31 Jan 2011 Closing Market Updates

31 Jan 2011 Closing Market Updates  15:30

Market opened with gap down but showed some recovery and bounced back near to yesterday's close and ended just below the yesterday's close. Nifty gained nearly 100 points from day's low of 5416.65 and ended at 5509.55 with just 2.60 points into negative. Sensex lost 68.91 points and ended at 18327.06. Nifty February month contract ended with a premium of 14.85 points.
Among BSE Sectoral Indices, Capital Goods Index gained the most by 3.24% and Realty Index was the major loser with 1.93%
In Nifty50 stocks, Siemens gained the most with 17.49% and ended at 855.35 whereas JP Associate was the top loser with 4.92% and ended at 83.15.
SBIN was the turnover topper by the traded value and Shreeashta was the most traded stock on NSE today.
Advance / Decline ratio was negative as 879 stocks declined and 506 gained today on NSE.

Major World Indices,

Hang Seng : -169.68
Nikkei : -122.42
FTSE : -29.49
CAC : -19.92
DAX : -33.09
Dow Futures : -24.00
Nasdaq Futures : -0.75

31 Jan 2011 Morning Market Updates

31 Jan 2011 Morning Market Updates  09:05


As Asian Markets opened weak, our market will follow the same trend.
The turmoil in Egypt is a key concern for global markets at the moment the government imposed curfew was ignored for a second night and military jets and helicopters, some bearing the presidential seal, flew low over the centre of the city in a show of strength. Protesters, meanwhile, turned to the army and to a retired diplomat to maintain momentum in efforts to unseat Hosni Mubarak. Thousands gathered in Cairo's Tahrir Square to protest. More than 100 people have died in the turmoil so far
Pessimism and lacking buying interest are the factors which are affecting the market. Logically speaking, investors can consider this as an opportunity. These investors were into a hurry to Buy L&T* stock at 2000 levels but now the same stock with no change in fundamentals is getting at 40% discounted rate but investors have become fearful and considering it may fall further. This is how retail investors fail for bottom fishing.
It is true that no one can predict the bottom of the market but we advice to start building your portfolio with our value buys.


1)Bajajhind,2)BHEL,
3)DCHL,
4)EIH,
5)GPIL(@ 183), 6)GUJNRECOKE,
7)HCC, 8)HDIL,
9)IRB(around 194),
10)JPAssociat, 11)JSWenergy, 12)Jubilant,
13)LT,
14)Mcdowell-n, 15)MLL,
16)NHPC,
17)ONGC,
18)Powergrid, 19)Punjlloyd,
20)Reliance,
21)SCI,
22)Thermax,
23)Yesbank.

Nifty support : 5460/5345
Nifty Resistance : 5550
Bank Nifty entry level 9800


Results today: Andhra Bank, Asahi Infra, Bajaj Steel, Birla Cap, BPCL, DB Realty, Dabur India, DLF, GVK Power, NTPC, IDFC, Tata Comm, KEC Intl, Gujarat Fluorochemical.
Govt appoints R Gopalan as economic affairs secretary
-R Gopalan to also hold additional charge of financial services
RS Sharma says:
-ONGC has categorical right of first refusal on Cairn blocks
-Did not make counter offer for Cairn as valuation unsuitable
-Very clear Cairn-Vedanta deal will be resolved shortly
Mindtree
-Ashok Soota resigns from MindTree’s board of directors
-Ashok Soota resigns as Executive Chairman/ member of board
-Siemens makes open offer to acquire 19.82% stake at Rs 930/sh (CMP Rs 727), promoters currently hold 55% stake, offer opens of March 25, closes on April 13
-ITC to setup Rs 3000 crore paper unit in Andhra Pradesh as part of plans to double capacity over the next five years (ET)
-Deepak Fertilizers plans to invest Rs 80-100 corre to setup a plant to manufacture customized fertilizers in the next 18-24 months (ET)
-Tata Power in negotiations to refinance close to USD 300 million of debt raised to buy assets of Indonesia’s PT Bumi Resources (ET)
-SAIL to setup 1000 MW power plant in Sultanpur Uttar Pradesh (ET)
-Nirma set to delist its shares at Rs 260/share currently holding 22.83% (ET)
-Dhanlaxmi Bank plans to raise Rs 1100 crore to improve its capital position ahead of the entry of new private banks (ET)
-HPCL plans lubricant blending facility after a new refinery at Ratnagiri coastal Maharashtra takes shape (BS)
-EPFO plans to invest in LIC Housing again (FE)
-JSW to setup downstream facility on the 700 acres of the land of BSAL has acquired the land for Rs 210 crore (FE)
-GTL Infra & VIOM networks eyeing to buy Vodafone Essar Ltd’s 7000 telecom towers (Mint)
-United Phosphorus set to restart its Ankleshwar unit in Gujarat which was closed down after Chinese companies started dumping phosphorus (DNA)
-Lupin plans to launch products in USA, Latin America, Australia and South Africa (DNA)
-Lupin in talks to buy 300 acres from Indiabulls near Nashik in SEZ for around Rs 300 crore (HT)
-Kingfisher gets a Rs 1644 crore debt relief through debt restructuring (BL)
-PharmAsia News says Zenotech gets USFDA nod for injectibles facility near Hyderabad.
-Simbhaoli Sugar allots 30 lakh shares at Rs 50/sh (CMP Rs 47) on preferential basis to non promoters
-Eros International & Ocher Studios to co-produce Rajnikanth's next movie RANA
-Renaissance Jewellery board approves issue of 20,00,000 convertible share warrants on preferential basis
-Kerala Ayurveda Ltd (also listed) & Tata Global Beverages Ltd & Kerala Ayurveda Limited sign MOU to form a Joint Venture for Product Development.
-Binani Industries proposes to acquire Composite Products, Inc, USA. Its company engaged in the manufacture of Composite Products, and acquisition through the merger of the Company's SPV, Binani Composites, USA with it.
-CEBBCO obtained Vendor approval from Wagon Directorate of RDSO, Ministry of Railways, for refurbishment work of BOXNR Wagons for the Indian Railway
-Emami Ltd: Emami Overseas FZE a step down WOS of company has acquired 90.59% (1926 shares) Share Capital of M/s. Pharma Derm S A E Co
-Persistent System: Ex dividend by Rs 3

F&O cues:



-Videocon in F&O ban


Total Nifty futures up Rs 217 crore, Options up Rs 11497 crore
Stock futures net add 66 lakh shares in Open Int

Nifty Fut OI net add 13 lakh shares in OI; Nifty futures premium at 25 points.


Nifty OI PCR unchanged at 1.31
Nifty Put add 1.1 crore shares, Call add 83 lakh shares in OI
Highest OI outstanding at 5400 Put, 5500 Put, 5800 call
Nifty 5400 Put adds 26 lakh shares in OI
Nifty 5600 Call adds 20.9 lakh shares in OI
Nifty 5200 Put adds 15.3 lakh shares in OI
Nifty 5100 Put adds 14.9 lakh shares in OI
Nifty 5700 Call adds 12.8 lakh shares in OI
Nifty 5300 Put adds 12.7 lakh shares in OI
Nifty 5500 Call adds 10.7 lakh shares in OI
Nifty 5000 Put adds 6.9 lakh shares in OI


FIIs in F&O on Jan 28
FIIs net sell Rs 321 crore in Index Futures; Open Int up by 29953 contracts
FIIs net buy Rs 3040 crore in Index Options; Open Int up by 221982 contracts
FIIs net sell Rs 412 crore in Stock Futures; Open Int up by 7193 contracts



FIIs Interest :
FIIs were net sellers to the tune of Rs 321 crore in Index Futures on Friday, which open interest (OI) was up by 29953 contracts. FIIs were net sellers of Rs 412 crore in Stock Futures; which OI was up by 7193 contracts.
FIIs were net buyers of Rs 3040 crore in Index Options; which OI was up by 221982 contracts.



Nifty 5400 Put added 26 lakh shares in Open Interest, Nifty 5200 Put added 15.3 lakh shares in Open Interest and Nifty 5100 Put added 14.9 lakh shares in Open Interest. Nifty 5600 Call added 20.9 lakh shares in Open Interest.
Fresh shorts & cash based selling were seen in RIL, DLF, M&M and IVRCL Infrastructure. RIL tumbled 3%; its OI was up by 6% and delivery volume declined at 39.5 lakh equity shares versus 41.5 lakh.
DLF went down 7%; its OI was up by 11% and delivery volume increased at 39.5 lakh shares versus 22.5 lakh. M&M lost 5%; its OI was up by 10% and delivery volume went up at 30 lakh shares versus 25.2 lakh.
IVRCL Infra tanked 8.5%; its OI was up by 15% and delivery volume increased to 28 lakh shares versus 20 lakh.
Short covering was seen in ONGC. The stock rose 2.5%; its OI was down by 6%.




Disclaimer :


This blog has been prepared by the Research Division of Integrity Financial Consultants Pvt. Ltd.(IFCL),Pune, India and is meant for use by the recipient only as an informative. Nothing on this blog/website is intended or should be construed as investment advice. It is intended to be used for informational purposes only. This document is not to be reported or copied or made available to others without prior permission of (IFCL). It should not be considered or taken as an offer to Buy or Sell or a solicitation to Buy or Sell any security. These views alone are not sufficient and should not be used for the development or implementation of an investment strategy. It should not be construed as an investment advice to any party. All opinions and estimates included here constitute our view as of this date and are subject to change without notice. The information contained in this report other than the recommendation(s) has been obtained from sources that are considered to be reliable. However, iNTEGRITY has not independently verified the accuracy or completeness of the same. Neither iNTEGRITY nor any of its affiliates and/or its business associates and/or its directors and/or its employees accept any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well as the market related investments are subject to market risk and volatility. The suitability or otherwise of any investments will depend upon the recipient's particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Either (IFCL) and / or its affiliates and / or its business associates and / or its directors and / or its employees and / or its representatives and / or its clients and / or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior and / or after to publication. The information shared in this blog may be and or may not be 100% perfect as it is being shared from many sources. iNTEGRITY and / or its affiliates and / or its business associates and / or its directors and / or its employees and / or its representatives and / or its clients and / or their relatives do not take any type of responsibility if reader or recommendation(s) follower will face any losses or liabilities because of our recommendations; market risk will be always there while and whenever concerned parties enter the stock market by any means.It is recommended for the recipients to take their decisions according to re-verification of the shared information. No arguments and / or claims and / or objections will be entertained. Similarly, iNTEGRITY and / or its affiliates and / or its business associates and / or its directors and / or its employees and / or its representatives and / or its clients and / or their relatives will not take any assurity about our given recommendation(s) about its success. Sole discretion will be most recommended for readers and/or subscribers and/or followers and/or information receivers and/or investors and/or traders.

28 Jan 2011 Closing Market Updates

28 Jan 2011 Closing Market Updates  15:30

Market corrected consecutively on the third day. As per our level, Nifty took support of 5460 and bounced back to 5526.80 to end with 77.50 points of loss..Nifty made an intraday low of 5459.55. Sensex ended at 18427.57 after losing 256.86 points.
All BSE Sectoral Indices ended in red. Realty was the top loser by 4.66%.
In Nifty50 stocks, ONGC was the top gainer with 2.53% rise and ended at 1142. DLF was the most declined stock on NSE which fell 6.91% to end at 222.90
Advance/Decline Ratio was negative as 1233 stocks declined and 159 stocks gained today on NSE.

Major World Indices :

Hang Seng : -162.60
Nikkei : -118.3
FTSE : -33.64
CAC : 0.54
DAX : 12.18
Dow Futures : -15.00
Nadaq Futures : -5.00

27 Jan 2011 Closing Market Updates

27 Jan 2011 Closing Market Updates  15:30

First month of 2011 derivative expiry threatened the bulls.Markt broke its previously made lows made on 17th Jan 2011.Nifty tanked 80.20 points to end at 5607.20 and Sensex tumbled by 281.16 points and ended at 18688.29.
All BSE Sectoral Indices ended in negative. Realty Index was the major loser which ended 3.95% down.
In Nifty50 stocks, Tatamotors was the top gainer with 2.32% which ended at 1193.DLF was the top loser with 6.24% fall and ended at 238.1.
SBIN was the turnover topper by its traded value and GTLInfra was the most traded stock on NSE today.
Advance / Decline Ratio was negative to 2.93:1 ratio as 1031 stocks declined and 352 stocks gained today NSE.

World Market Indices :

Hang Seng : -63.62
Nikkei : +77.80
FTSE : +22.72
CAC : +1.53
DAX : +29.10

25 Jan 2011 Closing Market Updates

25 Jan 2011 Closing Market Updates  15:30

Hon.Governor eased the investors but market surprised the investors. Market tumbled even after expected RBI policy but with a fear tht RBI may hike interest rates further. Nifty spurted upto 5801.55 but could not sustain above 5800 mark and lost the ground to end at 5685.25 with a 58 points fall. Sensex fell 182.66 points and ended at 18968.62
Among BSE Sectoral Indices, Consumer Durable Index gained the most with 1.17% whereas Bankex was the top loser by 2.30%
In Nifty50 stocks, BPCL gained the most with 4.79% rise and ended at 630 whereas Hindunilvr was the major loser by 5.69% and ended at 281.
SBIN was the turnover topper by traded value and Unitech was the most traded stock on NSE today.
Advance / Decline Ratio was negative as 884 stocks declined and 479 stocks gained today on NSE.

Major World Indices :

Hang Seng : -12.95
Nikkei : +119.31
FTSE : -38.28
CAC : -5.63
DAX : +1.01
Dow Futures : -38.00
Nasdaq Futures : -11.25

25 Jan 2011 RBI Credit Policy

25 Jan 2011 RBI Credit Policy 


REPO and reverse REPo rose by 0.25%
In line with street expectations.CRR remained unchange at 6%

Today's move clearly shows that the RBI has relaunched its attack on inflation given the persistance of inflationary pressures.

Third Quarter Review of Monetary Policy 2010-11


By
Dr. D. Subbarao
Governor,RBI


Introduction :


1.There have been significant changes in the macroeconomic environment since the Second Quarter Review issued on November 2, 2010. Globally, the recovery in the advanced economies appears to be consolidating and expectations of growth during 2011, particularly in the US, are generally being revised upwards. However, inflationary tendencies are clearly visible. Though still subdued in the advanced economies, inflationary pressures in emerging market economies (EMEs), which were already strong, have intensified due to sharp increases in food, energy and commodity prices.
2. The Indian economy has reverted to its pre-crisis growth trajectory, with growth in the first half of 2010-11 estimated at 8.9 per cent. Recent data on agricultural output and service sector indicators suggest that the growth momentum continued in the third quarter. The robustness of growth is also reflected in corporate sales, tax revenues and bank credit, notwithstanding some moderation in the index of industrial production (IIP).
3. Inflation is clearly the dominant concern. Even as the rate itself remains uncomfortably high, the reversal in the direction of inflation is striking. After some moderation between August and November 2010, inflation rose again in December 2010 on the back of sharp increase in the prices of primary food articles and the recent spurt in global oil prices. Non-food manufacturing inflation has remained sticky, reflecting both buoyant demand conditions and rising costs.
4. Against this backdrop, this statement sets out the Reserve Bank’s assessment of the current macroeconomic situation and forward projections. It is organised in four sections. Section I provides an overview of global and domestic macroeconomic developments. Section II sets out the outlook and projections for growth, inflation and monetary aggregates. Section III explains the stance of monetary policy. Section IV specifies the policy measures. This statement should be read and understood together with the detailed review in Macroeconomic and Monetary Developments released yesterday by the Reserve Bank.
I. The State of the Economy
The Global Economy
5. Global growth prospects have improved in recent weeks. The recovery in major advanced economies, which had weakened during Q2 of 2010, regained strength in Q3 of 2010. Real GDP growth in the US, which had moderated from 3.7 per cent in Q1 of 2010 to 1.7 per cent in Q2 of 2010, improved to 2.6 per cent in Q3. Corporate capital spending and retail sales in the US have improved. While uncertainty persists in the Euro area and Japan, the baseline outlook for both is improving. Growth in EMEs has remained strong, supported largely by domestic demand.
6. In advanced economies, the earlier fears of deflation have given way to early signs of inflation. In EMEs, inflation has accentuated significantly in the recent period. Rapidly rising food prices in several economies such as China, India, Indonesia, Brazil and Russia are a major contributory factor. According to the Food and Agriculture Organisation (FAO), international food prices rose by 25 per cent in December 2010 in comparison with the level at the end of 2009. The increase in global food prices has been led by prices of edible oils (55 per cent), cereals (39 per cent) and sugar (19 per cent). Significantly, the FAO expects food prices to further harden during 2011, intensifying global inflationary pressures.
7. These pressures are likely to be reinforced by trends in energy and commodity prices. The crude oil (Brent) price perked from US$ 85 per barrel on November 2, 2010 to US$ 97 per barrel on January 21, 2011. The price of crude (ICE Brent) in the futures market is ruling at US$ 98 per barrel for March 2011 delivery. Many other commodities have seen similar movements. As growth prospects in the US improve, the consequent increase in global demand for energy and commodities will exert further pressure on prices. Already, the 10-year benchmark US government securities yield increased from 2.4 per cent in early October 2010 to 3.4 per cent in mid-January 2011, indicating, among other things, rising inflationary expectations.

The Domestic Economy
8. Real GDP in India increased by 8.9 per cent during the first half of 2010-11, reflecting strong domestic demand, especially private consumption and investment, and improving external demand. Although on a cumulative basis, the IIP grew by 9.5 per cent during April-November 2010, it has been volatile in the current financial year with growth rates ranging between 2.7 per cent and 16.6 per cent. Overall, robust corporate sales, large indirect tax collections, advance tax payments and leading indicators of service sector activity suggest persistence of the growth momentum.
9. On the other hand, the latest quarterly Industrial Outlook Survey conducted by the Reserve Bank during October-December 2010 indicates a marginal moderation in overall business expectations during January-March 2011 from their high level in the previous quarter. The Reserve Bank’s order book, inventories and capacity utilisation survey for July-September 2010 showed a marginal improvement in capacity utilisation in Q2 of 2010-11, while the HSBC Purchasing Managers’ Index (PMI) showed some moderation in the pace of manufacturing sector expansion in December 2010.
10 . Headline inflation, based on year-on-year changes in the wholesale price index (WPI), moderated to a single digit in August 2010 and softened further to 7.5 per cent in November 2010, the lowest level attained during 2010. However, inflation reversed course to rise to 8.4 per cent in December 2010, driven primarily by food and fuel inflation.
11. Year-on-year primary food articles inflation spiked to 13.5 per cent in December from 9.4 per cent in November due to severe supply constraints in respect of some food items. In particular, vegetable prices increased by 22.9 per cent in December 2010 over the previous month’s level. Month-on-month price increases were very high for some vegetables such as brinjals (65 per cent), onions (35 per cent), garlic (26 per cent), cabbage (22 per cent), tomatoes (19 per cent) and potatoes (16 per cent).
12. Year-on-year fuel inflation, which had moderated from 14.4 per cent in May 2010 to 10.3 per cent in November 2010, rose again to 11.2 per cent in December 2010 due to a rise in non-administered domestic fuel prices, reflecting the sharp increase in international prices. In the first fortnight of January 2011, oil marketing companies further raised the prices of petroleum products (petrol and aviation turbine fuel) which will further add to fuel inflation. The year-on-year WPI non-food manufactured products (weight: 55 per cent) inflation, which moderated from 5.9 per cent in April 2010 to 5.1 per cent in September 2010, increased to 5.4 per cent in November, though it softened marginally to 5.3 per cent in December. Significantly, non-food manufactured products inflation continues to remain above its medium-term trend of 4.0 per cent. Moreover, in recent months, the underlying inflation momentum in this segment has been positive.
13. Between November and December 2010, as WPI inflation moved up from 7.5 per cent (year-on-year) to 8.4 per cent, the wholesale price index increased by 1.3 per cent. Of this increase in index, 82 per cent was contributed by primary articles and fuel groups and 18 per cent by the manufactured products group. At a disaggregated level, vegetables alone contributed as much as 40 per cent to the increase in the index in December, followed by mineral oil (13 per cent), condiment and spices (8 per cent) and minerals (7 per cent).
14. Money supply (M3) growth moderated during the year, reflecting slower deposit growth and faster currency expansion which reduced the money multiplier. Several banks raised their deposit rates after the Second Quarter Review of 2010-11 which contributed to a larger deposit mobilisation in December. Consequently, M3 growth increased to 16.5 per cent by end-December 2010, close to the indicative projection of 17 per cent for 2010-11.
15. However, year-on-year non­food credit growth has been above the Reserve Bank’s indicative projection of 20 per cent since early October 2010, rising to 24 per cent by end-December 2010. The wide gap between credit growth and deposit growth resulted in a sharp increase in the incremental non-food credit-deposit ratio to 102 per cent by end-December 2010, up from 58 per cent in the corresponding period of previous year.
16. Disaggregated data suggest that credit growth, which was earlier driven by the infrastructure sector, is becoming increasingly broad-based across sectors and industries, evidencing growth momentum and demand pressures. Credit flow to the services sector increased significantly for transport operators, tourism, hotel and restaurant and commercial real estate, besides retail housing and personal loans. As regards industry, apart from infrastructure, increase in credit was significant for metals, engineering, textiles, food processing and chemical and chemical products.
17. Rough estimates showed that the total flow of financial resources from banks and non-banks to the commercial sector during April-December 2010 was `9,01,000 crore, up from `6,36,000 crore during the corresponding period of last year. While bank credit to the commercial sector surged, the flow of funds from other sources was lower than last year’s level mainly on account of lower net inflows from foreign direct investment (FDI).
18 . As part of the calibrated exit from the crisis driven expansionary monetary stance, the Reserve Bank increased the repo rate by 150 basis points (bps) and the reverse repo rate by 200 bps during March–November 2010. In addition, the cash reserve ratio (CRR) was raised by 100 bps. In response to these monetary policy measures, scheduled commercial banks (SCBs) raised their deposit rates in the range of 25-250 bps during March 2010 -January 2011 across various maturities, indicating strong monetary policy transmission.
19. The Base Rate system replaced the Benchmark Prime Lending Rate system with effect from July 1, 2010. Several banks reviewed and increased their Base Rates by 25-100 bps between July 2010 and January 2011. Base Rates of 67 banks with a share of 98 per cent in the total bank credit were in the range of 7.5-9.0 per cent in December 2010.
20. Tight liquidity conditions persisted throughout the third quarter of 2010-11. The average daily net injection of liquidity through the liquidity adjustment facility (LAF) increased from around `62,000 crore in October to around `99,000 crore in November and further to around `1,20,000 crore in December, with the peak injection of around `1,71,000 crore on December 22, 2010. While the overall liquidity in the system has remained in deficit consistent with the policy stance, the extent of tightness after the Second Quarter Review of 2010-11 was outside the comfort zone of the Reserve Bank, i.e., (+)/(-) one per cent of net demand and time liabilities (NDTL) of banks. Above-normal government cash balances, which rose from an average of `73,000 crore in October to `1,53,000 crore by the second half of December 2010, contributed to the frictional component of liquidity deficit. However, the widening difference between credit and deposit growth rates coupled with high currency growth accentuated the structural liquidity deficit.
21. The Reserve Bank instituted a number of measures to mitigate the liquidity deficit. First, the statutory liquidity ratio (SLR) of SCBs was reduced from 25 per cent of their NDTL to 24 per cent with effect from December 18, 2010. Second, it conducted open market operation (OMO) purchase of government securities of the order of over `67,000 crore. Third, additional liquidity support to SCBs was provided under the LAF. This facility, which was initially available up to 2 per cent of their NDTL, was brought down to one per cent of NDTL after reduction in the SLR by one percentage point. Fourth, a second LAF window was introduced.
22. Government spending resulted in a reduction of its cash balances during January 2011 (up to January 21, 2011). As a result, the average daily net liquidity injection through the LAF declined from around `1,20,000 crore during December 2010 to around `90,000 crore in January 2011 (up to January 21, 2011).
23. Reflecting the improvement in the tight liquidity conditions, the average daily call rate moderated from 6.7 per cent during December 2010 to 6.5 per cent in January 2011 (up to January 21, 2011). At the longer end, 10-year government security (G-Sec) yield, which had generally remained above 8 per cent during most of October-November 2010 on account of inflationary pressures and persistent liquidity tightness, also softened in the second half of December 2010. However, the yield on 10-year G-sec moved up again to 8.2 per cent by January 21, 2011, reflecting both liquidity conditions and inflationary expectations.
24. Over 95 per cent of the Central Government’s budgeted borrowing programme (net) was completed by January 24, 2011. During the first eight months of 2010-11, the fiscal deficit of the Central Government was less than 50 per cent of the budget estimates. The one-off revenue generated from spectrum auctions, estimated to be around 1.5 per cent of GDP for the year, has been a major contributor to the current improvement on the revenue side.
25. During 2010-11 (up to December 2010), the real exchange rate of the rupee showed a mixed trend. It appreciated by 3.7 per cent on the basis of the trade based 6-currency real effective exchange rate (REER), reflecting both nominal appreciation of the rupee against the US dollar and the higher inflation differential with major advanced countries. However, against broader baskets of 36-currency and 30-currency REER, the rupee depreciated over its March 2010 levels by 0.6 per cent and 2.5 per cent, respectively.
26. On a balance of payments (BoP) basis, the trade deficit widened to US$ 35.4 billion in Q2 of 2010-11 from US$ 31.6 billion in Q1. Coupled with stagnation in invisibles receipts, this led to a widening of the current account deficit (CAD) from US$ 12.1 billion in Q1 of 2010-11 to US$ 15.8 billion in Q2 of 2010-11. In the first half of 2010-11, the CAD expanded to 3.7 per cent of GDP from 2.2 per cent in the corresponding period of last year. Subsequent trade data indicate faster growth in exports vis-a-vis imports which may help improve the CAD in Q3 of 2010-11. However, the sharp increase in global commodity prices, particularly oil, could have an adverse impact on our trade balance going forward. For the year as a whole, India’s CAD is expected to be close to 3.5 per cent of GDP.


II. Outlook and Projections
Global Outlook

Growth
27. With advanced economies showing firmer signs of sustainable recovery, global growth in 2010 is expected to have been less imbalanced than before. While growth in advanced economies may improve, growth in EMEs, which have been the main engine of global economic growth in the recent period, may moderate due to tightening of monetary policy to address rising inflationary concerns and the waning impact of the fiscal stimulus measures taken in the wake of the global financial crisis.

Inflation


28. Even as a large slack persists, inflation has edged up in major advanced economies owing mainly to increase in food and energy prices. Inflation in the Euro area exceeded the European Central Bank’s (ECB) medium-term target for the first time in more than two years in December 2010. Similarly in the UK, the headline inflation has persisted above the target of the Bank of England. In the US, the headline CPI rose to 1.5 per cent in December 2010 from 1.1 per cent in November 2010. Whereas signs of inflation in the advanced countries are only incipient, many EMEs have been facing strong inflationary pressures, reflecting higher international commodity prices and rising domestic demand pressures.
29. Significantly, food, energy and commodity prices are widely expected to harden during 2011, driven by a combination of supply constraints and rising global demand, as the advanced economies consolidate their recovery. This suggests that inflation could be a global concern in 2011.


Domestic Outlook

Growth :
30. On the domestic front, the 8.9 per cent GDP growth in the first half of 2010-11 suggests that the economy is operating close to its trend growth rate, powered mainly by domestic factors. The kharif harvest has been good and rabi prospects look promising. Good agricultural growth has boosted rural demand. Export performance in recent months has been encouraging.
31. With the risks to growth in 2010-11 being mainly on the upside, the baseline projection of real GDP growth is retained at 8.5 per cent as set out in t he Second Quarter Review of Monetary Policy of July 2010 but with an upside bias (Chart 1).

Inflation






32. The moderation in headline inflation observed between August and November 2010 was along the projected trajectory of the Reserve Bank. This trend, however, reversed in December 2010 due mainly to sharp increase in the prices of vegetables, mineral oils and minerals.
33. While the current spike in food prices is expected to be transitory, structural demand-supply mismatches in several non-cereal food items such as pulses, oilseeds, eggs, fish and meat and milk are likely to keep food inflation high. Non-food manufacturing inflation also remains significantly above its medium-term trend of 4 per cent. The Reserve Bank’s quarterly inflation expectations survey, conducted during the first fortnight of December 2010, indicates that expectations of households remain elevated.
34. Going forward, the inflation outlook will be shaped by the following factors. First, it will depend on how the food price situation – both domestic and global – evolves. Domestic food price inflation has witnessed high volatility since mid-2009 due to both structural and transitory factors. A significant part of the recent increase in food price inflation is due to structural constraints. This is reflected in the less than expected moderation in food price inflation even in a normal monsoon year. There has also been a sharp increase in the prices of some food items due to transitory supply shocks. What is more worrying is the substantial increase in pr ice s of sever a l food items even though their production has not been affected. As a result, the usual moderation in vegetable prices in the winter season has not materialised.
35. Notably, high food pr ice inflation is not unique to India. Food prices have spiked in many countries in the recent period. India is a large importer of certain food items such as edible oils, and the domestic food price situation could be exacerbated by the increase in global food prices. This, therefore, poses an additional risk to domestic food price inflation.
36. The second factor that will shape the inflation outlook is how global commodity prices behave. Prices of some commodities rose sharply in the recent period even as the global recovery was fragile. Should these trends continue, they will impact inflation, domestically and globally.
37. The third factor is the extent to which demand side pressures may manifest. This risk arises from three sources, viz., the spill-over of rising food inflation; rising input costs, particularly industrial raw materials and oil; and pressure on wages, both in the formal and informal sectors. The rise in food inflation has not only persisted for more than two years now, the increase has been rather sharp in the recent period. This cannot but have some spill-over effects on generalised inflation, particularly when the growth momentum is strong and both workers and producers are likely to have pricing power. There are indications that, in the corporate sector, the share of wages in total costs is increasing. The indexation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wages will also raise the wage rate in the agricultural sector. Further, besides oil, the prices of some primary non-food articles have risen sharply in the recent period. Since these are inputs into manufactured products, the risk to headline inflation is not only from the increase in non-food items but also because the increase in input costs will ultimately impact output prices. As the output gap closes, corporates will also be able to sustain higher output prices. In the absence of commensurate increase in capacity, there is the risk of demand side pressures accentuating.
38. In the Second Quarter Review of November 2010, the Reserve Bank set out the baseline projection of WPI inflation for March 2011 at 5.5 per cent, based on the new WPI series (2004-05=100). The Mid-Quarter Review of December 2010 indicated that the risks to inflation going forward were largely on the upside. Some of these risks have materialised as reflected in the increase in the prices of metals and non-administered fuel. There have also been some transitory supply shocks as reflected in the sharp increase in vegetable prices. In addition, petroleum and aviation turbine fuel prices were raised in early January which will add 9 bps to WPI inflation.

While the impact of transitory factors is expected to wane, the price pressures on account of demand-supply imbalances in respect of some commodities will persist. Considering the increase that has already occurred and the emerging domestic and external scenario, the baseline projection of WPI inflation for March 2011 is revised upwards to 7.0 per cent from 5.5 per cent (Chart 2).


Monetary Aggregates
39. While the year-on-year money supply (M3) growth at 16.5 per cent in December 2010 was close to the indicative projection of 17 per cent, non-food credit growth at 24.4 per cent was much above the indicative projection of 20 per cent. Credit expansion in the recent period has been rather sharp, far outpacing the expansion in deposits. Rapid credit growth without a commensurate increase in deposits is not sustainable.
40. As a result of injection of primary liquidity of over `67,000 crore through OMO auctions since early November 2010, the structural liquidity deficit in the system has declined significantly. While the Reserve Bank will endeavour to provide liquidity to meet the productive credit requirements of a growing economy, it is important that credit growth moderates to conform broadly to the indicative projections. This will prevent any further build-up of demand side pressures. Accordingly, the projection for 2010-11 of M3 growth has been retained at 17 per cent and that for non-food credit growth at 20 per cent. As always, these numbers are indicative projections and not targets.


Risk Factors
41. The growth and inflation projections as outlined above are subject to several risks.
i) Food inflation has remained at an elevated level for more than two years now. It is not only that the moderation in food price inflation as expected during a normal monsoon year has not occurred to the extent expected, but also that there has been sharp unusual increase in prices. It is also significant that food inflation is not confined to a few items which were affected by unseasonal rains in some parts of the country but is fairly widespread across several food items. The inflation rates for primary articles and fuel items have risen sharply. Inflationary expectations remain at elevated levels. As high food inflation persists, the prospect of it spilling over to the general inflation process is rapidly becoming a reality.
ii) Non-food manufacturing inflation is persistent and has remained sticky in recent months as several industries are operating close to their capacity levels. Imports as a means to supplement domestic availability for many commodities will become less of an option as global growth consolidates and capacity utilisation increases. This may accentuate demand side pressures.
iii) India’s CAD has widened significantly. Although recent trade data suggest moderation of the trade deficit in the latter part of the year, overall CAD for 2010-11 is expected to be about 3.5 per cent of GDP. A CAD of this magnitude is not sustainable. Further, commodity prices, which rose sharply even when the global recovery was sluggish, may rise further if the global recovery is faster than expected. This has implications for both the CAD and inflation. There is, therefore, a need for concerted policy efforts to diversify exports and contain the CAD within prudent limits.
iv) Apart from the level of CAD, financing of CAD also poses a risk. Global growth prospects have improved significantly in the recent period. Should global recovery be faster than expected, it may also have implication for the financing of CAD. Capital flows, which so far have been broadly sufficient to finance the CAD, may be adversely affected. Faster tthan expected g lobal re cover y may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of our external sector. Hence, the composition of capital inflows needs to shift towards longer-term commitments such as FDI.
v) The recent improvement in the fiscal situation has been mainly the result of one-off revenue generated from spectrum auctions. The Government also had the benefit of disinvestment proceeds, which may continue to occur for some more time. However, fiscal consolidation based on one-off receipts is not sustainable. As emphasised in the Second Quarter Review of November 2010, fiscal consolidation is important for several reasons, including the fact that monetary policy works most efficiently while dealing with an inflationary situation when the fiscal situation is under control. Apart from this, the commodity price developments that have been referred to earlier pose significant risks for fiscal consolidation in the year ahead. Rising oil prices will impact prices of both petroleum products and fertilisers. If the Government chooses to restrict the pass-through to consumers and farmers, it will have to make adequate budgetary provisions, which will constrain its ability to reduce the fiscal deficit. If it does not, either fiscal credibility will be undermined or inflationary expectations will be reinforced by the likelihood of higher prices of these key inputs, both of which will further complicate inflation management.
vi) The combined risks from inflation, the CAD and fiscal situation contribute to an increase in uncertainty about economic stability that consumers and investors will have to deal with. To the extent that this deters consumption and investment decisions, growth may be impacted. While slower growth may contribute to some dampening of inflation and a narrowing of the CAD, it can also have significant impact on capital inflows, asset prices and fiscal consolidation, thereby aggravating some of the risks that have already been identified.
III. The Policy Stance
42. The Reserve Bank began exiting from the crisis driven expansionary monetary policy as early as in October 2009. Since then, it has cumulatively raised the CRR by 100 bps, and the repo and reverse repo rates under the LAF by 150 and 200 bps, respectively. As the overall liquidity in the system has transited from a surplus to a deficit mode, the effective tightening in the policy rate has been of 300 bps. The monetary policy response was calibrated on the basis of India specific growth-inflation dynamics in the broader context of global uncertainty.
43. While the Reserve Bank decided to leave the policy rates unchanged in the Mid-Quarter Review of December 2010, developments on the inflation front since then have reinforced the already elevated concern in this regard. Accordingly, our monetary policy stance for the remaining period of 2010-11 has been guided by the following considerations:
First, since the Second Quarter Review of November 2010, inflationary pressures, which were abating until then, have re-emerged significantly. Primary food articles inflation has risen again sharply after moderating for a brief period. Non-food articles and fuel inflation are already at elevated levels. Importantly, non-food manufacturing inflation has remained sticky. There are, therefore, signs of rapid food and fuel price increases spilling over into generalised inflation. As it is, there is some evidence of rising demand side pressures which are reflected in rapid bank credit growth, robust corporate sales and rising input and output prices, and buoyancy in tax revenues. The need, therefore, is to persist with measures to contain inflation and anchor inflationary expectations.
Second, global commodity prices have risen sharply which has heightened upside risks to domestic inflation.
Third, growth has moved close to its pre-crisis growth trajectory as reflected in the 8.9 per cent GDP growth in the first half of 2010-11, even in the face of an uncertain global recovery.
Fourth, the global economic situation has improved in the recent period. The uncertainty with regard to global recovery, which was prevailing at the time of the Second Quarter Review, has reduced with the US economy showing signs of stabilising. Although uncertainty continues in the Euro area, there is an overall improvement in the global growth prospects.
44. To sum up, the current growth-inflation dynamics in the last few weeks suggest that the balance of risk has tilted towards intensification of inflation. In this scenario, the stance of the monetary policy is intended to :
Contain the spill-over of high food and fuel inflation into generalised inflation and anchor inflationary expectations, while being prepared to respond to any further build-up of inflationary pressures.
Maintain an interest rate regime consistent with price, output and financial stability.
Manage liquidity to ensure that it remains broadly in balance, with neither a surplus diluting monetary transmission nor a deficit choking off fund flows.
45. It is important to emphasise that the role of monetary policy in the current inflationary situation is confined to containment and prevention of food and energy prices from spilling over into generalised inflation and anchoring inflation expectations. While energy prices are driven by global developments, the food price scenario is primarily a reflection of persistent structural constraints in the domestic agricultural sector. While these have been known and debated upon for a long time, the recent price dynamics highlight the need for rapid action to increase the output of a number of products, the demand for which is being driven by changing consumption patterns reflecting increasing incomes. Unless meaningful output enhancing measures are taken, the risks of food inflation becoming entrenched loom large and threaten both the sustainability of the current growth momentum and the realisation of its benefits by a large number of households.
46. Another challenge to effective management of inflation by monetary policy arises from the persistence of a large fiscal deficit. While the Government may succeed in raising receipts, both from high tax buoyancy and one-off sources, the real measure of fiscal consolidation lies in improving the quality of expenditure. If the Government is able to commit more resources to capital expenditure, it will help deal with some of the bottlenecks that contribute to supply-side inflationary pressures. With reference to revenue expenditure, while large and diffused subsidies may contribute in the short term to keeping supply-side inflationary pressures in check, they may more than offset this benefit by adding to aggregate demand.
IV. Policy Measures


Monetary Measures
47. On the basis of the current assessment and in line with the policy stance as outlined in Section III, the following monetary policy measures are announced.
Bank Rate
48. The Bank Rate has been retained at 6.0 per cent.
Repo Rate
49. It has been decided to : Increase the repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.25 per cent to 6.5 per cent with immediate effect.
Reverse Repo Rate
50. It has been decided to : Increase the reverse repo rate under the LAF by 25 basis points from 5.25 per cent to 5.50 per cent with immediate effect.


CRR(Cash Reserve Ratio) :
51. The cash reserve ratio (CRR) of scheduled banks has been retained at 6.0 per cent of their net demand and time liabilities (NDTL).
Liquidity Management Measures
52. On the basis of an assessment of the current liquidity situation, it has been decided to extend the following liquidity management measures:
i) The additional liquidity support to scheduled commercial banks under the LAF to the extent of up to one per cent of their net demand and time liabilities (NDTL), currently set to expire on January 28, 2011, is now extended up to April 8, 2011. For any shortfall in maintenance of the SLR arising out of availment of this facility, banks may seek waiver of penal interest purely as an ad hoc measure.
ii) The second LAF (SLAF) will be conducted on a daily basis up to April 8, 2011.
53. The Reserve Bank will constantly monitor the credit growth and, if necessary, will engage with banks which show an abnormal incremental credit-deposit ratio.
Expected Outcomes
54. These actions are expected to:
(i) Contain the spill-over from rise in food and fuel prices to generalised inflation.
(ii) Rein in rising inflationary expectations, which may be aggravated by the structural and transitory nature of food price increases.
(iii) Be moderate enough not to disrupt growth.
(iv) Continue to provide comfort to banks in their liquidity management operations.
Guidance :
55. Current growth and inflation trends warrant persistence with the anti-inflationary monetary stance. Looking beyond 2010-11, the Reserve Bank expects domestic growth momentum to stabilise, though the GDP growth rate may decline somewhat as agriculture reverts to its trend (assuming a normal monsoon). Inflation is likely to resume its moderating trend in the first quarter of 2011-12, but several upside risks are already visible in the global environment and more may surface domestically. The monetary stance will be determined by how these factors impact the overall inflationary scenario. For the fiscal consolidation process to be credible and effective, it is important that apart from augmenting revenue, the composition and quality of expenditure improves. Any slippage in the fiscal consolidation process at this stage may render the process of inflation management even harder.
56. The frictional liquidity shortage is expected to ease as government balances adjust to the expenditure schedule. However, banks need to focus on the underlying structural cause of liquidity tightness arising out of the gap between the credit and deposit growth rates.
Mid-Quarter Review of Monetary Policy
57. The next mid-quarter review of Monetary Policy for 2010-11 will be announced through a press release on March 17, 2011.
Monetary Policy 2011-12
58. The Monetary Policy for 2011-12 will be announced on Tuesday, May 3, 2011.


Mumbai


January 25, 2011


ACRONYMS



BoP - Balance of Payments
bps - Basis Points
BPLR - Benchmark Prime Lending Rate
CAD - Current Account Defi cit
CPI - Consumer Price Index
CRR - Cash Reserve Ratio
ECB - European Central Bank
EMEs - Emerging Market Economies
FAO - Food and Agriculture Organisation
FDI - Foreign Direct Investment
GDP - Gross Domestic Product
HSBC - Hongkong and Shanghai Banking Corporation
IIP - Index of Industrial Production
LAF - Liquidity Adjustment Facility
MQR - Mid-Quarter Review
NDTL - Net Demand and Time Liabilities
MGNREGA - Mahatma Gandhi National Rural Employment
Guarantee Act
OMO - Open Market Operation
PMI - Purchasing Managers’ Index
Q - Quarterly
REER - Real Effective Exchange Rate
SCBs - Scheduled Commercial Banks
SLR - Statutory Liquidity Ratio
SQR - Second Quarter Review
WPI - Wholesale Price Index

25 Jan 2011 Credit policy will decide the sentiment of the market.

25 Jan 2011 Morning Market Updates  09:03


All eyes are on RBI Governor, D Subbarao as the central bank meets for the first time in 2011 to assess the monetary policy of the country. The RBI and government's desperation to fight inflation has prepared the markets for a rate hike on January 25. According to bankers and economists, majority expect RBI to hike repo and reverse repo rates by 25 basis points each. Only a minority 6% expect a larger hike of 50 basis points. But Mr.Governer is expert in giving surprises so hope for the betterment of the market and economy as well.
Market also does not expect RBI to cut SLR further from 24%. Instead majority expect RBI to keep open the second liquidity facility which allows banks to borrow from the repo window twice every day. Despite tight liquidity condition, market does not expect banks to hike their lending or borrowing rates anytime soon.


So, even with risng prices and tight monetary condition, growth for the current fiscal year remains intact. Nifty four percent of bankers and economists polled do not any change in the RBI's FY11 growth projection from the current 8.5% with an upward bias, whereas 6% expect it to be lowered to 8-8.5%.
Today's credit policy will decide the sentiment of the market.
Nifty immediate support at 5710 and resistance 5790. Breaching these levels will give decisive movement.


Results Today - DRL, Grasim, HUL, IDBI Bank, Sterlite Ind, Ultratech Cem, United Phosphorus, Ceat








JK Tyre - dissapointing numbers due to high rubber prices, lower tonnage. Margins slipped further and profits now at single digits


Q3FY11 YoY (cr - crore, vs - versus, cons - consolidated)


-Revenues up 46% at Rs 1178 cr vs Rs 802 cr


-PAT down 75% at Rs 9 cr vs Rs 36 cr


-OPM at 5.2% vs 12.1%


QoQ


-Revenues at Rs 1178 vs Rs 1138cr


-OPM at 5.2% vs 6.2%


-PAT at Rs 9 cr vs Rs 20cr






EIH Q3


-Net profit at Rs 28.4 cr vs Rs 22.3 cr (YoY)


-Net sales at Rs 282 cr vs Rs 222 cr (YoY)






Torrent Power cons Q3FY11


-Revenue up 5% at Rs 1558 cr vs Rs 1488 cr


-PAT down 20% at Rs 197 cr vs Rs 245 cr


-EBIDTA margin at 27.5% vs 34.8%


-Total Exp up 15% at Rs 1230 cr Vs Rs 1066 cr






Kirloskar Ferrous Q3FY11


-Revenue up 38% at Rs 284 cr Vs Rs 206 cr


-PAT down 23% at Rs 10 cr Vs Rs 13 cr


-EBIDTA margin at 4.55% vs 4.32%


-Consumption of raw material up 50% at Rs 235 cr Vs Rs 157 cr






Hinduja Foundires Q3FY11


-Revenue up 42% at Rs 156 cr Vs Rs 110 Cr


-PAT up 42% at Rs 3.2 cr Vs Rs 2. 2 Cr


-EBIDTA margin at 12.59% vs 14.35%






SKS Microfinance Q3


-Net profit at Rs 34.2 cr vs Rs 55.5 cr (YoY)


-Revenue at Rs 363 cr vs Rs 250 cr (YoY)


-Write off, provisioning stands at Rs 100 crore


-Makes Rs 26.98 crore provisioning;


-Provisioning followed by Malegam report;






Deccan Chronicle Holdings okays merger of 2 companies with self


Deccan Chronicle says


-Deccan Chargers Sporting Venture, Odyssey India to merge


-No fresh shares to be issued as units fully owned by company






SAIL Chairman says


-Committed to launching FPO by end of FY


-Still studying timing for filing DRHP


-FPO committee will take final call on I-Bankers by end of week






Other stocks and sectors that are in news today:


-L&T to turn itself in 9 business verticals to be more competitive and offer a planned transition to senior management (ET)


-Ispat allots 1.09 billion shares to JSW Steel


-USL acquires 7.3% equity of Pioneer Distilleries at Rs 88.55/sh through open market


-Sun Pharma plans its biggest acquisition in the USA to boost sales in the world’s largest pharmaceutical market (BS)


-Bharti Shipyard mulls rights issue to repay its debt, currently having a total debt of Rs 2300 crore (DNA)


-IDFC may raise funds through External commercial borrowing (ECB) in the global markets (DNA)


-Mahindra group buys strategic stake in East India company


-Karnataka Bank board fixes issue price for its rights issue in the ratio of 2:5 at Rs 85/share


-Zee Learn board meet on 27th: proposal for consideration of Education Infrastructure assets.


-Securities in F&O ban: Videocon and Suzlon


-Listing of Dalmia Bharat Enterprises post scheme of arrangement on 27th January


-Hindustan Composite buy back at maximum Rs 550/share


F&O Cues:


Total Nifty futures up Rs 1154 crore, Options up Rs 693 crore
Stock futures net add 2 cr shares in Open Int

Nifty Fut OI net add 5.7 lakh shares in Open Int; Nifty futures discount at 3 pts versus 5 pts prem
Nifty Open Int PCR up at 0.93 versus 0.89
Nifty Put add 21 shares in Open Int, Call shed 12.1 shares in Open Int
Highest Open Int outstanding on call side at 6200 call, 5600 Put, 6000 call
Nifty Jan 5700 Put add 8.4 lakh shares in Open Int
Nifty Feb 5800 Call add 6.6 lakh shares in Open Int
Nifty Feb 5700 Put add 5.7 lakh shares in Open Int
Nifty Jan 5400 Put add 3.6 lakh shares in Open Int
Nifty Feb 6100 Call add 3.7 lakh shares in Open Int
Nifty Feb 5900 Call add 3 lakh shares in Open Int
Nifty Feb 6000 Call add 2.5 lakh shares in Open Int
Nifty Jan 5700 Put shed 16.8 lakh shares in Open Int
Nifty Jan 5600 Call shed 11.7 lakh shares in Open Int
Nifty Jan 5600 Put shed 3 lakh shares in Open Int
FIIs in F&O Jan 24
FIIs net sell Rs 261 crore in Index Futures; Open Int up 51996 contracts
FIIs net buy Rs 184 crore in Index Options; Open Int down 5217 contracts
FIIs net buy Rs 549 crore in Stock Futures; Open Int up 12023 contracts
FIIs were net sellers to the tune of Rs 261 crore in Index Futures; which open interest (OI) was up by 51996 contracts. However, FIIs were net buyers of Rs 549 crore in Stock Futures; which OI was up by 12023 contracts.
Marketwide rollover was at 37% and Nifty rollover at 31%. Nifty Open Interest PCR was up at 0.93 versus 0.89.
Nifty January 5700 Put added 8.4 lakh shares in OI while Nifty February 6100 Call added 3.7 lakh shares in Open Interest.
SBI rallied 3.3%; its OI was down by 10%. Delivery volume surged to 16.2 lakh shares as against 10.8 lakh and there was delivery based buying worth Rs 450 crore.
Unwinding and fresh shorts were seen in ONGC. The stock rose 2.7%; its OI was down 5%.
Tata Steel went up 3%; its OI was up by 4% and delivery volume increased at 27.8 lakh shares versus 21.6 lakh. It has completed rollover of 61%.
Shree Renuka Sugars rose 4.3%; its OI was down by 6% and delivery volume went up to 37 lakh shares versus 12.7 lakh. Rollover of the stock was at 50%.
Orbit Corp shot up 11.5%; its OI was down by 3%. Short covering & speculative buying were seen in stock.

24 Jan 2011 Closing Market Updates

24 Jan 2011 Closing Market Updates  15:30

Market gained cautiously on low volumes as RBI policy will be announced tomorrow. Nifty was hovering around 5720-5745 gaining 45.85 and ended at 5742.35. Sensex gained 145.49 points to end at 19153.02
As today's most traded Nifty Option (Jan 5700 PUT) added 34.55% in OI with atp of 29.5 which has ended at 22.4. It clearly shows the huge write off. Total volume was 2.35 crores. It will clearly give signal about the market mood for the next 2 days.
Among BSE Sectoral Indices, Bankex gained the most by 2.36% whereas Oil & Gas Index and  Healthcare Index were the only losers with 0.20% & 0.07% respectively.
In Nifty50 stocks, Maruti gained the most by 4.10 % and ended at 1299.80 and Wipro was the top loser with 2.62% and ended at 444.
SBIN was the turnover topper by traded value and Shreeashta was the most traded stock on NSE today.
Advance Decline Ratio : 801/560
World Major Indices :

Hang Seng : -75.08
Nikkei : +70.59
FTSE : +6.08
CAC : -1.57
DAX : -28.12
Dow Futures : +3.00
Nasdaq Futures : +0.25

24 Jan 2011 Daily Recommendations

24 Jan 2011 Morning Market UPdates  08:55
Note : Follow Buy recommendations in Positive market bias and v.v.


Buy Andhrabank Abv 136 sl 132 T 141
Buy Axisbank Abv 1298 sl 1287 T 1323
Buy Bajaj-auto Fut Abv 1326 sl 1307 T 1352
Buy Banknifty Fut Abv 10970 sl 10921 T 11164 P
Buy Bhel sl 2174 T 2240
Buy Centurytex sl 350 T 386 P
Buy Rcom Abv 138 sl 135 T 148
Buy SBIN Abv 2606 sl 2582 T 2679 P
Sell Jindalsaw Bel 211 sl 216 T 204

Results today: ICICI Bank, Union Bank of India, Idea Cellular, Indian Bank, JSPL, Godrej Consumers, Jindal Steel, Sesa Goa, SKS Finance, Sobha Dev, Deccan Chronicle
Chambal Fertiliser Q3 (cr - crore, vs - versus)

-Revenue up 18.5% to Rs 1353 cr vs Rs 1142 cr
-OPM 17% vs 16.2%
-PAT up 35% to Rs 107 cr vs Rs 80 cr


Omkar Speciality Chemical IPO opens today
-Price band Rs 95-98/sh
-Offer to raise Rs 76.95-79.38 crore


Tata Steel sets issue price for FPO at Rs 610/share: NW18
-QIB (net of anchor): 10.41 times (x)
-Retail: 1.46x
-HNI: 7.21x
-Employee: 0.05x
-Overall: 5.98x
ONGC :
-Mumbai offshore oil pipeline leakage stopped
-To disperse Mumbai offshore oil spill within 48 hours
RIL Q3 (Largely inline with street expectations) (YoY)
-Sales up 5.2% at Rs 59789 crore Vs Rs 56856 crore
-OPM at 15.96% Vs 13.80%
-Net profit up 28.1% at Rs 5136cr Vs Rs 4008cr
-GRM at USD 9/bbl Vs USD 7.9/bbl QoQ
-Petchem margins up 60 bps at 15.2% Vs 14.6%
-Oil and Gas margins down 360 bps at 36% Vs 39.6% QoQ
-Crude throughput at 16.1 MMT Vs 16.9 MMT QoQ
-Utilization at 104% Vs 109% QoQ
-Lower utilization on account of planned shutdown at Jamanagar refinery
-Other expenses up 7.1% at Rs 4142 crore Vs Rs 3869 crore QoQ
-Q3 Other un-allocable expenses including forex loss of Rs 117 crore
-KG-D6 average production in Q3 at 54.5 mmscmd
SBI Q3
-Net profit at Rs 2,828 cr Vs Rs 2,479.1 Cr (YoY)
-NII at Rs 9,050 cr vs Rs 6,316.3 cr (YoY)
Tech Mahindra Q3
-Consolidated net profit at Rs 260 cr vs Rs 170 cr (QoQ)
-Consolidated income from operations at Rs 1,211 cr vs Rs 1,187 cr (QoQ)
Tech Mah says from boardroom
-Q3 volume growth flat sequentially
-Q3 operating profit margin at 20.6%
-Q3 IT utilisation at 76.3%
-Discretionary IT spending slow to pick up
-Q3 attrition around 30%
-Debt as on December at Rs 1,348 cr vs Rs 1,426 cr in September
-Cash, cash equivalents at Rs 519 cr as on December 31
-Tepid quarter due to sluggish growth in telecom sector
-Strong hedge portfolio to protect margins in short-term
-Expect AT&T biz to grow
-Business from BT will not be affected by stake sale
-Details on merger with Mahindra Satyam to be clearer soon
Godrej Consumer Q3
-Cons net profit at Rs 118.8 cr vs Rs 85.1 cr (YoY)
-Cons net sales at Rs 980.4 cr vs Rs 517.6 cr (yoy)
Royal Orchid Q3
-Consolidated net profit at Rs 4.4 cr vs Rs 3 cr
-Consolidated revenues at Rs 40.9 cr vs Rs 31.3 cr (YoY)
-Consolidated EBIDTA margins at 29% vs 24.7%
Bharat Forge Q3
-Net profit at Rs 82.6 cr vs Rs 38 cr (YoY)
-Net sales at Rs 754 cr vs Rs 496 cr (YoY)
Other stocks and sectors that are in news today:
-Maruti ups vehicle prices by up to Rs 8,000
-Kotak Mahindra Bank hikes rates on some deposits by 25-50 bps effective January 22
-Government in process to ban FDI in the wholesale marketing arm of the tobacco companies (BS)
-Jyoti Structures rights issue opens today (ET)
-Vodafone gives a nod for Essar IPO (ET)
-Thermax to setup country’s first geothermal power plant in Maharashtra (ET)
-Nalco to foray into titanium production forms a JV with Indian Rare Earths will entail an investment of Rs 400 crore (ET)
-Bayer rejects Natco's VL plea for grant of voluntary license for Nexavar
-DCB mulling a QIP of Rs 150 cr in about six months reducing the promoter’s holding by 2-3% (BS)

F&O cues:

Total Nifty futures up Rs 1060 crore, Options up Rs 894 crore
Stock futures net add 35 lakh shares in OI
Nifty Fut Open Int net shed 14.4 lakh shares in OI; Nifty futures prem at 5 pts prem versus 8 pts prem
Nifty OI PCR down at 0.89 from 0.91
Nifty Put shed 3.6 shares in Open Int, Call add 15.7 shares in OI
Highest OI outstanding on options side at 6200 call, 5600 Put, 6000 call, 5700 call
Nifty Jan 5600 Put add 10.7 lakh shares in OI
Nifty Jan 5700 Call add 9.8 lakh shares in OI
Nifty Feb 5400 Put add 5.2 lakh shares in OI
Nifty Jan 5800 Call add 5 lakh shares in OI
Nifty Feb 6000 Call add 3.2 lakh shares in OI
Nifty Feb 5600 Put add 2.7 lakh shares in OI
Nifty Jan 5700 Put shed 12 lakh shares in OI
Nifty Jan 5500 Put shed 10.9 lakh shares in OI
Nifty Jan 6200 Call shed 3 lakh shares in OI
FIIs in F&O on Jan 21
FIIs net sell Rs 922 crore in Index Futures; OI up 39289 contracts
FIIs net sell Rs 11 crore in Index Options; OI down 1344 contracts
FIIs net buy Rs 227 crore in Stock Futures; OI down 11785 contracts


Market cues:

NSE F&O Open Int was up Rs 1955 crore at Rs 1.55 lakh crore.
FIIs net sell USD 183 million in the cash market on Jan 20

MFs net buy Rs 27.5 crore in the cash market on Jan 20
Nifty rollover 16%
SBI reported strong operational performance; Margins expand, supported by CASA and hike in lending rate
RIL Q3 largely inline with street expectations
Tata Steel FPO finally subscribed 6.03 times, QIBs: 10.4x, NIIs: 7.2x, Retail: 1.6 x
As per provisional data of January 21, FIIs were net sellers of Rs 368 crore in the cash market. FIIs were net sellers of Rs 726 crore in the F&O market. DIIs were net buyers of Rs 223 crore in the cash market.

Disclaimer :



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