Nifty June 2010 futures below 5,000

Turnover surges
Nifty June 2010 futures were at 4,940, at a discount of 30.20 points to spot closing of 4970.20. Turnover in NSE's futures & options (F&O) segment surged to Rs 81,961.32 crore from Rs 62,506.35 crore on Monday, 31 May 2010.
Bharat Heavy Electricals June 2010 futures were at discount at 2313.25 compared to the spot closing of 2315.90.
Reliance Industries June 2010 futures were at premium at 1012.50 compared to the spot closing of 1010.50.
Suzlon Energy June 2010 futures were near spot price at 55.80 compared to the spot closing of 55.65.
In the cash market, the S&P CNX Nifty fell 116.10 points or 2.28% at 4,970.20.

Global sell-off cut winning streak

Today's major news
FY10 fiscal deficit at 6.6% of gross domestic product
Maruti Suzuki sales hit record high in May; the stock surges 1.80%
Lanco Infratech FY10 net profit jumps 84%, the stock closes 0.08% higher
Post-market summary
Global signals
European shares fell on Tuesday, as slowing Chinese factory output fuelled pessimism over global economic recovery and banks slid after the European Central Bank said Euro zone lenders face another wave of potential write-down. The key benchmark indices in France, Germany and UK fell by 1.61% to 2.43%.
The Asian indices closed in the red as Chinese manufacturing growth slowed. SGX Nifty closed 126 points lower.
The US stock index futures indicate a drop of more than 1% at the open on Tuesday as a slowdown in Asian manufacturing added to doubts about the pace of an economic recovery.
Indian indices
The worries across the globe got erupted after the Fitch Ratings on May 28, 2010 cut Spain's credit rating by one level to AA+ from AAA, saying that the country's debt burden is likely to weigh on growth. There was lack of support from the UK and US markets as they were shut overnight. The key benchmark index was keenly depended on Asian indices.
The Asian markets were down on the woes that Chinese economy may slow down as China's Purchasing Managers Index fell to 53.9 in May from 55.7 in April.
The Nifty again broke its psychological 5000 levels. However, the selling pressure across the sector indices dragged the benchmark indices.
Taking cues from Asian markets, the 30-share index, Sensex, opened mere two points lower at 16943 and this was also its day's high. The Sensex traded lackluster till the mid-session. Post lunch, the Sensex witnessed a sharp intraday fall of over 600 points due to some freak trades in the index heavyweight Reliance Industries. Ths European equities opened almost 2% lower, this also dragged the index further to touch the day’s low of 16318.
The India's exports rose 36% to $16.9 billion and the imports surged 43% to $27.3 billion in April 2010. The gross domestic product (GDP) readings for Q4FY2010 came in at 8.6% and FY2010 stood at 7.4%. The fiscal deficit stood at Rs4.12 lakh crore or roughly 6.6% of the GDP in 2009-10, as compared to a revised target of Rs4.14 lakh crore. The auto companies reported decent sales numbers for the month of May. These positive triggers could have bought some positive momentum in the domestic market today. But that failed to cheer the market and the Sensex extended its losses, with sell-off across the globe. The Sensex ended the day at 16572, 373 points lower. The Nifty closed below the 5000 levels at 4970, 116 points lower.
Market sentiment
The market breadth was unconstructive. Of the 2,898 shares traded on the BSE, 1,796 shares (61%) declined whereas 1,005 shares (35%) advanced. Ninety seven shares remained unchanged.
Sectoral & stock screening
All in red for the sector indices. The metal sector topped the losers’ list posting losses of 3.86% after downbeat Chinese economic data sparked concerns about demand for metals, which led to huge profit booking on sell-off in the metal stocks. The second, which was hit the most, was realty that fell by 2.95% due to selling pressure.
The defensive sectors — healthcare (HC) and fast moving consumer goods (FMCG) — saw some buying interest. But at last that too ended in red, with BSE HC and BSE FMCG down 0.02% and 0.63% respectively.
The top-3 gainers — Chambal Fertilisers and Chemicals that rose by 6.42%, Container Corporation of India that surged by 3.18% and Shree Renuka Sugars that was up by 2.27%. The top-3 losers — Jaiprakash Associates that slid by 6.04%, Fortis Healthcare that was down by 5.89% and Sesa Goa that declined by 5.19%.
Viewing volumes
Industrial finance company — IFCI saw highest trading with over 1.14 crore shares changing hands on the BSE, followed by Anil Dhirubhai Ambani Group firm — Reliance Natural Resources (0.66 crore share), wind turbine major — Suzlon Energy (0.66 crore shares), construction company — Unitech (0.55 crore shares) and sugar manufacturer — Shree Renuka Sugars (0.46 crore share).

MRPL

Investors with short-term trading perspective can consider selling the stock of Mangalore Refinery and Petrochemicals Ltd (MRPL). Since June 2009 high of Rs 102, the stock has been on an intermediate-term downtrend. In April 2010, the stock encountered significant resistance around Rs 84 and its downtrend accelerated thereafter. It has been on a medium-term downtrend too since April. The stock conclusively broke through its important long-term support level of Rs 70 during the third week of May by tumbling almost six per cent. At present, this support level has turned into a key resistance level for the stock. It is trading well below its 21 and 50-day moving averages. The daily relative strength index has re-entered into the bearish zone from the neutral region, whereas the weekly RSI is featuring in the bearish zone. Both daily and weekly moving average convergence and divergence indicators are hovering in the negative territory. These facts reinforce bearish sentiment on the stock. Our short-term forecast is bearish. We expect the stock to decline further until it hits our price target of Rs 63 in the upcoming sessions. Short-term traders can, hence, sell the stock with the stop at Rs 69.
via BL

FII-TO-FII Trades: Union Bank traded at 5% premium

Trades between FIIs generated a volume of Rs 396 crore on the BSE Monday-an increase of 282.18% from Rs 104 crore clocked on Friday. As many as six stocks witnessed trades of 39 lakh shares on Monday.

Union Bank Of India was traded at highest premium of 5.14% on BSE with 2,100 shares changing hands at Rs 310 as against the spot price of Rs 294.85.

Punjab National Bank was traded at second highest premium of 2.85% on NSE with 17 lakh shares changing hands at Rs 1,045.05 as against the spot price of Rs 1,016.10.

Scrip	FII Close*	FII shares#	Spot Close@	Premium To spot price %
BSE
Union Bank	310.00	2100	294.85	5.14
Punjab Nat Bank	1040.00	1895271	1015.00	2.46
Grasim Ind	2700.00	15036	2667.75	1.21
Maruti Suzuki	1295.25	55785	1294.70	0.04
Bank of India	333.50	157326	334.50	-0.30
NSE
Punjab Nat Bank	1045.05	1740558	1016.10	2.85
* FII-Close is the closing price of the scrip under FII-to-FII trades # FII-Shares is the total number of shares traded under the FII-to-FII trades @ Spot close price is the closing price in the cash market

Bank of India was traded at discount of 0.30% on BSE with 1.57 lakh shares changing hands at Rs 333.50 as against the spot price of Rs 334.50.

Source : Business Standard.

Ambani gas war: Blow to Anil, order favours Mukesh

In what could be a severe blow to Anil Ambani group seeking cheap gas from elder brother Mukesh-led Reliance Industries Ltd, the Supreme Court on Friday ruled that the government has the last word on pricing and utilisation of national asset.

Giving its verdict on the four-year-old Ambani battle that was intertwined with a bitter public wrangling, a three-judge bench of the court headed by Chief Justice K G Balakrishnan said the Ambani family memorandum of understanding (MoU) dividing the gas was not binding, both legally as well as technically.

Immediately after the judgement, RNRL chairman Anil Ambani, who was present at the courtroom, left without taking any questions from the throng of reporters and cameramen.

Stock market responded swiftly to the judgement, with RIL shares shooting up by about 5 per cent to nearly Rs 1,050 and that of RNRL tanked close to 26 per cent close to Rs 50.

"RIL does not have absolute right over gas and price is subject to government approval. . . since the MoU (of the Ambani family) has not been made public, it does not fall in the corporate domain. Under the Production Sharing Contract, it is for the government to evaluate the price of fuel," Justice P Sathasivam said, reading out the verdict.

The court also directed RIL to initiate negotiations with RNRL within six weeks to arrive at a sale agreement within the framework of government policy.

RNRL had contended that it was entitled to 28 mmscmd of gas a day from RIL's eastern offshore KG-D6 fields, at $2.34 per mmBtu, a price 44 per cent lower than the government approved rate of $4.20 per mmBtu.

The bench, headed by Chief Justice of India Balakrishnan who will be demitting office on May 11, also said that the Ambani family MoU can only be a means of arriving at suitable arrangement but cannot be the sole means for a suitable arrangement.

Contrary to speculation that the judgement could be split, the bench held that since the MoU had not been made public, it doesn't fall in the corporate domain.

Concurring with the judgement, Justice B Sudershan Reddy, who replaced Justice P Raveendran after he recused in November 2009 citing conflict of interest, said that the family MoU cannot be taken into consideration at all.

After a bitter public battle over division of Reliance empire, less than two years of Ambani family patriarch Dhirubhai's death, Mukesh and Anil reached a family settlement spelt out by mother Kokilaben in June 2005.

As per the settlement, the energy and petrochemicals business went to Mukesh and the power, financial services and telecom business to Anil.

Accordingly, the scheme of de-merger approved by the Bombay high court in December 2005, paving the way for creation of a new entity -- Anil Dhirubhai Ambani Group.

However, the bitterness between the two brothers did not cease and the two sides were constantly engaged in public and courtroom battles, with gas dispute reaching the flash point. ADAG firm RNRL had sought gas from RIL to power its proposed 7,800 MW electricity plant at Dadri in Uttar Pradesh.

The Bombay high court had last year directed RIL to reach an amicable agreement with RNRL for gas supply as per the family MoU.

Although the Apex Court said that the petition filed by RNRL was maintainable, as the company court had sanctioned the original demerger scheme, it held that the 'gas is government asset till it reaches consumer'.

The court, however, also made it clear that RIL did not have absolute marketing right over gas and in the face of the bench's observation, the Anil Ambani group's claim to over 28 mmscmd of gas for 17 years is likely to go back to the negotiating table.

"The court has asked us to renegotiate. . . that is what we are going to do. The court has given us some time," Reliance Industries executive director P M S Prasad told reporters.

The court earlier said that a suitable arrangement must not be suitable only for RIL, but also for shareholders of RNRL and it's RIL's obligation to look after it.

The Supreme Court held the family MoU as technically not binding on the ground that three million shareholders of RIL-RNRL did not know its contents. The MoU was only among the two brothers and their mother Kokilaben.

When the courts were hearing the matter last year, Anil Ambani had launched public tirade against Mukesh, saying his elder brother had traded their father Dhirubhai's vision for 'corporate greed'.

He had then also said that Mukesh no longer saw a role for their mother Kokilaben in resolving the gas dispute.

The public wrangling also included defamation suit filed by Anil against Mukesh, and Mukesh opposing Anil group firm RCOM's bid to merge with South African telecom giant MTN.

All this happened when the gas supply battle was playing out in courts.

The Apex Court on Friday said since gas is a national asset, public interest has to be looked into first.

"Terms of production sharing contract (between government and contractor RIL) will have  over-riding effect," the court said, adding that the PSC is meant for regulating supply of gas and under PSC it's for the government to evaluate price of fuel.

Govt stand vindicated: Deora on RIL-RNRL case verdict

Oil Minister Murli Deora, who faced flak for intervening in the gas dispute between the Ambani brothers, today welcomed the Supreme Court verdict saying the government stand that gas belongs to the nation has been vindicated.

Immediately after the Supreme Court upheld the government's right to fix price of gas and decide its utilisation, Deora told PTI: "SC verdict upholds the fact that gas belongs to the government and the people of the country and that is what we have been saying."

The court said that the Ambani family MoU seeking to divide gas between Reliance Industries and Reliance Natural Resources Ltd was not binding, both legally and technically.

"I welcome the verdict. No matter what campaign one ran against the government, the nation is supreme," he said without naming Anil Ambani group which had cast aspersions on his ministry for allegedly siding with Mukesh-led RIL.

In the midst of the court battle, the government had also moved the Supreme Court asserting its sovereign right on pricing and utilisation, even as RIL said that it had fixed the gas price at $4.20 per mmBtu as per the government policy.

The government's intervention in the case had made Deora the target of Opposition parties' attack both inside and outside Parliament.

Anil Ambani group had carried front page advertisements in newspapers, accusing Deora's ministry of trying to bailout RIL from its obligation under the Ambani family MoU to supply 28 mmscmd of gas to RNRL at a price of $2.34 per mmBtu.