Market Outlook 17th July 2009

Intraday Calls 17th Jul 2009

BUY EMCO-85 for a target 88-93+ stop loss 83

BUY Atlanta-83 for a target 89-94+ stop loss 80

BUY Satyam-82 for a target 93+ stop loss 79

BUY Maruthi-1142 for a target 1167-1188+ stop loss 1125

BUY TVSMotor-50 above 53 for a target 58-61+ stop loss 50

BUY Centurtex-403 above 415 for a target 426-433+ stop loss 395

BUY GSPL-58 for a target 69+ stop loss 54 [positional]

stocks that are in news today:
Exclusive; Oil Ministry Sources: Oil Ministry pushing to reinstate tax breaks under NELP I-VI
Hindalco to close wheel plant at Silvassa, no impact on operations and financials ((very small unit))
NTPC agrees to pay margin for Reliance Gas – Mint
PBA Infrastructure bags orders worth Rs 70.8 crore from Mumbai Metropolitan Region Development Authority (MMRDA)
JMC Projects board approves 1:5 rights issue @ Rs 110/share
19.86 crore Satyam shares to hit the market ((pref issue))
1.98 crore Graphite India shares to hit the market ((issued GKW shareholders on scheme of arrangement))
Vantage Corporate to resume trading, no circuit filter today
16.2 lakh Educomp shares to hit the market today ((QIP issue))

 

Big story: Govt
-To divest stake in Kudremukh Iron Ore, Manganese Ore, NMDC
-Between 9-20% of Kudremukh may be divested
-Kudremukh sale can raise between Rs 771-Rs 1,713 crore
-Alert: Kudremukh is listed with 1% market float
-10% of Manganese Ore may be sold via offer for sale
-Manganese Ore sale may fetch Rs 108 crore
-Alert: Manganese is unlisted, owned by GoI (Government of India), Maharashtra and Madhya Pradesh
-Between 8.38%-20% of NMDC may be divested
-NMDC sale may fetch between Rs 10,351 crore-Rs 24,704 crore
-Alert: NMDC is listed with 1.62% market float

 

Results today:

TCS, Colgate, Crompton, India Infoline, Container Corporation, Goa Carbon, Kirloskar Brothers, Prime Securities, Sasken, Sonata Software, Wyeth, Radico Khaitan

 

NIFTY FUTURE LEVELS

RESISTANCE

4252

4291

4327

4339

4376

SUPPORT

4220

4215
4208

4182

4170

4133

Buy INFOTECH ENTERPR, BAJAJ AUTO

 

 Strong & Weak  futures  
This is list of 10 strong futures:

GSPL, Sesa Goa, Patni, Opto Circuits, Gail, Tulip, Grasim, Edu Comp, Cipla & REC Ltd.

And this is list of 10 Weak futures:

DCB, FSL, Orchid Chem, GTL Infra, Nagar Fert, Praj Ind, Moserbaer, Sintex, Bajaj Hind & KFA.
Nifty is in Up Trend.

 

NIFTY FUTURES (F & O):  
Above 4252 level, expect short covering up to 4289-4291 zone and thereafter expect a jump up to 4325-4327 zone
by non-stop.

Support at 4218-4220 zone. Below this zone, selling may continue up to 4215 level and thereafter slide may continue up to 4208 level by non-stop.

Multiple Support Zones at 4170-4172 zone & at 4182-4184 zone. Rebound expected at around these zones. Stop Loss at 4133-4135 zone.

On Positive Side, cross above 4337-4339 zone can take it up to 4374-4376 zone by non-stop. Supply expected at around this zone and have caution.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 3906 level, it can zoom up to 4600 level by non-stop. 

BSE SENSEX:  
Higher opening expected. Recovery should start. 

Short-Term Investors: 
 Short-Term trend is Bullish and target at around 15379 level on upper side.
Maintain a Stop Loss at 13220 level for your long positions too.
  
POSITIONAL BUY:
Buy INFOTECH ENTERPR (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 199 level can be used to buy. If uptrend continues, then it may continue up to 212 level for time being. 

If crosses & sustains at above 222 level then uptrend may continue.

Keep a Stop Loss at 190 level for your long positions too.
 
Buy BAJAJ AUTO (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 1102 level can be used to buy. If uptrend continues, then it may continue up to 1156 level for time being. 

If crosses & sustains at above 1202 level then uptrend may continue.

Keep a Stop Loss at 1056 level for your long positions too. 

FII DATA 

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	16-Jul-2009	2516.6	2484.23	+32.37

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	16-Jul-2009	1266.13	1301.15	-35.02

 

SPOT LEVELS TODAY

	4231.40	( -0.05 %)	-2.10
		1	2	3
Resistance		4289.10	4346.80	4388.60
Support		4189.60	4147.80	4090.10

	14250.25		( -0.02 %)	-2.99
			1	2	3
Resistance			14439.04	14627.83	14762.56
Support			14115.52	13980.79	13792.00

Global Cues & Rupee
The Dow Jones Industrial Average closed at 8,711.82. Up by 95.61 points.
The Broader S&P 500 closed at 940.74. Up by 8.06 points.

The Nasdaq Composite Index closed at 1,885.03. Up by 22.13 points.

The partially convertible rupee closed at 48.68/69 per dollar on yesterday, weaker than Wednesday's close of 48.64/65.
 
 Interesting findings on web:

U.S. stocks rose for a fourth day, the longest streak in six weeks, as economist Nouriel Roubini said the worst of the financial crisis is over and reiterated that the recession may end this year, while takeover speculation lifted commodity shares.

Roubini, the New York University professor who predicted the financial crisis, said a second government stimulus plan would help broaden the economic recovery.

Economist Nouriel Roubini says the real U.S. gross domestic product could stop contracting by the end of 2009, but he warns that other economic indicators such as unemployment and manufacturing may remain under pressure.

Roubini, a noted bear who had warned about the financial crisis before it unfolded, said that "worst is behind us in terms of economic, financial conditions," according to Reuters. Roubini also brought up the idea of a second stimulus package, one in a range of $200 billion to $250 billion, arguing that a program "can not be too small, but it can not be too large."

Comments by prominent bearish economist Nouriel Roubini that made the stock market rise Thursday actually weren't even new or improved comments, said the man called "Dr. Doom."

Various media reports on Thursday framed Roubini's comments at a Chilean investors' conference as an improved outlook on the U.S. economy. Reports had circulated that the man credited with calling the global economic crisis all the way back in 2006 was calling an end to the recession in 2009, a purported change from his earlier view that recovery wouldn't come until 2010.

However, an afternoon release from Roubini said the views he presented at the conference were no different than his previous views.

"I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19 months into that recession. If, as I predicted, the recession is over by year end, it will have lasted 24 months, with a recovery only beginning in 2010. Simply put, I am not forecasting economic growth before year's end," said Roubini.

U.S. stocks staged a late-day rally on Thursday on renewed hopes that earnings will remain strong, while rebounding equities and news of surging growth in China, the No. 2 energy consumer, helped lift crude prices.

Wall Street rallied, with the benchmark Standard & Poor's 500 index posting the best four days since late March, when the S&P 500 recovered from a 12-year low set earlier in the month.

The headlines were dominated by the financial sector, in the wake of JPMorgan's robust profit report and speculation that CIT is moving closer to bankruptcy.

Bank of America (BAC Quote), JPMorgan Chase (JPM Quote) and American Express (AXP Quote) were among the worst performers, one day after financials were among the strongest performers on the Dow, following reports that CIT Group (CIT Quote) could file for bankruptcy as soon as Friday.

BofA was the focus of a meeting called by House Committee on Oversight and Government Reform, where former Treasury Secretary Henry Paulson testified he threatened to remove BofA's management if it walked away from the Merrill Lynch deal, calling the threat "appropriate" because their invocation of a Material Adverse Change, or MAC, clause would have shown "a colossal lack of judgment."

After the bell, the tech world was focused on IBM ( IBM - news - people ) and Google ( GOOG - news - people ). Both firms easily beat expectations, with Google's profits up 18% to $1.5 billion. IBM raised its full-year forecast for 2009 to $9.70 a share, from $9.20 a share.

While most tech stocks rose on Thursday, Nokia ( NOK - news - people ) bucked the trend, falling 14%, after lowering its guidance for market share.

The tech-heavy Nasdaq advanced for the seventh straight day and closed at its highest level since October.

For the week:

The Dow is up 565.30, or 6.9 percent.

The S&P is up 61.61, or 7.0 percent.

The Nasdaq is up 129.00, or 7.4 percent.

For the year:

The Dow is down 64.57, or 0.7 percent.

The S&P is up 37.49, or 4.2 percent.

The Nasdaq is up 308.00, or 19.5 percent.

Worries about earnings reports on Friday from Citigroup (C.N) and Bank of America (BAC.N) also capped investor enthusiasm and contributed to volatility on Wall Street.

Risk aversion had earlier swept markets, pushing up U.S. government debt prices and dampening commodity prices after mixed economic data and concern about the possible failure of U.S. lender CIT (CIT.N) spurred caution.

U.S. Treasuries' prices rose, supported by some bargain hunting after a three-day sell-off, and by safe-haven buying, given the concern about the potential CIT failure.

The benchmark 10-year U.S. Treasury note was up 10/32 in price to yield 3.57 percent. The 2-year U.S. Treasury note was up 2/32 in price to yield 0.99 percent.

The U.S. dollar initially fell to a six-week low against major currencies after JPMorgan Chase & Co reported strong results, providing further evidence of recovery.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index .DXY off 0.10 percent at 79.237.

The euro was up 0.30 percent at $1.4147, and against the yen, the dollar was down 0.50 percent at 93.79.

U.S. crude oil rose 48 cents to settle at $62.02 a barrel, while London Brent eased 34 cents to $62.75 a barrel ahead of the August contract's expiry.

The gains, which added to Wednesday's rally of more than $2 triggered by a U.S. report showing sliding domestic crude inventories, coincided with Wall Street's afternoon bounce.

"Another late rally and coinciding with an S&P 500 rally, although it's arguable who's watching whom more closely," said Tim Evans, oil analyst at Citi Futures Perspective in New York.

U.S. gold futures ended lower after trading in a tight range as bullion investors looked for a new catalyst from markets outside of the commodities sector to fuel the metal's recent rally amid inflation concerns.

August futures fell $4 to settle at $935.40 an ounce in New York.

Copper ended down, giving back a fraction of the week's strong gains, even though upbeat U.S. corporate earnings and China's robust growth data provided fresh signs that the worst may be over for the world economy.

China reported economic growth rose to 7.9 percent in the second quarter, beating forecasts.

Copper for September delivery in New York slipped 0.25 cent to close at $2.3895 a pound.

Crude oil for August delivery fell 72USc, or 1.2%, to $US60.82 in New York after rising to $US61.54 on Wednesday, the highest close since July 7.

Gold fell on speculation that the dollar will strengthen, reducing demand for precious metals as alternative investments. Silver gained.

Gold futures for August delivery fell $US4, or 0.45, to $US935.40 an ounce in New York. The metal retreated after the most-active contract touched a two-week high on Wednesday.

Bullion for immediate delivery in London dropped $US2.14, or 0.2%, to $US937.05 an ounce.

The yen advanced against the euro for the first time in four days after CIT said bailout talks failed and a gauge of US manufacturing fell, reducing demand for higher-yielding assets.

The yen appreciated 0.6% to ¥132.13 per euro after declining to ¥133.40, the weakest level since July 7.

The dollar traded at $US1.4116 per euro while the yen gained 0.7% to ¥93.60 per dollar.

New Zealand's dollar decreased the most in two weeks against the greenback after Fitch Ratings cut the outlook for the nation's long-term credit rating. The kiwi fell as much as 1.5% to 63.88USc in its biggest intraday drop since July 2.

The Canadian dollar dropped from near a one-month high as crude oil prices retreated and US stocks fluctuated.

The loonie slid 0.4% to $C1.1173 after crude oil dropped 0.2% to $61.43 a barrel.

Goldman reported a very strong performance in its core business: investment banking. It enjoyed the stock-market rally in the second quarter and continued to position itself as one of the few financial institutions smart enough to benefit from the horrible financial crisis. While some of its competitors - Merrill Lynch, Lehman Brothers and Bear Sterns - collapsed due to reckless exposure to complex derivatives related to the mortgage market, Goldman wisely bet against them and managed to finish even a terrible year like 2008 with a $2b. net profit. So excellent results from Goldman shouldn't really surprise investors.

The real question is whether Goldman Sachs's results indicate a real change in the environment in which America's financial system operates. Let us not forget that Goldman Sachs isn't a commercial bank; it is not exposed to the time bomb of loans given to businesses, to residential and commercial real-estate borrowers, and its exposure to toxic derivatives is extremely low.

Hence, trying to compare Goldman to other banks in the US is foolish.

This is not to say that the rest of the reports from financial institutions won't be impressive. They probably will be. But if we learned anything from the current havoc in the markets, it is that we shouldn't believe a single word written in a bank's financial reports. Not only are they are purposely unreadable, the shady practices used by their accountants have received governmental approval. There is no way anyone could understand (including the most capable analysts) what their real exposure to toxic assets is and what is the real default rate on loans and mortgages. Future write-downs could be anywhere between hundreds of billions to trillions of dollars.

Ironically, the gloomy future of CIT, a midget compared to Goldman Sachs and Citigroup, is more relevant for understanding the true reality of America. CIT will go bankrupt because its customers - million of small and midsized businesses - are defaulting on their loans in growing numbers. What is true for small businesses, which account for half the jobs in the US economy, is true for households as well.

But even if the future of financial firms is not as bright as Goldman Sachs's report may indicate, what about the good news from Intel? Many Wall Street experts rushed to the televisions studios, saying the positive outlook provided by the Silicon Valley chip maker played a far more important role in the recent rally.

Intel is indeed one of the world's leading hi-tech companies, and the world's No. 1 chip maker. But the second-quarter reports just show us the meaning of relativity in life. It is true that Intel beat the market's expectations, but the bottom line is that its revenues fell 15% compared with the second quarter of 2008, and net profit fell almost 30%.

Intel also enjoys being a global company. It does not depend solely on the crippling US or EU markets and has a very good market position in the emerging Asian markets. But still, most of its revenues come from developed markets; as for emerging markets, the notion that they can replace the US economy as the world's growth engine took a serious blow last year. It is clear that without a significant improvement in Western markets, growth in China and India is in real danger.

The global economy and stock markets are far from hitting the bottom. Yes, it is possible we shall witness a wave of encouraging reports in the coming weeks. Some of them, like Intel's, may be more realistic; some, mainly in the financial sector, will probably be total nonsense.

But as long as labor markets continue to shed hundreds of thousands of jobs each month, as long as millions of foreclosed homes continue to burden housing markets, and as long as businesses and states lose their credit lines, a real recovery is still a far-off dream.

Treasuries rose for a second day after two blasts in the Indonesian capital of Jakarta and as futures contracts on the Standard & Poor's 500 Index fell, stoking demand for the relative safety of government debt.

Notes also gained as CIT Group Inc., the lender facing bankruptcy because it failed to obtain U.S. guarantees for its bonds, said it is still in talks to secure financing. The advance helped Treasuries trim a weekly loss, the first since the start of June.

China's crude oil production in June fell 1.8% from a year earlier to 15.71 million metric tons, equivalent to 3.84 million barrels a day, data from the National Bureau of Statistics confirmed Friday. Output fell 1% on year in the first half of this year to 93.50 million tons.

China produced 6.83 billion cubic meters of natural gas in June, up 8.2% on year, the data showed. Output rose 7.6% on year to 42.04 billion cubic meters in the January-June period.

A series of blasts hit hotels in central Jakarta early Friday, according to reports. Early information on casualties varied, with Kyodo news citing police as saying the incident had claimed four lives, while CNBC reported an Indonesian official had been injured. At least three explosions were heard around the Mega Kuningan business area of the Indonesia capital, where the JW Marriott /quotes/comstock/13*!mar/quotes/nls/mar (MAR 20.44, -0.01, -0.05%) and Ritz Carlton hotels and some embassies are located, according to Dow Jones Newswires.

ASIA:

Japan's Nikkei average rose 0.4 percent on Friday after Wall Street climbed for a fourth day following strong earnings results at JPMorgan (JPM.N), though gains were limited due to concern over domestic politics.

Nissan Motor (7201.T) climbed 2.2 percent after the Nikkei business daily said Japan's third-largest automaker aims to develop its own hybrid technology for small and midsize cars and will launch a vehicle using that system in Japan in 2011.

But electronics conglomerate NEC Corp (6701.T) sank 11.1 percent after news that it is considering raising $2.1 billion in capital. [ID:nT291536]

The market got a boost following another rise in U.S. stocks the previous day, but the advance was kept in check by worries about Japanese politics amid thin trade before a long weekend in Japan.

Hong Kong shares rallied for a fourth straight day early Friday, as commodity and shipping stocks joined market heavyweights China Mobile Ltd. and HSBC Holdings Plc to advance in the wake of overnight Wall Street gains.

The benchmark Hang Seng Index rose 0.8% to 18,513.11, and the Hang Seng China Enterprises Index added 0.8%. China Cosco Holdings Co. rose 2.3%, and Yanzhou Coal Mining Co. added 1.5%, while Aluminum Corp. of China, or Chalcoclimbed 1.6%. China Mobile added 1.5%, while HSBC advanced 1.2%.

China announced Thursday that its economy, the world's third largest, grew 7.9 percent in the three months to June on the back of a massive stimulus package. That followed expansion of just 6.1 percent in the first quarter.

However, Shanghai had a negative reaction to the China GDP figures, picking up on warnings from the government that problems still lie ahead.

Technology stocks in Asia had a bit of a mixed cue from IBM and Google results after the market closed. In after-hours trade, Google was down 3.3% despite above-consensus earnings and improved guidance, as paid advertising "clicks" fell. IBM was up 1.5% after beating earnings consensus, though revenue growth slowed.

Investors were still watching news from U.S. lender CIT Group. Large bondholders of the company were discussing a plan to exchange $5 billion in debt for equity in the company, which was also trying to raise emergency funds to avert a bankruptcy filing, said a person familiar with the matter.

NEC Corp. fell 6.6% in Tokyo after the Yomiuri Shimbun reported it was looking to raise around Y150 billion in new capital. NEC said in a statement there was no truth to the report it had made such a decision, though a person familiar with the matter told Dow Jones Newswires that NEC was currently considering raising capital to strengthen its finances.

Japanese shipping stocks gained after the Baltic Dry Index rose for the third straight day Thursday, with Mitsui O.S.K. Lines up 2.1%. Insurers, real estate firms and brokerages were solid with Tokio Marine up 1.8%, Mitsui Fudosan up 1.5% and Nomura Holdings 1.5% higher. 
 
INVESTMENT VIEW

Wyeth: Securing Good Health 
Wyeth reported the first marketing approval for a new version of its vaccine Prevenar, as the drug was cleared by regulators in Chile. Prevenar is the world's best selling vaccine, with sales of about $2.7 billion in 2008. The original version of the drug blocks seven pneumococcal diseases. The version approved in Chile, which will be marketed under the name Prevenar 13 Valent, is intended to block a total of 13 illnesses.

The approval covers children age 6 weeks to 5 years, and Wyeth said it will launch the drug later this year. The company has asked regulators in more than 50 countries to approve Prevnar 13, and the Food and Drug Administration is expected to complete a review by early November.

Pneumococcal disease is a group of illnesses caused by Streptococcus pneumoniae. Wyeth said the diseases kills about a million children each year, making them the largest vaccine-preventable killer of children in the world. A major part of these infant deaths occur in India making Wyeth one of the biggest providers of the cure for dreaded diseases to an impoverished nation.
 

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 16th july 2009

BUY Wipro-413  for a target 417-423+ stop loss 405
BUY ACC-806  for a target 817-823+ stop loss 800
Yesterday's BTST
BUY Ashokley-32.3  for a target 34-35+ stop loss 31.25
BUY Adlabs-296  for a target 315-323+ stop loss 31.25
Breakout calls
BUY CAIRN-232 for a target 245+ stop loss 225

 

NIFTY FUTURES LEVELS
RESISTANCE
4263
4316
4367
SUPPORT
4227
4209
4156
4105
4020
3969
Buy TORRENT POWER,PFC

Strong & Weak  futures 
 This is list of 10 strong futures:

Tcs, Sesa Goa, Tulip, PFC, Edu Comp, Grasim, Indus Ind Bank, LITL ,Patni & Bhushan Steel.

And this is list of 10 Weak futures:

Amtek Auto, Nagar Fert,  Praj Ind, Mosear Bear, Bajaj Hind, Chambal Fert, Essar Oil, Adlab Films, BRFL & Orchid Chem.
 Nifty is in Up Trend.

 

NIFTY FUTURES (F & O):  
Rally may continue up to 4263 level for time being.

Support at 4209 & 4227 levels. Below these levels, expect profit booking up to 4156-4158 zone and thereafter slide may continue up to 4105-4107 zone by non-stop.

Buy if touches 4020-4022 zone. Stop Loss at 3969-3971 zone.

On Positive Side, cross above 4314-4316 zone can take it up to 4365-4367 zone. If crosses and sustains this zone then uptrend may continue.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 3906 level, it can zoom up to 4600 level by non-stop. 

BSE SENSEX:  
Higher opening expected. Uptrend should continue. 
Short-Term Investors:
 
Short-Term trend is Bullish and target at around 15379 level on upper side.
Maintain a Stop Loss at 13220 level for your long positions too.
 
POSTIONAL BUY:
Buy POWER FINANCE CORP (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 221 level can be used to buy. If uptrend continues, then it may continue up to 232 level for time being. 

If crosses & sustains at above 238 level then uptrend may continue.

Keep a Stop Loss at 215 level for your long positions too.
 
Buy TORRENT POWER (NSE Cash)   
Uptrend to continue.
Mild sell-off up to 194 level can be used to buy. If uptrend continues, then it may continue up to 203 level for time being. 
If crosses & sustains at above 210 level then uptrend may continue.
Keep a Stop Loss at 187 level for your long positions too.
 
Global Cues & Rupee  
The Dow Jones Industrial Average closed at 8,616.21. Up by 256.72 points.
The Broader S&P 500 closed at 932.68. Up by 26.84 points.

The Nasdaq Composite Index closed at 1,862.90. Up by 63.17 points.

The partially convertible rupee closed at 48.64/65 per dollar on yesterday, stronger than its Tuesday's close of 48.96/97.

 

FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	15-Jul-2009	2134.55	1879.09	+255.46

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	15-Jul-2009	1261.15	988.18	+272.97

 SPOT LEVELS TODAY

	4233.50	( 2.97 %)	122.10
		1	2	3
Resistance		4282.45	4331.40	4413.25
Support		4151.65	4069.80	4020.85

	14253.24		( 2.88 %)	399.54
			1	2	3
Resistance			14404.84	14556.44	14813.34
Support			13996.34	13739.44	13587.84

 Interesting findings on web:
A rally in technology stocks lifted the main Wall Street index to its biggest gain in three months after an upbeat outlook from Intel, which many view as a bellwether for spending on computers and other electronics throughout the economy.

Global stocks and crude oil prices jumped 3.0 percent or more on Wednesday after blockbuster earnings from Intel and a raft of economic news suggested the U.S. economy may be pulling out of a deep recession.

As stocks surged Wednesday, Intel helped the Nasdaq Composite Index mark its highest close in nine months.

The Dow Jones Industrial Average gained 256.72 points, or 3.1%, to 8616.21, as 29 of 30 members rose (McDonald's dropped 38 cents to $57.08).

The Standard & Poor's 500 index gained 26.84 points, or 3%, to 932.68. The Dow and the S&P marked their highest close in more than a month.

The Nasdaq Composite Index jumped 63.17 points, or 3.5%, to 1862.90, its highest close since Oct. 6.

"The Federal Reserve essentially raised its expectations for GDP growth, Intel did very well and credit-card issuers saw delinquencies decline," said Robbert Van Batenburg, head of equity research at Louis Capital Markets. "All of this raises expectations that the economy is starting to get its bearings again."

Intel (Nasdaq) rose 1.22, or 7.2%, to 18.05, its shares' highest close in over nine months. The news helped spark a rally in tech stocks.

Financial stocks rallied broadly, with card companies especially strong after releasing better-than-expected delinquency and charge-off data for June.

Toll Brothers rose 85 cents, or 5.3%, to 16.92 and D.R. Horton gained 49 cents, or 5.5%, to 9.37. Stifel Nicolaus raised its ratings for the home builders to "neutral" from "sell," saying housing prices should deteriorate less this month, and sentiment for builders should turn positive as second-quarter earnings from consumer companies are in line with expectations.

Lubrizol gained 2.88, or 5.9%, to 51.69. The maker of lubricant additives for engine oils projected second-quarter earnings well above analysts' estimates and said it will revise its full-year outlook later this month.

An upbeat forecast from Intel and an improving view of the economy from the Fed were enough to generate big gains in the stock market on Wednesday.

Intel's ( INTC - news - people ) views boosted the tech sector in general, as well, with the Technology SPDR exchange-traded fund, which tracks a basket of tech stocks, up almost 4%.

But outperformance for technology is nothing new this year. Value investors have touted the sector since January, noting strong balance sheets and the potential for increased revenue despite an economic downturn. And even though the bursting of the technology bubble is still fresh in people's minds, the wave of other technology firms poised to report earnings in the next couple days is unlikely to provide a retreat for tech.

"You're afraid to think about this huge growth in technology because you did in 2000 and see where that got you," said Kent Croft, chief investment officer for investment-management firm Croft Funds. "But the multiples and value and are there."

Overall, the Nasdaq is up 17% year-to-date, including a 14% jump in the past three months. Seemingly, Intel's report has signaled what the the market already knew -- technology is going to have a better year than most.

In the next few days, the direction of technology will likely have little to do with technicals. First, there will be earnings reports from International Business Machines and Google on Thursday, then Texas Instruments and Apple early next week.

CIT Group Inc. said late Wednesday that it probably won't get a government bailout anytime soon, increasing the likelihood that the lender may collapse in what could be the fourth-largest bankruptcy in U.S. history.

The U.S. Treasury estimates the government could lose its entire $2.3 billion investment in troubled lender CIT Group Inc. /quotes/comstock/13*!cit/quotes/nls/cit (CIT 1.65, +0.01, +0.61%) , according to a report published late Wednesday.

Among the companies whose shares are expected to see active trade in Thursday's session are Baxter International Inc., Biogen Idec Inc., Cypress Semiconductor Corp., Genuine Parts Co., Google Inc., Harley-Davidson Inc., International Business Machines, JPMorgan Chase & Co. and Marriott International Inc.

A forecast from the Federal Reserve released on Wednesday says the economy will shrink less than the central bank previously thought. Gross domestic product will likely fall by 1% or 1.5% in 2009, compared with a May forecast of 1.3% to 2%. Still, unemployment will likely reach 10%.

Although the economy is certainly better than earlier this year, Federal Reserve officials believe the recovery is going to creep along at a slow rate that won't lower the unemployment rate anytime soon, according to a summary of the central bank's latest meetings last month.

Commodity stocks helped the market rally, as a weak dollar boosted prices of crude oil and industrial metals on the New York Mercantile Exchange.

On economic news, the Fed Bank of New York's July general economic index climbed to minus 0.6, the highest level since April2008, from minus 9.4 in June. The reading was much better than a minus 5 economists had expected and added investors' appetite for industrial shares.

Minutes from last month's Federal Open Market Committee meeting showed central bank policy-makers thought economic growth would resume in the second half of the year.

Treasury debt lost on Wednesday as investors scrambled into riskier stocks.

Crude oil futures rose for the first session in four, climbing above $US61 a barrel as government data showed bigger than expected drop in crude inventories last week.

Refiners have ramped up production to the highest level in nearly a year while inventories rose for a 16th week to the highest level in 11 years.

August crude futures gained $US2.08, or 3.5%, to $US61.60 a barrel in New York.

Gold futures rallied as the US dollar sank and corporate results and economic data had participants buying the metal as an inflation hedge.

August gold rose $US16.60 to settle at $US939.40 an ounce in New York.

The dollar is substantially lower against all of its major rivals except the yen as an intensified appetite for risk remains dominant in markets.

The yen shifted lower against the dollar and the euro, with the dollar breaking above the ¥94 mark for the first since it tumbled sharply lower against the yen on July 8.

Most major currencies remained within their recent broad trading ranges.

The dollar was up at ¥94.04 and the euro was up at $US1.4116, after peaking briefly at $US1.4103 and up at ¥132.77.

The UK pound soared to $US1.6450 from $US1.6270.

The Canadian dollar has extended its rally from earlier in the week as it continued to benefit from the more robust appetite for risk.

The US dollar is trading at $C1.1186 after trading at $C1.1178, its lowest level since June 12.

Is Goldman new king of the Street?

Goldman Sachs is emerging as the king of post-meltdown Wall Street.

Already the most powerful US financial company before the credit crisis, the bank profited handsomely from Wall Street's rally and the recovering credit markets during the second quarter and distanced itself from the few competitors still standing.

The result was a stunning profit of $2.7 billion - even as the bank repaid $10 billion in federal bailout money. The total blew past what Wall Street analysts were expecting.

Goldman pulled off a remarkably speedy recovery from last year, when it lost $3.3 billion in four months during the worst of the financial crisis. And it had its best quarter since the end of 2007, when the recession was just beginning.

The results also confirm that despite controversy over everything from its role in the meltdown and the bonuses it pays executives and even the power of its alumni who sit at the highest levels of government, one thing remains constant: Goldman knows how to make money better than anybody else on Wall Street.

While other firms have curtailed risk and preserved cash to protect against further losses, Goldman has returned to what made it so profitable in the past - high-risk trading and investing in everything from mortgages to commodities and underwriting of stock and debt offers.

"Goldman really is in a class by themselves," said Phillip Silitschanu, a senior analyst with Aite Group. "They've always been the golden child of the market."

Of course, Goldman also benefited because there are fewer competitors on Wall Street following the demise of Bear Stearns Cos and Lehman Brothers Holdings Inc in 2008. Both companies were felled by their investments in risky, and ultimately failed, mortgage-backed securities.

Changing mood

And in a sign that the mood in Washington may be shifting, there was little outrage directed at Goldman from officials who have criticized the firm in recent months. Goldman took the bailout cash under pressure from the government at a time when faith in its financial institutions was shaken to its core.

While Goldman is making money in its core businesses, it's also gotten some hard cash into its corporate treasury that has also strengthened the company. Warren Buffett made a well-publicized investment of $5 billion in the bank in September. Goldman also benefited from the government's bailout money to insurer American International Group Inc, which paid Goldman $12.9 billion during the first quarter. AIG was forced by contracts it had signed to compensate banks like Goldman for losses they suffered from complex mortgage investments.

Asia:

Asian stock markets were higher Thursday, lifted by solid gains on Wall Street. In Japan, Toyota Motor and Mazda Motor surged on a report they planned a tie-up in the hybrid car segment.

The DJIA's 3.1% surge Wednesday was its biggest one-day gain in four months, but regional markets were not matching the Dow's rise. That wasbecause most Asian markets already gained Wednesday, in anticipation of Wall Street strength because of better-than-expected results from Intel.

Japanese shares rallied into a third straight session Thursday on hefty overnight gains on Wall Street and a weakened yen. Exporters such as Nikon Corp. /quotes/comstock/!7731 (JP:7731 1,533, +26.00, +1.73%) led the advance. Energy producers and commodity traders also jumped on an increase in oil and metal prices. The Nikkei 225 Average rose 2.2% to 9,470.03, while the broader Topix index also added 2.2% to 885.29.

The Japanese stock market opened with a strong positive gap on Thursday as stocks across the board rose sharply following the overnight surge on Wall Street and on the back of a stronger dollar. Non-ferrous metals, banking and auto stocks are among the among the top gainers in morning trades.

Hong Kong stocks took early gains Thursday, with mainland Chinese metal companies up sharply after data showing China's economy grew by a better-than-expected margin in the second quarter. Shares of Aluminum Corp. of China Ltd., also known as Chalco /quotes/comstock/22h!e:2600 (HK:2600 7.52, +0.27, +3.72%) was up 3.7% in early action, while Jiangxi Copper Co. /quotes/comstock/22h!e:358 (HK:358 13.88, +0.56, +4.21%) rose 4.7% and Angang Steel Co. /quotes/comstock/22h!e:347 (HK:347 13.48, +0.38, +2.90%) was 2.6% higher. The benchmark Hang Seng Index gained 2%, while the Hang Seng China Enterprises Index rose 2.1%.

The mainland stocks advanced, driving the Shanghai Composite Index to a 13-month high, as rating upgrades at Shenyin & Wanguo Securities Co spurred gains by shipping companies and metals producers climbed on higher prices.

"Strong domestic demand for commodities and expectations about a pick up in exports in the second half have prompted investors to believe shipping lines will benefit," said Wang Zheng, a fund manager at Jingxi Investment Management Co in Shanghai.

The Shanghai Composite rose 43.39, or 1.4 percent, to 3188.55 at the close, the highest close since June 2008.

China's gross domestic product expanded by 7.9% in the three months ended June 30 from the year-ago period, driven by domestic consumption and a strong increase in industrial activity, Chinese government data showed Thursday. The growth rate was higher than the 7.7% expansion anticipated by economists polled by Dow Jones Newswires and marked a sharp acceleration from the 6.1% growth recorded in the first quarter. The expansion came in spite of a decline in Chinese consumer and wholesale prices in June. Official data showed the mainland's consumer price index fell 1.7% in June from the year-earlier period, while the monthly producer price index shrank 7.8%. In May, China's CPI fell 1.4% while the PPI declined 7.2%.

Chinese economy expanded 7.9 percent year on year in the second quarter, as massive pump-priming and record lending pushed for a rebound from the worst growth in a decade, official data showed Thursday.

The gross domestic product (GDP) grew 7.1 percent from the same period a year ago to 13.99 trillion yuan (2.06 trillion U.S. dollars) in the first half, said the National Bureau of Statistics (NBS).

The world's third largest economy tumbled to 6.1 percent in the first quarter as exports shrank to a decade low.

China's producer price index (PPI),a major measurement of inflation at the wholesale level, fell 7.8 percent year on year in June, the National Bureau of Statistics announced Thursday.

The decline compared with a 7.2-percent drop in May from the same period last year.

China's industrial output expanded 10.7 percent in June from a year earlier, faster than the 8.9 percent rate in May, the National Bureau of Statistics (NBS) said Thursday.

It makes the industrial output growth rise to 7 percent for the first half.

China's retail sales in the first half year rose 15.0 percent from a year earlier, the National Bureau of Statistics announced Thursday.

China's urban fixed-asset investment in the first half year rose 33.5 percent from a year earlier, the National Bureau of Statistics announced Thursday.

The figure is 7.2 percentage points higher than the same period of last year.

China's consumer price index (CPI),a main gauge of inflation, declined 1.7 percent in June from a year earlier, the National Bureau of Statistics said here Thursday.

This marks the fifth consecutive month of decline since the index dropped 1.6 percent in February, the first fall since October 2002. 
 

INVESTMENT VIEW
Electrosteel Castings-Value Buy  
 
Electrosteel is a leading Ductile Iron pipes and cast iron pipe manufacturing company. It also offers turnkey solutions in water transport and sewage management. The demand for ductile pipes comes from Govt/ Govt sponsered projects for transportation of potable water and for cast iron pipes - from irrigation / sewage disposal projects. Demand for ductile pipes is growing very fast looking to growing focus of the Govt to provide potable water not only in India but also across Asia and other developing countries.
 

Electrosteel is fully integrated backward, with pig iron plant, sinter plant and captive power plant, as also iron ore & coal mining rights. This kind of integration leads to superior margins for company. It is thus very cost efficient and large player earning attractive margins.

 

Business is mostly dependent on municipal/Govt orders and is thus immune to economic/business cycle. Under - Accelerated Rural Water Supply Program and Pradhan Mantri Gramodaya Yojana - Rural Drinking Water; significant annual demand for projects and products [pipes] is generated on sustained basis.

Through an SPV wherein company holds 40% stake] it is also setting up a 2.2 million integrated steel plant, fully backed by required iron ore & coal mines. Of this 1.3 million capacity will come on stream by the end of '09 and rest will come on stream by the end of 2010. Captive mining of Ore and coal will also be operational by the same time or slightly latter, so cost of production will be always under tight control.Company's current working is good and its likely to perform much better in coming years.
 

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
 

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 15th july 2009

stocks that are in news today:
DoT (department of telecommunication) for extending Licence period forever – BS ((+ve for Telecom cos))
ATF (Aviation turbine fuel) prices may decline 5-6%
Govt to focus divestment where the stake is 90-100% ((Hindustan Copper, MMTC and NMDC))
HPCL eyes Shell's NZ unit, management denied any such plans – Agencies
Rishabhdev Technocable board approves ADR/GDR/FCCB issue up to Rs 150 crore
Edserv Softsystems board meet on July 23 on issue of warrants on preferential basis
Teledata Technology to resume trading, no circuit filter today ((after scheme of arrangement))
Board meets: IL&FS Investment Managers on stock split

 

NIFTY FUTURES LEVELS

RESISTANCE

4145

4191

4235

4270

SUPPORT

4103

4096

4050

4006

3904

Buy TCS,PATNI

 

Strong & Weak  futures 
 This is list of 10 strong futures:

Tulip, Grasim, PFC, Ambuja Cement, Sesa Goa, Colpal, Patni, Cipla, Gail & ITC.

And this is list of 10 Weak futures:

Orchid Chem, Nagar Fert, Adlabs Film, Praj Ind, Bajaj Hind, Chambal Fert, Ispat Ind, Essar Oil, Bhushan Steel & BRFL.
 Nifty is in Down Trend.

 

NIFTY FUTURES (F & O):  
Rally may continue up to 4145 level for time being.

Support at 4096 & 4103 levels. Below these levels, expect profit booking up to 4050-4052 zone and thereafter slide may continue up to 4006-4008 zone by non-stop.

Buy if touches 3904-3906 zone. Stop Loss at 3860-3862 zone.

On Positive Side, cross above 4189-4191 zone can take it up to 4233-4235 zone by non-stop. If crosses and sustains this zone then uptrend may continue.
 
Short-Term Investors: 
 Bullish Trend. 3 closes above 4270 level, it can zoom up to 4830 level by non-stop.
Already SL triggered. 3 closes below 4270 level, it can tumble up to 3990 level by non-stop.
 
BSE SENSEX: 
Higher opening expected. Uptrend should continue. 

Short-Term Investors:  
Short-Term trend is Bearish and target at around 12478 level on down side.
Maintain a Stop Loss at 14931 level for your short positions too.

Already SL triggered.
 
POSITIONAL BUY

Buy PATNI COMPUTER SYSTEMS (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 259 level can be used to buy. If uptrend continues, then it may continue up to 272 level for time being. 

If crosses & sustains at above 284 level then uptrend may continue.

Keep a Stop Loss at 247 level for your long positions too.
 
Buy TCS (NSE Cash) 
Uptrend to continue.

Mild sell-off up to 406 level can be used to buy. If uptrend continues, then it may continue up to 412 level for time being. 

If crosses & sustains at above 417 level then

uptrend may continue.

Keep a Stop Loss at 401 level for your long positions too.

 

 

SPOT LEVELS

	4111.40	( 3.46 %)	137.35
		1	2	3
Resistance		4168.83	4226.27	4323.63
Support		4014.03	3916.67	3859.23

	13853.70		( 3.38 %)	453.38
			1	2	3
Resistance			13988.31	14122.93	14342.37
Support			13634.25	13414.81	13280.19

 

FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	14-Jul-2009	1778.09	1690.86	+87.23

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	14-Jul-2009	1092.83	892.54	+200.29

 

Global Cues & Rupee 
The Dow Jones Industrial Average closed at 8,359.49. Up by 27.81 points.
The Broader S&P 500 closed at 905.84. Up by 4.79 points.

The Nasdaq Composite Index closed at 1,799.73. Up by 6.52 points.

The partially convertible rupee closed at 48.96/97 per dollar on yesterday, stronger than Monday's close of 49.08/09.
 
 Interesting findings on web:
Mixed economic data Tuesday reminded investors of the challenges businesses still face and left the market zigzagging all day. Stocks gained on a handful of strong earnings, while Treasurys tumbled on news of a jump in inflation.

Investors were pleased that Goldman Sachs Group Inc.'s second-quarter earnings easily surpassed analysts' forecasts thanks to big gains in trading and underwriting. But the release of the results came as something of an anticlimax, as anticipation of a strong report sent the entire stock market soaring Monday.

Johnson & Johnson also had better-than-expected results, although its profits fell 3.5 percent.

The yield on the 10-year Treasury note jumped to 3.47 percent from 3.35 percent as its price fell nearly a point. Long-term government debt tends to be sensitive to reports of higher prices, as inflation erodes the value of fixed-income securities over time.

Dell Inc. warned that quarterly gross margins will fall below first-quarter levels due to higher component costs and pressure to keep prices low. The stock fell $1.05, or 8.1 percent, to $11.97.

Railroad operator CSX Corp. said it expects shipping demand to sink by double-digits again this quarter, but not as drastically as the 21 percent decline in the second quarter. The stock jumped $2.26, or 7 percent, to $34.80.

The dollar fell against other major currencies, while gold prices rose.

Oil slipped 17 cents to settle at $59.52 a barrel on the New York Mercantile Exchange.

Investors hoping Intel Corp.'s (INTC) better-than- expected quarter and bullish comments suggest the broader tech sector will see similarly strong results should reconsider: The giant chip maker is benefiting from the idiosyncracies of its inventory, rather than the broader economy.

On Tuesday, Intel posted $8 billion in second-quarter revenue, well above the $7.3 billion Wall Street expected and said third-quarter revenue would likely exceed expectations. Chief Executive Paul Otellini said the results were the company's strongest quarter-on-quarter growth since 1988 and mark "a clear expectation for a seasonally stronger second half."

Intel shares jumped 7% after hours on the news. Other tech stocks, including Hewlett Packard Co. (HPQ), Microsoft Corp. (MSFT) and Texas Instruments Inc. ( TXN), rose after Otellini said the market for computers appeared to be rebounding.

Intel Corp. on Tuesday posted a quarterly loss as the world's largest computer chip maker paid the antitrust fine of 1.45 billion U.S. dollars from the European Union.

Counting the fine payment, Intel lost 398 million dollars or 7 cents per share in the second quarter ended on June 27, the company said.

The European Commission imposed the heavy antitrust fine on Intel in May, saying the company engaged in illegal practices such as giving rebates to computer manufacturers on condition that they bought all or almost all of their chips from Intel.

Excluding the effects of the European Commission fine, Intel earned 1 billion dollars or 18 cents per share in the second quarter, 36 percent lower than the profit of 28 cents per share the same period last year but still beating analysts' estimates of8 cents per share.

Intel's second-quarter sales grew 12 percent over the previous quarter to 8 billion dollars, though down 15 percent compared with the year-ago period.

"Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," Paul Otellini, Intel's chief executive officer, said in a statement.

Looking ahead, Intel said it now expects the third-quarter sales to be in the range of 8.1 billion to 8.9 billion dollars, higher than analysts' average estimates.

Analysts cautioned that investors shouldn't use Santa Clara, Calif.-based Intel as a proxy for the broader technology market. They say Intel's performance, while encouraging, reflects the fact the company dramatically scaled back - and is now slowly ramping up - its inventory. It also benefitted from strong-but-temporary demand from Chinese consumers as opposed to a broad pick-up in the tech economy.

Intel's earnings come as the second-quarter reporting season begins in earnest, and software makers are largely expected to post lower sales this quarter as growth continues to slow internationally. While some companies have reported revenue has stabilized in the U.S., technology spending remains on track to fall 6% in 2009.

Other technology companies have delivered mixed messages about their performance. For example, Dell Inc. (DELL) said this week it expects margins to contract as it offered discounts to entice corporate customers and watched consumers move to lower-priced products.

Microsoft shares rose 2.8% to $23.76 in after-hours trading.

U.S. President Barack Obama said on Tuesday that the country's unemployment rate will continue to rise for several months due to the worst economic recession in decades.

"This has been a more severe recession than we've seen since the Great Depression," Obama said after meeting with Dutch Prime Minister Jan Peter Balkenende, noting that the unemployment rate would continue to tick up for several months.

"The challenge for this administration is to make sure that even as we are stabilizing the financial system, we understand that the most important thing in the economy is, are people able to find good jobs that pay good wages," he said.

But he also stressed that the situation in the financial markets has been improved.

"We have looked at a lot of the economic data that's coming outright now," said Obama. "And, as I've said repeatedly, we have seen some stabilization in the financial markets."

The pace of job losses in the United States quickened in June to 467,000, driving the jobless rate to 9.5 percent, the highest in more than 26 years.

Since the recession began in December 2007, the U.S economy has lost a net total of 6.5 million jobs.

Today's events:

Don't forget the BOJ has an interest rate event early this morning (NY time). The BOJ usually holds their press conference any time after 2300 EST but typically after midnight EST. There's been a good deal of volatility with the Japanese yen the past week and any strength in the yen would obviously be unwelcomed by the BOJ, so what traders need to be on the lookout for are threats or rhetoric to weaken the yen. Should the BOJ hit the markets with anti-yen verbal rhetoric I would expect to see the yen crosses soar violently. The exporting situation in Japan is too dire to handle an appreciating yen, especially against the dollar, it's too much of a hindrance to growth.

Fundamentally, we have a big day tomorrow and once again much of the focus will be on inflation as we get Eurozone CPI and US CPI data. The euro came under pressure from weak Eurozone fundamentals on Tuesday morning and should CPI print strongly negative I would expect to see the euro sold-off. It's anybody's guess how the US consumer inflation data will print, but I'm not expecting a negative number, not with the way that food and energy prices have ticked up in June.

Beside CPI the markets will also have to contend with Capacity Utilization (price inflation connected), Industrial Production, Crude Inventories, and the FOMC Meeting Minutes.

The FOMC is the real wild card tomorrow because there's no telling what kind of surprises the Fed may decide to hit the markets with. If the Fed wants to see a return of euphoria in order to push equities higher, the FOMC minutes will provide the perfect opportunity to pump up the markets.    

There's been a consistent price action trend for Wednesday's to be the most volatile day of the week and I think we could see another repeat performance of strong price swings and extended price moves. Unless we get some shocking downside surprises tomorrow I expect to see a continuation of more upside gains for the higher-risk, higher-yielding markets.

For tonight, expect the price action to pick up after 2300 EST and watch out for the BOJ and Fed on Wednesday...

Asia:

The benchmark Nikkei average rose 0.4 percent and the broader TOPIX gained 0.2 percent on Wednesday.

**HISAMITSU GAINS ON NEWS TO BUY NOVEN PHARM OF U.S.**

Shares of Hisamitsu Pharmaceutical, a drug and health goods maker, climbed 1.9 percent to 3,240 yen after the company said on Tuesday it would buy Miami-based Noven Pharmaceuticals Inc ( NOVN - news - people ) for $430 million to expand in the United States.

Nippon Steel, the world's No. 2 maker of the alloy, added 1.9 percent. Asahi Glass, Asia's largest glassmaker, jumped 3.6 percent. Dowa Holdings Co., the nation's second-biggest zinc smelter, surged 6.6 percent after the metal price gained. Kawasaki Kisen Kaisha Ltd., Japan's No. 3 shipping line, added 2.6 percent on higher cargo fees. Mizuho Financial Group Inc. sank 3.5 percent as it starts to determine the price of new shares it will sell.

Kawasaki Kisen added 2.6 percent to 351 yen, and Mitsui O.S.K. Lines Ltd., Japan's No. 2 shipping line, advanced 2.1 percent to 574 yen. The Baltic Dry Index, a measure of shipping costs for commodities, surged 4.1 percent, breaking a nine-day losing stretch.

Dowa surged 6.6 percent to 374 yen. Mitsui Mining & Smelting Co., Japan's top zinc smelter, leapt 4.5 percent to 231 yen. A gauge of six metals in London gained 3.4 percent, with zinc climbing 3.9 percent.

Mizuho, Japan's No. 2 listed bank, dived 3.5 percent to 191 yen, making it the most actively traded stock by value in Tokyo. The lender said earlier this month it will offer 3 billion common shares and set the price between July 15 and July 17.

"People are selling Mizuho on speculation the price of a new share will be set today. This is the final stage of the market reflecting the impact of the dilution of shareholder value," said Toshikazu Horiuchi, a market analyst at Cosmo Securities Co.

Asian stocks advanced with Japan's Nikkei 225 Stock Average adding 0.4 percent and the MSCI Asia Pacific Index of regional shares gaining 0.5 percent. The Reuters/Jefferies CRB index of 19 commodities surged 1.1 percent yesterday.

Hong Kong's Hang Seng Index added 1 percent.

Air China climbed 5.8 percent to HK$4.19. The company said it expects first-half profit to rise more than 50 percent from last year's 1.3 billion yuan ($190 million).

PetroChina Co., China's largest oil producer, gained 1 percent to HK$6.06. The company's refining profit climbed to a record in the first half, parent company China National Petroleum Corp. said in a statement in Beijing today.

"With the rebound in equities, the yen will remain bearish versus commodity-related currencies like the Aussie dollar," said Masafumi Yamamoto, head of foreign-exchange strategy for Japan at Royal Bank of Scotland Group Plc in Tokyo and a former Bank of Japan currency trader.

Luxury apartment sales in China's big cities saw significant growth in the second quarter, mainly due to increased purchases by overseas residents.

Statistics put out by the Beijing Real Estate Transaction website showed that among the capital's top 30 most expensive residential projects, 993 units were sold in the second quarter, up 100 percent year-on-year and more than 50 percent quarter-on-quarter.

"The loosening up of the policy canceling limitations on home purchases by foreigners and compatriots from Hong Kong and Macao in Beijing contributed largely to rising sales in the high-end residential sector," said Will Chen, deputy-managing director of CBRE.

In 2005, overseas residents' home purchases accounted for 27 percent of total sales, said Chen. But the figure dropped to 3-4 percent in the past two years after the government restrictions took effect in 2006.

A Hong Kong resident, who just bought a 6.8-million-yuan ($995,100) apartment in the capital's CBD area, told China Daily that he wanted to take advantage of low rates before inflationary trends started gaining ground.

"You have to find a place to invest your money, and high-end property is the best investment choice to maintain the value of assets," said the buyer, who declined to be named.

"Compared to Hong Kong, property prices in Beijing are comparatively lower. And, given China's fast-growing economy, the current prices still have appreciation potential," he added.

Sales of luxury apartments in Shanghai were heating up as well.

The UWIN property transaction system showed that the sales of apartments with unit price higher than 30,000 yuan per sq m in Shanghai touched a three-year record. Around 546,476 sq m of floor space area were sold in the first half, compared to 438,532 sq m for the whole of 2008.

Among buyers of Yanlord Town, a project with a sale price of 37,000 yuan per sq m, 38 percent were Shanghai residents, 42 percent buyers from other provinces and the rest overseas buyers, said Yao Wei, vice-general manager of Singapore-based Yanlord Land Group Ltd.

"Compared to last year, the proportion of home purchases by Hong Kong, Macao and Taiwan residents saw an obvious increase in the past few months," Yao was quoted by China Business News as saying.

A survey by Centaline China's research center showed that residents from Hong Kong, Macao and Taiwan were turning into increasingly important players in Shanghai's high-end residential market.

Since March, the number of buyers from these three regions saw an increase of 25 percent, 40 percent and 43 percent month-on-month, approaching the record highs of 2007.

The trend was similar in Guangzhou, a city neighboring Hong Kong.

The marketing chief of Summer Palace Golf Chateau, a project with a price tag of 40,000 yuan per sq m, said sales had jumped by more than 200 percent in the first six months of this year, and around 40 percent of the buyers were Hong Kong and Macao residents, with purchases for investment and self-use being roughly equal.

China's foreign exchange reserves topped 2.13 trillion U.S. dollars by the end of June, up 17.84 percent year on year, the People's Bank of China said Wednesday.

About 185.6 billion U.S. dollars were added to the world's largest official foreign exchange reserves in the first half of the year, but that figure is about 95 billion U.S. dollars less than the same period a year ago, said the central bank.

The stockpile was increased by 42.1 billion U.S. dollars in June, 30.2 billion U.S. dollars more than the same time a year earlier.

Chinese exports plummeted 21.8 percent through the January-June period in the sharpest decrease in a decade after the global financial crisis sapped demand for Chinese goods.

Declining exports drove down the trade surplus to 96.94 billion U.S. dollars in the first half, down 1.3 percent year on year.

A decline of the greenback also helped depress the reserves value as a big share of the holdings were U.S. treasury bills.

The Organization of the Petroleum Exporting Countries (OPEC) forecasted that the world oil demand this year would be lower again, but it would grow in next year.

According to the OPEC latest monthly oil market report released on Tuesday, the average global oil demand in 2009 was 83.84 million barrel every day (mb/d), amounting to a decline of 1.65 mb/d compared to last year, which increased 0.03 mb/d in comparison to the forecast in last monthly report.

However, it was forecasted in the report that the global oil demand in 2010 would be positive, representing an increase of 0.5 mb/d to 84.34 mb/d.

China's foreign direct investment (FDI) dropped by 17.9 percent to 43 billion U.S. dollars in the first half of the year, said Yao Jian, spokesman of the Ministry of Commerce Wednesday.

Spying accusations against four Rio Tinto Ltd. employees have complicated contentious price talks between China and iron ore suppliers that without an agreement could disrupt the global industry.
 
INVESTMENT VIEW
Punj LLoyd-No Faith In Themselves, But Can Sell QIPs  
Punj LLoyd intends to raise Rs 1500 crore through an QIP issue, but refused to convert warrants issued to themselves because the stock had fallen down to Rs 75. What can be said about the quality of management at such an entity which perceives itself as the second L&T in the making.
 

Punj Lloyd Ltd has informed BSE that the Company had on August 10, 2007 allotted 1,00,00,000 warrants to M/s. Indtech Construction Pvt. Ltd, one of the Promoters of the Company at a price of Rs 254.

The applicant has not exercised the option to acquire the equity shares within a period of 18 months from the date of allotment i.e. on or before February 09, 2009. Therefore, the Warrants stand lapsed and the amount of Rs 25.4 crores received by the Company as advance has been forfeited.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
--
Arvind Parekh
+ 91 98432 32381

Market Outlook 14th July 2009

Intraday Calls 14th Jul 2009
+ve Sector & Scripts : IT, HclTech

BUY TCS-397 for a target 408-415+ stop loss 393
BUY HclTech-182 for a target 188-193+ stop loss 179

BUY Cipla-267 for a target 273-277+ stop loss 263
BUY Cairn-217 for a target 223-227+ stop loss 214

BUY Grasim-2448 above 2468 for a target 2510-2517+ stop loss 2550

 

NIFTY FUTURES LEVELS

RESISTANCE

3979

4012

4044

4055

4086

SUPPORT

3955

3946

3938

3915

3904

3873

Buy MANGALAM TIMBER,Buy CIPLA

NIFTY FUTURES (F & O): 
 Above 3979 level, expect short covering up to 4010-4012 zone and thereafter expect a jump up to
4042-4044 zone by non-stop.

Support at 3955 level. Below this level, selling may continue up to 3946-3948 zone and thereafter

slide may continue up to 3938 level by non-stop.

Multiple Support Zones at 3904-3906 zone & at 3915-3917 zone. Below these zones, expect panic up to 3873-3875 zone by non-stop.

On Positive Side, supply expected at around 4053-4055 zone. Should not be allowed to cross 4084-4086 zone at

any cost.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 4270 level, it can zoom up to 4830 level by non-stop.
Already SL triggered. 3 closes below 4270 level, it can tumble up to 3990 level by non-stop.

3 closes below 3990 level, it can tumble up to 3710 level by non-stop.
 
BSE SENSEX:  
Lower opening expected. Profit Booking should start. 

Short-Term Investors:
Short-Term trend is Bearish and target at around 12478 level on down side.
Maintain a Stop Loss at 14931 level for your short positions too.

Already SL triggered.

 POSITIONAL  BUY:
Buy MANGALAM TIMBER (NSE Cash) 
Recovery to start.

Mild sell-off up to 22 level can be used to buy. If recovery starts, then it may continue up to 24 level for time being. 

If crosses & sustains at above 25 level then uptrend may continue.

Keep a Stop Loss at 20 level for your long positions too.
 
Buy CIPLA LTD (NSE Cash) 
Profit Booking expected and have caution.

Mild sell-off up to 265 level is possible. If uptrend continues, then it may continue up to 273 level for time being. 

If unable to cross 278 level then expect profit booking too.

If does not break 260 level, then traders can buy this stock.
 

Strong & Weak  futures  
This is list of 10 strong futures:

Tulip, Colpal, Dabur, Cipla, ITC, Gail, Patni, Grasim, GT Off Shore & Edu Comp.

And this is list of 10 Weak futures:
JP Hydro, Essar Oil, Orchid Chem, Ispat Ind, Suzlon, Praj Ind, Aban, Nagar Fert, Adlabs Film & Bajaj Hind. 
 Nifty is in Down Trend.

 

FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	13-Jul-2009	1360.52	1919.75	-559.23

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	13-Jul-2009	1555.53	813.27	+742.26

 

SPOT LEVELS TODAY

	3974.05	( -0.75 %)	-29.85
		1	2	3
Resistance		4096.97	4190.03	4250.12
Support		3943.82	3883.73	3790.67

	13400.32		( -0.77 %)	-103.90
			1	2	3
Resistance			13794.81	14085.40	14273.61
Support			13316.01	13127.80	12837.21

 
Global Cues & Rupee  
The Dow Jones Industrial Average closed at 8,331.68. Up by 185.16 points.
The Broader S&P 500 closed at 901.05. Up by 21.92 points.

The Nasdaq Composite Index closed at 1,793.21. Up by 37.18 points.

The rupee at 49.12/49.13 per dollar on yesterday, weaker than from its previous close of 49.01/02.
 
 Interesting findings on web:
A few kind words about Goldman Sachs sent financial shares soaring and yanked the entire stock market out of a slumber. Rising bank stocks propelled indexes to their biggest one-day gain in six weeks Monday after influential banking analyst Meredith Whitney raised her rating on Goldman Sachs Group Inc. The bank reports earnings on Tuesday. Whitney said also on CNBC that hard-hit Bank of America Corp. looks inexpensive given the assets on its books.

Analyst Meredith Whitney told CNBC television she had upgraded her recommendation to `buy' for US bank Goldman Sachs, and said bank shares could rally 15 per cent.

Stocks on Wall Street have kicked off the week on a positive note as investors welcomed a retreat in energy prices and snapped up bank stocks ahead of a wave of earnings reports.

The financial sector was helped by a 5.5% gain in Goldman Sachs, which kicks off the wave of bank reports later today. Blue chips Intel and Johnson & Johnson, also due to report, were up 2.4% and 1.4%, respectively.

Stocks have been in a rut in recent weeks due to worries about the economy, chart-based selling and weak volumes. The Dow is on a four-week losing streak.

Financials rallied, with the KBW Bank index rising 6.5% after Meredith Whitney Advisory Group upgraded Goldman Sachs(GS Quote) to buy. Bank of America(BAC Quote) and JPMorgan Chase(JPM Quote) rose 8.3% and 6.4%, respectively, on the Dow.

Elsewhere in the financial sector, ailing CIT Group plummeted 11.76 percent to 1.35 dollars after confirming it was in talks with US authorities to try to avoid bankruptcy.

Two U.S. manufacturers filed for bankruptcy on Monday with combined debts of about $600 million, both victims of the economic recession and frozen credit markets.

Crude futures slipped 5USc to $US59.84 a barrel in New York as plentiful petroleum stockpiles remained a drag on the market.

In London, Brent crude on the ICE Futures exchange fell 54USc to $US59.98 a barrel.

Gold futures reversed earlier gains, falling on the heels of last week's drop as tumbling oil prices reduced the metal's appeal as a hedge against inflation.

The dollar pared earlier losses against the euro. A stronger dollar tends to put downward pressures on dollar-denominated gold prices.

August gold fell $US3.40, or 0.4%, to $US909.10 an ounce in New York.

The euro recovered earlier losses against the dollar as US stocks strengthened.

The euro was up at $US1.3969 while the dollar was up at ¥92.63.

The euro was also stronger at ¥129.40 while the UK pound rose to $1.6172.

Asia:

Posco yesterday reported its lowest quarterly operating profit in at least nine years as South Korea's largest steelmaker continues to feel the impact of lower demand and falling prices amid the global economic slowdown.

However, the steelmaker presented an upbeat outlook for the second half, predicting that earnings would improve on the back of stronger demand and lower material costs.

"We see the Chinese steel demand increase accelerating in the second half, driven by economic recovery," the company said.

South Korea's Posco (005490.SE) isn't planning to raise domestic product prices this year, but may raise export prices in the third quarter depending on market conditions, the company's chief financial officer said Monday.

The Bank of Japan bought Y28.88 billion worth of bank-held stocks as of July 10, the central bank's latest account data showed Tuesday.

That was up from Y25.74 billion as of June 30.

In a move to help Japan's troubled banking sector, the central bank decided in February to buy Y1 trillion worth of bank-owned shares in companies with ratings of BBB- or better.

The BOJ said it will keep buying the shares until April 2010.

Aided by the overnight surge on Wall Street and a stronger U.S. dollar, the Japanese stock market opened on a firm note on Tuesday. Stocks across the board moved higher with those

from non-ferrous metals, iron & steel and financial sectors leading the charge.

The Japanese benchmark index Nikkei 225, which opened nearly 83 points or 1.36% up at 9,173, is currently trading at 9,244, up 193.67 points or 2.16% over its previous close. On Monday, the Nikkei had dropped 236.95 points or 2.55% to close at 9,050.33, extending its losses to a ninth successive session.

Steel stocks JFE Holdings, Pacific Metals, Nippon Steel, Sumitomo Metal Industries and Kobe Steel are currently up by 3%-5%. Oil and gas developer Inpex Corp. is up by around 2.5%. Other oil stocks Nippon Mining Holdings and Showa Shell Sekiyu K.K. are also trading firm.

Among non-ferrous metals, Sumitomo Metal Mining, SUMCO, Toyo Seikan Kaisha, Sumitomo Electric Industries, Fujikura, Furukawa Electric, DOWA Holdings, Toho Zinc, Mitsui Mining, Furukawa, Nippon Light Metal and Mitsubishi Materials are all trading sharply higher today.

In the automobile space, Toyota Motor, Honda Motor, Suzuki Motor, Nissan Motor, Mazda Motor, Isuzu Motors and Hino Motors are up by 2%-6%.

Asian stocks bounced on Tuesday as a rally in U.S. financial shares helped Japan break a 10-session losing streak, while also reversing a little of the recent safe-haven rush into the yen.

Helping was upbeat news from Singapore, as economic growth in the trade hub climbed 20.4 percent annualized in the three months to June, putting an end to four quarters of contraction.

Analysts said other export-dependent Asian economies were also expected to see improved second quarters, but questioned whether improvements can be sustained amid still weak consumer demand in the region's major Western markets.

Unease ahead of key data on U.S. retail sales and a slew of U.S. corporate earnings including banking giant goldman Sachs (GS.N), was enough to keep commodity prices subdued and oil pinned around $60 a barrel.

"Market sentiment has improved slightly compared to a few days ago, but we still need to see the actual numbers of U.S. results," said Mitsuru Sahara, chief manager at Bank of Tokyo-Mitsubishi UFJ.

Shares of Komatsu were up 6.3% in early trading despite reports that the construction machinery maker's quarterly operating profit dropped 94% from last year as demand in the U.S. and Europe fell off.

One reason for the lift: cost cutting and a boom in Chinese orders helped the firm become profitable again in recent months. All Nippon Airways gained 1.1% after the financially troubled firm said it will raise $1.5 billion by selling shares.

At least one Asian economy is bucking the recession. Singapore's government said its economy grew 20.4% in the second quarter of 2009. That beat analysts' forecast of 16.4% growth. The government said booming

drug production ended a year of recession, though the government maintains the economy will shrink overall this year.

Automakers rose after the Nikkei business daily said major Japanese carmakers such as Nissan Motor Co ( NSANY - news - people ) and Honda Motor ( HMC - news - people ) are raising production capacity in China as brisk local demand helps prop up their earnings at a time when sales virtually everywhere else are in a steep slump.

Nissan jumped 5.9 percent to 538 yen after the Nikkei reported that the automaker will boost production capacity in China by 20 percent. Honda rose 2.5 percent to 2,430 yen and Toyota Motor Corp ( TM - news - people ) climbed 2.4 percent to 3,460 yen.

China's Ministry of Finance announced Monday that the country's fiscal revenue in June rose 19.6 percent year on year to 686.75 billion yuan (100.5 billion U.S. dollars).

However, in the first half of this year, fiscal revenue fell 2.4 percent to 3.398 trillion yuan, said the ministry in a statement on its website.

The growth rate last month was 14.8 percentage points higher than the growth rate in May. Fiscal revenue fell 9.9 percent in the first four months this year from a year earlier to 2.05 trillion yuan due to shrinking business profits hit by the global economic slowdown and active fiscal policies including tax cuts to buoy domestic economic growth.

The ministry attributed the revenue rise in June to the stabilization of overall economic performance, growing business profits and the increase in the cigarette tax.

The government announced on June 20 the tax on cigarette cartons costing 70 yuan or more would rise to 56 percent from 45 percent, and the tax on cigarette cartons costing less than 70 yuan would rise from 30 to 36 percent.

Sales tax revenues rose 63.1 percent year on year in June, with business tax revenues edging up 6.4 percent, but the ministry did not specify the figures.

In June, China's fiscal expenditure increased 21.5 percent to 640.56 billion yuan from a year earlier. From January to June, the figure stood at 2.89 trillion yuan, up 26.3 percent from the same period last year.

The government unveiled a 4-trillion-yuan stimulus package in November last year to be spent over the next two years to shore up the world's third largest economy, with 1.18 trillion yuan from the central government.

Fiscal revenue includes taxes as well as administrative fees and other government income, such as fines and income from state-owned assets. 
 
INVESTMENT VIEW!
Suzlon-Pretty Wind Farms, But Zero Profits

Investors must ask, what are they paying Rs 80 for? The company remains in deep losses and is only using GOI led FX relaxations to show profits....if Suzlon financials are getting impacted by FX conversion in the short term where is the guarantee these are reversible losses to allow a change in accounting policy for FY09.
 

That the corporate is in a credit crisis is apparent from the Rs 300 crore Suzlon raised from LIC, possibly to fund operational losses---- vide an issue of 12.50% Secured Redeemable Non-Convertible Debentures (NCDs).

 

As a result of change in the accounting policy, the net loss before tax for the quarter and year is lower by Rs 402.52 crore in the standalone financial results and net profit before tax for the quarter and year is higher by Rs 405.04 crore in consolidated financial results. These include the following:

 

The Company has amortized the foreign exchange loss as per amended AS - 11 retrospectively and accordingly there is gain of Rs 303.15 crore for the quarter.

 

WTG / Blade restoration & retrofit costs arising out of events like blade failures in Overseas Markets and disruption of WTGs in Dhule and, including their consequential generation / availability provisions. These amounts aggregate Rs 103.74 crore (Rs 182.41 crore) for the quarter ended March 31, 2009 and Rs.411.10 crore (Rs.266.61 crore) for the year ended March 31, 2009.

 

The Company has not provided for the proportionate premium on redemption of Zero Coupon Convertible Bonds, due 2012, since the Company believes that the same is contingent in nature. The proportionate premium as at March 31, 2009 is approximately Rs.226.11 crore (Rs.101.08 crore).

 

The Backdrop:

 

On June 6, 2008, the Company, through its subsidiary acquired further 30% stake of REpower Systems AG ('REpower') held by Areva. Consequently, REpower has become a subsidiary of the Company with effect from June 6, 2008. Accordingly, the consolidated financial results for the year ended March 31, 2009 are to that extent not comparable with the consolidated financial results of March 31, 2008.

 

Further, pursuant to an agreement dated December 15, 2008 with the Martifer Group to acquire its 22.4% stake in REpower, the Company, through its subsidiary has paid first tranche of Euro 65 Million in December 2008, thereby increasing its holding in REpower to 73.65% as on March 31, 2009. Post balance sheet date, the Company through its subsidiary has acquired additional stake of 17.07% and increased its holding in REpower to 90.72%.

 

In financial year 2007-2008, the financial statements of REpower had been consolidated using equity method of accounting with a three-month time lag to that of the Company and accordingly, the financial statements of REpower for the period June 1, 2007 to December 31, 2007 have been consolidated in the financial statements of the Company for the year ended March 31, 2008. Appropriate entries have been effected in the consolidated financial statements of the Company for the year ended March 31, 2009, wherein the aforesaid three-month time lag on consolidation of REpower financials as at March 31, 2008 has been adjusted.

2. In respect of long-term foreign currency monetary items, the Company earlier followed a policy of recording all exchange differences to the profit and loss account. In line with notification of the Companies (Accounting Standards) Amendment Rules 2006 issued by Ministry of Corporate Affairs on March 31, 2009 amending Accounting Standard – 11 (AS - 11) 'The Effects of Changes in Foreign Exchange Rates (revised 2003)´, the Company has chosen to exercise the option under para 46 inserted in AS - 11 by the notification.

 

Accordingly with retrospective effect from April 01, 2007, exchange differences on all long term foreign currency monetary items have been amortized over future periods not exceeding March 31, 2011 / adjusted to fixed assets as prescribed by the notification.

 

As a result of change in the accounting policy, the net loss before tax for the quarter and year is lower by Rs 402.52 crore in the standalone financial results and net profit before tax for the quarter and year is higher by Rs 405.04 crore in consolidated financial results.

3. Exceptional items referred to above include the following:

a. The Company has treated the Zero Coupon Convertible Bonds as monetary liability and accordingly restated the liability based on the exchange rate prevailing as at the end of the respective quarter. The Company has amortized the foreign exchange loss as per amended AS - 11 retrospectively and accordingly there is gain of Rs 303.15 crore for the quarter.

b. WTG / Blade restoration & retrofit costs arising out of events like blade failures in Overseas Markets and disruption of WTGs in Dhule and, including their consequential generation / availability provisions. These amounts aggregate Rs 103.74 crore (Rs 182.41 crore) for the quarter ended March 31, 2009 and Rs.411.10 crore (Rs.266.61 crore) for the year ended March 31, 2009.

c. Mark-to-market losses of Rs.128.68 crore (Rs.23.00 crore) for the quarter and Rs.330.71 crore (Rs.23.00 crore) during the year in the standalone financial results and Rs.139.24 crore (Rs.23 crore) for the quarter and Rs.353.54 crore (Rs.23 crore) during the year in the consolidated financial results. The same is in respect of foreign exchange forward / option contracts, taken for hedging purposes.

4. On June 11, 2007 and October 10, 2007, the Company made an issue of USD 300 Million (Rs.1,223.70 crore) and USD 200 Million (Rs.786.20 crore) Zero Coupon Convertible Bonds due 2012, respectively convertible into equity shares. However, in May 2009 and June 2009, the Company has done a restructuring of the Zero Coupon Convertible Bonds, by virtue of which bondholders have been exercised the following options provided to them:

- buy back of the bonds @ 54.55% of the face value

- exchange of new bonds in place of old bonds in the ratio of 3:5

- payment of consent fee to bondholders who agree for relaxation of covenants

The restructuring does not have any impact on the standalone or consolidated results for the quarter and year ended March 31, 2009.

5. The Company has not provided for the proportionate premium on redemption of Zero Coupon Convertible Bonds, due 2012, since the Company believes that the same is contingent in nature. The proportionate premium as at March 31, 2009 is approximately Rs.226.11 crore (Rs.101.08 crore). The auditors have without qualifying their opinion, given a matter of emphasis on non-provision of the proportionate premium in their audit report for the year ended March 31, 2009

The Company has share premium of Rs 3,465.18 crores, which is adequate to cover the cost of proportionate premium, in case the contingency materialises.

6. On January 26, 2009, AE-Rotor Holding B.V. ("AERH"), a wholly owned subsidiary of the Company has sold 67,010,421 shares (10% equity) in Hansen Transmissions International NV ("Hansen") to funds managed by Ecofin Limited ("Ecofin"), a London based specialized investment firm. Following this disposal, the Suzlon Group has a voting and economic interest in Hansen of approximately 61.28%.

7. The Company has raised Rs.300 crore in December 2008 from The Life Insurance Corporation of India (LIC) vide an issue of 12.50% Secured Redeemable Non-Convertible Debentures (NCDs). These NCDs are listed on the National Stock Exchange of India Ltd.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
--
Arvind Parekh
+ 91 98432 32381