Weakness may persist

The market may extend a sharp fall witnessed over the past few days. Concerns about slowdown in corporate earnings, political uncertainty and sustained FII inflow will continue to keep market sentiments edgy. The barometer index BSE Sensex tumbled to its lowest level in 13 months on Friday, 27 June 2008.

Companies in sectors ranging from capital goods to automobiles are feeling the heat on their margins from rising input costs and slackening growth over the past two quarters. Nevertheless, advance tax payment by the Indian corporate sector this year so far has been decent to strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year.

Oil prices rose to a record near $143 a barrel on Friday, 27 June 2008, as a drop in global equities markets lured more investors into commodities. Crude oil rose one dollar in electronic trading to $141.21 a barrel on Monday, 30 June 2008.

Political uncertainty continues to haunt the bourses. The media continues to speculate whether the ruling Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal.

A sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. As per provisional data, foreign funds sold shares worth a net Rs 703.11 crore on Friday, 27 June 2008. FII outflow in June 2008 totaled Rs 9349 crore (till 26 June 2008). FII outflow in calendar year 2008 totaled Rs 24,719.10 crore (till 26 June 2008).

Source : Capitalmarket.com

Buffett vs. Bernanke: The inflation showdown

NEW YORK (Fortune) -- Even Warren Buffett is wrong some of the time. Federal Reserve chairman Ben Bernanke is hoping this is one of them.

Buffett, the billionaire investor behind Berkshire Hathaway (BRKA, Fortune 500), fingered "exploding" inflation Wednesday as the biggest risk to the economy. "I think inflation is really picking up," Buffett said on CNBC. "It's huge right now, whether it's steel or oil," he continued. "We see it everywhere."

Indeed, the prices of gasoline and milk have shot past $4 a gallon, and Dow Chemical (DOW, Fortune 500) has announced twice in the past month that it's raising prices to offset soaring commodity costs.

Yet Bernanke's Fed signaled Wednesday that, after nine months of interest rate cuts and expansive lending to the financial sector, it isn't eager to reverse course and push rates higher to try to tamp down rising prices.

Why? Because the Fed remains skeptical that high commodity prices will ripple through the economy, leading to broad price hikes and big wage increases.

"The committee expects inflation to moderate later this year and next year," the Federal Open Market Committee said in holding the fed funds rate steady at 2%, though it did note that "uncertainty" remains high and suggested inflation concerns could rise.
Depends on what you mean by 'inflation'

In part, the Fed's decision turns on a distinction economists make between inflation and "relative-price changes." The former is a general loss of purchasing power that's caused, or at least exacerbated by, overly lax monetary policy (such as keeping interest rates too low for too long). The latter are price hikes driven primarily by fundamental shifts in supply and demand.

If demand for commodities is spiking because of strong worldwide growth, the thinking goes, prices should rise accordingly, until consumers react by reducing consumption - a process that isn't apt to be influenced by interest rate changes.

The Fed is betting that rising prices won't feed through to higher general inflation expectations unless workers start demanding raises and companies start raising prices.

But wages haven't been rising sharply, and declining unionization means workers have less bargaining power than they did during the inflationary 1970s, economists say. And while some processors of commodities, like Dow, are charging more, their customers in turn have generally been unable to pass along those costs to consumers.

So even as some members of the Fed's policymaking body, such as Dallas Fed President Richard Fisher, warn of the need to take quick action against inflation - Fisher dissented for the third straight meeting in Wednesday's vote, this time advocating a rate increase - committee members' inflation forecast for 2010 has risen only slightly since October, despite surging oil prices.

"Oil prices have ratcheted up over the past nine years and the dollar has depreciated for more than six years. Nevertheless, as long as a central bank is not creating an excessive amount of money, these relative price pressures ought to be transitory," Sandra Pianalto, president of the Federal Reserve Bank of Cleveland and a voting member this year of the Federal Open Market Committee, explained in a speech last month.

"As consumers spend more money for higher-priced petroleum and agricultural goods," she continued, "they eventually have less money to spend on other goods and services. Other relative prices must then fall."
Wait and see

To be sure, there are other factors at work in the Fed's move to the sidelines. Bernanke & Co. wants to measure the stimulative effect of the rate cuts it's already made. The rate cuts of the past nine months - the Fed has slashed its overnight bank lending rate by 3.25 percentage points since September - will take time to impact the economy. If possible, the Fed wants to wait before making another move on rates.

And while fears of a marketwide meltdown seem to have eased, a weak housing market, rising unemployment and increasing loan losses at banks mean the risk of a sharp economic pullback remains substantial.

"In an environment of dislocated funding markets, a rate cut would not produce a recovery but a rate hike could trigger a recession," writes Tullett Prebon economist Lena Komileva.

Indeed, while inflation is the buzzword right now, the surge in fuel costs is hurting growth in some key industries. Airlines such as United Airlines, a unit of UAL (UAUA, Fortune 500), and Continental (CAL, Fortune 500) have set plans to eliminate thousands of jobs in response to soaring fuel costs.

Automakers Ford (F, Fortune 500) and General Motors (GM, Fortune 500) have slashed their production schedules as well, as consumers stopped buying the fuel-guzzling sport utility vehicles that were once a huge source of profits for Detroit. The loss of high-paying pilot and autoworker jobs will only add to existing weak wage and job trends.

None of this makes the recent price shocks easier to bear, of course. But for policymakers, if not for media darlings such as Buffett, the distinction is an important one. "While sometimes devastating," Pianalto said in her speech last month in Paris, "these global relative-price pressures are not the same thing as inflation."


Source : Money.cnn.com

Market may remain weak

The outlook for the market remains grim for the near term as steaming inflation, record high global crude oil prices and high interest rates threaten the pace of growth in the world's second fastest expanding major economy, driving investors to the sideline or to exit.

The wholesale price index rose 11.42% in 12 months to 14 June 2008, above the previous week's annual rise of 11.05%, government data released on Friday, 27 June 2008, showed. Inflation for the year through 19 April 2008 was revised upwards to 8.23% from 7.57%.

To tame inflationary pressures, the Reserve Bank of India (RBI) on 24 June 2008, raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. The RBI had earlier on 11 June 2008, raised the repo rate, by 25 basis points to 8%.

The RBI also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.

Foreign investors, who usually set the trend for the market, have been withdrawing relentlessly this year. FIIs dumped shares worth Rs 9349.60 crore in the month of June 2008 (till 26 June 2008). FII outflow in calendar year 2008 totaled Rs 24,719.10 crore (till 26 June 2008).

Political factors will also weigh on the market due to the ongoing confrontation between the government and Left parties over the Indo-US nuclear deal. The UPA-Left coordination committee on Indo-US nuclear deal on 25 June 2008 decided to meet again later. Foreign Minister Pranab Mukherjee said the committee completed its discussions on all aspects of the nuclear deal. The next meeting of the committee will finalise its findings.

The Left parties have already made it clear that they will withdraw their support to the government if it moves ahead with the nuclear deal. Left parties are opposing the deal saying it undermines India's independent foreign policy and nuclear weapons program.

With inflation expected to remain in double-digits in the coming months, it would be suicidal for the ruling coalition to precipitate a political crisis and go for early elections, which are due by May next year.

Crude hit a record of $141.71 on Friday, 27 June 2008 after Opec President, Chakib Khelil predicted that the oil prices could rise to $150-170 a barrel in the next 3-4 months. Rising crude oil remains a major worry as India imports close to 70% of its crude requirements.

Source : Capitalmarket.com

Sensex sheds 769 points

The key benchmark indices slumped as a political rift over nuclear deal, soaring crude oil prices and high inflation weighed heavily on the market sentiment. The BSE Sensex fell to the lowest level in 13-months while the S&P CNX Nifty touched a 10-month low.

Sensex declined 769.07 points or 5.28% to 13,802.22 in the week ended Friday, 27 June 2008. The S&P CNX Nifty lost 210.90 points or 4.85% to 4136.65 in the week.

The BSE Mid-Cap index declined 473.68 points or 7.85% to 5,558.75. The BSE Small-Cap index slumped 459.59 points or 6.21% to 6,938.07.

The market suffered major losses on 23 June 2008 to settle at 10-month low on sustained selling pressure throughout the day. The 30-share BSE Sensex lost 277.97 points or 1.91% at 14,293.32. The broader based S&P CNX Nifty was down 81.15 points or 1.87% to 4266.40.

Equities extended losses for the fifth straight day on 24 June 2008 with the barometer index BSE Sensex falling below the psychologically important 14,000 mark for the first time in 10 months since late August 2007. The 30-share BSE Sensex was down 186.74 points or 1.31% at 14,106.58. The broader based S&P CNX Nifty slumped 75.30 points or 1.76% at 4,191.10.

On 25 June 2008, equities staged a solid rebound after touching fresh calendar 2008 lows in early trade. The initial jolt was caused by the Reserve Bank of India's move to hike the key lending rate. However, short covering ahead of the expiry of June 2008 derivatives contracts tomorrow, 26 June 2008, provided a foundation for the recovery. The 30-share BSE Sensex gained 113.49 points or 0.80% at 14,220.07. The broader based S&P CNX Nifty surged 61.55 points or 1.47% at 4,252.65.

On 26 June 2008, short covering ahead of expiry of June 2008 derivatives contracts helped market move higher for the second straight session. However, the market underwent choppy swings throughout the day. The 30-share BSE Sensex gained 201.75 points or 1.42% at 14,421.82. The broader based S&P CNX Nifty was up 63.20 points or 1.49% at 4,315.85.

A setback to stocks in Asia and US, sharp spurt in crude oil prices and political uncertainty due to Indo-US nuclear deal rattled bourses on 27 June 2008. The 30-share BSE Sensex slumped 619.60 points or 4.30% to 13,802.22. Intense selling pulled it lower to day’s low of 13,760.78, which is its lowest level in more than 13 months. The broader based S&P CNX Nifty tanked 179.20 points or 4.15% at 4,136.65.

India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) rose 4.07% to Rs 2181.90 in the week. RIL will start pumping 25 million standard cubic metres a day (mmscmd) of natural gas by September from its D-6 field in the Krishna Godavari basin, the oil ministry said on 25 June 2008. It said in a statement that the output would be raised to 40 mmscmd by March 2009.

India’s second largest private sector bank in terms of net profit HDFC Bank declined 7.31% to Rs 1018.65. The bank announced a hike in its benchmark prime lending rate by 25 basis points to 15.25%. The bank made this announcement after trading hours on Friday, 20 June 2007.

Wipro, the country’s third largest software services exporter fell 6.65% to Rs 442.60. Wipro has reportedly raised close to Rs 1,400 crore (35 billion Yen) through external commercial borrowings (ECBs). The company has been pursuing an aggressive acquisition strategy over the last few years and it concluded two major acquisitions in the year ended March 2008 including Unza and Infocrossing for a cumulative value of close to $900 million. As of 31 March 2008, Wipro had cash and bank balance Rs 3,927 crore.

Reliance Communications (RCom), the country’s second largest telecom services provider in terms of market capitalisation lost 3.61% to Rs 473.55. RCom’s proposed merger deal with South Africa based global operator, MTN is reportedly expected to close by first week of July 2008.

India’s leading pharma company in terms of sales Ranbaxy Laboratories fell 3.61% to Rs 523.05 after receiving tentative approval from US Food and Drug Administration for manufacturing and marketing valganciclovir hydrochloride tablets in 450 miligram strength.

India’s largest bank in terms of net profit State Bank of India fell 7.15% to Rs 1158.30 after the state-run bank raised its benchmark prime lending rate by 50 basis points to 12.75% with effect from 27 June 2008. The bank made this announcement during trading hours on 26 June 2007.

India’s largest private sector steel manufacturer in terms of sales Tata Steel fell 6.54% to Rs 726.75. The company reported 195.64% jump in consolidated net profit to Rs 12349.98 crore on 415.04% spurt in total income to Rs 132110.09 crore in the year ended March 2008 over the year ended March 2007. The results are non comparable due to merger Corus Group with Tata Steel.

India’s largest private sector bank by assets ICICI Bank plunged 11.10% at Rs 653.10. It hit a 52-week low of Rs 643 on 27 June 2008.

India’s largest engineering and construction firm by revenue Larsen & Toubro fell 11.57% at Rs 2267.15.

India’s second largest software exporter by sales Infosys Technologies fell 6.57% at Rs 1707.60.

India’s largest state-run oil exploration company Oil & Natural Gas Corporation (ONGC) fell 4.23% to Rs 830.15. Net profit of ONGC fell 2% to Rs 2627.10 on a 26% increase in sales to Rs 15626.07 crore in Q4 March 2008 over Q4 march 2007. The company announced the results during trading hours on 25 June 2007.

The wholesale price index rose 11.42% in 12 months to 14 June 2008, above the previous week's annual rise of 11.05%, government data released on Friday, 27 June 2008, showed. Inflation for the year through 19 April 2008 was revised upwards to 8.23% from 7.57%.

RBI, after market hours on 24 June 2008, raised its key lending rate viz. the repo rate by 50 basis points to 8.5% with immediate effect, its highest since March 2002 and the second hike this month. The RBI had earlier on 11 June 2008, raised the repo rate, by 25 basis points to 8%.

The RBI also increased the cash reserve ratio, the ratio of deposits banks must keep with it, to 8.75% from 8.25% in two 25-basis-point stages on 5 July 2008 and 19 July 2008.

Political uncertainty weighed heavily on the market due to confrontation between the government and Left parties over the Indo-US nuclear deal. The UPA-Left coordination committee on Indo-US nuclear deal on 25 June 2008 cided to meet again later. Foreign Minister Pranab Mukherjee said the committee completed its discussions on all aspects of the nuclear deal. The next meeting of the committee will finalise its findings.

The Left parties have already made it clear that they will withdraw their support to the government if it moves ahead with the nuclear deal. Left parties are opposing the deal saying it undermines India's independent foreign policy and nuclear weapons program.

The finance ministry on 25 June 2008, said the direct tax receipts were up 43.45% to Rs 49411 crore until 21 June 2008, on the back of a higher advance tax payments by corporates. Collection from corporate tax were Rs 30655 crore, up 39.81% from a year-ago, while income tax receipts were up 49.8% to Rs 18756 crore, it said in a statement.

Source : Capitalmarket.com

Sun Pharma may see action

Sun Pharmaceutical Industries, the country’s most valuable drugmaker, has decided to launch a hostile bid for Israel’s Taro Pharmaceutical Industries. The move comes close on the heels of Taro’s rejection of a merger agreement with Sun last month. Taro had termed the offer ‘inadequate’.

Sun said on Thursday, 26 June 2008, it will offer to purchase all outstanding shares of Taro in the next few days at $7.75 a share, the rate that both the companies had agreed upon a year ago. Sun, which already holds a 36% stake in Taro, said the offer is in line with the 2007 merger agreement between the two companies.

Tata Steel, the world's sixth-largest steelmaker, on Thursday 26 June 2008, reported 195.64% jump in consolidated net profit to Rs 12349.98 crore on 415.04% growth in total income to Rs 132110.09 crore in the year ended March 2008 (FY 2008) over the year ended March 2007. The results are non comparable due to merger Corus Group with Tata Steel in FY 2008.

At the time of announcing the results, Tata Steel managing director B. Muthuraman said it had raised prices for one-year steel sale contracts. 25% of Tata Steel's total sales were through annual contracts, he said.

B.K. Birla promoter of diversified firm Kesoram Industries said on Thursday, 26 June 2008, the company will not be split and both his grandson and head of Aditya Birla group, Kumar Mangalam Birla, and daughter Manjushree Khaitan will run the company in his absence. B.K. Birla said he will be happy working till the age of 90. He is currently 88 years old.

Earlier, B.K. Birla had plans to split the group firms between his two daughters and grandson. Other B.K. Birla group firms include Mangalam Cement, Jay Shree Tea & Industries and Century Enka.

Union Bank of India has raised its benchmark prime lending rate by 50 basis points to 13.25%. The new rates will be effective from July 2008.

The finance ministry on Thursday offered exemption of service tax on the supply of vehicles to goods transport agencies.

Satyam Computer Services announced on Thursday it has formed an alliance with Sciformix Corporation, a Westborough, Mass.-based, life science knowledge process outsourcing (KPO) company, to deliver end-to-end data management services in "Pharmacovigilance."

Financial services firm Religare Enterprises on Thursday reported a 269.8% surge in net profit to Rs 91.97 crore on 180% growth in total income to Rs 896.51 crore in the year ended March 2008 over the year ended March 2007.

The company also said on Thursday its board has approved raising upto Rs 1075 crore through equity or debt. It will also raise an additional Rs 500 crore through issue of redeemable preference shares to non-promoter entities, it said in a statement.

Shipbuilder ABG Shipyard has won an order worth Rs 585 crore from Sealion Shipping on behalf of Toisa, the company said on Friday, 27 June 2008. The total order book of ABG stands at about $2.44 billion, it said in a notice to the stock exchange.

Source : Capitalmarket.com

Market may open weak on negative global cues

The market is likely to open on a weak note tracking negative global cues. The sharp spurt in crude oil prices above the $140 per barrel mark may dampen the sentiment further.

However trading might be cautious ahead of the government’s release of inflation data for the year through 14 June 2008. The wholesale price index rose 11.05% in the 12 months to 7 June 2008. The rate was above market expectation of about 10% rise. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.

To add to the negative sentiment, Standard and Poor’s (S&P) and its Indian subsidiary Crisil have lowered their India growth forecast for the current year to 7.8% from 8.1-8.6% earlier. The agencies said that the Indian economy would be hit by the surge in inflation fuelled by energy and commodity prices. The Reserve Bank of India (RBI) has already hiked interest rates twice in June 2008 to curb inflationary pressures and may well do so again.

As per reports, the marketwide rollover of positions from June 2008 contracts to July 2008 contracts in the derivatives segment stood at 82% while that of Nifty was 70%. June 2008 derivaties contracts expired yesterday, 26 June 2008.

Asian markets were trading weak today, 27 June 2008. Shanghai Composite plunged 3.67% or 106.41 points at 2,795.44, Japan's Nikkei fell 2.22% or 307.20 points at 13,515.12, Hang Seng tumbled 2.64% or 592.71 points at 21,862.96, Taiwan's Taiwan Weighted declined 3.99% or 311.64 points at 7,500.16, Singapore's Straits Times lost 1.41% or 42.02 points at 2,938.93. and South Korea's Seoul Composite was down 2.10% or 36.01 points at 1,681.65

US markets plunged after a downgrade on brokerage stocks, disappointing earnings from two tech giants and oil's rally above $140 a barrel. The Dow Jones closed at its lowest level since September 2006. The Dow Jones industrial average plunged 358.41 points, more than 3%, to close at 11,453.42. The Standard & Poor's 500 fell 38.82 points, about 3 percent, to 1,283.15, and the Nasdaq composite lost 79.89 points, or 3.3%, to 2,321.37.

Back home, short covering ahead of expiry of June 2008 derivatives contracts helped market move higher for the second straight session yesterday, 26 June 2008. The 30-share BSE Sensex gained 201.75 points or 1.42% at 14,421.82 and the broader based S&P CNX Nifty was up 63.20 points or 1.49% at 4,315.85, on that day.

Nifty July 2008 futures were at 4252.95, a huge discount of 62.90 points as compared to spot closing.

The BSE Sensex is down 5,865.17 points or 28.91% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2008. It is 6,784.95 points or 31.99% away from its all-time high of 21,206.77 struck on 10 January 2008.

As per provisional data, foreign funds today, 26 June 2008, sold shares worth a net Rs 667.19 crore. Domestic funds bought shares worth a net Rs 395.64 crore.

Foreign institutional investors (FIIs) were net buyers of Rs 918.59 crore in the futures & options segment yesterday, 26 June 2008. They were net buyers of index futures to the tune of Rs 1023.89 crore and sold index options worth Rs 368.21 crore. They were net buyers of stock futures to the tune of Rs 33.80 crore and bought stock options worth Rs 33.80 crore.

U.S. light crude for August delivery was down 32 cents at $139.32 a barrel today, 27 June 2008 in Globex electronic trading. U.S. oil hit a record of $140.39 on Thursday after Libya said it was studying possible options to cut output in response to potential U.S. actions against OPEC countries.

Asian markets trading weak

Asian markets were trading weak. China's Shanghai Composite plunged 3.67% or 106.41 points at 2,795.44.

Japan's Nikkei fell 2.22% or 307.20 points at 13,515.12.

Hong Kong's Hang Seng tumbled 2.64% or 592.71 points at 21,862.96.

Taiwan's Taiwan Weighted declined 3.99% or 311.64 points at 7,500.16.

Singapore's Straits Times lost 1.41% or 42.02 points at 2,938.93.

South Korea's Seoul Composite was down 2.10% or 36.01 points at 1,681.65

Source : Moneycontrol.com

Asian markets trading higher

Asian markets were trading higher. China's Shanghai Composite surged 0.78% or 22.52 points at 2,927.53.

Japan's Nikkei advanced 0.43% or 59.43 points at 13,889.35.

Hong Kong's Hang Seng rose 0.71% or 160.72 points at 22,795.88.

Taiwan's Taiwan Weighted gained 0.31% or 24.29 points at 7,879.35.

Singapore's Straits Times was up 0.62% or 18.50 pointsat 3,005.12.

South Korea's Seoul Composite shot up 0.85% or 14.53 points at 1,732.32.

Source : Moneycontrol.com

HDFC Bank may see action on hike in lending rate

After trading hours on Friday, 20 June 2008, HDFC Bank, announced a hike in its benchmark prime lending rate (BPLR) by 25 basis points to 15.25%. The bank has also upped its deposit rates by 25 basis points across different tenures. The hikes come into effect from 18 June 2008.

As per reports, several banks are reviewing their interest rate structures and are expected to take a call soon on whether to raise their rates or not.

After trading hours on Friday, 20 June 2008, Dredging Corporation of India reported 22.13% fall in net profit to Rs 50.15 crore on 5.56% fall in sales to Rs 190.72 crore in Q4 March 2008 over Q4 March 2007. The net profit declined 17.97% to Rs 154.82 crore on 23.12% growth in sales to Rs 705.32 crore in the year ended March 2008 over the year ended March 2007.

Securities and Exchange Board of India (Sebi) on Friday, 20 June 2008, exempted Abbott India’s parent Abbott Laboratories, US, from making an open offer for the shares of the drug firm. The parent plans to buy back 5.83% of Abbott India's shares from the open market at a price not exceeding Rs 650 each. On Friday, the Abbott India shares rose 3.68% % to Rs 554.75 on BSE.

The proposed buyback would raise the shareholding of Abbott Laboratories in Abbott India to 68.94% from the current 65.14%. "The promoters are already in control of the target company. The increase in the shareholding ... is incidental to the buy-back proposal of the target company and is not a pro-active acquisition," Sebi said in its order.

After trading hours on Friday, 20 June 2008, hospitality firm EIH reported 9.68% growth in net profit to Rs 65.38 crore on 13.14% rise in sales Rs 339.88 crore in Q4 March 2008 over Q4 March 2007. The net profit rose 8.43% to Rs 217.23 crore on 15.01% growth in sales to Rs 1079.87 crore in the year ended March 2008 over the year ended March 2007.

Pyramid Saimira Theatre said on Monday, 23 June 2008, its board will meet on 30 June 2008 to consider raising funds.

Source : Capitalmarket.com

Indian stocks headed for weak start

Indian stocks may be geared for weak start today, 23 June 2008, as whole host of factors including weak global markets, shadows of a interest rate hike post double-digit inflation, and political uncertainty may create havoc on the bourses.

Also there might be possibility of early elections after Uttar Pradesh chief minister Mayawati’s Bahujan Samaj Party (BSP) withdrew its support to the Congress-led UPA government during the weekend.

Volatility is expected to remain high as derivatives contracts for June series are set to expire on Thursday, 26 June 2008. As per reports, the marketwide rollover of positions from June 2008 series to July 2008 series stood at 16% while that of Nifty was 20%, as on Friday, 20 June 2008.

Asian markets were trading weak today, 23 June 2008. China's Shanghai Composite slipped 1.98% or 56.01 points at 2,775.73, Nikkei plunged 1.16% or 162.27 points at 13,779.81, Hang Seng tumbled 1.28% or 290.53 points at 22,455.07, Taiwan's Taiwan Weighted lost 0.44% or 34.87 points at 7,867.57, Singapore's Straits Times fell 0.78% or 23.47 points at 2,978.34. and South Korea's Seoul Composite declined 1.17% or 20.25 points at 1,710.75

US stocks tumbled on Friday, 20 June 2008, with the Dow cracking below the crucial 12,000 mark to hit 3-month lows. Moody's cut its ratings for bond insurers M-B-I-A and Ambac. Merrill Lynch reducing its earnings estimates for a host of banks on concerns of credit risk, capital raising and possible dividend cuts also impacted sentiment. The Dow Jones industrial average slumped 220 points to 11,843 while the Nasdaq Composite index declined 56 points to 2406.

Back home, investors chucked stocks on Friday, 20 June 2008, to survive the snowballing threat of a possible monetary tightening by Reserve Bank of India to rein in soaring inflation. The 30-share BSE Sensex slumped 516.70 points or 3.42% at 14,571.29, and the broader based S&P CNX Nifty was down 157.70 points or 3.48% at 4347.55, on that day.

The Sensex is down 6635.48 points or 31.28% from a record high of 21206.77 it hit on 10 January 2008. It is down 5715.70 points or 28.17% in calendar year 2008 so far.

The BSE Sensex declined 618.33 points or 4.07% to 14,571.29 in the week ended Friday, 20 June 2008. S&P CNX Nifty lost 169.55 points or 3.75% to 4,347.55 in the week.

As per provisional data, foreign funds sold shares worth a net Rs 999.31 crore on 20 June 2008. Domestic funds bought shares worth a net Rs 563.86 crore on that day.

Foreign institutional investors (FIIs) were net sellers of Rs 1254.40 crore in the futures & options segment on Friday 20 June 2008. They were net sellers of index futures to the tune of Rs 1429.10 crore and bought index options worth Rs 17.74 crore. They were net buyers of stock futures to the tune of Rs 160.87 crore and sold stock options worth Rs 1.91 crore.

The wholesale price index rose 11.05% in the 12 months to 7 June 2008, government data released on Friday, 20 June 2008, showed. The rate was above market expectation of about 10% rise. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.

Crude oil prices rose in Asian trading today, 23 June 2008, after Saudi Arabia said at a weekend summit that it had raised output, and said speculators were partly to blame for higher prices. New York's main oil futures contract, light sweet crude for August delivery, was 29 cents higher at $135.65 per barrel.

Source : Capitalmarket.com

Asian markets trading weak

Asian markets were trading weak. China's Shanghai Composite slipped 1.98% or 56.01 points at 2,775.73.

Japan's Nikkei plunged 1.16% or 162.27 points at 13,779.81.

Hong Kong's Hang Seng tumbled 1.28% or 290.53 points at 22,455.07.

Taiwan's Taiwan Weighted lost 0.44% or 34.87 points at 7,867.57.

Singapore's Straits Times fell 0.78% or 23.47 points at 2,978.34.

South Korea's Seoul Composite declined 1.17% or 20.25 points at 1,710.75.

Source : Moneycontrol.com

Sensex sheds 618 points

The soaring crude oil prices, high inflation and sustained selling by foreign institutional investors (FIIs) pulled the market down to its lowest level in calendar year 2008. Political concerns over the nuclear deal with US also weighed on the market sentiment. Sensex declined in 3 out of 5 trading sessions in the week ended Friday, 20 June 2008.

The BSE Sensex declined 618.33 points or 4.07% to 14,571.29 in the week ended Friday, 20 June 2008. S&P CNX Nifty lost 169.55 points or 3.75% to 4,347.55 in the week.

The BSE Mid-Cap index declined 195.74 points or 3.14% to 6,032.43. The BSE Small-Cap index slumped 184.06 points or 2.43% to 7,397.66.

Interest rate sensitive sectors bore major brunt of selling. BSE Bankex (down 3.56% to 6,804.78), BSE Auto index (down 2.1% to 4,042.86) and BSE Realty index (down 5.05% to 5,383.81) edged lower in the week.

Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar. In June 2008, FIIs dumped shares worth Rs 7,477.80 crore (till 19 June 2008). FII outflow in calendar year 2008 totaled Rs 22,847.20 crore (till 19 June 2008). On the other hand, mutual funds were net buyers of shares to the tune of Rs 1,820.20 crore in the month of June 2008, till 19 June 2008.

The 30-share BSE Sensex rose 206.20 points or 1.36% at 15,395.82 on Monday, 16 June 2008. The market ended on a firm note on the back of firm global markets. However, a rebound in global crude oil prices pared strong intra-day gains on that day. Banking and information technology stocks rallied. However, automobile stocks declined after the Union government raised excise duty on large cars, multi-utility vehicles and sports utility vehicles with an engine cubic capacity exceeding 1500.

The 30-share BSE Sensex gained 301.08 points or 1.96% at 15,696.90 on Tuesday, 17 June 2008. Bulls had an upper hand over bears for a second day in a row with market sentiment boosted by reports of higher advance tax payment by top Indian firms in the first installment of 15 June 2008, reports of good monsoon in the initial phase and easing of oil prices from record high.

The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31 on Wednesday, 18 June 2008. Bears struck back with a vengeance on the bourses after a sharp rally in the past two days. Bears used the ploy of weak European markets and deferral of a crucial UPA-Left coordination committee meeting on Indo-US nuclear deal scheduled to bring share prices down. The decline followed a range bound movement on the bourses for a better part of the day till early afternoon trade.

The 30-share BSE Sensex lost 334.32 points or 2.17% at 15,087.99 on Thursday, 19 June 2008. The market succumbed to selling pressure for the second consecutive day. Political concerns and weak Asian markets weighed on the investor sentiments. Banking, realty and capital goods stocks were hurt the most. All the sectoral indices on BSE ended in red.

The 30 share BSE Sensex declined 516.70 points or 3.42% to 14,571.29 on Friday, 20 June 2008. The two key indices, Sensex and Nifty hit their lowest level of calendar year 2008 on that day. The market tumbled after the latest data showed India’s inflation soared to a 13-year high early this month. High inflation sparked fears of tighter monetary policy by the Reserve Bank of India.

India's largest aluminium producer by sales Hindalco Industries declined 8.21% to Rs 161 in the week . Its board on 20 June 2008 approved raising up to Rs 5000 crore by way of a rights issue to redeem a bridge loan it had taken for acquisition of Novelis Inc. The ratio for the rights issue will be 1:3, i.e. one right of Rs 1 each for every three equity shares of Rs 1 each held by the shareholder as on the record date.

India’s biggest engineering and construction firm in terms of revenue Larsen & Toubro rose 0.8% to Rs 2637.80 The company on 20 June 2008 said its heavy engineering division had crossed Rs 1000 crore of order booking for supply of high tech equipment and systems in the first two months of the current financial year.

India’s second largest telecom services provider by sales Reliance Communications plunged 9.58% to Rs 491.30 in the week. In another family feud between Ambani brothers, Mukesh ambani controlled Reliance Industries claimed a right of first refusal to buy a controlling stake in Reliance Communications. Meanwhile, Reliance Communications (RCom) said, in a mala fide effort to disrupt the talks, Reliance Industries (RIL) has sent a communication to MTN, making a false claim of an alleged right of first refusal to buy a controlling stake in RCom.

Reliance Communications (RCom) also threatened to claim damages from Reliance Industries, in case the latter choses to take legal action against RCom. It added that RIL's claim is legally and factually untenable, baseless, and misconceived. Earlier on 26 May 2008, Reliance Communications (RCom) had informed the bourses that it has entered into exclusive negotiations with MTN Group for 45 days soon after the South African giant aborted its talks with the Sunil Mittal-controlled Bharti group. As part of a tie-up, Anil Ambani would likely swap his controlling stake in Reliance Communications to become the largest shareholder in MTN.

World’s sixth largest steel producer Tata Steel declined 7.58% to Rs 777.60. The company said it has formed a joint venture with Jasper Industries to set up a 135 megawatt power plant in Orissa. Tata Steel along with its wholly owned subsidiary Rawmet Ferrous Industries will hold 26% in the project and Japser Industries will hold the remaining 74%.

India’s largest commercial bank State Bank of India declined 6.52% to Rs 1,247.50. The country's largest lender, on Saturday, 14 June 2008, decided not to raise its prime-lending rate. The decision was taken at a meeting of the assets-liability committee (Alco) of the bank

India’s largest tractor maker by sales Mahindra & Mahindra gained 0.84% to Rs 575.20. The Union government raised excise duty on large cars, multi-utility vehicles and sports utility vehicles with an engine cubic capacity exceeding 1500. As per reports, the additional excise duty will be applicable on Mahindra & Mahindra’s Renault-Logan, Mahindra Scorpio and Bolero, Maruti Suzuki India’s Maruti SX4, and Tata Motor’s Tata Safari, Tata Sumo

India’s largest car maker by sales Maruti Suzuki India gained 0.82% to Rs 727.80 in the week.

ICICI Bank (down 3.94% to Rs 734.65), Infosys (down 1.93% to Rs 1,827.60), Satyam Computer Services (down 5.37% to Rs 455.05), Tata Consultancy Services (down 4.88% to Rs 863.40), HDFC Bank (down 2.17% to Rs 1,099), Reliance Industries (down 7.57% to Rs 2,096.60) edged lower in the week.

The infrastructure sector output rose 3.6% in April 2008 from a year earlier, much lower than an unrevised 9.6% growth in March 2008, government data showed on Wednesday, 18 June 2008. The infrastructure sector accounts for 26.68% of industrial output.

The direct tax collections recorded strong growth in the first two months of this fiscal. As per the Finance Ministry data, direct tax collections jumped 71.28% to Rs.22840 crore in April-May 2008 over April-May 2007. The growth in personal income tax was 73.05% at Rs.14690 crore in April-May 2008 over April-May 2007. Corporate tax collection rose 68% to Rs 8126 crore in April-May 2008 over April-May 2007.

The wholesale price index rose 11.05% in the 12 months to 7 June 2008, government data released on Friday, 20 June 2008, showed. The rate was above market expectation of about 10% rise. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.

The June-September south west monsoon has been 45% above average so far this season, the Indian Meteorological Department said on 19 June 2008. Rainfall in the four-month rainy season this year will be near-normal, or 99% of the average between 1941 and 1990, the weather office had said in April 2008. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average. Good rains will bolster farm production which in turn may help rein in inflation.

A key UPA-Left coordination committee meeting on Indo-US nuclear deal, which was scheduled on 18 June 2008, was postponed due to absence of leaders. The meeting is now likely to be held on 25 June 2008.

Source : Capitalmarket.com

Sensex, Nifty at 10-month low

It was the worst day for Indian equity markets since the beginning of this year. Investors chucked stocks to survive the snowballing threat of a possible monetary tightening by Reserve Bank of India to rein in soaring inflation.

The key benchmark indices plummeted over 3% to end at their lowest level in 10 months after the latest data showed a surge in inflation to 13-year high early this month. The market breadth was extremely weak due to widespread selling. All the sectoral indices on BSE ended in the red. Oil & gas and realty stocks declined sharply.

As per provisional data, foreign funds today, 20 June 2008, sold shares worth a net Rs 999.31 crore. Domestic funds bought shares worth a net Rs 563.86 crore.

The 30-share BSE Sensex slumped 516.70 points or 3.42% at 14,571.29, its lowest closing since late August 2007. The index shed 568.72 points at the day’s low of 14,519.27 hit at the fag end of the trading session today. The Sensex gained 114.02 points at the day’s high of 15,202.01, hit at the onset of trading session.

The broader based S&P CNX Nifty was down 157.70 points or 3.48% at 4347.55, its lowest closing level since August 2007. Nifty June 2008 futures were at 4343, a discount of 4.55 points compared with the spot closing. NSE's futures & options (F&O) segment turnover was Rs 58533.66 crore, which was higher than Rs 42696.18 crore on Thursday, 19 June 2008.

The Sensex is down 6635.48 points or 31.28% from a record high of 21206.77 it hit on 10 January 2008. It is down 5715.70 points or 28.17% in calendar year 2008 so far.

The market breadth was poor on BSE with 450 shares advancing as compared to 2247 that declined. 43 remained unchanged.

The BSE Mid-Cap index outperformed the Sensex, falling 3.17% to 6,032.43. The BSE Small-Cap index underperformed the Sensex, sliding 3.43% at 7,397.66.

India’s second largest cellular service provider by sales Reliance Communication (RCom) slipped 6.65% at Rs 491.30. South African mobile giant MTN remained silent on its talks with the company at its annual general meeting (AGM) in Johannesburg on Thursday, 19 June 2008. The AGM was expected to discuss RCom merger deal especially in the back drop of the Reliance Industries’ claims over first right of refusal for a controlling stake in RCom.

India's largest aluminium producer by sales Hindalco Industries slipped 6.37% at Rs 161 after its board approved raising up to Rs 5000 crore by way of a rights issue to redeem a bridge loan it had taken for acquisition of Novelis Inc.

The other major losers from the Sensex pack were, Jaiprakash Associates (down 6.03% at Rs 166.60), Reliance Infrastructure (down 4.92% at Rs 962.55), Bharti Airtel (down 4.76% at Rs 766.40) and Tata Steel (down 4.66% at Rs 777.60).

India's top state-run oil explorer by market capitalisation ONGC rose 1.56% at Rs 866.85. It was the only gainers from the Sensex pack.

The BSE Oil & gas index underperformed the Sensex, sliding 5.03% to 9,419.89. Reliance Natural Resources (down 7.27% at Rs 82.95), Essar Oil (down 6.62% at Rs 225.80), and Cairn India (down 5.69% at Rs 267.60), slumped.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 6.61% at Rs 2096.60. RIL has a highest weightage of 15.80% in Sensex.

Stocks of the interest rate sensitive sectors such as automobiles, realty and banking dropped after the inflation data. Bank of India (down 7.36% at Rs 247.90), State Bank of India (down 4.11% at Rs 1,247.50), and HDFC Bank (down 1.93% at Rs 1,099), were the key losers from the banking space. The BSE Bankex outperformed the Sensex, falling 2.97% to 6,804.78.

India's largest private sector bank by assets ICICI Bank lost 2.48% at Rs 734.65. ICICI Bank has a third highest weightage of 8.11% in BSE Sensex.

The BSE Realty index underperformed the Sensex, falling 4.45% at 5,383.81. Housing Development & Infrastructure (down 9.17% at Rs 528.15), Sobha Developers (down 6.66% at Rs 360.95), Indiabulls Real Estate (down 5.91% at Rs 354.05), Unitech (down 2.12% at Rs 184.60) and DLF (down 4.57% at Rs 456.35), tumbled.

Realty developer Parsvnath Developers lost 6.28% to Rs 152.10 after the company reported 17% fall in net profit to Rs 108.87 crore in Q4 March 2008 over Q4 March 2007.

Automobile sector stocks lost steam fearing that a tight monetary policy may compel banks to raise lending rates which in turn would hurt demand for automobiles. TVs Motor Company (down 5.19% at Rs 32.85), Hero Honda Motors (down 4.01% at Rs 759), Tata Motors (down 2.82% at Rs 488.85), Maruti Suzuki (down 2.51% at Rs 727.80) and Mahindra & Mahindra (down 0.22% at Rs 575.20), declined.

India’s second largest software exporter by sales Infosys Technologies shed 1.74% at Rs 1827.60. Infosys has a second highest weightage of 8.76% in BSE Sensex.

Sundaram Clayton, which resumed trading today on BSE, fell 57.92% at Rs 282.55. It opened at Rs 324 and touched a high of Rs 397.80 in early trade.

Reliance Industries clocked the highest turnover of Rs 387.31 crore on BSE. Anu's Laboratories (Rs 263.72 crore), Niraj Cement Structurals (Rs 233.67 crore), Reliance Capital (Rs 233.25 crore) and Reliance Petroleum (Rs 201.16 crore), were the other turnover toppers on BSE in that order.

Reliance Natural Resources reported a highest volume of 1.32 crore shares on BSE. IFCI (1.27 crore shares), Niraj Cement Structurals (1.16 crore shares), Reliance Petroleum (1.15 crore shares) and Chambal Fertilizers & Chemicals (1.07 crore shares), were the other volume toppers on BSE in that order.

European markets were trading lower. Key indices in UK, Germany and France were down by 1.07% to 1.43%. Some of the indices were trading in positive terrain earlier.

Asian stocks were mixed today. The key benchmark indices in Hong Kong, China and Singapore were up by between 0.31% to 3.01%. Key benchmark indices in Japan, Taiwan and South Korea were down by between 0.23% to 1.81%.

US stocks rose Thursday, 19 June 2008, as a drop in oil prices fueled investor optimism about consumer spending, driving shares of transportation and retailers sharply higher. The Dow Jones Industrial Average gained 34.03 points or 0.28% to 12,063.09. The tech-laden Nasdaq Composite Index rose 32.35 points or 1.33% to 2,462.06.

US crude for July delivery settled down $4.75, or 3.48%, at $131.93 per barrel on the New York Mercantile Exchange on Thursday. It lost further to $131.71 today as China's surprise move to increase fuel prices sparked worries about a curb in demand from the world's second largest consumer.

The sharp fall in oil price came just days before an emergency meeting on Sunday, 22 June 2008, in Saudi Arabia between oil consumers and producers to discuss rising oil prices. Saudi Arabia, the world's top oil exporter, is hiking output to help bring down prices, which have jumped nearly 40% this year and caused protests around the globe

Source : Capitalmarket.com

Inflation to set near-term mkt trend: Envision Cap

Nilesh Shah, MD and CEO, Envision Capital, said sentiment in the market remains bearish. "The Sensex may not break 14,000. Negative news will get factored in at 14,000, where some buying is possible."

According to Shah, the near-term trend will depend on inflation. "If it comes in double-digits, it will be bad. One needs to watch out for political developments on the nuclear deal. Uncertainty regarding politics will add more pressure on the market. Crude remains a concern, which will decide the market course."

Technicals don't look promising, he said. "There is small buying by domestic financial institutions. Foreign Institutional Investors, or FIIs, continue to be sellers. It is difficult to draw any comfort from it."

Excerpts from CNBC-TV18's exclusive interview with Nilesh Shah:



Q: Are we back within that grinding range, or is the market threatening to break down?



A: It will depend on a couple of events, which will unfold in the next few days. One is inflation, which is already close to about 9%. If it threatens to go above that and if it probably goes towards the 10% mark, we could definitely have one more leg down. What really emerged over the last one or two days is some kind of a political development related to the nuclear treaty. If there are more developments, which the market perceives that to be negative, it could probably pull the market down further.



In addition, crude oil is trying to break above the USD 136-138 per barrel mark. If crude makes a new high, it is another important event to watch out for. So, before the earnings season unfolds, it's basically inflation crude oil, and political developments which could decide the course of the markets.



Q: What is the worse-case scenario or the best case scenario that you can think of for the Nifty or the Sensex?



Shah: It is going to be difficult for this market to break 14,000. The bias is more on the downside and probably a majority of people are bearish. But at that level of around 14,000, give or take 200-300 points here or there, there should be some amount of value buying.



By and large, whatever negative developments we can think of, would probably get adequately factored in barring any political developments. Apart from that, things like inflation should get factored in that kind of levels.



A lot of pain and damage would still be seen if the market were to correct at 15,000 to 14,000 points. I don’t see a case for this market to sustain below 14,000 at this point of time.



Q: How do you map the technicals of the market right now with the shorts on the derivatives side and the relentless FII selling on one side and the cash lying with mutual funds on the other side? How are the technicals balanced?



A: The technicals do not look all that promising. The reality is that mutual funds are sitting on cash and they are coming in and buying.But that buying is not good enough.

Buying is probably in the region of Rs 200-500 crore on a daily basis but against that the FIIs are selling anywhere between Rs 500-1,500 crore on a daily basis. It is really difficult to pinpoint at what level the FIIs will stop selling or the levels the mutual funds will stop buying. For the FIIs, it is also some kind of global unwinding or deleveraging exercise which is really happening at their end.

There is really not much comfort coming in from a technical perspective. The selling is relentless and it is difficult to draw any kind of comfort on that front. It is still very early days for that.

Source : Moneycontrol.com

Market slides on weak global cues

The market opened on a weak note on negative cues from global markes and uncertainty on the political front. All the sectoral indices on BSE were in the red. Realty and banking shares were worst hit in the fall.

The postponement of a key meeting between the government and its communist allies on the proposed nuclear deal between US and India keeps the future of the deal uncertain. Talks were set to take place Wednesday, 18 June 2008, in New Delhi, but Communist leaders say the meeting will now take place on 25 June 2008. The delay comes as Left wing parties’ reffirm their opposition to the agreement, saying it undermines India's independent foreign policy and nuclear weapons program. As per reports, CPM a key left party may be working on a plan to pull out support to the UPA government.

Asian markets, which opened before Indian markets, were trading weak. Key indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 1.62% to 3.37%. The Dow Jones Industrial Average hit its lowest level in three months on Wednesday, 18 June 2008, as worries about a weak US economy compounded by credit sector concerns dragged down shares in banks, autos and transport firms.

At 10:20 IST, the 30-share BSE Sensex was down 199.08 points or 1.29% at 15,223.23. The index shed 231.07 points at the day’s low of 15,191.24 hit in early trade.

The broader based S&P CNX Nifty was down 55.30 points or 1.21% at 4527.10.

The market breadth was weak on BSE with 570 shares advancing as compared to 1035 that declined. 33 remained unchanged.

The BSE Mid-Cap index rose 0.58% to 6,323.11 and BSE Small-Cap index was up 0.56% to 7,731.50.

India's largest drug maker by sales Ranbaxy Laboratories declined 4.15% at Rs 573.40 after the company agreed to keep generic versions of the Pfizer's cholesterol pill Lipitor off the US market for extra 20 months. As per the agreement, Ranbaxy will not sell a generic of Lipitor, the world's best-selling drug, until November 2011. Ranbaxy was the top traded counter on BSE with a turnover of Rs 96.72 crore.

The other major Sensex losers were, Maruti Suzuki (down 3.01% at Rs 742), Larsen & Toubro (down 2.15% at Rs 2691.45), Bharat Heavy Electricals (down 2.25% at Rs 1466), and State Bank of India (down 1.84% at Rs 1326.50).

The top Sensex gainers were, ACC (up 1.37% at Rs 652), Hindalco Industries (up 0.725 at Rs 175.55), Ambuja Cements (up 0.77% at Rs 91.30), and Tata Steel (up 0.33% at Rs 825.40).

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries lost 1.23% at Rs 2255.30. RIL has a highest weightage of 15.72% in BSE Sensex.

India's largest private sector bank by assets ICICI Bank fell 2.21% at Rs 765. ICICI Bank has a third highest weightage of 8.27% in BSE Sensex.

India’s second largest software exporter by sales Infosys Technologies fell 1.32% at Rs 1841. Infosys has a second highest weightage of 8.59% in BSE Sensex.

Light, sweet crude oil jumped $2.67 to $136.68 per barrel on the New York Mercantile on Wednesday, 18 June 2008, after the US Energy Department said the country’s crude oil stockpiles fell less than expected last week but that gasoline supplies had declined.

Back home, market settled lower yesterday, 18 June 2008, led by weak European markets and deferral of a crucial UPA-Left coordination committee meeting on Indo-US nuclear deal scheduled yesterday, 18 June 2008. The 30-share BSE Sensex lost 274.59 points or 1.75% at 15,422.31 and the broader based S&P CNX Nifty was down 70.6 points or 1.52% at 4582.40, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 435 crore while domestic mutual funds bought shares worth a net Rs 193.64 crore yesterday, 18 June 2008.

Foreign institutional investors (FIIs) were net sellers of Rs 192.64 crore in the futures & options segment yesterday, 16 June 2008. They were net sellers of index futures to the tune of Rs 682.33 crore and bought index options worth Rs 359.98 crore. They were net buyers of stock futures to the tune of Rs 133.45 crore and sold stock options worth Rs 3.74 crore.

Source : Capitalmarket.com

Jet Airways may see action

Reliance Industries is reportedly in talks with Jet Airways for picking up around 6% to 7% stake in the airline.

JetLite, the low-fare subsidiary of Jet Airways has been reportedly asked to appear before the union government for non-payment of at least Rs 100 crore in service tax.

Maruti Suzuki India reportedly plans to counter Ratan Tata's Nano with a stripped-down version of its Maruti 800.

Reliance Power will reportedly get a $500 million loan from the Asian Development Bank for the 4,000 megawatt ultra mega power project coming up in Andhra Pradesh.

The Al Rostmani Group of the United Arab Emirates is reportedly planning to pick up a majority stake in Gujarat Heavy Chemicals (GHCL) for an estimated Rs 700 crore.

Tata Power Company is reportedly in talks with shipbuilders in South Korea to construct six big ships, which it will use to carry coal from its mines in Indonesia to feed its ultra mega power plant in Gujarat. The company will have to invest between $550 million to $600 million to buy the ships, the reports added.

Aditya Birla Minacs, the back-office arm of Aditya Birla Nuvo is reportedly eyeing acquisition of a knowledge process outsourcing (KPO) firm worth $150 million.

Housing Development and Infrastructure (HDIL) is reportedly eyeing the power sector as part of its diversification strategy.

Dishman Pharmaceuticals and Chemicals has reportedly invested $10 million to set up a facility in China.

British retail tycoon Philip Green-led Arcadia Group is reportedly striking a partnership with realty firm DLF to bring high-street clothing chain Topshop to India.

Transport Corporation of India is reportedly set to dilute promoter holding by about 10% to raise capital for its expansion plans.

Bharat Petroleum Corporation, Cambridge Solutions, IRB Infrastructure, Sical Logistics, Shree Digvijay Cement, Tantia Constructions, Tata Communication, Wire & Wireless India, and Zee News among others will declare their March 2008 ended quarter results today.

Source : Capitalmarket.com

Local equities seen range-bound on mixed global cues

Local equities are likely to stay range-bound tracking mixed global cues. The advance tax figures of some leading banks and a few corporates for the April-June quarter of this fiscal provide some room for comfort. State Bank of India recorded a 32% increase in advance tax payment to Rs 663 crore for the Q1 2008 over Q1 2007. Reliance Industries (RIL), reported 15% rise in advance tax paid to Rs 340 crore in Q1 2008 over Q1 2007.

Advance taxes are paid in four instalments, in June, September, December and March. Usually, the first instalment is 15% of the total tax estimated to be paid for the whole fiscal.

However crude oil striking record high just under $140 a barrel may dampen sentiment. Light, sweet crude for July delivery fell 25 cents to settle at $134.61 a barrel yesterday, on the New York Mercantile Exchange after earlier soaring to a trading record of $139.89.

Also caution will prevail in the coming day’s on fears that the Reserve Bank of India (RBI), as part of its efforts to contain rising inflation, would resort to more measures to make banks’ lending rates dearer.

Inflation, measured by wholesale price index (WPI), jumped to a 7-year high of 8.75% in the week to 31 May 2008, after rising 8.24% in the previous week. The negative impact of higher lending rates would rub off on the entire economy. Such concerns over slowdown in economic growth are expected to keep the market choppy in the near term.

Also high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth.

Asian markets were trading mixed today, 17 June 2008. Shanghai Composite was up 0.31% or 8.99 points at 2,883.09, Nikkei gained 0.13% or 18.51 points at 14,372.88, Hong Kong's Hang Seng rose 0.19% or 44.39 points at 23,074.08.

However, Taiwan's Taiwan Weighted fell 0.76% or 62.40 points at 8,107.37, Singapore's Straits Times slipped 0.39% or 11.80 points at 3,025.12 and South Korea's Seoul Composite declined 0.87% or 15.31 points at 1,745.51

US markets ended mixed in see-saw trade yesterday, 16 June 2008. A rally was sparked in banking stocks with Lehman Brothers declaring results in line with market expectations.

The Dow Jones industrial average lost 38.27 points, or 0.31%, to 12,269.08. The S&P 500 index gained 0.11 points, or 0.01%, to 1,360.14. The Nasdaq Composite index added 20.28 points, or 0.83%, to 2,474.78.

Earnings downgrades by brokerages amid rising input and interest costs for India Inc and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. A further hike in rates would impact bottomline of Indian companies.

Back home, the market ended on a firm note yesterday, 16 June 2008, on the back of firm global markets. The 30-share BSE Sensex rose 206.20 points or 1.36% at 15,395.82 and the broader based S&P CNX Nifty gained 55.4 points or 1.23% at 4572.50, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 547.84 crore yesterday, 16 June 2008. Domestic funds bought shares worth a net Rs 293.05 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 59.33 crore in the futures & options segment yesterday, 16 June 2008. They were net buyers of index futures to the tune of Rs 180.49 crore and sold index options worth Rs 257.05 crore. They were net buyers of stock futures to the tune of Rs 131.73 crore and bought stock options worth Rs 4.16 crore.

Source : Capitalmarket.com

Asian markets trading mixed

Asian markets were trading mixed. China's Shanghai Composite was up 0.31% or 8.99 points at 2,883.09.

Japan's Nikkei gained 0.13% or 18.51 points at 14,372.88.

Hong Kong's Hang Seng rose 0.19% or 44.39 points at 23,074.08.

However, Taiwan's Taiwan Weighted fell 0.76% or 62.40 points at 8,107.37.

Singapore's Straits Times slipped 0.39% or 11.80 points at 3,025.12.

South Korea's Seoul Composite declined 0.87% or 15.31 points at 1,745.51

Source : Moneycontrol.com

Somi Conveyor Beltings IPO opens on June 24

Somi Conveyor Beltings will enter the capital market with an initial public offering, IPO of 62,27,860 equity shares of Rs 10 each through 100% book building process on June 24, 2008. The price has been fixed at Rs 35 per equity share. The issue will close for subscription on June 27, 2008.

The issue comprises of contribution by promoters, of 14,99,286 equity shares of Rs 10 each at a price of Rs 35 per equity share for cash aggregating to Rs 5.25 crores, and the net issue to the public of 47,28,574 equity shares of Rs 10 each at a price of Rs 35 per equity share for cash aggregating to Rs 16.55 crores including an allocation of atleast 10% of the net issue to the public to Aualified Institutional Buyers. The net issue to public would constitute 40% of the fully diluted post issue paid up capital of the company. The issue price is 3.5 times of the face value of the equity share.

The shares are proposed to be listed on the BSE.

Ashika Capital is the Lead manager to the issue.

Mondkar Computers is the Registrar to the issue.

Source : Moneycontrol.com

Market spurts in opening trade

The market opened on a firm note on positive global cues. Fall in crude oil prices from record high and firm global markets boosted the sentiments. All the sectoral indices on the BSE were in green.

Crude oil for July delivery fell as much as 86 cents to $134 a barrel in after-hours electronic trading on the New York Mercantile Exchange today, 16 June 2008, on speculation Saudi Arabia will increase production, reducing risks to global growth from near-record energy prices.

Asian markets were trading higher today, 16 June 2008, on speculation demand for the region's exports will be sustained as the yen weakened against the dollar and crude oil prices retreated. Japan's Nikkei (up 1.47% at 14,179.62), Hang Seng (up 1.66% at 22,966.30), Taiwan's Taiwan Weighted (up 1.36% at 8,215.54), Singapore's Straits Times (up 1.59% at 3,027.07), South Korea's Seoul Composite (up 0.92% at 1,763.38), China (1.06% at 2,899.153), edged higher.

US markets rallied on Friday, 13 June 2008, led by financial and technology stocks, as a tame core-inflation reading and lower crude prices boosted market. The Dow Jones industrial average jumped 166 points at 12,307. The Nasdaq Composite index surged 50 points up at 2,454.50. The S&P 500 500 index advanced 20.16 points to 1360.03.

At 10:25 IST, the 30-share BSE Sensex was up 313.56 points or 2.06% at 15,503.18. At the day’s high of 15,553.37 Sensex gained 363.75 points in early trade.

The broader based S&P CNX Nifty was up 84.25 points or 1.87% at 4601.35.

The market breadth was strong on BSE with 1495 shares advancing as compared to 364 that declined. 33 remained unchanged. All 30 Sensex stocks were in green

The BSE Mid-Cap index rose 1.66% to 6,331.30 and BSE Small-Cap index up 1.65% to 7,706.99.

Banking shares were in demand after a sharp sell-off in the past few trading sessions. ICICI Bank (up 4.37% at Rs 798.25), HDFC Bank (up 2.98% at Rs 1,156.80), Bank of India (up 2.75% at Rs 276.15), and Axis Bank (up 2.36% at Rs 721), moved up. The BSE Bankex was up 2.91% at 7261.69.

India's top state-run commercial bank State Bank of India (SBI) rose 1.90% to Rs 1359.95. After a review of interest rates on Friday, 13 June 2008, SBI said it will not to raise its prime lending rate even though the Reserve Bank of India (RBI) had raised its key short term lending rate earlier this week.

The top Sensex gainers were, Infosys Technologies (up 3.27% at Rs 1924.55), HDFC Bank (up 3.36% at Rs 1161.10), Housing Development Finance Corporation (up 2.90% at Rs 2195), Bharti Airtel (up 2.98% at Rs 838.25), and Reliance Infrastructure (up 2.27% at Rs 1043.50).

India’s second largest telecom services provider by sales Reliance Communication was up 0.40% at Rs 545.50 after Reliance Industries claimed first right of refusal to buy a controlling stake in it. Reliance Communications, controlled by Anil Ambani, is in exclusive talks with South Africa's MTN about a tie-up that could create a top-10 global telecoms firm. As part of a tie-up, Anil Ambani would likely swap his controlling stake in Reliance Communications to become the largest shareholder in MTN.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries was up 1.82% at Rs 2309.

Back home, the market slipped on Friday, 13 June 2008, as data showed a surge in inflation to a seven-year high and weak European markets. The 30-share BSE Sensex lost 60.58 points or 0.4% at 15,189.62 and the broader based S&P CNX Nifty was down 22.25 points or 0.49% at 4,517.10, on that day.

As per provisional data, foreign funds sold shares worth a net Rs 116.51 crore on Friday, 13 June 2008. Domestic funds bought shares worth a net Rs 457.33 crore on that day.

Foreign institutional investors (FIIs) were net buyers of Rs 625.28 crore in the futures & options segment on Friday, 13 June 2008. They were net buyers of index futures to the tune of Rs 167.32 crore and bought index options worth Rs 173.58 crore. They were net buyers of stock futures to the tune of Rs 224.58 crore and bought stock options worth Rs 59.80 crore.

Source : Capitalmarket.com

Sterlite Industries, Tata Power may see action

Sterlite Industries and Tata Power will replace Ambuja Cement and Cipla on the BSE Sensex from 28 July 2008.

The Tamil Nadu government has reportedly agreed to help Tata Steel procure nearly 10,000 acres of land for its Rs 2500 crore titanium dioxide project in the state.

Yes Bank is reportedly facing disputes on derivatives products sold to two clients, with the valuation of the deals estimated at Rs 14 crore.

Jet Airways will reportedly be reducing more than six routes from July 2008. According to reports, the airline would reduce not only services in the metros but also routes connecting tier II cities.

The Uttar Pradesh state government has reportedly ordered first information reports to be lodged against all 16 Bajaj Hindustan owned sugar mills in the state for allegedly failing to honour farmers' payment for the crushing season 2007/08.

Primary steel makers have increased product prices for exports by Rs 2000 - Rs 3000 a tonne in the past two weeks, taking up the price of the benchmark hot rolled coils well above Rs 40000 a tonne.

The Maharashtra government has reportedly asked Giga Solutions, an unlisted unit of Reliance Communications, to pay about Rs 200 crore as charges for the right of way granted to it for laying broadband and other cables.

Unitech reportedly gets Rs 750 crore from Lehman Brothers, a foreign investment bank, for its 97-acre project in Koliwada, Santacruz in north Mumbai.

Source : Capitalmarket.com

Progress of monsoon, advance tax figures to dictate trend

The market is likely to move in sync with global markets in the coming week. Markets across the globe suffered severe setback in the past few days triggered by spiraling global commodity prices led by crude oil.

Fears of Reserve Bank of India (RBI) further hiking interest rates to check soaring mutli-year high inflation, which could choke overall growth of the economy, will continue to haunt investors.

Earnings downgrades by brokerages amid rising input and interest costs for India Inc and drying up of global liquidity due to credit crisis remain major concern for the Indian stock market. A further hike in rates would impact bottomline of Indian companies. Also high interest rates may delay expansion plans of corporates, which in turn may impact future earnings growth.

Foreign institutional investors (FIIs) have pressed heavy sales in the backdrop of a weakening rupee against the dollar. In June 2008, FIIs dumped shares worth Rs 6,463.20 crore (till 12 June 2008). FII outflow in calendar year 2008 totaled Rs 21,832.60 crore (till 12 June 2008). On the other hand, mutual funds were net buyers of shares to the tune of Rs 894.89 crore in the month of June 2008, till 11 June 2008

India’s economic growth has slowed down as a result of fall in consumer demand caused by rise in interest rates. Industrial output rose 8.1% in 2007/08 (April-March) compared with 11.6% growth in 2006/07.

The Indian Meteorological Department (IMD)’s second monsoon forecast for the crucial annual south-west monsoon (June-September) due this month which may indicate spatial rainfall distribution in the main sowing month of July 2008, will be keenly watched by market men. The IMD has forecast the 2008 monsoon rains would be near-normal and 99% of the average between 1941 and 1990.

Agricultural output in India depends on good rains. A well distributed monsoon, which will bolster food production, may help rein in inflation.

Market men will also watch corporate advance tax payments for the first installment that falls due on 15 June 2008, which will a give a cue on expected Q1 June 2008 numbers from top Indian corporates. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.

The BSE Sensex declined 382.56 points or 2.45% to 15,189.62 in the week ended 13 June 2008. The S&P CNX Nifty fell 110.70 points or 2.39% to 4,517.10 in the week.

The Sensex is now down 6,017.15 points or 28.37% from its all-time high of 21,206.77 hit on 10 January 2008.

Source : Capital.com

Market extends losses for fourth week in a row

The market tumbled to register its lowest level in calendar year 2008 as soaring crude oil prices, spiraling inflation and weak global cues dampened sentiment. Heavy offloading from foreign institutional investors (FIIs) caused the market to register its fourth straight weekly loss in the week ended Friday, 13 June 2008. The key benchmark indices settled lower in three out of five trading sessions. BSE Mid-Cap and BSE Small-Cap indices outperformed the Sensex.

The BSE Sensex declined 382.56 points or 2.45% to 15,189.62 in the week ended 13 June 2008. The S&P CNX Nifty fell 110.70 points or 2.39% to 4,517.10 in the week.

The BSE Mid-Cap index fell 121.98 points or 1.92% to 6,228.17 in the week. The BSE Small-Cap index shed 114.33 points or 1.48% to 7,581.72.

The Sensex is down 6,017.15 points or 28.37% from its all-time high of 21,206.77 hit on 10 January 2008.

Foreign institutional investors (FIIs) pressed heavy sales in the backdrop of a weakening rupee against the dollar, accentuating fall in share prices. In June 2008, FIIs dumped shares worth Rs 5,321.50 crore (till 11 June 2008). FII outflow in calendar year 2008 totaled Rs 20,690.90 crore (till 11 June 2008). On the other hand, domestic funds were net buyers to the tune of Rs 894.89 crore in the month of June 2008, during this period.

Trading for the week started on a bearish note as key indices slumped on Monday, 9 June 2008, as surging global crude oil prices along with setback in US stocks played the spoilsport. The 30-share BSE Sensex tumbled 506.08 points or 3.25% at 15,066.10 and the broader based S&P CNX Nifty shed 126.85 points or 2.74% at 4,500.95, on that day.

The market extended losses on Tuesday, 10 June 2008, as weakness in global markets once again weighed on the domestic bourses. The 30-share BSE Sensex lost 176.85 points or 1.17% at 14,889.25 and the broader based S&P CNX Nifty was down 41.25 points or 1.14% at 4,449.80, on that day.

On that day both the key indices Sensex and Nifty hit their lowest levels in 2008, with Sensex hitting a low 14,645.31 Nifty 4369.80.

The market recovered on Wednesday, 11 June 2008, as investors resorted to bargain buying after recent steep fall in share prices, taking cue from firm Asian markets. The 30-share BSE Sensex rose 296.07 points or 1.99% at 15,185.32 and the broader based S&P CNX Nifty jumped 73.8 points or 1.66% at 4,523.60, on that day.

Improved April 2008 industrial production data, firm European markets and higher US futures markets triggered gains on domestic bourses on Thursday, 12 June 2008, after an earlier steep intra-day fall caused by the Reserve Bank of India (RBI)'s decision to raise repo rate - a short term interest rate by 25 basis points to 8% after trading hours the previous day. The 30-share BSE Sensex gained 64.88 points or 0.43% at 15,250.20 and the broader based S&P CNX Nifty rose 15.75 points or 0.35% at 4,539.35, on that day.

The market drifted lower on Friday, 13 June 2008, as inflation surged to a seven-year high. The 30-share BSE Sensex declined 60.58 points or 0.40% at 15,189.62 and the broader based S&P CNX Nifty shed 22.25 points or 0.49% at 4,517.10

India’s largest drugmaker by sales Ranbaxy Laboratories surged 11.86% to Rs 566.90 in the week. Ranbaxy founders Malvinder Singh and Shivinder Singh inked a deal to sell their combined 34.8% stake to Japanese drug maker Daiichi Sankyo at Rs 737 a share. Daiichi also seeks to acquire majority of the voting capital of Ranbaxy. The total transaction value is expected at about Rs 14740 crore to Rs 19800 crore depending on the response to a mandatory 20% open offer which Daiichi will be making to Ranbaxy shareholders.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 1.29% to Rs 2268.30. RIL's chairman Mukesh Ambani said that the company will pursue greenfield investment in polyester.

India’s second largest telecom services provider by sales Reliance Communication (RCom) slipped 0.63% to Rs 543.55. As per reports, RCom and the South African telcom company MTN will decide the share swap ratio at which Anil Ambani will transfer his stake in RCom to get stake in MTN. Both the companies have reportedly agreed for the deal, which will result in RCom promoter viz. the Anil Dhirubhai Group (ADAG) emerging as the single-largest shareholder in MTN and the foreign company becoming the holding firm of RCom.

India’s third largest IT exporter by sales Wipro declined 5.38% to Rs 477.85. It is reportedly bidding for 12 contracts worth at least $100 million each as it seeks bigger clients.

India’ largest engineering and construction firm by sales Larsen & Toubro (L&T) was up 1.05% to Rs 2,710.15. L&T has reportedly decided to delay the listing of its software business unit L&T Infotech to 2009-10, due to unfavourable market condition. The firm had earlier decided to go for L&T Infotech's initial public offer in the second half of this fiscal.

India’s largest private sector bank by net profit ICICI Bank shed 0.78% to Rs 764.80. It is reportedly cutting about 1000 jobs at different levels. While the company insists that only the poor performers have been asked to leave, reports say the job cut is part of the company's attempt at cutting cost, mainly in segments such as retail, rural and agri-credit.

India’s largest dedicated housing finance firm by operating income HDFC slumped 9.11% to Rs 2133.30. HDFC’s chairman Deepak Parekh said the company will take a decision on raising interest rates on home loans by end of this month. He said there was upward pressure on interest rates.

India’s largest commercial vehicle maker by sales Tata Motors lost 4.42% to Rs 516.20. As per reports, it plans to raise an additional $1 billion in the international market to fund its expansion plans, which include strategic alliances and acquisitions.

Diversified company Grasim Industries fell 3.56% to Rs 2182.30 after the company said on Tuesday, 10 June 2008, it has sold its sponge iron business Vikram Ispat to Welspun Power and Steel for Rs 1030 crore.

Among the side counters, GHCL (up 41.52% to Rs 71.75), Aurobindo Pharma (up 16.98% to Rs 329.95), Chambal Fertilisers & Chemicals (up 13.09% to Rs 91.15), Fortis Healthcare (up 16.03% to Rs 82.50), and Zenotech Laboratories (up 11.85% to Rs 109.45), surged.

Inflation based on wholesale price index rose 8.75% in the 12 months to 31 May 2008, above the previous week's annual rise of 8.24%, government data released on 13 June 2008, showed. The reading is highest since 10 February 2001, when it was 8.77%. Inflation for the week ended 5 April 2008 was revised to 7.71% as against 7.14% reported earlier.

The Reserve Bank of India (RBI) on Wednesday, 11 June 2008, raised short-term lending rate viz. the repo rate, by 25 basis points to 8% to contain inflation expectations.

Industrial production rose 7% in April 2008 from a year earlier, rebounding strongly from the previous month's provisional 3% rise, data released by the government on 12 June 2008, showed. Manufacturing production rose 7.5% in April 2008 from a year earlier, compared with a provisional 2.9% growth in March 2008.

On 9 June 2008, Finance Minister P Chidambaram said the Indian economy is expected to grow 8.5% in the fiscal year ending March 2009. Chidambaram also said the government’s target for direct tax receipts for 2008/09 would be revised upwards from the current Rs 3.65 trillion.

Source : Capitalmarket.com

Market may be range bound

The market may remain range bound with negative bias tracking subdued trend in Asian stocks. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and China were down by between 0.02% to 1.28%.

US stocks rose on Thursday after a stronger-than-expected May 2008 retail sales report and a $46 billion takeover bid for Anheuser-Busch from an overseas rival helped the market recover from a string of deep losses. The Dow Jones Industrial Average gained 57.81 points or 0.48% at 12,141.58. The tech-laden Nasdaq Composite Index gained 10.34 points or 0.43% at 2,404.35

Oil was trading below $137 a barrel, near record highs of $139.12 hit last Friday, 6 June 2008.

Short covering by traders following improved industrial production data for April 2008 triggered a strong intra-day rebound on the bourses yesterday, 12 June 2008. The barometer index BSE Sensex gained 64.88 points or 0.43% to settle at 15,250.20, bouncing back from an intra-day 437.33-points fall.

The market’s concerns are that higher interest rates will raise borrowing costs and hit bottom line of corporates. Banks are likely to raise interest following a strong signal from the Reserve Bank of India (RBI) that banks' cost of funds is headed north when the central bank raised repo rate, a short term rate, by 25 basis points on Wednesday, 11 June 2008. The repo rate is the rate at which RBI lends money to banks under its liquidity adjustment facility.

The stock market’s another concern is that high interest rates may delay expansion plans of corporates which in turn may impact future earnings growth. A latest research report released by Lehman Brothers pointed out that the cost of borrowing is likely to increase further. According to Lehman inflation is unlikely to tread below 8% in 2008. Lehman expects another 25 basis points hike in repo rate in third quarter and a 100 basis points hike in banks’ cash reserve ratio (CRR) later this year.

The asset-liability committee of State Bank of India (SBI), India’s largest commercial, will be reviewing interest rates today following the latest RBI move. HDFC chairman Deepak Parekh said on Thursday, 12 June 2008, HDFC will take a decision on raising interest rates on home loans by end of this month. He said there was upward pressure on interest rates

A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 5321.50 crore in the first few days of this month, till 11 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 20690.90 crore, till 11 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.

India’s economic growth has slowed down as fall in consumer demand caused by rise in interest rates. Industrial output rose 8.1% in 2007/08 (April-March) compared with 11.6% growth in 2006/07.

According to a report on the Indian economy made at the beginning of this month by Morgan Stanley, weak consumption growth and slowing business investment will slow India’s gross domestic growth (GDP) growth to 6.7% in the quarter ending March 2009 from 8.8% growth in the quarter ended March 2008. It, however, states that, on a long-term basis, an interplay of three key macro factors viz. favourable demographics, continuation of economic reform process by the government, and globalization, justify a gradual speeding up in India’s pace of growth.

According to a recent monthly June 2008 strategy report by HSBC Global Research, a possibility of Left parties withdrawing support to the government at the centre over the fuel price hike issue, cannot be ruled out. In such an environment with prospects of mid-term polls, the stock market is likely to remain nervous, HSBC says. Parliamentary elections are due in India in May 2009. The Union government on Wednesday, 4 June 2008, raised retail petrol and diesel prices by about 10%, more than expected, to help curb losses at its state-owned refiners arising from surging global crude oil prices.

A near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.

The government will today unveil inflation data for the year through 31 May 2008. Inflation based on the whole price index had climbed to 8.24% in year through 24 May 2008, the highest reading in nearly four years.

Source : Capitalmarket.com

Asian markets trading lower

Asian markets were trading lower. China's Shanghai Composite slipped 0.23% or 6.86 points at 2,950.67.

Japan's Nikkei lost 0.16% or 22.31 points at 13,866.29.

Hong Kong's Hang Seng fell 0.67% or 154.13 points at 22,869.73.

Singapore's Straits Times was down 0.43% or 13.13 points at 3,007.02.

South Korea's Seoul Composite declined 0.42% or 7.31 points at 1,732.05.

However, Taiwan's Taiwan Weighted gained 0.34% or 27.60 points at 8,089.91.

Source : Moneycontrol.com

Sejal Architectural IPO oversubscribed 10 times

The IPO of Sejal Architectural Glass has received good response and has oversubscribed by 9.75 times. It has received total bids for 8.96 crore equity shares as against issue size of 91,94,155 shares.

Sejal Architectural Glass, a glass processing house in India, had opened for subscription on June 9, 2008 with an initial public offering (IPO) of 91,94,155 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The equity shares are proposed to be listed on National Stock Exchange of India and Bombay Stock Exchange.

The objects of the issue are to raise capital for part financing the funds required for setting up of a new manufacturing facility for the production of float glass and general corporate purposes.

The company's existing plant is located in the Union Territory of Dadra & Nagar Haveli, District, Silvassa. The company proposes to set up a new manufacturing facility for float glass with a capacity of 2,00,750 MT per annum in Bharuch district, Gujarat.

Saffron Capital Advisors Private Limited is the sole book running lead manager to this issue.

Source : Moneycontrol.com

Sentiments remain edgy despite market recovery

The stock market today managed to extend yesterday’s gains as improved April 2008 industrial production data, firm European markets and higher US futures markets triggered rebound on domestic bourses after an earlier steep intra-day fall. Consumer durables stocks rose.

US futures markets were in green indicating positive start of US markets later in the day. Dow Jones Industrial Average futures were up 46 points and Nasdaq 100 futures were up 7.50 points.

The 30-share BSE Sensex gained 64.88 points or 0.43% at 15,250.20. Sensex gained 85.53 points at day's high of 15,270.85 hit in late trade. The market had slumped earlier in the day hit by Reserve Bank of India (RBI)'s announcement of a repo rate rise, the first hike in repo rate since March 2007, after trading hours on Wednesday, 11 June 2008. Weak Asian markets further marred the sentiment. At the day’s low of 14,748.07, Sensex lost 437.32 points in early trade.

The broader based S&P CNX Nifty rose 15.75 points or 0.35% at 4,539.35.

Nifty June 2008 futures were at 4500.55, at a discount of 38.80 points as compared to spot closing of 4539.35.

The BSE clocked a turnover of Rs 6209 crore today as compared to a turnover of Rs 5,317.70 crore on 11 June 2008. NSE futures & options (F&O) segment turnover was Rs 52,333.46 crore, which was higher than Rs 45,775.86 crore on Wednesday, 11 June 2008.

Industrial production rose 7% in April 2008 from a year earlier, rebounding strongly from the previous month's provisional 3% rise, data released by the government today, 12 June 2008, afternoon showed. Manufacturing production rose 7.5% in April 2008 from a year earlier, compared with a provisional 2.9% growth in March 2008.

The Reserve Bank of India (RBI) on Wednesday, 11 June 2008, raised short-term lending rate viz. the repo rate, by 25 basis points to 8% to contain inflation expectations. Banks are likely to raise interest following a strong signal from RBI that banks' cost of funds is headed north. Higher interest rates will raise borrowing costs and hit bottom line of corporates.

The market breadth turned positive compared to weak breadth earlier in the day. 1,481 shares advanced as compared to 1,109 that declined on BSE. 84 remained unchanged. Among the 30 stocks from Sensex pack, 18 were trading in green.

The Indian stock market which had hit its lowest level in 2008 on Tuesday 10 June 2008, had recovered on Wednesday, 11 June 2008 with Sensex rising 296.07 points or 1.99% at 15,185.32 as investors resorted to bargain buying after recent steep fall in share prices, taking cue from firm Asian markets.

Back to today's trade, the BSE Mid-Cap index rose 0.53% to 6,223.50 and BSE Small-Cap index climbed 0.78% to 7,525.90. Both these indices outperformed Sensex.

BSE Consumer Durables index (up 1.73% to 3,913.40), BSE Oil & Gas index (up 1.45% to 9,974.94), BSE Capital Goods (up 0.74% at 11,989.71), BSE Metal index (up 0.7% to 15,508.64), outperformed Sensex.

BSE TecK index (up 0.42% to 3,387.15), The BSE Realty index (up 0.3% at 5,820.90), BSE PSU index (up 0.28% to 6,521.69), BSE Bankex (up 0.28% at 7,037.89), BSE Power index (up 0.13% to 2,656.46), BSE FMCG index (up 0.01% to 2,268.86), The BSE Auto (down 0.09% at 4,148.55), BSE HealthCare index (down 0.14% at 4,441.15), BSE IT index (down 0.27% to 4,345.82), underperformed Sensex.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.96% to Rs 2,281.75. The stock recovered from intraday low of Rs 2185. RIL Chairman Mukesh Ambani today said the company's annual general meeting that RIL will pursue greenfield investment in polyester.

Consumer durables stocks rose in late trade. Rajesh Exports (up 13.12% to Rs 79.30), Videocon Industries (up 2.66% to Rs 302.60), Titan Industries (up 0.81% to Rs 1,075) edged higher.

Power stocks edged higher. Reliance Power (up 2.06% to Rs 186.15), Reliance Infrastructure (up 2.4% to Rs 1,046.50), Tata Power Company (up 1.05% to Rs 1,316.50), Power Grid Corporation of India (up 1% to Rs 86.15) edged higher.

Interest rate sensitive auto stocks were mixed. Mahindra & Mahindra (up 0.24% to Rs 575.40), Tata Motors (up 0.35% to Rs 507.35), Maruti Suzuki India (up 0.37% to Rs 736.35) edged higher. India’s largest motorbike maker by sales Hero Honda Motor declined 0.29% to Rs 806.70.

Realty stocks were mixed. DLF (down 2.64% to Rs 497.70), Housing Development and Infrastructure (down 1.48% to Rs 568.30) edged lower. However Indiabulls Real Estate (up 3.69 % to Rs 394.95) and Unitch (up 2.6% to Rs 189.15) edged higher.

Banking stocks recovered after initial sharp fall caused by RBI's repo rate hike. India’s largest private sector bank by market capitalisation ICICI Bank rose 0.09% to Rs 742.30. The stock recovered from session's low of Rs 702.15. State Bank of India, India's biggest commercial bank, rose 2.31% to Rs 1,339.70. The stock came off session's low of Rs 1252.30.

Banks are set to raise interest rates following the repo rate hike by RBI. State Bank of India chairman O.P. Bhatt said on Thursday, the bank will review its interest rates on Friday, 13 June 2008.

India’s largest dedicated housing finance firm by operating income HDFC declined 0.69% to Rs 2,171.95. The stock recovered from session's low of Rs 2,001. HDFC chairman Deepak Parekh today said HDFC will take a decision on raising interest rates on home loans by end of this month. He said there was upward pressure on interest rates.

Tata Steel (up 2.35% to Rs 856.85), Wipro (up 2.11% to Rs 483.10), Jaiprakash Associates (up 1.67% to Rs 186.20), Bharti Airtel (up 1.61% to Rs 819.90), Grasim Industries (up 0.83% to Rs 2,210.35) edged higher from the Sensex pack.

Ranbaxy Laboratories (down 3.08% to Rs 543.50), Ambuja Cements (down 2.61% to Rs 85.90) Infosys (down 0.89% to Rs 1,877.55), Cipla (down 0.57% to Rs 217) edged lower from Sensex pack.

IFCI clocked the highest volume of 3.15 crore shares on BSE. Reliance Petroleum (2.12 crore shares), Reliance Natural Resources (1.84 crore shares), Spice Communications (1.31 crore shares) and Suzlon Energy (1.15 crore shares) were other volume toppers in that order.

Reliance Industries clocked the highest turnover of Rs 417.14 crore on BSE. Reliance Petroleum (Rs 372.83 crore), Suzlon Energy (Rs 292.39 crore) and DLF (Rs 218.02 crore) were other turnover toppers in that order.

European markets were in green. Key benchmark indices in France, Germany and UK were up by between 0.5% to 0.8 %.

US stocks sank on Wednesday, 11 June 2008, with all the three indices viz. the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite index - losing around 2%, after oil prices shot back near their record high, stoking fears about inflation and its toll on consumers. More signs of trouble in the financial sector further soured the mood on Wall Street. The Financial Times said on Wednesday that Lehman Brothers may look to raise more capital, hammering shares of the investment bank.

Asian stocks fell on Thursday, 12 June 2008, hit by the steep oil price rise. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were down by between 1.44% to 3.39%.

Oil futures jumped almost $7 to an intraday high above $138 a barrel on Wednesday, and settled at $136.38 a barrel on that day.

A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 5170 crore in the first few days of this month, till 10 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 20539.40 crore, till 10 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.

A near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.

Source : Capitalmarket.com

Weak global markets, RBI rate hike to weigh on domestic bourses

A hike in repo rate – a short term interest rates, by the Reserve Bank of India (RBI) after trading hours on Wednesday, 11 June 2008, and an overnight setback in US stocks are likely to take their toll on the bourses today. The market, however, had factored in a rise in interest rates with bank and realty stocks witnessing a sharp fall over the fast few days. Banks are likely to raise interest following a strong signal from RBI that interest rates in the economy are headed north. Higher interest rates will raise borrowing costs and hit bottom line of corporates.

US stocks sank on Wednesday, 11 June 2008, with all the three indices viz. the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite index - losing around 2%, after oil prices shot back near their record high, stoking fears about inflation and its toll on consumers. More signs of trouble in the financial sector further soured the mood on Wall Street. The Financial Times said on Wednesday that Lehman Brothers may look to raise more capital, hammering shares of the investment bank.

Oil futures jumped almost $7 to an intraday high above $138 a barrel on Wednesday, and settled at $136.38 a barrel on that day.

A surge in global commodity prices led by crude oil spooked stocks across the globe in the past few days. In India, foreign funds have pressed heavy sales. FIIs sold shares worth a net Rs 5170 crore in the first few days of this month, till 10 June 2008. They had dumped stocks worth a net Rs 5011.50 crore in May 2008. Their outflow in calendar 2008 reached Rs 20539.40 crore, till 10 June 2008. There has been heavy buying by domestic funds led by insurance firms in the past few days, but that has failed to stop the slide on the bourses.

A near term trigger for the market will be corporate advance tax payments for the first installment which falls due on 15 June 2008. The income tax law requires a company to 15% the estimated tax liability for the year as advance tax in the first installment. The advance tax payment by the corporate sector will give a cue on Q1 June 2008 results.

The market will also be keeping a watch on the industrial production numbers for April 2008, which the government will unveil today, 12 June 2008, which will give a cue on the extent of slowdown in the Indian economy caused by high interest rates.

Source : Capitalmarket.com