+ve Script : Heliosmath
BUY Bhusanstl-969 for 998-1011 with sl 955
BUY TANLA-55 for 59-63-66 with sl 53
BUY EDUCOMP-3790 for 3854-3896 with sl 3750
BUY YesBank-159 for 163-166 with sl 157
Positional
BUY Tulip-1058 for 1160 with sl 1035
BUY Bhartiship-176 for 206-220 with sl 159
Expected Breakout
BUY Stretch-243 above 248 for 290 with sl 240
BUY TAKE-41 above 43 for 53 with sl 40
NIFTY FUTURES LEVELS
RESISTANCE
4416
4467
4516
4532
4581
SUPPORT
4378
4363
4329
4313
4264
Buy CESC LTD;BHARTI SHIPYARD
Strong & Weak futures
This is list of 10 strong futures:
Bhushan Steel, Patni, FSL, Mphasis, Tulip, Oracle Fin Serv, GSPL, Aurobindo Pharma, Jindal Saw & Polaris Software.
And this is list of 10 Weak futures:
Chambal Fert, RCom, Hero Honda, ACC Ltd, Dabut India, Rel.Capital, Nagarjuna Fert, Essar Oil, Suzlon & India Cements.
Nifty is in downtrend
NIFTY FUTURES (F & O):
Above 4416 level, expect short covering up to 4465-4467 zone and thereafter expect a jump up to 4514-4516 zone by non-stop.
Support at 4378-4380 zone. Below this zone, selling may continue up to 4376 level and thereafter slide may continue up to 4363 level by non-stop.
Multiple Support Zones at 4313-4315 zone & at 4329-4331 zone. Below these zones, expect panic up to 4264-4266 zone by non-stop.
On Positive Side, cross above 4530-4532 zone can take it up to 4579-4581 zone. Supply expected at around this zone and have caution.
Short-Term Investors:
Bearish Trend. 3 closes below 4623.80 level, it can tumble up to 4092.20 level by non-stop.
BSE SENSEX:
Higher opening expected. Recovery should start.
Short-Term Investors:
Short-Term trend is Bearish and target at around 14235 level on down side.
Maintain a Stop Loss at 15973 level for your short positions too.
POSITIONAL BUY:
Buy CESC LTD (NSE Cash)
Uptrend may continue.
Mild sell-off up to 330 level can be used to buy. If uptrend continues, then it may continue up to 344 level for time being.
If crosses & sustains at above 355 level then uptrend may continue.
Keep a Stop Loss at 319 level for your long positions too.
Buy BHARTI SHIPYARD (NSE Cash)
Uptrend may continue.
Mild sell-off up to 173 level can be used to buy. If uptrend continues, then it may continue up to 187 level for time being.
If crosses & sustains at above 197 level then uptrend may continue.
Keep a Stop Loss at 163 level for your long positions too.
Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,279.16. Up by 61.22 points.
The Broader S&P 500 closed at 996.46. Up by 6.79 points.
The Nasdaq Composite Index closed at 1,969.24. Up by 13.32 points.
Indian currency and bond markets were closed on yesterday for a local holiday.
Interesting findings on web:
A jump in commodities gives Wall Street a boost as investors shrug off morning weakness to recharge the advance.
Stocks gained Wednesday, fighting back from early losses, as investors scooped up oil and other commodity shares following a nearly 5% rally in crude prices.
The Dow closed 61.22 points higher, or 0.6%, to 9279.16, pulling the market back to within 42 points of last Friday's close.
The S&P 500 Index advanced 0.7% to 996.46, after slumping as much as 0.9%, while the Nasdaq rose 0.7% to 1969.24.
But it was clear investors weren't trusting the gains of the past two days: The VIX, the best gauge of fear in the market, ticked higher, closing at 26.26.
U.S. stocks rebounded and oil closed above $72 a barrel on Wednesday after data suggested a recovery in U.S. oil demand, a surprise for investors who earlier were fretting over a sharp slide in Chinese equities.
The stock market has extended a streak of erratic trading, rebounding from early losses and rising moderately after a drop in oil inventories lifted hopes for an economic recovery.
News from the government Wednesday that the nation's oil inventory fell by more than 8 million barrels in the past week sent oil prices and stocks higher. Investors bet that the drop in stockpiles is an indication that energy demand is rising.
The surprising decline in crude inventories was a reassuring sign, but there is still plenty of caution among investors. Although stocks recovered, Treasury prices held on to most of their gains. Treasurys are a safe-haven investment in a struggling economy.
Analysts also said Wall Street's gains were magnified by short-covering, in which investors have to buy stock after having earlier sold borrowed shares in a bet they would fall. That rush to cover ill-timed bets can quicken the market's climb.
"People were watching that 990 level and the fact that we didn't pull back from that, they decided to cover their shorts," said Robert Pavlik, chief market strategist at Banyan Partners, referring to the 990 level on the S&P 500, which the index has had trouble breaking through this week. "So many people focus on the technicals."
Investors have become nervous that Wall Street's summer rally sprinted ahead of signs of an economic recovery.
All of the major indexes have risen at least 40 percent since hitting a low point in early March. Some traders have speculated that Wall Street would see a major pullback as the economy continued to sputter. But after a major sell-off Monday, stocks have regained ground during the past two trading days.
Stocks are likely to bounce around over the next few months, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. But "looking out twelve to eighteen months I am still optimistic," he said.
Analysts said Wall Street's gains on Wednesday were likely magnified by short-covering, in which investors have to buy stock after having earlier sold borrowed shares in a bet they would fall. That rush to cover ill-timed bets can quicken the market's climb.
At the same time, money managers and investors are still afraid of missing out on a rally that began last March and has continued despite period setbacks.
"I think people would like to buy (stocks) lower, but as the market creeps higher, people are kind of forced to buy," said Nick Kalivas, vice president of financial research at MF Global. "The action today especially has been much stronger than I would hope and it is making me nervous about my bearish view."
Still, the advance in bond prices is one sign that investors don't feel secure.
Stocks slumped in the early going, but managed to trim declines as the morning wore on, eventually staging a rally. A spike in oil prices and the underlying stocks helped drive the advance, after the Energy Information Administration reported a surprise drop in crude inventories.
A rally in crude prices gave a boost to oil stocks, including Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500). The Amex Oil index gained 1.6%.
Among energy stocks, Murphy Oil Corp. jumped $1.64, or 2.9 percent, to $57.96, while Exxon Mobil Corp. rose more than 2 percent, adding $1.42 to $67.91. Southwestern Energy share were higher.
ConocoPhillips went up by 1.2%.
The drop in crude oil inventory and the spike in prices is probably an anomaly that will dissipate because demand remains weak, said Phil Flynn, oil analyst at PFGBest Research in Chicago. "Did demand dramatically go up? It really didn't," he said.
After the close Tuesday, Hewlett-Packard (HPQ, Fortune 500) reported lower quarterly sales and earnings that topped analysts estimates. Mark Hurd, the company's CEO said business is stabilizing, but it is too soon to say the economy has turned a corner.
The tech leader also boosted its current-quarter earnings forecast and reiterated its full-year revenue forecast. Shares drifted lower Wednesday.
Among other movers, shares of Dow component Alcoa (AA, Fortune 500) declined on a Goldman Sachs downgrade, according to published report. The brokerage cut its rating on the aluminum stock because it has surged sharply in recent weeks and industry conditions could deteriorate.
In earnings news Wednesday, BJ's Wholesale Club Inc. said its second-quarter profit dipped 4 percent and sales declined because of falling gasoline prices. Still, the warehouse-club's results beat analysts' estimates and it raised its full-year profit outlook.
Deere & Co., the world's largest maker of farm equipment, reported a 27 percent drop in its fiscal third-quarter profit, but also did better than Wall Street expected.
Deere shares tumbled $1.58, or 3.5 percent, to $43.51.
Shares of Merck & Co. rallied after a federal judge ruled in favor of the drug maker in a patent fight with an Israeli company that wants to sell a generic version of its top-selling asthma drug. Shares rose 78 cents, or 2.5 percent, to $31.49. Pfizer added 2.5%.
Analog Devices shares [ADI 27.80 0.58 (+2.13%) ] rose 2.1 percent after three brokerages raised their price targets on the stock, saying they expect margins to improve in coming quarters.
Elsewhere in earnings, afternoon reports include JDS Uniphase [JDSU 5.80 -0.01 (-0.17%) ] and Limited Brands [LTD 14.58 0.61 (+4.37%) ]. JDS Uniphase fell slightly ahead of its earnings, while Limited shares jumped 4.4 percent.
Asian markets tumbled, with the Chinese market losing 5% on worries about the economy. The Shanghai Composite has lost almost 20% in two weeks, a decline that is typically measured as a bear market.
China is seen as an indicator of the health of the global economy. It is also a big buyer of American and European products. Should it experience a bigger slowdown, that would pressure an already fragile U.S. recovery.
"Given how overheated Chinese stocks had been, this correction was inevitable, and some would say it was necessary," said Tachibana Securities analyst Kenichi Hirano, adding: "players will continue to monitor Chinese stocks."
UBS to divulge Swiss account names
The U.S. pulled back the veil on Switzerland's famed tradition of banking secrecy Wednesday, winning an agreement for banking giant UBS AG to disclose the names of 4,450 American clients suspected of hiding assets in Swiss accounts.
The news is expected to prod thousands more UBS clients in America to voluntarily disclose their financial details to the Internal Revenue Service, lest they be pursued later.
The accounts held $18 billion at one time, though many have since been closed, said IRS Commissioner Doug Shulman.
The Swiss, known worldwide for keeping bank accounts secret, said UBS had no real choice in turning over the names.
Glaxo used ghostwriting program to promote Paxil.Drugmaker GlaxoSmithKline used a sophisticated ghostwriting program to promote its antidepressant Paxil, allowing doctors to take credit for medical journal articles mainly written by company consultants, according to court documents obtained by The Associated Press.
Germany — home to brands including Volkswagen, Porsche and BMW — became the latest country to fast track development of electric cars, the government approving a plan Wednesday that aims to put 1 million of them on the road by 2020.
Transportation Secretary Ray LaHood assured car dealers Wednesday that they will be reimbursed for the money they have fronted to customers buying cars under the Cash for Clunkers program, responding to complaints over a backlog of rebate payments.
The banking unit of Wells Fargo & Co. is facing a lawsuit claiming it illegally reduced the size of customers' home equity lines of credit.
Oil,Gold & Currencies:
Crude prices surged after the government's weekly inventory report showed a surprise drop in supplies. U.S. light crude oil for September delivery rose 4.7%, or $3.23, to settle at $72.42 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery rose $5.60 to settle at $944.80 an ounce.
Crude oil rose more than $US3 a barrel after a government report showed that US inventories declined the most in 15 months as imports tumbled and refineries increased operating rates.
Stockpiles dropped 8.4 million barrels last week, the most since the week ended May 23.
Crude oil for September delivery increased $US3.23, or 4.7%, to $US72.42 a barrel in New York, the highest settlement since June 11.
Gold rose as the dollar fell as much as 0.9% against the euro. Gold has mostly moved in tandem with the euro in every session since Aug. 5.
The metal has declined 1.2% this month. In the second quarter, global gold demand dropped to a six-year low.
Gold futures for December delivery gained $US5.60, or 0.6%, to $US944.80 an ounce in New York. Earlier, the price dropped as much as 0.6%. The metal has advanced 6.8% this year.
Bullion for immediate delivery rose $US3.06, or 0.3%, to $US941.66 an ounce.
In currency trading, the dollar fell versus the euro and the Japanese yen.
The dollar dropped versus the euro as a rebound in US stocks eased investor demand for safety triggered by a tumble in Chinese shares.
Sterling weakened versus the euro after minutes of the Bank of England's policy meeting showed Governor Mervyn King favoured a bigger increase in asset purchases.
The pound weakened 0.9% to 86.09p per euro and was little changed at $US1.6538 after earlier losing 1.1%.
The dollar declined 0.7% to $US1.4237 per euro while the yen appreciated 0.8% to ¥93.94 per dollar.
The yen was little changed at ¥133.76 per euro after touching ¥132.20, the strongest level since July 22.
Yen Weakens as Gain in Asian Equities Spurs Demand for Yield
The yen fell against the euro and the dollar as Chinese equities led Asian stocks higher, encouraging investors to buy higher-yielding assets.
Japan's currency weakened versus all of its 16 major counterparts as Chinese stocks rebounded from yesterday's plunge. The euro traded near a one-week high against the dollar on expectations Europe's manufacturing and service industries contracted at a slower pace.
"Risk-taking sentiment is coming back, as reflected by gains in Asian equities led by China," said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. "This is prompting buying of major currencies versus the yen. There's also talk the Japanese are looking to buy foreign securities."
The yen declined to 134.39 per euro as of 11:05 a.m. in Tokyo from 133.80 in New York yesterday. The currency dropped to 94.37 per dollar from 94.08. The euro was at $1.4231 from $1.4224. The pound traded at $1.6537 from $1.6529.
The Shanghai Composite Index jumped 2.9 percent and the MSCI Asia-Pacific Index of regional shares added 0.7 percent today, paring a 2.9 percent decline so far this week.
Dollar Trades Near Week Low on Optimism Recession Is Abating
The dollar traded near a one-week low against the euro on speculation economic data will add to signs the global recession is easing, prompting investors to seek higher-yielding assets.
The dollar fell against 11 of its 16 major counterparts before a report forecast to show an index of U.S. economic indicators rose for a fourth consecutive month. The yen declined against all 16 major counterparts on expectations Europe's manufacturing and service industries contracted at a slower pace. The pound traded near a one-week high against the dollar on economist estimates that U.K. retail sales gained in July for a second month, signaling the recession is easing.
"It's more of stabilization rather than a turnaround at this point," said Katie Dean, senior economist in Melbourne at Australia & New Zealand Banking Group Ltd. "We could see a small move in terms of risk trade. The Aussie is going to be a little bit higher, the euro higher and the U.S. dollar weaker."
The dollar traded at $1.4254 per euro at 8:58 a.m. in Tokyo from $1.4224 in New York yesterday, when it fell 0.6 percent. Europe's currency was at 134.13 yen after touching 132.20 yesterday, the lowest level since July 22. The yen was at 94.12 per dollar from 94.08. It gained 0.6 percent yesterday and touched the strongest level since July 23.
The euro may advance to as high as $1.4320 by the end of this week, Dean said.
Sterling was at $1.6557 from $1.6529. It's near the highest level since Aug. 14 when it touched $1.6608. The Australian dollar gained versus the dollar for a third day to 83.04 U.S. cents from 82.87.
Benchmark interest rates of 3 percent in Australia and 2.5 percent in New Zealand compares with as low as zero in the U.S. and 0.1 percent in Japan, making the South Pacific nations' assets attractive to investors seeking higher returns.
U.S. Outlook
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, was at 78.45 from 78.48 yesterday.
The dollar fell against the euro for a third day as economists surveyed by Bloomberg News said the Conference Board's gauge of the U.S. economic outlook for the next three to six months increased 0.7 percent last month after advancing at the same rate in June. The New York-based research group will report the data today.
The composite index of manufacturing and service industries in Europe probably climbed to a year-high 48 this month from 47 in July, according to a separate survey. The index is based on a survey of purchasing managers by Markit Economics and a reading below 50 indicates a contraction. The data will be released tomorrow.
U.K. retail sales gained 0.4 percent last month after rising 1.2 in June, according to a survey of economists. The Office for National Statistics is expected to release the data today in London.
Bonds:
Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.45% from 3.51% Tuesday. Treasury prices and yields move in opposite directions.
What to expect:
THURSDAY: Weekly jobless claims; leading indicators; Philly Fed survey; Earnings from Gamestop, Hormel, and Sears.
FRIDAY: Existing-home sales; Earnings from JM Smucker.
Reports on jobless claims, leading economic indicators (LEI) and manufacturing are all due Thursday.
The Labor Department report is due before the start of trading.
The Conference Board's July LEI index is due after the start of trading.
The Philadelphia Fed index, a regional reading on manufacturing, is also due after the start of trading.
Asia:
Japan's Nikkei stock average edged higher on Thursday, buoyed by gains in resource-linked shares such as Inpex (1605.T) after oil surged more than 4 percent and rekindled economic recovery hopes. Truckmaker shares climbed after a brokerage upgrade, with Isuzu Motors (7202.T) up more than 5 percent, and trading houses gained on strong metals prices.
But worry about Chinese shares was keeping gains capped after the Shanghai Composite Index .SSEC fell to its lowest close in two months on Wednesday, with trading volume in Tokyo lacklustre.
"People are definitely still worried about China, and we're not seeing a lot of enthusiastic buying, with foreign investors not much of a presence right now either," said Koichi Ogawa, chief fund manager at Daiwa SB Investments.
"Until Japan's election is over, stocks may find it hard to move."
The benchmark Nikkei rose 0.4 percent or 44.65 points to 10,248.65, up from the three-week closing low hit on WednesdayThe broader Topix rose 0.4 percent to 947.37.
Shares in Sony Corp. (6758) extended their losing streak to a fourth day Thursday.
Shares in Fast Retailing Co. (9983) rebounded moderately Thursday after The Nikkei reported that Uniqlo Co., the firm's casual wear retailer, will open six new outlets inside Marui Group Co. (8252) commercial facilities in Tokyo and Osaka next month.
Mori Seiki Co. (6141) shares traded lower for the fourth straight day Thursday morning, falling as much as 39 yen down to 993 yen.
Regional stock markets were higher Thursday, but the gains were fragile, with the positive sentiment coming off Wall Street's higher close being watered down by a good deal of caution surrounding Chinese markets. Energy stocks were higher after crude oil futures surged to a two-month high in New York.
Japan's Nikkei 225 was up 0.3%, Australia's S&P/ASX 200 was 0.9% higher, South Korea's Kospi Composite had gained 0.4% while New Zealand's NZX-50 rose 0.2. DJIA futures were three points lower in screen trade.
Brown Brothers Harriman said that despite the gains in U.S. equities and oil futures, China's erratic markets were still in the back of investors' minds. "The VIX index has given up only part of its Monday gains (when the Shanghai Composite Index dropped 5.8%), suggesting markets remain concerned about the Chinese equity market and a possible further drop in today's trading," it said in a note. The Chicago Board Options Exchange Volatility Index, or VIX, measures implied volatility of S&P 500 index options, and is used as a gauge of fear in the markets.
Many consider Chinese economy a key pillar for the global economic recovery so investors were rightly concerned when the Shanghai Composite Index tumbled in Wednesday's afternoon session. The index closed 4.3% lower at 2785.58 after going into the lunch-break a modest 0.4% in the red. The index has now lost 20% in just over two weeks, after peaking for the year at 3478.01 on August 4.
Regional energy stocks were higher after crude oil futures soared in New York on Wednesday. The gains in oil futures came on the back of data from the U.S. Department of Energy which showed that oil inventories unexpectedly plunged by 8.4 million barrels last week. Light, sweet crude for September delivery settled $3.23, or 4.7%, higher at $72.42 a barrel on the New York Mercantile Exchange, the contract's highest finish since June 11. The October contract, which becomes the benchmark after September's expiry Thursday also saw good volume and posted big gains, settling $2.74, or 3.9%, higher at $73.83 a barrel.
The Nymex September crude oil futures contract was down seven cents from the New York close, at $72.35 per barrel on Globex. The October contract was down four cents at $73.79 a barrel.
Japan's Inpex was up 2.3%, Japan Petroleum Exploration was up 1.9%, Woodside Petroleum was up 4.6% and Korea's SK Energy was up 1.7%.
In Tokyo, the focus was on stock plays with strong trading themes, as the overall market was expected to stay in a tight range, with little in the way of economic indicators on the horizon.
"Players expect that the Nikkei won't move much, so they are focusing instead on individual stocks with key trading themes like crude and swine flu," SMBC Friend Securities senior strategist Toshihiko Matsuno said.
Increased swine flu concerns lifted shares of Chugai Pharmaceutical, which sells Tamiflu in Japan, by 1.6%. All Nippon Airways had gained 3.3% on a ratings upgrade from Mitsubishi UFJ Securities.
In Australia, Brambles was up 3.8% after saying its fiscal year 2009 net profit fell 30% to US$452.6 million. That result was above the average forecast of US$426.3 million from four analysts surveyed by Dow Jones Newswires.
Macquarie Media Group was up 1.5%. Though it showed a fiscal year net loss of A$84.6 million, that mostly reflected a writedown to the goodwill on its American Consolidated Media business of A$138.9 million.
New Zealand shares were drifting, and "directionless," with mixed cues from overseas, said ABN Amro broker Bryon Burke. "We will continue to crab sideways until we get further indications of where overseas markets are going," he said.
Transport company Mainfreight was 3.3% higher after releasing first quarter earnings. Its net profit fell sharply in the quarter, though the company was slightly more positive in its outlook.
In Korea, U.S. stocks' resilience was helping to stabilize sentiment. Banks were higher, led by KB Financial, up 3.0%. But shipbuilders were extending losses from Wednesday with Daewoo Shipbuilding down 2.0%.
Foreign exchange markets were taking their cue from equities with the euro getting bid against the yen as the markets opened higher, fueling risk appetite. The single unit was buying Y134.14, compared with Y133.80 late in New York trade Wednesday. It was flat against the dollar though, at $1.4233. The dollar was slightly stronger against the yen, at Y94.22 from Y94.00.
Japanese government bond futures hit their highest point since late March. The futures were recently up 0.07 point at 138.94 points.
Mitsubishi UFJ Securities strategist Naomi Hasegawa said the market was likely to be well-supported, despite Tokyo shares' rise. "The reason the U.S. stock market rose yesterday was the sharp rise in oil prices because of a decline in U.S. oil inventories, but that's a one-time thing. So, the background to yesterday's U.S stock market rebound is kind of shaky," she said, adding the overall supportive macro environment for JGBs remained intact.
Base metals were steady in light trade so far in Asia after the complex slid Wednesday, with LME 3-month copper closing below $6,000 per ton after falling below this key level during Asian trade yesterday.
The losses came on the heels of Shanghai stocks' collapse. Investors in commodities are especially sensitive to moves in China, given the country's status as one of the world's greediest consumers of commodities.
"Cash does remain king and it is the interplay between Chinese appetite and investor appetite for copper that will ultimately determine whether copper ends the summer with a whimper or a roar," Standard Bank analyst Leon Westgate said.
In Asia, LME three-month copper was at $6030 per ton, up $50 from the London kerb. Aluminum was at $1960 per ton, up $11.
Spot gold was at $940.90 per troy ounce, down 60 cents.
HSI 20300.16 +345.93 +1.73% (08.05 AM IST).
Hong Kong shares opened 1.7 percent higher on Thursday after bouncing off a one-month closing low in the previous session, tracking early gains on the Shanghai bourse on signs of regulatory support for the sliding stock market.
Chinese stocks in Shanghai and Hong Kong rebounded strongly Thursday, with metals and energy producers leading a broad-based advance, riding on the back of higher commodity prices. China's Shanghai Composite Index jumped 2.9% to 2,867.61 in early trading, after slumping 4.3% and weighing down regional equities Wednesday. In Hong Kong, the Hang Seng Index and the mainland-China-focused Hang Seng China Enterprises Index each rose 1.9%.
SSE 50 Index 2258.63 +1.25% (08.17 AM IST).
Chinese stocks open 0.46% higher on Thu.
The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,798.37 points, up 0.46% or 12.79 points from the previous closing.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.15% or 16.89 points lower at 11,193.03 points.
Stock markets across Asia were in the green Thursday, helped by China's rebound following its lowest close in two months.
The Shanghai Composite Index [CN;SHI 2819.986 34.4021 (+1.24%) ] was solidly higher, led by Yangtze Power, after state media said the stock regulator had approved several mutual funds this week in quiet support to the market, which has dropped 20 percent over the past two weeks.
Hong Kong's Hang Seng [HK;HSI 20224.59 270.3594 (+1.35%) ] was also firmly in the green, tracking gains in Shanghai.
Japan's Nikkei stock average [JP;N225 10279.19 75.1904 (+0.74%) ] edged higher, helped by gains in resource-linked shares such as Inpex after oil surged more than 4 percent and rekindled economic recovery hopes.
Truckmaker shares climbed after a brokerage upgrade, with Isuzu Motors up more than 5 percent, and trading houses gained on strong metals prices.
Elsewhere, Australia's S&P/ASK 200 [AU;XJO 4369.9 -3.90 (-0.09%) ] index climbed, boosted by positive earnings results.
China's H1 current-account surplus off 32%
China's current-account surplus in the first half of the year was 32% lower than the same period a year earlier, according to data released by the foreign-exchange regulator and reported Thursday by Dow Jones Newswires. The current-account surplus narrowed to $130 billion in the six months through June, compared to the year-ago total of $191.72 billion, according to previous data from the State Administration of Foreign Exchange, which were reportedly released on its Web site Tuesday. The trade surplus in goods totaled $118.33 billion, while a deficit of $18.64 billion was reported in services. Year-ago figures for these results weren't provided by the agency, the report said.
SOHO China buys office building in Shanghai from Morgan Stanley
SOHO China Ltd<0410>, a major real estate developer in China, has spent RMB 2.45 billion to acquire an office building in Jing'an District, Shanghai, from the real estate unit of Morgan Stanley, the sixth-largest U.S. bank by assets, sources reported.
The 52-story office building is located on Nanjing Road W., and the project is SOHO China's first investment deal in Shanghai, whose operations are mainly in Beijing.
The acquisition shows that the firm has officially entered the commercial property market in Shanghai, said SOHO China Chairman Pan Shiyi, adding that the company will continue to seek opportunities in the potential market.
SOHO China will dispatch a team to Shanghai to market sale and leasing activities. It expects to sell the building, to be renamed SOHO Donghai Plaza, by the end of 2010.
Shares of the Beijing-based developer rose 0.23% to close at HK$4.39 on Wednesday.
HSBC in talks to form JV with Industrial Securities: report
HSBC Holdings PLC<0005><HBC>, the biggest foreign bank in mainland China, is in advanced talks with China-based Industrial Securities Co to set up an securities venture, a Hong Kong-based Chinese newspaper reported.
If the things go well, the two parties are expected to reach an agreement as early as the end of this year, according to the report.
A senior official with Industrial Securities said that the two firms are in talks about business cooperations and are in a sensitive period, but no relevant information was revealed so far.
HSBC Asia Pacific Chairman Vincent Cheng said in early August that the bank was in negotiations with potential partners in China to establish a securities venture, but did not give further details.
The establishment of securities venture will provide the European bank access to stock and bond underwriting businesses as the lender is preparing for a Shanghai listing to benefit from the country's booming capital markets.
HSBC is likely to launch an initial public offering in the second half of 2010 to raise RMB 50 billion, according to an earlier report from China Knowledge.
Mid-sized industrial Securities, based in China's southeastern Fujian province, plans to raise about RMB 5 billion through an IPO on the domestic stock market to replenish its working capital.
Warren Buffett's 'Greenback Effect' Warning: A Call to Buy Stocks
Warren Buffett is back with a new piece in the New York Times, but today he's not using the high-profile platform to explicitly urge us all to buy stocks as he did last October.
But there's still a big "buy" recommendation implicit in the dollar doomsday scenario he lays out in his latest op-ed.
In The Greenback Effect, Buffett details his ongoing warning that the "enormous dosages of monetary medicine" being used to rescue the U.S. economy will eventually produce a dangerous "side effect."
He worries there won't be enough borrowers ready and able to absorb the nation's growing debt relative to its economic output over the years, forcing Washington's "printing presses" to work overtime churning out paper money.
All those "greenback emissions" will, he fears, feed potentially "banana-republic" style rates of inflation.
Buffett's warning, however, doesn't come with a policy prescription that has to be filled right away.
He still believes our "immediate problem" is to get the economy "back on its feet and flourishing" and that the nation should continue to do "whatever it takes."
While "the United States economy is now out of the emergency room and appears to be on a slow path to recovery," Buffett argues that "once recovery is gained ... Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources."
"With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can't come close to bridging that sort of gap.
Buffett recognizes that's a very difficult position for politicians who depend on voters for their jobs.
Since they will "correctly perceive" that raising taxes or cutting spending will hurt their re-election chances, legislators may instead "opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes."
Buffett, however, believes the "invisible" and "latent" threat of inflation could be "as ominous as that posed by the financial crisis itself."
The world "properly" worries about greenhouse emissions causing global warming, says Buffett. "Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar's destiny lies with Congress."
It's hard to imagine Washington will have the discipline to properly handle that responsibility, and that brings us back to Buffett's previous op-ed in the Times last October.
What should an investor do in tough economic times with inflation on the horizon? Buffett's recommendation then was to buy stocks rather than try to play it safe with cash:
"People who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts."
He repeated that advice late last month, when he told CNBC viewers that with "real inflationary possibilities" down the road, he "would much rather own equities at 9000 on the Dow than have a long investment in government bonds or a continuously rolling investment in short-term money."
So, while Buffett doesn't explicitly use today's Times piece to repeat his advice to buy stocks, that remains the implicit recommendation given his argument that it will be very difficult, if not impossible, for Washington to summon the "extraordinary political will" to hold off serious long-term inflation.
China Stocks Set to Rebound From Slump, Merrill Says
China's stocks are set to rebound from this month's plunge on prospects earnings will beat estimates and policy makers will maintain bank lending, Bank of America Corp.'s Merrill Lynch unit said.
The Shanghai Composite Index climbed 2.7 percent to 2,860.97 at 10:12 a.m. local time. The gauge yesterday fell 19.8 percent below the high on Aug. 4, near the 20 percent bear- market threshold, amid disappointing earnings and concern the government will seek to damp property speculation.
"I don't think this is a turning point," David Cui, China strategist at Merrill Lynch, said in a phone interview yesterday. "My sense is that earnings will surprise on the upside and we'll see a round of earnings upgrades. The government's monetary policy also hasn't changed."
Cui's view is shared by U.S. fund managers Uri Landesman of ING Investment Management Inc. and Sentinel Asset Management's Kate Schapiro, who say the stock selloff won't prompt them to cut their investments in the world's third-largest economy.
"If you were to put a gun to my head, I would say that China is a buy, not a sell," said Landesman, who manages $2.5 billion at ING Investment in New York. "China has always been a volatile place and that hasn't changed in the last few weeks." Landesman said he's considering adding to his China holdings.
The stocks will rebound because they were "oversold" and valuations are reasonable, leaving a "safety margin," analysts led by Yu Jun at Citic Securities Co., the country's biggest listed brokerage, wrote in a report today. Equities on the CSI 300 Index have dropped to 21 times estimated earnings for 2009 from 27 times on Aug. 3.
Stimulus Rally
China's benchmark stock index posted the biggest gains among the world's markets from Jan. 1 to Aug. 4, more than doubling from the low in November. Shares had surged as the government unveiled a 4 trillion yuan ($585 billion) stimulus package and new loans by banks surged to a record in the first half. The gauge remains 53 percent below the all-time high on Oct. 16, 2007.
The index has slumped this month, paring the year-to-date advance to 57 percent, after new lending in July tumbled to less than a quarter of June's level, while losses at Yunnan Copper Industry Co. and Maanshan Iron & Steel Co. revived concern that earnings will deteriorate.
The equities rally also faltered as the securities regulator allowed initial public offerings after a nine-month moratorium.
The stocks probably face a further "correction" in the next 30 days due to regulatory risks, UBS AG strategist John Tang said in a report today, advising investors to be "less aggressive for now, more aggressive" later.
State Construction
Jonathan Garner, chief Asian and emerging market strategist at Morgan Stanley in London, told Bloomberg Television that the main catalyst for the recent plunge was the July IPO of China State Construction Engineering Corp.
"It drained liquidity from secondary markets," he said.
China Everbright Securities Co. yesterday underscored the downturn, slumping by the 10 percent daily limit, a day after it had the smallest debut of any new stock in Shanghai this year. Shanghai-based Everbright rose 30 percent on Aug. 18, against an average 109 percent for the seven other companies to list shares in China since the moratorium ended last month.
"The next few days are key," said Cui at Merrill Lynch, who favors shares of property developers, coal and non-ferrous metals producers. "We may see another leg down if the market doesn't hold around the 2,800 level."
China's biggest state-owned banks such as Industrial & Commercial Bank of China Ltd. are scheduled to report their half-yearly results within this fortnight.
Policy Stance
Shanghai's index has extended its decline since Prime Minister Wen Jiabao said on Aug. 9 that the government will maintain its current macroeconomic policy stance aimed at bolstering domestic spending as the nation continues to experience fallout from the global recession.
The index is trading at 30.6 times reported earnings, against 17.8 times for the MSCI Emerging Markets Index, and remains 53 percent higher than at the start of this year.
"I think it's healthy for the market to back off a bit," said Schapiro, fund manager at San Francisco-based Sentinel, with $17 billion in assets. "Over the next 12 months or so I think we're in a period of time where China's growth is still going to be the fastest of the major countries of the world. Even without a pickup in their export sector, they can probably grow at around 8 or 9 percent."
Technical Signals
The Shanghai Composite is poised to rally and global equities may follow suit, according to Richard Ross, global technical strategist at New York-based Auerbach Grayson & Co. Charts shows four levels of "support" signaling that the index may rebound: the 38.2 percent Fibonacci retracement, the 200-day exponential moving average, the trend line since mid-January and the 14-day relative strength index.
"A rebound is in the cards," said Ross.
Stocks plunged the most in eight months on July 29 on speculation the government will curb inflows into the market. Beijing-based Caijing magazine reported that day speculation the central bank was poised to order lenders to set aside larger reserves. Market News International said Chinese equities fell that day on speculation regulators will increase a tax on stock trading.
"The Chinese market is very trend-oriented because there are many individual investors," said Philippe Zhang, chief investment officer at AXA SPDB Investment Managers in Shanghai, which oversees about $220 million. "So it can rally very quickly and go down strongly as well."
New Accounts
Investors opened 484,185 accounts to trade stocks last week, the slowest pace since the five days ended July 10, according to data from the nation's clearing house. Account openings peaked this year at 700,617 in the last week of July, days before the index reached this year's high, the data shows.
"It's scary," retiree Xu Xuehong, 64, who had about 300,000 yuan ($43,900) invested in shares, said in an interview at a branch of Shenyin & Wanguo Securities Co. in Shanghai. "The decline is too rapid; I am not going to make new investments."
China's CSI 300 index, measuring exchanges in Shanghai and Shenzhen, has fallen more than 20 percent five times since 2005, with the index plunging by 33 percent and lasting almost three months on average during the bear markets, according to Birinyi Associates Inc. The index fell 5 percent to 3,014.47 yesterday, down 20 percent since Aug. 4.
"The speed of this drop stands out," said Kevin Pleines, analyst for the Westport Connecticut-based research and money management firm. "If this decline follows the average, it will take the CSI down another 486 points to 2,527."
INVESTMENT VIEW
Gujarat Gas-Fuelling Growth
-Owned by British Gas to the extent of 65 per cent, Gujarat Gas is the largest private sector gas distribution company in India-providing piped natural gas to industrial consumers and residential users; and compressed Natural Gas to automobile users.
-Area of operations include Surat, Ankleshwar, Bharuch, Vapi and Jhagadia.
-While Gujarat Gas owns a 30 per cent ownership of the Panna/Mukta/Tapti fields from where it derives it's principal source of Natural Gas. Recent gas allocations from the Reliance owned KG basin have sorted out Natural Gas supply issues for the company.
-Gujarat Gas operates a network of 3000 kms of gas pipelines within Gujarat and plans to lay atleast 300 kms of new pipelines every year, investing Rs 150-200 crore per annum.
-With the GOI allowing IGL, Mahanagar Gas and Gujarat Gas to apply for City Gas Distribution in identified non metros, Gujarat Gas has applied for a license to operate in Bhavnagar and Kutch.
-Gujarat Gas gets 2.13 mmscmd gas from the PMT fields with a firm offtake agreement till 2019.
-Priority sector sales comprise less than 15 per cent of Revenues, while the rest is on commercial terms.
-With KG Basin operating at full capacity the nation will have a direct source of Natural Gas amounting to 90 mmscmd, to which will get added Natural Gas supplies discovered by Ongc in many offshore fields comprising another 100 mmscmd. Finally, Cairn which operates the Mangalaya, Aishwarya and Saraswati fields would at peak output produce 30 mmscmd of natural gas.
-With Natural Gas supplies from domestic sources rising to 210 mmscmd per day over the next 4 years, there will be enough pricing freedom for concerns like Gujarat Gas as also the users of Natural Gas in the country.
-At 13 times estimated CY09 earnings, and a 1:1 Bonus thrown in Gujarat Gas looks a strong play on the sector and yet moderately priced at.
(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.)
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 | 19-Aug-2009 | 1992.12 | 2614.18 | -622.06 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 19-Aug-2009 | 867.91 | 784.14 | +83.77 |
SPOT LEVELS TODAY
 | 4394.10 | ( -1.45 %) | -64.80 |  |
| 1 | 2 | 3 | ||
| Resistance | 4463.28 | 4532.47 | 4587.38 | |
| Support | 4339.18 | 4284.27 | 4215.08 | |
 | 14809.64 | ( -1.50 %) | -225.62 | | |
| 1 | 2 | 3 | |||
| Resistance | 15042.90 | 15276.17 | 15455.39 | ||
| Support | 14630.41 | 14451.19 | 14217.92 | ||
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Arvind Parekh
+ 91 98432 32381
