Indian Stock News by Experts

Stocks Added to F&O - Sept 6 2007

<DIV>                        <TABLE class=MsoNormalTable style="MARGIN-LEFT: 4.65pt; WIDTH: 306px; BORDER-COLLAPSE: collapse; HEIGHT: 371px" cellSpacing=0 cellPadding=0 border=0> <TBODY> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: windowtext 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 1pt solid; HEIGHT: 13.5pt" vAlign=top width=61> Sr no.<o:p></o:p></TD> <TD style="BORDER-RIGHT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 198.4pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 1pt solid; HEIGHT: 13.5pt" width=265> Security Name<o:p></o:p></TD> <TD style="BORDER-RIGHT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: windowtext 1pt solid; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: medium none; WIDTH: 92.15pt; PADDING-TOP: 0in; BORDER-BOTTOM: windowtext 1pt solid; HEIGHT: 13.5pt" width=123> Symbol<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 1</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> 3I INFOTECH LTD. <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top width=123> 3IINFOTECH<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 2</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> APTECH LIMITED <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> APTECHT<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 3</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> BHUSHAN STEEL & STRIPS LT <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> BHUSANSTL<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 4</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> BIOCON LIMITED. <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> BIOCON<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 5</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> CMC LTD. <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> CMC<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 6</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> HAVELLS INDIA LIMITED <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> HAVELLS<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 7</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> LAKSHMI MACHINES LTD <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> LAXMIMACH<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 8</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> NIIT TECHNOLOGIES LTD. <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> NIITTECH<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 9</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> NUCLEUS SOFTWARE EXPORTS <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> NUCLEUS<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 10</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> SASKEN COMMU TECHNO LTD <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> SASKEN<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 11</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> TECH MAHINDRA LIMITED <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> TECHM<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 12</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> TULIP IT SERVICES LTD <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> TULIP<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 13</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> WELSPUN GUJ ST. RO. LTD. <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> WELGUJ<o:p></o:p></TD></TR> <TR style="HEIGHT: 13.5pt"> <TD style="BORDER-RIGHT: 1pt solid; PADDING-RIGHT: 5.4pt; BORDER-TOP: medium none; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; BORDER-LEFT: 1pt solid; WIDTH: 45.75pt; PADDING-TOP: 0in; BORDER-BOTTOM: 1pt solid; HEIGHT: 13.5pt" noWrap width=61> 14</TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 198.4pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=265> YES BANK LIMITED <o:p></o:p></TD> <TD style="PADDING-RIGHT: 5.4pt; PADDING-LEFT: 5.4pt; PADDING-BOTTOM: 0in; WIDTH: 92.15pt; BORDER-TOP-STYLE: none; PADDING-TOP: 0in; BORDER-RIGHT-STYLE: solid; BORDER-LEFT-STYLE: none; HEIGHT: 13.5pt; BORDER-BOTTOM-STYLE: solid" vAlign=top noWrap width=123> YESBANK</TD></TR></TBODY></TABLE></DIV>

Stocks Added to F&O - Sept 6 2007

Sr no. Security Name Symbol 1 3I INFOTECH LTD. 3IIN…

31 Aug 2007

Ashok Leyland, Cement Sector, Telecommunications

Ashok Leyland, Cement Sector, Telecommunications

CLICK HERE…

31 Aug 2007

Magnum Ventures IPO Subscription

Magnum Ventures IPO Subscription

CLICK HERE…

31 Aug 2007

Oil India IPO coming soon

Oil India IPO coming soon

CLICK HERE…

31 Aug 2007

Upward trend may continue

<DIV>The market is likely to witness upward trend as major Asian gauges like the Nikkei, the Hang Seng index, the Kospi index and the Jakarta index are trading firm in current trades and have gained over 0.5% to 1% each. The domestic indices also gained by strong volatility on Thursday and saw the index gained during intra-day trades to finally closed above 15,100 marks may also help the market to move upward. However, US Market slipped in overnight trades on the back of problems in the credit market may keep investors cautious. Major US indices slipped on Thursday, amid subprime fears and the comments expected today from Federal Reserve chief Ben Bernanke. The Dow Jones industrial average tumbled by 50 points or about 0.4 percent lower, the Nasdaq moved up by two points to close at 2565. The Indian ADRs also witnessed fall on the US bourses. ICICI Bank tumbled 2.08% followed by Dr Reddy's Lab, Infosys, Satyam, Wipro, Tata Motors and Rediff were down around 0.5 -1% each. However, VSNL added 4.44% and Patni Computer gained around 4%. Crude oil prices slipped on Thursday, with the Nymex light <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">crude <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">oil for October delivery fell by 15 cnts to close at $73.36 a barrel. In the commodity space, the Comex gold for Decembert delivery slipped $1.50 to settle at $673.90 an ounce.</DIV>

Upward trend may continue

The market is likely to witness upward trend as major Asian gauges like the Nikkei, the Hang Seng index, the Kospi index and the Jakarta index are trading firm in current t…

31 Aug 2007

Nifty September 2007 futures at sharp discount

<DIV> Turnover slips The Nifty September 2007 futures settled at 4350, a sharp discount of 62.30 points as compared to spot closing of 4,412.30. August 2007 futures & options (F&O) contracts expired today. The NSE's F&O turnover slipped to Rs 71,282.94 crore as compared to Rs 76,510.22 crore yesterday, 29 August 2007. GMR Infrastructures September 2007 futures settled at premium at 806.90 as compared to spot closing of Rs 802.50. Reliance Industries 2007 September futures settled at premium, at 1904.40, compared to the spot closing of Rs 1895 Tata Steel September 2007 futures settled at premium, at 659.45, compared to the spot closing of Rs 657.35. In the cash market, the S&P CNX Nifty rose 53 points or 1.22% at 4,412.30.</DIV>

Nifty September 2007 futures at sharp discount

Turnover slipsThe Nifty September 2007 futures settled at 4350, a sharp discount of 62.30 points as compared to spot closing of 4,412.30. August 2007 futures & options (F&…

31 Aug 2007

It's only words

<DIV>When ideas fail, words come in very handy We could just getaway with a few words like <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana; POSITION: static; BACKGROUND-COLOR: transparent">consolidation, cautious optimism or select buying to explain the near term uncertainty. US markets were flat and are awaiting words from Federal Reserve chairman Ben Bernanke's speech today. Our markets can't wait for that. Asian stocks have risen with gains in metal stocks. While Inflation figures will be closely watched (for lack of other indicators) in India, a host of reports will be watched closely in the US market. Friday brings reports on personal income and spending, factory orders, consumer sentiment and manufacturing in the Chicago-area. Something seemed 'fishy' towards the end of expiry on Thursday. The price differences in the August and September series caught most market observers by surprise. Counters like SAIL seems to have been propped up. The September series contracts also saw the discount rising to a whopping 62 points on Thursday. The rollover in the September series contracts was lower at 66.2% for the Nifty futures and 76.6 % for the stocks futures. This is against 73% in the Nifty futures and 83% in the stocks futures on the last day of the July series. The government sees to be buying time as it announced that it would operationalise the Indo-US civil nuclear deal only after a committee has looked into the objections raised by the Left parties. The Reserve Bank of India has warned that hedge funds and private equity funds, which are major investors in emerging market economies like India, could pull out of these markets, in the face of the continuing crisis in the US mortgage market, causing greater financial volatility. 14 new scrips will be added in F&O from Sept.06. So expect some action on these counters. They include: 3i Infotech, Aptech, Bhushan Steel, Biocon, CMC, Havell's India, Lakshmi Machine Works, NIIT Technologies, Nucleus Software, Sasken Communications, Tech Mahindra, Tulip IT Services, Welspun Gujarat Sthall and Yes Bank BAG Films and Media is witnessing hectic activity on the bourse on hopes of a higher valuation of its proposed foreign currency convertible bonds (FCCB) issue. There are concerns over the performance of textile exports in the current quarter on account of rupee appreciation, said a senior Textile Ministry official on Thursday Bharat Heavy Electricals Ltd (BHEL) has won an order for the supply and installation of the steam generator and steam turbine packages at the upcoming Vallur Thermal Power Project at Ennore in Tamil Nadu involving two units of 500 MW each. Finance Minister P Chidambaram has favoured acceptance of the pricing formula proposed by Reliance Industries for natural gas to be produced from its eastern offshore KG-D6 block from July 2008. State Bank of Hyderabad (SBH) has put its public issue plans on hold till December and is awaiting 'specific roadmap' on a possible merger with State Bank of India. TVS Motor Company rolled out seven vehicles, including three variants of its new three-wheeler, marking its foray into the segment The domestic steel prices are set to rise in September, with a hike of Rs 500-1,000 a tonne in hot rolled coil (HRC) rates from the beginning of the month. This will be the first rise in prices in the financial year and after the drop in July by the same amount. Markets continued its upward run for the fourth straight trading session as bulls enter in to the September series. Global cues coupled with strong gains in the index heavyweights like RIL, ICICI Bank and IT bellwether Infosys aided the benchmark Sensex to close above the 15100mark. Realty and Oil & Gas refiners were on the receiving end. Finally, the BSE 30-share Sensex closed at 15,121 surging 128 points. NSE Nifty added 53 points to close at 4412. Puravankara Projects started trading at a discount on the bourses and closed 9.5% lower at Rs362 against the issue price of Rs400. The Indian real-estate developer raised Rs8.6bn selling. The company had extended its IPO period and reduced its price band from Rs500- 525 to Rs400-450 a share. The scrip touched an intra-day high of Rs390 and a low of Rs310 and recorded volumes of over 1,00,00,000 shares on NSE. Ashok Leyland advanced by 0.8% to Rs37.9 after Nissan agreed to team up with the company for making Light trucks. The scrip touched an intra-day high of Rs38 and a low of Rs37 and recorded volumes of over 38,00,000 shares on NSE. IVRCL Infrastructure advanced by 2% to Rs373 after the company announced that they secured orders worth Rs3.2bn. The scrip touched an intra-day high of Rs384 and a low of Rs363 and recorded volumes of over 20,00,000 shares on NSE. Apollo Hospital slipped by 1.4% to Rs484 after the company announced that they have purchasesd US based Medical Services Company. The scrip touched an intra-day high of Rs505 and a low of Rs493 and recorded volumes of over 84,000 shares on NSE. Sun TV rallied by over 6% to Rs330.The Company through its subsidiary - South Asia FM Ltd (SAFL) has entered into a strategic alliance with Red FM to further its FM Radio broadcasting business in the North, West and East Indian markets. The scrip touched an intra-day high of Rs348 and a low of Rs311 and recorded volumes of over 12,00,000 shares on NSE. Auto stocks were in top gear led by gains in the index heavyweights like Tata Motors the scrip surged by over 1% to Rs680, Bajaj Auto was up by 2% to Rs2368, M&M was up by 3.5% to Rs677 and Maruti gained by 0.4% to Rs836. Select Oil & Gas stocks witnessed selling pressure. HPCL was down by 1% to Rs233, IOC slipped 1% to Rs383. Oil Exploration stocks were in momentum RIL gained by 1. 2% to Rs1912 and ONGC added 1% to Rs840. Sugar stocks continued to be in the limelight after UP Government requested Centre to grant Rs20bn interest free loan for state sugar companies. Bajaj Hindusthan surged by over 3% to Rs137, Balrampur Chini advanced by over 2.8% to Rs61, Renuka Sugar jumped by 1.5% to Rs538 and Sakhti Sugar rallied by over 10% to Rs79. IT stocks ended higher led by gains in the heavyweight Infosys, the scrip was up by 1.5% to Rs1865, Patni gained by 2.5% to Rs509, Wipro advanced by 1.5% to Rs477 and Financial Technologies added 2.7% to Rs2382. Metal stocks witnessed some profit booking at higher levels. National Aluminum slipped by 4.5% to Rs255, Tata Steel edged lower by 0.5% to Rs657. However, SAIL gained by 3% to Rs166, Hindalco gained by 1.7% to Rs159 and Sterlite Industries lost 3.7% to Rs638.Uncertainty is likely to continue for the market after UPA announced that they will set up a committee to examine the implications of INDO-US nuclear deal, in order to convince the Communist parties to accept the landmark pact. Given the volatility we had on the last day of F&O expiry for the month of August, the market is clearly struggling for guidance. Even, the outlook for liquidity flows, from global funds, is uncertain as institutional investors are still waiting for a clear direction. We will continue to witness stock-specific action. A lot will also depend on the overseas markets especially crude oil prices Fund Activity: FIIs were net sellers of Rs5.6bn (provisional) in the cash segment on Thursday and the local institutions bought worth Rs3.5bn. In the F&O segment, On Wednesday, foreign funds sold worth Rs1.9bn in the cash segment. Mutual funds were net buyers to the tune of Rs0.5bn. Major Bulk Deals: Andhra Cement was bought by ICICI Bank. Axis Bank was bought by Merill Lynch and LIC while the same was sold by Barclays Captal. Birla Corp was bought by Emerging Markets and was sold by Citi. DIsh TV was bought by Reliance MF and sold by Fidelity. Dwarikesh Sugar was bought by Merill Lynch. Kirloskar Electricals was bought by Franklin Templeton and sold by HSBC. Triveni Engineering was bought by CLSA Mauritius. Lower Circuit: Yashraj Securities Upper Circuit: Evinix, Gremac Infrastructure, ETC Network, Ruby Mills, Flawless Diamond, Jai Corp, Genus Overseas, Raj Tele, Bank of Rajasthan, Kalindi Rail, Vakran Software and BF Utilities Delivery Delight (Rising Price & Rising Delivery): Abnormal Delivery: Major News & Announcements: Ranbaxy gets tentative FDA nod for Galantamine ICSA India to split each share into five TCS announces Rs5.74bn deal with BSNL Areva T&D secures 67mn Euro Substation order from Saudi Arabia Phoenix Mills teams up with Shangri-La for Luxury hotel project </DIV>

It's only words

When ideas fail, words come in very handyWe could just getaway with a few words like consolidation, cautious optimism or select buying to explain the near term uncertainty.…

31 Aug 2007

India Technicals

India Technicals

Nifty — The index opened on a positive note and saw range-bound movement; it firmed up towards the close and ended the day with gains of 34 points.Resistance — The index has…

31 Aug 2007

Caravaggio's anchor

Caravaggio's anchor

Investors not only use psychological anchors to price assets but they also overestimate individual capabilities. ... But the problem does not end here with value anchors. Do…

31 Aug 2007

Puravankara Projects ends with 10% discount

Puravankara Projects ends with 10% discount

CLICK HERE…

31 Aug 2007

Bellary Steels & Alloys tops volume on BSE

<DIV> 4.36 crore <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">shares were traded in Ispat Industries counter on BSE today. The scrip topped volumes on BSE. The share price declined 4.28% to Rs 4.47. Bellary Steels & Alloys reported a net loss of Rs 28.23 crore in Q1 June 2007 as against net loss of Rs 24.58 crore in Q1 June 2006. Sales rose 2.45% to Rs 9.63 crore in in Q1 June 2007 over Q1 June 2006. On 28 June 2007, the company said the corporate <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">debt <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">restructuring proposal submitted in June 2007 is under the active consideration of the Industrial Development Bank of India, the lead financial institution for the company. The proposal is expected to be completed and in place within the next three months. After the restructuring of debts availability of captive ore and commissioning of the power plant, the bottom line and the cash flow would improve tremendously. Ispat Industries clocked the second highest volume of 1.6 crore shares on BSE. The shares price rose 0.76% to Rs 18.45. As per recent reports, company is planning to invest about Rs 10,000 crore within five years to ramp up domestic production. It is also planning to expand in overseas through capacity expansion and backward integration. Ispat Industries reported net profit of Rs 8.37 crore in Q1 June 2007 as against net loss of Rs 111.49 crore in Q1 June 2006. Sales rose 8.48% to Rs 1813.34 crore in Q1 June 2007 over Q1 June 2006. The results were announced on 24 July 2007. Tata Teleservices (Maharashtra) clocked the third highest volume of 1.55 crore shares on BSE. The share price declined 3.08% to Rs 31.50. Tata Teleservices (Maharashtra) reported a net loss of Rs 28.43 crore in Q1 June 2007 as against net loss of Rs 112.59 in Q1 June 2006. Sales rose 21.47% to Rs 393.34 crore in Q1 June 2007 over Q1 June 2006. The results were announced on 30 July 2007. Nagarjuna Fertilizers & Chemicals clocked the fourth highest volume of 1.29 crore shares on BSE. The share price rose 2.28% to Rs 35.90. The derivative contracts in Nagarjuna Fertilizers & Chemicals underlying are currently in the ban period on NSE as it has crossed 95% of the market-wide position limit. Net profit of Nagarjuna Fertilizers & Chemicals declined 7.02% to Rs 7.15 crore on 2.18% rise in sales to Rs 300.30 crore in sales in Q1 June 2007 over Q1 June 2006. The results were announced on 27 July 2007. Jaiprakash Hydro-Power clocked the fifth highest volume of 1.07 crore shares on BSE. The share price rose 4.55% to Rs 49.40. Net profit of Jaiprakash Hydro-Power rose 28.28% to Rs 50.39 crore on rise of 7.65% in sales to Rs 93.99 crore in Q1 June 2007 over Q1 June 2006. </DIV>

Bellary Steels & Alloys tops volume on BSE

4.36 crore shares were traded in Ispat Industries counter on BSE today. The scrip topped volumes on BSE. The share price declined 4.28% to Rs 4.47. Bellary Steels & Alloys…

31 Aug 2007

VSNL leads gainers in 'A' group

<DIV> India's eighth largest telecommunication <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">services <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">provider in terms of sales, Videsh Sanchar Nigam (VSNL) spurted 6.71% to Rs 407.25 and it topped the gainers in BSE's A group <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: blue! important; BORDER-BOTTOM: blue 1px solid; FONT-FAMILY: Arial,Helvetica,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">shares. India's second largest electronic media company by sales Sun TV moved up 5.87% to Rs 330.25. It was the second biggest gainer in A group. The company through its subsidiary South Asia FM (SAFL) has acquired a 48.9% stake in Red FM with an aim to expand its FM radio broadcasting business. Red FM's promoters would hold the remaining 51% stake. State-run engineering firm Hindustan Machine Tools (HMT) jumped 5.61% to Rs 62.10 and came third among top gainers in A group. Small-sized auto ancillaries maker Escorts gained 5.50% to Rs 90.15. It was the fourth biggest gainer in A group. Yesterday, 29 August 2007, National Stock Exchange banned building fresh positions in the company's derivatives contracts as the open interest crossed 95% of the position limit. GlaxoSmithKline Pharma rose 5.35% to Rs 1184.50 and came fifth among top gainers in A group. The company, recently launched anti-cervical cancer vaccine Cervarix in Southeast Asia. The drug combats the virus that is responsible for over 70% of cervical cancer cases worldwide. </DIV>

VSNL leads gainers in 'A' group

India's eighth largest telecommunication services provider in terms of sales, Videsh Sanchar Nigam (VSNL) spurted 6.71% to Rs 407.25 and it topped the gainers in BSE's A g…

31 Aug 2007

Of bubbles and troubles

<DIV> In the wake of the discount rate cut by the <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">Federal <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">Reserve on 17 August, Asian <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">stock <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">markets staged an impressive recovery last week. Just as drug addicts deprived of their daily shot when they run out of money treat themselves with more than one shot when they find some money, investors have grabbed Asian stocks with both hands and more. This hunger for Asian stocks will result in indigestion, eventually. Some historical perspective would help investors. In the 1990s, China exported deflation to the rest of the world by becoming the centre for global manufacturing. The West, trying to opportunistically lower inflation, welcomed it. Import prices came down dramatically everywhere. The declining <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">price <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">of <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">crude <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">oil added its own deflationary weight to this mix. That is why, when the technology, media and telecom bubble melted in the US and Europe, central bankers' fears were about deflation. They eased aggressively—some early, some late—and they kept rates low for long. They were willing to take the risk of allowing some inflation back into the system. Soon, the pendulum began to swing the other way. Crude oil prices began to rise from a combination of war, political tensions in West Asia, rising demand and supply discipline. Strong global growth revived prices of industrial metals, which boomed. With each year of strong growth, capacity utilization edged up globally and all raw material prices began to climb. China thus began to export inflation, indirectly. It is about to do so more directly now that its inflation rate has climbed to nearly 6% from around 1% a year ago. The US, which had put monetary policy on hold in 2006 but was keeping its finger on the trigger for another rate hike, has been forced to take its hand off the trigger because Wall Street has just sent a bill to the Main Street and policymakers are paying up. Politicians would see to it that they pay a lot more. In America, capitalists have rigged the system effectively in their favour. David Walker, the comptroller general of the country, warns darkly of the threat of the US going the way of the Roman Empire. Perhaps I am digressing. Even as the central bank is busy providing liquidity and cutting interest rates, inflation ghosts are not about to disappear soon. Commodity prices have resumed their uptrend. Wheat prices are at a 20-year high and crude oil is firmly ensconced above $70 per barrel. Monetary policy contradictions might soon reappear in the US. That is what happened in 1987. After the infamous October 1987 crash, the federal funds rate was lowered from 7.25% to 6.5% by February 1988. Soon, within six months, the rate was rising. In the middle of the super-bull market between 1982 and 1999, the <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">S&P <SPAN class=kLink style="FONT-WEIGHT: 400; FONT-SIZE: 12px; PADDING-BOTTOM: 1px; COLOR: orange! important; BORDER-BOTTOM: orange 1px solid; FONT-FAMILY: Verdana,sans-serif; POSITION: static; BACKGROUND-COLOR: transparent">500 delivered a princely annual return of just over 4% from September 1987 to end-1994. Adjusted for inflation, the real returns were actually negative. Asia fared little better. Between October 1987 and December 1990, the Hang Seng index returned -30.0%, the Singapore Straits Times index, -15.0% and Taiwan weighted index, -33.0%. Only Korea's KOSPI gave positive 40.0% returns. With the exception of Japan, Asian stocks began to rally in 1991, up to end-1993. But, that was because it was preceded by a three-year drought. After a five-year feast of returns, famine awaits Asian investors, as not just the US but China, too, will be complicating matters for them. In China, monetary policymakers had to put on hold even token attempts at tightening on seeing the inflation rate climb to 5.6% because the US had successfully exported its structured finance and alphabetical viruses all over the globe. Initially, we were told that Chinese banks were not infected. Mea culpa followed reluctantly last week. It is just the first instalment of confessions. So, China held back from tightening monetary policy and came up with a clever plan to export its stock price bubble. It allowed its residents to buy foreign shares, including H-shares in Hong Kong. The Hang Seng index, at one stage, had surged 3,000 points from the intraday low on 17 August to an intraday high on Tuesday (21 August) morning. This was insanity at its best (or, worst?). Economic theory has taught us that developed countries would export technology and capital while developing countries would export raw material and consumer goods. Instead, the US exported its housing bubble and consequent troubles to the other (China) and the other is now exporting its bubble to Hong Kong and, through that, to the rest of Asia and the world. It would be soon exporting its inflation as well. When economic policy in two of the world's biggest economies is geared towards propping up asset prices and ponzi schemes, the end result would likely be disastrous. It would not hurt investors to be afraid.</DIV>

Of bubbles and troubles

In the wake of the discount rate cut by the Federal Reserve on 17 August, Asian stock markets staged an impressive recovery last week. Just as drug addicts deprived of th…

31 Aug 2007

Market Close: Positive ending to a very choppy day!!

<DIV>Volatile day on the back of FNO Expiry but the Indian indices ended with gains for the fourth straight session. Indices had a good start following its firm global peers. But profit booking at higher levels kept indices to trade in a narrow range. But Final hours of trading witnessed some value buying in index heavy weights like M&M, Wipro, HDFC Bank and Bajaj Auto which pushed up the Indices to end in green. Buying was seen across the board but except Realty stocks which ended in red. Auto, Sugar, Banking and IT stocks cheered the day. Mid and Small caps were inline with the front line indices. Asian markets ended firm while Europe was in green. Sensex closed up by 129 points at 15121.74. It was helped up by gains in RCVL (534.4,+3 percent), HDFC Bk (1182.05,+2 percent), Bajaj Auto (2364.55,+2 percent), ACC (1061.1,+2 percent) and ICICI Bk (872.05,+2 percent). Restricting the gains were Cipla (165.2,-3 percent), Rel Energy (766.75,-2 percent), TISCO (657.35,0 percent), L & T (2580.3,0 percent) and SBI (1572.3,0 percent). TTK Prestige kitchen solutions provider embarked into a joint development pact with the Salarpuria Group to carry out a commercial project, on its factory land in Bangalore. Salarpuria is a Kolkata-based property developers. The TTK group, which initially planned to sell its factory land would either build an office complex or a retail mall on it to add another revenue stream. Investment for a mall project is estimated around Rs 150 cr while an office complex will cost about Rs 100 cr. TTK owns 6.5 acres at Dooravaninagar, Old Madras Road, Bangalore. After shifting many of its operations to Tamil Nadu and Uttarakhand from Bangalore, it plans to exploit the land for commercial purpose. It also partnered with Ernst & Young to identify real estate developing agency. It is awaiting clearances and approvals from the Bangalore Development Authority and local authorities to commence work on the project. So this benefits will not accrue immediately. However on back of the envelope calculations indicate land value at Rs 50 per share. Thats quite good. The business valuation is cheap. We have a wow call on TTK and that we believe it should deliver. The stock closed up by 3.26%. Trai has recommended that there will be no limit on the number of players in telecom sector, relaxation of stringent M&A norms and technology neutrality for telecom licences. It further added that both GSM and CDMA players should pay an entry fee and higher spectrum fee for additional 2G radio frequency allocation. Trai has also proposed increasing the spectrum fee in addition to recommending a one time entry fee for allocation of spectrum beyond 10 Mhz for GSM operators and 5 Mhz for CDMA operators. Trai has not warped under intense pressure from India?s powerful GSM lobby who were demanding a cap on the number of operators, retention of the existing M&A norms and ban of offering dual technology (CDMA and GSM) under the same licence and retention of the existing spectrum allocation norms. As per Trai?s proposals, operators offering dual technologies will be subject to an entry fee, which is equivalent to the amount for obtaining a new licence for that service area. This implies CDMA operator such as Reliance Communications which has applied for GSM spectrum across the country must pay an entry fee of Rs 1,700 cr to offer these services on a pan India level. These new rules would lead to more competition. There are some positives as well in terms of lower fees. The negative is more for the GSM Telecom companies like Bharti and Idea. Rcom ended up by 1.7% while Bharti closed marginally down. Technically Speaking: It was a choppy session through out the day before closin in green. Sensex touched intraday high of 15201 and low of 15054. Overall breadth was in favor of Advances, where the Advances to Declines ratio stood at 1.5:1. The turnover was pretty good as the market churned Rs 5378 cr. Sensex has expectedly been choppy and closed below 15200. We can expect a correction in the current rise upto 14960. On the higher side, if Sensex breaks above 15200, we might see a rally upto 15650.</DIV>

Market Close: Positive ending to a very choppy day!!

Volatile day on the back of FNO Expiry but the Indian indices ended with gains for the fourth straight session. Indices had a good start following its firm global peers. But…

31 Aug 2007

RBI Annual Report 2006-2007

<DIV><TR><TD>Assessment of 2006-07 </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Overall Performance </TD></TR><TR><TD height="5"></TD></TR><TR><TD>During 2006-07, the Indian economy exhibited acceleration in growth, led by manufacturing and services sector activities. The sustained high growth since 2003-04 has been supported by increase in domestic savings and investment. Robust growth during 2006-07, however, was accompanied by inflationary pressures on account of rising capacity utilisation, strong growth in monetary and credit aggregates, demand-supply gaps in domestic production of foodgrains and oilseeds, and firm global commodity prices. A series of timely and appropriate measures undertaken by the Reserve Bank and other supply side responses to rising prices made by the Government helped to contain headline inflation. More importantly, the measures facilitated the anchoring of inflationary expectations to a certain extent. Strong growth in general and of the industrial sector in particular enabled the corporate sector to maintain high profitability. This, in turn, resulted in buoyant tax collections and played a major role in improving public finances. The growth process was facilitated by financial market conditions, which remained orderly, barring a few episodes of volatility. However, interest rates in various segments of the financial market hardened to some extent. Strong growth led to a widening of the trade deficit. Nonetheless, the current account deficit, as per cent of GDP, remained unchanged from the previous year since the widening of the merchandise trade deficit was offset to a large extent by the continuing buoyancy in net invisibles surplus. Large capital flows led by external commercial borrowings and net foreign direct investment (FDI) inflows resulted in large accretion to foreign exchange reserves. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Real GDP growth accelerated from 9.0 per cent during 2005-06 to 9.4 per cent during 2006-07. The growth, thus, averaged 8.6 per cent per annum during the four-year period ended 2006-07. Real GDP growth during the Tenth Five Year Plan period averaged 7.6 per cent per annum, the highest in any Plan period. Acceleration in the growth rate during 2006-07 was attributable to buoyancy in the industrial and services sectors, which exhibited double-digit growth (11.0 per cent each). Higher growth in the industry and services sectors more than offset the deceleration in the agricultural sector. Growth in the agricultural sector decelerated from 6.0 per cent in 2005-06 to 2.7 per cent in 2006-07, partly on account of uneven rainfall during the South-West monsoon and partly due to the base effect. Although the overall foodgrains production rose by 3.6 per cent in 2006-07, the production of major crops still did not reach the previous peak touched in 2001-02. Amongst the non-foodgrains, the production of sugarcane and cotton scaled new peaks during 2006-07, while that of oilseeds declined. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Monetary Developments </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Money supply (M3) increased by 21.3 per cent (Rs. 5,80,733 crore) during 2006-07 as compared with 17.0 per cent (Rs. 3,96,878 crore) during 2005-06. Amongst the major components, time deposits exhibited a growth of 23.2 per cent (Rs. 4,41,913 crore) during 2006-07 as compared with 15.3 per cent (Rs. 2,53,056 crore) during 2005-06. Higher growth in time deposits could be attributed to factors such as higher interest rates on bank deposits and availability of tax benefits under Section 80C for bank deposits. On the sources side, growth of bank credit remained high, although there was some moderation. Demand for bank credit was largely broad-based with agriculture, industry and personal loans absorbing 14 per cent, 36 per cent and 24 per cent, respectively, of incremental expansion in overall non-food credit during 2006-07. Growth of credit to sectors such as real estate remained high, albeit with some moderation. In order to maintain asset quality, the Reserve Bank further tightened the provisioning requirements in respect of sectors witnessing high growth in credit. Banks' SLR investments, as a proportion of their net demand and time liabilities (NDTL), declined further to 28.0 per cent by end-March 2007 (close to the prescribed ratio of 25 per cent) as the expansion in investments did not keep pace with the expansion in the NDTL. Net foreign assets remained the key driver of reserve money and the Reserve Bank continued to modulate market liquidity through operations under the liquidity adjustment facility (LAF), issuance of securities under the market stabilisation scheme (MSS) and use of the cash reserve ratio (CRR). </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Headline inflation firmed up from 4.0 per cent, y-o-y, on April 1, 2006 to 5.9 per cent on March 31, 2007 with an intra-year high of 6.7 per cent on January 27, 2007 and a low of 3.7 per cent on April 15, 2006. Both demand and supply side factors added to inflationary pressures during 2006-07. Demand pressures emanated from both high investment and consumption demand, strong growth in credit and monetary aggregates, and elevated asset prices. Supply side pressures emerged from demand-supply gaps in domestic production of major foodgrains and oilseeds amidst rising global prices. Although there was some improvement in domestic agricultural production during 2006-07, the production of major foodgrains has exhibited stagnation over the past few years. For instance, the production of rice, wheat and pulses during 2006-07 was still lower than the previous peaks touched during 2001-02, 1999-2000 and 1998-99, respectively. Consumer price inflation rose from 4.9-5.3 per cent in March 2006 to 6.7-9.5 per cent in March 2007, mainly reflecting the impact of higher food prices. In order to contain inflation and to stabilise inflationary expectations, the Reserve Bank persevered with the policy of pre-emptive actions and gradual withdrawal of monetary accommodation, using various instruments at its disposal flexibly. Between the second half of 2004 and July 31, 2007, the repo and the reverse repo rates were increased by 175 basis points and 150 basis points, respectively. In addition, the cash reserve ratio was raised by 250 basis points (including the increase of 50 basis points effective August 4, 2007). The Government also took various fiscal and supply-side measures to contain inflation during the latter part of 2006-07. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Balance of Payments </TD></TR><TR><TD height="5"></TD></TR><TR><TD>India's balance of payments in 2006-07 reflected a number of positive features. Merchandise trade continued to exhibit robust growth during 2006-07, although there was some loss of pace from the strong growth of 2005-06. The higher growth of imports vis-à-vis exports led to a persistent rise in the trade deficit, on a balance of payments basis. Nonetheless, the current account deficit, as per cent of GDP, remained unchanged (1.1 per cent of GDP) from the previous year since the widening of the merchandise trade deficit was offset to a large extent by the continuing buoyancy in net invisibles surplus. Net capital inflows to India remained buoyant (4.9 per cent of GDP), far exceeding the current account deficit. Higher capital flows could be attributed to the strengthening of macroeconomic fundamentals, greater investor confidence and ample global liquidity. Net FDI inflows from abroad of US $ 19.4 billion exceeded FII inflows (net) during 2006-07 aggregating US $ 3.2 billion. The debt flows (net) at US $ 25.0 billion were led by external commercial borrowings reflecting strong investment demand. Net capital flows, after financing the current account deficit, led to accretion of US $ 36.6 billion, excluding valuation changes, to foreign exchange reserves during 2006-07. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Financial Markets </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Financial markets remained orderly during 2006-07, barring some episodes of volatility, especially during the second half of March 2007. Capital inflows and movements in Government cash balances continued to be the key drivers of liquidity conditions and overnight interest rates. Interest rates in the various market segments hardened during the year, broadly in tandem with the pre-emptive monetary tightening measures taken by the Reserve Bank. By and large, the exchange rate of the Indian rupee exhibited two-way movement with respect to the main reserve currencies during 2006-07. The stock market remained buoyant with the benchmark indices reaching record highs during 2006-07 amidst intermittent corrections. The primary segment of the capital market exhibited buoyant conditions. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Outlook for 2007-08 </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Available information so far indicates continuation of the growth momentum during 2007-08 at a strong pace with the impulses of growth getting more broad-based. Steady increases in the rate of gross domestic saving and investment, consumption demand, addition of new capacity as well as more intensive and efficient utilisation/capitalisation of existing capacity are expected to provide support to growth during 2007-08. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>For monetary policy purposes, the Reserve Bank, in its Annual Policy Statement (April 2007), placed the real GDP growth for 2007-08 at around 8.5 per cent, assuming no further escalation in international crude prices and barring domestic or external shocks. In view of the lagged and cumulative effects of monetary policy on aggregate demand and assuming that supply management would be conducive, capital flows would be managed actively and in the absence of shocks emanating in the domestic or global economy, the Reserve Bank in its Annual Policy Statement noted that the policy endeavour would be to contain inflation close to 5.0 per cent in 2007-08. The Reserve Bank in its First Quarter Review of the Annual Statement of Monetary Policy in July 2007 retained its projection of real GDP growth at around 8.5 per cent, barring domestic and external shocks. Assuming that aggregate supply management will continue to receive public policy attention and that a more active management of the capital account will be demonstrated, the outlook for inflation in 2007-08 in the First Quarter Review remained unchanged. Accordingly, it was indicated in the Review that holding headline inflation within 5.0 per cent in 2007-08 assumed priority in the policy hierarchy; while reinforcing the medium-term objective to condition policy and perceptions to reduce inflation to 4.0-4.5 per cent on a sustained basis. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Monetary Management </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Expansion of money supply (y-o-y) as on August 3, 2007 was higher (21.7 per cent) than a year ago (19.3 per cent) and also higher than the indicative projection of 17.0-17.5 per cent set out in the Annual Policy Statement. Growth in aggregate deposits accelerated, led by time deposits. Bank credit witnessed some moderation from the strong pace of the preceding three years. Growth of non-food credit of scheduled commercial banks was 23.6 per cent, y-o-y, as on August 3, 2007 as compared with 32.5 per cent a year ago. Commercial banks' investments in SLR securities, as per cent of their net demand and time liabilities, at 28.6 per cent were marginally higher than those at end-March 2007, but below those of 31.1 per cent a year ago. Growth of reserve money as on August 10, 2007 at 26.9 per cent (19.6 per cent adjusted for the first round impact of the increase in the CRR) was higher than a year ago (17.2 per cent), mainly on account of accretion to the Reserve Bank's net foreign assets. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Headline inflation, based on movements in the wholesale price index (WPI), moderated to 4.1 per cent, y-o-y, on August 11, 2007 from 5.9 per cent at end-March 2007 and 5.1 per cent a year ago. Inflation for all the three sub-groups of the WPI eased from their end-March levels. Fuel group inflation turned negative (-2.1 per cent) reflecting cuts in domestic prices during November 2006 and February 2007. International crude oil (average) prices have, however, increased by around 28 per cent up to July 2007 from February 2007, when domestic prices were cut last. Non-oil global commodity prices also remained firm led by food and metals. Various measures of consumer price inflation were placed lower in June 2007 (5.7-7.8 per cent) than those in March 2007 (6.7-9.5 per cent). However, consumer price inflation continued to exceed wholesale price inflation mainly on account of higher food prices. Although inflation has eased since end-March 2007, inflationary pressures could potentially persist for several reasons. There are concerns regarding further hardening of international commodity prices, in particular, oil prices. Moreover, the possibility of inflationary pressures from domestic factors such as strong growth in monetary aggregates, elevated asset prices and large capital flows with implications for domestic liquidity conditions need to be recognised. Accordingly, a continuous vigil supported by appropriate policy actions by all concerned would be needed to maintain price stability so as to anchor inflationary expectations on a sustained basis. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The stance of monetary policy in 2007-08, as observed in the Annual Policy Statement, would be conditioned by the patterns in which the global and, more particularly, the domestic environment unfold. The likely evolution of macroeconomic and financial conditions indicates an environment supportive of sustaining the current growth momentum in India. Monetary policy, while contributing to growth, has to ensure and maintain conditions of price and financial stability. Accordingly, the policy preference for the period ahead was articulated strongly in favour of reinforcing the emphasis on price stability and anchoring inflation expectations. The Reserve Bank in its First Quarter Review of the Annual Statement of Monetary Policy in July 2007 observed that monetary policy in India would continue to be vigilant and proactive in the context of any accentuation of global uncertainties that pose threat to growth and stability in the domestic economy. The domestic outlook continues to be favourable and would dominate the dynamic setting of monetary policy in the period ahead. It is important to design monetary policy such that it protects growth by contributing to the maintenance of stability. Accordingly, while the stance of monetary policy would continue to reinforce the emphasis on price stability and well-anchored inflation expectations and thereby sustain growth momentum, contextually financial stability may assume greater importance in the months to come. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Agriculture </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The recent upward trends in global prices of major food items have significant implications for the domestic agricultural sector and overall macroeconomic and financial stability. Increases in global food prices reflected a shortfall in global production and the rising demand for non-food uses such as bio-fuels. Reflecting the sustained uptrend in major food prices, the food price index (compiled by the IMF) reached a 26-year high in June 2007 - the highest since early 1981. Against the backdrop of these hardening trends in global food prices, there is an urgent need to take measures to accelerate the growth in Indian agriculture, especially food crops. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Although the share of agriculture in overall GDP declined over the years from around 40 per cent in 1980-81 to below a fifth in 2006-07, it continues to play an important role in the Indian economy. Since the mid-1990s, however, the growth of the agricultural sector has been low as well as volatile; the growth decelerated from an annual average of 4.7 per cent per annum during the 1980s to 3.1 per cent during the 1990s and further to 2.2 per cent during the Tenth Plan period. Volatility in agricultural production has not only implications for overall growth but also, as the experience of 2006-07 amply demonstrated, for maintaining low and stable inflation. Enhanced growth of the agricultural sector is vital for ensuring food security, poverty alleviation, price stability, overall inclusive growth and sustainability of growth of the overall economy. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The reduction in agricultural growth since the mid-1990s could be attributed to stagnant/declining yields, which, in turn, reflect a variety of factors such as declining investment, lack of proper irrigation facilities, inadequate other infrastructural facilities, inadequate attention to R&D for developing high yielding varieties of seeds, absence of major technological breakthroughs, improper use of fertilisers/nutrients and institutional weaknesses. In view of stagnation in the production of major foodgrains, there may be a need to refocus production efforts in alternative potential areas with suitable agro-climatic conditions, rather than the traditional areas, particularly in the case of rice and wheat. As Indian agriculture continues to be heavily dependent on the monsoon, the need for enhancing the irrigation potential to meet the growing water requirements of farmers and to impart stability to agricultural production and yield assumes greater emphasis. More focus needs to be placed on agricultural research in the coming years as the success so far has been restricted to select crops. A growing disparity between the actual and the potential yields points to a crucial gap between research and extension. There is an urgent need to revive the extension system so that it is able to respond to the emerging demands of renewed agricultural growth. In order to bring marketing reforms, there is a need to take forward the process of implementing Agricultural Produce Marketing Committee (APMC) Act in all the States. There is also a need to have an appropriate legislative framework that is conducive to participatory organisations. In view of significant weather and price risks, appropriate risk mitigation policies would need to be put in place to provide relief to distressed farmers as well as enhance efficiency of production. While agricultural growth is envisaged at four per cent per annum during the Eleventh Plan, the Planning Commission's projections suggest that the production of foodgrains needs to increase by 2-2.5 per cent per annum. The production of non-foodgrains will, thus, have to expand at a much higher rate to achieve the overall target of four per cent which will necessitate substantial development of activities such as horticulture, dairy, poultry, and fishery. This would require a revolution on the lines of the green revolution of the 1970s. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Inclusive growth calls for greater financial inclusion with, inter alia, enhanced and easy access to institutional credit. The programme for financial inclusion initiated by the Reserve Bank in collaboration with banks and several State Governments by adopting modern technology needs to be intensified and expanded urgently. In view of small and fragmented farm holdings, the population dependent upon agricultural activity and incomes will have to increasingly rely on non-farm sources of income in future. Thus, diversification towards activities such as poultry, food processing and other rural industries will be critical for the betterment of living standards in rural areas. While there has been rapid integration of the Indian economy with the global economy since the early 1990s, the pace of progress on intra-regional integration within the country needs to be quickened to enable the rural areas to reap the benefits of higher growth. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Industry and Infrastructure </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The rebound in industrial production that started during 2002-03 continued during 2006-07 resulting from increased domestic and external demand. The sustained growth has led to high capacity utilisation and is contributing to increased investment activity. Modernisation of the capital stock, reduction/rationalisation of import tariffs and other taxes, increased openness of the economy, higher foreign direct investment inflows, greater competitive pressures, increased investment in information and communication technology and greater financial deepening are contributing to productivity gains in industry. The sustained growth in industry is vital to generate employment opportunities and to absorb the disguised labour force dependent upon the agricultural sector. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The manufacturing sector has recorded robust growth, despite several infrastructure deficiencies. It is imperative to augment the existing infrastructure facilities, particularly roads, ports and power, to provide the enabling environment for industry to prosper. There has been mixed progress in the infrastructure sector so far. The telecom sector has witnessed high growth as reflected in the accelerated spread of mobile telephony in the country. Railways and ports have also witnessed some improvement. However, progress remains less than adequate in other sectors such as power, coal, water, roads, urban infrastructure and rural infrastructure. Urban infrastructure is a vital element in the growth process. Studies show that increase in the size of urban agglomerations is associated with large productivity gains. These gains emanate from the proximity to the product as well as labour markets, which provide savings in trade and transport costs on the one hand and the availability of skilled labour on the other. Efficient functioning of cities of all sizes is essential for improving the overall efficiency. Improvements in the provision of water, transport, sanitation, health and education facilities in urban areas are also essential for the welfare of the poor. The High Level Committee on Infrastructure headed by the Prime Minister has estimated that an investment of Rs.14,50,000 crore during the Eleventh Plan would be required to develop world class infrastructure. This would require a substantial increase in spending on infrastructure by both the public and privates sectors from the current levels of 4.6 per cent of GDP to almost 8 per cent of GDP every year. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Services </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The sustained strength of manufacturing activity, strong growth in tourism, improvements in the telecommunications, buoyancy in IT and BPO sectors, robust growth of the construction sector, acceleration in deposit and credit growth and opening up of the insurance sector have buoyed the services sector in recent years. The impressive performance of the services sector was attributable largely to the availability of skilled and cheap labour. However, the sustained acceleration in the services and the manufacturing activities is leading to incipient pressures on the supply of good quality skilled labour. While its demographic profile places the country favourably in terms of manpower availability, there are reports of emerging talent supply shortages. In order to reap the benefits of the demographic dividend, substantial expansion and reforms in the education sector would be needed on an urgent basis. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Fiscal Policy </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The process of fiscal consolidation in Central Government finances under the rule-based framework of the FRBM has been characterised by front-loaded reduction in deficit indicators in 2004-05, pause in 2005-06 and resumption of the process in 2006-07. The fiscal correction process is budgeted to continue during 2007-08. With the gross fiscal deficit budgeted at 3.3 per cent of GDP in 2007-08, the FRBM target of 3.0 per cent by 2008-09 appears feasible. The revenue deficit is budgeted at 1.5 per cent of GDP for 2007-08; the FRBM path envisages elimination of revenue deficit in 2008-09. Adherence to the FRBM target would require a reduction of 1.5 per cent in the revenue deficit/GDP ratio during 2008-09. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The fiscal consolidation strategy has been underpinned by revenue-led correction and reprioritisation of expenditures with a focus on outcomes, reflecting improved quality of adjustment. Maintaining the current buoyancy in tax revenues over a higher base needs to be continued with sustained effort in the light of high income growth. The scope for deepening fiscal empowerment further through improved tax revenues lies in maintaining a moderate structure of tax rates and broadening the base without affecting the growth momentum of the economy. The Government's policy of reprioritising expenditure has led to higher outlays for the social sector. The shares of public expenditure on education and health in India are, however, still low by international standards. Reprioritisation of expenditures towards social sectors along with higher capital outlays would promote fiscal discipline without restricting operational efficiency of the Government. Higher public spending on social services would improve the social infrastructure and provide productivity gains. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>External Sector </TD></TR><TR><TD height="5"></TD></TR><TR><TD>India's linkages with the global economy are getting stronger, underpinned by the growing openness of the economy and the two way movement in financial flows. The ratio of merchandise exports to GDP has been rising since the early 1990s reflecting growing international competitiveness. At the same time, import intensity has been rising steadily as domestic entities have expanded access to internationally available raw material and intermediate goods as well as quality inputs for providing the cutting edge to domestic production and export capabilities. Structural shifts in services exports, led by software and other business services, and remittances have imparted stability and strength to India's balance of payments. The net invisible surplus has offset a significant part of the expanding trade deficit and helped to contain the current account deficit to an average of one per cent of GDP since the early 1990s. Capital flows (net) have remained substantially above the current account deficit and have implications for the conduct of monetary policy and macroeconomic and financial stability. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Like India, several other countries are facing a similar situation of excess foreign exchange inflows which is affecting monetary management in these countries as well. However, monetary management at the current juncture in India is more complex than in other EMEs for several reasons. First, domestic interest rates are higher than the return on foreign exchange reserves, which leads to quasi-fiscal costs. Second, although the fiscal deficit and public debt have declined in recent years in India, by international standards, they still remain high. This restricts the flexibility available to fiscal policy to keep inflation relatively low. Third, in India, the real sector has been liberalised over the years which constrains the ability to take administrative measures with regard to supply management. At the same time, several policy rigidities persist, inhibiting the rapid and flexible adjustments that are needed by the demands of a well-functioning market economy. Further, in India, the banking system has been gradually deregulated and the conduct of monetary policy is largely through the use of market-based instruments. This restricts the ability to use administrative instruments such as prescribing deposit and lending rates, which some other countries may be able to use. Moreover, some countries are managing capital account more actively than before. Finally, it is also necessary to recognise that India is one of the few emerging market economies (EMEs) to record current account deficits, along with a significantly high trade deficit. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>There has been a significant liberalisation of the policy framework with regard to capital outflows over the past few years. The policy regime for capital outflows is designed keeping the specific country context in view, especially characteristics of the real sector, and not merely the contextual level of inflows and extant absorptive capacity of the economy. First, the current regime of outflows in India is characterised by liberal but not incentivised framework for corporates to invest in the real economy outside India, including through the acquisition route. The regime has served the country well since Indian corporates are increasingly able to establish synergies with overseas units; to make up for lack of scale that has been a legacy problem in India, and to quickly acquire domain knowledge through acquisition. Second, significant liberalisation of outflows by individual households has been implemented following recommendation of the Committee on Fuller Capital Account Convertibility (Chairman: Shri S. S. Tarapore, 2006). However, the international experience shows that resident individuals often precede overseas investors in initiating outflows when the perceptions in regard to domestic economy's performance or stability appear to turn adverse. Further, more favourable tax treatment, if any, on investments from foreign destinations relative to domestic investments provides a compelling incentive for round tripping. Third, as regards the regime for outflows through financial intermediaries, the approach is characterised by caution and quantitative stipulations whereby both prudential considerations and compulsions of management of capital account are relevant. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Financial Sector </TD></TR><TR><TD height="5"></TD></TR><TR><TD>During 2006-07, the Reserve Bank continued to fine tune the regulatory and supervisory initiatives. In order to ensure asset quality, prudential measures were further tightened through increases in the provisioning requirements and risk weights in respect of specific sectors. The focus of the various prudential and supervisory measures was on anchoring financial stability while providing flexibility to the financial system. In order to further strengthen the domestic banking sector and to conform the banking sector with international best practices, commercial banks will migrate to Basel II norms in a phased manner from the year ending March 2008. Although implementation of Basel II poses a significant challenge to both banks and the regulators, it also offers two major opportunities to banks, viz., refinement of risk management systems and improvement in capital efficiency. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Monetary Policy </TD></TR><TR><TD height="5"></TD></TR><TR><TD>In view of the incipient inflationary pressures, the stance of monetary policy progressively shifted from an equal emphasis on price stability along with growth (October 2004/April 2005) to one of reinforcing price stability with immediate monetary measures and to take recourse to all possible measures promptly in response to evolving circumstances (January 2007). Concomitantly, the Reserve Bank has taken pre-emptive monetary measures beginning mid-2004 to contain inflation and inflationary expectations. The major policy challenge for monetary policy during the recent period has been to manage the transition to a higher growth path while containing inflationary pressures so that potential output and productivity are firmly entrenched to sustain growth. Monetary measures, supported by supply side and fiscal measures, have helped in containing inflation and anchoring inflation expectations while supporting the growth momentum. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The Reserve Bank's self-imposed medium-term ceiling on inflation at 5.0 per cent has had a salutary effect on inflation expectations and the socially tolerable rate of inflation has come down. In recognition of India's evolving integration with the global economy and societal preferences in this regard, the resolve, going forward, would be to condition policy and expectations for inflation in the range of 4.0–4.5 per cent. This would help in maintaining self-accelerating growth over the medium-term, keeping in view the desirability of inflation at around 3 per cent to ensure India's smooth global integration. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>The conduct of monetary policy has turned out to be more complex in recent years for a variety of reasons. Globalisation has brought in its train considerable fuzziness in reading underlying macroeconomic and financial developments, obscuring signals from financial prices and clouding the monetary authority's gauge of the performance of the real economy. There is considerable difficulty faced by monetary authorities across the world in detecting and measuring inflation, especially inflation expectations. The operation of monetary policy in India is also constrained by some uncertainties in the transmission of policy signals to the economy. </TD></TR><TR><TD height="5"></TD></TR><TR><TD>Monetary policy in India has also to contend with the burden of challenges emanating from other sectors. First, fiscal imbalances remain large by international standards and have to be managed in a non-disruptive manner. Second, the enduring strength of foreign exchange inflows complicates the conduct of monetary policy. Third, in India, levels of livelihood of a large section of the population are inadequate to withstand sharp financial fluctuations which impact real activity. Accordingly, monetary policy has also to take into account the effect on these segments of the economy of volatility in financial markets, often related to sudden shifts in capital flows. Fourth, limitations on the elasticity of aggregate supply domestically impose an additional burden on monetary policy, particularly in the short term. While open trade has expanded the supply potential of several economies, it does not seem to have had any significant short-term salutary effect on supply elasticities. Persisting supply shocks to prices of commodities and services to which headline inflation is sensitive can exert a lasting impact on inflation expectations. Faced with longer term structural bottlenecks also in supply, with less than adequate assurance of timely, convincing and demonstrated resolution, monetary policy has to respond appropriately. The burden and the dilemmas, in fact, are greater in the event of a structural supply problem on account of its persistent effects on inflation. Managing structural change, while keeping inflation low and stable, without dampening the growth momentum is the quintessential challenge to monetary policy in the period ahead.</TD></TR></DIV>

RBI Annual Report 2006-2007

Assessment of 2006-07 Overall Performance During 2006-07, the Indian economy exhibited acceleration in growth, led by manufacturing and services sector activities. The sust…

31 Aug 2007

Market rallies for fourth consecutive session.

<DIV>The market settled with gains for the fourth straight session on continued buying demand for index pivotals. It saw volatile swings in fag session of day, after staying firm throughout the day. It had opening on a firm note today, 30 August 2007, as US stocks rallied overnight on expectation that the US Federal Reserve would cut rates in September 2007 to cushion the impact of the subprime crisis on the broader US economy. The BSE Sensex settled above the 15,100 mark while the S&P CNX Nifty ended above the 4,400 level. Turnover was also healthy today. The BSE 30-share Sensex up 128.70 points or 0.86% at 15,121.74. It opened with a 175.65-point upward gap at 15,168.69 and advanced further to hit a high of 15,200.81. The index touched a low of 15,053.98. It oscillated in a range of 114.71 points for the day It has now urged 957 points in four trading sessions, from its close of 14,163.98 on 23 August 2007. The S&P CNX Nifty up 53 points or 1.22% at 4,412.30. August 2007 futures & options (F&O) contracts expired today. The Nifty September 2007 futures settled at 4350, a sharp discount of 62.30 points as compared to spot closing The total turnover on BSE spiked to Rs 5,378 crore as against Rs 4,815 crore yesterday, 29 August 2007. The NSE's F&O turnover also surged to Rs 71,282.94 crore as compared to Rs 76,510.22 crore yesterday, 29 August 2007. The market breadth was strong on BSE, with 1,578 shares advancing as compared to 1112 that declined, while 84 remained unchanged. The BSE Mid-Cap Index rose 0.54% to 6,485.44, the BSE Small-Cap Index gained 1.06% to 7,957.96 All the sectoral indices on BSE settled with gains, except the BSE Realty index, which lost 1.28% to 7,116.08 BSE Capital Goods Index (up 0.45% at 13,306.72), BSE Health Care Index (up 0.43% at 3,501.17), BSE Auto Index (up 1.38% at 4,776.70), BSE Metal Index (up 0.83% at 11,297.31), BSE FMCG Index (up 0.67% at 1,949.32), BSE Oil and Gas Index (up 0.50% at 7,976.43), BSE IT Index (up 1.06% at 4,552.30) and BSE Bankex (up 1.29% at 7,751.50), all posted gains Among the 30-member Sensex pack, 21 advanced while the rest declined. Mahindra & Mahindra, the country's top tractor maker by sales, rose 2.47% to Rs 672 on 1.15 lakh shares. It was the top gainer from Sensex pack. The stock rose on reports that it is conducting due diligence on Jaguar and Land Rover, put up for sale by Ford. Other potential bidders include private equity groups TPG Capital, Cerberus Capital Management, Ripplewood Holdings, One Equity Partners and Tata Motors. India's top truck maker Tata Motors rose 0.59% to Rs 679, off its day's high of Rs 699. Banking shares advanced on fresh buying on a view that interest rates have peaked. ICICI Bank (up 1.46% to Rs 869.50), HDFC Bank (up 2.02% to Rs 1180), Syndicate Bank (up 2.77% to Rs 76), Allahabad Bank (up 3.41% to Rs 88), Canara Bank (up 1.54% to Rs 240) and Andhra Bank (up 2.11% to Rs 82.35), advanced. Market expectations peg inflation rate at 3.94% for 12 month to 18 August 2007 compared to previous week's 4.1%. The data will be released by the government tomorrow, 31 August 2007, afternoon. India's largest pharma company by sales Ranbaxy Laboratories rose 1.60% to Rs 378. Recently, US Food and Drug Administration gave approval to the company to make and market two drugs hydrocodone bitartrate and acetaminophen prescribed for pain relief. Total annual market sales of the drugs were $391 million. India's largest firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped sharply just before closing bell. It was up marginally by 0.11% to Rs 1891.80 on 8.96 lakh shares, after surging to a high of Rs 1924. A newspaper reported on Wednesday, 29 August 2007, the government is likely to approve a pricing formula for the company's natural gas within a few days. The stock had hit an all- time high of Rs 1948 on 26 July 2007. India's second largest software services exporter Infosys Technologies rose 1.42% to Rs 1860. As per report, Infosys Technologies plans to increase billing rates for new customers by 3-4% due to the sharp appreciation of the rupee against the dollar. The billing rates for existing contracts could increase by 2-3%. Infosys gets about 60% of its revenue from the United States. Tata Consultancy Services (TCS), the country's leading software services exporter rose 0.80% to Rs 1040 after it won a deal worth Rs 574 crore ($ 140 million) over a multi period from BSNL to provide comprehensive range of telecom services. The rupee was hovering at 41.13, slightly weaker than Wednesday (29 August 2007)'s close of 41.10/41.11 Cipla, the country's third largest pharma company by sales lost 2.50% to Rs 165.50 on 8.71 lakh shares. It was the top loser from the Sensex pack. Reliance Energy (down 1.80% to Rs 768.10), State Bank of India (down 0.74% to Rs 1563.25) and Bharti Airtel (down 0.53% to Rs 875) were the other losers from the Sensex pack. India's largest power equipment maker by sales Bhel declined 0.87% to Rs 1835.30, off the session's high of Rs 1884, after the company won a Rs 1990-crore order for supply and installation of power equipment to a project in southern India. Tata Steel, the world's sixth largest steel manufacturer lost 0.51% to Rs 656.50. It came off sharply from day's high of Rs 679.80. It had surged 9.2% to Rs 659.85 yesterday, 29 August 2007 after it recorded a consolidated net turnover of Rs 31,155 crore for Q1 June 2007, an increase of 442% over the same period last year, on the back of Corus acquisition. Its consolidated operating profit surged 186% to Rs 4,904 crore in Q1 June 2007 over Q1 June 2006. The results also include an extraordinary item of Rs 4,121 crore primarily representing actuarial gains due to increase in yield rates on bonds held by various pension funds of Corus. Three block deals of 18.85 lakh shares each were struck in Axis bank counter at an average rate of Rs 614 per share on BSE in opening trade. The stock rose 2.44% to Rs 627 on high volume of 82.33 lakh shares. Sugar shares surged for the second consecutive day on reports that a group of ministers had recommended mandatory blending of 10% ethanol with petrol by October 2008 to deal with the massive oversupply of sugar. Dwarikesh Sugar (up 10.26% to Rs 56.40), Sakthi Sugar (up 8.93% to Rs 78.70), Triveni Sugar & Industries (up 11.19% to Rs 80), Balrampur Chini Mills (up 2.68% to Rs 61.35), Shree Renuka Sugars (up 0.45% to Rs 534.50), Dhampur Sugar Mills (up 5.17% to Rs 54.90) and Bajaj Hindustan (up 2.54% to Rs 137.50) gained. In a related move, the GoM has also suggested that the import duty on imported industrial ethanol be reduced from 7.5% to 5%. Puravankara Projects settled at Rs 361.75 on BSE, a discount of 9.56% over the IPO price of Rs 400. On BSE, 71.23 lakh shares of the scrip were traded. The stock debuted at Rs 399 on BSE, a discount of 0.25% over the IPO price of Rs 400. It hit a high of Rs 399 and a low of Rs 357.55. The IPO had ended on 8 August 2007 with 1.91 times subscription. Among the side counters, Kemrock Industries (up 10.63% to Rs 342), Rasoya Proteins (up 15.88% to Rs 63.50), Aristocrat (up 10% to Rs 57.20), Kirloskar Electric (up 10% to Rs 231) and Aarvee Denim (up 10% to Rs 88.60) gained. Cambridge Solutions (down 8.64% to Rs 111), Jindal Worldwide (down 7.87% to Rs 117), Fortis Healthcare (down 7.22% to Rs 81), Khaitan Industries (down 6.63% to Rs 50) and TCI Industries (down 5% to Rs 3691) declined. VSNL surged 5.59% to Rs 403 after its ADR gained 3.65% to $18.47 overnight on New York Stock Exchange (NYSE). ICSA (India) surged 5.60% to Rs 1752.10 after its board approved 5-for-1 stock split. Bartronics India rose 2.57% to Rs 197.95 after its board approved the issue of foreign currency convertible bonds (FCCB),Global depository receipts (GDRs) and/or American depository receipts (ADRs) of $ 50 million. Real estate major DLF slipped 0.80% to Rs 591. It will develop a 250-room super luxury five-star hotel with premium brand Four Seasons Hotels and Resorts in Gurgaon at an investment of Rs 600 crore. The hotel project will be developed in around 10 acre land at DLF Golf Link in Gurgaon by DLF Hotels - the hospitality arm of DLF. Escorts gained 4.45% to Rs 89.25. Yesterday, 28 August 2007, National Stock Exchange banned building fresh positions in the company's derivatives contracts as the open interest crossed 95% of the position limit. GlaxoSmithKline Pharma rose 3.35% to Rs 1162. The company, recently launched anti-cervical cancer vaccine Cervarix in Southeast Asia. The drug combats the virus that is responsible for over 70% of cervical cancer cases worldwide. Andhra Cement jumped 7.10% to Rs 37 after a block deal of 66 lakh shares at Rs 40 per share on BSE in opening trade. At the strike price of Rs 40 per share, the total deal size works out to Rs 26.40 crore. Sun TV Network rose 5.47% to Rs 329 after it said during trading hours today, 30 August 2007, its unit has bought 48.9% stake in Red FM to expand its radio FM business to the north, west and east Indian markets. Karuturi Networks advanced 3.80% to Rs 194 on reports that it has acquired Dutch floriculture firm Sher Agencies in a deal worth $69 million to become the world's largest rose producer. Vijaya Bank surged 5.36% to Rs 56 after its chairman and managing director Prakash P. Mallya said on Wednesday, 29 August 2007, the bank plans to sell its stake in Principal Pnb Asset Management Company. Software services firm 3i Infotech slipped 0.15% to Rs 138.85. It said after trading hours on Wednesday, 29 August 2007, it had acquired 51% in back-office services firm HCCA Business Services Dry-cell battery maker Eveready Industries lost 4.12% to Rs 52.40 after it said during trading hours today, 30 August 2007, its board would meet on 6 September 2007 to consider raising funds through issue of shares and warrants to promoters and other investors. For the second day India Foils gained on reports yesterday that Ess Dee Aluminium was in the final stages of negotiations to acquire it. The stock surged 5% to Rs 11.13 today. Reportedly, Ess Dee would use the Rs 81.08 crore that it raised by selling a 5% stake to Morgan Stanley for the acquisition. It had surged 5% yesterday, 29 August 2007. New Delhi Television vaulted 3.47% to Rs 351.95 on reports that UB group may announce 5-year advertisement commitment of Rs 100 crore to company's forthcoming lifestyle channel, NDTV Good Times. Construction firm Gammon India rose 2.06% to Rs 455. It entered the hospitality sector by forming an alliance with the US-based Wyndham Hotel Group International, Inc., to develop affordable or budget hotels. The Wyndham Group, which runs more than 6,500 hotels under 10 brands in six continents, is one of the largest hospitality companies in the world. Most of the Europe markets were trading higher today, 30 August 2007. Key benchmark indices from France (up 0.26% to 5,534.56) and United Kingdom (up 0.21% to 6,145) advanced. Germany's DAX slipped 0.09% to 7,432.69 All Asian markets were trading higher today, 30 August 2007, except Singapore's Straits Times (down 0.41% at 3,321.15). Hang Seng (up 2.02% at 23,486.29), Shanghai Composite (up 1.14% to 5,167.57), Japan's Nikkei (up 0.88% at 16,153.82), Taiwan Weighted (up 1.48% at 8,772.20), and South Korea's Seoul Composite (up 0.85% at 1,841.70) edged higher. US stocks rallied across the board on Wednesday, 29 August 2007 boosted by strong gains in technology and energy shares. The Dow Jones Industrial Average surged 247 points, or 1.9%, to 13,289. The S&P 500 index rose 31 points, or 2.2%, to 1,463 and the technology-laden Nasdaq Composite rallied 62 points, or 2.5%, to 2,563 points. Crude oil prices steadied on Thursday, 30 August 2007. US crude inched up 2 cents to $73.53 a barrel. The government has decided to form a panel to study a controversial nuclear deal with the United States, taking into account objections from communist parties. The announcement came after a meeting between senior government leaders and their communist allies who have demanded the deal be put on hold. Foreign Minister Pranab Mukherjee said the operationalisation of the deal will take into account the committee's findings. The announcement came after trading hours today, 30 August 2007.</DIV>

Market rallies for fourth consecutive session.

The market settled with gains for the fourth straight session on continued buying demand for index pivotals. It saw volatile swings in fag session of day, after staying firm…

31 Aug 2007

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