Stocks to Watch - June 12 2009

Steel Authority of India (SAIL) is likely to cut its Rs 780 billion expansion plans by 13% to save Rs 100 billion. Shares of the company gained Rs 3.25, or 1.9%, to end at Rs 174.55.
National Thermal Power Corporation (NTPC) and Bharat Heavy Electricals (BHEL) have joined hands to set up a major power projects equipment manufacturing unit in Andhra Pradesh (AP). Shares of BHEL closed down Rs 81.35, or 3.46%, at Rs 2,271.45.
Mercator Lines is planning to invest Rs 5 billion to acquire three gearless post-Panamax bulk carriers totalling 2.77 lakh dead-weight tonnage (DWT) on a charter basis. Shares of the company gained Rs 2.8, or 4.21%, to end at Rs 69.30.
Maruti Suzuki India is intending to tap new markets for exports, as the demand is shifting towards compact cars globally. Shares of the company closed down Rs 14.8, or 1.33%, at Rs 1,094.65.
Sesa Goa acquired Goa-based Dempo group`s mining assets for Rs 17.50 billion in an all-cash deal. Shares of Sesa Goa closed up Rs 12, or 6.66%, at Rs 192.10.
ONGC said it will borrow about Rs 270 billion over next three to four years to fund its projects. Shares of the company closed down Rs 46.7, or 4.01%, at Rs 1,117.90.
All the 10,000 surplus employees of Satyam Computer, who feared unemployment, can breathe easy now as the company`s new owner Tech Mahindra said there will be no retrenchment. Shares of the company closed up Rs 7.35, or 10%, at Rs 80.85

Pre Session Commentary - June 12 2009

Today domestic markets are likely to open positive as most of the Asian markets have opened positive and the US markets have shown better than expected retail sales data. The northward movement of frontline stocks would however test the profit booking pressure. The mid cap and small cap stocks seem to have lost its shine and therefore much movement in that space is less likely. Sesa Goa will be in the limelight today as the company is acquiring a major stake in Dempo for Rs.1,750 crore. The further movement of the markets would depend on the opening of European markets.
On Thursday, the domestic markets closed nearly flat with minimal loss. After a subdued opening the domestic bench mark indices drifted towards the southward on cues of gyrating Asian markets. The sentiments were weak since the opening bell, however throughout day the domestic markets traded range bound. The frontline stocks pared off some gains at this high level and in the stock specific move, Satyam (+10% to Rs80.85) closed with a buying freeze for the third consecutive day. During the last hour of the trade, the markets managed to pare off its early losses to close flat. The inflation numbers fell to three decades low at 0.13% and its has been learned that Finance Minister Pranab Mukherjee has asked banks to reduce interest rates to lend more for the growth in country’s economic activity. We expect the markets to be trading volatile.
The BSE Sensex closed with a loss of 55.34 points at 15,411.47 and NSE Nifty ended with a marginal loss of 17.55 points at 4,637.70. BSE Mid Caps and Small Caps closed with losses of 11.92 points and 55.98 points at 5,347.58 and 6,150.44 respectively. The BSE Sensex touched intraday high of 15,568.74 and intraday low of 15,240.73.
On Thursday, the US Markets closed with moderate gains on the back of better than expected macro economic indicators. Retail sales data recorded a growth of 0.5%, the best in the first three months. Initial weekly jobless claims are declining at a phenomenal pace but the unemployment claims climbed to a record high. Utilities stocks were the charm of the day as it gained a remarkable 2.0% followed by impressive gains among energy stocks, which finished 1.8% higher. The recent surge in crude oil prices has pushed energy stocks to new high and thanks to the good oil demand forecast by IEA for 2009. The US light crude oil for July delivery closed high by 1.81% at $72.60 per barrel marking a new 2009 high on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed high by 31.90 points at 8,770.92 the NASDAQ Composite (RIXF) index inclined by 9.29 points to close at 1,862.37 and the S&P 500 (SPX) closed high by 5.74 points at 944.89.
Today major stock markets in Asia are trading positive. Hang Seng is up by 186.17 points at 18,977.20. Shanghai Composite is low by 16.34 points at 2,780.886. Japan''s Nikkei is trading up by 90.71 points at 10,072.04. Strait Times is also low by 9.87 points at 2,371.94. KLSE Composite is up by 5.99 at 1,088.
The FIIs on Thursday stood as net buyers in equity and no trade in debt. The Gross equity purchased stood at Rs 3,851.50 Crore and gross debt purchased stood at Rs 0.00 Crore, while the gross equity sold stood at Rs 3,133.80 Crore and gross debt sold stood at Rs 0.00 Crore. Therefore, the net investment of equity and debt reported were Rs 717.60 Crore and Rs 0.00 Crore respectively.
On Thursday, the partially convertible rupee closed at 47.60/61 per dollar, 0.80% weaker than it previous close at 47.24/25. The rupee fell due to lackluster trading in local stock markets.
On BSE, total number of shares traded were 55.54 Crore and total turnover stood at Rs 7,618.57 Crore. On NSE, total number of shares traded was 126.29 Crore and total turnover was Rs 23,892.48 Crore.
Top traded volumes on NSE Nifty – Unitech with 88512670 shares, Suzlon Energy with 61687941 shares, Idea Cellular with 35040268 shares, Hindalco with 26673066 shares, followed by Reliance Power with 15355920 shares.
On NSE Future and Options, total number of contracts traded in index futures was 620479 with a total turnover of Rs 13,799.74 Crore. Along with this total number of contracts traded in stock futures were 452149 with a total turnover of Rs 27,097.97 Crore. Total numbers of contracts for index options were 869113 with a total turnover of Rs 20,333.09 Crore and total numbers of contracts for stock options were 39153 and notional turnover was Rs 2,233.47 Crore.
Today, Nifty would have a support at 4,541 and resistance at 4,713 and BSE Sensex has support at 15,275 and resistance at 15,605.

Ashok Leyland

We recommend a sell in Ashok Leyland from a short- and medium-term perspective. The stock has been charting a strong up-trend since its January trough of Rs 13.4. The rally that ensued from this level has resulted in a retracement of over 50 per cent of the decline from January 2008 peak. The stock has significant long-term resistance at Rs 37 and the rally from January lows could have ended at the recent peak of Rs 37.9. The bearish engulfing pattern in the weekly candlestick chart and sell signals in weekly as well as daily oscillators support this view. Investors with a short-term perspective can sell the stock with a stop at Rs 34.2. We expect a decline to 29.4 in the near term. The medium-term target for this stock is Rs 26.
via BL

Market set for uncertain start

The key benchmark indices may open in green tracking gains in most of Asia. However volatility may be high as investors may remain cautious after recent surge in Indian stocks. The investors will take further cues from Industrial output data for the month of April 2009 due today. Industrial production showed a decline 2.3% in March 2009 as compared to a rise of 5.5% during March 2008.
Most of the Asian stocks rose today as improved economic indicators pointed to an easing of the U.S. recession and metal prices jumped the most in 10 days. Key benchmark indices in Hong Kong, South Korea, Japan, and Singapore rose by between 0.4% to 0.98%.
But,China's Shanghai Composite fell 0.35% even as China's industrial production rebounded in May 2009, adding to signs that the world's third-biggest economy is recovering from its worst slump in almost a decade. Output rose 8.9 % in May 2009 over May 2008 the statistics bureau said today, after gaining 7.3 % in April 2009. Taiwan's Taiwan Weighted fell 0.65%.
The US markets closed flat yet again on Thursday, 11 June 2009, well off their earlier highs. Wall Street got an early boost from the pre-market economic reports, which showed jobless claims fell last week and retail sales ticked higher in May 2009. The Dow gained 31.90 points, or 0.4%, to 8,770.92. The S&P 500 added 5.74 points, or 0.6%, to 944.89. The Nasdaq Composite Index was up 9.29 points, or 0.5%, to 1,862.37
Some encouraging economic data lifted the sentiment on Wall Street yesterday initial claims for unemployment benefits fell by 24,000 last week to 601,000, a much sharper drop than expected. Retail sales also shot up 0.5% in May 2009, marking the first gain in three months, boosted by rising gasoline prices.
Closer home, Indian stocks have soared in the past three months on a view that ample global liquidity and a return of risk appetite will help India Inc help raise funds for expansion which in turn will boost corporate profits. India Inc has already raised almost Rs 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
Foreign funds are aggressively buying in Indian stocks. As per the provisional figures on NSE, foreign funds bought shares worth Rs 786.57 crore on Thursday, 11 June 2009. Foreign funds are aggressively buying in Indian stocks. FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
On the back of heavy buying by foreign funds, the Sensex jumped 5,819.50 points or 60.32% in calendar year 2009 as on 10 June 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 7,306.41 points or 89.53% on 10 June 2009.
Net inflows into domestic equity mutual funds rose to Rs 1,930 crore in May 2009, the highest in 14 months, and more than twice the amount in the first four months of 2009, according to data from the Association of Mutual Funds in India.
Meanwhile, the government reportedly is considering a proposal to restore the rate of service tax to its earlier level of 12%. The government had reduced the service tax rate to 10% in the third stimulus package which was unveiled in February 2009. This option of withdrawing the service tax cut is being weighed on account of spiralling government expenditure, a result of the government's attempts to boost the economy and shrinking revenues due to the slowdown in economic activity.
Finance minister Pranab Mukherjee on Thursday said there was a need to find ways to bring the economy back to higher growth path without increasing the fiscal deficit. He said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs.
Mukherjee had on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said. Mukherjee said banks have agreed to explore the possibility of reducing rates after a meeting with chiefs of state-run banks.
Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.
A change in the Reserve Bank of India's current loose monetary policy stance if and when it takes place may weigh on equities. Investors have been betting that falling interest rates in India may help sustain strong domestic demand and also support a larger capital expenditure programme of India Inc. Late last week, India's biggest private sector bank by net profit ICICI Bank cut prime lending rate by 50 basis points.
Rising metal prices is a cause of concerns for manufacturing companies as their raw material costs may shoot up.
The government's oil subsidy bill may remain high and it could continue to put pressure on the already high fiscal deficit if the government does not resort to decontrol of oil prices. However, the surging rupee against the dollar may mitigate the impact to some extent as India is a major importer of crude.
Petroleum Secretary R.S. Pandey on Wednesday said the government is committed to reforms in fuel pricing but it wants to ensure affordable fuel supply. Pandey's comments come in the backdrop of a newspaper report on Tuesday that the government may defer a proposal to decontrol pricing of gasoline and diesel because of the increase in crude oil prices. Trinamool Congress (TC), a key ally in Prime Minister Manmohan Singh's government, opposes lifting controls on fuel pricing. With her eye on a series of local elections coming up in West Bengal, she told a Bengali television channel on Monday that her party would protest against any move which would result in higher fuel prices.
The government fixes the price of petrol and diesel and compensates state refiners, such as Indian Oil Corporation, HPCL and BPCL by supplying domestic crude oil at a discount and by issuing bonds to shore up their balance sheets.
Any disappointment on reforms may weigh on the stock market at a time when many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will push economic reforms to boost growth.
The petroleum minister had recently said he will submit a proposal for deregulation of oil products to the Cabinet in six to eight weeks. If government removes price controls on petrol and diesel, it would benefit PSU OMCs and also the government, which has been issuing oil bonds to share PSU OMC's burden. It would also persuade private refiners, such as Reliance Industries and Essar Oil, to reenter the oil-marketing business.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present.
Unveiling the agenda of the government, President Pratibha Patil in her speech addressed to a joint session of both houses had last week indicated government's intension to divest stake in state-run firms. The government, however, intends to retain control over state-run firms and will continue to hold at least 51% stake. But some investors are concerned that the government's two key allies viz. the DMK and Trinamool Congress (TC) may oppose economic reforms.
Prime Minister Manmohan Singh on Tuesday said India will achieve an economic growth of at least 7% this fiscal and promised more resources for areas like infrastructure and public services. He said India will be able a growth rate of 8-9%, even when the world grows at a lower rate.
The Prime Minister said the reason behind his optimism was that India's savings rate, which determines the money that can be deployed for development projects, was still high at 35% of gross domestic product (GDP).
Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation. "It (expenditure towards infrastructure) will not add to inflation, but to our economic growth."
According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6% achieved during the past five years. He also said that his government was deeply committed to the agenda listed in the President's address, adding flagship programmes will be further strengthened and public delivery system made more transparent.

Daily News Roundup - June 12 2009

Reliance and Essar Oil are in talks with the Petroleum Ministry and Cairn Energy to lift a portion of Cairn’s Mangala crude in Rajasthan. (BL)
Sesa Goa has agreed to takeover the mining assets of Dempo Group for Rs17.5bn in an all cash deal. (BL)
Infosys is in discussion with five-six of its clients for acquiring their technology units. (BL)
ONGC to borrow Rs270bn in the next three-four years to fund projects. (ET)
Tech Mahindra may not hike open offer price for Satyam Computer from Rs58 per share. (ET)
NTPC-BHEL, plan to jointly set up a Rs60bn power equipment manufacturing unit in Andhra Pradesh, has been allocated 750 acres of land for the greenfield project. (BL)
Hindustan Unilever has decided to enter into the kitchen cleaning surface market by bringing its international brand, Cif. (BL)
Reliance Power to raise Rs120bn debt for its 4,000MW ultra mega power project at Krishnapatnam in Andhra Pradesh. (ET)
Maruti Suzuki will manufacture Nissan Pixo at its Manesar plant. (BL)
Orissa Government has pruned Vedanta Aluminium’s plans to expand its smelter and refining capacity due to lack of bauxite linkages and environmental issues. (BL)
L&T sold its 14.3mn shares in Ultratech, 11.5% stake in the company, thus registering a profit on sale of shares of Rs10.4bn. (BL)
TCS is competing for 5-6 BPO deals worth US$150-200mn. (ET)
Jet Airways is negotiating with Boeing to cancel its order for B777 jet, worth Rs7.3bn. (BS)
Satyam has launched a cost cutting plan which is expected to save Rs10mn a day. (ET)
Maruti to launch A-Star into Africa and Latin America markets. (ET)
SAIL to cut its Rs780bn expansion plans by 13% to save Rs100bn. (ET)
Novartis India has successful closed its open offer to buy shares in Indian arm and rejects suggestion of de-listing. (ET)
Real-estate private equity firm Red- Fort Capital has acquired 18% stake in Parsvnath Developers premium residential project in New Delhi. (ET)
Tata Tea is scouting to acquire global brands in Russia, South America and Asia Pacific region. (FE)
Tech Mahindra will make a preferential issue to raise its holding in Satyam Computers if its open offer flounders. (FE)
Pantaloon Retail’s same store sales grew to the highest in May as consumer demand improved. (BS)
Following a drop in orders Suzlon has decided to cut 160 jobs, more than half of its workforce, at its US plant. (BL)
Jubilant Organosys subsidiary Jubilant Biosys has entered into 3- year collaboration with US based pharmaceutical firm Endo Pharmaceuticals for research in oncology. (BL)
Tata Tea has initiated a strategic reorganization plan of its beverages business. (BL)
ADAG to repay Rs40bn of debt which was backed by shares of its 3 group companies. (BS)
Shiv Vani Oil plans to raise Rs6bn from domestic and international markets. (BL)
GM India beings trial production of new mini car, to be launched later this year. (BL)
Inflation for the week ended May’ 30 dropped to 0.13% as against 0.48% in the previous week. (ET)
Finance Minister is not keen to do away with STT as of now. (ET)
DoT open to hiking reserve price for 3G spectrum to Rs35.4bn. (ET)
World Health Organization has declared first flu pandemic of 21st century. (ET)
PM economic advisory council expects 7% GDP growth in the FY10. (ET)
BJP ruled states are against the introduction of Goods and Services Tax (GST) from April 1, 2010. (ET)
Retail fuel price differential between PSU’s and private players is expected to rise to Rs2-2.5/litre from Rs1-1.5/litre currently. (BL)

IIP…Index of Improved Performance!

No great improvements in the lot of mankind are possible until a great change takes place in the fundamental constitution of their modes of thought.

Investors seem happy with the small changes in economy and great changes in the market. After Thursday’s pullback, bulls are all set to rule again. We expect the Indian market to open higher and stay firm. IIP data for April will be out today. Expectations are of continued improvement. Besides, March’s dismal figure (-2.3%) may also be revised upwards. What’s more, inflows from both, foreign and local funds have been pretty strong despite a choppy week.

Global cues are encouraging, barring the surge in oil prices. Key global markets in the US and Asia have hit multi-month highs. Stocks in Europe ended up for a third successive day. The advance is largely on belief that the worst of the global recession is history. Economic reports from across the globe show that the severity of economic slump is easing. Unless we are hit by any nasty surprises, the positive trend in equity markets is likely to hold, though the speed of the rise may slow a bit.

The immediate issues confronting this rally are: rising bond yields, spike in commodity prices, a possible weak monsoon, budget disappointments, policy delays and corporate earnings missing estimates. Meanwhile, the WHO has declared swine flu a global pandemic.

Watch out for Sesa Goa as the iron ore exporter has bought mining assets of the Dempo group for Rs17.5bn.

Gail India and Indian Hotels will announce their results today.

FIIs were net buyers in the cash segment on Thursday at Rs7.86bn while the local institutions pumped in Rs5.58bn. In the F&O segment, the foreign funds were net sellers at Rs7.98bn. On Wednesday, FIIs were net buyers at Rs7.17bn in the cash segment. Mutual funds were net buyers at Rs9.49bn on the same day.

US stocks ended modestly higher on Thursday, with all three major benchmarks closing at multi-month highs, spurred by the day's positive economic reports. The Standard & Poor’s 500 Index ended at a seven-month high.

The Dow Jones Industrial Average gained nearly 32 points, or 0.4%, to 8,770.92. Despite falling short of its 2008 finish, the index ended at its highest level since Jan. 6. The S&P 500 index added over 5 points, or 0.6% to 944.89, its highest close since Nov. 5.

The Nasdaq Composite index climbed 9 points, or 0.5%, to 1,853.40, ending at its best point since Oct. 6.

US stocks have been on the rise since bottoming March 9, with the Dow up 34%, the S&P 500 up 40% and the Nasdaq up 47%, as of Thursday's close. But they have fluctuated this week as rising Treasury yields and higher commodity prices sparked worries about inflation hampering the economic recovery.

A rise in retail sales and a bigger-than-expected dip in jobless claims raised hopes that the pace of the recession is slowing. But the early advance lost momentum; the S&P 500 failed to hold on after briefly hitting a key level that traders and other market pros watch.

A comparatively strong 30-year bond auction helped temper worries about pricing pressures, at least in the short term. Treasury prices jumped, lowering the corresponding yields. The benchmark 10-year note yield fell to 3.85%, down from 4% early Thursday morning. The yield touched 4% during Wednesday's session for the first time since last October.

Retail sales climbed 0.5% in May, the Commerce Department reported. The report was in line with forecasts and showed an improvement from April, when sales fell a revised 0.2%.

Sales excluding autos rose a bigger-than-expected 0.5%. Economists had forecast that sales without volatile autos would rise 0.2% after falling a revised 0.2% in April. But the report mostly reflects the recent rise in gas prices, rather than any new direction for the consumer.

A Federal Reserve report showed Americans saw $1.3 trillion in wealth disappear in the first quarter of this year, as home values declined and the stock market tanked. But the rate of decline was slower than last year. In the fourth quarter alone, $5.1 trillion in wealth disappeared, the biggest quarterly plunge since the Fed started tracking data in 1951.

Another report showed that foreclosure filings fell 6% in May from April, but still saw the third-worst month on record. The report showed that one of every 398 households received some kind of filing in the month, including notices of default, scheduled auctions or bank repossession.

The number of Americans filing new claims for unemployment fell 24,000 to 601,000 last week, according to a Labor Department report released Thursday morning. Economists though claims would dip to 615,000. However, continuing claims, the number of Americans who have been receiving benefits for a week or more, rose to 6,816,000 from a revised 6,757,000 in the previous week.

Bank of America CEO Ken Lewis stressed that pressure from the government played a key role in the company's decision to complete its purchase of Merrill Lynch last year. He said the federal government threatened to remove management or board members if the company went back on its promise to buy Merrill, even though Merrill's financial state was deteriorating.

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

US light crude oil for July delivery rose $1.35 to settle at $72.68 a barrel on the New York Mercantile Exchange, the highest close since October.

COMEX gold for August delivery rose $7.30 to settle at $962 an ounce.

European shares rose, owing to strength in drugmakers and banks. The pan-European Dow Jones Stoxx 600 index advanced 1% to close at 214.80, up for a third straight session.

Germany's DAX 30 index climbed 1.1% to 5,107.26, while the French CAC-40 index rose 0.6% to finish at 3,334.94 and the UK's FTSE 100 index was up 0.6% to end at 4,461.87.

Indian markets ended with marginal losses on Thursday ending a two day 5% rally. Weak cues from the US coupled with mixed cues from the Asian markets prompted the traders and investors to book some profits at higher levels. Inflation numbers which fell to 30-year low had a minimal impact on sentiment. India’s Inflation fell to 0.13% for the week ended May 30 as against 0.48% in the previous week.

The Sensex slipped 55 points or 0.36% to end at 15,411 after touching a high of 15,517 and a low of 15,240. The index had opened at 15,517 against the previous close of 15,466. The NSE Nifty slipped 18 points or 0.4% to shut shop at 4,637.

Shares of UltraTech Cement declined by over 4% to Rs735 after Larsen & Toubro Limited sold its complete stake of 11.49% in the company in the open market.

The sale was carried out at an average price of around Rs725 per share. L&T had exited its cement business through a demerger and sale to Grasim in 2004, and had retained 11.49% stake in Ultratech with a commitment to sell the stake on or before 31st Dec,
2009

The sale of its complete stake in Ultratech Cement Limited is in accordance with L&T’s obligations under its agreement with Grasim, and is also in line with L&T’s strategy of focusing on its core business. In its efforts to get the best value for its shareholders, the company decided that the present market conditions were correct for disinvestment of its stake.

Shares of L&T also ended lower by 0.5% to Rs1624 after hitting an intra-day low of Rs1669 and Rs1586 recording volumes of over 0.9mn shares on BSE.

Shares of Mahindra & Mahindra Financial advanced by 2.5% to Rs285 after ~6.81mn shares or 7% of its equity changed hands in three transactions. The scrip touched an intra-day high of Rs293 and a low of Rs263 and recorded volumes of over 7mn shares on NSE.

Shares of EKC gained by over 5% to Rs226 after ~4.7% equity shares of the company changed hands in a single transaction. The scrip touched an intra-day high of Rs234 and a low of Rs209 and recorded volumes of over 0.8mn shares on BSE.

Shares of GTL Infrastructure gained 1.6% to Rs46 after the Board of directors of the company would meet on June 11, 2009, to consider allotment of equity shares consequent to Conversion Notice(s) received for conversion of FCCBs at a conversion price of Rs53.04 per share. The scrip touched an intra-day high of Rs47.4 and a low of Rs44 and recorded volumes of over 4.6mn shares on BSE.

Shares of Shiv Vani Oil advanced by 2.7% to Rs318 after the board of directors of the company approved to raise funds through issue of equity shares / GDRs / ADRs / FCCBs/ securities for an amount not exceeding Rs6bn or its equivalent in any foreign currency, either through preferential issue and / or qualified institutional placement (QIP) and / or private placement or otherwise.

Shares of GMR Infra ended lower by 3% to Rs157. GMR Energy Ltd (GEL), the 100% subsidiary company along with other group company owns 33.34% of the issued and outstanding capital of Homeland Energy Group Ltd (HEG), Canada, listed on Toronto Stock Exchange.

HEG, Canada, through its subsidiaries has major interest in coal projects in South Africa including an operating mine and also other investment in uranium exploration Company etc. GEL has nominated three directors, Mr. B V Nageswara Rao, Mr. Raaj Kumar and Mr. Ashis Basu on the Board of HEG, representing 50% of the Board."

Shares of DS Kulkarni slipped by 3.2% to Rs55.9 after the company announced that it has terminated an agreement with GTC Cyprus Holding. GTC agreement was for joint venture development of SEZ said the company. The scrip touched an intra-day high of Rs60 and a low of Rs55 and recorded volumes of over 0.15mn shares on BSE.

Looking at the choppy trades on Thursday, markets would continue to struggle for direction in the coming days. The 4,650 levels for Nifty would continue to be crucial, a break out above or below the vital mark on either side would be the trend decider. Market players would also be awaiting the release of the industrial production numbers to be released on Friday noon. The consensus forecast is for a flat IIP as against a drop of 2.3% in March.

Market may open positive

Yesterday's pullback and firm economy outlook may help the market advance further. Asian indices coupled with US indices are displaying a subdued trend in the ongoing trades and may exert some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 4600 and a break below this level could see it slip further to 4550-4500, while on the upside the index could test higher level at 4700. The Sensex has a likely support at 15300 and may face resistance at 15600.
Major US indices Stocks cut losses, but still ended lower Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort. While the Dow Jones moved down by 24 points at 8739, the Nasdaq moved down by 7 points to close at 1853.
Most of the Indian ADRs traded firm on the US bourses. Satyam led the pack with gains of 35.71% while HDFC Bank, Dr Reddy, Tata Motors, ICICI Bank and Patni Computers jumped over 0.09-4% each. Among the laggards Rediff lost 6.67%, Wipro, Infosys, MTNL and VSNL lost marginally.
Crude oil prices raised, with the Nymex light crude oil for July delivery falling by $1.32 to close at $71.33 a barrel. In the commodity space, the Comex gold for August delivery reamined unchanged at $954.70 an ounce.

Crude shoots up

Prices rise as International Energy Agency increases the 2009 global demand forecast
Oil prices ended substantially higher on Thursday, 11 June, 2009. Price rose today after International Energy Agency increased the 2009 global demand forecast for oil for the first time in ten months. Prices also rose today after energy department reported sudden draw in crude inventories for last week yesterday.
On Thursday, crude-oil futures for light sweet crude for July delivery closed at $72.68/barrel (higher by $1.35 or 1.9%). Last week, crude ended higher by 3.2%.
Crude ended the month of May, 2009, higher by 30%. This was the largest month gain for crude in almost a decade. Prior to May, crude ended April and March, 2009 higher by 2.9% and 10.9% respectively. It rallied 11.3% in the first quarter. Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 50% since then. Year to date, in 2009, crude prices are higher by 43.9%.
In a monthly report released on Thursday, the IEA, an energy advisor to 28 developed countries, increased its global oil demand estimate for this year by 120,000 barrels a day to 83.3 million barrels a day.
Yesterday, the EIA had reported that crude inventories fell by 4.4 million barrels in the week ended 5 June, 2009. Refineries operated at 85.9% of their operable capacity last week, slightly lower than a week ago. EIA also reported that crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year. Meanwhile, gasoline inventories fell 1.6 million barrels, and distillate stockpiles declined 300,000 barrels.
Earlier this week, the Energy Information Administration raised its outlook for this year's crude-oil and gasoline prices. The body said that crude prices are expected to average $58.70 a barrel this year. That's up from the $52 a barrel the EIA had forecast a month ago. It also raised the outlook for next year's crude price to $67.42 from $58. The EIA also said regular gasoline prices are expected to average close to $2.70 a gallon in July. The average regular gasoline price averaged across the full year is expected to be $2.33 a gallon.
Also at the Nymex on Thursday, July reformulated gasoline rose 4.96 cents, or 2.5%, to $2.0649 a gallon and July heating oil gained 2.08 cents, or 1.1%, to $1.8534 a gallon.
July natural gas rallied 22.5 cents, or 6.1%, to $3.933 per million British thermal units. It rallied to $4.067 earlier. EIA reported today that U.S. inventories rose 106 billion cubic feet in the week ended 5 June, 2009. At 2,443 billion cubic feet, stocks were 568 billion cubic feet higher than last year at this time and 438 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 June delivery closed at Rs 3,456/barrel, higher by Rs 88 (2.6%) against previous day's close. Natural gas for June delivery closed at Rs 187.8/mmbtu, higher by Rs 11.7/mmbtu (6.6%).

Precious metals end higher

Drop in dollar imparts shine on them
Precious metal prices shot up on Thursday, 11 June, 2009. They gave up earlier losses as the dollar lost sheen and dropped increasing their appeal as a hedge against inflation.
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 ended at $962, higher by $7.3 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10.8%.
Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.
On Thursday, Comex silver futures for July delivery rose 26 cents (1.7%) at $15.49 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 37.7% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar reversed its earlier gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down 1.2%.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for August delivery closed higher by Rs 70 (0.5%) at Rs 14,665 per 10 grams. Prices rose to a high of Rs 14,694 per 10 grams and fell to a low of Rs 14,525 per 10 grams during the day's trading.
At the MCX, silver prices for July delivery closed Rs 373 (1.6%) higher at Rs 23,948/Kg. Prices opened at Rs 23,650/kg and rose to a high of Rs 24,018/Kg during the day's trading.

FIIs continue buying

Inflow of Rs 717.70 crore on 10 June 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 717.70 crore on Wednesday, 10 June 2009, lower than Rs 990.70 crore on Tuesday, 9 June 2009.
FII inflow of Rs 717.70 crore on 10 June 2009 was a result of gross purchases Rs 3851.50 crore and gross sales Rs 3133.80 crore. The BSE Sensex surged 339.81 points, or 2.25%, to 15,466.81 on that day.
FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
There are a total of 1660 foreign funds registered with the Securities & Exchange Board of India (Sebi).

Sensex ends lower; ONGC plunges

The Sensex ended the volatile session on a lower note. IT, PSU, oil & gas,capital goods and power stocks led the declines, whereas metal gained. It opened with a gain of 50.55 points, at 15,517.36 on Thursday after witnessing a huge rally yesterday for the second day. The index soon fell into the negative terrain on profit booking and proceeded to slip further touching a low of 15,240.73 on the back of aggressive selling pressure seen in frontliners. However, it pared some of its losses to finally close in the negative.
India`s benchmark wholesale price index (WPI), inflation declined to 0.13% for the week ended May 30, 2009 as compared to 0.48% a week ago.The lowest ever in over three decades even as prices of essential food items like pulses, fruit and vegetables, spices and eggs turned dearer.
On the other hand, it was a cheerful day for fraud-hit Satyam Computer as the company hit the upper limit for the third consecutive session on the Bombay Stock Exchange on the back of better-than expected results. On Tuesday, Satyam posted a net profit of Rs 1,605 million for the October-December 2008 - a period that saw the beginning of Satyam`s fall from grace - and a total income of Rs 23,272.1 million.
BSE Midcap and Smallcap index declined 0.22% and 0.90% respectively.
European stocks fell. Carnival fell almost 2.5% as oil climbed for a third day. UK`s benchmark index FTSE 100 rose 20.34 points, or 0.46%, to trade at 4,457.05. French benchmark index CAC 40 gained 7.51 points, or 0.23%, to trade at 3,322.31 and Germany`s benchmark index DAX climbed 31.82 points, or 0.63%, to trade at 5,083.04. (4.15 p.m., IST)
The Sensex ended the day with a loss of 55.34 points, or 0.36% at 15,411.47 after touching a high of 15,568.74 and a low of 15,240.73. The broad-based NSE Nifty declined 17.55 points, or 0.38% at 4,637.70 after hitting a high of 4,679.55 and a low of 4,586.15.
Major gainers in the 30-share index were Hindalco Industries (7.92%), Mahindra & Mahindra (6.18%), Sterlite Industries (India) (5.82%), HDFC Bank (3.85%), Tata Steel (2.90%), and Reliance Capital (2.66%).
On the other hand, Oil & Natural Gas Corporation (4.01%), Jaiprakash Associates (3.96%), ACC (3.84%), Bharat Heavy Electricals (3.46%), State Bank Of India(3.44%), and Infosys Technologies (2.87%) were the major losers in the Sensex.
Overall market breadth was negative. Out of the total 2,793 stocks traded at BSE, 967 advanced, 1,768 declined while 58 remained unchanged.

NSE Bulk Deals to Watch - June 11 2009

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
11-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,460462,1031.05,-
11-JUN-2009,ADSL,Allied Digital Services L,BLACK ROCK A/C BLACK ROCK INDIA EQUITIES FUND MAURITIUS LTD,BUY,100000,358.60,-
11-JUN-2009,CHI,CHI Investments Limited,CAMPHAR SEC. & ADV. P LTD.,BUY,83019,40.58,-
11-JUN-2009,EKC,Everest Kanto Cylinder Li,CAPITAL GRP-GLOBAL INST INV SER A/C CAP INTL EMERGING MKTS F,BUY,1368449,219.99,-
11-JUN-2009,EKC,Everest Kanto Cylinder Li,CAPITAL GRP-GLOBAL INST INV SER A/C EMERGING MKTS GROWTH FUN,BUY,2841964,219.99,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,129284,440.01,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,C D INTEGRATED SERVICES LTD.,BUY,121265,446.50,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,BUY,137154,437.82,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,147373,447.69,-
11-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,BUY,4506633,51.63,-
11-JUN-2009,M&MFIN,Mahindra & Mahindra Finan,HSBC GLOBAL INVT FUNDS A/C HSBC GLOBAL INVT FUNDS (MAURITIUS,BUY,1028297,263.00,-
11-JUN-2009,M&MFIN,Mahindra & Mahindra Finan,INDEA CAPITAL PTE LTD A/C INDEA LONG TERM OPPORTUNITIES MAST,BUY,500000,263.00,-
11-JUN-2009,M&MFIN,Mahindra & Mahindra Finan,SUNDARAM BNP PARIBAS MUTUAL FUND A/C SUNDARAM BNP PARIBAS,BUY,1645792,263.00,-
11-JUN-2009,MAYTASINFR,Maytas Infra Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,BUY,357172,90.55,-
11-JUN-2009,NIITLTD,NIIT Limited,NIRSHILP SECURITIES PVT. LTD.,BUY,277975,63.92,-
11-JUN-2009,NOIDATOLL,Noida Toll Bridge Company,SUNDARAM BNP PARIBAS,BUY,1007143,42.35,-
11-JUN-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,BUY,75534,1147.12,-
11-JUN-2009,SURANATELE,Surana Telecom Ltd.,TARUNA SUBHASH SHARMA,BUY,177810,33.96,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,BAJAJ ALLIANZ LIFE INSURANCE CO LTD,BUY,750000,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE LIMITED,BUY,724213,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,LIFE INSURANCE CORPORATION OF INDIA LTD,BUY,2400000,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,PRU INDIA EQUITY OPEN LIMITED,BUY,987171,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,RELIANCE CAPITAL TRUSTEE CO LTD -A/C EQUITY OPPORTUNITIES FU,BUY,650000,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,RELIANCE CAPITAL TRUSTEE CO LTD RELIANCE NATRES FUND,BUY,1000000,725.00,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,THE MASTER TRUST BANK OF JAPAN LTD A/C NOMURA IND INVST FUND,BUY,1075682,725.00,-
11-JUN-2009,WANBURY,Wanbury Limited,PAWANSUT TIE-UP PRIVATE LTD,BUY,122411,61.98,-
11-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1118902,24.41,-
11-JUN-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,460462,1031.94,-
11-JUN-2009,CHI,CHI Investments Limited,CAMPHAR SEC. & ADV. P LTD.,SELL,43019,40.38,-
11-JUN-2009,CHI,CHI Investments Limited,MERRILL LYNCH CAPITAL MARKETS ESPANA S.A. SVB,SELL,125965,40.52,-
11-JUN-2009,DISHTV,Dish TV India Limited,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,3300000,43.98,-
11-JUN-2009,EKC,Everest Kanto Cylinder Li,BRIGHTWILL LIMITED,SELL,4750000,220.00,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,132184,439.26,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,C D INTEGRATED SERVICES LTD.,SELL,121265,447.39,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,MANSUKH SECURITIES & FINANCE LIMITED,SELL,137204,438.32,-
11-JUN-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,148173,447.74,-
11-JUN-2009,GLORY,Glory Polyfilms Limited,PRIYASHA-MEVEN FINANCE LTD.,SELL,100000,26.34,-
11-JUN-2009,IFCI,IFCI Ltd.,ADROIT SHARE & STOCK BROKER PVT. LTD.,SELL,4506633,51.63,-
11-JUN-2009,M&MFIN,Mahindra & Mahindra Finan,TPG-AXON (MAURITIUS) II LTD,SELL,4700000,263.13,-
11-JUN-2009,MAYTASINFR,Maytas Infra Limited,IFCI LTD.,SELL,900000,90.68,-
11-JUN-2009,NIITLTD,NIIT Limited,NIRSHILP SECURITIES PVT. LTD.,SELL,1024875,63.23,-
11-JUN-2009,RIIL,Reliance Indl Infra Ltd,C D INTEGRATED SERVICES LTD.,SELL,75534,1148.36,-
11-JUN-2009,SESAGOA,Sesa Goa Ltd.,SOCIEDADE DE FOMENTO INDUSTRIAL PVT LTD,SELL,4200000,182.59,-
11-JUN-2009,SURANATELE,Surana Telecom Ltd.,TARUNA SUBHASH SHARMA,SELL,177810,33.53,-
11-JUN-2009,ULTRACEMCO,UltraTech Cement Limited,LARSEN & TOUBRO LIMITED,SELL,14303294,725.16,-
11-JUN-2009,WANBURY,Wanbury Limited,TITANIC NETWORK MARKETING PVT. LTD.,SELL,96935,61.97,-
11-JUN-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1155587,24.36,-

Turnover declines

RIL June 2009 futures at premium
Nifty June 2009 futures were at 4649, at a premium of 11.30 points as compared to the spot closing of 4637.70. Turnover in NSE's futures & options (F&O) segment was Rs 63,464.28 crore, lower than Rs 73,359.99 crore on Wednesday, 10 June 2009.
Reliance Industries (RIL) June 2009 futures were at premium at 2310.20 compared to the spot closing of 2303.25.
Sesa Goa June 2009 futures were at premium at 193.20 compared to the spot closing of 192.15.
Tata Steel June 2009 futures were near spot price at 452.80 compared to the spot closing of 452.50.
In the cash market, the S&P CNX Nifty lost 17.55 points or 0.38% at 4637.70.

Market snaps two day winning streak

The key benchmark indices snapped last two days' strong gains as investors took a breather after a solid rally in the past three months. IT and oil stocks fell even as metal stocks rose. Index heavyweight Reliance Industries came off intraday lows. The BSE 30-share Sensex was down 55.34 points, or 0.36%, up close to 175 from the day's low and off close to 155 points from the day's high. The barometer index had jumped 800.89 points or 5.46% to 15,466.81 on Wednesday, 10 June 2009 from 14,665.92 on Monday, 8 June 2009.
The market was volatile today. The market slipped into the red soon after a firm opening triggered by higher Asian stocks. It recovered from the day's low in mid-morning trade. It swung between the positive and negative terrain later. The market recovered some ground after hitting fresh day low in afternoon trade. Recovery gathered steam later after Finance Minister Pranab Mukherjee said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs. But the market weakened again in late trade.
European markets cut initial losses and moved into green from red as pharma and utility stocks rose. Key benchmark indices in France, Germany and UK were up by between 0.24% to 0.54%.
Asian stocks were mixed after fluctuating between positive and negative zones. Key benchmark indices in Hong Kong and South Korea and Taiwan rose by between 0.03% to 1.63%.
But Japan's Nikkei was down 0.1%. Japan's economy shrank less than the government initially estimated as business investment and inventories fell at a slower pace. Gross domestic product shrank at a record 14.2% annual pace in the three months ended 31 March 2009, less than the 15.2 % reported last month, the Cabinet Office said today in Tokyo.
China's key stock index fell from a 10-month high, led by transport and commodity companies, as a record slump in the nation's exports spurred concern that equity gains have outpaced prospects for economic growth. The Shanghai Composite Index, which tracks the bigger of China's exchanges, fell 18.93, or 0.7%, to 2,797.32 at the close, after gaining as much as 0.4% earlier.
Australian employers cut fewer workers than estimated in May 2009, adding to signs the economy may recover faster than other developed nations.
Trading in the US index futures indicated Dow could rise 12 points at the opening bell today, 11 June 2009.
US markets closed flat with a negative bias on Wednesday, 10 June 2009, but well off their intraday lows. Stocks had opened higher, but those gains quickly faded as a jump in oil prices and sharp rise in lending rates spurred worries that higher borrowing costs and oil prices will threaten a recovery of the US economy. The Dow fell 24.04 points, or 0.3%, to 8,739.02. The S&P 500 index fell 3.28 points, or 0.4%, to 939.15. The Nasdaq Composite Index fell 7.05 points, or 0.4%, to 1,853.08.
US Treasury prices fell on Wednesday, sending benchmark yields up to 4% for the first time in eight months, after an auction of 10-year notes heightened concerns over the burgeoning US budget deficit. The sell-off in the bond market also has fueled concern about stock valuations.
Closer home, Indian stocks have soared in the past three months on a view that ample global liquidity and a return of risk appetite will help India Inc help raise funds for expansion which in turn will boost corporate profits. India Inc has already raised almost Rs 5,000 crore from three qualified institutional placements (QIPs) so far in 2009 and announced plans to raise another Rs 20,000 crore.
Foreign funds are aggressively buying in Indian stocks. Foreign funds are aggressively buying in Indian stocks. FII inflow in June 2009 totaled Rs 4,602.30 crore (till 10 June 2009). FII inflow in calendar year 2009 totaled Rs 25,921.70 crore (till 10 June 2009).
On the back of heavy buying by foreign funds, the Sensex jumped 5,819.50 points or 60.32% in calendar year 2009 as on 10 June 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 7,306.41 points or 89.53% on 10 June 2009.
Net inflows into domestic equity mutual funds rose to Rs 1,930 crore in May 2009, the highest in 14 months, and more than twice the amount in the first four months of 2009, according to data from the Association of Mutual Funds in India.
Meanwhile, the government reportedly is considering a proposal to restore the rate of service tax to its earlier level of 12%. The government had reduced the service tax rate to 10% in the third stimulus package which was unveiled in February 2009. This option of withdrawing the service tax cut is being weighed on account of spiralling government expenditure, a result of the government's attempts to boost the economy and shrinking revenues due to the slowdown in economic activity.
Finance minister Pranab Mukherjee today said there was a need to find ways to bring the economy back to higher growth path without increasing the fiscal deficit. He said the government would focus on infrastructure, agriculture and employment generating sectors to protect growth and jobs.
Mukherjee had on Wednesday said banks should provide credit at reasonable rates to spur growth, saying cuts in official rates by the Reserve Bank of India had not been passed on. This will help restore the environment for rapid growth and ensure that the growth process benefits, he said. Mukherjee said banks have agreed to explore the possibility of reducing rates after a meeting with chiefs of state-run banks.
Inflation based on the wholesale price index rose 0.13% in the year through 30 May 2009, a record low, government data showed at 12:00 IST today. Inflation was 0.48% in the year through 23 May 2009. However, the government revised upwards inflation for the week ended 4 April 2009 to 0.83% from 0.18%.
Interest rates in India are falling thanks to ample liquidity in the banking system, low headline inflation and a loose monetary policy stance of the Reserve Bank of India. However, inflation may rise if oil and metal prices which have risen sharply in 2009 continue to rally.
A change in the Reserve Bank of India's current loose monetary policy stance if and when it takes place may weigh on equities. Investors have been betting that falling interest rates in India may help sustain strong domestic demand and also support a larger capital expenditure programme of India Inc. Late last week, India's biggest private sector bank by net profit ICICI Bank cut prime lending rate by 50 basis points.
Rising metal prices is a cause of concerns for manufacturing companies as their raw material costs may shoot up.
The government's oil subsidy bill may remain high and it could continue to put pressure on the already high fiscal deficit if the government does not resort to decontrol of oil prices. However, the surging rupee against the dollar may mitigate the impact to some extent as India is a major importer of crude.
Petroleum Secretary R.S. Pandey on Wednesday said the government is committed to reforms in fuel pricing but it wants to ensure affordable fuel supply. Pandey's comments come in the backdrop of a newspaper report on Tuesday that the government may defer a proposal to decontrol pricing of gasoline and diesel because of the increase in crude oil prices. Trinamool Congress (TC), a key ally in Prime Minister Manmohan Singh's government, opposes lifting controls on fuel pricing. With her eye on a series of local elections coming up in West Bengal, she told a Bengali television channel on Monday that her party would protest against any move which would result in higher fuel prices.
The government fixes the price of petrol and diesel and compensates state refiners, such as Indian Oil Corporation, HPCL and BPCL by supplying domestic crude oil at a discount and by issuing bonds to shore up their balance sheets.
Any disappointment on reforms may weigh on the stock market at a time when many equity analysts have been raising earnings forecasts of India Inc on hopes that the new government will push economic reforms to boost growth.
The petroleum minister had recently said he will submit a proposal for deregulation of oil products to the Cabinet in six to eight weeks. If government removes price controls on petrol and diesel, it would benefit PSU OMCs and also the government, which has been issuing oil bonds to share PSU OMC's burden. It would also persuade private refiners, such as Reliance Industries and Essar Oil, to reenter the oil-marketing business.
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors expect financial sector reforms such as increase in the cap on foreign direct investment in insurance sector to 49%, from 26% at present.
Unveiling the agenda of the government, President Pratibha Patil in her speech addressed to a joint session of both houses had last week indicated government's intension to divest stake in state-run firms. The government, however, intends to retain control over state-run firms and will continue to hold at least 51% stake. But some investors are concerned that the government's two key allies viz. the DMK and Trinamool Congress (TC) may oppose economic reforms.
As per media reports, the government will stick to the course of disinvestment plans it has charted out despite DMK's opposition to it. Finance minister Pranab Mukherjee will prepare the road map for the programme in his Budget. DMK leader and M Karunanidhi's daughter, Kanimozhi, who had spoken out against disinvestment in the Rajya Sabha during the debate on the motion of thanks to the President's address on Monday, has already clarified that her party will take a case-by-case view on the issue. The divestment in three to four companies could be taken up in the immediate run. These include NHPC, Power Finance Corporation and REC report said.
Prime Minister Manmohan Singh on Tuesday said India will achieve an economic growth of at least 7% this fiscal and promised more resources for areas like infrastructure and public services. He said India will be able a growth rate of 8-9%, even when the world grows at a lower rate.
The Prime Minister said the reason behind his optimism was that India's savings rate, which determines the money that can be deployed for development projects, was still high at 35% of gross domestic product (GDP).
Manmohan Singh also sought to allay fears that pump priming of the economy by way of stimulus packages announced earlier and measures that will follow in the ensuing months would fuel inflation. "It (expenditure towards infrastructure) will not add to inflation, but to our economic growth."
According to the Prime Minister, fiscal deficit had increased sharply but even then India had enough resources to spend on flagship programmes thanks to the average annual growth of 8.6% achieved during the past five years. He also said that his government was deeply committed to the agenda listed in the President's address, adding flagship programmes will be further strengthened and public delivery system made more transparent.
The BSE 30-share Sensex was down 55.34 points, or 0.36%, to 15,411.47. The Sensex rose 101.93 points at the day's high of 15,568.74 in early trade. At the day's low of 15,240.73, the Sensex fell 226.08 points in afternoon trade.
The S&P CNX Nifty was down 17.55 points or 0.38% to 4,637.70. Nifty June 2009 futures were at 4649, at a premium of 11.30 points as compared to the spot closing of 4637.70. Turnover in NSE's futures & options (F&O) segment was Rs 63,464.28 crore, lower than Rs 73,359.99 crore on Wednesday, 10 June 2009.
BSE clocked a turnover of Rs 7,587 crore lower than Rs 8,340.01 crore on Wednesday, 10 June 2009.
The BSE Mid-Cap index was down 0.22% and outperformed the Sensex. The BSE Small-Cap index was down 0.9%. It underperformed the Sensex.
The BSE Metal index (up 2.95%), the BSE Auto index (up 0.84%), the BSE FMCG index (up 0.23%), the BSE Healthcare index (up 0.03%), the BSE Bankex (down 0.34%), outperformed the Sensex.
The BSE IT index (down 2.58%), the BSE PSU index (down 1.84%), the BSE Oil & Gas index (down 1.65%), the BSE Capital Goods index (down 1.28%), the BSE Power index (down 1.19%), the BSE Consumer Durables index (down 1%), the BSE Realty index (down 0.82%), the BSE TECk index (down 0.67%), underperfomed the Sensex.
The market breadth, indicating the overall health of the market was weak. On BSE, 968 shares rose as compared with 1,768 that declined. A total of 54 shares remained unchanged.
From the 30 share Sensex pack 18 fell while the rest rose.
Oil stocks fell even as oil moved past $72 a barrel on Thursday, heading for a third consecutive day of gains, after data showed falling US crude and product inventories, adding to signs that oil demand may have bottomed out. Cairn India fell 1.06 %. But India's largest state-run oil exploration firm by sales ONGC fell 4.01%. The rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
The International Energy Agency today increased its forecast of 2009 world oil demand by 120,000 barrels a day, citing stronger-than-forecast first quarter data from countries belonging to the Organization for Economic Cooperation and Development. Global oil demand is projected at 83.3 million barrels a day, down 2.9% compared to year earlier.
PSU OMCs fell on rise in crude oil prices. HPCL, BPCL and IOCL fell by between 1.32% to 5.07%. State-run oil marketing firms suffer revenue loss on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) was down 0.88% to Rs 2,299.75 on profit taking after recent strong gains. Nevertheless, the stock came off the day's low of Rs 2,341. The stock had surged recently on market talks the government may extend a seven-year tax holiday given to crude oil explorers to producers of natural gas in the Union Budget 2009-2010.
Analysts expect strong growth in RIL's bottom line in coming quarters from sale of gas which it started pumping last month from its deep-sea field off the east coast.
The Bombay High Court is likely to deliver the final judgement on the legal tussle over the supply of gas from Reliance Industries (RIL) to Reliance Natural Resources (RNRL) this week when the court re-opens after summer vacations.
The basic argument in the RIL-RNRL case pertains to the pricing and quantum of gas RIL has to supply s from its Krishna Godavari basin to RNRL for RNRL's upcoming 7400 megawatt (MW) power project at Dadri in Uttar Pradesh.
Outsourcing focussed IT stocks fell on worries higher borrowing costs and oil prices will threaten a recovery of the US economy. US is the biggest market for the Indian firms.
India's second largest software firm by sales Infosys Technologies fell 2.87%. The company said on Tuesday it had won a new IT outsourcing contract from Telstra Corp, Australia's top phone company. The total value of the outsourcing contract is A$450 million ($355 million) over five years, Infosys said in a statement, but didn't disclose its share in the deal. EDS, a unit of Hewlett-Packard Co, and US technology major IBM are also part of the project. Its American depository receipt (ADR) fell 0.67% on Wednesday.
India's third largest software services exporter by sales Wipro fell 2.18% as its ADR fell 1.41% on Wednesday. India's largest software services exporter by sales TCS fell 0.81%.
But Satyam Computer Services hit 10% upper circuit for the third straight day after it posted a standalone net profit of Rs 181 crore ($38 million) on revenue of Rs 2290 crore in Q3 December 2008, it said in a filing to the stock exchange during trading hours on Tuesday.
It said it had total bank balances of Rs 373 crore as at 31 March 2009. Satyam was plunged into crisis after its founder quit in saying profits and assets had been falsified. Outsourcer Tech Mahindra won an auction in April 2009 for a controlling stake in Satyam.
Metal stocks rose on strong domestic demand. Steel Authority of India, Hindalco Industries, Tata Steel, Sterlite Industries and National Aluminum Company rose by between 1.9% to 7.92%.
Bank stocks cut intraday losses on recent reports the Reserve Bank of India may standardise the way banks calculate their prime lending rates (PLRs) and bar them from lending below their respective PLRs for more transparency. But the higher bond yields capped gains as it will result in diminution in value of their bond portfolio. Bond yields climbed to more than 2-month highs on Thursday due to lack of clarity about government borrowing, firmer US yields and rising oil prices. Bond yields and bond prices are inversely related.
India's largest private sector bank by net profit ICICI Bank rose 0.33% to Rs 750.30. The stock came off the day's low of Rs 735.10. Its American depository receipt (ADR) rose 0.22% on Wednesday, 10 June 2009. ICICI Bank cut prime lending rate by 50 basis points to 15.75% with effect from Friday, 5 June 2009. All the existing floating rate customers to benefit from the cut.
India's second largest private sector bank by operating income HDFC Bank rose 3.85% as its ADR rose 4.63% on Wednesday.
But India's biggest bank in terms of branch network State Bank of India (SBI) was down 3.44% to Rs 1,696.25. The stock came off the day's low of Rs 1,681.10. As per recent reports, SBI may cut lending rates by 25 basis points. SBI chairman O.P. Bhatt during trading hours on Wednesday said said SBI's first priority is to absorb its associate banks. It is also looking to grow by buying domestic banks.
India's biggest dedicated housing finance firm by operating income HDFC fell 0.17% to Rs 2,346.10. But the stock was off the day's low of Rs 2,306.10. HDFC plans to raise up to Rs 4000 crore after its board yesterday approved a proposal to raise Rs 4000 crore by selling bonds and warrants. The maximum dilution on conversion of all warrants to shares would be 3.5% of the expanded capital, HDFC said in a statement to the stock exchange after trading hours on Tuesday.
At 10:42 IST, the 10-year benchmark bond yield was at 6.84% after hitting 6.91%, which was its highest since 8 April 2009. Only three trades were reported. It ended at 6.79% on Wednesday. Volumes were light at Rs 1145 crore on the central bank's trading platform with the 2016 bond being most traded.
The yield on the 7.59% bond maturing in 2016 was at 6.95%, below its previous closing of 6.99%.
Engineering-to-construction major Larsen & Toubro (L&T) was down 0.55% after it sold its entire 11.49% stake in UltraTech Cement. Other capital goods stocks, Bharat Heavy Electricals, Punj Lloyd, ABB Praj Industries fell by between 0.27% to 3.46%.
Realty stocks fell on profit taking after a recent surge triggered by expectations that stability at the Centre will attract more money from foreign investors into the sector which in turn will boost growth. Orbit Corporation, Unitech, DLF, and Omaxe fell by between 1.16% to 3.99%.
Unitech and Indiabulls Real Estate, have already raised funds through qualified institutional placements (QIPs). A number of other realty funds have decided to raised funds by way of QIPs. The promoters of DLF last month sold a 10% stake in the secondary equity markets.
Cement and construction stocks fell on profit taking after a recent surge triggered by hopes that the government will focus on the infrastructure sector to boost growth. India Cements, ACC, Ambuja Cements fell by between 0.91% to 6.88%.
Among construction stocks, Nagarjuna Construction Company, IVRCL Infrastructure & Projects and Hindustan Construction Company fell by between 1.72% to 4.92%.
healthcare stocks rose on hopes the government will give primary importance to healthcare segment and health of citizens. Ranbaxy Laboratories, Biocon, Wochardt, Pfizer, Dr Reddy's Laboratories rose by between 0.6% to 3.01%.
Auto stocks were mixed after improved sales in the month of May 2009. Tata Motors and Mahindra & Mahindra rose by between 2.49% to 6.18%. But Bajaj Auto, Maruti Suzuki India and Hero Honda Motors fell by between 0.99% to 1.59%.
Telecom stocks were mixed on hopes government may speed up the auction process for the third generation WiMax services. Idea Cellular, Bharti Airtel rose by between 2.34% to 5.36%. Reliance Communications fell 0.81%.
Unitech clocked the highest volume of 3.3 crore shares on BSE. Ispat Industries (2.17 crore shares), Reliance Natural Reosurces (1.82 crore shares), Suzlon Energy (1.65 crore shares) and IFCI (1.59 crore shares) were the other volume toppers in that order.
Reliance Capital clocked the highest turnover of Rs 297.49 crore on BSE. Unitech (Rs 285.78 crore), Suzlon Energy (Rs 200.11 crore), Reliance Natural Reosurces (Rs 165.55 crore) and Sesa Goa (Rs 164.03 crore) were the other turnover toppers in that order.

BSE Bulk Deals to Watch - June 11 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
11/6/2009 530715 ALPS INDUST PANKHURI INVESTEMENTS & SECURI B 200000 12.75
11/6/2009 530715 ALPS INDUST SUNSTAR SHARE BROKERS PRIVATE LIMITED S 200594 12.75
11/6/2009 532114 AREALTY CLSA (MAURITIUS) LIMITED B 700000 19.05
11/6/2009 532114 AREALTY SUNILTALWAR S 500000 19.05
11/6/2009 532114 AREALTY SANDEEPSETHI S 659014 19.11
11/6/2009 524663 BHARAT IMUNO B R INTERNATIONAL B 205669 17.76
11/6/2009 524663 BHARAT IMUNO NANDITAMEHTA S 205669 17.76
11/6/2009 533026 CHEMCEL USHADEVI SHAHRA S 134770 8.22
11/6/2009 531358 CHOIC INTERN VINOD JEETAPAL BANA S 25000 48.29
11/6/2009 504000 ELPRO INTERN FARIDABAD COMPANY LIMITED B 25000 457.10
11/6/2009 504000 ELPRO INTERN KEYNOTE CAPITALS (STOCK) S 20000 455.75
11/6/2009 530407 EPIC ENERGY DIPAKKSHAHSHAH B 40150 44.66
11/6/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 185826 448.47
11/6/2009 532876 EVERONN SYS MANSUKH STOCKS BROKERS LTD. B 92387 441.88
11/6/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 185826 449.01
11/6/2009 532876 EVERONN SYS MANSUKH STOCKS BROKERS LTD. S 92387 443.52
11/6/2009 532318 GEMINI COMMU SAMPADA CHEMICALS LTD B 500000 26.90
11/6/2009 532318 GEMINI COMMU AMRUT SECURITIES LTD. S 500001 26.90
11/6/2009 531137 GEMSTONE INV BHAVESH TEXTILE S 25000 21.75
11/6/2009 531137 GEMSTONE INV KISHOREBCHAUHAN S 29000 21.78
11/6/2009 532857 GLORY POLY KAMAL KUMAR JALAN SEC. PVT. LTD S 130000 26.27
11/6/2009 531439 GOLDSTON TEC NANDITAMEHTA B 193535 37.90
11/6/2009 531439 GOLDSTON TEC B R INTERNATIONAL S 193535 37.90
11/6/2009 532216 HB STOCKHOLI B R INTERNATIONAL B 350834 26.00
11/6/2009 532216 HB STOCKHOLI NANDITAMEHTA S 350834 26.00
11/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL B 34323 33.42
11/6/2009 516078 JUMBO BAG LT RUSHAB RAVJI PATEL S 35095 33.19
11/6/2009 532720 M&M FINANSER TREE LINEADVISORSHONGKONGLTDA/CTREELINEASIAMASTERFUNDSINGAPOREPTE B 2107000 263.00
11/6/2009 532720 M&M FINANSER TPG AXON MAURITIUS TWO LTD S 2300000 263.23
11/6/2009 526773 PRESSURE SEW MRUDULASHANTILALSHAH B 32800 2.22
11/6/2009 526753 ROSELABS LTD NIRMALADEVITRILOKCHANDAGRAWAL S 110100 11.11
11/6/2009 531898 SANGUINE MD SETU SECURITIES PVT LTD B 158002 5.17
11/6/2009 531898 SANGUINE MD DHARMENDRAKUMAR CHANDULAL PATEL B 133000 5.17
11/6/2009 531898 SANGUINE MD JMP SECURITIES PVT LTD B 151868 5.17
11/6/2009 531898 SANGUINE MD FORSEE FINANCIAL AND CONSULTANCY SERVICES PVT LTD S 300000 5.17
11/6/2009 531898 SANGUINE MD ANGEL INFIN PRIVATE LIMITED S 216289 5.17
11/6/2009 531312 SANRAA JMP SECURITIES PVT LTD B 2925197 0.86
11/6/2009 531312 SANRAA JMP SECURITIES PVT LTD S 3909366 0.85
11/6/2009 531312 SANRAA CHOTALALSHAHMAHESH S 3230000 0.86
11/6/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD B 57009 55.22
11/6/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD S 52147 55.49
11/6/2009 532338 VALUEMART IN S V ENTERPRISES S 151456 2.52
11/6/2009 531874 VENUS VENT PRADEEPKANTILALTHAKKAR B 40000 55.50
11/6/2009 531874 VENUS VENT KANCHAN VIJAYKUMAR THAKKAR B 26585 54.86
11/6/2009 531874 VENUS VENT TEJALBHARATKUMARPADIA S 48415 55.50

Post Session Commentary - June 11 2009

Indian market ended the highly volatile session marginally below the dotted line on profit booking after previous session’s gains. Domestic bourses were unable to sustain in either direction. Positive European markets contributed a bit to the recovery during the trading. However, most of the Asian stocks ended lower, which led selling pressure in the domestic bourses. Further, the inflation for week ended May 30 came in at 0.13% against 0.48% a week ago.
The market opened on positive note and slipped lower soon after start on profit taking after a sharp rally in the yesterday’s trade. Besides, cues from the global markets were mixed. Asian stocks were marginally up during early trade and the US stock markets on Wednesday ended lower after a jump in oil prices and sharp rise in lending rates. In addition, the overall trade deficit in US widened to $29.2 billion in April from $28.5 billion in March. Moreover, the April figure was a bit above the first quarter average, so it will factor negatively into second quarter GDP forecasts. Further, domestic market turned volatile and was swinging up and down during the trading session. However, benchmark indices tried to recover and managed to get back strength but were unable to hold the momentum and again slipped into negative before closing lower as selling pressure witnessed on key stocks. BSE Sensex ended around 15,400 level and NSE Nifty below 4,650 mark. From the sectoral front, most of the selling was observed in IT, PSU, Oil & Gas, Capital Goods, Power and Consumer Durables stocks. Mid Cap and Small Cap stocks also remained out of favour today. However, Metal, Auto and FMCG stocks remained in limelight as witnessed most of buying from these baskets.
Among the Sensex pack 18 stocks ended in red territory and 12 in green. The market breadth indicating the overall health of the market remained negative as 1768 stocks closed in red while 967 stocks closed in green and 58 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 55.34 points at 15,411.47 and NSE Nifty ended down by 17.55 points at 4,637.70. BSE Mid Caps and Small Caps closed with losses of 11.92 and 55.98 points at 5,347.58 and 6,150.44 respectively. The BSE Sensex touched intraday high of 15,568.74 and intraday low of 15,240.73.
Losers from the BSE Sensex pack are ONGC Ltd (4.01%), JP Associates (3.96%), ACC Ltd (3.84%), BHEL (3.46%), SBI (3.44%), Infosys Tech (2.87%), Wipro Ltd (2.18%), Reliance Infra (2.10%), Tata Power (1.74%), HUL (1.68%) and Maruti Suzuki (1.33%).
Gainers from the BSE Sensex pack are Hindalco (7.92%), M&M Ltd (6.18%), Sterlite Industries (5.82%), HDFC Bank (3.85%), Tata Steel (2.90%), NTPC Ltd (2.62%), Tata Motors (2.49%) and Bharti Airtel (2.34%).
India''s wholesale price index dropped to 0.13% for the week ended May 30 2009, as compared to the 0.48% of the previous week. The annual inflation rate was 9.32% during the corresponding week of the previous year. Inflation slipped to three decade low despite rise in prices of prices of essential food items like pulses, fruit and vegetables, spices and eggs.
On the global markets front the Asian markets which opened before the Indian market, ended mixed. Shanghai Composite, Nikkei 225 and Straits Times index ended lower by 18.93, 10.16 and 9.41 points at 2,797.32, 9,981.33 and 2,381.81 respectively. However, Hang Seng and Seoul Composite closed up by 5.37 and 4.51 points at 18,791.03 and 1,419.39 respectively.
European markets which opened after the Indian market are trading in green. In Frankfurt the DAX index is trading higher by 27.58 points at 5,078.76 and in London FTSE 100 is trading up by 8.31 points at. 4,445.06.
The BSE IT index decreased by (2.58%) or 87.69 points to close at 3,305.23. Main losers are Financ Tech (5.63%), Patni Computer (5.29%), Oracle Fin (4.16%), HCL Tech (3.84%) and NIIT Ltd (3.71%).
The BSE PSU ended down by (1.84%) or 158.75 points at 5,451.96. Losers are Canara Bank (5.48%), BPCL (5.07%), St Trade Corp (4.70%), HPCL (4.36%) and ONGC Ltd (4.01%).
The BSE Oil & Gas index decreased by (1.65%) or 173.43 points at 10,366.40. BPCL (5.07%), HPCL (4.36%), ONGC Ltd (4.01%), Aban Offshore (3.32%) and Gail India (2.89%) ended in negative territory.
The BSE Capital Goods index lost (1.28%) or 171.91 points to close at 13,294.91. Losers are Gammon Indi (4.99%), Lakshmi Ma W (4.66%), Kalpat Power T (3.65%), BHEL (3.46%) and Bharat Bijli (3.43%).
The BSE Metal index advanced by (2.95%) or 343.81 points at 11,988.77 on emerging domestic demand. Scrips that gained are JSW Steel (8.94%), Hindalco (7.92%), Sesa Goa Ltd (6.66%), Sterlite Industries (5.82%) and Nalco (3.75%).
The BSE Auto stocks also gained (0.84%) or 41.88 points to close at 5,018.98. Major gainers are Apollo Tyre (8.19%), M&M Ltd (6.18%), Tata Motors (2.49%), Amtek Auto (1.56%) and Escorts Ltd (0.64%).
Compucom Software Ltd gained 8.63%. The company has been awarded an order by Rajasthan Council of Elementary Education, under Sarv Shiksha Abhiyan of government, for providing Computer Aided learning Programme (CALP) on the basis of BOOT Model in 836 Govt. Schools of Rajasthan. The Order value is worth Rs 10.68 Crores (Approx).
Tata Tea Ltd declined 3.26% to after consolidated net profit dipped 54.48% to Rs. 700.55 crore despite 12.14% rise in total income to Rs. 4,907.30 crore in the year ended March 2009 over the year ended March 2008
ING Vysya Bank Ltd slides 1.45% after the bank termed media reports of ING looking to sell out of ING Vysya Bank as speculative.
Larsen & Toubro Ltd declined 0.55% on reports that it is selling 8.3% stake in UltraTech Cement to financial investors for around Rs. 757 crore.

Asian markets ends mixed

Sensex, Shanghai gave up yesterday's gains while Hang Seng, Nikkei manages to remain in positives
Stock market in Asian region closed mixed on Thursday, 11 June 2009, as investors weighed the impact of higher oil prices and commodities on inflation and an economic recovery. Profit taking after recent gains and negative cues from Wall Street overnight also affected investor sentiment.
On Wall Street, the stock markets pared losses into the close Wednesday, recovering after a somewhat disappointing Treasury auction and the Federal Reserve's regional look at the economy after oil futures closed above $71 a barrel. The Dow Jones Industrial Average gave up 24.04 points, or 0.3%, to 8739.02, while the S&P 500 was off by 3.28 points, or 0.4%, to 939.15. The Nasdaq fell 7.05 points, or 0.4%, to 1853.08.
On the economic front, the Federal Reserve released its beige book, a report on 12 of its district banks. Economic conditions remained weak or further deteriorated during the period from mid-April through May, according to the report.
However, five of the Districts noted that the downward trend is showing signs of moderating, it said. Further, contacts from several Districts said that their expectations have improved, though they do not see a substantial increase in economic activity through the end of the year.
In the commodity market, crude oil rose for a third day, climbing above $72 a barrel after China’s net imports jumped to a 14-month high in May and a government report showed U.S. crude and gasoline stockpiles unexpectedly fell.
According to data released by customs on its Web site, China, the world’s second-biggest energy user increased its net crude purchases to 16.62 million metric tons, or 3.9 million barrels a day. Crude oil was also supported by a 4.38 million barrel drop in U.S. stockpiles.
Crude oil for July delivery gained as much as 85 cents, or 1.2%, to $72.18 a barrel in after-hours electronic trading on the New York Mercantile Exchange and was at $72.10 at 4:18 p.m. Sydney time. Yesterday, the contract rose $1.32, or 1.9%, to close at $71.33, the highest settlement since 20 October 2009.
Brent crude for July delivery rose as much as 75 cents, or 1.1%, to $71.55 on London’s ICE Futures Europe exchange. The contract was at $71.50 a barrel at 4:12 p.m. in Sydney. Yesterday, it settled at $70.80, the highest since 20 October 2009.
Gold climbed as crude oil advanced for a third day and the dollar declined, increasing the appeal of the precious metal as an alternative investment. Silver also gained. Gold for immediate delivery gained as much as $3.26, or 0.3%, to $957.75 an ounce and was at $956.85 at 1:57 p.m. in Singapore.
In the currency market, US dollar continued to engage in range trading against major currencies with some choppy movements. Not much guidance is provided from stocks as Dow rebounded strongly in late session after earlier sell off and is still staying in range above 8600 levels.
Diversification talk continues to be a key factor in driving the dollar but markets are reassessing recent news. Russia and Brazil announced plans to buy $20b of IMF bonds after China said they'll buy $50b.
Nikkei breached 10000 levels to 10022 in Asia but closed slightly lower at 9981. While crude oil continues its rally and breached 72 levels briefly, Gold is lagging behind and stays below 960 level.
The Japanese yen strengthened against greenback, while the yen edged down against the European currency, the British pound, and the Swiss francon Thursday. The Japanese currency quoted at 98.01 against greenback.
The Hong Kong dollar was trading at HK$ 7.7513 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$7.85 to the U.S. dollar.
In Sydney trade, the Australian dollar advanced against the greenback on Thursday, following the release of Australian Bureau of Statistics report showing the nation’s jobless rate rose to 5.7% in May. The Aussie was quoted at 80.87 cents against the greenback.
The New Zealand dollar rose today after the Reserve Bank left the official cash rate unchanged. The RBNZ left the official cash rate unchanged at 2.5 percent and left the door open to lower rates, but the talk of "green shoots" here and offshore had traders thinking about rate rises.
The NZ dollar rose to US63.72c at 5pm, from US63.10c at the same time yesterday. The currency was around US62.60c just before the statement and quickly moved to US63c then kept on posting gains as the day went on.
The South Korean won ended at 1,253 won against the dollar, down 6.30 won from Wednesday's close.
The Taiwan dollar weakened after registering consecutive gain in last two sessions. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.7370, up by NT$ 0.180 from Tuesday’s close of NT$32.715.
Coming back in equities, Asian share markets ended mixed as investors weighed higher oil prices and a host of fresh economic data out of China that pointed to continuing fast growth in fixed-asset investment.
In Japan, the stock index finished the session below the line, as investor prompted for profit booking after hitting the psychologically important 10,000 line for the first time in eight months, thanks largely to renewed interest in automakers, electronics firms and other exporters.
The Nikkei 225 Stock Average index tumbled 10.16 points, or 0.1%, to 9,981.33, while the broader Topix index added 3.64 points, or 0.4% to 941.
On the economic front, Japan’s Cabinet Office said in a revised statement that Japan’s gross domestic product fell at an annual pace of 14.2% in the January-March period. A preliminary report last month had said GDP shrank at an annualized rate of 15.2%. On a quarterly basis, GDP fell a revised 3.8% from the previous three-month period.
In Mainland China, stock market finished volatile session lower, snapping three days of winning streak, after hitting a 10-month intraday high, as investor prompted for cashed in profit amid worries about liquidity after the regulator is ready to end a de facto suspension of initial public offerings on the Shanghai and Shenzhen stock exchanges.
The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, tumbled 0.7%, or 18.92 points, to 2,797.32, meanwhile the Shenzhen Component Index dropped 1.12%, or 120.83 points, to 10,699.91.
On the economic front, the General Administration of Customs said China’s exports and imports shrank for the seventh month in row in May. The trade surplus was $13.39 billion. Exports fell 26.4 % in May from the same period a year ago to $88.758 billion. Imports were down 25.2 % to 75.36 billion U.S. dollars.
The combined foreign trade in May was worth $164.13 billion, down 25.9% year on year, and down 3.1 % from April. Exports in the five months to May totaled $426.14 billion, down 21.8%, and imports went down 28% to $337.34 billion over the same period.
National Bureau of Statistics announced China’s urban fixed-asset investment in the first five months rose 32.9% year on year to 5.352 trillion Yuan. The growth rate was 2.4%age points higher than that of the first four months.
In other economic news, China's consumer price index (CPI), the major gauge of inflation, decreased 1.4% year on year in May. According to statistics released by the National Bureau of Statistics (NBS) the CPI fell 1.5% from a year earlier in urban regions, while the CPI in rural areas dipped 1%.
NBS said that food prices edged down 0.6% in May, while prices in non-food sectors slid 1.7%. The price of meat dropped 15.5% year on year, while pork was down 32%. The price of edible oil dived 23.1% from a year earlier. There was a 0.9% increase in the price of aquatic products, a 5% increase in the price of grain, and a 22.2% surge in the price of vegetables.
The price of consumer products dropped 1.4% year on year, while that of services sank 1.3% from a year earlier. China's CPI fell 0.3% in May compared with April. There was a 0.6% decrease in food prices and a 0.3% decline in housing prices.
In Hong Kong, the stock market finished above the line, enduring gains for second consecutive day, with gains in banks and financials and resource related stocks amid firmer commodity prices and after strong investment data from China, offset declines by properties and energy stocks.
The Hang Seng Index climbed up 5.37 points, or 0.03%, to 18,791.03, while the Hang Seng China Enterprise Index surged 47.29 points, or 0.43% to 11,080.84.
In Australia, the stock market surged, extending winning streak for second consecutive day, on the back of gains in the shares of miner, energy, and materials and resources sector on firmer commodity and oil prices and on speculation China was looking to make more investments in the sector ahead of a recovery in commodities markets.
At the closing bell, the benchmark S&P/ASX200 index surged 22.8 points, or 0.57%, to 4,047.2, while the broader All Ordinaries spurted 30.4 points, or 0.76%, to 4,046.7.
On the economic front, the Australian Bureau of Statistics said in a statement that Australia’s unemployment rate increased to 5.7% in May after a further 27,200 full-time jobs were cut. The April figure was 5.4%. In the separate survey report revealed that consumer inflationary are expected a median rate of inflation was 2.8% in June, up from 2.3% cent the previous month.
In New Zealand, the stock market ended in red today, giving up the yesterday’s intraday gains as the market participants were quick to lock in gains after the New Zealand Reserve Bank left the official cash rate unchanged at 2.5%. The NZX 50 Gross Index finished the day down 31.43 points or 1.1% on last night's close, at 2797 while the NZX 15 Gross Index finished the day down 77 points or 1.5% at 5093.
In South Korea, stocks closed 0.32% higher after fluctuations due to the expiration of futures and option. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 4.51 points to 1,419.39.
In Singapore, the stocks market finished the choppy session lower, under sell-off pressure following recent gains after a weak lead from Wall Street overnight and other Asian bourses. The market witnessed a mixed rally across the board. The blue chip Straits Times Index dived 9.41 points, or 0.39%, to 2,381.81.
In Taiwan, stock market carried its advance in second straight session, led by steel shares after China Steel said it would raise prices, while LED stocks also jumped on hopes of increasing demand from China. The main Taiex share index strengthened its yesterday’s gains as the Taiex index gained by 105.10 points or 1.63%, closing the day at 6567.37.
On the economic front, Taiwan’s domestic banks witnessed average interest rate for deposits at 1.15% per annum in the first quarter of 2009, while the loan rate at 2.36%, for a record low gap of 1.21%.
The shrinking rate gap was mainly sued to the central bank’s continuing lowering of interest rates. As a result, the gap between the deposit and loan rates dipped by 0.54 of a percentage point over the last six quarters.
According to the central bank of Taiwan, usually the major profits of domestic banks are generated by the interest differential. If based on the gap of 1.21%, then most domestic banks can hardly be profitable after deducting operating costs. So, to avoid further loss, they may be reluctant to offer new financing to enterprises.
In Philippines, the stock market sustained its upward trend for the second consecutive day, closing more than 2% higher despite the government slashing its growth outlook to only 0.8-1.8% this year, far below the previous estimate of 3.1-4.1%. However, investor’s sentiments were supported by the statement of Planning Secretary Ralph Recto, who said that they are confident that the Philippine economy will maintain a positive growth this year. OFW remittances have continued to increase.
The benchmark index PSEi escalated 2.69% or 68.08 points to 2,598.80, while the All Shares index increased 1.60% or 25.98 points to 1,645.64.
On the economic front, foreign direct investments reversed to a net outflow of $27 million in March amid the global downturn, causing inflows to fall more than 83% in the first quarter from a year earlier, the Bangko Sentral ng Pilipinas (BSP) yesterday said. The March outflow — the first since October 2008 — compared to an inflow of $149 million a year earlier and February’ $19-million result. For the first quarter, net inflows fell to $44 million from $266 million a year ago.
In India, the key benchmark indices snapped last two days' strong gains as investors booked profits. IT and oil stocks fell even as metal stocks rose. The BSE 30-share Sensex was down 55.34 points, or 0.36%, to 15,411.47. The S&P CNX Nifty was down 17.55 points or 0.38% to 4,637.70.
Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.55% or 5.99 points to 1088.96 while Indonesia’s Jakarta composite index ended the day lower at 2089.58.
In other regional market, shares in Europe traded in a tight range, with investors cautious about pushing shares higher after the previous session's strong gains. Overall, the German DAX 30 index traded flat at 5,051.60, the French CAC-40 index slipped 0.4% to 3,303.03 and the U.K. FTSE 100 index declined 0.4% to 4,419.37.

Market may open positive

Yesterday's pullback and firm economy outlook may help the market advance further. Asian indices coupled with US indices are displaying a subdued trend in the ongoing trades and may exert some pressure on the domestic indices. However, players are maintaining their bets on almost all the sectors. Among the key local indices, the Nifty has a support at 4600 and a break below this level could see it slip further to 4550-4500, while on the upside the index could test higher level at 4700. The Sensex has a likely support at 15300 and may face resistance at 15600.
Major US indices Stocks cut losses, but still ended lower Wednesday, as spiking Treasury yields and rising commodity prices added to worries that inflation could limit any recovery effort. While the Dow Jones moved down by 24 points at 8739, the Nasdaq moved down by 7 points to close at 1853.
Most of the Indian ADRs traded firm on the US bourses. Satyam led the pack with gains of 35.71% while HDFC Bank, Dr Reddy, Tata Motors, ICICI Bank and Patni Computers jumped over 0.09-4% each. Among the laggards Rediff lost 6.67%, Wipro, Infosys, MTNL and VSNL lost marginally.
Crude oil prices raised, with the Nymex light crude oil for July delivery falling by $1.32 to close at $71.33 a barrel. In the commodity space, the Comex gold for August delivery reamined unchanged at $954.70 an ounce.

Pre Session Commentary - June 11 2009

Today domestic markets are likely to open positive as most of the Asian markets have opened positive. But there could be an early selling pressure on the yesterday’s gain and therefore volatility is likely to creep during the day’s trade. The frontline stocks may face some profit booking pressures however on the other hand bottom line stocks may outshine.
On Wednesday, the domestic markets closed with phenomenal gains for the second consecutive day. After a remarkable positive gap opening the markets traded firm till the end exuding signs of a strong bull run. The sentiments were reinforced by the rally across Asian markets and European bourses as well. The domestic traders were very optimistic about the frontline stocks especially in sectors like Power, CG and CD which inclined by 3.62%, 3.46% and 2.74% respectively. In BSE Sensex cap Tata Power, Reliance Infra and HDFC bank stocks were the fore runners registering gains of 6.43%, 5.99% and 5.56% respectively. Satyam stock for the second consecutive day closed with a mammoth buying freeze at Rs. 73.50, up by 9.95%. Frontline stocks outshined Mid cap and Small cap stocks as the latter recorded moderate gains of 1.59% and 0.34% respectively. We expect the markets to be trading volatile.
The BSE Sensex closed with gain of 339.81 points at 15,466.81 and NSE Nifty ended high by 104.30 points at 4,655.25. BSE Mid Caps and Small Caps closed with gains of 83.78 points and 20.81 points at 5,359.50 and 6,206.42 respectively. The BSE Sensex touched intraday high of 15,580.81 and intraday low of 15,168.18.
On Wednesday, the US Markets closed with minimal losses. The day started with a good northward trend however as the Crude oil prices inclined to 2009 high, causing apprehensions of economic growth. The increasing yield on the 10 year note consequently a higher borrowing costs and the widening trade deficit which was little up at $29.20 billion in April from $28.50 billion in March is likely to factor a negative impact on the second quarter GDP forecasts. Financials were the losers of the day as it lost 1.6%, however sectors like materials (+0.1%), telecom (+0.2%), and energy (+0.7%) managed to recover its early losses to trade in green. The US light crude oil for July delivery closed high by 1.7% at $71.14 per barrel marking a new 2009 high on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) closed low by 24.04 points at 8,739.02 the NASDAQ Composite (RIXF) index declined by 7.05 points to close at 1,853.08 and the S&P 500 (SPX) closed flat at 939.15.
Indian ADRs ended mixed on Wednesday. In the IT space, Satyam Computers continue to rise and was up 35.71%, while Patni Computers was up 0.09%. However, Infosys was down 0.67% and Wipro was down 1.41%. In the Banking space, HDFC Bank was up 4.63% and ICICI Bank was up 0.22%. In the Telecom space, Tata Communication was down 0.05% and MTNL was down 0.43%. In other sectors, Dr Reddy''s Labs was up 3.44%, Sterlite Industries was up 1.45% and Tata Motors was up 0.77%.
Today major stock markets in Asia are trading positive. Hang Seng is up by 72 points at 18,857.66. Shanghai Composite is up by 8.25 points at 2,824.499. Japan''s Nikkei is trading low by 29.52 points at 9,961.97. Strait Times is also low by 10.97 points at 2,380.25. KLSE Composite is flat at 1,082.987.
The FIIs on Wednesday stood as net buyers in equity and net sellers in debt. The Gross equity purchased stood at Rs 3,815.30 Crore and gross debt purchased stood at Rs 0.00 Crore, while the gross equity sold stood at Rs 2,824.60 Crore and gross debt sold stood at Rs 324.30 Crore. Therefore, the net investment of equity and debt reported were Rs 990.70 Crore and Rs (324.30) Crore respectively.
On Wednesday, the partially convertible rupee closed at 47.24/25 per dollar, 05% stronger than it previous close at 47.48/49. The rupee gained due to rally in the local stock markets, concurrently raising hopes for green back inflow.
On BSE, total number of shares traded were 57.67 Crore and total turnover stood at Rs 8,340.01Crore. On NSE, total number of shares traded was 129.39 Crore and total turnover was Rs 25,673.64 Crore.
Top traded volumes on NSE Nifty – Unitech with 92987529 shares, Suzlon Energy with 55548760 shares, NTPC with 26304587 shares, Hindalco with 16108501 shares, followed by DLC with 15340734 shares.
On NSE Future and Options, total number of contracts traded in index futures was 696122 with a total turnover of Rs 15,517.40 Crore. Along with this total number of contracts traded in stock futures were 483098 with a total turnover of Rs 28,898.06 Crore. Total numbers of contracts for index options were 1143941 with a total turnover of Rs 26,677.63 Crore and total numbers of contracts for stock options were 39501 and notional turnover was Rs 2,266.90 Crore.
Today, Nifty would have a support at 4,571 and resistance at 4,723 and BSE Sensex has support at 15,310 and resistance at 15,612.

Modest losses at Wall Street

Indices register losses despite a strong start
US stocks once again ended with modest losses on Wednesday, 10 June, 2009. Though stocks made a strong start at Wall Street, they ran out of gas in a couple of hours. Financial sector led the pack of decliners. Even Fed's Beige Book comments that signs of economic decline are slowing failed to push stocks higher. Despite an upward guidance from an important home-improvement retailer, stocks just failed to inch up in the green even for once since then. Crude prices reached an eight month high today.
The Dow Jones Industrial Average ended lower by 24 points at 8,739.02. The Nasdaq Composite Index, ended lower by 7.05 points at 1,853.08. S&P 500 ended lower by 3.3 points at 939. During session highs, Dow was up by more than 47 points.
Six of the ten sectors declined, led by financials, healthcare and consumer discretionary sectors. Materials, telecom and energy sectors managed to log in some gains.
Exxon Mobil, Microsoft, Home Depot and Alcoa traded as the main Dow winners while Mc Donald's, Wal-Mart and Caterpillar traded as the main Dow laggards.
Retailers tried staying strong today after Home Depot issued an improved outlook. This also pulled up the shares of its competitor, Lowes.
The Fed's Beige Book hit the wires around 2 pm E.T. It stated that the economy remains weak, but that the signs of decline are slowing. The Beige Book also revealed that five of the 12 Fed districts see economic declines moderating; several districts also indicated that their expectations have improved yet they do not see a substantial increase in economic activity through the end of the year.
Treasuries fell under renewed selling pressure amid news that the Russian Central Bank will cut its Treasury holdings. The $19 billion auction of 10-year Notes proved disappointing. The disappointing auction and rise in yields drove selling in the broader market.
Among the major economic reports expected for the day, the May Treasury deficit came in at $189.7 billion. The commerce Department reported that this was slightly more than the consensus that called for a deficit of $181 billion and much larger than the prior deficit of $28.6 billion.
The inventory report by the energy department pushed crude prices higher on Wednesday, 10 June, 2009. Price rose to eight month high today after energy department energy department reported sudden draw in crude inventories for last week.
EIA reported that crude inventories fell by 4.4 million barrels in the week ended 5 June, 2009. On average, a build of 100,000 barrels was expected. Crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year, the report showed.
In currencies trading Wednesday, the dollar reversed its earlier losses, with the dollar index up 1.3% at 80.541.
Economic news flow is expected to be slow tomorrow. Initial Unemployment Claims (week ended June 6) and Retail Sales (May) are due at 8:30ET, followed by Business Inventories (April) at 10:00ET. Only a handful of relatively small companies are scheduled to report earnings tomorrow.