6th December 2010 Daily Recommendations

6 Dec 2010 Morning Market Updates  09:00
Buy BankIndia Abv 495 sl 486 T 526 P
Buy Bhartiartl Abv 350 sl 343 T 360
Buy Bhel Abv 2244 sl 2220 T 2288/2348 P
Buy Divislab Abv 652
Buy IDBI Abv 175
Buy KFA Abv 73
Buy Reliance Abv 1018 (Close) sl 1005 T 1032/1046
Buy Renuka Abv 94 D
Buy Sail Abv 185 sl 181 T 191
Buy Ster Abv 171 sl 167 T 177
Sell Axisbank sl 1413 T 1390
Sell Lupin Bel 492 sl 500 T 483
Stocks that are in news today:
Tata Steel in focus
Riversdale Mining surges 12% after reports that Rio Tinto made a USD 3.5 billion bid for Africa-focused company;
Tata Steel is the largest shareholder holding 21.15% stake in company ((means Rs 35/sh for Tata Steel))
RBI likely to relax 70% provisioning rule for banks
RBI ED Anand Sinha said the central bank is working on a policy whereby banks will not be required to keep such higher provisioning against bad loans
This can positively impact banking stocks
GoI should support transfer of Indian asset to Indian owner
Believe GoI will honour contract; willing to allay any concerns
GoI must see how we turned around Hindustan Zinc (HZL), Balco
Have a proven track record; must be judged fairly
One of the largest exporters from India; one of the largest employers in India
Don’t believe there is a political witch hunt on
We have nothing to do with politics; we want to create big capital in India
Will plough back profit from Cairn blocks back into company
Have done the best we could for Cairn Deal; believe GoI will not hold up deal
Foreign investors watching Cairn-Vedanta deal closely
Foreign investors worried about delays, exit option
Perhaps Vested Interests at play but have patience
Shareholders across the world wondering about the delay
Positive interaction with Ministries on Cairn-Vedanta Deal
Believe in faith; whatever has to happen will happen
Positive and confident about the deal closing
Anyone can make a counter offer if they want; have paid top dollar
Anil Agarwal is here to stay; will not leave India
On Langigarh Mines -
Vedanta has complied with all rules
Not a blade of grass has been removed
l never flout any norms; I am more sensitive about the tribals
Rahul Gandhi is not against development
On environmental clearance issue
Jairam Raresh has given clearance for 40-50 projects
Only 2 projects have been not cleared
It’s a democratic country; my agenda is not different than the government
On Shifting to Gujarat & other states – We’ll expand our base India inspite of everything
Family has agreed to put 75% of wealth for philanthropic effort
On looking outside India – we are like a river; will flow regardless of mountains
We have a full 3 years plan and we’ll stick to it
Sterlite Energy IPO by early next year; waiting for SEBI approval
Konkana Mines listing by early next year; Either on London Stock Exchange or NY stock exchange
Konkana Mines likey to be listed in FTSE 100
Arbitration in HZL, BACLCO over; awaiting judgement
Hope residual stake sale in HZL, BALCO will be complete by Q1 next year
Bullish on Commodity Prices; demand is high
ICICI ups deposit rates by 25 to 50 bps across maturities
ICICI Bank ups PLR by 50bps
ICICI base rate unchanged at 7.75%
Mines Ministry Says
Have reached consensus on new mining draft bill
New Mining draft bill to come up before cabinet soon
Ministerial panel broadly okay with 26% profit sharing norm
DGCA says
Have met low-cost airlines; will meet other carriers soon
Have asked airlines to be transparent about bucket seats
Have asked airlines to be more reasonable on air fares
SpiceJet, Go Air, IndiGo Management met DGCA today
Reports suggest Airlines set to cut fares by 25%
DoT
DoT likely to send notices to telcos by December 20: Sources
DoT penalty to telcos will vary on case to case basis
DoT mulling grant of additional spectrum to 3 operators
F&O cues:

Total Nifty Futures down Rs 692 crore
Total Nifty Options up Rs 2,476 crore

Stock Futures add 4.5 lakh shares in Open Int
Nifty Open Int shed 1.2 lakh shares in Open Int
Nifty Futures prem at 25-pts prem versus 18-pts
Nifty Open Int PCR up at 1.26 versus 1.24
Nifty Puts add 22.8 lakh shares in Open Int
Nifty Calls add 7.5 lakh shares in Open Int
Highest Open Int Outstanding
At 5800 Put (74 lakh), 6000 Call (66 lakh shares)
Nifty 5900 Put adds 8.6 lakh shares in Open Int
Nifty 6000 Put adds 7.1 lakh shares in Open Int
Nifty Jan 5600 Put adds 5.9 lakh shares in Open Int
Nifty 6100 Call adds 3 lakh shares in Open Int
Nifty Jan 6400 Call adds 2.7 lakh shares in Open Int
Nifty 6100 Put adds 2.3 lakh shares in Open Int
FIIs in F&O on Dec 03
FIIs net buy Rs 333 crore in Index Futures
Index Futures Open Int up by 2,131 contracts
FIIs net sell Rs 329 crore in Index Options
Index Options Open Int up by 1,271 contracts
FIIs net buy Rs 482 crore in Stock Futures
Stock Futures Open Int down by 2,600 contracts
Market cues:

NSE F&O Open Int up Rs 1,784 crore at Rs 1.38 lakh crore
FIIs net buy USD 103 million in cash market on December 02

RPP Infra to list today
RPP Infra raised Rs 48.75 crore via issue at Rs 75
US mkts recover despite disappointing jobs report
Dollar index down 1.4%
As per provisional data of December 03, FIIs were net buyers of Rs 604 crore in the cash market. FIIs were net buyers of Rs 568 crore in the F&O market. DIIs were net sellers of Rs 690 crore in the cash market.
US Markets:
US stocks closed their best week in a month on Friday, shrugging off tepid jobs growth in a sign that the rally may have further to run.

Stocks gained late in the day after reports that Federal Reserve Chairman Ben Bernanke said in a CBS television interview recorded on November 30 that he does not rule out more than the announced USD 600 billion in Fed asset purchases. The interview with "60 Minutes" has yet to be televised.
The S&P 500 rose 3% this week, as investors were reassured by signs the economy is stabilizing and have taken a more optimistic view of Europe's debt crisis. This has helped push the S&P 500 close to a new two-year high.

"We're within 5 to 6 points on the S&P of brand-new recovery cycle highs," said Jim Paulsen, chief investment officer at Wells Capital Management, in Minneapolis. "If it does break through, there is a lot of room to the upside."
Despite a modest day for major averages, the PHLX Semiconductor Index and the Dow Jones Transportation Average touched 52-week highs, a positive sign as both are viewed as market bellwethers.
Paulsen said the jobs number was such an outlier that it did not shake investors' new-found confidence in the economic recovery.
"The economic momentum is not doused by what we got this morning," he said. But he added, "If data reports start going weak in the next few weeks, then this jobs number is going to get a lot more attention."
Volume was at its lowest level this week, according to early data, and was well below its daily average so far this year.
But the market's breadth was overwhelmingly positive on both the New York Stock Exchange and the Nasdaq, where about eight stocks rose for every five that fell.
The Dow Jones industrial average rose 19.68 points, or 0.17%, to end at 11,382.09. The Standard & Poor's 500 Index added 3.18 points, or 0.26%, to 1,224.71. The Nasdaq Composite Index gained 12.11 points, or 0.47%, to close at 2,591.46.
Alcoa and banks rise, VIX falls
Commodity-related shares benefited from a weaker dollar, which declined after the jobs report. Aluminum company Alcoa Inc gained 1% to USD 14.22.
Financials, which had their biggest day in three months on Thursday, extended gains late in Friday's session. The KBW bank index rose 0.8%.
Employment barely grew in November. Nonfarm payrolls rose by only 39,000, much weaker than the 140,000 new jobs that economists forecast. The US unemployment rate unexpectedly jumped to a seven-month high of 9.8%, the Labor Department said.
But recent data, including retail sales and other labor reports, have raised optimism the recovery remains on track after hitting a soft patch in the summer when fears of a double-dip recession drove stocks sharply lower.
Investors also said the Federal Reserve would be less likely to cut stimulus to the economy while employment remained weak.
The lack of investor alarm over the jobs report was reflected in the CBOE Volatility Index, or VIX, known as Wall Street's "fear gauge," which shed 7.1% to 18.01
The S&P 500 faced strong technical resistance at about 1,228, near a recent high of more than two years and also the 61.8% Fibonacci retracement of the index's slide from October 2007 to March 2009, a key technical indicator.
Paulson said that traders wanted to stay positioned for a potential year-end rally if stocks break through resistance.
Support for the benchmark kicks in at 1,200, which was recently a stubborn resistance point, and the top end of its recent trading range, and near 1,195, its 10-day moving average.
Also helping to curb stocks' decline was the euro's gain on Friday of more than 1% against the US dollar to USD 1.3422. In recent weeks, the euro's moves have been tightly coupled with US and global equities.
In company news, US-based mining group Walter Energy Inc agreed to buy Canada's Western Coal Corp for about USD 3.25 billion to create the world's leading metallurgical coal producer. Walter added 4.7% to USD 110.52.
Combined volume on the New York Stock Exchange, Amex and Nasdaq was 6.87 billion, compared with a daily average of 8.47 billion so far this year.