Crude ends little higher

Prices pare most of their early gains but manage to climb up

Crude oil ended little higher on Thursday, 07, May, 2009. Prices gave up earlier gains today. Still prices ended higher due to a couple of positive economic reports hitting the wires.

On Thursday, crude-oil futures for light sweet crude for June delivery closed at $56.71/barrel (higher by $0.37 or 0.7%) on the New York Mercantile Exchange. Last week, crude ended higher by 3.2%.

Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 61% since then. Year to date, in 2009, crude prices are higher by 20.4%. On a yearly basis, crude prices are lower by 43%.

Among major economic reports for the day, The Labor Department reported on Thursday, 07 May, 2009 that the number of initial claims in the week ended 2 May, 2009 fell 34,000 to stand at 601,000. The four-week average for first-time claims also fell, down 14,750 to 623,500.

The four-week average is considered a better gauge of labor market conditions than the volatile weekly figures because it smoothes out one-time distortions caused by holidays, bad weather or strikes. Reported weekly claims are one of the best tools for spotting turning points in the economy. A moderation in claims could mean that the pace of deterioration in the labor market is slowing.

The Labor Department also reported on Thursday, 07 May, 2009, that productivity rose in the first quarter as U.S. firms slashed their workforce, outpacing the drop in output. Compared with the first quarter in the prior year, productivity was up 1.8%, while unit labor costs rose 2.4%.

Yesterday, EIA had reported that crude inventories increased by 600,000 barrels in the week ended 1 May, 2009. Gasoline inventories fell by 200,000 barrels. Market was expecting a buildup of more than 2 million barrels in crude inventories and a 750,000 increase in gasoline inventories. Crude inventories, meanwhile, still remained at the highest level since September 1990.

The report also showed that total petroleum demand over the past four weeks was 7.9% lower than a year ago. EIA also reported U.S. refineries increased their capacity utilization of 85.3%, up from 82.7% a week ago.

Also at the Nymex on Thursday, June reformulated gasoline rose 3.75 cents, or 2.3%, to $1.6655 a gallon and June heating oil added 1.39 cents, or 0.9%, to $1.4852 a gallon.

Natural gas for June delivery rose 19.3 cents, or 4.1%, to $4.08 per million British thermal units. EIA reported on Thursday that U.S. natural-gas inventories rose 95 billion cubic feet in the week ended 1 May, 2009. Stockpiles were 491 billion cubic feet higher than last year at this time and 362 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 May delivery closed at Rs 2,768/barrel, lower by Rs 10 (0.35%) against previous day's close. Natural gas for May delivery closed at Rs 198.3/mmbtu, higher by Rs 7/mmbtu (3.65%).

Shipping Corporation

We recommend a 'buy' in the Shipping Corporation of India from a short-term horizon. It is clearly visible from the charts of Shipping Corporation that after finding support at Rs 70 in early March, a significant long-term support level, it bounced up. Since its March low, the stock has been on a medium-term uptrend. However, in mid-April the stock encountered resistance at around Rs 98 and witnessed a pull back to Rs 81, retracing 61.8 per cent (Fibonacci retracement) of its prior up move. Subsequently, the stock resumed its medium-term uptrend taking support from the up trendline recently. The stock is trading well above its 21 and 50-day moving averages. We notice that the volumes are high during the advance days. The daily relative strength index (RSI) has re-entered into the bullish zone from the neutral levels. The weekly RSI is gradually rising in the neutral region towards the bullish zone. Our short-term outlook is bullish on this stock. We expect the stock to move up until it hits our price target of Rs 102 in forthcoming trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 87.

via BL

Bullion metals shine

Precious metals rise for fourth straight day as European Central Bank cut interest rates

Precious metals ended higher for fourth straight time on Thursday, 07 May, 2009 at Comex. Prices rose today as European Central Bank cut interest rates and also due to the weak dollar.

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 Thursday, Comex Gold for June delivery gained $4.5 (0.5%) to close at $915.5 an ounce on the New York Mercantile Exchange. Earlier in the day, it rose to a high of $926.5. Last week, gold ended lower by 3%. Year to date, gold prices are higher by 2.9%.

For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.

On Thursday, Comex silver futures for July delivery gained 32.5 cents (2.3%) at $14.03 an ounce. Year to date, silver has climbed 18.2% this year. For 2008, silver had lost 24%.

Today, European Central Bank cut its benchmark interest rate to a record low of 1%, raising worries about global inflation.

In the currency market on Thursday, the dollar stayed weak against its counterparts. The dollar index, which weighs the strength of dollar against the basket of six other currencies fell by 0.1%.

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

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 June delivery closed higher by Rs 47 (0.32%) at Rs 14,533 per 10 grams. Prices rose to a high of Rs 14,655 per 10 grams and fell to a low of Rs 14,441 per 10 grams during the day's trading.

At the MCX, silver prices for May delivery closed Rs 325 (1.45%) higher at Rs 22,650/Kg. Prices opened at Rs 22,350/kg and rose to a high of Rs 22,826/Kg during the day's trading.

Rupee recovers

The Indian rupee recovered yesterday's losses and was up by 35 paise to close at a two and a half month high of 49.26/27 against the dollar in line with a smart rebound in local equity markets amid sustained capital inflows.

In active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit resumed higher at 49.30/32 a dollar
from its previous close of 49.61/62.

It later moved in the range 49.23-49.52 before closing the day at 49.26/27 a dollar.

Firm trends in Asian equity markets, including India, mainly boosted rupee sentiment. The Indian benchmark Sensex ended higher by over 164 points or 1.37 per cent after yesterday's fall of about 178 points.

Asian indices also ended firm while European markets resumed better on the back of favourable Wall Street advice.

The weakness of the dollar against most of the Asian currencies also helped rupee recovery.

Meanwhile, oil prices rose towards USD 58 a barrel today in Asia, extending gains to near six-month highs on investor expectations that global economic growth may begin to rebound by the end of the year.

The Reserve Bank of India (RBI) fixed the reference rate for the US dollar at Rs 49.46 and the euro at Rs 65.63. Rupee premiums on the forward dollar ended stable.

The benchmark six-month forward dollar premium payable in October ended at 65-1/2-67-1/2 paise from 66-1/2-68-1/2 paise
on Wednesday and the far-forwards maturing in April finished steady at its previous level of 107-109 paise.

In cross-currency trade, the Indian rupee rose against the pound sterling, the euro and the Japanese yen.

The rupee firmed up against the pound sterling at Rs 74.22/24 against its previous close of Rs 74.42/44 while improved further against the euro to Rs 65.54/56 from Rs 65.91/93.

It shot up against the Japanese yen to settle at Rs 49.60/62 per 100 yen from the last close of Rs 50.44/46.

Sensex closes firm; Sterlite zooms 13.78%

The Sensex ended on a firm note led by metal stocks, consumer goods, realty and banking stocks. It belled the day above 12,000 mark with a gain of 111.76 points, at 12,064.51 on reports that US bank stress tests will reassure investors. It proceeded to trade higher through the day on sustained buying interest seen in frontline stocks, touching a high of 12,143.95.

Secondline stocks also supported the sentiment. BSE Midcap and Smallcap index rose 2.75% and 2.66% respectively.

Amongst the sectoral indices, BSE Metal gained the most. The counter soared 8.22% followed by Consumer durables, which surged 3.72%, Realty and Bankex rose over 1% each, while FMCG declined 0.71%.

On global front, Asian stocks jumped to a seven-month high on better-than-estimated US and Australian jobs reports and an assurance from US Treasury Secretary Timothy Geithner that none of the country`s biggest banks are insolvent. Nikkei gained 408.33 points, or 4.55%, to end at 9,385.70, Hang Seng index advanced 383.32 points, or 2.28%, to close at 17,217.89 and Shanghai Composite went up 4.93 points, or 0.19%, to settle at 2,597.45.

European stocks rose, on speculation that banks don`t need as much capital as had been projected amid signs the worst of the recession may be over. FTSE climbed 105.29 points, or 2.39%, to trade at 4,501.78, CAC 40 gained 59.13 points, or 1.80%, to trade at 3,342.64 and DAX rose 73.18 points, or 1.50%, to trade at 4,953.89. (3.59 p.m., IST)

The Sensex ended the day with a gain of 164.19 points, or 1.37% at 12,116.94 after touching a high of 12,143.95 and a low of 11,981.13. The broad-based NSE Nifty climbed 58.85 points, or 1.62% at 3,683.90 after hitting a high of 3,692.05 and a low of 3,617.15.

Major gainers in the 30-share index were Sterlite Industries (India) (13.78%), Hindalco Industries (11.25%), Tata Steel (8.76%), Wipro (5.80%), Housing Development Finance Corporation (3.86%), and Maruti Suzuki India (3.72%).

On the other hand, Mahindra & Mahindra (2.83%), ACC (2.44%), Hindustan Unilever (1.68%), Grasim Industries (1.47%), NTPC (1.34%), and ITC (1.25%) were the major losers in the Sensex.

Overall market breadth was positive. Out of the total 2,616 stocks

JSW Steel May 2009 futures at premium

Turnover declines

Nifty May 2009 futures were at 3682.40, at a discount of 1.50 points as compared to the spot closing of 3,683.90. Turnover in NSE's futures & options (F&O) segment was Rs 48,471.10 crore, lower than Rs 57,634.57 crore on Wednesday, 6 May 2009.

JSW Steel May 2009 futures were at premium at 439.05 compared to the spot closing of 429.40.

Reliance Industries May 2009 futures were near spot price at 1916.15 compared to the spot closing of 1915.55.

State Bank of India May 2009 futures were near spot price at 1368.65 compared to the spot closing of 1369.50.

In the cash market, the S&P CNX Nifty gained 58.85 points or 1.62% at 3,683.90.

Asian Markets finds little stress ahead of Stress Test

Nikkei catch up regional rally while Hang Seng, Taiex, Shanghai notched gains for a sixth straight session

Stock market in Asian region closed mostly higher on Thursday, 7 May 2009, as investors cheered better-than-expected news about U.S. jobs and banks. Shares of financials and properties led the market on growing confidence about the global economic outlook, while exporters and automakers zoomed as yen softened against greenback.

On Wall Street, the stock markets closed modestly higher with financials out in front; particularly those whose capital needs were in the stress test discussion. The Dow Jones Industrial Average climbed 101.63 points, or 1.2%, to 8512.28, while the S&P 500 rose 15.73 points, or 1.7%, to 919.53. The Nasdaq edged up 4.98 points, or 0.3%, at 1759.10.

The day started on a positive note, as ADP estimated that there were 492,000 jobs lost in the private sector in April, well below the 645,000 expected and a downwardly revised 708,000 in March. Financials were at the forefront of advances. The Financial Selects Sector SPDR, which tracks the financial stocks in the S&P 500, and the KBW Bank Index were higher by 8% and 11.5%, respectively, a day before the release of the so-called stress test results.

In the commodity market, crude oil traded little changed near $56 a barrel after rising 4.6 percent yesterday on a smaller- than-expected increase in U.S. stockpiles and as equities advanced to a four-month high. Overall U.S. crude supplies rose to 375.3 million barrels last week, the highest since 1990, the Energy Department said.

Gasoline supplies fell 167,000 barrels to 212.4 million in the week ended May 1, the Energy Department report showed. Supplies of distillate fuel, a category that includes heating oil and diesel, rose 2.43 million barrels to 146.5 million last week, the highest since October 2006, according to the department.

Crude oil for June delivery fell 16 cents to $56.18 a barrel on the New York Mercantile Exchange at 10:41 a.m. in Sydney. Yesterday, the contract climbed $2.50 to settle at $56.34, the highest settlement since 14 November 2009.

Brent crude oil for June settlement increased $2.03, or 3.8%, to end yesterday's session at $56.15 on London's ICE Futures Europe exchange, the highest since 10 November 2009.

Gold traded little changed in Asia as investment demand faltered after gains in equities dimmed demand for the precious metal as an alternative investment. Gold for immediate delivery rose 0.1% to $911.79 an ounce at 9:51 a.m. Singapore time, up 2.9% for the week.

In the currency market, commodity currencies extend recent rally on better than expected employment data from Australia and New Zealand as well as strong rally in Asian stocks.

The Japanese yen softened against its most major counterparts on Thursday on speculation U.S. banks need less new capital than was projected, sapping demand for Japan's currency as a refuge from the global financial crisis. The Japanese currency quoted at 98.45 against the US dollar.

The Hong Kong dollar was trading at HK$ 7.7502 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 shot up a US cent to a new seven-month high on Thursday after a surprise jump in employment threw into doubt the need for more interest rate cuts in the next few months. The Aussie soared as high as $US0.7563, compared to $US0.7468 before the data and a low of $US0.7333 on Wednesday. At the close, the dollar had pulled back to $US0.7519, but was still up 6% in the past seven sessions.

In Wellington trades, the New Zealand dollar got a lift today from better-than-expected unemployment data. The unemployment rate rose to a six-year high of 5 percent in the March quarter, but it was a smaller rise than economists forecast, which suggested to some that the Reserve Bank may not cut interest rates further. The NZ dollar rose from US58.30c to US59.10c on the news. It was back US58.85c by 5pm, which was still up from US57.75c yesterday.

The South Koran won ended at 1,262.3 won against the U.S. dollar, up 14.7 won from Wednesday's close, after the central bank said that the country's foreign exchange reserves rose by the largest monthly amount over three years in April to $212.48 billion.

The Taiwan dollar continued to rally further. The Taiwan dollar strengthened against the US dollar as it was trading higher at NT$ 33.1150, up by NT$ 0.650 from Wednesday's close of NT$33.180.

Coming back in equities, the Asian markets stretched their winning streak, with financials again leading as investors chose to look at the bright side of economic and earnings data while they await results of the stress tests on U.S. banks. Japanese shares surged, catching up as trading resumed for the first time this week after the Golden Week holidays. Hong Kong, Taiwanese and Chinese shares notched gains for a sixth straight session.

In Japan, the stock market finished the session sharply higher on the first day of trading after the country's "Golden Week" holidays, with broad based gain across the board, as investors cheered better-than-expected news about U.S. jobs and banks. Shares of financials and properties led the market on growing confidence about the global economic outlook, while exporters and automakers zoomed as yen softened against greenback.

The Nikkei 225 Stock Average index climbed 408.33 points, or 4.55%, to 9,385.70, while the broader Topix index climbed up 39.08 points, or 4.6% to 886.

On the economic front, the Bank of Japan said in the statement that the monetary base in Japan gained 8.2% in April, standing at 95.62 trillion yen, following a 6.9% annual gain registered in March. Banknotes in circulation were up 1% on year reaching to 76.48 trillion yen, while coins in circulation eased 0.2% to 4.52 trillion yen. Current account balances jumped an annual 81.2% to 14.61 trillion yen, including a 69.7% rise in reserve balances. Seasonally adjusted, the monetary base was up 17.4% on year in April, coming in at 95.597 trillion yen.

In Mainland China, shanghai stock market recouped morning losses to finish the choppy session marginal higher, endured gains for six days in row, with rebound in the shares of energy and financials after the People's Bank of China said the economy was "better than expected" in the first quarter and the central bank pledged to keep money flowing into the financial system to sustain growth.

The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, rose 0.2%, or 4.92 points, to close at 2,597.44. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange slid 0.4% or 40.13 points to close at 10,108.94 points.

On the economic front, the State Council said China would give 20 billion Yuan this year in interest rate subsidies on bank loans to help industries including steel; petrochemical and automobile companies upgrade their technology.

In Hong Kong, the stock market finished the session higher, extending winning streak for sixth day in row, as gains in the shares of financials stocks on bolstering expectations for a recovery in the Chinese economy would revive demand and after U.S. Treasury Secretary Timothy Geithner said bank stress- test results will reassure investors. Metal and energy stocks leaped as metal and crude oil prices ballooned amid optimism the global economy was on the recovery path.

The Hang Seng Index spurted 383.32 points, or 2.28%, to 17,217.89, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, rose 146.72 points, or 1.5% to 9,896.93.

On the economic front, Hong Kong's official foreign currency reserve assets increased by 3.81% in April amounting to US$193.4 billion at the end of April 2009 compared to US$186.3 billion in March.

Including unsettled forward contracts, the foreign currency reserve assets of Hong Kong at the end of April 2009 stood at US$194.0 billion (end-March 2009: US$186.3 billion).

In Australia, the stock market finished the session higher, touched six-month closing high buoyed by miners, materials and resources, and energy stocks as metal and crude oil prices ballooned amid optimism the global economy was on the recovery path. Financials spurted after their peers on Wall Street soared. Meanwhile better than expected third quarter earning from Newscorp's fueling the rally.

The benchmark S&P/ASX200 index has gained 71.60 points, or 1.85%, to 3,938.7, while the broader All Ordinaries rose 72 points, or 1.87%, to 3,912.10.

On the economic front, the Australian Bureau of Statistics said unemployment rate has dropped from 5.7% in March to 5.4% in April.

In New Zealand, the share market ended the day in the positive region for the fourth day in a row. The stock market rose today, after it held back its gains slightly yesterday following a surge for the first two days of the week. Most of the Asian markets were also trading in the green terrain although they lost momentum relative to the early days of the week.

At the closing bell, the benchmark NZX50 advanced 0.83% or 23.514 points to close at 2854.87. The NZX 15 was up 0.68% or 35.454 points to close at 5263.90.

On the economic front, New Zealand's jobless rate continued to rise in the first quarter, although less than expected, as per Statistics New Zealand. In seasonally adjusted terms, the labour market continued to weaken in the March 2009 quarter, with the number of people unemployed continuing to rise. The unemployment rate increased for the fifth consecutive quarter, to reach 5.0 percent. Both the labour force participation rate and the number of people employed fell.

In South Korea, South Korean stocks closed 0.55% higher after swinging in and out of positive terrain as investors took comfort from Wall Street gains on eased fears over the results of a stress test on U.S. banks. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 7.63 points to 1,401.08, the highest level since the beginning of this year.

In Singapore, the stocks were finished the session higher, extending winning streak for sixth consecutive day, led by banks and properties. Metal and commodity stocks were firmer on the back of strong rally in commodity prices. Financial stocks outperformed after United Overseas Bank and Oversea-Chinese Banking Corporation reported yesterday first-quarter earnings that beat forecasts. Meanwhile, buying pressure was evident in manufacturing and multi industries issues. The blue chip Straits Times Index leaped 62.57 points, or 2.87%, to 2,241.60.

On the economic front, Singapore's central bank, which devalued the country's currency last month, said monetary policy remains "appropriate" amid signs the economy may be past the worst of its recession. The central bank expects consumer prices to remain unchanged or fall 1% this year. Inflation slowed to a 21-month low of 1.6% in March.

In Taiwan, stock market in Taiwan experienced a volatile trading day, as bourses managed to end the day slightly higher after slipping about 100 point lower during its intraday movement. Investors capped the gains as they locked in profits from the recent rally. Financial shares continued as leader while technology stocks showed some weakness.

The main Taiex share index crawl further as Taiex added 6.17 points or 0.09%, closing the day at 6572.87, highest closing since 8 September 2008 when market closed the day at 6658.69, bringing gains in the past six days to 976 points, the most since 18 January 1991.

On the economic front, the Cathay island-wide home sales index, collaboratively compiled by the Real-estate Center of the National Chengchi University (NCCU) and Cathay Construction Company, slid to 16.26 points in the first quarter, down 68.46% year-on-year with most regions hitting record lows since the second quarter of 2003.

In other economic news, the number of people on the dole declined to 114,000 in April after reaching a peak of 124,000 in March, indicating that the country's jobless situation is improving, the Council of Labor Affair's (CLA) said in a statement.

In Philippines, the stock market continued to take an uphill, buoyed by the hefty gains in the index-linked counter as investor's became optimistic by the overnight gains on Wall Street. At the concluding bell, the benchmark index PSEi escalated 1.48% or 32.69 points to 2,238.92, while the All Shares index rose 0.96% or 13.80 points to 1,436.63.

On the economic front, debt watcher Fitch Ratings has affirmed its Philippine ratings but warned that a downgrade was possible if the government failed to increase revenues and change its spending tack once the economy recovers. A sharp drop in exports, which will be "only partially offset" by weaker imports, plus a likely 6.8% drop in remittances means the county can expect to grow by just 0.1% this year, Fitch said.

Fitch noted the government's response to the global downturn — the P330-billion Economic Resiliency Plan — but said a drop in tax revenues could put pressure on the deficit, the target for which it said was P229 billion excluding privatization. Fitch noted that state revenues for the period were down 4%, the weakest in 22 years, which could lead to "fiscal policy adjustments" later in the year and below-target spending.

However, commenting on the growth forecast, the Philippines official's expects GDP to grow by 2 to 3% this year, a rate superior to anything in East Asia other than China and Vietnam, and a sharp contrast to the negative numbers elsewhere. The relatively strong performance this year will be largely due to what is also the Philippines' biggest long-term weakness — reliance on overseas worker remittances, which account for 10% of GDP and the bulk of foreign exchange earnings.

In India, firm global markets lifted the domestic bourses in what was a highly volatile trading session. Metal stocks surged on rally in global metal prices. Index heavyweight Reliance Industries was volatile. The BSE 30-share Sensex was up 164.19 points, or 1.37%, to 12,116.94. The S&P CNX Nifty added 58.85 points, or 1.62%, to 3,683.90.

Elsewhere, Malaysia's Kula Lumpur Composite index was down 0.05% or 0.49 points to 1023.47 while Indonesia's Jakarta composite index added 1.70% or 30.52 points ending the day at 1828.85.

In other regional market, European shares climbed on Thursday, as banks rose and investors welcomed updates from Unilever, Axa and others. In regional equity markets, the U.K. FTSE 100 index rose 1.4% to 4,459.07, the German DAX 30 index advanced 1.1% to 4,932.22 and the French CAC-40 index climbed 1% to 3,317.55.

Looking ahead for the day, all eyes will now turn to European Central Banks rate decision and press conference today. ECB is expected to slash its main refinancing rate by 25 bps to 1%. Emphasis has been put on the potential non-standard measures to be employed by ECB and these will likely be extension of refinancing maturity to 12 months from 6 months and enhancement of loan collaterals. Bank of England is expected to keep interest rate unchanged at 0.5% and continue working on the asset purchase program announced before.

Another major focus today will be Fed's announcement of announce result on bank stress test. Treasury Secretary Timothy Geithner stated earlier that while some banks will need to raise more capital, 'none of those 19 banks are at risk for insolvency' and 'the results will be, on balance, reassuring'. New said that Bank of America, Citigroup, Wells Fargo and GMAC are among the firms needing to raise capitals.

DLF Cheating Buyers ?

This was in Today's Times of India, Bangalore FULL PAGE ad by BBMP - the development authority of Bangalore

(CLICK ON THE IMAGE TO VIEW FULL SIZE)

Interested in the New Pension System ?

If you are interested in the NPS or the New Pension System - you will have to fill up the UOS-S1 registration form to the POP-SP (Points of Presence/Service Provider) (folks who accept your application) listed at http://www.pfrda.org.in

Some of the POPs include SBI and its associate banks, LIC, OBC, CAMS and Citibank.

In terms of contribution - you are required to make

a minimum per contribution of Rs 500

a minimum contribution of Rs 6000 per year

a minimum of 4 contributions per year

You can invest in 3 asset classes

Asset Class E - which is equity market instruments (stocks, mutual funds)

Asset Class C - investment in fixed income instruments other than govt securities

Asset Class G - which invests in Govt securities

You can choose to invest your pension entirely in C or G asset classes and upto a maximum of 50% in Asset Class E

If you subscribe to NPS, you will have to pay a fee to the central record-keeping agency (CRA), which will maintain all accounts and also to the PFM which manages the account. These charges will be deducted from his savings on a periodic basis. The fees and charges by the CRA and PFMs will be regulated by the PFRDA and is under discussion.

The fund management charge for mutual fund investors is 2.5 per cent of the investible corpus, deducted at the end of the year. There is a fund management fees that will be levied by the NPS are expected to be the same as mutual funds

BSE Bulk Deals to Watch - May 7 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
7/5/2009 530499 A K CAPITAL FIRSTRAND (IRELAND) PUB LTD CO S 40000 165.07
7/5/2009 516064 AROW COAT PR EPCOT SECIRITIES PVT LTD B 40000 10.81
7/5/2009 516064 AROW COAT PR JASMEEN KAUR S 40000 10.81
7/5/2009 500023 ASIAN HOTELS BIRLA SUNLIFE INSURANCE COMPANY LTD. B 400276 222.71
7/5/2009 500023 ASIAN HOTELS INDEA LONG TERM OPPERTUNITIES MASTER FUND S 500345 222.53
7/5/2009 532668 AURIONPRO SO NITADHIRENKOTHARY B 90000 80.40
7/5/2009 532668 AURIONPRO SO NITIKET INVESTMENT PRIVATE LIMITED B 83306 80.40
7/5/2009 532668 AURIONPRO SO ARISAIG INDIA FUND LTD(AIF) S 338512 80.44
7/5/2009 505506 AXON INFOTEC TRIPTI VYAPAAR PRIVATE LIMITED B 4756 11.10
7/5/2009 532989 BAFNA PHARMA RENEKA M B 105233 25.22
7/5/2009 532989 BAFNA PHARMA SASIKALABAFNA S 100000 25.22
7/5/2009 517001 BIRLA POWER JMP SECURITIES PVT LTD B 5379422 2.69
7/5/2009 517001 BIRLA POWER JMP SECURITIES PVT LTD S 8595000 2.71
7/5/2009 590061 BRUSHMAN IND AMIT BUSINESS PVT LTD B 70000 19.80
7/5/2009 590061 BRUSHMAN IND IVORY CONSULTANTS PVT LTD S 70000 19.80
7/5/2009 519600 CCL PRODUTS CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED B 409453 89.00
7/5/2009 519600 CCL PRODUTS THE MASTERTRUSTBANKOFJAPANLTDA/CNOMURA INDIA INVT.FUNDMOTHERFUND S 409453 89.00
7/5/2009 531270 DAZZEL CONFI PRITI V MEHTA B 61940 2.89
7/5/2009 531270 DAZZEL CONFI HASTI CHHAJER S 60557 2.89
7/5/2009 530643 INFOTREK SYS SARITA ANANDKUMAR GUPTA B 20000 12.27
7/5/2009 530643 INFOTREK SYS MAGNA UMBRELLA FUND PLC S 21100 12.27
7/5/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 38481 28.38
7/5/2009 531413 KIRAN PRIN P YASH MANAGEMENT AND SATELITE LTD B 50000 11.80
7/5/2009 531413 KIRAN PRIN P ROHYL CONSULTANCY PRIVATE LIMITED S 61600 11.87
7/5/2009 531602 KOFF BR PICT PARIMALJASHWANTRAIMEHTA B 370000 3.00
7/5/2009 511551 NETWO ST BRO ALBULA INVESTMENT FUND LTD B 725000 30.00
7/5/2009 511551 NETWO ST BRO KVPRAKASH S 304900 30.00
7/5/2009 511551 NETWO ST BRO TRINITY CAPITAL S 325040 30.01
7/5/2009 526753 ROSELABS LTD SINGHAL OVERSEAS LIMITED S 71485 10.06
7/5/2009 531898 SANGUINE MD DHIRAJLAL V SANGHVI HUF S 93628 2.38
7/5/2009 526071 SELLAIDS PUB VIRENDRASEVANTILALSHAH S 30000 2.60
7/5/2009 512048 SPLASH MEDIA SANGEETAMANTRIMANTRI B 15000 50.35
7/5/2009 512048 SPLASH MEDIA SUNITAAGARWAL B 15000 50.35
7/5/2009 512048 SPLASH MEDIA ASHAJAIN B 15000 50.35
7/5/2009 512048 SPLASH MEDIA KIRIT V DAVE B 10000 50.15
7/5/2009 512048 SPLASH MEDIA HITESHBABUBHAIDOBARIYA S 38494 50.35
7/5/2009 512048 SPLASH MEDIA BHANUMATIDHARAMRAJGIRI S 6506 50.35
7/5/2009 512048 SPLASH MEDIA GANDHI MANISHA NAVNEETLAL S 12500 50.23
7/5/2009 517385 SYMP COM SYS JONAKIACHALBAKERI B 43161 45.75
7/5/2009 517385 SYMP COM SYS ROWENTA NETWORKS PVT. LTD. S 41320 45.72
7/5/2009 531364 ZENU INFOTEC SUMANGUPTA B 55011 6.53
7/5/2009 531364 ZENU INFOTEC SUMANGUPTA S 56921 6.54
7/5/2009 531364 ZENU INFOTEC VIDYA M CHALKE S 65000 6.22

NSE Bulk Deals to Watch - May 7 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
07-MAY-2009,ALLSEC,Allsec Technologies Ltd,S.J.ASSOCIATES,BUY,244792,27.55,-
07-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,980893,103.82,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,4676866,2.95,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,BP FINTRADE PRIVATE LIMITED,BUY,3572792,2.87,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,HI-GROWTH CORPORATE SERVICES PVT. LTD.,BUY,2309902,2.89,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,BUY,23891155,2.97,-
07-MAY-2009,GMRINDS,GMR Industries Limited,GMR HOLDINGS PVT LTD,BUY,178000,80.96,-
07-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,BUY,1800691,167.96,-
07-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,13920533,15.05,-
07-MAY-2009,KOTHARIPET,Kothari Petrochem Ltd,SENEX MARKETING PRIVATE LIMITED,BUY,399489,7.69,-
07-MAY-2009,LOTTEINDIA,Lotte India Corporation L,GOVIND PARIKH SECURITIES (P) LTD.,BUY,19524,524.00,-
07-MAY-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,BUY,2400498,25.25,-
07-MAY-2009,SABERORGAN,Sabero Organics Gujarat ,V.K. KUMRA,BUY,155000,19.11,-
07-MAY-2009,ALLSEC,Allsec Technologies Ltd,EURONET,SELL,252317,27.57,-
07-MAY-2009,BAJAJHIND,Bajaj Hindusthan Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,913993,103.47,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,4676750,2.98,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,BP FINTRADE PRIVATE LIMITED,SELL,2818550,2.92,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,HI-GROWTH CORPORATE SERVICES PVT. LTD.,SELL,2309902,2.89,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,JMP SECURITIES PVT LTD,SELL,20617831,3.00,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,LOTUS GLOBAL INVESTMENTS LIMITED,SELL,9651360,3.05,-
07-MAY-2009,BIRLAPOWER,Birla Power Solutions Ltd,MAVI INVESTMENT FUND LIMITED,SELL,10580000,2.90,-
07-MAY-2009,GMRINDS,GMR Industries Limited,SATABDI INVESTMENT PVT LTD,SELL,174988,80.97,-
07-MAY-2009,HDIL,Housing Development and I,GENUINE STOCK BROKERS PVT LTD,SELL,1800691,168.02,-
07-MAY-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,13868893,15.11,-
07-MAY-2009,KOTHARIPET,Kothari Petrochem Ltd,JALAN CEMENT WORKS LTD.,SELL,392989,7.69,-
07-MAY-2009,NAGARFERT,Nagarjuna Fert & Chem,PACE FINANCIAL SERVICES,SELL,2106501,25.20,-

Post Session Commentary - May 7 2009

Indian market rebounded from yesterdays' losses to end the day with gain of more than 1% mirroring favorable cues from global markets. Report that US April job cuts were not as bad as feared, also contributed to the positive attitude. Companies in the US axe probable 491,000 workers from payrolls in April, while 6,45,000 job cuts were expected. Though, market also exhibited volatility since initial bell and pared some of gains later on. Bench mark indices recuperated strength since afternoon trade on buying by foreign funds.

The market opened on positive terrain backed by positive cues from the markets all over the world. The US stock markets on Wednesday closed higher with financial stocks rallied on the back of leaked government''s "stress tests" results that indicated that the major banks are better capitalized than expected. Further, domestic bourses continued to trade above yesterday's closing amid volatility. Firm trading in European markets also contributed to gain momentum. After paring some of gains during afternoon, market regained same momentum to close on upbeat note led by significant buying momentum. In sectoral indices, mainly Metal, Consumer Durable, Realty, Bank, Pharma, Oil & Gas and Capital Goods stocks contributed to the buying momentum. The broader market stocks out performed the benchmark indices as gained more than 2.5% each. However, FMCG stocks witnessed selling from these baskets.

Among the Sensex pack all 19 stocks ended in green territory and 11 in red. The market breadth indicating the overall health of the market remained positive as 1696 stocks closed in green while 828 stocks closed in red and 92 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 164.19 points at 12,116.94 and NSE Nifty ended up by 58.85 points at 3,683.90. BSE Mid Caps and Small Caps closed with gains of 101.10 and 110.59 points at 3,776.94 and 4,263.60 respectively. The BSE Sensex touched intraday high of 12,143.95 and intraday low of 11,981.13.

Gainers from the BSE Sensex pack are Sterlite Industries (13.78%), Hindalco (11.25%), Tata Steel (8.76%), Wipro Ltd (5.80%), HDFC (3.86%), Maruti Suzuki (3.72%), SBI (3.27%), Tata Motors (3.05%), Bharti Airtel (2.92%), RCom (61.85%), Reliance (1.82%), L&T Ltd (1.66%) and ICICI Bank (1.53%).

Losers from the BSE Sensex pack are M&M Ltd (2.83%), ACC Ltd (2.44%), HUL (1.68%), Grasim Industries (1.47%), NTPC (1.34%), ITC Ltd (1.25%), Infosys Tech (0.86%) and Sun Pharma (0.67%).

On the global markets front the Asian markets which opened before the Indian market, ended higher on better than expected US and Australian job reports. Timothy Geithner, US Treasury Secretary assured that none of country's banks are insolvent. Shanghai Composite, Hang Seng, Nikkei 225, Straits Times index and Seoul Composite ended up by 4.93, 383.32, 408.33, 62.57 and 7.63 points at 2,597.45, 17,217.89, 9,385.70, 2,241.60 and 1,401.08 respectively.

European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading up by 74.32 points at 4,955.03 and in London FTSE 100 index is trading higher by 108.16 points at. 4,504.65.

The BSE Metal index outperformed the benchmark indices as ended up by (8.22%) or 619.71 points at 8,155.08 on rise in metal prices on the London Metal Exchange. Scrips that gained are Ispat Industries (14.85%), Hindustan Zinc (14.77%), Sterlite Industries (13.78%), JSW Steel (12.79%) and Hindalco (11.25%).

The BSE Consumer Durable index gained (3.72%) or 68.52 points at 1,912.44. Scrips that gained are Blue Star L (5.56%), Videocon Ind (3.35%), Titan Ind (3.35%), Gitnanjali GE (3.14%) and Rajesh Export (1.90%).

The BSE Realty ended up by (1.90%) or 44.34 points at 2,382.51 on hopes that lower rates will encourage demand. Gainers are Pheonix Mill (7.57%), Orbit Co (4.96%), Housing Dev (4.80 %), Unitech Ltd (4.15%) and Ansal Infra (2.84%).

The BSE Bank index increased by (1.85%) or 112.82 points to close at 6,206.46 on hopes that drop in interest rates will flourish lending growth. Main gainers are Yes Bank (4.75%), Canara Bank (4.60%), Bank of Baroda (4.01%), Kotak Bank (3.53%) and Punjab National Bank (3.52%).

The BSE Pharma stocks also advanced by (1.74%) or 53.82 points to close at 3,154.89. Major gainers are Bil Care Ltd (13.73%), Dishman Pharma (9.60%), Piramal Health (8.72%), Divi's Lab (8.49%) and Lupin Ltd (4.34%).

The BSE FMCG index lost (0.71%) or 15.13 points to close at 2,103.50. Losers are HUL (1.68%), Godrej Cons (1.42%), ITC Ltd (1.25%) and Nestle Ltd (0.75%).

Bhushan steel sharply jumped 36.39% after subsidiary of the company called Bhushan Energy has acquired 0.39% of Orissa Sponge Iron & Steel at Rupees 332.7 per share.

Bharat Heavy Electrical Ltd ended up by 0.28%. The company has touched a landmark by posting a turnover of Rs 5,405 crore in 2008-09 through products developed through its in-house research and development efforts.

McNally Bharat Engineering increased by 4.96%. The company has signed a MoU with Germany-based KHD Humboldt Wedag International GMBH and its subsidiaries in Germany, India and Hong Kong to buy their various businesses.

Hindustan Zinc advanced by 14.77%. The company announced that ongoing exploration activities have yielded significant success with an increase of 46.3mn tons to its reserves and resources, prior to a depletion of 6.7mn tons in FY09.

Tata Power lost 0.31%. Industrial Energy Limited (IEL), a joint venture between Tata Power (74%) and Tata Steel (26%), announced the commissioning of 1x120 MW - power house 6 at Jamshedpur.

Tata Communications fell 0.07% to despite forming an alliance with a Russian company, RTComm to provide joint data services between the carriers in Russia and the rest of the world.

Nifty scales 7-month high; Sensex regains 12,000

Firm global markets lifted the domestic bourses in what was a highly volatile trading session. Metal stocks surged on rally in global metal prices. Index heavyweight Reliance Industries was volatile. IT stocks fell even as banking and realty stocks gained. The BSE 30-share Sensex rose 164.19 points, or 1.37%, up close to 135 points from the day's low and off close to 25 points from the day's high.

Strong inflow from foreign institutional investors and a recovery in the Indian economy bolstered sentiment. But the market was volatile. After an early surge triggered by firm global equities, the market pared gains later. Market regained strength in early afternoon trade as Asian stocks rose. After firming up in late trade, the Sensex pared gains at the fag end of the trading session.

The barometer index BSE Sensex regained the psychological 12000 mark. A 1.47% slide had pulled the Sensex below the 12,000 level yesterday, 6 May 2009. The broader-based 50-share S&P CNX Nifty attained its highest closing in more than 7 months.

Buying by foreign funds supported domestic bourses. Foreign institutional investors (FIIs) are an aggressive buying mode after they made heavy sales in the first two months of calendar 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 688.30 crore on Wednesday, 6 May 2009. FII inflow in May 2009 totaled Rs 2,874.40 crore (till 6 May 2009). FII inflow in calendar year 2009 totaled Rs 3,587.20 crore (till 6 May 2009).

A recovery in the economy also supported the domestic bourses. Activity in Indian factories expanded for the first time in five months in April 2009 as a swelling orders pipeline pointed to a tentative recovery, a survey showed on Monday, 4 May 2009. The ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April 2009 from 49.5 in March 2009, climbing above the threshold of 50 that separates expansion from contraction. The latest reading is the highest in seven months and it has steadily risen after hitting a trough of 44.4 in December 2008.

Manufacturing makes up about 16% of India's gross domestic product. The boost in manufacturing index came from a surge in new orders. The new orders index rose to 54.9 in April 2009 from 49.5 in March 2009. Several research notes in the past few days have pointed to improvement in economic activity in the months ahead.

European shares rose on Thursday, 7 May 2009, extending a winning streak to seven days, with banks taking the lead. Key benchmark indices in France, Germany and UK were up by between 1.74% to 2.5%.

The Bank of England said on Thursday it would increase the size of its asset purchase program by 50 billion pounds to 125 billion pounds, and left interest rates at a record low 0.5% for a second month.

The European Central Bank cut its benchmark interest rate by 25 basis points to a new record low of 1% on Thursday, as expected.

Asian stocks rose today, 7 May 2009, on better-than-estimated US and Australian jobs reports and an assurance from US Treasury Secretary Timothy Geithner that none of the country's biggest banks are insolvent. Key benchmark indices in Taiwan, Hong Kong, Singapore, China, South Korea and Japan were up by between 0.09% to 4.55%. Key benchmark indices in China, Taiwan and South Korea regained strength after falling in red for the brief period.

The China Enterprises Index of top mainland companies listed in Hong Kong rose 1.5% to 9,896.93.

Geithner said results of bank stress tests will reassure investors. The results of the stress tests will be reassuring, Geithner said in an interview that's scheduled to air on PBS. While some banks will need to raise more capital, there are a number of ways they can do that and most should be able to do it in the private sector, he said.

Meanwhile, a report from the statistics bureau of Australia said employers unexpectedly added workers in April 2009, buoying optimism the economy will avoid the worst of the global recession.

In South Korea, the Ministry of Strategy and Finance said although some recent data were pointing to an improvement in the economy it was too early to say the recovery will continue.

Trading in US index futures showed the Dow could rise 57 points at the opening bell on Thursday, 7 May 2009. US markets surged on Wednesday, 6 May 2009, as investors speculated banks will need less capital than expected and ADP Employer Services said US companies eliminated fewer jobs in April 2009 than economists expectations. The Dow rose 101.63 points, or 1.2%, to 8,512.28. The S&P 500 index added 15.73 points, or 1.7%, to 919.53. The Nasdaq gained 4.98 points, or 0.3%, to 1,759.10.

In encouraging economic data in US, reports suggested planned layoffs in April 2009 fell to 132,590, while ADP National Employment Report said private employment decreased by 491000 in April 2009 against an expected 650000 private-sector job cuts.

Closer home, political uncertainty may cause volatility on the bourses in the next few days with polling underway for India's 15th Lok Sabha. The month-long a parliamentary elections that began on 16 April 2009 will conclude on 13 May 2009. Poll estimates point to a fractured mandate. Consumption and investment decisions will be significantly impacted by any signs that the new government is unstable. The counting of votes will take place on 16 May 2009. A party/alliance needs 272 seats in the 543-member parliament to claim power at the Centre.

Polling for the fourth phase for 85 Lok Sabha seats is being held today, 7 May 2009. At the end of the fourth phase, elections would be completed in 457 of the 543-member Lok Sabha.

The BSE 30-share Sensex rose 164.19 points, or 1.37%, to 12,116.94. The Sensex jumped 191.20 points at the day's high of 12,143.95 in early trade. At the day's low of 11,981.13, the Sensex gained 28.38 points in mid-morning trade.

BSE clocked a turnover of Rs 4,670 crore, lower than Rs 5,850.89 crore on Wednesday, 6 May 2009.

The S&P CNX Nifty gained 58.85 points or 1.62% to 3,683.90, its highest closing since 3 October 2008.

Nifty May 2009 futures were at 3682.40, at a discount of 1.50 points as compared to the spot closing of 3,683.90. Turnover in NSE's futures & options (F&O) segment was Rs 48,471.10 crore, lower than Rs 57,634.57 crore on Wednesday, 6 May 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,702 shares rose as compared with 851 that fell. A total of 56 shares remained unchanged.

The BSE Mid-Cap index rose 2.75% and the BSE Small-Cap index gained 2.66%. Both these indices outperformed the Sensex.

The BSE Metal index (up 8.22%), the BSE Consumer Durables index (up 3.72%), the BSE Realty index (up 1.9%), BSE Bankex (up 1.85%), BSE Healthcare index (up 1.74%), the BSE Capital Goods index (up 1.55%), the BSE Oil & Gas index (up 1.5%) outperformed the Sensex.

The BSE FMCG index (down 0.71%), the BSE IT index (up 0.06%), the BSE Power index (up 0.29%), The BSE TECk index (up 1.16%),the BSE Auto index (up 1.23%) and the BSE PSU index (up 1.26%) underperfomed the Sensex.

Among the 30-member Sensex pack, 19 stocks gained while the rest fell.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 1.82% to Rs 1,914. The stock was volatile. It hit a high of Rs 1,922 and a low of Rs 1,880. Analysts expect strong growth in bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.

Oil exploration firm Cairn India gained 7.02% on higher crude oil prices. India's biggest listed state-run oil exploration firm by sales Oil and Natural Gas Corporation (ONGC) rose 0.26%. Crude oil extended yesterday's 4.6% gain after an Energy Department report showed US refinery demand climbed. Crude oil for June 2009 delivery rose as much as 56 cents, or 1%, to $56.90 a barrel on the New York Mercantile Exchange.

But, PSU OMCs fell on rise in oil prices. Indian Oil Corporation HPCL and BPCL fell 1.1% to 1.6%. State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.

Capital goods stocks rose after India's biggest engineering & construction firm by revenue Larsen & Toubro (L&T) recently said it expect a strong order flow in the year ending March 2010 (FY 2010). L&T rose 1.66%. Bharat Heavy Electricals, Thermax, Punj Lloyd, Praj Industries, Siemens, rose by between 0.28% to 4.8%.

L&T on 16 April 2009 said the company expects its order inflow to grow by 25-35% in FY 2010.

Real estate shares rose on reports commercial banks have stepped up lending to the real estate sector. Housing Development & Infrastructure, Indiabulls Real Estate and Unitech rose by between 2.62% to 4.8%. Most of the realty deals including sale of commercial property and housing sales is driven by finance and bank lending is therefore key.

According to RBI data, loans to the real estate sector grew 61% on a year-on-year basis, with Rs 90,765 crore outstanding as on 27 February 2009. During the corresponding period in the previous year, the growth was 26.7%.

Metal stocks surged after LMEX, a measure of six metals traded on the London Metal Exchange, jumped 4.14% to 2,255 on Wednesday, 6 May 2009. Hindustan Zinc, Tata Steel, Steel Authority of India, Sterlite Industries, Hindalco Industries and National Aluminum Company, rose by between 5.1% to 14.77%.

Outsourcing focussed IT stocks fell for the second straight day on US government plans to scrap tax incentives that encourage American firms to ship jobs overseas. A firm rupee also weighted on IT stocks. India's second largest software services exporter by sales Infosys slipped 0.86% as its ADR slipped 3.05% on Wednesday.

India's largest software services exporter by sales TCS fell 0.47%.

But, India's third largest software services exporter by sales Wipro rose 5.8% even as its ADR fell 2.75% on Wednesday.

Analysts feel that US government's plan to scrap tax incentives that encourages American firms to ship jobs overseas is unlikely to dent business for Indian outsourcers. US president Barack Obama on Monday, 4 May 2009, announced plans to reduce tax breaks for US-based multinationals shipping jobs to places like India. Instead, the tax incentives would now go to those creating jobs inside the US, in places like the Buffalo city, New York.

Currently, US businesses that invest overseas can take an immediate tax deduction for expenses supporting their overseas investments. They can also defer the payment of US taxes on the profits they make from such investments. But, now the Obama Administration wants to ensure that companies do not receive deductions for expenses supporting their offshore investments until they pay tax on their offshore profits. This is intended to disincentivise US companies from retaining profits abroad.

Infosys said the proposal, if implemented, was unlikely to reverse the outsourcing of a gamut of services by US firms to Indian companies. "The current proposal, as we understand, is to close corporate tax loopholes on US multinational corporations and crack down on their overseas tax havens," the company said in a statement. "We do not believe that it has anything to do with IT outsourcing done by US corporations.", Infosys said.

Meanwhile, the Indian rupee rose to fresh two and half month highs on Thursday on expectations foreigners would bring in funds into the local share market, with higher Asian units also supporting sentiment. The partially convertible rupee was at 49.24 per dollar, higher than Wednesday's close of 49.58/60.

A stronger rupee affects operating profit of IT firms negatively as they earn most of their revenues from exports.

Banking stocks rose in choppy trade on hopes falling interest rates will boost lending growth. India's largest private sector bank by net profit ICICI Bank rose 1.53% to Rs 549.10. It hit a high of Rs 557.75 and a low of Rs 538.15. Its ADR fell 5.79% on Wednesday.

India's largest bank in terms of assets and branch network State Bank of India (SBI) was up 3.27% to Rs 1,366.95. It hit a high of Rs 1,375 and a low of Rs 1,330.35. SBI announces Q4 March 2009 results on Saturday, 9 May 2009. A total 13 brokerages expect a between 15% fall to a 39% rise in SBI's net profit at between Rs 1601.20 crore to Rs 2626.60 crore in Q4 March 2009 over Q4 March 2008.

India's second largest private sector bank by operating income HDFC Bank rose 0.4% to Rs 1,176.75 . It hit a high of Rs 1,189 and a low of Rs 1,164. Its American depository receipts (ADRs) fell 0.15% on Wednesday, 6 May 2009.

India's biggest dedicated housing finance firm by operating income HDFC was up 3.86%.

Shipping firms rose after the Baltic Dry Index, which measures commodity-shipping rates, surged. Shipping Corporation of India, Varun Shipping Company, Essar Shipping, ABG Shipyard, Shreyas Shipping, GE Shipping Company, Mercator Lines rose by between 2.92% to 10.93%.

The Baltic dry index, which measures commodity-shipping rates, rose 8.85% to 2,065 in London yesterday, 6 May 2009, its highest closing level since mid-March 2009. The index rose after China, world's largest consumer of metals, said iron-ore imports at the country's major ports rose by a quarter in April 2009 to a record.

Auto stocks gained on strong sales figures posted by auto firms in April 2009. India's largest commercial vehicle maker by sales Tata Motors rose 3.05% after the British government said it is continuing talks with Tata Motors on providing aid to its UK's Jaguar Land Rover unit. Bajaj Auto, Maruti Suzuki India and Hero Honda Motors, rose by between 1.64% to 3.72%. But Mahindra & Mahindra fell 1.81% 2.83%

Cement stocks fell on reports cement prices could fall by up to 10% in the coming months, pushed lower by new supply and slower construction activity during the monsoon season. Ultratech Cements, Grasim Industries, ACC and Ambuja Cements, fell by between 1.41% to 2.7%.

Rates in Mumbai may see the steepest fall before the four-month-long monsoon season ends in September, dropping by about Rs 20 for a 50 kilogram bag, the report added.

Some healthcare stocks rose as most of the healthcare firms reported better than expected Q4 Marc 2009 result. Piramal Healthcare, Lupin, Biocon, Dr Reddy's Laboratories rose by between 0.71% to 8.72%.

Cals Refineries clocked the highest volume of 5.24 crore shares on BSE. Ispat Industries (3.19 crore shares), Unitech (1.68 crore shares), Birla Power Solutions (1.31 crore shares) and Suzlon Energy (1.21 crore shares) were the other volume toppers in that order.

Tata Steel clocked the highest turnover of Rs 222.33 crore on BSE. Reliance Industries (Rs 210.89 crore), DLF (Rs 207.33 crore), Reliance Capital (Rs 182.88 crore) and ICICI Bank (Rs 175.90 crore) were the other turnover topers in that order.

US stocks end modestly higher

Earnings and economic reports indicate that worst might be over

Swine flu news dominated the US market for the week that ended on Friday, 01 May, 2009 with modest gains. Economic and earning reports continued to check in during the course of the week one after another. The reports, in most cases, pointed out that the worst might be over for the overall US economy in terms of the ongoing recession and things might have bottomed out and will only start to improve from now on.

The Dow Jones Industrial Average gained 136.12 points (1.7%) for the week to end at 8,212.41. Tech - heavy Nasdaq gained 24.91 (1.5%) to end at 1,719.20. S&P 500 gained 11.29 (1.3%) to end at 877.52.

During the middle of the week, advanced reading for first quarter GDP came in at a much weaker-than-expected -6.1% (consensus -4.7%). But stocks shrugged off the GDP figure and rallied ahead of the FOMC's rate decision and policy statement that afternoon. The FOMC kept its key interest rate in a range of 0.00%-0.25%, as expected.

Economic reports dominated the entire week. Consumer confidence came in at a better-than-expected 39.2 for April, well above the 29.7 consensus estimate. Chicago PMI's turn, as it came in at a better-than-expected 40.1 for April vs. the 35.0 consensus.

Finally, on Friday, the ISM Manufacturing Index for April came in at 40.1. That was much better than the 38.4 that was expected, and was also up from 36.3 in March. But economic conditions remained dour as factory orders for March declined 0.9%, which was worse than the 0.6% decline that was widely expected, and February orders were revised lower to reflect an increase of 0.7%. Also, U.S. consumer sentiment rose in April, but remained at relatively low levels, according to a survey released by the University of Michigan.

In the US market on Friday, 01 May, 2009, stocks started the day in a choppy mode. Volumes remained extensively low. But the indices managed to end the day with modest gains. Economic reports dominated the day. The Dow Jones Industrial Average ended higher by 44 points at 8,212. The Nasdaq Composite Index, ended higher by 1.9 points at 1,719.2. S&P 500 ended higher by 4.7 points at 877.5.

In the financial sector, the big headline of the day came late morning when a government source said it would announce information on the bank stress tests late afternoon on Thursday, 7 May, later than the original date of 4 May. This followed a slew of headlines on the tests throughout the week, mainly the one which stated that Bank of America and Citigroup might need to raise additional capital based on early results of the tests.

Among major earning reports of the week, Exxon Mobil's earnings results missed analysts' expectations. Chevron too reported that its first quarter profits have almost halved compared to last year.

Crude oil ended higher for the third straight day on Friday, 01 May, 2009 helping crude register its second consecutive weekly gain. Better than expected earning and economic reports gave some hopes that the worst might be over for the overall economy in terms of recession and things might just get better from here thereby increasing the demand for energy in the coming months. On Friday, crude-oil futures for light sweet crude for June delivery closed at $53.2/barrel (higher by $2.08 or 4.1%) on the New York Mercantile Exchange. For the week, crude ended higher by 3.2%.

For the year 2009, Dow and S&P 500 are down by 6.4nd 2.8% respectively. Nasdaq is up by 9%.

Daily HOT News - May 4 2009

Reliance Industries increased its holding in Reliance Petroleum to 75.4% by buying Chevron's 5% stake for Rs13.5bn. (ET)

IOC will take up 4% stake in ONGC-Reliance Industries alliance that plans to pick up stake in an oilfield in Venezuela. (ET)

Bharti Airtel entered into a JV with Alcatel-Lucent to manage its landline and broadband business. (ET)

Wipro won the Rs25bn contract from Unitech Wireless to provide IT services. (ET)

M&M enters into the sub-30HP tractor market. (FE)

PNB cuts its benchmark PLR by 50bps to 11%. (FE)

Siemens India will execute Rs7.2bn of the Rs13.8bn transmission contract awarded by Adani Power, balance will be executed by the German parent. (ET)

CL Technologies signed a 5 year multi-million dollar outsourcing deal with supply chain services firm UTi Worldwide. (ET)

Jindal Steel and Power is in advanced talks with Hudson Resources, Australia, to form a JV for exploration and mining of coking coal there. (ET)

Suzlon Energy has paid €30mn as part payment to Martifer SGPS SA for acquiring the latter's stake in a Germany-based wind turbine maker.(TOI)

Solar power firm Cobol Technologies, owned by the promoters of Moser Baer, raises US$30mn through a sale of minority stake to Pangea Emerging Infrastructure Fund. (ET)

SREI Infrastructure Finance plans to raise up to Rs10bn from the market to meet its long term working capital requirements. (ET)

Balco is planning to close its plant-1, which produces 100,000 tonnes of aluminum every year, as the dip in prices makes production unprofitable.(BS)

Aditya Birla Nuvo plans to rejig its apparel business by opening 150 new stores at city centers, where footfall is higher, after closing 30 unviable stores.(BS)

Reliance Industries which faces possible penalties by the US administration for its business ties with Iran, has paid about Rs10mn for lobbying among US lawmakers.(BS)

Hindustan Unilever along with a few associations for glass and detergents, has filed writs in the Delhi and Bombay High Courts to get a stay against a safeguard duty imposition of 20% on import of soda ash from China.(BS)

Punj Lloyd Ltd is in talks with Areva NP and Westinghouse Electric for a tie-up to build nuclear power plants in the country.(BL)

Corus' US$480mn deal with a consortium of buyers to sell its Teesside steel mill "is in danger of being scrapped," leading British daily Financial Times has said.(DNA)

International Coal Ventures, an SPV created by five PSU majors including Coal India and SAIL, may bid for a coal block in Mozambique this month.(BL)

Reliance Gas Transportation Infrastructure has approached the competent authorities to seek a nod for the transportation tariff to be levied by it for ferrying Reliance Industries' D6 Block gas.(BL)

Pipe manufacturer Man Industries has bagged a Rs13.5bn order from Middle East in April.(BL)

Jet Airways and Sahara India Commercial Corporation have told the Bombay High Court that both the parties would soon meet to sort out the ongoing issue related to the takeover deal of Sahara Airlines.(BL)

Tata Motors to bring Jaguar, Land Rover to India.(BL)

Tata Steel to consider restructuring the continental European operations of Corus. (BS)

GMR Infra may raise upto Rs30bn through PE route. (ET)

Sobha Developers plans to raise Rs3.5bn by offloading around 25% stake through preferential allotment and is expected to also evaluate the QIP route. (BS)

DLF plans to launch more mid-income housing projects in Kochi, Bangalore and Hyderabad, among other cities, and divest stakes in some hotel projects to generate liquidity in the current fiscal. (BS)

ACC has no plans to increase the prices of the commodity in Delhi. (BS)

DLF plans to raise Rs55bn through the sale of non-core assets such as power units and hotels to help it reduce its debt.

DLF is banking on Rs20bn of additional inflows from group company DLF Assets. (BS)

SBI reduces the interest rate on domestic term deposits by 25bps across maturities. (BS)

NTPC may set up 600MW hydel power plant in Bhutan. (ET)

Tata Steel may re-bid for Liberian mine. (ET)

Ranbaxy Laboratories is forced to withdraw all batches of a generic urinary infection antibiotic drug from the US market. (BS)

Talks between Jaguar Land Rover and the UK government over a financial aid package for the carmaker have reached an impasse. (ET)

Titan Industries to close its two Tanishq jewellery brand boutiques in the US. (ET)

Godrej Consumer is eyeing acquisitions worth US$1bn in emerging markets in this fiscal. (ET)

Reliance Industries may neither start any greenfield initiative nor raise new funds in this fiscal, as it looks to consolidate its diverse portfolio of biz. (ET)

ONGC Videsh and its partners, IOC and Oil India, are likely to invest about US$4bn to start production from a gas field they discovered in offshore Iran, in the next 3-4 years. (ET)

R-Power may not get entire Sasan coal. (ET)

GMR Infrastructure has tied-up funds for its 1,050MW power project in Kamalanga in Orissa (ET)

TCS has shelved plans to increase its headcount in Australia to around 2,000 (BS)

RNRL has decided to procure six ships for transportation of imported coal to its proposed 4,000MW UMPP in Krishnapatnam (ET)

IOC has forayed into the wind power sector by commissioning its first wind farm at Kandla in Gujarat (ET)

Wockhardt has reached an out-of-court settlement on three patent infringement cases in the US with Orion Corporation (BS)

Apollo Tyres to fully acquire a Netherlands-based premium tyre maker for an undisclosed sum (BS)

Parsvnath Developers is planning to cut its debt by a quarter by the end of FY10 (BS)

UTV earmarks Rs9bn for its movie production venture (BS)

Sterlite Technologies to raise Rs419mn by issuing warrants to promoters (BS)

Siemens, BHEL plans to form JV for manufacturing super critical and ultra super critical steam turbines. (ET)

Aditya Birla Nuvo is considering plans to raise fresh equity of about Rs15bn to finance the group's life insurance business (BS)

L&T reaches an agreement to end a standoff over its 60MW Singoli-Bhatwari hydel project in Rudraprayag district of Uttarakhand (BS)

Inflation inches higher to 0.56% as food prices remain high. (ET)

State run banks will now charge 9.25% or less interest rate for the first 5 years on home loans up to Rs3mn. (ET)

Index of six core industries registered a growth of 2.9% in Mar' 09 (ET)

New premium collection in the life insurance industry fell by 12% in Q4 FY09 to Rs348bn from Rs394bn last year. (ET)

Anti¬dumping duty on some auto parts likely.(Mint)

Mumbai Metropolitan Region Development Authority is planning a 100km network of monorail in the Mumbai metropolitan area in next seven years.(BL)

Government has extended the special dumping duty on nylon tyre cord fabric imports from China for another 5 years. (ET)

State run oil companies cut jet fuel prices by 1% in tandem with the international prices. (ET)

India's crude oil output fell 1.8% in FY09 to 33.5mn tons. (ET)

Planning commission has proposed to set up a National Electricity Fund with a corpus of Rs1-1.5trn to finance the development of T&D network of the state utilities. (ET)

DoT panel mulls new 2G spectrum pricing formula.(BL)

Indian gas companies may soon boast their first gas swap arrangement that could slash transportation costs by more than 50%.(BS)

Airport developer to raise over Rs 18bn by pledging revenues from passenger charges.(BS)

India plans to increase stockpiles of the anti-influenza drug Tamiflu or its generic version by 10-fold, from 1mn to 10mn currently.(BS)

India's exports declined a record 33.3% in March 2009, marking a contraction for the sixth consecutive month to US$11.5bn. (BS)

Number portability charges likely to be below Rs300. (BS)

India's foreign exchange reserves increased by US$631mn to US$253.1bn during the week ended April 24. (BS)

Public-sector banks chalk out expansion plans to open at least 15,300 ATMs across the country by the end of this fiscal. (ET)

General insurance industry, comprising 16-odd players, has registered a drop in premium income growth for the fiscal 2008-09.(DNA)

Government has decided to create separate quality guidelines for medical devices and not treat them as drugs. (ET)

Government plans to impose a 20% safeguard duty on imported acrylic fibre (ET)

GSM mobile service providers are opposing an 11-digit mobile numbering proposal (BS)

Government may decide on steel safeguard duty next week. (ET)

Global feel-good to rub off on India

Take calculated risks. That is quite different from being rash.

Today we expect the key Indian indices to rally as risk appetite is holding up globally. World markets were up while we enjoyed a long weekend. The intermediate trend remains up as things are looking up globally as well as back home. But, there is a likelihood of correction after 7-8 week's rally. The outcome of the Lok Sabha could provide a trigger for that. Another cause for concern is the spread of swine flu and its economic fallout.

US Treasury's stress test results will be out later this week, which will reveal the health of the large American banks. Monthly labour report is also due on Friday in the US. On the whole, key global data points show continued signs of improvement, though the recovery is still fragile. There may be a few more hiccups going ahead but not as bad as the ones suffered in October-November and in early March. The upside will hinge on persistent improvement in economic conditions, pick-up in earnings and foreign capital inflows.

One also must not forget that the generous doses of fiscal stimulus administered by most governments could lead to its own set of problems. Running large fiscal deficits leads to inflation, higher interest rates and debt, besides crowding out private borrowing. Countries like Germany and New Zealand have already expressed concern on this front, so has the RBI Governor. In short, the recovery will not be a walk in the park and one should brace for a bumpy ride.

Key Results Today: Allahabad Bank, Century Textiles, HDFC and Indian Overseas Bank.

FIIs were net buyers in the cash segment on Wednesday at Rs3.65bn (provisional) while the local institutions were net sellers of Rs4.04bn. In the F&O segment, the foreign funds were net buyers at Rs12.96bn. On Tuesday, FIIs pulled out Rs1.74bn from the cash segment.

US stocks ended higher on Friday, as encouraging reports on manufacturing and consumer sentiment raised optimism that the worst of the global recession may be behind us. All the three major stock benchmarks closed up for the week as well as for April.

Stocks slumped in the morning, fluctuated in the afternoon and then made a run higher near the close. The Dow and S&P 500 have now gained for seven of the last eight weeks. The Nasdaq has gained for eight weeks in a row.

Last week's gains are a continuation of strong gains made in April amid growing expectations that the world's largest economy is close to stabilising. For the month of April, the Nasdaq gained 12.3%, the S&P 500 gained 9.4% and the Dow Jones gained 7.3%.

Market experts say this improved undertone should continue to benefit stocks in the weeks ahead, but there could be some hiccups next week. There are some concerns about the results of the banks' 'stress tests' and its implications for the market.

The results of the stress tests of the nation's largest banks are now expected late on Thursday, according to reports. Results were initially expected to be released on Monday.

In major corporate developments, auto major Chrysler filed for Chapter 11 bankruptcy protection after failing to reach a deal with some of its smaller lenders to cut debt. But a deal has been negotiated to combine the company with Italian automaker Fiat, allowing Chrysler to stay in business. Chrysler is privately owned. Shares of rivals General Motors (GM) and Ford Motor slipped Friday after rallying on Thursday.

Separately, Ford reported a 31.6% drop in sales versus a year ago, a steeper decline than expected. But the pace of the decline was smaller than a month ago. GM said sales fell 33.2% from a year ago, beating forecasts. But sales were an improvement after the 45% decline in March. Toyota Motor reported a worse-than-expected April sales decline of 41.9%. Toyota's March sales fell 30.9% versus a year earlier.

In the day's economic reports, the Institute for Supply Management's (ISM) manufacturing index rose to 40.1 in April from 36.3 in March beating forecasts for a rise to 38.4. The report was consistent with recent signs that the pace of the economic slowdown is easing.

Another report showed that consumer sentiment improved in April. The University of Michigan's consumer sentiment index was revised up to 65.1 from a previous reading of 61.9. Economists had forecast no change.

A third report showed that March factory orders fell 0.9% after rising 0.7% in February. Economists predicted a 0.6% fall, on average.

Dow component Chevron reported a big drop in first-quarter sales and earnings, that missed expectations, due to a steep drop in energy prices. Shares of the No. 2 oil services firm ended higher.

Fellow Dow component Exxon Mobil reported weaker sales and earnings on Thursday. Shares gained 2%. MasterCard reported weaker quarterly earnings that topped estimates on weaker revenue that missed expectations. Shares fell nearly 6%.

Citigroup is selling its Japanese retail brokerage business to Sumitomo Mitsui Financial Group in a deal worth US$7.9 billion. Shares fell 2.6%.

Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.15% from 3.14% on Thursday.

Lending rates were mixed. The 3-month Libor rate fell to 1.01% from 1.02% on Thursday. The overnight Libor rate rose to 0.24% from 0.23%. Libor is a bank-to-bank lending rate.

In currency trading, the dollar fell versus the euro and gained against the yen.

US light crude oil for June delivery rose US$2.08 to settle at US$53.20 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell US$3 to US$889 an ounce.

The majority of developed markets were closed on Thursday on account of Labour Day. Among the world markets that were open for trading, Japan's Topix added 1.1%, while the UK's FTSE 100 Index slipped less than 0.1%.

A sharp rally for European stocks on Thursday helped a key index to record its best-ever monthly performance in April. Trading over the 200-point mark for the first time since early February, the pan-European Dow Jones Stoxx 600 index jumped 1.5% to 200.23. This move brings gains for the month to 13.5% - the best monthly performance for the index since Stoxx started tracking the data at the end of 1986.

Germany's DAX 30 index rose 1.4% to 4,769.45, the UK's FTSE 100 index advanced 1.3% to 4,243.71 and the French CAC-40 index gained 1.4% to 3,159.85.

After a sharp cut on Tuesday, Indian markets staged a strong come back as bulls ended the week on a high. Strong cues from the Asian markets coupled with buying witnessed in the heavyweights lifted the key indices to end with healthy gains erasing previous day's losses.

The BSE Sensex surged 401 points to close at 11,403 and the NSE Nifty rose by 111 points at 3,473.

Among the 30-components of Sensex, 29 stocks ended in the green and only Grasim ended in the negative terrain. Among the major gainers were ICICI Bank, Sterlite, JP Associates, Tata Power, Wipro and Reliance Infra.

Among the BSE Sectoral indices BSE Bankex index was the top gainer, the index gained 5%. Among the other major gainers were BSE IT index (up 4.4%), BSE Teck index (up 4%), BSE Oil & Gas index (up 3.7%) and BSE Power index (up 3.5%)

Market breath was positive, 1,406 advanced against 1043 declines, while, 90 remained unchanged.

For the week:

The BSE IT Index (up 4.2%): IT stocks were among the major gainers after the tech companies (both mid-caps and large caps) announced quarterly earnings without any major negative surprises.

The top gainers in the IT sector were TCS (up 6.8%), Wipro (up 6%), Infosys (up 4.2%) and Financial Tech (up 2.7%).

Patni surged 3% during the week. The revenues for the quarter stood at Rs79.54bn, a decrease of 11.4% as compared to Rs85.70bn in the earlier quarter. The operating income stood at Rs8.12bn, an increase of 7.7% as compared to Rs7.20bn in the earlier quarter.

The top losers were Sasken Communication (down 5.3%), Oracle Financial (down 1.7%) and Satyam (down 0.5%).

The BSE Consumer Index: The top losers in the consumer durables space were Videocon Industries (down 11.1%), Su-Raj Diamonds (down 1.8%), Titan (down 1.5%)

Blue Star surged 4.5% during the week.

The BSE Healthcare Index (up 0.1%): The top gainer in the Pharma space was Piramal Healthcare. The stock surged over 7% during the week. The net profit for the quarter increased by 59% at Rs1149mn as compared to Rs722.8mn.The total operating income was up by 9.3% to Rs8.5bn over Q4FY08.

Sun Pharma (up 6.9%), Lupin (up 1.6%), Astrazeneca Pharma (up 1.4%) and Panacea Biotec (up 0.9%) were among the major losers.

The top losers were Wockhardt (down 13%), Strides Arcolab (down 10.4%), Glenmark Pharma (down 9.1%), Orchid Chem (down 7.1%) and Ranbaxy Labs (down 5.6%).

The BSE Banking Index (up 1.7%): The top gainer in banking space was ICICI Bank. The stock was up 10.4% during the week. ICICI Bank posted a net profit of Rs7.44bn for the quarter ended March 31, 2009 compared to Rs11.5bn for the quarter ended March 31, 2008. Total Income decreased to Rs92.03bn for the quarter ended March 31, 2009 from Rs103.91bn for the quarter ended March 31, 2008.

Among the other major gainers were Bank of Baroda (up 7.1%), Axis Bank (up 5.2%), Federal Bank (up 5.2%) and Canara Bank (up 2%).

The top losers were Bank of India (down 12%), PNB (down 7.8%), Karnataka Bank (down 5.9%), IOB (down 5.5%) and Union Bank of India (down 4.2%).

The BSE Auto Index (up 0.7%): The top gainer in the auto space was M&M. Hero Honda gained 3.1% during the week. Hero group and Honda are reportedly considering plans to extend their 25-year-old partnership. Both the companies may look at sharing details of new products with each other, including engines, design sequences and vehicle platforms, says a financial newspaper.

Among the other major gainers were Eicher Motors (up 2.8%), Bajaj Auto (up 2.4%) and Swaraj Mazda (up 2.2%). The top losers were Ashok Leyland (down 5.7%) and Tata Motors (down 3.8%).

Why government should tax less and work more

One of the key challenges before companies is to figure out what business they are really in. Once this is clear, everything else -- strategy, etc -- follows. If you know what you want to be, you know what to do.

Xerox Corp thought it was in the business of selling copiers. You had to hardsell the product, and convince the customer why he should invest money in expensive machines. But when the management probed a little deeper, it found that the customer's real need was making copies; owning a copier was incidental to the process. The change in the company's self-definition yielded significant benefits to both the company and its customers.

Governments, like companies, need to be clear about what business they are in. They do lots of things they shouldn't be doing, and don't do the things they should be. Most governments define their jobs as defending the country from external aggression, maintaining internal law and order, promoting economic and social development and ensuring a fair distribution of the fruits of growth.

But look closer: are these responsibilities that need to be done within government or should government merely be ensuring that someone does the job? When governments try to do too much, the net result is bureaucracy, waste, corruption and lack of accountability.

A sensible government should, therefore, try to get things done rather than do everything itself. If governments are to define their businesses like Xerox did, we can restate the job definition thus: creating an enabling environment in which citizens and corporations can help themselves prosper economically and socially. Jobs don't have to be created in state-run institutions; we merely need a policy in which jobs can grow everywhere. Schools do not have to be run by municipalities. They should be set up and run by those who can run them best.

To raise literacy and provide efficient healthcare, you don't need the deadening hand of government. The best educational and healthcare institutions are not government-run. Visit any municipal school or hospital and contrast their performance with convent schools, institutions run by the Ramakrishna Mission, the Ekal Vidyalayas or the Aravind Eye Hospitals and you will appreciate the difference. In the former, public money goes down the drain; in the latter, private money (with some government assistance) works wonders.

Aravind has a world record in eyecare. In just one year between April, 2007, and March, 2008, it offered outpatient services to 2.4 million people, and operated on 2,85,000 patients -- and all this from just five centres in Tamil Nadu and Puducherry. Imagine what can be achieved if there is an Aravind in every state.

If we need better healthcare, it follows that government's role must be to facilitate better investments in this sphere. It should enter healthcare directly only if no one else is willing to do so. If any sensible NGO or private organisation can provide better healthcare and education, why should government be raising revenues for these purposes? Isn't it simpler to let resources flow directly to the organisations doing the good work?
This brings us the crux of the argument: if the government's job is to facilitate the allocation of resources, shouldn't our tax structure reflect this? Defining the government's job more precisely enables us to say that
it does not have to raise resources itself (i.e. tax us) to fund social sector projects. One way to do this would be to offer tax rebates for any organisation that channels money to critical areas like health or schools.
Look what happens now. Government collects taxes from companies and individuals, allocates these funds to various ministries. After feeding babus and financing corruption, the balance reaches schools and hospitals. Being government-run, the cycle of corruption and waste continues in government-run schools and hospitals. Putting money in the hands of government is the worst way to spend on a socially desirable project.
We can cut this cycle of waste by making resources directly available to organisations that venture into social sectors. Any bonafide organisation willing to run a hospital on the basis of government norms --- free treatment, etc --- should be given a tax rebate to the extent of its spending. If I am Dr Reddy's Labs and I am supporting municipal schools in Andhra Pradesh to upgrade themselves, this is currently being funded through a charity foundation.
Instead, if this can be done directly from corporate resources, the company would save on taxes to the extent it channels them directly to social purposes.
It would pay less tax, and would also be able to serve society directly. Dr Reddy's would still need a subsidiary for conducting work in the social sector. This would facilitate the auditing of its books both socially and by accountants. The government need not collect resources and waste them.
We can all be happy that money paid as taxes will not disappear into a black hole called government.

Bullion metals end mixed

Gold registers 3% weekly drop in prices

Precious metals (gold) ended lower on Friday, 01 May, 2009. Prices dropped as earning and economic reports checked in better than expected on Friday reducing the appeal of precious metals as a safe bet for investment. But silver gained for the day.

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 Friday, Comex Gold for June delivery lost $3 (0.3%) to close at $888.2 an ounce on the New York Mercantile Exchange. For the week, gold ended lower by 3%. Year to date, gold prices are practically unchanged.

For the month of April, gold lost 3.7%, the second consecutive monthly drop. For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15%) since then.

On Friday, Comex silver futures for July delivery gained 17.5 cents (1.4%) at $12.5 an ounce. Year to date, silver has climbed 6.5% this year. For 2008, silver had lost 24%.

On Friday, the ISM Manufacturing Index for April came in at 40.1. That was much better than the 38.4 that was expected, and was also up from 36.3 in March. But economic conditions remained dour as factory orders for March declined 0.9%, which was worse than the 0.6% decline that was widely expected, and February orders were revised lower to reflect an increase of 0.7%.

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

Crude goes further higher

Crude witnesses second consecutive weekly gains

Crude oil ended higher for the third straight day on Friday, 01 May, 2009 helping crude register its second consecutive weekly gain. Better than expected earning and economic reports gave some hopes that the worst might be over for the overall economy in terms of recession and things might just get better from here thereby increasing the demand for energy in the coming months.

On Friday, crude-oil futures for light sweet crude for June delivery closed at $53.2/barrel (higher by $2.08 or 4.1%) on the New York Mercantile Exchange. For the week, crude ended higher by 3.2%.

Crude ended April higher by 2.9%. Previously, March trading ended up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 68.8% since then. Year to date, in 2009, crude prices are higher by 14%. On a yearly basis, crude prices are lower by 51%.

On Friday, the ISM Manufacturing Index for April came in at 40.1. That was much better than the 38.4 that was expected, and was also up from 36.3 in March. But economic conditions remained dour as factory orders for March declined 0.9%, which was worse than the 0.6% decline that was widely expected, and February orders were revised lower to reflect an increase of 0.7%. Also, U.S. consumer sentiment rose in April, but remained at relatively low levels, according to a survey released by the University of Michigan.

Also at the Nymex on Friday, June reformulated gasoline rose 5.16 cents, or 3.5%, to $1.5174 a gallon and June heating oil gained 5.16 cents, or 3.9%, to $1.3884 a gallon.

June natural-gas futures added 16.5 cents, or 4.9%, to $3.538 per million British thermal units.

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

SRF

We recommend a buy in the SRF stock from a short-term trading perspective. It is apparent from the charts of SKF that it has been on a medium-term up trend since its one-year low of Rs 62, recorded on February 3. Since this low the stock has been forming higher peaks and higher bottoms. While trending upward, the stock breached its 50-day moving average in late February and has been trading well above this average. Most recently the stock encounters resistance around Rs 95 and made a minor pullback to Rs 75 level. However, the stock resumed its medium-term uptrend after taking support from the up trendline around Rs 78. The daily relative strength index is on the verge of re-entering the bullish zone from the neutral region. Considering that the medium-term up trendline is intact, we are bullish on the stock from a short-term horizon. We expect the stock's uptrend to continue until it hits our price target of Rs 94 in the upcoming trading sessions. Traders with short-term trading perspective can buy the stock while maintaining a stop-loss at Rs 81.

FIIs restructure portfolio

The last 45 days have seen heightened FII investment flows after nearly a quarter of lull and more than four quarters of gradual sell off.

The last month alone, FIIs have pumped in about $1 billion in stock markets.

These investors have restructured their portfolios to protect their interest in a volatile market, according to a study of FII investments patterns conducted by Mumbai-based, CNI Research on 394 companies listed on the stock exchanges in India.

The study covering the fourth quarter of fiscal 2009 reveals that there is a direct co-relation between FIIs hiking stake and their investment pattern with the company share performance.
Smart strategy?

"Wherever the FIIs have hiked stake, the share prices have gone up and conversely, wherever they have exited, the prices have lowered. Therefore, for an investor, this offers some broader hints at where to invest," Mr Kishor Ostwal, Managing Director of CNI Research, said.

The Mumbai-based research company analysed 394 companies where FII stake has changed during the fourth quarter of 2008-2009.

The stake patterns of the 394 companies show that in 121 companies the FII stake has dropped below 5 per cent, in about 164 companies it is still above 5 per cent and in about 109 companies, they stepped up their holding.
Sector specific

Mr Ostwal told Business Line that the last four quarters have seen volatile markets and continuous efforts by the FIIs to restructure their portfolio. This was also compounded by tough markets back home where the FII come from.

This meant constant asset reallocation. However, for FIIs with sector specific mandate, say IT or real estate, it has been a tough way out, especially in a falling market.

"The research sought to analyse the co-relation between FII holding and stock prices. After the recent re-allocation of portfolio and heightened investment, it is time to have re-look at some of the stocks where FIIs have earlier exited due to tough market conditions due to pressure on some sectors. It won't be long before they will come back to them," he explained.

The study covered Maruti Suzuki, Grasim Industries, Infosys Technologies, Hero Honda, Lanco Infrastructur, HDFC, Colgate Palmolive, Tata Steel and host of others.

via BL