Wednesday, December 31, 2008

Gati may buy a Chinese cargo co; stk up 5%

Gati had touched an intraday high of Rs 41 and an intraday low of Rs 41. At 10:12 am, the share was quoting at Rs 41, up Rs 1.95, or 4.99%.

The company may buy a Chinese cargo co for USD 5 million, reports The Economic Times.

There were pending buy orders of 15,696 shares, with no sellers available. It wastrading with volumes of 1,826 shares.

Yesterday the share closed up 0.39% or Rs 0.15 at Rs 39.05.

Share Price Movement During The Last 12 Months
PeriodPriceLatest PriceGain/Loss (Rs.)% Gain/Loss










Currently -80.95% below the 52-week high of 215.20
Currently 52.13% above the 52-week low of 26.95

Monday, December 22, 2008

Cairn India finds new oil, gas ; shares gain 7%

Energy explorer Cairn India Ltd said on Monday it had made an oil and gas discovery near its existing field in the western Indian state of Rajasthan, sending its shares up 7 percent in a weak Mumbai market.

The company, a unit of Britain's Cairn Energy Plc said it was yet to determine the reserves but the well had a flow of 500 barrels of oil per day and 0.4 million standard cubic feet of gas a day during a testing phase.

"Future work on the Raageshwari East 1/1Z includes field studies to determine extent of the discovery as well as evaluate cost effective development options," Chief Executive Rahul Dhir said in a statement.

Cairn India, which aims to produce 175,000 barrels a day from existing fields in Rajasthan by 2010, said the new well was situated 1.5 kilometres east of its Mangala, Aishwarya, Raageshwari and Saraswati development area in the desert state.

Its largest field so far, Mangala, is set to start production by the second half of 2009.

Shares in Cairn India, which has a market value of $6.2 billion, were up 6.8 percent at 163.35 by 0817 GMT, while the main BSE index .BSESN was down nearly 1 percent.

Thursday, December 18, 2008

Inflation dives to nine-month low of 6.84%

Economists and analysts expect a further easing of key policy rates soon with the headline inflation rate for the week ended December 6 dropping to a nine-month low of 6.84 per cent, below the Reserve Bank of India’s target of 7 per cent for the 2008-09.

Data released by commerce and industry ministry today showed that the inflation rate for the week under consideration fell sharply from 8 per cent in the previous week, driven mainly by the cut in fuel prices. The rate, however, was higher than 3.84 per cent in the same week last year.

This is the sixth consecutive week that inflation has been in single digits. Headline inflation, however, remains higher than the central bank's 5 to 5.5 per cent "comfort level".

“The sharp decline in the inflation rate was primarily bought about by the reduction in prices of petrol and diesel during the week under consideration. Moreover, the restricted monetary policy also seems to be helping in this decline,” said Soumendra Dash, chief economist, CARE Ratings.

The inflation rate for the fuel group, which has a weight of 14.23 per cent in the index, declined to 0.57 per cent from 4.48 per cent in the previous week. The government had slashed prices of petrol by Rs 5 and diesel by Rs 2 on December 5, in the backdrop of falling crude oil prices, which have declined by more than 73 per cent from the record high of $ 147.27 a barrel on July 11.

The inflation rate for primary articles, which has a weight of 22 per cent in the index, increased 11.8 per cent in the reported week as against 11.66 per cent in the previous week. However, the inflation rate for food articles decreased marginally 10.18 per cent in the seven days up to December 6, 2008, as compared to 10.52 per cent in the previous week.

Inflation for manufactured goods, which constitutes about 64 per cent of the WPI basket, marginally declined to 7.31 per cent from 7.85 per cent in the previous week.

The inflation number for the week ended October, 11, 2008 has been revised upward by 27 basis points to 11.3 per cent. The provisional numbers are revised after a gap of two months.

Lower inflation nos boost markets; Sensex ends above 10,000 news

Better-than-expected decline in inflation numbers and expectations of further rate cuts from the Reserve Bank played a key role in today's trade. Huge buying in rate sensitive, infrastructure, technology, and oil boosted the benchmark indices higher. The Sensex successfully closed above the 10,000 mark after 24 sessions and similer was the case with the Nifty, which settled above 3050 level.

Inflation for the week ended December 6 came in at 6.84% as against 8% on week-on-week basis. This was better-than-expected, as CNBC-TV18 poll saw inflation at 7.46%. Wholesale price Index (WPI) for all commodities fell 1.1% (WoW) to 231.1 and WPI for fuel and power index down 3.7% (WoW). Such an unexpected fall indicates that there may be rate cut in near term.

Commenting on inflation numbers which have fallen sharply, Mridul Sagar, Chief Economist, Kotak Securities, said inflation may fall to 3% by March and expects inflation in range of 3-4% next year. Sagar said he expects further rate cuts with inflation coming down.

Mridul Sagar, Chief Economist, Kotak Securities, said inflation may fall to 3% by March and expects inflation in range of 3-4% next year. Sagar said he expects further rate cuts with inflation coming down.

Yes Bank sees 100 bps repo cut and 25-50 bps reverse repo cut in January.

The Sensex has hit an intraday high of 10,110.34, before closing the day at 10,076.43, up 361.14 points or 3.72% over previous close. The Nifty shut shop at 3060.75, with a gain of 106.40 points or 3.60%, after hitting a high of 3072.55.

The markets had started the day with choppy trade and turned completely back into green after announcement of inflation numbers. In the last half an hour of trade, the Sensex held strong above 10,000 mark due to bounce back in shares of ONGC and Reliance Industries, which beaten down quiet badly since morning due to decline in crude prices.

Nymex January crude declined 8% to 4-year low on Wednesday despite OPEC cut. It was trading around USD 40.5 to a barrel on the NYMEX. OPEC cut output by record 9% (2.46 mbpd) from 29.04 mbpd in September. Crude declined on skepticism that OPEC will adhere to new agreement.

The fall in crude is very much positive for oil marketing companies. HPCL jumped 8.71% and IOC gained 6.01%. BPCL rose 3.59%. Oil exploration companies also gained in late trade; Reliance Petroleum surged 6.88% and ONGC was up 2.16%. Reliance Industries closed up just by 0.07%. BSE Oil & Gas Index ended with a gain of 120.26 points or 1.89% at 6,484.60.

Rate sensitive and infrastructure stocks witnessed huge buying interest on the expectations of further rate cut due to fall in inflation numbers.

BSE Bankex was up 370.66 points or 7.06%, to settle at 5,620.04. ICICI Bank jumped 8.62% and SBI rose 7.35%. HDFC Bank gained 4.79%.

According to the Indian Banks' Association (IBA) Head TS Narayanasami said that banks are likely to cut deposit rates in January. The extent of the interest rate cut may be decided in 1-2 days, he said. Banks cannot pay abnormal interest rates on deposits, he added.

Enormous buying was seen in realty stocks. Index closed at 2,283.99, up 154.78 points or 7.27% over previous close. DLF and Unitech surged 10-10.9%.

Power stocks also charged up; Index shot up 5.81% or 101.36 points to 1,845. Suzlon Energy, GVK Power, Reliance Infrastructure, GMR Infra, Reliance Power and NTPC shot up 5-12.6%.

Capital Goods Index surged 304.78 points or 4.46% at 7,140.20. L&T jumped 3.40% and BHEL moved up 6.63%.

Technology stocks like HCL Tech went up 12.90%. TCS, Satyam and Infosys rose 3-6.8%. Wipro gained 2.26%. BSE IT Index gained 99.13 points or 4.41% at 2,345.06. Satyam surged 6.7%, as the company's board meet on December 29 will consider buyback.

FMCG stocks like ITC, Tata Tea, Dabur India, Marico and HUL were up 1.9-5.4%. Index was up by 61.61 points or 3.12% at 2,034.81.

Auto stocks namely Tata Motors, Maruti Suzuki, Hero Honda and Bharat Forge rose 1.7-7.4%. Index ended at 2,516.49, with a gain of 74.72 points or 3.06% over previous close.

Among the telecom stocks, Reliance Communication and Idea Cellular were up over 3%. Tata Communication, MTNL and Tata Teleservices were up 1-2%. Bharti Airtel ended marginally up.

Metal Index finished with a gain of 104.75 points or 1.97% at 5,428.19. NALCO went up 12.19%. JSL, SAIL, Tata Steel, Jindal Steel and Sterlite Inds jumped 1.8-6.5%.

Buying was also seen in pharma stocks. BSE Healthcare Index rose 24.15 points or 0.84% to 2,915.37. Matrix Labs, Dr Reddys Labs, Dishman Pharma, Biocon, Wockhardt, Cipla and Ranbaxy Labs went up 2-5%.

Cement stocks like ACC, Ambuja Cements, India Cements and Shree Cements moved up 3.5-11.7%.

Midcap and small cap stocks also bounced back. BSE Midcap Index was up 68.39 points or 2.18% at 3,204.56 and Small Cap Index gained 33.39 points or 0.91% at 3,711.95.

Among the midcap stocks, Time Techno, India Infoline, IRB Infra, Educomp Solutions and GVK Power shot up 12-17%.

In the small cap space, ETC Networks, Mcnally Bharat Engg, Shrenuj and Company, Aptech and Astra Microwave rose 10-15.6%.

Asian markets ended higher. Shanghai gained 1.97%. Straits Times and Taiwan closed up over 1%. Nikkei, Hang Seng and Kospi rose 0.24-0.64%. However, Jakarta fell 0.9%.

India rupee at near 1-½ mth high on rising stocks

The Indian rupee ended at its highest in nearly 1-½ months on Thursday, as a rally in local shares raised expectations of more capital inflows and dollar weakness supported sentiment.

The partially convertible rupee ended at 46.95/96 per dollar, off an intraday high of 46.88, but still about 1.5 percent stronger than Wednesday's close of 47.67/69.

Indian shares rose 3.7 percent on Thursday to their highest close in five weeks, after inflation dropped to a nine-month low and the government sought parliament's approval for additional spending to stimulate the economy.

"The way the stock market closed on a bullish note and overseas with the dollar showing a weakness ... sentiment is clearly in favour of the rupee," Paresh Nayar, chief forex dealer at Development Credit Bank, said.

The dollar touched a 2-½ month low against the euro on Thursday and hovered near its weakest versus the yen since 1995 as investors dumped the U.S. unit after the Federal Reserve's dramatic interest rate cut this week. [USD/]

Falling oil prices also calmed concerns of a widening trade deficit. Oil CLc1, India biggest import, hovered above $40 a barrel on Thursday, around its lowest price since July 2004.

India's new oil subsidy plan by mid-January

India plans to ease the subsidy burden on upstream firms such as Oil and Natural Gas Corp by formulating a new system to offset losses from selling cheap fuels, oil ministry sources said on Thursday.

When crude oil was above $100 a barrel, ONGC was forced to offer discounts of up to $70 a barrel to help state refiners sell transport fuels, keorsene and cooking gas at subsidized rates.

But crude oil's fall from a peak of over $147 a barrel in July, to below $40 on Wednesday limits the discount ONGC can give.

"By the middle of January, we will have a mechanism in place which would compensate our oil marketing firms," a senior oil ministry official said.

Upstream firms share one-third of the revenue losses of oil retailers by offering discounts on crude sales, while the government compensates for a larger part of the remaining losses by issuing special bonds, which the oil firms can sell.

Another official said the new system may limit the subsidy share of upstream firms to 300 billion rupees ($6.40 billion) for the current financial year ending March.

"Both upstream and downstream firms have limited capacities so they cannot be asked to share the losses in the same way," he added.

In the first half of this financial year, Indian state-refiners suffered a combined losses of 144.3 billion rupees, and their combined borrowings until November stood at 1.15 trillion rupees.

The projected annual revenue losses of the oil firms on fuel sales have declined to about 1.10 trillion rupees, from over 2.4 trillion rupees estimated in June, when global crude oil prices were over $100 a barrel.

"When crude prices were $147, we were not getting the full price," said a senior official at Oil and Natural Gas Corp.

In July-September quarter, when the ONGC's gross billing was $119 a barrel but it got only $46 a barrel.

"We could contribute toward subsidy when the prices were $140 but when the prices are today at $40 we can not contribute any subsidy ... in quarter three (Oct-Dec), we expect subsidy burden should not be more than 20-30 billion rupees," he said.

Aviation ministry seeks Rs2,500-crore package to bail out Air India

The civil aviation ministry is reported to have sought a Rs2,500 crore bailout package for the National Aviation Company of India Ltd (NACIL), which runs the ailing national carrier Air India.

The ministry has also sought cabinet nod for infusing additional equity and further working capital loan in NACIL, which had earlier indicated that it may require up to Rs4,081 crore, including debt and equity, to get out of the rut.

The company had, earlier this year, sought Rs1,300 crore in equity and Rs1,000 crore as debt, but later raised it to Rs1,231 crore in equity and Rs2,750 crore in debt last month.

Since then its losses have more than doubled. Air India lost nearly Rs4,000 crore during 2007-08 and, with the high fuel prices, the airline's accumulated losses are expected to double in the current fiscal.

Air traffic growth in the country fell 22 per cent in November to 3.04 million, with most air carriers operating flights at around 60 per cent seat capacity against the break-even occupancy of over 70 per cent.

With a fleet of 150 aircraft, Air India is the country's largest airline by market share and is bound to share almost half the country's total airline losses.

The airline had to pull out service from some of the commercially unviable sectors and rationalise operations in some other sectors to reduce cost.

While it recently cleared dues of about Rs1,000 crore to oil marketing companies, it still owes a whopping Rs739.5 crore to the Airports Authority of India.

The union cabinet, meanwhile, is expected to take up a recommendation by the civil aviation ministry to delay the implementation of the new ground handling policy by six months.

It is as yet unclear what is the increased amount the ministry has now sought for Air India.

Chrysler shuts down all production

Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.

All 30 of the carmaker's plants will close after the last shift on Friday, and employees will not be asked to return to work before Jan. 19.

Chrysler blamed the "continued lack of consumer credit for the American car buyer" for the slow-down in sales that forced the move.

The company ordinarily shuts down operations between Dec. 24 and Jan. 5. This closure would add roughly two weeks to that shutdown.

Chrysler is the third of the Big Three automakers to suspend operations for January. Last week, General Motors announced it was idling 30% of its North American manufacturing capacity during the first quarter of 2009 in response to deteriorating market conditions. That move will take 250,000 vehicles out of production. On Wednesday, a Ford spokeswoman confirmed for CNN that the automaker is adding a week to its normal two-week seasonal shutdown at a number of its plants.

Chrysler would not say how many fewer vehicles would be produced because of this shutdown. A total of 46,000 employees will be affected. They will be paid during the time off through a combination of state unemployment benefits and Chrysler contributions, but they will not receive the full amount of their working pay, a Chrysler spokesman said.

"Chrysler dealers confirmed to the company at a recent meeting at its headquarters, that they have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing," the carmaker said in an announcement. "The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation."

Auto sales have been hit hard by tight credit and the struggling economy. Overall auto sales in the United States were down 37% last month compared with November 2007. Chrysler's situation was especially bad. Its sales dropped 47%.

Chrysler's financing arm, Chrysler Financial, has tightened lending terms for buyers and earlier this year, it announced it would no longer offer leases.
The Bush administration has said it is working on a possible plan to throw the companies a lifeline using money from the $700 billion bailout approved by Congress in October, the Troubled Asset Relief Program or TARP.

"It's clear that the automakers are in a very fragile financial condition and they're taking steps to deal with it," White House Press Secretary Dana Perino said Wednesday. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."

"The speed and severity of the U.S. auto market's decline has been unprecedented in recent weeks as consumers reel from the collapse of the financial markets and the resulting lack of credit for vehicle financing," GM said in a Dec. 12 announcement, citing a 41% drop in November sales.

Both GMAC and Chrysler Financial are trying to receive federal assistance under the TARP program. GMAC is affiliated with General Motors, which owns 49% of the finance company. The other 51% of GMAC is owned by a consortium of investors led by Cerberus, which owns Chrysler and Chrysler Financial.

Sunday, December 14, 2008

OPEC urged to cut output by 2 mn barrels

A Kuwaiti expert has called on the Organisation of the Petroleum Exporting Countries (OPEC) to cut production by two million barrels a day to stabilise falling prices, a media report said on Saturday.

Musa Maarfi, member of the country's top advisory body on oil, told the Al-Kabas newspaper that the 1.5 million barrel cut in daily output, which came into force on November 1, had been "insufficient".

The OPEC is set to hold an extraordinary meeting in Algeria on December 17 to decide on further reductions in production.

Russian President Dmitry Medvedev had said on Thursday that Moscow could also go for lower production and suggested the country could join OPEC, given the importance of oil prices to the economy and government finances.

Maarafi emphasized the necessity of the "coordination of action with such influential non-OPEC countries as Russia".

He said that a price of $40 a barrel, which crude has neared in recent weeks, would restrict investment in extraction and said $75 per barrel was a fair price.

However, a cut of two million barrels per day might not be enough for Russia. A senior executive at Russia's largest independent producer had said that a 2.5 billion-barrel cut was likely.

"If 2.5 million barrels a day, or 125 million tonnes a year, is taken off the market, the (crude) price could rise to $60-$80," LUKoil vice president Leonid Fedun said.

Russia and OPEC together account for more than half the global oil production.

OPEC: to join or not to join?

Russia is attending next week's summit of the oil cartel OPEC in Algeria along with three other non-member countries - Azerbaijan, Oman and Syria. Faced with a budget deficit at home, President Dmitry Medvedev says he is considering joining OPEC and cutting oil exports to boost oil price.

Inside Story - Financial crisis and Asia

The Financial Crisis Explained

Why Wont The Bail Out Work? MUST SEE!

Voters are rightly furious at the proposal to spend $700,000,000,000 that the government doesn't have to bail out Wall Street bankers who created the current economic crisis in the first place. But why then aren't we concerned about the trillions of dollars the Federal Reserve is pumping into the system? Or the trillions missing from the Pentagon? Or the quadrillion dollar derivatives bubble.

700 Billion Dollar Bailout Or Bust?

Forecasters say recession to be worst since Depression

The current recession may turn out to be the longest and most painful downturn since the Great Depression, according to economists in the latest Wall Street Journal economic-forecasting survey.


‘For the household sector, this will be the worst event we’ve had in the post-World War II period,’ Bruce Kasman of J.P. Morgan Chase & Co told WSJ.
WSJ said the 54 economists who participate in the survey, on average, forecast quarterly contractions in gross domestic product for the current quarter and the first two periods of 2009. The Commerce Department’s preliminary estimate showed a 0.5% decline in quarterly GDP for the third quarter. If the economists’ predictions bear out, it would mark the first time GDP has contracted in four consecutive quarters during the postwar period.
On average, economists expect the downturn to conclude in June 2009. Last week, the National Bureau of Economic Research dated the start of recession in December 2007. That puts the downturn at 18 months, the longest period of decline since the Great Depression. The recessions of 1973-75 and 1981-82 both lasted 16 months.
‘The downturn would be deeper still, in our view, were it not for an ultra-aggressive combination of monetary and fiscal stimulus that will soon move into high gear,’ Morgan Stanley economists Richard Berner and David Greenlaw said in a research note. ‘Authorities are pulling out all the stops: Quantitative easing by the Fed and the largest-ever fiscal stimulus package likely will promote stability in the economy late in 2009 and a moderate recovery in 2010.’ about the results of the latest survey showing economists believe the current recession will last into June 2009, making it the longest since the
Great Depression.
Many economists cited a major expected fiscal-stimulus package as the key to pulling the U.S. out of recession. Details about the government intervention remain unclear. ‘The precise date is likely to depend on timing of the stimulus package,’ said Lou Crandall of Wrightson ICAP.
Even with specifics of the stimulus uncertain, the economists expressed confidence in U.S. President-elect Barack Obama’s economic team. Nearly half of respondents said the incoming policy makers are significantly better than their counterparts in the Bush administration, and a quarter said the new team is slightly better. Just 10% favored the departing officials.
The lack of confidence was clear in the economists’ grades for Treasury Secretary Henry Paulson, whose marks fell to a 60, the lowest level during his tenure. More than half of respondents gave the Treasury secretary a grade equivalent to a D or F. Federal Reserve Chairman Ben Bernanke’s average grade rose slightly to a 72, but 26% gave him the equivalent of a D or F. More than half of economists put his grade in the A or B range.
The length of a downturn can be measured against earlier recessions, but its intensity is harder to quantify and compare. ‘History never really repeats itself,’ said Stuart Hoffman of PNC Financial Services Group. ‘It’s difficult to say that this is the worst recession in the postwar period.’
Adding in the economists’ forecasts, a tally of the change in GDP from the beginning to the end of the recession puts the decline at slightly more than 1% overall. Periods of growth in early 2008 offset some of the expected weakness this year and next. That makes the current recession deeper than those in the 1990s and early this century, but it doesn’t reach lows seen in the 1970s and 1980s.
‘Recessions that tended to be the deepest were sparked by events that caught the business sector off guard,’ said Mr. Kasman, who notes that corporate profits aren’t likely to be hit as hard as past recessions. ‘This event had a prelude. Therefore, the intensity of the event is being smoothed out over a longer period of time.’
This recession has centered not on businesses but consumers, who are being hit by dwindling home prices and job losses. The economists on average said the unemployment rate will peak at 8.4% in response to this recession. While that actual rate was surpassed in both the 1970s and 1980s, it would mark a four-percentage-point increase from the low of 4.4% in March 2007. Only the 1973-75 recession, with a 4.1-percentage-point increase, had a larger jump in the postwar period.
The Wall Street Journal surveys a group of 55 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared.
Adding to consumers’ pain is that the end of the recession isn’t likely to mark the end of job losses. In past recessions, labor-market contraction continued for months after a downturn’s official end. So, while economists, on average, expect the unemployment rate to top out at 8.4%, they forecast an 8.1% rate for December 2009 as job cuts continue into 2010.
‘The job market is ugly and is going to stay that way,’ said Allen Sinai at Decision Economics. ‘The economy is going through the heart of reductions in the work force now.’

Thursday, December 11, 2008

Rupee posts biggest one-day gain in a month

The rupee posted its biggest single-day gain in more than a month on Thursday as large unwinding of long dollar
positions in the
non-deliverable forwards prompted banks to sell dollars in the spot market.

The partially convertible rupee closed at 48.33/34 per dollar, off a high of 48.25, which was its strongest since November 11, and above its previous close of 49.03/04.

At its close, the rupee gained 1.4%, which was its best since a 2% rise on November 4.

"It was more due to some unwinding of the NDF positions," said Paresh Nayar, chief dealer at Development Credit Bank.

The market was also underpinned by foreign inflows to the stock market, he said.

One-month offshore non-deliverable forward contracts were quoting at 48.37/52, just a shade weaker than the onshore spot rate in stark contrast to the largely lower rates seen in recent days, indicating a change in sentiment for the unit in the near term.

Foreigners have bought $482.9 million worth of shares in the last four sessions, but are net sellers of $13.3 billion so far in 2008. They had bought a record $17.4 billion last year.

Indian shares ended a seesaw session down 0.1% on Thursday, as market talk Reliance Industries was close to settling a gas dispute offered some cheer to gloomy investors worried by a deepening global downturn.

Another dealer said the rupee could head towards 47.90, if it broke past 48.25 significantly.

But Nayar was not so sure. "It's too early to say that the sentiment for the rupee has changed, it may just be a very temporary phase," he said.

RNRL leads gainers in `A` group

Reliance Natural Resources (RNRL) rose 25.72% to Rs 54.75 following reports the government has withdrawn an affidavit filed in the Bombay High Court in the ongoing case between Reliance Industries (RIL) and RNRL over gas supply wherein it had asserted that RIL cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula. It was the top gainer in BSE`s A group.

In its affidavit filed last month, the government had also said that RIL could not sell KG basin gas at a price less than $4.20 per million British Thermal Units. While the government approved price of gas for KG basin is $4.20 per million British Thermal Units (mBTU), RNRL is seeking the gas at $2.34 mBTU.

Great Eastern Shipping Company rose 15.71% to Rs 192.60 on recovery in the Baltic Dry Index. It was the second biggest gainer in A group. The Baltic Dry Index gauges changes in the prices of shipping commodities.

Jet Airways rose 12.58% to Rs 153.05 on buzz the company is looking to sell 2 plots of 4 acres at Bandra Kurla complex to raise at least Rs 500 crore. It was the third biggest gainer in A group.

Shipping firm Shipping Corporation of India jumped 12.13% to Rs 80.90. It was the fourth biggest gainer in A group.

Indiabulls Real Estate surged 10.77% to Rs 128.60 on reports real estate developers may lower prices by 30% by mid-2009 to push sales of new homes. It was the fifth biggest gainer in A group.

MRPL`s mega project to go onstream by October 2011

Mangalore Refinery & Petrochemicals is augmenting its refining capacity from 9.6 mmtpa to 15 mmtpa with cutting edge technologies incorporated in the process to get the maximum value from the hydrocarbon molecule. Preparatory work has been on for sometime now and the mandatory approvals have since been secured, process licensors appointed, and work awarded for execution of PFCCU & SRU. Engineers India is the project management consultant.

Explains U K Besu, managing director MRPL, while phase III was to have achieved mechanical completion by June 2010 and the original estimate was Rs 7943 crore, we have been beleaguered by an overheated market hampering appointment of process licensors, delay in land acquisition, and the steep Increase in steel & cement prices in the last 12 to 18 months. He put the new completion date at October 2011 and the project estimate stands revised to Rs 12412 crore as approved by MRPL board as well as by ONGC board under Navratna empowerment.

Despite 50% cost Overrun, and a 15 month time overrun, MRPL has benefited from the delay because as the country was exposed to unprecedented volatility in crude prices and the consequent market dynamics, MRPL quickly seized the situation and re-engineered the process design to make the new Unit capable of handling high tan an acidic crudes more than envisaged before, added some more secondary processing units to upgrade residues and the entire HSD (diesel) quality.The company made this announcement after the trading hours on 11 December 2008.

Market stages a late comeback as RIL bounces back

A rebound in index heavyweight Reliance Industries (RIL) helped the key benchmark indices bounce back in late trade in what was a choppy trading session. The recovery materialized in the last one hour of trade after the market had weakened in mid-afternoon trade. The BSE 30-share Sensex rose 20.31 points, recovering 233.24 points from the day`s low.

The market breadth, indicating the overall health of the market, was strong, as data showing further fall in inflation raised hopes of further cuts in interest rates by the central bank. Also aiding the late rebound was Commerce Minister Kamal Nath `s statement the government will consider another financial assistance package for the export sector next week. The package will target employment-oriented sectors, he said.

After initial gains triggered by upmove in bank shares, the market soon slipped into the red on concerns over the weakening global economy and uncertainty about the fate of the beleaguered US automakers. It cut losses later as stocks recovered in Japan. After moving into positive zone from negative zone in early afternoon trade, the market slipped into the red again later. The market extended losses in afternoon trade.

The market weakened further to register day`s low in mid-afternoon trade as European markets dropped in early trade and on lower US index futures. The market staged a comeback in late trade helped by recovery in index heavyweight Reliance Industries (RIL) in the last one hour of trade. The BSE Sensex swung 304.04 points between the day`s high and low.

Investors cashed in on gains after a recent strong rebound in prices. A fiscal stimulus package by the government and cut in interest rates by the Reserve Bank of India (RBI) helped the market stage a rebound this month. The BSE Sensex advanced 562.18 points or 6.18% to 9654.90 on 10 December 2008 from 9092.72 on 28 November 2008. Foreign institutional investors (FIIs) have turned buyers this month. FII inflow in December 2008 totaled Rs 727 crore (till 8 December 2008).

Falling inflation will provide further room for the RBI to cut rates further. Inflation based on the wholesale price index rose 8% in the year through 29 November 2008, lower than previous week`s annual rise of 8.4%, data released by the government today, 11 December 2008, showed. Lower rates may help revive the domestic economy, which has been witnessing a slowdown.

The Reserve Bank of India (RBI) D Subbarao on Wednesday, 10 December 2008, indicated that RBI`s forecast of a between 7.5% to 8% economic growth for the current fiscal year may be revised downwards. He also said that the fiscal year 2009-10 will be tougher.

Subbarao today said the RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as and when needed. He said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.

India`s infrastructure sector output rose 3.4% in October 2008 from a year earlier, below a downwardly revised 4.8% annual growth in September 2008, data released by the government today, 11 December 2008, showed. The infrastructure sector accounts for 26.68% of India`s industrial output.

European stocks dropped on renewed concerns over the health of the global economy and on uncertainties surrounding Washington`s auto rescue plan. Key benchmark indices in UK, Germany and France were down by between 0.56% and 1.21%.

The House of Representatives on Wednesday approved a bailout legislation that would force US automakers to restructure or fail. However, prospects for passage of the legislation in the US Senate appears grim, reports suggest. Trading in US futures indicated the Dow could fall 23 points at the opening bell.

Recent economic data continues to highlight the extent of that global slowdown. China`s exports shrank unexpectedly in November 2008, while industrial output in several European economies sank, according to data on Wednesday, 10 December 2008.

The Asian Development Bank today, 11 December 2008, said growth in developing nations in the Asian region is seen slowing to an eight-year low of 5.8% in 2009, joining the chorus of increasingly pessimistic calls made from brokerages to international bodies.

The US recession will tighten its grip next year as unemployment rises and weak home and stock prices imperil consumers, finance firms and debt-laden businesses, a UCLA Anderson Forecast report released on Thursday, 11 December 2008 said. Additionally, a sustained retreat in prices for goods and services is a very real possibility that would further drag on the economy, according to the forecasting unit`s report.

Corporate news has added to worries about global growth. Major companies worldwide such as Rio Tinto are announcing steep job cuts as they seek ways to cope with a crisis of a magnitude not seen in decades.

Stocks moved into the green from red in Japan on hopes aggressive rate cuts and government actions around the world to revive economic growth could limit the depth of a global recession. The Nikkei 225 average was up 0.70%. South Korea`s KOSPI gained 0.75% after the central bank cut its key interest rate by an unprecedented 100 basis points to a record low 3%, double the reduction that analysts had forecast. Hong Kong`s Hang Seng index, too, reversed early losses and was up 0.23%. However, other Asian markets from China, Taiwan, and Singapore, were down by between 0.07% and 2.28%.

Governments worldwide are looking to spend their way out of sharply slowing economic growth via various stimulus measures, while expectations are rising they will also step in to help sectors and companies in trouble. US President-elect Barack Obama announced large infrastructure investment plans last weekend.

The Swiss National Bank today slashed interest rates by 50 basis points, in a bid to save Switzerland`s economy from a deeper recession.

The BSE 30-share Sensex rose 20.31 points, or 0.21%, to 9,675.21, as per provisional closing. At the day`s high of 9,746.01, the Sensex gained 91.11 points in early trade. The Sensex lost 212.93 points at the day`s low of 9,441.97 in mid-afternoon trade.

The S&P CNX Nifty gained 3.75 points, or 0.13%, to 2,932 as per provisional closing

A fiscaltimulus package by the government and cut in interest rates by the Reserve Bank of India (RBI) helped the market stage a rebound this month. The BSE Sensex advanced 562.18 points or 6.18% to 9654.90 on 10 December 2008 from 9092.72 on 28 November 2008. Foreign institutional investors (FIIs) have turned buyers this month. FII inflow in December 2008 totaled Rs 727 crore (till 8 December 2008)

The market breadth, indicating the overall health of the market, was strong on BSE with 1576 shares advancing as compared with 914 that declined. 92 shares remained unchanged.

The total turnover on the BSE amounted to Rs 4626 crore as compared to Rs 3362 crore by 14:30 IST

Among the 30-member Sensex pack, 20 declined while the rest advanced. Hindalco (down 4.01% to Rs 51.50), Grasim (down 2.05% to Rs 1076), and Hindustan Unilever (down 1.88% to Rs 240.50), edged lower from the Sensex pack.

Bharti Airtel (up 1.48% to Rs 746.65), and State Bank of India (up 0.91% to Rs 1200), edged higher from the Sensex pack.

India`s largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) advanced 5.04% to Rs 1289, rebounding sharply from low of Rs 1192.05 hit in mid-afternoon trade, following reports the government has withdrawn an affidavit filed in the Bombay High Court wherein it had asserted that RIL cannot sell its Krishna-Godavari basin gas to anyone without its approval to the pricing formula. In its affidavit filed last month, the government had also said that RIL could not sell KG basin gas at a price less than $4.20 per million British Thermal Units.

The withdrawal came following insistence by Reliance Natural Resources (RNRL) counsel Ram Jethmalani to cross-examine the government on the issue. RNRL galloped 31.92% to Rs 57.45 on massive volumes of 3.32 crore shares

India`s top dam builder by sales Jaiprakash Associates galloped 10.96% to Rs 83 on high volumes of 1.63 crore shares on momentum buying after its contract in derivative segment saw a build up of 10 lakh shares in open interest with the total reaching to 1.37 crore shares on Wednesday, 10 December 2008. It was the top gainer from the Sensex pack.

India`s top copper producer by sales Sterlite Industries (India) jumped 9.52% to Rs 298 boosted by a 12.2% surge in ADR on Wednesday, 10 December 2008.

India`s second largest cellular services provider by sales Reliance Communications jumped 5.52% to Rs 240.85 on reports that strategic investors, including telecom groups from the US and Europe, are in talks with the company to acquire around 20-26% stake

India`s top private sector bank by net profit ICICI Bank gained 2.29% to Rs 409.10 as its American depository receipt (ADR) jumped 8.68%.

Outsourcing focused IT pivotals slumped on fears a weak global economy would cut the amount firms spent on technology. India`s largest IT exporter by sales Tata Consultancy Services lost 6.55% to Rs 506 and was the top loser from the Sensex pack

India`s third largest IT exporter by sales Satyam Computer Services plunged 5.58% to Rs 223.10 despite its ADR gaining 0.49%

India`s second largest IT exporter by sales Infosys slipped 3.32% to Rs 1135 even as its ADR rose 0.56% on Wednesday, 10 December 2008. India`s fourth largest IT exporter by sales Wipro slipped 4.76% to Rs 249.20 even as its ADR gained 1.71%.

A firm rupee also weighed on IT shares. The rupee was trading firm at 48.50/52 per dollar, compared with Wednesday`s close of 49.03/04. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.

Select shares retraced sharply from the day`s high. DLF (down 2.91% to Rs 255, after hitting a day`s high of Rs 270), Tata Steel (down 0.51% to Rs 216.30, off day`s high of Rs 225.90), and ONGC (down 1.91% to Rs 664, easing from early high of Rs 684), slipped.

Friday, December 5, 2008

Govt cuts petrol, diesel prices

The government has decided to slash prices of petrol, diesel by Rs 5 and Rs 2 a litre with effect from midnight Friday, the first in over two years.

The price cut will come as a relief to fuel consumers, rein in inflationary pressures and boost demand in the economy.

Fuel consumers who have seen increases in their fuel bills over the past two years, and an increase in their home budgets because of rising prices of fruits, vegetables, food articles and travel.

The price cut will also help rein in inflationary pressure as most of the transportation trucks and railways use diesel as a fuel.

A cut in diesel prices is expected to soften prices of fruits, vegetables, food grain and industrial products.

Inflation in food products has been steadily increasing and was at a nineteen month high of 10.43% according to the latest government data.

Tuesday, December 2, 2008

Rupee strengthens as stocks pare losses

The rupee strengthened after hitting a record low on Tuesday as the domestic stock market pared some losses on bargain buying and as positive U.S. stock futures eased selling pressure.

* At 3:48 p.m. the partially convertible rupee was at 50.17/19 per dollar, off a record low of 50.65, and stronger than Monday's close of 50.30/32.

* Dealers said the central bank had likely sold dollars around 50.60 levels through state-run banks to halt a further slide in the rupee.

* A recovery in the local share market helped calm some nerves about accelerated foreign fund outflows, dealers said. The BSE Sensex closed down 1.14 percent after having shed more than 4.2 percent early.

* Foreign funds have so far sold a net $13.7 billion worth of Indian shares in 2008, after buying a record $17.4 billion last year.

Vedanta to buy back shares worth $250 mn

To enhance value for its shareholders, NRI billionaire Anil Agarwal-led Vedanta Resources Plc on Tuesday said it will buy back shares worth USD 250 million, representing a 10 per cent stake in the company, from the open market.

"Given the recent share price decline and current market conditions, the board of Vedanta believes that such a buyback programme would be value-enhancing for its shareholders," the company said in a filing to the London Stock Exchange here.

Vedanta would use only a small part of its substantial cash balances of over USD 5 billion and the group would remain well-capitalised to fund its organic growth programme, it said.

The global metal and mining major also said that its board would continue to seek opportunities to consolidate minorities within the group, to create more wealth and value for its investors.

"In addition, the board will continue to seek opportunities to consolidate minorities (minority shareholders) within the group, in line with its stated strategy," it added.

Vedanta's major shareholder, Volcan Investments Ltd, would not participate in the buyback, the London-based conglomerate added.

'HSBC to cut 500 jobs, Credit Suisse to lay off 650'

Amid the ongoing economic crisis, the banking sector continues to be hit by mass layoffs with financial service major Credit Suisse and HSBC announcing additional 1,150 job cuts, a media report says.

According to the Financial Times, Credit Suisse will be trimming its workforce by 10 per cent leading to job loss for 650 employees, while HSBC said it was slashing 500 jobs.

Credit Suisse has been impacted by the loan writedowns, which has led to two quarters of losses for Switzerland's second-largest bank this year, the report said.

A majority of the jobs at Credit Suisse would be cut in the investment banking and the support functions segment.

The report quoted Credit Suisse as saying that it was reacting to market conditions and projected staffing levels required to meet client needs.

The UK's largest bank, HSBC, said it was planning to reduce its UK workforce by more than five per cent at its headquarters in Canary Wharf and other locations, to reduce duplication of work, FT said.

HSBC, which employs about 8,000 people at its headquarters, said that it would shed 500 employees of its head office in areas including finance and legal services, the report added.

However, the union has seen no business rationale for these job cuts and believes that HSBC is using the economic downturn an excuse to reduce employment.

Earlier, HSBC said that it would cut 500 jobs in Asia as part of a shake-up of its global banking and markets division.

Besides, Citigroup had also announced it was shedding 52,000 staff worldwide, while Royal Bank of Scotland plans to cut about 3,000 jobs in its investment banking division.

Oil falls below $48 to 3-1/2-year low

Oil fell to a 3-1/2-year low below $48 a barrel on Tuesday as signs grew that the global economy was in worse shape than thought and after OPEC opted to delay talks on further output cuts.

U.S. stocks closed sharply lower on Monday and Japan's Nikkei average followed suit, sliding more than 6 percent with exporters hit by a stronger yen after news the U.S. economy has been in a recession for a year heightened risk aversion. European stocks also fell.

U.S. light crude for January delivery slipped $1.92 or 3.9 percent to a low of $47.36 a barrel, its lowest since May 2005 and almost $100 off the record peak of $147.27 reached in mid-July. That followed a more than 9 percent dive on Monday.

By 0923 GMT, U.S. crude futures had recovered slightly, trading down $1.25 at $48.03.

London Brent crude dropped $1.30 to $46.67.

Producer group OPEC over the weekend deferred a decision on whether to deepen production curbs until later this month as Saudi Arabia and other Gulf members called for greater compliance, a delay that sent oil prices tumbling on Monday.

"OPEC was the key reason for the sell-off at first and then the poor performance on equity markets helped it follow through," said Rob Laughlin, oil analyst at MF Global in London.

More bearish news could be in store on Wednesday, with U.S. crude oil inventories likely having risen by 1.8 million barrels last week, a third consecutive build, as imports continued to increase, a preliminary Reuters poll of analysts showed.

The Organization of the Petroleum Exporting Countries is ready to cut production by a significant amount when it meets later this month in Algeria in order to whittle down high stocks, the group's secretary-general said on Monday.

But Saudi Arabian Oil Minister Ali al-Naimi told Saudi-owned al-Hayat newspaper OPEC would not need to make a further output cut in Algeria if producers comply with previous curbs and fuel stocks decline.

Adding to the uncertainty, Abu Dhabi National Oil Co (ADNOC) told major Asian customers that it will increase term crude oil supplies next month, although traders said it seemed unlikely the UAE was reneging on its OPEC obligations.

With demand destruction in focus, concerns about the pace of non-OPEC oil supply growth were set aside.

Oil production in Russia, which vies with Saudi Arabia as the world's top producer, fell in November by 0.4 percent versus October, Energy Ministry data showed on Tuesday.

Saturday, November 29, 2008

Indian economy grew a better-than-expected 7.6%

The Indian economy grew a better-than-expected 7.6% during the second quarter of the fiscal, but analysts and economists were far from

happy. They expect the growth rate to slow over the next two quarters, and stressed on the need for further rate cuts to prevent a sharp slowdown.

Data released by the Central Statistical Organisation on Friday showed that all the eight economic sectors that contribute to the gross domes-tic product (GDP) recorded a lower growth year-on-year. The slow-down in the services sector — which accounts for nearly 60% of the output — was milder than expected, though.

Select industries such as trade, hotels, transport and communication saw better-than-expected growth, expanding 10.8% during the three months to September 30, almost on a par with year-ago levels. In-vestment during the period also remained robust, shoring up the GDP figure.

The economy expanded by 7.9% during the first quarter, taking the first-half GDP growth to 7.8 %. Economists had been expecting second quarter GDP to grow 6.9%, according to an ET poll of 12 analysts.

“The growth rate for the first half is healthy as the global economy is going through a slowdown. Growth in agriculture and allied services will pick up in the coming quarters,” finance minister P Chidambaram told reporters.

The PM’s economic advisory council expects GDP growth to be 7.7% this year, although other agencies are expecting it be be-low 7%, well short of the 9%-plus average growth of the past three years. Suresh Tendulkar, chairman of the PM’s economic advisory council, told ET that “agriculture and the manufacturing sector are expected to fare better in the coming quarters”.

He, however, said that the terror attacks in Mumbai, in which top five-star hotels were targeted and many foreign nationals were killed, would sour the overall investment sentiment.

Growth in manufacturing during the second quarter almost halved year-on-year to 5%, and was down 60 basis points compared with the preceding quarter. Growth in agriculture slipped to a two-year low of 2.7%, raising concerns about its potential impact on food inflation, which continues to rise despite falling headline inflation.

However, economists expect agriculture growth to rebound to 4% levels on the back of a spurt in output in the third quarter, benefiting from the good monsoon and expected interest rate cuts.

With the headline inflation no longer a major concern, some econo-mists said they expected the Reserve Bank of India (RBI) to cut its short-term repo rates by 50 to 100 basis points and signal a lower in-terest rate regime to boost the economy.

The inflation rate based on the wholesale price index fell to 8.84% during the week to November 15, and is well below the peak of nearly 13% witnessed in early August.

Finance minister P Chidambaram on Monday said GDP growth would be slower at 7-8% this year due to the ripple effects of the global fi-nancial crisis, but bounce back in the second quarter of the next fi-nancial year. The RBI is expecting a growth of 7.5% to 8% this year, while the Planning Commission expects GDP to grow at 7%.

Saturday, November 22, 2008

Top Performing mutual funds

For Complete Rankings, Click here
Scheme1 Year Return (%)
Benchmark Split Capital Fund - Balanced - Class-B22.32
ICICI Pru Blended - Plan B (G)8.40
ICICI Pru Blended - Plan B (D)8.40
Bond Funds
Canara Robeco Income (Bonus)22.39
Canara Robeco Income (Income)21.83
Canara Robeco Income (Growth)21.62
Equity - Diversified
ICICI Pru Equity & Deriv -Income Optimis -Inst(D)14.98
ICICI Pru Equity & Deriv -Income Optimis (D)13.83
UTI-SPrEAD Fund (G)9.59
Gilt Funds
ICICI Pru Gilt Fund - Invest - PF Option26.38
Canara Robeco Gilt (PGS)-(I)22.40
Canara Robeco Gilt (PGS)-(G)22.32
UTI-Gold Exchange Traded Fund (G)19.85
Gold BeES19.78
Kotak GOLD ETF19.74
Liquid Funds
Reliance Liquidity Fund (Div-M)22.24
IDFC Liquid Fund (Div-M)14.67
ICICI Pru Liquid (Div-Q)10.97
UTI-Retirement Benefit Pension Plan-18.21
UTI-Unit Linked Insurance Plan-18.24
Templeton India Pension Plan - (G)-25.67
Speciality (Sectoral Funds)
Reliance Banking Fund - Inst (G)0.00
Reliance Banking Fund - Inst (D)0.00
Reliance Banking Fund - Inst (Bonus)0.00
Tax Planning
SBI Tax Advantage Fund - Series I (G)0.00
SBI Tax Advantage Fund - Series I (D)0.00
JM Tax Gain Fund (G)0.00

Sops for textile exporters shortly

Union Commerce Secretary G. K. Pillai on Friday said the textiles sector alone could lose five-lakh jobs in the next five months due to steep decline in exports. Stating that global economic slowdown had impacted the Indian export sector, Mr. Pillai said the Centre was working on a relief package for exporters.

Taking to journalists on the sidelines of a function here, Mr. Pillai said a survey had begun to assess how many jobs would be lost in the industry due to current crisis. A sample survey would be released by next week, containing data of about 800 companies.

Mr. Pillai also informed that a high-power committee, set up to examine the impact of global financial crisis on the Indian economy, will submit its recommendations by the end of next week, which would be followed by a relief package. A high-power committee, headed by Prime Minister Manmohan Singh with Finance Minister, Commerce and Industry Minister and Planning Commission Deputy Chairman its members, has been set up to handle the impact of global crisis on India and recommend various measures to bailout the industry, especially exporters that had been hit by the slowdown in Western markets.

Mr. Pillai said the impact of the global meltdown had been seen on the Indian economy in late September and October, adding that it would feel the impact of this financial crisis for at least next six months.

Exports in October this year stood at $12.8 billion against $14.6 billion in the corresponding period a year ago, a decline of 12.32 per cent.

By the end of December, the Government will review its export target of $200 billion for 2008-09, he added.

Friday, November 21, 2008


Why You Should Trade Trending Stocks

To consistently make money in the stock market, you only want trade stock trends! But what are the characteristics that make up a trend? I thought you would never ask.

Remember when we talked about stock market stages?

Well Stage 2 is an uptrend that is characterized by a series of higher highs (HH) and higher lows (HL).

Stage 4 is a downtrend that is characterized by a series of lower highs (LH) and lower lows (LL).

This creates a series of peaks and troughs on the chart that you can trade successfully.

Below is the the beautiful anatomy of stock trends:

stock trends diagram

Stocks Trends Vs. Trading Ranges

It is estimated that stocks only trend about 30% of the time. The rest of the time they move sideways in trading ranges. This is what a trading range looks like:

trading range diagram

Yeah, trading ranges can get that sloppy! There is absolutely no reason to trade stocks that are chopping around like that when you can trade stocks that are in the trending phases. Trying to trade stocks in trading ranges (stage 1 and stage 3) is a great way to chew up your trading capital. Stick with trends! Here are some examples:

chart of trend

And now this one...

chart of trading range

Which one would you rather trade? Case closed! I know all of this may seem pretty basic but I can’t tell you how many times I've been in a stock trading forum and Joe Trader says, “I bought XYZ stock yesterday at $32.57”.

So I go and look at the chart and the stock is in a steep downtrend! Or someone says that they shorted a stock at $52.03. So of course I look at the chart and the stock is in a parabolic uptrend!