Adani Enterprises - SELL

We recommend a sell in Adani Enterprises from a short-term perspective. It is evident from the charts that the stock has been in a long-term downtrend from its January high of Rs 1,335.

On September 29, the stock tumbled more then 9 per cent and found support around Rs 500 level, which is also the March trough. However, this halt proved to be temporary. The stock conclusively broke through this support level by declining 6 per cent with high volume on September 30, reinforcing the bearishness.

The counter is trading well below its 21 and 50-day moving averages. The daily and weekly relative strength indices are featuring in the bearish zone. Moreover, the daily and weekly moving average convergence and divergence are featuring in the negative territory. The long-term down trend line is intact and is still in place.

Our short-term forecast for the stock is negative. We expect the stock's downtrend to prolong until it hits our price target of Rs 420 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 490.

via BL

Inflows will be affected

With markets abroad tumbling as the fate of US bailout package hangs in balance, a key Finance Ministry official on Tuesday said that the global financial crisis will hurt capital inflows in India.

"The situation is staring on the face of huge mind-boggling crisis in the western world, especially the US. There will be shortage of money in the country, that is the financial crisis is to hurt capital inflows in India," Economic Affairs Secretary Ashok Chawla said in a seminar here.

At the same seminar, stock market regulator C B Bhave said once the crisis is over, India will come stronger and the balance would be in the country's favour. He also said in the future, there will be more open market in the recently-launched currency futures.

Former chairman of PM economic advisory panel C Rangarajan said, "We are going through an international crisis which we cannot ignore."

Yesterday, the US House of Representatives had rejected around USD 700 billion bailout package, sending stock markets around the world into a tailspin.

After coming into major selling pressure yesterday and in the early morning trade today, Indian markets recovered after Bhave's statement that there is no panic and no settlement issues in the markets.

US plans for a new bailout plan

Top Congressional and White House officials, stunned when the House rejected a massive rescue plan for the nation's economy, scrambled to structure a new bailout proposal that would attract reluctant lawmakers and still soothe the unnerved financial markets.

"Doing nothing is not an option," House Majority Leader Steny Hoyer, D-Md, said after seeing the USD 700 billion emergency package for the nation's financial systems fail 228-205 on Monday.

With the House not scheduled to meet again until Thursday, Congressional leaders and Bush administration officials promptly sought to assess what types of changes could win over enough votes to guarantee success. President Bush planned to make a statement on the rescue plan at 8:45 am EDT Tuesday.

The outcome of Monday's vote fed a huge sell-off in the stock market, sending the Dow Jones Industrial Average into its biggest single-day plunge, 777 points. The House vote and the market's terrified reaction shook Washington and New York centers of power — even overseas markets — but no immediate solution seemed at hand.

The bill's failure came despite furious personal lobbying by Bush and support from House leaders of both parties. But the legislation was highly unpopular with the public, ideological groups on the left and the right organized against it, and Bush no longer wielded the influence to leverage tough votes. Even pressure in favour of the bill from some of the biggest special interests in Washington, including the US Chamber of Commerce and the National Association of Realtors, could not sway enough votes.

The legislation the administration promoted would have allowed the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believed it would help lift a major weight off the already sputtering national economy.

Treasury Secretary Henry Paulson emerged after the vote and warned of a credit crunch that would affect American businesses and said families would find it harder to get student loans and car loans.

"We need to work as quickly as possible," he said gravely. "We need to get something done."

The sense of urgency was not universal. Many opponents of the bill argued that the package amounted to a too-costly commitment of taxpayer money to bail out financial institutions for their own mistakes.

Rep Dean Heller, R-Nev, offered a typical sentiment. "I cannot with good conscience put Nevada's taxpayers on the hook for the foolish excesses of Wall Street," he said. "Congress should pass legislation that protects the taxpayer, assists with bad assets and allows the market to correct itself."

Immediately following the vote, Republican leaders blamed their failure to secure more votes on the partisan tone of Speaker Nancy Pelosi's pre-vote speech on the House floor. "There were a dozen members who we thought ... we had a really good chances of getting on the floor," said Minority Leader John Boehner of Ohio. "And all that evaporated with that speech."

Rep Barney Frank, D-Mass, the gruff but quick-witted chairman of the House banking committee, countered, "Give me the names of those 12 people and I'll go talk uncharacteristically nice to them."

Behind the bluster, lawmakers pledged to work again. Hoyer met with House Republican Whip Roy Blunt of Missouri, one of the lead GOP negotiators from the House.

Blunt, noting that the House would break for the Jewish holidays until Thursday, said, "We are going to have a couple days to see how the marketplace reacts to all this, and maybe that's a good thing."

House members weren't going home to campaign for re-election "until this is addressed," Hoyer vowed.

Both Blunt and Hoyer suggested that the Senate could vote first on a bill then send it to the House, but Senate leaders showed no inclination to take up a bill without being certain of its fate in the House.

"What would be wrong, I think, would be to act without some kind of clear indication from the House about how they're going to proceed," said Sen Christopher Dodd, D-Conn, the chairman of the Senate Banking Committee. "We don't need to start all over."

The two men campaigning to replace Bush watched the situation closely — from afar — and demanded action.

In Iowa, Republican John McCain said his rival Barack Obama and Congressional Democrats "infused unnecessary partisanship into the process. Now is not the time to fix the blame; it's time to fix the problem."

Obama said, "Democrats, Republicans, step up to the plate, get it done."

The burden for votes fell more strongly on Republican leaders. About three out of five House Democrats voted for the legislation; only a third of Republicans backed it.

Republicans, already seeking possible votes, floated several ideas. One would double the USD 100,000 ceiling on federal deposit insurance. Another would end rules that require companies to devalue assets on their books to reflect the price they could get in the market.

Post Session Commentary - Sep 30 2008

Domestic markets rebounded sharply from days low after sun outage session to end the day with handsome gains. The assuring comments from Finance Minster P Chidambaram that the Indian banking and financial system is well capitalized had provided some boost to the markets after sharp slide. Sentiments also got boosted on expectations that US administration will put forward a revised rescue package for the US financial sector. The BSE Sensex recovered nearly 700 points from days low to end above 12,800 level and the NSE Nifty above the 3900 mark. Markets opened on extremely negative note on weak global cues due to defeat of bailout package. Yesterday House of Representatives rejected the $700 billion bailout plan to save the US financial system. However, the markets suddenly managed to recover a bit but were still below dotted line till sun outage close. Markets extended its gains further to conclude the day in green. From the sectoral front, most of the indices ended with gains and Bank index out performed the benchmark index as witnessed sharp rise of around 5%. Apart from that, smart pullback was led by Capital Goods, Oil & Gas, Reality and Consumer Durables stocks. However, Metal and FMCG stocks remained out of favor as witnessed most of the selling from these baskets. The market breadth was negative as 1316 stocks closed in red while 1277 stocks closed in green and 79 stocks remained unchanged.

The BSE Sensex closed higher by 264.68 points at 12,860.43 and NSE Nifty ended up by 71.15 points at 3,921.20. The BSE Mid Caps and Small Caps closed with gains of 68.96 points at 4,798.29 and by 24.44 points at 5,577.47. The BSE Sensex touched intraday high of 12,995.20 and intraday low of 12,153.55.

Gainers from the BSE are ICICI Bank Ltd (8.42%), TCS Ltd (6.96%), HDFC (5.33)%, Bharti Airtel (5.14%), BHEL (5.07%), SBI (4.32%), L&T Ltd (4.16%), JP Associates (4.12%), Maruti Suzuki (3.73%), NTPC Ltd (3.31%) and HDFC Bank Ltd (2.46%).

The BSE Capital Goods index surged 310.53 points to close at 10,581.13. Major gainers are As Bharat Bijli (6.32%), Usha Martin (5.35%), BHEL (5.07%), Bharat Elect (4.65%), Punj Lloyd (4.53%) and L&T Ltd (4.16%).

The BSE Bank index advanced by 303.75 points to close at 6,478.15. As ICICI Bank Ltd (8.42%), Axis Bank (7.28%), Indus Ind Bank (4.52%), Bank of India (4.45%), SBI (4.32%) and IDBI Bank Ltd (4.27%) closed in positive territory.

The BSE Oil & Gas index ended up by 114.27 points at 9,039.28 as BPCL (5.59%), HPCL (5.39%), IOC Ltd (5.18%), Reliance Natural Resources (5.01%), Aban Offshore (3.10%) and Cairn India (1.24%) ended in positive territory.

The BSE Reality index closed higher by 100.90 points at 3,508.77. Gainers are Ansal Infra (11.63%), Akruti City (10.75%), Orbit Co (7.98%), Unitech Ltd (7.03%), Penland Ltd (3.43%) and Housing Dev (2.50%).

The Consumer Durables index gained 56.02 points to close at 2,929.18. As Titan Ind (3.10%), Gitanjali GE (2.83%), Blue Star L (2.06%) and Videocon Ind (0.69%) closed in positive territory.

The BSE Metal index plunged 152.17 points to close at 8,992.06. Major losers are Jai Corp Ltd (7.42%), JSW SL (4.94%), SAIL (4.87%), Hindustan Zinc (4.82%), Tata Steel (4.43%) and NMDC Ltd (2.19%).

Markets brave it out

After the 777-point fall, the highest-ever for the Dow Jones Industrial Average (Dow) as the $700-billion financial-rescue bill failed to get through the US's house of representatives, the markets across the globe were expected to fall. In line, the Asian markets reported losses and witnessed high volatility for the major part of their trading session. In the early trades, the Sensex too seemed to take a leaf out of Dow's book and plunged nearly 418 points on massive selling in front-line stocks, However sustained buying in heavyweights, banking and realty stocks lifted the market's sentiment and the Sensex turned positive. Thereafter, the market witnessed choppy trades and with some range-bound moves the Sensex slipped in the red in the afternoon again. The market bounced back from its lows once again towards the close and touched the day's high of 12,995 led by ICICI Bank, Tata Consultancy Services (TCS), HDFC and Bharti Airtel. The Sensex finally ended the session with a gain of 265 points at 12,860. Nifty ended the session at 2,921 by adding 71 points.

The breadth of the market was neutral. Of the 2,671 stocks traded on the BSE, 1,283 stocks advanced, whereas 1,309 stocks declined. Seventy nine stocks ended unchanged. Among the sectoral indices the BSE Bankex advanced by 4.92% at 6,479 followed by the BSE CG (up 3.02% at 10,581) and BSE Realty (up 2.96% at 3,508). However, the BSE Metal and BSE FMCG closed in the negative territory.

Select blue chips notched up significant gains. ICICI Bank jumped 8.42% to Rs534.85, TCS rose 6.96% at Rs662.75, HDFC advanced 5.33% at Rs2,141.15, Bharti Airtel climbed 5.14% at Rs785.05, BHEL surged 5.07% at Rs1,586, State Bank of India scaled up 4.32% at Rs1,465, Larsen & Toubro (L&T) gained 4.16% at Rs2,442.85 and JP Associates added 4.12% at Rs111.10 while Maruti Suzuki India, NTPC and HDFC Bank ended with gains. Among the laggards Tata Steel tumbled by 4.43% at Rs425.60, Tata Motors dropped 3.27% at Rs344.20 and Ranbaxy Laboratories declined 3.17% at Rs247.75 while Grasim Industries, Tata Power, ITC, Hindustan Unilever, Sterlite Industries, Wipro and Reliance Energy ended with marginal losses.

Over 2.33 crore Reliance Natural Resources shares changed hands on the BSE followed by IFCI (1.27 crore shares), Suzlon Energy (0.89 crore shares), Chambal Fertilisers and Chemicals (80.34 lakh shares) and Ispat Industries (72.22 lakh shares).

Valuewise, Reliance Capital registered a turnover of Rs405 crore on the BSE followed by Reliance Industries (Rs356 crore), ICICI Bank (Rs336 crore), L&T (Rs206 crore) and Axis Bank (Rs203 crore).