Nifty May 2008 futures at discount

Turnover in F&O segment surges

Nifty May 2008 futures were at 5024, at a discount of 1.45 points as compared to spot closing of 5025.45.

The NSE's futures & options (F&O) segment turnover was Rs 45,076.17 crore, which was higher than Rs 39,481.17 crore on Wednesday, 21 May 2008.

Reliance Petroleum May 2008 futures were near spot price at 187.30 compared to the spot closing of 187.10.

Reliance Capital May 2008 futures were near spot price at 1391.50 compared to the spot closing of 1390.75.

Reliance Industries May 2008 futures were at premium at 2629 compared to the spot closing of 2626.05.

In the cash market, the S&P CNX Nifty lost 92.20 points or 1.80% at 5025.45.

OPEC head concerned about oil market volatility

OPEC head Abdalla Salem el-Badri on Wednesday said he was worried about volatility in the oil market as prices soared through the historic 130 dollars level for the first time.

"The Secretary General expressed concern about the volatility that has characterised the market in recent times," the Vienna-based cartel said in a statement from Caracas, where el-Badri met Venezuelan President Hugo Chavez as part of a weeklong working visit to OPEC members Venezuela and Ecuador.

Following his meeting with Chavez, el-Badri said, "The crude oil market remains well-supplied, with (developed world) stocks increasing above their five-year average.

"OPEC will continue to strive to bring stability to the oil market," the statement said, noting that el-Badri "also called on other stakeholders in the industry -- consumers, producers, investors -- to cooperate to find a lasting solution to the volatility."

El-badri stressed that OPEC remained committed "to working for the stability of the international oil market, noting that the current high oil prices are not influenced by market fundamentals, as the market is well supplied.

"OPEC will continue to monitor global oil markets regularly and is ready to act if and when necessary to ensure market stability and adequate supplies," the statement added.

OPEC has repeatedly said that the market is well supplied and that record prices reflect speculative investment activity rather than underlying supply and demand conditions.

US Federal Reserve sharply cuts growth forecast

The US Federal Reserve on Wednesday sharply cut its growth forecast for 2008 but suggested it may halt a string of drastic rate cuts aimed at boosting the sagging US economy.

The central bank predicted 2008 growth of 0.3 percent to 1.2 per cent, down from a January projection of 1.3 percent to 2 percent, according to the minutes of the Federal Open Market Committee's April 30 meeting.

The Fed cut its benchmark interest rate by 0.25 percentage points to 2 percent at the April meeting, but the minutes indicate that inflation risks made it a difficult decision.

Consumer prices were projected to increase by 3.1 to 3.4 percent in 2008, up from 2.1 to 2.4 percent inflation expected in Fed's January forecast.

'Most members viewed the decision to reduce interest rates at this meeting as a close call,' the Fed minutes said. 'Although downside risks to growth remained, members were also concerned about the upside risks to the inflation outlook.'

Two of the board's 10 members voted against April's rate cut.

The economy expanded by 0.6 percent in the first quarter according to initial government estimates. Some economists believe the US has entered a recession.

The Fed's federal funds rate has been cut from 5.25 percent to two percent since September to combat a housing and mortgage crisis that has engulfed the world's largest economy.

NSE Bulk Deals to Watch - May 22 2008

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
22-MAY-2008,HARRMALAYA,Harrisons Malayalam Ltd,ADROIT FINANCIAL SERVICES PVT LTD,BUY,133652,125.35,-
22-MAY-2008,HARRMALAYA,Harrisons Malayalam Ltd,PRASHANT JAYANTILAL PATEL,BUY,108111,125.74,-
22-MAY-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,BUY,4114137,64.20,-
22-MAY-2008,ISPATIND,Ispat Industries Limited,CLEAN FINANCE & INVESTMENT LTD,BUY,9146921,35.16,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,FIN BRAINS SECURITIES (INDIA) LTD.,BUY,123603,165.83,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,LEGEND COMMODITY & DERIVATIVES PRIVATE LIMITED,BUY,67776,165.82,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,LPC SECURITIES LTD,BUY,59369,165.29,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,MANSUKH SECURITIES & FINANCE LTD,BUY,81084,165.01,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,MBL & COMPANY LTD.,BUY,65359,164.40,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,PRASHANT JAYANTILAL PATEL,BUY,61673,169.44,-
22-MAY-2008,KOHINOOR,Kohinoor Foods Limited,A S CONFIN PVT.LTD.,BUY,157500,90.00,-
22-MAY-2008,SITASHREE,Sita Shree Food Products,ADROIT FINANCIAL SERVICES PVT LTD,BUY,112373,45.66,-
22-MAY-2008,UTTAMSTL,Uttam Galva Steels Limite,KSHITIJ VENKATESH RAJKUMAR,BUY,602061,42.62,-
22-MAY-2008,HARRMALAYA,Harrisons Malayalam Ltd,ADROIT FINANCIAL SERVICES PVT LTD,SELL,133652,125.20,-
22-MAY-2008,HARRMALAYA,Harrisons Malayalam Ltd,PRASHANT JAYANTILAL PATEL,SELL,108111,126.61,-
22-MAY-2008,HILTON,Hilton Metal Forging Limi,DEUTSCHE INTERNATIONAL TRUST CORP (MAURITIUS) LTD,SELL,67000,36.82,-
22-MAY-2008,IFCI,IFCI Ltd.,AMBIT SECURITIES BROKING PVT. LTD.,SELL,4127927,64.25,-
22-MAY-2008,ISPATIND,Ispat Industries Limited,CLEAN FINANCE & INVESTMENT LTD,SELL,9146921,35.17,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,FIN BRAINS SECURITIES (INDIA) LTD.,SELL,123603,165.96,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,LEGEND COMMODITY & DERIVATIVES PRIVATE LIMITED,SELL,67776,166.24,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,LPC SECURITIES LTD,SELL,59369,165.52,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,MANSUKH SECURITIES & FINANCE LTD,SELL,81084,165.01,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,MBL & COMPANY LTD.,SELL,65359,164.50,-
22-MAY-2008,JAYSREETEA,Jayashree Tea Ltd.,PRASHANT JAYANTILAL PATEL,SELL,61673,170.24,-
22-MAY-2008,KOHINOOR,Kohinoor Foods Limited,ALOSHA VANIJYA PVT LTD,SELL,160000,90.01,-
22-MAY-2008,SITASHREE,Sita Shree Food Products,ADROIT FINANCIAL SERVICES PVT LTD,SELL,112373,45.38,-

BSE Bulk Deals to Watch - May 22 2008

Deal Date Scrip Code Scrip Name Client Name Deal Type * Quantity Price **
22/5/2008 523269 ADVANI HOT R AAYUSH KABRA S 362000 100.02
22/5/2008 532975 AISHWARYA TE SANJAY D. MIRANI B 60000 110.10
22/5/2008 532975 AISHWARYA TE SMITA VILAS MARATHE B 99956 108.74
22/5/2008 532975 AISHWARYA TE MANISH V SARVAIYA B 92273 111.23
22/5/2008 532975 AISHWARYA TE SANJAY D. MIRANI S 60000 109.40
22/5/2008 532975 AISHWARYA TE SANJAY KUMAR YADAV S 53793 110.81
22/5/2008 532975 AISHWARYA TE SMITA VILAS MARATHE S 99956 109.80
22/5/2008 532975 AISHWARYA TE MANISH V SARVAIYA S 92273 111.32
22/5/2008 531223 ANJANI SYNTH ARVIND KALYANJI RAMBHIA B 119534 47.80
22/5/2008 531223 ANJANI SYNTH ARVIND KALYANJI RAMBHIA S 119534 46.58
22/5/2008 590081 BRAHMANAND SPJSTOCK B 123492 174.23
22/5/2008 590081 BRAHMANAND SPJSTOCK S 123492 175.78
22/5/2008 590061 BRUSHMAN IND KIRTI STOCKS AND SECURITIES LTD B 65000 120.00
22/5/2008 590061 BRUSHMAN IND ASHOK FINSTOCK LTD B 89100 117.87
22/5/2008 590061 BRUSHMAN IND ASHOK FINSTOCK LTD S 89100 120.00
22/5/2008 531682 CAT TECHNOL BASMATI SECURITIES PVT LTD S 216060 9.03
22/5/2008 530713 CHOKSH INFO V B DESAI FINANCIAL SERVICES LIMITED S 20000 23.44
22/5/2008 532271 CYBERMAT INF ANGEL INFIN PRIVATE LIMITED B 534554 6.52
22/5/2008 532271 CYBERMAT INF PRABHUDAS LILLADHER PVT. LTD. B 501661 6.41
22/5/2008 532271 CYBERMAT INF JMP SECURITIES PVT. LTD. B 1073598 6.52
22/5/2008 532271 CYBERMAT INF S V ENTERPRISES B 3785369 6.52
22/5/2008 532271 CYBERMAT INF ASTUTE COMMODITIES AND DERIVATIVES PVT LTD B 575099 6.51
22/5/2008 532271 CYBERMAT INF ANGEL INFIN PRIVATE LIMITED S 534554 6.63
22/5/2008 532271 CYBERMAT INF PRABHUDAS LILLADHER PVT. LTD. S 541160 6.42
22/5/2008 532271 CYBERMAT INF JMP SECURITIES PVT. LTD. S 1323941 6.45
22/5/2008 532271 CYBERMAT INF S V ENTERPRISES S 2875080 6.43
22/5/2008 532271 CYBERMAT INF EDELWEISS ESTATES PRIVATE LIMITED S 1000000 6.51
22/5/2008 532271 CYBERMAT INF ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 590098 6.61
22/5/2008 531137 GEMSTONE INV PREM MOHANLAL PARIKH B 25000 22.77
22/5/2008 531137 GEMSTONE INV HEMANT MADHUSUDAN SHETH S 46140 22.80
22/5/2008 505893 HIND HARDY S NAIMISH J MEHTA B 11084 114.90
22/5/2008 505893 HIND HARDY S NAIMISH J MEHTA S 16871 114.10
22/5/2008 532414 IKF TECHNO ANGEL INFIN PRIVATE LIMITED B 1757883 9.64
22/5/2008 532414 IKF TECHNO JMP SECURITIES PVT. LTD. B 1381240 9.60
22/5/2008 532414 IKF TECHNO ANGEL INFIN PRIVATE LIMITED S 2055466 9.55
22/5/2008 532414 IKF TECHNO JMP SECURITIES PVT. LTD. S 1412617 9.61
22/5/2008 509715 JAYSHRE TEA MANSUKH STOCK BROKERS LTD B 98808 164.73
22/5/2008 509715 JAYSHRE TEA MANSUKH STOCK BROKERS LTD S 98808 165.00
22/5/2008 530985 JPTSECURITII ASTUTE COMMODITIES AND DERIVATIVES PVT LTD B 16180 44.82
22/5/2008 530985 JPTSECURITII ASTUTE COMMODITIES AND DERIVATIVES PVT LTD S 16176 47.14
22/5/2008 532926 JYOTHY LAB FIDELITY INDIAN MUTUAL FUND AC FIDELITY EQUITY FUND B 140400 510.00
22/5/2008 532926 JYOTHY LAB TEMPLETON MUTUAL FUND AC FLEXI CAP FUND S 241371 510.59
22/5/2008 532758 KEW INDUSTR HARSHIL KANTILAL KOTHARI B 140000 27.50
22/5/2008 532758 KEW INDUSTR SPJSTOCK B 106797 27.84
22/5/2008 532758 KEW INDUSTR SPJSTOCK S 116797 27.81
22/5/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD B 34720 23.95
22/5/2008 531602 KOFF BR PICT LAXMI CAP BROKING PVT LTD S 49894 23.52
22/5/2008 512559 KOHINORFOODS A S CONFIN PVT LTD B 152500 90.00
22/5/2008 512559 KOHINORFOODS ALOSHA VANIJYA PVT LTD S 172764 90.01
22/5/2008 531194 MEWAR INDUS SANDHYA AGARWALA S 19954 12.30
22/5/2008 532692 RADHA MADHAV INDIASTAR MAURITIUS LIMITED S 176098 63.09
22/5/2008 500365 REMI METALS NOSHIRWAN NADIR MODI S 640264 10.00
22/5/2008 504375 SOFTBPO GLOB CHETAN BHUPATRAI MEHTA B 1000 264.60
22/5/2008 513530 STELCO STRIP SPJSTOCK B 158773 45.58
22/5/2008 513530 STELCO STRIP SPJSTOCK S 158773 45.72
22/5/2008 532887 SUJANATOWER DEUTSCHE INTERNATIONAL TRUST CORP MAURITIUS LTD MINIVET LIMITED S 224859 124.46
22/5/2008 522267 VEEJAY LAK E RAJIV ARORA B 29690 91.91
22/5/2008 531249 WELL PACK PA DEEPIKA SHARAD NANSI B 25000 58.55
22/5/2008 531249 WELL PACK PA JIGAR JAYANTILAL SHAH S 35000 60.00

Post Session Commentary - May 22 2008

Indian market closed in deep red due to heavy selling pressure across key sectors on the back of crude oil prices and surging inflation. The domestic market opened on the weak note tracking the unfavouring cues from the US market. The market kept on hovering in the negative territory and remained extremely bearish till the end. Market was not able to change the investors’ weak sentiment, as the international oil prices reached a new high of above $135 per barrel, Asian markets ended low and inflation worries demolished the market, which led the Sensex to fall below 17,000 mark. Also, the US Federal Reserve’s steps to cut US economic growth forecasts and signaling of any rate cut further is unlikely also add to the sentiments. The IT stocks attract the investors confidence at the initial stage but it gave up its gains towards the end due to selling pressure across the counters. From the sectoral front, all indices ended in negative but capital goods and metal stocks faced heavy selling pressures. The market breadth was negative as 1684 stocks closed in red while 1040 stocks closed in green and 67 stocks remained unchanged.

The BSE Sensex closed lower by 336.05 points at 16,907.11 and NSE Nifty fell by 92.2 points to close at 5,025.45. Among the Sensex pack, only 1 stock ended in green while 29 stocks in red. The BSE Mid Cap and Small Cap closed lower by 98.80 points and 125.14 points at 7,049.25 and 8,663.84 respectively.

Losers from the BSE are Tata Motors (3.98%), Reliance Infra (3.97%), ICICI Bank Ltd (3.39%), SBI (3.28%), Reliance Communication Ltd (3.16%), Jaiprakash Associates (2.65%), Ambuja Cement (2.61%), L&T Ltd (2.57%) and HDFC Bank Ltd (2.40%).

The Capital Goods index declined by 328.17 points to close at 13,341.91. Major losers are Kirlosker Br (8.81%), Suzlon Energy (5.62%), Areva (4.04%), Punj Lloyd (3.41%), Laskshmi MA W (2.96%) and ABB Ltd (2.79%).

The Bankex index fell by 264.01 points to close at 8,375.89 as Indian Overseas Bank (4.82%), Axis Bank (4.73%), Yes Bank (4.52%), Punjab National Bank (3.70%), ICICI Bank Ltd (3.39%), SBI (3.28%), and Kotak Bank (3.12%) ended in negative territory.

The Metal closed lower by 237.33 points at 17,152.95. Losers are JSW SL (5.01%), Hindustan Zinc (4.57%), Jindal Stain (3.97%), SH.Precoated (3.82%), Steel Authority (3.75%), and Bhushan Steel (3.07%).

The Oil & Gas index closed lower by 216.26 points at 11,216.54. Losers are Reliance Natural Resources (3.35%), HPCL (3.34%), Reliance Petroleum (3.01%), Essar Oil Ltd (2.83%), BPCL (2.77%) and Cairn India (2.40%).

The Realty index closed lower by 211.54 points at 7,693.54. Losers are Akruti City (4.06%), Puravankara (3.67%), Housing Development (3.55%), Ansal Infra (3.45%), Indiabull Real (3.43%), and Penland Ltd (3.13%).

The Auto index fell by 98.07 points to close at 4,684.83 as Esscorts Ltd (4.65%), TVS Motors (4.63%), Ashok Leyland (4.00%), Tata Motors (3.98%), Bharat Forge (3.74%), and MRF Ltd (2.30%) closed in negative territory

Market tracks weak global equities; Sensex sheds 336 points

Sharp fall in US stocks overnight and surging crude oil prices weighed on the market sentiment today, triggering a broad based decline in blue chips. Asian markets which opened before Indian markets were weak. European markets which opened after Indian market were in red

Banking, capital goods, realty and auto stocks fell. All the sectoral indices on BSE were in red. The market breadth was weak.

On Wednesday, 21 May 2008, the US Federal Reserve cut its 2008 US economic growth forecast and signaled that mounting concerns over inflation would make further interest rate cuts unlikely, driving the three major US indexes down over 1.5%. Oil prices surged to a record high above $135 per barrel on Thursday, 22 May 2008, stoking fears of global inflation.

The 30-share BSE Sensex lost 336.05 points or 1.95% at 16,907.11. Sensex lost 379.78 points at day’s low of 16,863.38 touched in late trade.

The broader based S&P CNX Nifty was down 92.2 points or 1.8% at 5,025.45. Nifty May 2008 futures were at 5024, at a discount of 1.45 points as compared to spot closing of 5025.45.

The BSE clocked a turnover of Rs 5,742 crore, lower than a turnover of Rs 7,126.12 crore on Wednesday, 21 May 2008. NSE's futures & options (F&O) segment turnover was Rs 45,076.17 crore, which was higher than Rs 39,481.17 crore on Wednesday, 21 May 2008.

The market breadth was weak on BSE with 1,040 shares advancing as compared to 1,684 that declined. 67 remained unchanged.

Among the 30-member Sensex pack, 29 declined while 1 advanced.

The BSE Mid-Cap index declined 98.80 points or 1.38% to 7,049.25 and BSE Small-Cap index declined 125.14 points or 1.42% to 8,663.84.

BSE Bankex (down 3.06% at 8,375.89), BSE Realty index (down 2.68% at 7,693.34), BSE Capital Goods index (down 2.4% at 13,341.91), BSE Power (down 2.12% to 3,232.82), BSE Auto index (down 2.05% at 4,684.83) underperformed Sensex.

BSE Oil & Gas index (down 1.89% to 11,216.54), BSE FMCG index (down 1.74% at 2,440.04), BSE Metal index (down 1.36% to 17,152.95), BSE TecK index (down 1.23% to 3,489.01), BSE Consumer Durables index (down 1.04% to 4,632.70), BSE PSU index (down 0.94% to 7,653.82), BSE IT index (down 0.79% to 4,418.23), BSE Health Care index (down 0.41% at 4,228.08), outperformed Sensex.

As per the provisional figures on NSE, the foreign institutional investors (FII)'s sold shares worth Rs 537.35 crore while domestic funds bought shares worth Rs 415.16 crore today, 22 May 2008.

Banking stocks declined. ICICI Bank (down 3.39% to Rs 880.40), HDFC Bank (down 2.4% to Rs 1,379.90) and State Bank of India (down 3.28% to Rs 1,607) edged lower.

Realty stocks fell. Indiabulls Real Estate (down 3.43% to Rs 512.50), Unitech (down 3.1% to Rs 273.85) and DLF (down 2.17% to Rs 620.70) edged lower.

Capital goods stocks declined. Larsen & Toubro (down 2.57% to Rs 2,916.80), Bharat Heavy Electricals (down 1.33% to Rs 1,748.05) and Suzlon Energy (down 5.62% to Rs 291.60) edged lower.

Auto stocks declined. Tata Motors (down 3.98% to Rs 661.45), Maruti Suzuki India (down 1.79% to Rs 800.50), Hero Honda Motors (down 0.03% to Rs 788.50) edged lower.

India’s largest tractor maker by sales Mahindra & Mahindra (M&M) declined 2.2% to Rs 652.35. It has reportedly signed a term sheet with Kinetic Motors to acquire a majority stake in the company. According to reports, M&M is looking to acquire 76% stake in Kinetic Motors valued at about Rs 120 crore. A deal could fructify in the next two months if the due diligence proceeds smoothly, the reports added.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries declined 1.89% to Rs 2,617.35.

India's largest state-run oil exploration firm in terms of revenue Oil and Natural Gas Corporation (ONGC) declined 1.53% to Rs 924.35. It is reportedly planning to sell 30% to 40% each in two blocks in Vietnam to share the risks and drilling costs. ONGC owns 100% in the two deepwater exploration blocks. The buyer has not yet been finalised, the reports added.

India's largest drug maker by sales Ranbaxy Laboratories declined 1.14% to Rs 498.25. It has reportedly struck two deals with group companies. Ranbaxy has sold some land and building for Rs 90 crore to a group company. It has also picked up 24.91% stake in Shimal Laboratories, another promoter family company, for Rs 93.4 crore, the reports added.

Reliance Infrastructure (down 3.97% to Rs 1,322.95), Reliance Communications (down 3.16% to Rs 584.65), Ambuja Cements (down 2.61% to Rs 104.30), Jaiprakash Associates (down 2.65% to Rs 246.10), ITC (down 2.36% to Rs 223.05), HDFC (down 2.29% to Rs 2,626.70) edged lower from the Sensex pack.

India’s largest aluminium maker by sales Hindalco Industries rose 0.2% to Rs 197.65.

Ispat Industries clocked the highest volume of 4.32 crore shares on BSE. IFCI (3.13 crore shares), Nagarjuna Fertilisers and Chemicals (1.11 crore shsres), Reliance Natural Resources (1.09 crore shares) and Cybermate Infotek (99.73 lakh shares) were the other volume toppers in that order.

Reliance Capital clocked the highest turnover of Rs 225.63 crore on BSE. IFCI (Rs 201.77 crore), Cairn India (Rs 189.47 crore), Reliance Power (Rs 180.57 crore) and Reliance Industries (Rs 176 crore) were the other turnover toppers in that order.

In Asia, key benchmark indices in Hong Kong, China, South Korea, Singapore and Taiwan were down by between 0.08% to 1.89%. However Japan’s Nikkei was up 0.37%.

European markets were weak. Key benchmark indices in Frnace andd Germany and UK were down between 0.04% to 0.49%.

Earnings downgrade amid rising input and interest costs, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. Inflation based on the wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% on 6 November 2004.

Further, a steep increase in upward revision in inflation rate for the week ended 8 March 2008, to 7.78% from the provisional 5.92%, came as a rude shock to marketmen. According to retail brokerage Sharekhan, the steep upward revision in inflation rate is a cause for concern, as prices of many commodities have not been updated for varied periods. Moreover, a sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review.

With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity scrips such as cement and steel. Cement maker ACC said earlier this months that its margins will be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures. The government recently imposed export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. The government had earlier banned export of cement and non-basmati rice. On 7 May 2008, the government ordered suspension in futures trading in channa, refined soyoil, potato and rubber for four months.

Meanwhile, as per a recent study by CLSA, large amount of foreign currency convertible bonds (FCCBs) issued by Indian companies are coming up for redemption in the next 18-24 months. After recent stock market volatility many FCCBs are at risk of not converting i.e. if the stock market remains subdued, it will stop the bond holders from opting for an equity conversion as it will be easier for them to buy the stock from the open market instead of paying the agreed premium.

When the FCCBs come for redemption, some of these companies may have to take on more debt to redeem the FCCB, thereby raising interest outgo. In the event FCCBs don't get converted, companies have the option to lower the conversion price in line with the market, leading to higher equity dilution. If companies decide to issue fresh FCCBs to finance redemption of FCCBs, it will be at lower premium than earlier.

With the rupee tumbling against the dollar in the last few days, the government may ease restrictions on overseas corporate borrowing when it, together with the RBI, reviews the external commercial borrowing (ECB) policy later this month, reports suggest. Last year, the government had imposed restrictions on ECBs in a bid to check in surge in rupee against the dollar. There are many Indian corporates who will eagerly seek cheap overseas funds if the RBI re-opens the ECB tap, analysts reckon.

The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. A CLSA report says India’s infrastructure development is set to accelerate, backed by greater private sector participation and improved finances of government and public sector enterprises. Rating agency Crisil in its outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Given the continued inflow to unit linked insurance plans (Ulips) and equity linked savings schemes (ELSS) of mutual funds, stock-specific buying will continue depending on fundamentals of individual stocks. Insurance firms are now a major player in the Indian stock market given the huge mop up in Ulips in recent years. It was buying support from domestic funds which had aided the recent recovery on the bourses.

Meanwhile, as per recent reports, ELSS which offer tax benefit are catching the fancy of small savers. ELSS funds saw their collective assets jump more than nine times to about Rs 16000 crore in three years ending March 2008. In 2005 the investment limit eligible for income tax breaks was raised ten times to Rs 1,00,000 rupees for ELSS funds. Systematic investment plan (SIP) are said to be driving inflows into ELSS funds.

Market takes beating, falls below 17000

Across-the-board selling dragged the market by over 1.95% as indices followed the weak international markets and overlooked the strong quarterly numbers from heavyweights, Cummins, Bajaj Holding, Balaji Telefims and Moser Baer. The market never recovered after resuming 138 points lower at 17105 and the sentiment turned extremely bearish as the trading progressed. Followed by a sharp fall in heavyweights, correction in bank, realty, CG, power and auto stocks dragged the index below the 16900 mark in noon trades to touch the day's low of 16863, down 380 points from yesterday's close of 17243. Finally, the Sensex tumbled by 336 points at 16907 while the Nifty dropped 92 points to close at 5025.

All the sectoral indices took heavy hammering. The BSE Bankex led the slump and dropped 3.06% at 8,376 followed by the BSE Reality index (down 2.68% at 7,693), the BSE CG index (down 2.40% at 13,342), the BSE Power index (down 2.12% at 3,233) and the BSE Auto index (down 2.05% at 4,685).

The market breadth was extremely weak. Of the 2,791 stocks traded on the BSE 1,684 stocks declined, 1,040 stocks advanced and 67 stocks ended unchanged. While only one Sensex stock advanced, 29 declined today. Among the major losers, Tata Motors slumped 3.98% at Rs661.45, Reliance Infra shed 3.97% at Rs1,322.95, ICICI Bank declined 3.39% at Rs880.40, SBI lost 3.28% at Rs1,607, Reliance Communication shed 3.16% at Rs584.65, Jaiprakash Associates fell 2.65% at Rs246.10, Ambuja Cement slipped by 2.61% at Rs104.30, Larsen & Toubro plunged 2.57% at Rs2,916.80 and HDFC Bank tumbled 2.40% at Rs1,379.90. Other blue chips also fell around 1-2% each. Among the gainers only Hindalco Industries added 0.20% at Rs197.65.

Among the bank stocks, Indian Overseas tanked 4.82% at Rs138.25, Axis Bank slumped 4.73% at Rs828.40, Yes Bank dropped 4.52% at Rs161.45, PNB shed 3.70% at Rs537.60 and Kotak Bank was down 3.12% at Rs714.85.

Ispat Industries was the most actively traded counter with volumes of over 4.32 crore shares traded on the BSE followed by IFCI (3.13 crore shares), Nagarjuna Fertilizers (1.11 crore shares), RNRL (1.09 crore shares) and Cybermate (0.99 crore shares).

Value-wise Reliance Capital clocked a turnover of Rs225 crore followed by IFCI (Rs201 crore), Cairn India (Rs189 crore), R Power (Rs180 crore) and Reliance Industries (Rs176 crore).

Grey Market - Bafna, Gokul, Anus

Gokul Refoils 175 to 195 14 to 15

Anus Laboratories 200 to 210 35 to 38

Bafna Pharmaceutical 40 6 to 8

Morning Call - May 22 2008

Market Grape Wine :

In House :

Nifty at a support of 5056 and 4990 and resistance at 5140 and 5170 levels .

Buy : intraday INFY above 1850 target 1900 s/l of 1830

Buy : intraday LUPIN above 685 target 699 s/l of 674

Buy : in F&O : IFCI above 63.5 target 70 s/l of 60.5

Sell : in F&O SUZLON below 310 target 295 s/l of 316

Out House :

Markets at a support of 16969 & 16786 and resistance at 17272 & 17373 levels .

Buy : INFY at dips

Buy : RPL & RIL at dips

Buy : Bhel at dips

Buy : RPower

Buy : BombayDye

Buy : Coreproject

Buy :GujNre

Buy : Adlab& Centurytex

Buy : Cairn & Suzlon at dips

Dark Horse : BombayDye , Emami , IFCI , CORE, , GujNRE & Cairn

Company Background - HDFC Bank

HDFC Bank, a private sector bank was incorporated in the year of 1994 by Housing Development Finance Corporation Limited (HDFC), India's premier housing finance company. HDFC was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The Bank commenced its operations as a Scheduled Commercial Bank in January 1995 with the help of RBI's liberalisation. HDFC Bank deals with three key business segments - Wholesale Banking Services, Retail Banking Services, Treasury. It has entered the banking consortia of over 50 corporates for providing working capital finance, trade services, corporate finance and merchant banking. It is also providing sophisticated product structures, sound advice and fine pricing mainly in areas of foreign exchange and derivatives, money markets and debt trading and equity research through its state-of-the-art dealing room.

Notable event was happened in the history of bank as well as Indian banking sector in Feb. 2000, the Times Bank was amalgamated with HDFC bank. This was an important milestone, being the first merger of two private sector banks. HDFC Bank was the first Bank to launch an International Debit Card in association with VISA (Visa Electron). The Bank launched its Credit Card business in 2001. In the same year HDFC Bank has became the first private sector bank to be authorised by the Central Board of Direct Taxes (CBDT) as well as the RBI to accept direct taxes. The taxes accepted at specified branches of the bank. Also it has announced a strategic tie-up with a Bangalore-based business solutions software developer Tally Solutions Pvt (TSPL) for developing and offering products and services facilitating on-line accounting and banking services to SMEs (Small and Medium Enterprises). In 2001-02 the bank was listed on the New York Stock Exchange in the form of ADS and bank had alliance with LIC for provide online payment of insurance premium to the customers.

Bank received plenty of awards to its credit, in the year 2003 bank received "Best Local Bank in India" by Finance Asia, "Best Domestic Bank in India Region" in The Asset Triple A Country Awards 2003. Apart from this, 'Best Bank in the Private Sector' for the year 2003 in the Outlook Express Awards, 'Best New Private Sector Bank 2003' by the Financial Express in the FE-Ernst & Young Best Bank's survey 2003. It was also figured in the 'Best Under a Billion, 200 Best Small Companies for 2003' by Forbes Global and for use of information technology the bank was awarded with 'Best IT user in Banking' at the IT User Awards 2003 conferred by Economictimes.com & Nasscom. In the year of 2004 to 2005, "Best Domestic Commercial Bank" & "Best Cash Management Bank"- India- Asiamoney Awards for Corporate Excellence of 2004-05, "Best Bank" - India - Finance Asia, "Company of the Year "- The Economic Times Awards for Corporate Excellence 2004-05, "Best Domestic Bank in India" - The Asset Triple A Country Awards 2005, "Most Customer Responsive Company- Banking and Financial Services" - The Economic Times - Avaya Global Connect Customer Responsiveness Awards 2005. During the year of 2006-07 also bank received number of awards, The Asian Banker Achievement Award, Best Listed Bank of India in 2006 by Business World, Euromoney Award as Best Bank in India, One of Asia Pacific's Best 50 Companies in 2006 by Forbes Magazine, Asiamoney Award for Best Local Cash Management in Large and Medium segments, other than above bank received " Best Bank in India " award continuously from the year 2003 to 2007 conferred by the magazine Business Today. The Financial Express rated 1st in India's Best Banks 2007 under New Private Sector Bank under along with Axis Bank.

As on 2007 May, The Reserve Bank of India has allowed HDFC Bank to start a non banking finance company. The NBFC, to be set up by HDFC Bank as a wholly owned subsidiary and will undertake retail operations such as auto, personal loans etc. On June 2nd of 2007 HDFC Bank has opened 19 branches in a day in Delhi and the National Capital Region (NCR), outdoing its own record of 14 branches in a day 2005. As part and apart from the regular banking activity, HDFC Bank and The Institute for Technology and Management (ITM), Chennai gone under Memorandum of Understanding to promote co-operation advancement of academic and business exchanges between the two.

In credit card industry alone, HDFC grown more than 10 times within the 3 years from 2005 to 2007. The bank have over 10 million customers and 1605 ATMS. The number of branches accounted 684 in 316 towns and cities as of 2007 and the bank want to survive as " a World Class Indian Bank ", benchmarking against international standards and best practices in terms of product offering, technology, service levels, risk management.

Company Background - MTNL

Incorporated in 1986 by merging the Bombay and Delhi telephone networks, Mahanagar Telphone Nigam (MTNL) is into telecom services of international standards.

The company enjoys a virtual monopoly in telecom services in these two cities, (Bombay & Delhi). It depends upon the Department of Telecommunications (DoT) for calls made outside the respective circles, for which it pays licence fees.

MTNL has gone on a computerisation spree in areas like directory enquiry, billing, waiting list enquiry, material management, etc. During the year 1996-97, in order to increase customers satisfaction it has commissioned number of facalities like round the clock operatorless Computerised 'Change Number Announcement Service' based on Interactive voice response system popularly known as 195 Seva, Introduction of On Line Registration of new telephone connections, Fault Repair System, popularly known as FRS.

MTNL launched its cellular service branded Dolphin in Bombay on Feb.'01. It has also started its cellular services in Delhi. Recently the company has implemented its expansion plan of call center for customer care services for Dolphin Mobile customers.

MTNL got its American Depository Receipts (ADRs) listed on the New YorkStock Exchange on 8th November, 2001. During 2001-02 the company has invested Rs.1,675 million as equity in the United Telecommunications Limited, a joint venture formed with M/s TCIL,M/s VSNL and NVPL,a local partner in Nepal. This is the first for the company to foray into the International Telecom Market. The company has commenced its commercial operations and the services has been inaugurated in September 2003.

The subsidiaries of MTNL are Millennium Telecom Ltd at Mumbai and Mahanagar Telephone Mauritius Ltd at Mauritius.

In the year 2003-04 the company was planning to purchase the international roaming replicator soultion from Roamware Inc. USA as a turnkey solutions. The company is also planning about the scrapping and decommissioning of PDH transmission system working in MTNL Delhi. Further the company is planning to expand the equipment for provision of 400K lines CDMA 2000 1X equipment in Delhi and Mumbai & provision of 400K lines GSM each in Delhi and Mumbai.

During 2004-05, the company sucessfully lanuched its Broad Band services under the Brand name 'Tri Band' in Delhi and Mumbai simultaneously.

Pre Session Commentary - May 22 2008

The Indian Market is expected to have a negative opening as the US market closed in deep red and the Asian markets are trading weak. On Wednesday, the Indian market closed with marginally higher after smart recovery from its initial losses. The market lacked the investor’s active participation till mid session on the back of surging crude oil prices above $132 a barrel as well as inflation worries. Though the market opened on the weak note but made a smart turnaround after the mid session due to selective buying across the counters. Irrespective of the negative cues, the oil and gas stocks shines through out the trading session. The BSE Sensex closed marginally higher by 12.98 at 17,243.16 and NSE Nifty also increased by 12.7 points to close at 5,117.65. We expect that the market may remain cautious during the trading session and would look for cues to take further direction.

On Wednesday, the US market closed in red. The US stocks tumbled amid fears the US economy faces stagflation after the Federal Reserve reduced its economic growth forecasts while raising estimates for inflation.

The Dow Jones Industrial Average (DJIA) closed lower by 227.49 points at 12,601.19 along with NASDAQ fell by 43.99 points to close at 2,448.27 and S&P 500 dropped by 22.69 points to close at 1,390.71.

Indian ADRS ended down. In technology sector Wipro fell by (2.19%) along with Satyam by (1.42%), Patni Computers by (1.09%) and Infosys by (0.90%). In banking sector, HDFC bank and ICICI bank slipped by (5.20%) and (4.76%) respectively. In telecommunication sector, Tata Communication and MTNL decreased by (1.81%) and (1.00%). Sterlite industries declined by (0.04%).

Today the major stock markets in Asia are trading weak. Hang Seng index is trading lower by 565.63 points at 24,894.66 along with Japan’s Nikkei trading down by 164.03 points at 13,762.27 and Taiwan Weighted trading at 8,929.46 down by 86.11 points.

The FIIs Wednesday stood as net seller in equity and debt also. The gross equity purchased was Rs3,119.70 Crore and the gross debt purchased was Rs0.00 Crore while the gross equity sold stood at Rs3,439.50 Crore and gross debt sold stood at Rs99.20 Crore. Therefore, the net investment of equity reported was (Rs319.80)Crore and net debt was (Rs99.20)Crore.

Today, Nifty has support at 4,991 and resistance at 5,174 and BSE Sensex has support at 16,853 and resistance at 17,453.

US market gets dumped again

Indices end substantially lower for second consecutive day as crude also shoots up

US market once again ended the day with substantial losses today, Wednesday, 21 May, 2008. A lowered economic outlook at the Fed and a spike in crude oil prices were the main reasons for today’s negative mood in the market. The dollar fell after Federal Open Market Committee's 30 April meeting reinforced belief that the central bank has paused its rate-cutting cycle and clearly remains worried about inflation and growth. All ten sectors ended the session in negative territory, led by the telecom and financials sector.

According to the minutes from the Federal Open Market Committee (FOMC) 30 April meeting, real GDP growth is expected to range from 0.3% to 1.2% this year. The Fed previously forecast growth between 1.3% and 2%.

Crude-oil futures were on a roll todayafter government data showed that crude supplies unexpectedly dropped, marking their first decline in five weeks. Prices crossed the $133 mark and registered an increase of more than $4. A strengthening of the euro against the dollar added to the gains.

The Dow Jones industrial Average ended the day with a loss of 227 points at 12,601. The Nasdaq Composite Index, finished lower by 44 points at 2,448. S&P 500 finished lower by 22.7 points at 1,390. All the thirty Dow stocks ended in the red.

The FOMC released the minutes from its 30 April meeting around 2:00 ET, which sent stocks tumbling. The 2008 inflation outlook was increased, as was the unemployment rate forecast. The release of the minutes spurred the majority of today’s selling interest.

The Fed also announced that it expects unemployment will "increase significantly," raising its 2008 forecast to 5.6% from 5.25%. In addition, inflation risks have increased, with the Fed raising its core-inflation forecast to between 2.2% and 2.4% from between 2% and 2.2%.

Earnings reports were mostly better than expected, but the market's response was mixed. Hewlett-Packard and Analog Devices topped their respective earnings estimates.

Crude-oil futures for light sweet crude for July delivery today closed at $133.17/barrel (higher by $4.19/barrel or 3.3%) on the New York Mercantile Exchange. Price touched a high of $133.35 earlier during the day.

As per the weekly inventory report by the Energy Department, crude supplies fell by 5.4 million barrels to 320.4 million for the week ended 16 May. Prior to that, supplies had climbed more than 12 million barrels in the past four weeks. Market was expecting a rise of 900,000 barrels for the latest week.

Trading volumes remained light, with 1.4 billion shares exchanging hands on the New York Stock Exchange, and 925 million shares trading on the Nasdaq stock market. Decliners topped gainers by 2 to 1 on both exchanges.

For tomorrow, the weekly jobless claims report hits the wires first along with a couple of earning reports.

Market to drift lower on weak global equities, record high oil prices

The market is expected to drift lower tracking weakness in global equities. On Wednesday, the US Federal Reserve cut its 2008 US economic growth forecast and signaled that mounting concerns over inflation would make further interest rate cuts unlikely, driving the three major US indexes down over 1.5%. Oil prices surged to a record high above $135 per barrel on Thursday, 22 May 2008, stoking fears of global inflation.

In Asia, key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were down by between 0.72% to 2.26%.

Earnings downgrade amid rising input and interest costs, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. Inflation based on the wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% on 6 November 2004.

Further, a steep increase in upward revision in inflation rate for the week ended 8 March 2008, to 7.78% from the provisional 5.92%, came as a rude shock to marketmen. According to retail brokerage Sharekhan, the steep upward revision in inflation rate is a cause for concern, as prices of many commodities have not been updated for varied periods. Moreover, a sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review.

With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity scrips such as cement and steel. Cement maker ACC said earlier this months that its margins will be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures.

The government recently imposed export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. The government had earlier banned export of cement and non-basmati rice. On 7 May 2008, the government ordered suspension in futures trading in channa, refined soyoil, potato and rubber for four months.

Meanwhile, as per a recent study by CLSA, large amount of foreign currency convertible bonds (FCCBs) issued by Indian companies are coming up for redemption in the next 18-24 months. After recent stock market volatility many FCCBs are at risk of not converting i.e. if the stock market remains subdued, it will stop the bond holders from opting for an equity conversion as it will be easier for them to buy the stock from the open market instead of paying the agreed premium.

When the FCCBs come for redemption, some of these companies may have to take on more debt to redeem the FCCB, thereby raising interest outgo. In the event FCCBs don't get converted, companies have the option to lower the conversion price in line with the market, leading to higher equity dilution. If companies decide to issue fresh FCCBs to finance redemption of FCCBs, it will be at lower premium than earlier.

The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. A CLSA report says India’s infrastructure development is set to accelerate, backed by greater private sector participation and improved finances of government and public sector enterprises. Rating agency Crisil in its outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Given the continued inflow to unit linked insurance plans (Ulips) and equity linked savings schemes (ELSS) of mutual funds, stock-specific buying will continue depending on fundamentals of individual stocks. Insurance firms are now a major player in the Indian stock market given the huge mop up in Ulips in recent years. It was buying support from domestic funds which had aided the recent recovery on the bourses.

Meanwhile, as per recent reports, ELSS which offer tax benefit are catching the fancy of small savers. ELSS funds saw their collective assets jump more than nine times to about Rs 16000 crore in three years ending March 2008. In 2005 the investment limit eligible for income tax breaks was raised ten times to Rs 1,00,000 rupees for ELSS funds. Systematic investment plan (SIP) are said to be driving inflows into ELSS funds

Market to drift lower on weak global equities, record high oil prices

The market is expected to drift lower tracking weakness in global equities. On Wednesday, the US Federal Reserve cut its 2008 US economic growth forecast and signaled that mounting concerns over inflation would make further interest rate cuts unlikely, driving the three major US indexes down over 1.5%. Oil prices surged to a record high above $135 per barrel on Thursday, 22 May 2008, stoking fears of global inflation.

In Asia, key benchmark indices in Hong Kong, China, Japan, South Korea, Singapore and Taiwan were down by between 0.72% to 2.26%.

Earnings downgrade amid rising input and interest costs, high inflation and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. Inflation based on the wholesale price index rose 7.83% in 12 months to 3 May 2008, higher than previous week's annual rise of 7.61%, government data released on 16 May 2008, showed. It was the highest since an annual reading of 7.93% on 6 November 2004.

Further, a steep increase in upward revision in inflation rate for the week ended 8 March 2008, to 7.78% from the provisional 5.92%, came as a rude shock to marketmen. According to retail brokerage Sharekhan, the steep upward revision in inflation rate is a cause for concern, as prices of many commodities have not been updated for varied periods. Moreover, a sharp fall in the rupee against the dollar in the past few days has heightened concerns about inflation. This is because the fall in rupee will raise cost of imports which in turn will result in further rise in inflation.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review.

With parliamentary elections scheduled next year (May 2009), the government may leave no stone unturned in its attempt to tame inflation. This is bad news for commodity scrips such as cement and steel. Cement maker ACC said earlier this months that its margins will be hurt by a decision to hold its prices for 2 to 3 months that was taken after the government asked cement firms to help contain price pressures.

The government recently imposed export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. The government had earlier banned export of cement and non-basmati rice. On 7 May 2008, the government ordered suspension in futures trading in channa, refined soyoil, potato and rubber for four months.

Meanwhile, as per a recent study by CLSA, large amount of foreign currency convertible bonds (FCCBs) issued by Indian companies are coming up for redemption in the next 18-24 months. After recent stock market volatility many FCCBs are at risk of not converting i.e. if the stock market remains subdued, it will stop the bond holders from opting for an equity conversion as it will be easier for them to buy the stock from the open market instead of paying the agreed premium.

When the FCCBs come for redemption, some of these companies may have to take on more debt to redeem the FCCB, thereby raising interest outgo. In the event FCCBs don't get converted, companies have the option to lower the conversion price in line with the market, leading to higher equity dilution. If companies decide to issue fresh FCCBs to finance redemption of FCCBs, it will be at lower premium than earlier.

The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. A CLSA report says India’s infrastructure development is set to accelerate, backed by greater private sector participation and improved finances of government and public sector enterprises. Rating agency Crisil in its outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Given the continued inflow to unit linked insurance plans (Ulips) and equity linked savings schemes (ELSS) of mutual funds, stock-specific buying will continue depending on fundamentals of individual stocks. Insurance firms are now a major player in the Indian stock market given the huge mop up in Ulips in recent years. It was buying support from domestic funds which had aided the recent recovery on the bourses.

Meanwhile, as per recent reports, ELSS which offer tax benefit are catching the fancy of small savers. ELSS funds saw their collective assets jump more than nine times to about Rs 16000 crore in three years ending March 2008. In 2005 the investment limit eligible for income tax breaks was raised ten times to Rs 1,00,000 rupees for ELSS funds. Systematic investment plan (SIP) are said to be driving inflows into ELSS funds

Trading Calls - May 22 2008

Nifty (5118) Supp 5030 Res 5197

Sell GNFC (168) SL 171
Target 161, 158

Sell Hero Honda (786) SL 792 Target 775, 771

Sell HPCL (242) SL 247
Target 232, 229

Sell JP Associates (252) SL 257
Target 242, 239

Buy ITC (228) SL 224
Target 235, 238

Crude plays sp-oil sport!

You can't let one bad moment spoil a bunch of good ones.

For the bulls, bad moments seem to carry on longer. While they did manage to recoup their losses on Wednesday, the bulls are suddenly finding life difficult. Crude oil is on fire, the rupee keeps depreciating and inflation shows no sign of cooling. Governments and central banks the world over are grappling with a slew of headwinds. So, while on one hand economic growth is slowing, inflation remains at highly elevated level. Prices of several other commodities - both industrial and foods - have also shot through the roof.

What's worse, most governments and central banks are running out of options to tackle the emerging challenges. In India, we have a peculiar situation where the Government is bent on appeasing the masses due to political compulsions. SBI's withdrawal of circular suspending loans on farm equipment like tractors is a classic case in point. The oil marketing companies, which are desperately trying to cut losses by either suspending new LPG connections or rationing of fuels may well face a similar fate.

Against this backdrop, we see renewed risks for the market. The upside looks capped, and chances of a fresh round of selling have increased. Today, we expect a slight gap-down opening due to weakness across global markets. It will take some doing for the bulls to repeat Wednesday's stellar performance when they managed to bounce back after a lower opening.

FIIs were net sellers of Rs7.77bn (provisional) in the cash segment on Wednesday while local institutions were net buyers of Rs4.53bn. In the F&O segment, foreign funds were net sellers of Rs8bn. On Tuesday, foreign funds were net sellers of Rs3.2bn in the cash segment. Mutual Funds offloaded stocks worth Rs4.9bn.

Key Results Today: Bajaj Holdings & Investment, Balaji Tele, Core Projects, Cummins India, Dalmia Cement, Dishman Pharma, Havell's India and Moser Baer.

Asian stocks fell for a third day today, extending a global slump, after oil rose to a record and the Federal Reserve signaled it is done cutting interest rates.

Nintendo and Canon led consumer-electronics makers lower. Qantas Airways and Korean Air Lines retreated among airlines after crude climbed above $135 for the first time, boosting costs.

The MSCI Asia Pacific Index fell 1% to 150.49 as of 11:34 a.m. in Tokyo, with almost four stocks dropping for each that climbed. All 10 industry groups declined. All of Asia's benchmark indexes retreated, with Japan's Nikkei 225 Stock Average declining 1.2% to 13,762.27.

US stocks sank on Wednesday as crude oil surged further on a surprising weakness in government's weekly fuel supply report. Sentiment also got hit after the minutes from the Federal Reserve's last meeting showed policy makers were reluctant to cut rates.

The Fed also forecast worse economic conditions ahead, but could still find it tough to cut rates any further. The Fed also lowered its economic growth forecast for the year. At the same time, it raised its projections for inflation and unemployment.

Citigroup, Bank of America and JPMorgan Chase sent financial shares to their lowest since April 15. Target led retailers to their worst decline in a month and an index of airlines slid to an all-time low as crude climbed above US$133 a barrel.

Shares of Moody's Corp. slumped the most since 1999 after the credit ratings company said it is investigating whether it mistakenly assigned AAA ratings to debt securities that later fell in value.

The S&P 500 slumped 22.69 points, or 1.6%, to 1,390.71. The Dow Jones Industrial Average slid 227.49 points, or 1.8%, to 12,601.19. The Nasdaq Composite Index dived 43.99 points, or 1.8%, to 2,448.27.

Market breadth was negative. Four stocks retreated for every one that rose on the New York Stock Exchange.

US light crude oil for July delivery set a closing record of $133.17 in New York Mercantile Exchange trading, up more than $4 a barrel - and then proceeded to march to another record intraday high of $134.10 in electronic trading after the settlement.

Oil prices spiked after the government's weekly inventories report showed a surprise drop in crude and gasoline supplies and a weaker-than-expected buildup in distillates, used in heating oil. Oil has been climbing lately amid supply concerns and weakness in the dollar.

The US national average price for a gallon of regular unleaded gas rose to a record US$3.807 from the previous day's high of US$3.80, according to AAA.

Stocks in Europe fell on record crude prices, resulting in sharp losses for automakers and airlines. The pan-European Dow Jones Stoxx 600 index fell 0.9% to 323.16 as crude-oil prices run up as high as $132.08 a barrel. The UK's FTSE 100 edged up 0.1% to 6,198.10, while the German DAX 30 fell 1.1% to 7,040.83 and the French CAC-40 dropped 0.5% to 5,027.55.

In the emerging markets, the Bovespa in Brazil slid 1.7% to 72,294 while the IPC index in Mexico was down 1.3% at 31,126. The RTS index in Russia gained 0.6% to 2467 while the ISE National 30 index in Turkey fell 0.75% to 50,360.

Bulls to dance to global cues

It was a flat finish to a day that started off with negative bias. Indian bourses had a weak start mirroring overnight losses in the US markets. Going forward even the Asian markets were trading weak. However, bulls managed to stage come back in the afternoon trades on back of a swift recovery seen in the Asian markets coupled with a positive start in equity markets across Europe.

Among the 30-scrips of Sensex, Reliance Industries, Tata Steel, ITC and BHEL were among the major gainers. On the other hand, HDFC, ICICI Bank, HDFC Bank and Infosys were among the major laggards.

Among the BSE Sectoral indices, BSE Oil & Gas index led from the front gaining 2.3%. Other’s like BSE Metal index (up 1.2%), BSE PSU index (up 1%) and BSE Capital Goods index (up 0.8%). On the other hand, BSE Bankex index (down 1.5%) and Pharma index (down 0.6%).

Finally, the BSE benchmark Sensex ended 12 points higher to close at 17,243 and the Nifty index gained 12 points to close at 5,117.

Overall about 1,710 stocks advanced; 1,007 stocks declined while 77 stocks remained unchanged. Among the 50-Nifty 27 stocks ended in green and 23 stocks ended in red.

HDIL ended down by 3.6% to Rs811. The company posted a net profit of Rs7082.50mn for the quarter ended March 31, 2008. Total Revenue is Rs9894.90mn for the quarter ended March 31, 2008.

The Company has posted a net profit of Rs14105.00mn for the year ended March 31, 2008 as compared to Rs5418.20mn for the year ended March 31, 2007. Total Revenue has increased from Rs12165.10mn for the year ended March 31, 2007 to Rs24323.20mn for the year ended March 31, 2008. The board of directors of the company also announced that it approved 2 bonus shares for every 7 shares held. The scrip touched an intra-day high of Rs865 and a low of Rs805 and recorded volumes of over 47,00,000 shares on BSE.

GMR Infrastructure ended flat at Rs151. The company announced that it posted a net profit of Rs373.60mn for the quarter ended March 31, 2008 as compared to Rs123.70mn for the quarter ended March 31, 2007. Total Income has increased from Rs227.50mn for the quarter ended March 31, 2007 to Rs644.40mn for the quarter ended March 31, 2008.

The company posted a net profit after tax of Rs626.90mn for the year ended March 31, 2008 as compared to Rs28.80mn for the year ended March 31, 2007. Total Income has increased from Rs339.00mn for the year ended March 31, 2007 to Rs1122.00mn for the year ended March 31, 2008. The scrip touched an intra-day high of Rs152 and a low of Rs145 and recorded volumes of over 31,00,000 shares on BSE.

Kesoram Industries gained by a percent to Rs361 as the company is reportedly planning to spend Rs25bn for expanding its tyre and cement capacity by 2009.

According to report, the company is setting up three new tyre units in the northern state of Uttaranchal to take tyre-making capacity to 734 metric tons per day from 252 metric tons. The company will add another 1.65mn tons to its cement making capacity, taking it to 6.2mn tons per annum by 2008 from 4.5mn tons now. The scrip touched an intra-day high of Rs364 and a low of Rs352 and recorded volumes of over 12,000 shares on BSE.

Firstsource rallied by over 7% to Rs43 after the company said that it won 3-year outsourcing contract from Bharti Airtel. The scrip touched an intra-day high of Rs45 and a low of Rs40 and recorded volumes of over 12,00,000 shares on BSE.

SBI gained by half a percent to Rs1661 after the bank said that they would resume tractor loans with immediate effect. The scrip touched an intra-day high of Rs1677 and a low of Rs1631 and recorded volumes of over 2,00,000 shares on BSE.

Cairn India hit an intra-day high of Rs342, the scrip witnessed profit booking and ended flat at Rs327. Reports stated that the company would explore oil and gas in Rajasthan Hadauti region. The scrip touched an intra-day high of Rs342 and a low of Rs324 and recorded volumes of over 96,00,000 shares on BSE.

Educomp Solutions gained by 1.7% to Rs4103 after the company on Tuesday announced that it acquired 51% stake in US based Learning.com for US$24.5mn. The scrip touched an intra-day high of Rs4125 and a low of Rs3999 and recorded volumes of over 32,000 shares on BSE.

IOC gained by 0.5% to Rs408 following reports that the company plans to enter retail marketing business in Turkey along with setting up a 15 mtpa greenfield refinery and a petrochemicals complex. The scrip touched an intra-day high of Rs413 and a low of Rs399 and has recorded volumes of over 56,000 shares on BSE.

Corporate News

SBI to resume tractor and farm equipment loans, reversing its decision to stop lending for farm equipment. (BL)

RIL to pick up 50% stake and will invest Rs7bn in Rewas port connectivity project of Indian Railways. (ET)

ONGC planning to sell 30-40% stake in the two blocks won in Vietnam in 2006. (BS)

ONGC infuses Rs50bn in western offshore fields. (FE)

Bharti Airtel has signed a US$35mn, three-year outsourcing agreement with Firstsource Solutions. (ET)

M&M signs non-binding pact with Kinetic Motors in its bid to acquire 76% in the company, valued at Rs1.2bn. (ET)

BSNL awards US$90mn contract to Motorola. (BL)

IOC, BPCL and HPCL have stopped issuing new LPG connections to household consumers, defying government orders. (ET)

PFC to call for proposals for the 4,000MW Tilaiya UMPP at Orissa. (BL)

Infosys hires consultant to chalk out revamp plan. (BL)

Employees of Infosys Technologies to pass certification programs to be conducted every March, to get promoted. (BS)

Lanco Infra gets US$150mn IFC credit for power projects. (BL)

Ranbaxy begins operations in Yemen. (BL)

Dabur Pharma gets FDA nod for prostrate cancer drug. (BL)

Satyam Computers and GE Healthcare to support customers deploying healthcare IT solutions based on GE Centricity enterprise software.

GMR Infrastructure to diversify into corporate jet business and would invest Rs8bn for the same. (BL)

IOC seeks nod to raise borrowing limit to Rs800bn. (BL)

IFCI has acquired 46.7% shareholding of Mohan Exports Group in Foremost Factors Ltd in a transaction valued at about Rs116mn. (BL)

NMDC and three other Indian firms in talks with Australia’s Rio Tinto Group to buy a new technology to smelt low grade iron ores and even wastes. (BL)

Standard Chartered Bank to consider listing on the Indian Stock Exchanges. (ET)

Ranbaxy Laboratories sold off its land and building to its group companies at Rs900mn and bought 24.9% stake at Rs934mn in its other group company Shimal Labs. (ET)

ArcelorMittal in talks to take over Macarthur Coal of Australia. (ET)

Reliance Retail in talks with four foreign food suppliers including US based Dole and Chiquita, Sadia of Brazil and Doux of France for alliances. (ET)

The GMR group plans to increase its equity stake in South Africa’s Homeland Energy, a company that owns coal mines, from 10% to 50%. (ET)

Consumer goods companies like LG Electronics, Godrej Appliances etc. to raise prices of products like televisions and refrigerators by 5%.to offset increase in raw material cost. (BS)

West Asian telecom companies Etisalat and Qatar Telecom have approached Videocon Industries for tie-ups in India. (BS)

Essar Steel Holdings may raise its bid after Russian steel maker OAO Severstal matched its offer of US$17 a share for acquiring US based Esmark. (BS)

UTI AMC plans to revive its US$500mn IPO which it shelved earlier this year when markets plunged. (BS)

BEML Midwest acquired its first mine in Mozambique and is close to acquiring another in Indonesia.

Economic News

Number of passengers passing through Indian airports grew at ~11% in the first quarter of the calendar year against ~28% growth recorded in the first three months of 2007.

State Coal Ministry announced no intentions of increasing prices this year. (ET)

Indian Post has tied up with US-based postal solutions provider Pittney Bowes to offer enhanced mailing services. (ET)

Government is considering re-allocating wheat in place of rice for the Targeted Public Distribution System (TDPS), as part of its measures to control inflation and augment the availability of essential commodities. (BS)

Power Ministry says that it will be able to achieve 80,000MW of capacity addition in the 11th plan. (FE)

FIIs turn sellers

Foreign institutional investors (FIIs) turned net sellers in equities worth Rs 3,198 million on May 20. They bought equities worth Rs 31,197 million and sold equities worth Rs 34,395 million. Till May 20, they have been net buyers in equities worth Rs 227 million.

FIIs turned net sellers in debt segment worth Rs 490 million on May 20. They did not bought any debt but sold debt worth Rs 490 million. Till May 20, they have been net sellers in debts worth Rs 179 million

Assam Company

Assam Company

Phoenix Mills, Suzlon Energy, Bank of Baroda, India Economy

Phoenix Mills, Suzlon Energy, Bank of Baroda, India Economy

ICI India, Thermax, Tata Chemicals, Bharat Forge

ICI India, Thermax, Tata Chemicals, Bharat Forge

KGN Industries ka kamaal

The “relisting syndrome” surfaced again on Wednesday when Ahmedabad-based KGN Industries Ltd soared to Rs 55,000 a share on BSE after listing at Rs 100, forcing the exchange to suspend trading on the stock mid-session.

The Z-category stock was trading after a gap of seven years. Before its Wednesday relisting, it had last traded at Rs 11 in 2001 when it was suspended.

A BSE release noted that there are no price bands on scrips on the opening day of trading in order to allow price discovery.

“During the early hours of trading, it was discovered that orders were being placed at an unrealistic price. In order not to distort the price discovery process, as few orders were being placed at unrealistic prices, the trading of the scrip was suspended at 12.20 hours as a proactive surveillance measure,” said a BSE news release.

KGN Industries’ spot price at the time of suspension of trading was Rs 15,001. However, BSE said it has set a closing price of Rs 5,216.30 per share using the existing methodology but taking into consideration the entire trading duration. Trading will resume on Thursday with the applicable price band, it said

SEBI has proposed to impose a 20 per cent circuit filter on the first day of re-commencement of trading in stocks in all cases of revocation of suspension, demerger, amalgamation, capital reduction and scheme of arrangements as decided by stock exchanges through a concept paper brought out last year in April.

The regulator had also proposed a base price to be fixed in consultation with SEBI registered merchant bankers for applying the 20 per cent circuit filter.

Again in January 2008, SEBI brought a concept note for a limited price band for the IPOs whose issue size was upto Rs 250 crore on their day of listings.

SEBI proposed imposing a price band of 25 per cent on the issue price on the day of listing of IPOs of issue size upto Rs 250 Cr but the proposal does not apply in case of re-commencement of trading of the equity shares of a company on the stock exchanges.

However no guideline has been issued so far for either of the two proposals.

Earlier last year on February 22 when trading in Ahluwalia Contracts began on the BSE after restructuring of the company, it opened at Rs 101.50 and touched a high of Rs 611.90 and finally closed at Rs 577.80.

(Only Metal and Mineral Trading Corporation has in recent times touched such a high price, MMTC had touched a high of Rs 56,931.50 on November 12.)

KGN Industries is engaged in the business of trading in agro commodities like castor seeds, edible oils like soyabean oil, palm oil, non edible oils like petroleum products, lubricants, used oil.

The company reported a turnover of Rs 326.87 crore during the year 2006-07

via BL

Precious metals on a roll

Precious metals continue to rise as crude surpasses $133

Precious metals registered good increase once again today, Wednesday, 21 May, 2008 after crude oil prices rallied and dollar slipped against its rivals. The dual effect once again helped restore the lost glitter back on the precious metals. Earlier this week on Monday, 19 May, gold marked its first closing above $900 level in almost a week. Crude oil's rally to a fresh record high above $133 a barrel boosted the precious metal's appeal as an inflation hedge.

Gold has traditionally been used as a safe-haven asset against rising inflation. Investor sentiments are boosted by the fact that gold and silver are alternate sources of good investment in the face of declining dollar and rising energy prices. 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. On the other hand, a lower dollar pushes up precious metal prices as their demand lessens as it becomes cheaper for traders holding other currencies.

Comex Gold for June delivery rose $8.4 (0.9%) to close at $928.6 ounce on the New York Mercantile Exchange. During intra day trading, prices touched a high of $933/ounce. Last week, gold prices ended higher by $14 (1.6%). On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. Prices have dropped by 10.2% since then.

This year, gold prices have gained 10.7% for the till date against a 8.8% drop for the dollar against the euro. For April, prices closed lower by 6.3%. For first quarter prices gained 10.7%. In January, prices gained 11%, the highest monthly gain since April 2006. For February, it gained 6%. But in March, prices succumbed and fell by 5.5%.

Comex Silver futures for July delivery rose 33 cents (1.9%) to $18.05 an ounce. Silver has gained 20.9% in 2008 till date. For April, it closed lower by 5.5%. Silver gained 16% in Q1. In January this year itself, prices climbed 14%. In February, it gained another 15%. For March, it ended lower by 13%. The metal had climbed 16% in FY 2007. The metal also has gained for seven straight years.

At the currency markets on Wednesday, the dollar fell against most of its major counterparts, with the dollar index dropping to 71.91 from 72.459 in late North American trading on late Tuesday.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Among major economic news of the day, the official summary of the Federal Open Market Committee's 30 April meeting reinforced belief that the central bank has paused its rate-cutting cycle and clearly remains worried about inflation and growth.

In the crude market, crude-oil futures climbed past $133 a barrel to close at another record level on Wednesday after government data showed that crude supplies unexpectedly dropped, marking their first decline in five weeks. On its first full day as a front-month contract, crude for July delivery climbed to a close of $133.17 a barrel on the New York Mercantile Exchange, up $4.19, or 3.3%. It touched an all-time peak of $133.35.

Yesterday, crude oil rose for a third straight session after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply. Last week, crude-oil futures rallied to a fresh record high near $128 a barrel as Goldman Sachs raised its second-half-of-the-year forecast for oil prices by 32% to $141.

At the MCX, gold prices for August delivery closed higher by Rs 224 (1.8%) at Rs 12,866 per 10 grams. Prices rose to a high of Rs 12,883 per 10 grams and fell to a low of Rs 12,651 per 10 grams during the day’s trading.

At the MCX, silver prices for July delivery closed Rs 596 (2.4%) higher at Rs 24,927/Kg. Prices opened at Rs 24,356/kg and went to a high of Rs 24,954/Kg during the day’s trading.

Essar Oil, IFCI, Praj Industries May 2008 futures at premium

Turnover in F&O segment surges

Nifty May 2008 futures were at 5123.90, at a premium of 6.25 points as compared to spot closing of 5117.65.

The NSE's futures & options (F&O) segment turnover was Rs 39,481.17 crore, which was higher than Rs 33,290.93 crore on Tuesday, 20 May 2008.

Essar Oil May 2008 futures were at premium at 263 compared to the spot closing of 261.15.

IFCI May 2008 futures were at premium at 66.30 compared to the spot closing of 64.55.

Praj Industries May 2008 futures were at premium at 218.45 compared to the spot closing of 217.95.

In the cash market, the S&P CNX Nifty gained 12.70 points or 0.25% at 5117.65.

Crude takes a huge leap

Prices rise more than $4 on a single day as crude supplies mark unexpected drop

Crude-oil futures were on a roll today, Wednesday, 21 May, 2008 after government data showed that crude supplies unexpectedly dropped, marking their first decline in five weeks. Prices crossed the $133 mark and registered an increase of more than $4. A strengthening of the euro against the dollar added to the gains. The dollar fell after Federal Open Market Committee's 30 April meeting reinforced belief that the central bank has paused its rate-cutting cycle and clearly remains worried about inflation and growth.

Crude-oil futures for light sweet crude for July delivery today closed at $133.17/barrel (higher by $4.19/barrel or 3.3%) on the New York Mercantile Exchange. Price touched a high of $133.35 earlier during the day.

Last week, crude prices closed higher by 29 cents. For the year, crude is up by 33% till date. Prices have more than doubled on a yearly basis.

As per the weekly inventory report by the Energy Department, crude supplies fell by 5.4 million barrels to 320.4 million for the week ended 16 May. Prior to that, supplies had climbed more than 12 million barrels in the past four weeks. Market was expecting a rise of 900,000 barrels for the latest week.

EIA also revealed that crude-oil imports averaged 9.2 million barrels per day last week, down 696,000 barrels per day from a week earlier. Meanwhile, refinery utilization rose to 87.9% of capacity from 86.6% a week ago. Still, motor gasoline supplies fell 800,000 barrels to 209.4 million barrels last week. Distillate stocks were up 700,000 barrels at 107.8 million barrels.

Yesterday crude prices had closed above $129 a barrel for the first time ever after billionaire hedge-fund manager Boone Pickens said prices will reach $150 a barrel this year as demand outpaces supply.

At the currency markets on Wednesday, the dollar fell against most of its major counterparts, with the dollar index dropping to 71.91 from 72.459 in late North American trading on late Tuesday.

Since last September, Fed has axed interest rates seven times and brought it down to 2%. The ECB has kept rates unchanged at 4% since June, 2007.

Dollar weakness typically benefits dollar-denominated commodities, such as gold and crude oil, because it makes them cheaper for holders of other currencies. On the other hand strong dollar reduces the appeal of the metal as alternate source of investment.

Last week, prices kissed $128 for first time after Goldman Sachs raised its forecast on Friday for the average price of West Texas Intermediate oil in the second half of 2008 to $141 a barrel from $107 a barrel. As per the company’s reports, long-term oil prices will need to continue to rise to bring trend oil demand growth in line with trend supply growth. Credit Suisse Group AG and Societe Generale SA raised their oil price forecasts for 2008 and 2009 citing investor flows and limited supply.

Gasoline and heating oil climb to their loftiest levels ever

Brent crude oil for June settlement today rose $2.8 (2.2%) to $130.04 on the London-based ICE Futures Europe exchange. The London benchmark rose 54% in FY 2007, the most since 1999 when prices more than doubled.

June natural gas futures rose 27 cents, or 2.4%, to close at $11.64 per million British thermal units. It climbed as high as $11.68, its highest level in a week.

Against this backdrop, July reformulated gasoline gained 9.65 cents to close at $3.3965 a gallon and July heating oil rose 13.8 cents to end at $3.9084 a gallon.

Crude had ended FY 2007 substantially higher by $35 or 57%. It was crude’s biggest yearly gain in five years.

At the MCX, crude oil for May delivery closed at Rs 5,656/barrel, higher by Rs 206 (3.8%) against previous day’s close. Natural gas for July delivery closed at Rs 503.4/mmbtu, higher by Rs 14.4/mmbtu (2.9%).