Sensex, Nifty open in red

BSE Sensex was trading at 19,363, down 87 points over the previous close. It opened at the day's high of 19,382 and went onto touch a day's low of 19,311.

The benchmark Indian equity indices have opened in the red in early morning trade, with the BSE Sensex and the NSE Nifty down 87 points and 26 points respectively.

At 09:20 am (IST), the BSE Sensex was trading at 19,363, down 87 points over the previous close. It opened at the day's high of 19,382 and went onto touch a day's low of 19,311.

NSE Nifty was quoting 5, 815, down 28 points over the previous close. It had earlier touched a day's high of 5,818 and a day's low of 5,804. It opened at 5,805.

The BSE Small Cap index and the BSE Mid cap index were down 0.2% and 0.5% respectively.
Realty, Auto and Banking stocks are among the leading losers in terms of sectors. While, Metal, Power, PSU, Oil & Gas, Consumer Durables and select IT shares are struggling for direction.

Tata Power, Sterlite, Sun Pharma, Bharti Airtel, Sesa Goa, Tata Steel, BHEL, Grasim, Cairn India, Reliance Infra were among the notable leaders in the Sensex and the Nifty.

Siemens, IDFC, HDFC Bank, DLF, JP Associate, RCOM, BPCL, Hero Honda, Axis Bank, Bajaj Auto, SAIL, ONGC and TCS were among the notable losers in the Sensex and the Nifty.

The market breadth is negative on the BSE with 773 shares falling and 564 shares rising.

India Infoline

Realty stocks extend recent gains

A bout of volatility as the key benchmark indices dropped once again after recovering from the day's low in morning trade, as oil prices hovering near 2-1/2-year sparked inflation and interest rates worries. The BSE 30-share Sensex was down 27.65 points or 0.14%, off close to 35 points from the day's high and up close to 40 points from the day's low. The market breadth was strong. Index heavyweight Reliance Industries (RIL) extended initial losses. Maruti Suzuki India fell after recalling some diesel cars. Print media shares rose across the board on renewed buying. Realty stocks extended recent gains on value buying.

The market edged lower in early trade as crude hovered near 2-1/2-year highs. A bout of volatility as the key benchmark indices dropped once again after recovering from the day's low in morning trade.

India imports majority of its crude oil requirements and a surge in crude oil prices over the past few months has sparked inflation and interest rates worries. The Reserve Bank of India (RBI) is seen raising key short term policy rates by 25 basis points at its annual 2011-2012 monetary policy review on 3 May 2011.

High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were down 50 cents a barrel or 0.46% at $108.33 a barrel. The price had climbed 49 cents to $108.83 a barrel in New York on Wednesday, 6 April 2011, the highest settlement since 22 September 2008.

Good monsoon this year could help ease food inflation and boost rural income. Recent reports indicate that India will receive good rains during the July-September monsoon season this year. The India Meteorological Department (IMD) is expected to come out with its long term forecast of the summer monsoon rainfall season by the end of this month.

At 10:20 IST, the BSE 30-share Sensex was down 27.65 points or 0.14% to 19,586.98. The index gained 8.68 points at the day's high of 19,620.88 in early trade. The Sensex fell 69.21 points at the day's low of 19,542.99 in early trade.

The S&P CNX Nifty was down 12.60 points or 0.21% to 5,879.15.

The market breadth, indicating the health of the market, was strong. On BSE, 1469 shares advanced while 670 shares declined. A total of 78 shares remained unchanged.

Among the 30-member Sensex pack, 16 gained while only five of them declined. Bharti Airtel, TCS and HDFC Bank fell by between 0.96% to 1.74%. Hindalco Industries, HDFC and Tata Power Company rose by between 1.07% to 1.41%.

Index heavyweight Reliance Industries (RIL) fell 0.51%. RIL, last week, bagged two blocks in the ninth round of oil and gas block auctions held by the government.

Most auto stocks fell on profit taking after recent strong gains triggered by strong vehicle sales in the month of March 2011 and hike/likely hike in vehicle prices. India's top small care maker by sales Maruti Suzuki declined 1.01%, extending Wednesday's 1.4% fall. The company announced after market hours on Wednesday that it would recall 13,157 diesel engine cars. The company said it would inspect the 'connecting rod bolt' for units of its Swift and Ritz model diesel cars with engines manufactured between 13 November 2010 and 4 December 2010.

Maruti Suzuki increased the prices of its products by 0.2% to 2.4% from 4 April 2011, depending on the models to offset rising costs of key inputs viz. steel, aluminum, copper and natural rubber.

India's second largest bike maker by sales Bajaj Auto fell 0.05%. The company's total vehicle sales increased 12% to 3.07 lakh units in March 2011 over March 2010. The company announced its March 2011 sales figures on Monday, 4 April 2011.

India's largest truck maker by sales Tata Motors declined 1.08%. The company had hiked prices of some car models by Rs. 7,000 to Rs. 36,000 from 1 April 2011.

India's top tractor and utility vehicles maker by sales Mahindra & Mahindra shed 0.42%. The company had said on 1 April 2011 it will raise prices of its products within a week to offset higher commodity prices.

India's largest bike maker by sales Hero Honda Motors rose 0.25%, with the stock gaining for the thirteenth straight day. Hero Honda's total sales rose 24.4% to 5.15 lakh units in March 2011 over March 2010. The monthly sales in March 2011 were record monthly sales.

Realty stocks extended recent gains on continued value buying. Ackruti City, DLF, Indiabulls Rela Estate, HDIL and Unitech rose by between 0.43% to 2.43%.

Mahindra Satyam rose 2% after the Supreme Court directed the Central Board of Direct Taxes (CBDT) to maintain status quo over its demand of Rs. 617 crore in income tax till Friday, 8 April 2011. It also asked CBDT to work out Satyam's actual liability.

Print media shares rose across the board on renewed buying. Jagran Prakashan, Sandesh, DB Corp, HT Media and rose by between 1.69% to 5.73%.

Indian stocks had witnessed a sharp rally recently on the back of heavy inflow from foreign funds. As per provisional figures FIIs bought shares worth Rs. 528.47 crore on Wednesday, 6 April 2011. FIIs bought shares worth a net Rs. 1562.70 crore during two trading sessions on Monday, 4 April 2011 and Tuesday, 5 April 2011, the latest data from Securities & Exchange Boardof India (Sebi) showed. FII inflow in April 2011 totaledRs. 5650 crore (till 5 April 2011). FIIs had bought equities worth Rs. 6897.80 crore in March 2011. FII inflow in calendar year 2011 totaled Rs. 3149.10 crore (till 5 April 2011).

The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011. Investors will scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materialsprices and interest rates are pressurizing profit margins of India Inc.

On the macro front, the government will unveil data on some wholesale price indices for the year through 26 March 2011 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST.

Standard & Poor's Ratings Services on Wednesday affirmed the 'BBB-' long-term and 'A-3' short-term unsolicited sovereign credit ratings on India. The outlook on the long-term rating is stable, it said. The ratings on India reflect the country's good economic growth prospects and its fairly strong external position. Positive investment trends further underpin the ratings, with foreign direct investment and portfolio investments covering a large share of the current account deficit. Nevertheless, the country's weak fiscal profile and structural problems temper its strengths. Structural problems not only constrain efficiency but also preclude a large share of the population from benefiting from the country's rising prosperity, it added.

A survey showed on Tuesday that growth in India's service sector slowed in March from February's blistering seven-month high as new business growth moderated slightly, while price pressures, particularly wages, continued to rise. The seasonally adjusted HSBC Markit Business Activity index, based on a survey of over 450 companies, slipped to 58.8 in March 2011 from 60.2 in February 2011, but remained above the 50 mark that denotes expansion for the 23rd consecutivemonth.

On the political front, the first phase of assembly polls took place in Assam on Monday, 4 April 2011 in 62 of the 126 assembly constituencies. The second and concluding phase of elections will be held on 11 April 2011 in the remaining 64 constituencies. Assam elections will be followed by elections in Tamil Nadu, Puducherry, West Bengal and Kerala in twomonths between April and May. While Assam will have two-phased poll, Tamil Nadu, Kerala and Puducherry in one phase and West Bengal in six phases ending on 10 May 2011. The vote count is scheduled for 13 May 2011 for elections held in all the five states.

Asian stocks were mixed on Thursday after Portugal became the latest European country to plead for a bailout. The key benchmark indices in China, Indonesia and Taiwan rose by between 0.09% to 0.2%. The key benchmark indices in Hong Kong Singapore and South Korea fell by between 0.04% to 0.5%.

Portugal's caretaker government gave in to market pressures on Wednesday and joined Greece and Ireland in seeking an emergency bailout. The decision came after the government was forced to pay much higher rates to sell more debt.

Japanese stocks rose 0.16% off day's high after the Bank of Japan further eased its monetary policy, while leaving policy rates unchanged at the end of its two-day meeting. The Bank of Japan said Thursday that its policy board unanimously voted to keep its overnight call rate range from zero to 0.1%, and it also established a special lending facility for financial institutions in areas hit by the 11 March 2021 earthquake and tsunami.

US markets inched forward in relatively light volume on Wednesday, with investors adding selectively and avoiding large bets ahead of earnings.

Trading in US index futures indicated that the Dow could fall 12 points at the opening bell on Thursday, 7 April 2011.

The European Central Bank is widely expected to raise its key refinancing rate by a quarter of a percentage point to 1.25% at a policy meeting today, 7 April 2011, in what would be the first rate increase since the middle of 2008.

India Infoline

Sensex climbs modestly at start...Nifty stays above 5900

BSE Sensex was trading at 19,781, up 94 points over the previous close.

The Indian market has commenced the new trading session with a positive bias, but trading is likely to be muted amid mixed global cues. The Large-Cap shares may remain subdued while the non-index counters could continue to hog the limelight. Market breadth is positive.

Investors seem to be brushing aside concerns over rising crude oil prices and its impact on inflation and monetary policy. China yesterday hiked key lending and deposit rates by 25 bps to check inflation. Also, central banks in the eurozone may announce plans to increase borrowing costs this week. The US Federal Reserve is also debating when to exit from the current stimulus.

At 09: 28 (IST), the BSE Sensex was trading at 19,781, up 94 points over the previous close.
NSE Nifty was trading at 5,934, up 24 points over the previous close. It had earlier touched a day's high of 5,935 and a day's low of 5,907. It opened at 5,908.

The BSE Small Cap index and the BSE Mid Cap index were trading flat.

Sesa Goa, BPCL, Grasim, Sterlite, ONGC, IDFC, Hindalco, Maruti, M&M and HUL were among the notable leaders in the Sensex and the Nifty.

Ranbaxy, Sun Pharma, Kotak Mahindra Bank, ITC, Amuja Cement, Infosys, PNB and HDFC Bank were among the notable losers in the Sensex and the Nifty.

The market breadth is positive with 1,971 shares rising and 959 shares falling.

In global action, stocks in Asia are mixed, with Japan in the red. The Chinese market has shrugged off the latest monetary tightening move by its central bank. Markets in the US and Europe finished flat amid anxiety about the future direction of monetary policy.

Outside equities, gold prices have touched new all-time highs amid persistent safe haven buying as investors fret over the MENA turmoil, eurozone debt worries and high crude oil prices. Oil prices were hovering around 30-month peak while the dollar gained.

www.indiainfoline.com

Rabobank gets licence for banking operations

Mumbai: Netherlands-based Rabobank Nederland announced on Friday that it had received permission from the Reserve Bank of India (RBI) to start full-fledged local banking operations, as it seeks to take advantage of growth prospects in the world’s second fastest expanding major economy.

“This will help Rabobank to substantially expand its current range of services in the Indian market,” the Dutch lender said. “Rabobank’s application for this licence is part of the bank’s international strategy to expand its activities in major growth markets with a strong food and agriculture base.”

The licence comes nine months after it sold an 11% stake in private sector Yes Bank Ltd. It still has a 4.82% holding in the Indian lender, according to the Bombay Stock Exchange.

Under Indian banking regulations, a foreign bank holding more than 5% equity in an Indian lender can’t apply to open branches in the country.

Rabobank was a promoter in Yes Bank, holding as much as 20% when the private bank got a licence in 2004. This stake was reduced to 15.82% as Yes Bank sold shares to raise capital.

In India, the Rabobank Group also runs Rabo India Finance Ltd, a non-banking financial company that lends to food and agri-businesses and renewable energy companies, besides advising on mergers and acquisitions.

A Rabo India Finance spokesperson said the bank received the RBI approval on Thursday.

“The licence gives us an opportunity to start banking operations, but it is too early to say on what we will do with Rabo India,” she said.

Globally, Rabobank is focused on the food and agriculture business with origins in the local loan cooperatives that were founded in the Netherlands nearly 110 years ago, according to its website.

“India’s food and agriculture sector is currently estimated to be €185 billion (Rs11.7 trillion) and it is estimated to reach a size of €400 billion by 2025,” Rabobank said, adding that with a likely gross domestic product (GDP) growth of 7-9% annually, India could become the third largest economy by 2030.

The Indian licence will allow Rabobank to accept deposits and provide working capital loans to companies, besides dealing in foreign exchange, domestic fixed-income products and trade finance.

With the credit to GDP ratio at just about 60%, India presents an opportunity for new entrants such as Rabo, said Rajeev Mehta, research analyst with India Infoline Ltd.

Credit to GDP ratio is bank loan or credit as a percentage of GDP. Lower credit to GDP ratio means there is a huge scope for banks to lend more.

“Developed countries have a credit to GDP of more than 100%, so India presents a huge opportunity,” he said. “But with only one branch, Rabo will start with wholesale and corporate banking.”

www.livemint.com

Silver hits new record high...Gold continues to shine

Silver's bigger cousin, gold was not too far behind, advancing on the back local buying before festivals and the upcoming wedding season.

Precious metal prices in India continue to surge ahead, with silver prices touching a new record high in the bullion markets on Thursday due to a combination of safe haven buying and industrial demand.

Silver's bigger cousin, gold was not too far behind, advancing on the back local buying before festivals and the upcoming wedding season.

The latest spurt in the yellow and white metals in India can be partly attributed to international prices, which have firmed up amid lingering worries over the political upheavals in the MENA region and the eurozone sovereign debt problems.

In the domestic market, silver ready (.999 fineness) shot up by Rs. 490 per kg to close at Rs. 56,900 on Thursday while standard gold (99.5 purity) gained Rs. 80 per 10 grams to end at Rs. 20,775.

Pure gold (99.9 purity) closed at Rs. 20,875 per 10 grams compared to Rs. 20,795 on Wednesday.

Meanwhile, gold futures in New York rose today, extending gains after posting the longest streak of quarterly gains in more than three decades.

Gold futures for June delivery advanced US$15, or 1.1%, to close at US$1,439.90 an ounce at 1:53 p.m. on the Comex in New York, a record settlement.

In the January to March quarter, the yellow metal is up 1.3%, marking the 10th straight gain, the longest rally since at least 1975. On March 24, the commodity reached US$1,448.60, the highest intraday price ever.

Silver futures for May delivery rose 37.7 cents, or 1%, to US$37.888 an ounce. This quarter, the price gained 22%, marking the ninth straight gain, the longest rally since at least 1975.

On March 24, the silver contract reached US$38.18, the highest since February 1980. In the past 12 months, the white metal has more than doubled.

Platinum futures for July delivery gained US$9.10, or 0.5%, to US$1,783.20 an ounce. This quarter, the price rose 0.3% after climbing 16% in the second half of 2010.

India Infoline

Sensex, Nifty strike 9-week highs on revival of FII inflow

The key benchmark indices surged extending rally into the seven days on revival in foreign equity inflows and on firm Asian stocks. The barometer index BSE Sensex and the 50-unit S&P CNX Nifty struck 9-week highs. The market breadth was strong. Shares of PTC India Financial Services were trading at about 10% discount to its initial public offer price on debut.

As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs.1291.54 crore on Tuesday, 29 March 2011. FII inflow totaled Rs. 4483.95 crore in six trading sessions from 22 March 2011 to 29 March 2011 as per data from the stock exchanges.

Cooling of oil prices from recent 2-1/2-year high has helped ease inflation worries, aiding rally in Indian stocks. Oil declined as signs of rising US crude supplies stoked speculation that demand may falter in the world's biggest consumer of the commodity. US crude futures were down 43 cents a barrel or 0.41% to $104.36 a barrel. Oil rose in New York on Tuesday, 29 March 2011, as troops loyal to Muammar Qaddafi dug in to block rebels advancing on his hometown of Sirte. Prices have climbed 23 percent since anti-government protests began on 15 February 2011 in Libya, cutting output in Africa's third-largest producer by two-thirds.

India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently had sparked inflation and interest rates worries.

At 09:20 IST, the BSE 30-share Sensex was up 126.29 points or 0.66% to 19,247.09. The Sensex gained 152.80 points at the day's high of 19,273.60 in early trade, its highest level since 25 January 2011. The index rose 57.97 points at the day's low of 19,178.77 in early trade.

The S&P CNX Nifty was up 38.20 points or 0.67% to 5,774.55. The Nifty a high of 5,779.95, its highest level since 25 January 2011.

The market breadth, indicating the health of the market, was strong. On BSE, 950 shares advanced while 252 shares declined. A total of 36 shares remained unchanged.

The total turnover on BSE amounted to Rs. 153 crore by 09:25 IST.

All the 30 members from the Sensex pack logged gains. DLF (up 1.44%), TCS (up 1.22%), and Hero Honda Motors (up 1.14%), edged higher from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 0.49% to Rs. 1027.70 on reports the firm was awarded two blocks in the ninth round of oil and gas block auctions closed on Monday, 28 March 2011.

India's largest oil exploration firm ONGC rose 1.31% on reports a consortia led by ONGC won 10 blocks in the ninth round of oil and gas block auctions closed on Monday.

India's largest power utility firm by capacity NTPC rose 0.72%. After market hours on Tuesday, 29 March 2011, NTPC said that the unit number 3 of 500 megawatt of Simhadri Super Thermal Power Project has been successfully synchronised with grid on 29 March 2011 on coal firing.

Shares of PTC India Financial Services were trading at Rs. 25.25, a 9.82% discount to the initial public offer price of Rs. 28 on their debut.

Volatility may remain high on the bourses in the near term ahead of the expiry of derivative contracts for the near-month March 2011 series on Thursday, 31 March 2011. The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

Asian stocks rose on Wednesday as Japanese companies resumed production following the 11 March 2011 earthquake and on speculation economic recovery in the US will boost earnings. The key benchmark indices in Hong Kong, Taiwan, South Korea Singapore, Japan and Indonesia were up by between 0.64% to 1.37%. China's Shanghai Composite slipped 0.45%.

US markets closed higher on Tuesday on gains in telecom and energy companies. The Dow Jones Industrial Average finished with a gain of 81.13 points, or 0.67%, to 12279.01, while the Standard & Poor's 500-stock index gained 9.25 points, or 0.71%, to finish at 1319.44 and the Nasdaq Composite gained 26.21 points, or 0.96%, to 2756.89.

Trading in US index futures indicated that the Dow could rise 10 points at the opening bell on Wednesday, 30 March 2011.

www.indiainfoline.com

Sensex, Nifty hit two-month highs as FIIs step up buying

The key benchmark indices surged to two month highs as investors extended their buying spree for sixth straight session on easing inflation worries following a fall in crude oil prices. Data showing stepping up of buying by foreign funds recently also underpinned sentiment. The BSE 30-share Sensex was up 129.29 points or 0.69% to 19,072.43. The market breadth was strong.

As per provisional figures, foreign institutional investors (FIIs) bought shares worth Rs.890.02 crore on Monday, 28 March 2011. FII inflow totaled Rs. 3192.41 crore in five trading sessions from 22 March 2011 to 28 March 2011 as per data from the stock exchanges.

Oil extended recent losses after Libyan rebels advanced against Muammar Qaddafi's troops, raising speculation the conflict may be resolved soon.US crude futures were down 56 cents a barrel or 0.54% to $103.42 a barrel. India imports majority of its crude oil requirements and a surge in crude oil prices to 2-1/2-year highs recently has sparked inflation and interest rates worries.

At 09:28 IST, the BSE 30-share Sensex was up 129.29 points or 0.69% to 19,072.43. The Sensex gained 132.56 points at the day's high of 19,075.70 in early trade, its highest level since 27 January 2011. The index rose 1.68 points at the day's low of 18,944.82 in early trade.

The S&P CNX Nifty was up 24.45 points or 0.43% to 5,711.70. The Nifty a high of 5,715.75, its highest level since 27 January 2011.

The market breadth, indicating the health of the market, was strong. On BSE, 818 shares advanced while 452 shares declined. A total of 48 shares remained unchanged.

The total turnover on BSE amounted to Rs. 186 crore by 09:25 IST.

Among the 30-member Sensex pack, 19 gained while the rest declined. Reliance Communications (up 2.89%), Hero Honda Motors (up 2.01%), and HDFC (up 1.02%), edged higher from the Sensex pack.

India's largest listed cellular services provider by sales Bharti Airtel surged 3.09% to Rs.358.50 and was the top gainer from the Sensex pack. The stock extended four-day rally after a report showed the company has acquired up to 6-lakh 3G subscribers since the launch of the next generation telephony service in end-January 2011.

Oil & gas stocks were in action after the ninth round of oil and gas block auctions closed on Monday. India's largest oil exploration firm ONGC rose 1.54% on reports a consortia led by ONGC won 10 blocks in the latest round of bidding.

Index heavyweight Reliance Industries (RIL) rose 0.09% to Rs. 1024.30 on reports the firm was awarded two blocks in the latest round of bidding for oil & gas blocks in India.

RIL on Sunday, 27 March 2011, agreed to establish a joint venture (JV) with D.E. Shaw Group to build a leading financial services business in India. The JV will incorporate the D. E. Shaw group's investment and technology expertise with RIL's operational knowledge and extensive presence across India to offer a comprehensive array of financial services to the Indian market place, the two companies said in a joint press release.

India's largest realty firm by sales DLF lost 0.99% to Rs. 244.60 and was the top loser from the Sensex pack.

ACC fell 1.46% after the stock turned ex-dividend today, 29 March 2011, for a final dividend of Rs. 13 per share and one time special dividend Rs. 7.50 per share.

Volatility may remain high on the bourses in the near term ahead of the expiry of derivative contracts for the near-month March 2011 series on Thursday, 31 March 2011. Year-end reshuffling of positions by traders may add to volatility.

The near term major trigger for the market is Q4 March 2011 results which will start trickling in from about mid-April 2011.

Asian stocks were mixed on Tuesday, 29 March 2011 amid concerns arising from muted earnings in Japan as the nation struggled to contain a meltdown at a nuclear plant. The key benchmark indices in Singapore, Japan, Indonesia, and Hong Kong fell by between 0.01% to 1.28%. The key benchmark indices in China, South Korea and Taiwan were up 0.12% and 0.23%.

US stocks edged lower on Monday, 28 March 2011, after a late tumble undercut advances from earlier in the day, and as investors cautiously retreated ahead of key data reports later this week. The Dow Jones Industrial Average closed down 22.71 points, or 0.2%, at 12197.88. The Nasdaq Composite fell 12.38, or 0.5%, to 2730.68 and the Standard & Poor's 500-stock index shed 3.61, or 0.3%, to 1310.19.

In economic news, the National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February 2011, increased 2.1% to 90.8. The index had declined 2.8% in January 2011.

Trading in US index futures indicated that the Dow could rise 7 points at the opening bell on Tuesday, 29 March 2011.

Billionaire investor and international investment icon Warren Buffett who was in his maiden visit to India last week said that he hopes to spend some money in India. His firm Berkshire Hathaway is looking to park funds in large investment destinations and India fits the bill perfectly, he said. India, according to him, is not an emerging market but a very big country with a large number of significant businesses. He said that Berkshire Hathaway would look at possible acquisitions in India as and when there were opportunities.

Indian business tycoons Ratan Tata and Anil Ambani will appear before a parliamentary committee that is probing a multi-billion-dollar telecoms licencing scandal. The parliament's Public Accounts Committee (PAC) is investigating alleged corruption in the sale of 2G telecoms licences in 2007-08, which a state auditor said cost the government up to $39 billion in lost revenue, and led to the sacking of a former telecoms minister.

indiainfoline.com

Zee Ltd –Buy- India Infoline

After consolidating for almost 6 months, Zee Ltd on the daily line chart has signaled a breakout from the ‘symmetrical triangle’ with spurt in volumes. The stock has managed to form a solid base above Rs146 which is 200 DMA, for launching the next leg of upmove.

On the Oscillator front, the MACD is still trading above the reference line which clearly suggest, the intermediate trend in the counter remains up. We advise buying stock above Rs150 with stoploss of Rs146 for Target of Rs158.

Thanks to http://www.stockmarkettipz.info

RIL stock skids 66% in the downturn

CHENNAI: From August '07 to January '08 when stocks rallied from strength to strength, Reliance Industries was the catalyst for the the 7,000-point sensex rally. But, ever since the fall started since January 10, it is again Reliance, according to data, may be the chief reason for bringing the benchmark down in the quicker and sharper downturn.
The world may have changed for Indian stocks and Sensex may have come down substantially but the the most influential stock in the 30-share bellwether index -Reliance still remains the match-maker. While the stock price has corrected by Rs 2,000 a share, Sensex came down by 12,500 points.

Extrapolating this, it is fair to say that for every one rupee shed by Reliance stock, Sensex has fallen by close to 6 points, according to analysts. When sensex went up by 49% in just 7 months (August to January) Reliance, which carried a weightage of 15.3% in early January, witnessed its stock price outperform the benchmark index and raised by 73%.

While the DLF stock went up by over 90% in the same period, the real estate company carried a meagre sensex weightage of 2%.

The impact of Reliance's rise is significant on Sensex as blue-chip firms SBI, ITC, ADAG-controlled Reliance Comm and ONGC cumulatively held a weightage of close to Reliance"s 15% in January. "The Reliance stock is pivotal to sensex's fortunes. There has hardly been any day, when Reliance has fallen and has not pulled down sensex alongwith it. Nobody remains unaffected when the big boy falls," said a large broker at Bombay Stock Exchange.

During the downturn, the Reliance stock has fallen by 66%, again outperforming Sensex which has shed 59% in the same period.

Although Sensex constituents such as RCom, Larsen & Toubro and DLF have fallen by 75-80% in the same period, which is sharper than Reliance, the three stocks have a cumulative weightage of just under 10% (which is less than Reliance's 12% influence), data shows.

One half of all Sensex companies taken together i.e around 15 stocks have just the same influence that a single scrip has: Reliance. DLF may have corrected by over 80% but Reliance's freefloat market cap is 14 times more than it. "Sensex is calculated under free-float market capitalisation method.

This means that the influence of closely-held companies such as DLF on the index is preventing even if their stock price fall is much sharper," the research head of a foreign brokerage explained.

GAIL to expand petrochem business

State-run GAIL will focus on expanding its petrochemicals business and will raise the capacity of its plant in Pata, in the Auraiya district of Uttar Pradesh, Chairman and Managing Director, U.D. Choubey said.


"We have decided to expand the Pata plant capacity to 500,000 tonne per annum by installing a sixth furnace at the gas cracker unit with an estimated investment of around Rs 1 billion," Choubey said in an interview.

After the completion of its 100,000 tonne per year new high-density polyethylene plant late last year, the polymer production capacity of the Pata plant is currently at 410,000 tonne.

The cracker plant's ethylene output is likely to go up to 440,000 tonne in another six months utilising 10 per cent more than the designed capacity due to the installation of the fifth furnace, Choubey said.

Choubey said the US-based process licensor, Stone & Webster has suggested that installation of a sixth furnace was necessary for debottlenecking the plant capacity to 500,000 tonne.

GAIL also plans to increase its share in the lucrative petrochemical business, which contributed nearly 32 per cent to its bottomline in the financial year ended March, Choubey said. During 2007-2008, GAIL's polymer production rose 9 per cent to 386,000 tonne as against 354,000 tonne in the previous year.

Polymer sales increased 13 per cent to 391,000 tonne from 347,000 tonne year ago. GAIL also plans to set up two mega petrochemical plants, one each in India and overseas.

Choubey said the company has zeroed in on five options for the overseas plant, Qatar, Iran, Algeria, Nigeria and Russia.

Choubey had earlier said the company along with Reliance Industries is pitching for a mega petrochemical plant in Qatar, at an estimated investment of around $1.2 billion.

In India, he said the company is planning a 1-million tonne petrochemical unit at Visakhapatnam through a five-way joint venture. The other joint venture partners in the project are Hindustan Petroleum, Oil India, Mittal Energy and French oil major Total.

He said GAIL was also seeking equity participation in the proposed $7.5 billion Iran-Pakistan-India gas pipeline project, as it will give the company exposure in trans-national pipeline projects.

A special purpose vehicle is likely to be set up for building the gas pipeline from the Iran-Pakistan border to the Pakistan-India border. Iran has already started construction of the pipeline within its territory.

The 2,100 km pipeline tri-nation will originate in Iran's port city of Assaluyeh and pass through that country (1,340 km) and Pakistan before reaching the Indian border.

GAIL's equity participation in the pipeline will bring in transparency in the transportation tariff of the gas and also give the company experience of engagement in trans-national projects, Choubey said.

GAIL is looking to participate in other international pipeline projects like the $13 billion Trans-Saharan gas pipeline which would supply gas from Africa to the European market.

Suzuki to launch new ‘global car’ in India

Japanese auto maker Suzuki Motor Corp (SMC) will launch a new ‘global car’ in India and locate its biggest production units in the country, company chairman Osamu Suzuki said in New Delhi on Tuesday.

The new car, referred to as a ‘global car’ by the company, would be made at Maruti Suzuki India Ltd’s (MSIL) plant near the capital. Suzuki owns 54.2 per cent stake in MSIL.

The car would be targeted primarily at the European market and is expected to be launched in the small car segment, officials said.

“In order to cope with the more intensifying competition, Maruti will make further investments in the field of not only manufacturing but also R&D (research and development) and sales,” Suzuki said.

Osamu Suzuki is currently on a three-day visit to India. He is expected to highlight the increasing significance of India, which is gradually emerging as one of the company’s most important markets after Japan.

“Both our plants (Gurgaon and Manesar in Haryana) are totally geared up to produce one million units a year by 2010, but our sales network needs to be strengthened which remains one of our weak areas,” Suzuki said, adding that the company is keen to invest over $1 billion in R&D in India.

“Even though we have set ourselves the target of producing one million units by 2010, we are worried about certain challenges that the company is facing in India,” he pointed out.

“One of them is the capacity at the Mumbai port, which is currently full and operating beyond its capacity. We are also eagerly waiting for the railway freight to come up, in the absence of which we are facing huge difficulties in transportation between Delhi and Mumbai.”

The Indian government, which earlier owned a stake in the firm’s Indian subsidiary, completely exited from it in May this year.

The Maruti saga began in the 1970s when Suzuki responded to the invitation of then Prime Minister Indira Gandhi to set up a car factory in India in collaboration with her favourite son Sanjay Gandhi’s prototype small car project.

ONGC a market performer: India Infoline

India Infoline has rated Oil and Natural Gas Corporation as a market performer with a target price of Rs 950 in its June 27, 2008 research report. "During Q4 FY08, ONGC reported sales growth of 26% to Rs 156 billion, higher than our expectations. Out performance was driven by slightly higher oil volumes. During Q4 FY08, ONGC sold 6.06 million tons of crude oil (down 0.8% yoy and up1.2% qoq) and 4.9bcm of gas (down 5.2% yoy and 7.9% qoq). Net crude oil realization for the quarter was at USD 49.7 per barrel as compared to USD 54.5 per barrel in Q3 FY08. The subsidy burden for the company in the form of discounts to oil marketing companies was Rs 84.7 billion, much in line with our estimates."

"We believe, ONGC through its IOR/EOR initiatives and increased production from marginal fields should be able to maintain its production levels in the next couple of years. However, with crude oil prices touching USD 140 per barrel and expected to further rise from here, the subsidy burden could increase substantially for ONGC. This would have a considerable impact on earnings of the company. We rate ONGC as a Market Performer, with a target price of Rs 950," says India Infoline's research report.

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