in the 2700-2750 range on the upside and has supports in the 2600 - 2550 range, while the Sensex has a likely support at 8295 and may face resistance at 8600.

US indices posted gains on Wednesday on a report that China's economy may be improving and as government officials unveiled details of the $75 billion foreclosure fix. while the Nasdaq added 33 points to close at 1354 and Dowjones gained 150 points at 6876.

All of the Indian ADRs except satyam traded firm on the US bourses. Tata Motors led the pack with gains of 9.88% while Wipro, Rediff, Patni Computers, Infosys, VSNL, MTNL, HDFC Bank and Dr Reddy gained around 2-7% each.

Crude oil prices in the US market surged, with the Nymex light crude oil for April delivery raising by $3.72 to close at $45.38 per barrel . In the commodity segment, the Comex gold for April series lost $6.90 to settle at $906.70 a troy ounce.

Pre Session Commentary - March 5 2009

Today domestic markets are likely to open positive as the RBI has reduced the Repo and Reverse Repo rates by 50bps each to 5% and 3.5% from the previous 5.5% and 4% respectively. This rate cut would probably bring down the borrowing cost of commercial banks and simultaneously the banks may pass on the benefit to the final consumers by reducing their PLR. Besides, the phenomenal positive closing of the US markets is likely to spur positive sentiments in domestic arena. The Asian markets have however opened with less zeal, but in the domestic markets one could anticipate some fresh buying sentiments along with the essence of volatility.

On Wednesday, the domestic markets traded highly volatile but managed to close in green. Since the opening bell the investors were not sure of any movements as there was no specific news to support the trend. The sense of fear and anxiety was visible from the northward and southward movement of the benchmark indices. The Asian and European markets had similar kind of trade and therefore the global cues kept the investors dump. Sectors like Metal, Oil & Gas, HC and Auto were up by 2.80%, 1.15%, 1.05% and 0.92% respectively. On the other sectors like Bankex, CD, CG and Power closed with losses of 1.50%, 1.46%, 0.34% and 0.09% respectively. During the session we expect the markets to be trading positive with an essence of volatility.

The BSE Sensex closed high by 19.20 points at 8,446.49 and NSE Nifty ended up by 22.80 points at 2,645.20. The BSE Small cap and Mid Cap closed with losses of 8.77 points and 19.39 points at 2,648.36 and 2,990.17 respectively. The BSE Sensex touched intraday high of 8,501.46 and intraday low of 8,373.24.

On Wednesday, the US stock markets closed in green after snapping the fifth consecutive losing streak. Investors resorted to fresh buying and short covering as many stocks had fallen nearly 10% in the continuous five day southward trade. On the other hand the US investors responded positively to the news that China will add nearly $586 billion to its fiscal plan and industrial heavyweights would be the primary beneficiary. On the dark side, according to the latest ADP Employment Report, 697,000 jobs were lost in February. The consensus estimate called for 630,000 job losses. The ADP report isn''t always precise in counting job losses, but has been accurate in forecasting trends. US light crude oil for April delivery rose by $3.73 to settle at $45.38 a barrel on the New York Mercantile Exchange. The crude prices rose on the back of the government''s weekly supply report showed that crude stockpiles decreased by 700,000 barrels in the week ended Feb. 27, 2009.

The Dow Jones Industrial Average (DJIA) inclined by 149.82 points to close at 6,875.84 The NASDAQ Composite (RIXF) index inclined by 32.73 points to close at 1,353.74 and the S&P 500 (SPX) grew by 16.54 points to close at 712.87.

Today major stock markets in Asia are trading positive. Shanghai composite is up by 39.50 points to 2,237.61 along with Hang Seng that is trading higher by 14.81 points at 12,345.96 and South Korea''s Seoul Composite is up by 4.45 points at 1,063.71. Japan''s Nikkei is also up by 197.62 points at 7,488.58 and Singapore''s Straits Times is flat at 1,537.48.

Indian ADRs closed higher. In technology sector, Wipro ended up by 7.09% along with Infosys by 4.33%. Further, Satyam lost 1.50% while Patni Computers closed up by 5.57%. In banking sector ICICI Bank and HDFC Bank gained 4.04% and 3.86% respectively. In telecommunication sector, MTNL advanced by 4.12% and Tata Communication gained 3.85%. Sterlite Industries increased by 8.76%.

The FIIs on Wednesday stood as net sellers in equity and debt. Gross equity purchased stood at Rs 651.10 Crore and gross debt purchased stood at Rs 237.20 Crore, while the gross equity sold stood at Rs 1,297.40 Crore and gross debt sold stood at Rs. 426.30 Crore. Therefore, the net investment of equity and debt reported were Rs (646.30) Crore and Rs (189.20) Crore respectively.

On Wednesday, the Indian rupee closed at 51.53/55, 0.8% weaker than its previous close of 51.95/97. The concerns of falling stock markets and apprehensions about foreign money inflow pulled the rupee for the eight day session.

On BSE, total number of shares traded were 20.97 Crore and total turnover stood at Rs 2,550.79 Crore. On NSE, total number of shares traded were 46.47 Crore and total turnover was Rs 7,777.36 Crore.

Top traded volumes on NSE Nifty – ICICI Bank with 25291532, Unitech with 23795640 shares, SAIL with 20069928 shares, Suzlon with 14257423 shares followed by Tata Steel with 12273535 shares.

On NSE Future and Options, total number of contracts traded in index futures was 929572 with a total turnover of Rs 11,575.71 Crore. Along with this total number of contracts traded in stock futures were 411341 with a total turnover of Rs 11,030.52 Crore. Total numbers of contracts for index options were 1263218 with a total turnover of Rs 16,913.93 Crore and total numbers of contracts for stock options were 37197 and notional turnover was Rs 1,104.26 Crore.

Today, Nifty would have a support at 2,612 and resistance at 2,703 and BSE Sensex has support at 8,394 and resistance at 8,573.

SGX Nifty still negative

SGX Nifty currently trading at 2,622.5 and is -12.5 points

DOW After hours - 40 down

US stocks join the party

Wall Street takes cue from Asian stocks overnight

The new Chinese stimulus plan, gave a good boost to stocks at Wall Street today, Wednesday, 04 March, 2009 and US stocks ended with good gains today. The rally was induced by some sort of strength witnessed in the overseas market overnight. China's stimulus package to bolster its economy is perhaps being witnessed as a way to save the world from the ongoing recession. Economic reports disappointed as expected at Wall Street today. But stocks seem to have discounted these things already.

Market started the day in the green and remained quite strong for the day though ended off its session highs. The Dow Jones Industrial Average ended higher by 149 points at 6,875, the Nasdaq closed higher by 32 points at 1,353 and the S&P 500 closed higher by 17 points at 712. Indices would have fared better but for GE, whose shares tumbled 20%.

Eight of the ten sectors in the green led by materials and energy sectors. But financials, which had started the day on a strong note, ended in the red. With today's gain, market ended its five day losing streak.

Shares of GE plummeted today as investors panicked that the company may lack the capital to maintain its AAA credit rating despite lowering its dividend.

At Wall Street today, the ADP employment index reported that the U.S. labor market worsened in February, as private-sector firms cut 697,000 jobs in February,2009. The drop in ADP index was the largest ever, dating back to 2001. January's loss was revised sharply lower to 614,000 from 522,000 reported a month ago.

In a separate report, the Institute for Supply Management reported that U.S. nonmanufacturing sectors contracted at a faster pace in February as the global slowdown continued to take its toll. The ISM non-manufacturing index fell to 41.6% in February from 42.9% in January as survey respondents' comments reflected concern about financing and general weak economic conditions.

Federal Reserve's Beige Book garnered very less attention today. According to the Fed's Beige Book, the Fed does not expect a significant economic recovery until late 2009 or early 2010.

Weekly inventory report by the Energy Department and China's stimulus plan pushed crude prices higher for the second straight day on Wednesday, 04 March, 2009. Oil prices once again rose today in synchronization with stocks at Wall Street today. On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $45.38/barrel (higher by $1.5 or 8.9%) on the New York Mercantile Exchange. Last week, crude ended higher by 12%. For the month of February, crude prices had ended higher by 1.5%.

The EIA reported today that U.S. crude inventories, excluding those in the Strategic Petroleum Reserve, fell by 700,000 barrels in the week ended 27 February, 2009. Market was expecting an increase of 2.2 million barrels. U.S. refiners operated at 83.1% of their operable capacity last week, up from the 81.4% a week ago.

Tomorrow there are quite a few economic reports scheduled. Economic data for tomorrow include revised fourth quarter productivity, weekly new unemployment claims and January factory orders. Other than that, retailers will be in focus as they report their February same-store sales results.

Daily News Roundup - March 5 2009

S&P cuts ICICI Bank commercial paper rating to A-1 from A-1+. (ET)

Moody's lowers Tata Steel debt rating to Ba2. (ET)

NTPC to borrow 70% of the total Rs177bn needed for expansion during 2009-10. (BL)

Government seeks information from Tata Communications on end use of funds. (ET)

Fertilizer units object to Reliance Industries KG gas sales draft. (FE)

IBM leads the race to acquire Satyam Computers. (BS)

PTC moves to the Supreme Court against CERC over power trading. (BS)

HPCL is in talks with Reliance Industries to run its petrol pumps in India. (BS)

IOC plans to sell bonds to bring down borrowings. (ET)

Essar Oil approves merger of its wholly owned subsidiary Essar Oil Vadinar with itself. (ET)

Australian regulator TGA is reviewing 62 drugs sold by Ranbaxy in the country. (ET)

Kalpataru Power Transmission bags order worth Rs3.7bn from Power Grid. (BL)

BEML enters into a partnership with Sumber Mitra Jaya of Indonesia to bid for contract mining business in India. (BL)

Bajaj Auto Finance to buyback NCDs with face value of Rs500 from open market. (BS)

Hexaware cuts basic pay by 50% for 350 employees on bench and by 2%-10% for higher level employees. (BL)

BMC to withdraw notice sent to Bombay Dyeing asking the company to stop development work at its mills. (ET)

Mcleod Russel acquires Vietnam based Phu Ben Tea company for US$2mn. (ET)

Kingfisher Airlines is in talks with Arik Air to lease aircrafts. (BL)

 

RBI cuts repo and reverse repo rates by 50bps each. (ET)

Government may allow Indian companies to enter into share-swap deals with foreign firms to facilitate merger and acquisition activity. (ET)

Indian exports and imports for the month of February fell by 13% and 18% respectively. (ET)

Government has allowed companies located within SEZs to claim service tax refunds even for services consumed outside the tax free export zone. (BS)

Finance ministry says no relaxation of FBT norms for exporters. (BS)

Cement dealers in western region have raised retail prices by Rs5 per 50kg bag. (BL)

A Nasscom team has said the Indian IT industry would have to remain watchful for the next three to four weeks. (FE)

29 FDI proposals worth Rs6bn cleared by the government. (FE)

Temporary relief for bulls!

It's better to do nothing with your money than something you don't understand.

The banks will have to do something with the money they hold. The RBI has finally blinked and cut short-term rates by 50 bps in its continuing bid to nudge banks to lower borrowing costs.

Policy rates have already been slashed considerably since October. Banks too have done their bit, especially the nationalised ones. Private banks have been a little reluctant in cutting rates. The moot point is whether banks are willing to give up lazy banking and start lending again in a big way. A reverse repo rate below 4% should discourage banks from parking funds with the RBI.

But, the real issue is not with supply (liquidity), but the sluggish demand. Customers and banks continue to be risk averse. It is the crisis of confidence which is plaguing the markets, not only in India but across the world. Unless there is a reversal in this trend, we are unlikely to see a sustained advance in stocks.

Coming to today's market, the key indices are primed for further gains on the back of RBI's latest monetary offensive and a rebound in global equities. The advance may be temporary though, given the multitude of headwinds confronting us.

FIIs were net sellers in the cash segment on Wednesday at Rs4.94bn, while the local institutions pumped in Rs1.19bn. In the F&O segment, the foreign funds were net buyers at Rs7.93bn. On Tuesday, FIIs were net sellers in the cash segment at Rs6.46bn. Mutual Funds were net sellers of Rs1.04bn.

US indices rebounded on Wednesday after five straight days of losses, thanks largely to industrial and commodity shares, on hope of more stimulus spending from the Chinese government. The market opened higher and for once it managed to hold on to the momentum following reports that China's economy may be improving. The sentiment also took some heart from the details of the US$75bn foreclosure plan.

The Dow Jones Industrial Average jumped 150 points, or 2.2%, to end at 6,875.84. Earlier in the session, the Dow had been up more than 250 points. The broader S&P 500 index rose 16.5 points, or 2.4%, to close at 712.87. The tech-heavy Nasdaq Composite index surged 33 points, or 2.5%, to finish at 1,353.74.

On Tuesday, the Dow and S&P 500 ended at fresh 12-year lows. It was the fifth straight loss for the three major indexes. The S&P 500 and Dow industrials are both more than 50% off their all-time highs from October 2007.

Traders bought shares of heavy-equipment, metals and oil companies on bets that Beijing will step up its attempts to stimulate China's economy. Aluminum major Alcoa and construction machinery manufacturer Caterpillar led the Dow advance, both up about 13%.

But, General Electric (GE) was down almost 5%, as investors feared that the conglomerate with a legendary AAA credit rating may face a downgrade that could push it into a cash shortage and funding problems.

China said on Wednesday that its manufacturing activity increased for the third straight month. Asian markets were also supported by reports that the Beijing government will add to its US$585bn stimulus program. The Shanghai Composite Index surged 6.1%. Japan's Nikkei ended up nearly 1%.

Federal officials announced details of the President Barack Obama's US$75bn foreclosure prevention plan and the program opened for business on Wednesday. The foreclosure fix aims to modify home loans so monthly payments are no more than 31% of monthly gross income. The plan will offer incentives to borrowers and loan service providers and investors to help struggling homeowners make their payments.

Job market data released showed continued weakness, but a mixed message about whether there's an improvement underway. Payroll-processing company Automatic Data Processing said the private sector lost 697,000 jobs in February - more than the 630,000 jobs economists were expecting.

Meanwhile, the number of planned job cuts announced in February fell for the first time since December, according to a report from outplacement firm Challenger, Gray & Christmas Inc. US employers announced 186,350 job cuts, down 23% from January's 241,749 cuts, according to Challenger.

Investors were bracing for the government's reading on the labor market which is due on Friday. The Labor Department report is expected to show that the economy shed 650,000 jobs in February, more than the 598,000 reported for January, according to a consensus estimate of economists. The unemployment rate is expected to rise to 7.9% from 7.6%.

A report released early in the morning showed further contraction in the service sector in February. The Institute for Supply Management's non-manufacturing index fell 1.3% to 41.6 in February from the month prior. The drop was not as steep as economists were predicting, however.

As global equities rallied, government debt prices fell. The benchmark 10-year note was down, sending its yield higher to 2.98%. Bond prices and yields move in different directions.

Lending rates were nearly unchanged. The 3-month Libor rate rose to 1.28% from 1.27% on Tuesday while the overnight Libor rate eased to 0.31% from 0.32%. Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London.

Meanwhile, oil prices settled up US$3.73, or almost 9%, to US$45.38 a barrel. The government's weekly supply report showed that crude stockpiles decreased by 700,000 barrels in the week ended Feb. 27, while analysts expected an increase of 2.2 million barrels.

The dollar lost ground against the euro and the British pound, but rose against the yen.

COMEX gold for April delivery fell US$5.80 to US$907.80 an ounce.

The weekly jobless claims report will be released on Thursday. The number of Americans who filed for unemployment for the first time was expected to decrease to 650,000 from 667,000 the prior week, according to a consensus estimate of economists.

Also, factory orders for January are expected to have fallen 3.5% after having fallen 3.9% in the previous month.

In Washington, Federal Reserve Vice Chairman Donald Kohn is scheduled to testify at a Senate Banking Committee hearing on what happened with insurance giant American International Group.

European markets ended higher with companies exposed to China performing particularly well after government data raised hopes for a recovery in economic activity in that country.

The pan-European Dow Jones Stoxx 600 index climbed 3.9% to 167.61 on Wednesday, taking back some of the nearly 7% in losses made in the first two trading sessions of the week.

National equity markets finished in the black, with the UK's FTSE 100 index up 3.8% to 3,645.87, while Germany's DAX 30 index was up 5.4% at 3,890.94 and the French CAC-40 index gained 4.7% to 2,675.68.

Amid high volatility, Indian market ended on a flat but a slight positive note on Wednesday. After three days of losses, bulls finally had an upper hand as the discount in the Nifty March futures dropped to mere 10 points indicating short covering.

The Nifty managed to hold above the 2,600 level throughout the day, however on the higher side, sell on every rise was witnessed. The Nifty saw selling pressure every time the index went past the 2,650 levels.

Alternate bouts of buying and selling often tossed the benchmark index in positive and negative terrain. Even a positive start to equity markets across Europe had a minimal impact on the sentiments today.

The metal's, oil & gas, Pharma and auto stocks were in demand. However, the banking along with capital goods stocks suffered the most.

The BSE Sensex marginally gained 19 points to close at 8,446 and the NSE Nifty was up 22 at 2,645.

Among the 30-components of Sensex, 22 stocks ended in positive terrain and only 8 stocks ended in the red. Reliance Infra, Grasim, TCS, JP Associates, Hindalco, Sterlite and Wipro were among the major gainers. Among the major laggards were, ICICI Bank HDFC, BHEL, SBI and RCom.

Among the major BSE Sectoral indices BSE Metal index was the top gainer, the index rose 3%. Among the other major gainer were BSE Oil & Gas index (up 1.1%), BSE Pharma index (up 1%) and BSE Auto index (up 1%).

However, the BSE Mid-cap and the BSE Small-cap index slipped 0.5% each.

Market breath was negative, 1,438 stocks declined against 997 advances, while, 100 stocks remained unchanged.

Shares of Aurobindo Pharma surge by over 3% to Rs160 after the company announced that it received tentative approval for Escitalopram Oxalate Tablets 5mg, 10mg and 20mg from the US Food & Drug Administration (USFDA). The scrip touched an intra-day high of Rs164.7 and a low of Rs158 and recorded volumes of over 0.2mn shares on BSE.

Shares of HDFC slipped to a new 52-week low of Rs1128 losing over 3%. The stock has plunged by over 140% from its peak of Rs2950.

Towards the end the stock slightly bounced back to end at Rs1161. The scrip touched an intra-day high of Rs1230 and a low of Rs1228 and recorded volumes of over 0.7mn shares on BSE.

Shares of Himatsingka Seide surged by over 8% to Rs20 after almost 940,000 equity shares changed hands in 2 transactions. The scrip touched an intra-day high of Rs20.3 and a low of Rs18.5 and recorded volumes of over 0.4mn shares on BSE.

Shares of Kotak Bank slipped by 1.2% to Rs233 after ~1.39mn shares of the company changed hands in a single block on BSE. The scrip touched an intra-day high of Rs242 and a low of Rs230 and recorded volumes of over 1.6mn shares on BSE.

Shares of Ashok Leyland slipped by 2% to Rs16.2. The company announced that its February sales dropped 56% at 3,245 units against 7,501 units in the same period previous year. The scrip touched an intra-day high of Rs16.4 and a low of Rs15.8 and recorded volumes of over 1.4mn shares on BSE.

Shares of M&M gained by 1% to Rs314 after report stated that the company was in talks with Lockheed Martin and BAE for a naval JV. The scrip touched an intra-day high of Rs319 and a low of Rs310 and recorded volumes of over 0.2mn shares on BSE.

Shares of Pfizer gained by 4.7% to Rs536 the company announced that it would license 50 generics from Aurobindo. The scrip touched an intra-day high of Rs536 and a low of Rs506 and recorded volumes of over 10,000 shares on BSE.

Shree Renuka Sugars

We recommend a buy on Shree Renuka Sugars stock from a short-term trading perspective. It is clearly visible from the charts of Shree Renuka Sugars that it has been on an intermediate-term uptrend from its 52-week low of Rs 41, recorded in late October. From this low, the stock has been forming higher peaks and higher toughs. In December, the stock conclusively breached its 21- and 50-day moving averages. Recently, the stock found support at Rs 77. On March 4, the stock resumed its intermediate-term uptrend by gaining 6 per cent with high volume. Daily and weekly relative strength indexes are rising in the neutral region towards the bullish zone. Considering that the intermediate-term up trendline is still in place; we are bullish on the stock from a short-term perspective. We anticipate the stock's up move to continue until it hits our price target of Rs 92 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 78.

Bullion metals end mixed

Gold ends lower for eighth straight day but silver shines

Gold prices ended lower for the eighth straight day on Wednesday, 04 March, 2009. Prices continued to fall as traders turned their attention to equity today reducing the appeal of the precious metals.

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 and also vice versa.

On Wednesday, Comex Gold for April delivery fell $6.9 (0.8%) to close at $906.7 an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 6%. For the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%. Year to date, gold prices are higher by 2.5%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped significantly (12.3%) since then.

On Wednesday, Comex silver futures for March delivery rose 18.5 cents (1.6%) to end at $12.9 an ounce. Prices fell to $12.43 earlier during the day. In February, 2009, silver had rose 4.3% after climbing 14% in January. Year to date, silver has climbed 17.1% this year. For 2008, silver had lost 24%.

In the currency market today, the dollar remained a bit weak against its counterparts. The dollar index ended lower by 0.6%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

US stocks started and ended the day on a strong note on Tuesday, 04 March, 2009, though it was off its session highs. The rally was induced by some sort of strength witnessed in the overseas market overnight. China's stimulus package to bolster its economy is perhaps being witnessed as a way to save the world from the ongoing recession. Economic reports disappointed as expected at Wall Street today. But stocks seem to have discounted these things already.

Last year, the weakening dollar and higher global demand for raw materials had led to records for commodities including gold. Gold reached a record in March 2008 as a U.S. housing slump and credit crisis spurred the Federal Reserve to slash borrowing costs. In the last move, the Federal Reserve has cuts its target bank lending rate to 0.25% from 5.25% in September, 2007. The Fed did it in nine steps.

Prior to 2008, 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 April delivery closed lower by Rs 277 (1.8%) at Rs 14,991 per 10 grams. Prices rose to a high of Rs 15,285 per 10 grams and fell to a low of Rs 14,966 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 70 (0.3%) lower at Rs 21,852/Kg. Prices opened at Rs 21,976/kg and fell to a low of Rs 21,737/Kg during the day's trading.

Crude shoots up again

Prices rise almost 9% as crude supplies drop

Weekly inventory report by the Energy Department and China's stimulus plan pushed crude prices higher for the second straight day on Wednesday, 04 March, 2009. Oil prices once again rose today in synchronization with stocks at Wall Street today.

On Wednesday, crude-oil futures for light sweet crude for April delivery closed at $45.38/barrel (higher by $1.5 or 8.9%) on the New York Mercantile Exchange. Last week, crude ended higher by 12%. For the month of February, crude prices had ended higher by 1.5%.

Prices reached a high of $147 on 11 July, 2008 but have dropped almost 69% since then. Year to date, in 2009, crude prices are higher by 6.6%. On a yearly basis, crude prices are lower by 67%.

The EIA reported today that U.S. crude inventories, excluding those in the Strategic Petroleum Reserve, fell by 700,000 barrels in the week ended 27 February, 2009. Market was expecting an increase of 2.2 million barrels. U.S. refiners operated at 83.1% of their operable capacity last week, up from the 81.4% a week ago.

The EIA also reported gasoline inventories rose by 200,000 barrels, and distillate stockpiles, which include diesel and heating oil, rose 1.7 million barrels.

Total products supplied over the past four-week period have averaged 19.5 million barrels per day, down by 1.3% compared with the similar period last year. Among them, motor gasoline demand has averaged 9 million barrels per day, up by 2.2% from the same period last year.

The possibility of additional Chinese stimulus also boosted oil prices today. As per reports in the market today, Chinese Premier Wen Jiabao is considering new stimulus measures, adding to a $585 billion spending plan to revive the country's economy.

Prices had been sliding since past couple of months after fear gripped the US economy that US banks might be nationalized.

OPEC has been trying to cut production consistently in order to step up prices from their current low levels. There has been conflicting reports in the market regarding the fact that OPEC is likely to reduce output in March, 2009. OPEC has already agreed to cut cartel quotas by 4.2 million barrels a day since September, equivalent to about 5% of global oil demand. The cartel is supposed to meet on 15 March at Vienna.

April reformulated gasoline rose 4.7% to $1.3816 a gallon, and April heating oil gained 2.5% to $1.1796 a gallon.

April natural-gas futures rose 0.7% to $4.31 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.

At the MCX, crude oil for March delivery closed at Rs 2,277/barrel, higher by Rs 170 (8.1%) against previous day's close. Natural gas for February delivery closed at Rs 218.5/mmbtu, lower by Rs 1.3/mmbtu (0.6%).