Weekly Index Outlook 12th-16th Oct 2009

INDIABULLS POWER IPO

PRICE BAND 40-45

LOT SIZE : 150 SHARES

ISSUE OPENS ON 12th-15th Oct 2009

RECOMMENDATION: APPLY

 

INDEX OUTLOOK — Awaiting a pre-Diwali burst

Sensex (16,642.6)

Indian equities were in a dark and brooding mood last week despite the bonus announcement by Reliance Industries, Infosys upping its guidance for the current fiscal and slower growth in WPI.

As stocks drifted lower, attention shifted to rupee that strengthened past the significant resistance at 47.

Absence of the liquidity prop with foreign institutional investors turning net sellers in four out of the last five sessions could partly account for this lackadaisical movement.

Domestic institutional investors too were net sellers in the secondary market last week.

Volumes were however robust in both cash as well as derivative segment.

Open interest is nudging the Rs 1-lakh-crore-mark once again, showing that there is no let-up in speculative activity.

The momentum indicators in the daily chart are painting a bleak picture since the 10-day rate of change oscillator has declined in to the negative zone and the 14-day relative strength index is at 54.

This implies that a short-term down-trend is in progress. Weekly chart are showing a heavy negative divergence since May.

Despite weakness in momentum indicators, the scar left by last week's decline is superfluous.

The intra-week low of 16,606 is well above the key short-term support of 16,492 indicated last week.

If the index manages to hold above this level next week as well, it can then move higher to 17,200 or 17,560 in the near-term.

The medium-term view for the index stays positive and a weekly close below 16,000 is needed to negate this view. If we extrapolate the move from 13,219 low, the next medium-term target for the index is 17,467. As mentioned earlier, the peak at 17,735 is also a potential medium-term threat.

The truncated week ahead, before the Diwali festival lights up the bourses is likely to see some benign trading activity as most market participants would be busy spending their hard-earned profits. Sensex could head higher to 16,970 or 17,100.

If the index is unable to surpass the 17,100 mark, a decline towards 16,500 can follow. But move past 17,100 would take Sensex to 17,200 and then 17,420.

Supports for the week would be at 16,490 and 16,060.

Fresh short-term purchases should be avoided on a decline below the first support.

Nifty (4,945.2)

Nifty declined 138 points last week accompanied by high volumes as traders turned edgy. But the fact that the index resolutely held above the key short-term support at 4,900 last week is worth lauding. This leaves the door open for another spurt higher in the near term to 5,042, 5,100 or even 5,210. Traders can buy in declines with a stop at 4,900.

Caution should, however, be exercised if the index fails to move above the first target. That will imply that the index can decline to 4,845 or 4,780 in the near-term.

The medium-term trend continues to be up. But lack of momentum and the index nearing its key medium-term targets calls for dollops of caution. Though the index can rise a little further to 5,166 or 5,210 in the medium-term, the uptrend that began from July 13 low is nearing its final stages and a deeper or a more protracted correction could be around the corner.

Global Cues

Confidence returned to equity markets last week as better than expected economic readings buoyed sentiment sending many benchmark indices over 5 per cent higher. CBOE Volatility Index that had spiked close to 30 last week tumbled with equal speed to 23 towards the end of the week implying that all is well with the trading sentiment.

Many of the indices such as Chile's IPSA, Philippines' PSE Composite Index, Russia's RTS, Thailand's SET and so on recorded fresh break-outs and closed at new 2009 highs. Sri Lanka's All Share Index has gone on to a new life-time high last week after erasing all the losses recoded in 2008.

Dow had a fantastic week, with four strong days out of five. The index is all set to test the psychological 10,000 mark next week. If this level is breached, next target for the Dow would be the zone between 10,350 and 10,500 that is also the half-way mark up the previous bear market.

Commodities too had a strong week with gold dazzling investors with its rise to the intra week peak of $1061 per ounce. Immediate support for the yellow metal is at $1030 and a close below this level is required to signal a deeper correction in the offing. Reuters CRB index is testing the key long- term resistance at 450. Once this level is surpassed, the index can gain another 5 to 10 per cent.

PIVOTALS — Reliance Industries (Rs 2,100.05)

The bonus announcement that was expected to give a fillip to the sentiment on the RIL counter could not take the stock past the resistance at Rs 2,200. A three-wave move has been completed from the July 13 low in September and the sideways move witnessed since then could be a terminal corrective before the down move resumes to drag the stock down to our medium-term targets of Rs 1,727 or Rs 1,667. A strong close above Rs 2,200 is needed to signal an impending move higher to Rs 2,500.

The short-term trend in the stock is down but there is a strong support at Rs 2,070 where the 50-day moving average as well as the short-term trend line is positioned. Fresh shorts are therefore recommended only on a strong move below Rs 2,070. Subsequent targets are Rs 2,050 and Rs 2,010. Resistances for the week are Rs 2,163 and Rs 2,200.

SBI (Rs 2,066)

SBI led the market lower with 6 per cent decline last week. An evening-star pattern is apparent in the weekly chart that is a top reversal pattern. However, the decline needs to prolong below Rs 1,960 before alarm bells are sent trilling. First target of the intermediate term up-move from March lows is Rs 2,155 and then Rs 2,553. Since the first target has been achieved, the up-trend can terminate here. But we will retain a positive medium-term view as long as the stock holds above Rs 1,935.

The short-term outlook for SBI is negative and weaknesses in daily oscillators imply that the stock can decline to Rs 1,964 or Rs 1,890 in the near-term. Short-term traders can initiate fresh shorts in rallies with a stop at Rs 2,170.

Tata Steel (Rs 532.6)

Tata Steel did not decline below the key support at Rs 494 indicated in our last column and reversed higher to close 4 per cent higher. Short-term range for the stock is between Rs 490 and Rs 550. Since the stock has reached the upper end of this trading range, traders ought to be careful with long positions since it can reverse from here and decline to Rs 490 again. Fresh longs are recommended only on a strong close above Rs 550. Subsequent targets are Rs 560 and Rs 580.

Medium-term trend for the stock is positive and swing traders can hold the stock with a stop at Rs 490. Consolidation between Rs 490 and Rs 550 can be followed by a break-out to Rs 660.

Infosys (Rs 2,178.3)

Infosys followed our script closely, reversing lower from the peak of Rs 2,352 to decline towards our second target. A strong short-term down-trend has been established by the 14-day relative strength index declining to Rs 44 and the 10-day rate of change oscillator declining to the negative zone. The stock is however halting just above the 50-day moving average and a brief pull-back is possible from here that takes Infosys to Rs 2,324 or Rs 2,415.

Fresh shorts can be initiated on a failure to move above the first resistance. Downward targets would be at Rs 2,123 and Rs 2,061. We retain a positive medium-term view as long as the stock holds above Rs 1,900.

ONGC (Rs 1,220)

ONGC plodded higher to close at the upper end of its short-term trading range. As indicated earlier, a strong move past Rs 1,230 will take the stock higher to Rs 1,350 or Rs 1,390 whereas a reversal from current level can cause a decline to Rs 1,135 again. Traders can therefore initiate fresh long positions only on an emphatic move above Rs 1,230.

Maruti Suzuki (Rs 1,474.8)

Maruti Suzuki took a 11 per cent tumble last week resulting in bearish top reversal pattern in the weekly candlestick chart. The stock needs to close above the peak of Rs 1,740 over the next couple of weeks to avert the commencement of a medium-term downtrend. Short-term traders can hold with a stop at Rs 1,420. The medium-term view will however be roiled if only on a close below Rs 1,250.

 Strong & Weak  futures  

This is list of 10 strong futures:

OFSS, DCHL, IOB, Bajaj Auto, IDBI, Titan, Nagar Fert, Ultra Cem, HDIL & Canara Bank.  

And this is list of 10 Weak futures:

GMR Infra, Idea, Bharti Airtel, RCom, TV-18, Grasim, MTNL, Suzlon, Patni & HSL Tech.

Nifty is in Up trend

 

 FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	09-Oct-2009	3127.01	3171.28	-44.27

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	09-Oct-2009	1806.91	1720.19	86.72

 

SPOT LEVELS

	4945.20	( -1.14 %)	-57.05
		1	2	3
Resistance		5007.02	5068.83	5105.07
Support		4908.97	4872.73	4810.92

	16642.66		( -1.19 %)	-200.88
			1	2	3
Resistance			16868.18	17093.69	17224.31
Support			16512.05	16381.43	16155.92

 

Index Strategy — Bull-call spread for upward trending Nifty

Option traders can consider setting a bull-call spread on Nifty for the coming week. Though the Nifty does appear ripe for some downside from here, in all likelihood it may trend upwards by the end of the week. A bull call spread proffers a low-risk low-return option to play any such upside. You can set the spread by buying a call option on Nifty while simultaneously selling another Nifty call at a higher strike price. We suggest traders to set this spread using option strikes of 4,800 and 5,000; that is to say, buy Nifty 4,800 call, which closed the week at Rs 210 and sell Nifty 5,000 call, which closed at Rs 95. Note that this will entail an initial cash outflow of Rs 115 a share (or a total of Rs 5,750 for per lot). While ideally both the legs of this strategy should be executed simultaneously to avail the benefit of lower cost of setting the spread (given the premium inflow from selling the options) you can time the transaction depending on how the markets open on Monday. For instance, if the market opens with a gap down, you can consider buying the call first as that would then fetch a higher price. Selling the higher strike call can be reserved for the time when market begins to trend upwards. A reverse of this can be considered if markets open higher.

Risk-return tradeoffs

Depending on how Nifty moves, this strategy will deliver returns within a range.

The breakeven for this spread would be at 4,915 (4,800 +115), i.e. strike price of the purchased call plus the net debit paid for setting the spread. This means that when Nifty moves past 4,915, your spread will turn in the money. The maximum loss that can occur would be limited to the cost of setting the spread. In this case it would be Rs 115 a share.

But since it is limited risk-return strategy, the maximum profit would be limited too. For instance, if the Nifty closes above 5,000 (say at 5,100), while your 4,800 call will deliver a profit of Rs 300 (5,100-4,800), the sold call at 5,000 strike will result in a loss of Rs 100 (5000-5100). So the net profit will be Rs [(300-100) minus the cost of setting the spread], which is Rs 85 a share. So, for an initial outlay of Rs 115 a share, you will stand to gain Rs 85 a share, if Nifty moves up. On the contrary, if Nifty were to close at any price below the 4,800, the strike price of the purchased option, then you will lose the money that was used to set this spread.

Exit options

Since it is a limited return strategy, traders can consider closing the spread once Nifty moves past the strike of the sold option. Similarly, if in the interim period Nifty starts to show signs of weakness, traders can consider a premature exit from the spread. Traders with a more bullish stance and high-risk appetite can set the spread using strikes 4,800 and 5,100 (cost Rs 153 a share) or strikes 4,900 and 5,100 (cost Rs 90 a share).

--

Arvind Parekh

+ 91 98432 32381

 

 

--
Arvind Parekh
+ 91 98432 32381

Top 10 Strong & Weak Stocks!

 Strong & Weak  futures  

This is list of 10 strong futures:

OFSS, DCHL, IOB, Bajaj Auto, IDBI, Titan, Nagar Fert, Ultra Cem, HDIL & Canara Bank.  

And this is list of 10 Weak futures:

GMR Infra, Idea, Bharti Airtel, RCom, TV-18, Grasim, MTNL, Suzlon, Patni & HSL Tech.

Nifty is in Up trend

 

 FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	09-Oct-2009	3127.01	3171.28	-44.27

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	09-Oct-2009	1806.91	1720.19	86.72

 

SPOT LEVELS

	4945.20	( -1.14 %)	-57.05
		1	2	3
Resistance		5007.02	5068.83	5105.07
Support		4908.97	4872.73	4810.92

	16642.66		( -1.19 %)	-200.88
			1	2	3
Resistance			16868.18	17093.69	17224.31
Support			16512.05	16381.43	16155.92

--

Arvind Parekh

+ 91 98432 32381

 

 

Market Outlook for 9th Oct 2009

INTRADAY calls for 9th Oct 2009
+ve Script,Sector : FMCG GodrejCP, Thermax, FIEMind,
SyndiBank,Divislab, UBHolding
BUY Punjlloyd-277 for 286+ with sl 274
BUY Voltas-156 for 166+ with sl 152.50
BUY RELInfr-1331 for 1366-1379+ with sl 1317
BUY STER-820 for 839-849+ with sl 813

Breakout
BUY MLL-64 for 79+ with sl 61
BUY Indusind-117 for 123+ with sl 114

Positional
BUY RELInfr-1331 for 1366-1379+ with sl 1317
BUY Pratiba-221 for 249-265+ with sl 215
BUY RECltd-209 for 247+ with sl 200

Expected Breakout
BUY BGREnergy-483 above 495 for 609+ with sl 480
BUY Balramchin-131 above 133 for 141+ with sl 127

 

NIFTY FUTURE LEVELS
RESISTANCE
5022
5034
5054
5064
5084
SUPPORT
4992
4982
4950
4930
4920
4900
Buy VISHNU CHEMICALS;PASSARI CELLULOS

stocks that are in news today:
-Pipavav Shipyard to list today, issue price Rs 58/share
-ICICI Bank reduces auto loan rates by 50 bps to 10.75-11%
-MTNL eyes Zamtel, owned by Zambia government which has put 75% in the block, deal valued at $200 million
-Reliance Capital plans investment banking foray by March – Agencies
-Siemens bags order worth Rs 403 crore from Qatar
-TV18 rights issue closing date extended to October 14 from October 13 ((due to Maharashtra elections))
-39.76 lakh Axis Bank shares to hit market ((preferential issue))
-Ispat still in NSE F&O curb, Kingfisher comes out
-Board meets: Veer Energy on fund raising
-Ex-bonus: Sundaram Clayton @ 1:1
-Ex-split: Sunteck Realty from Rs 10 to Rs 2

 

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

DCHL, IOB, Aurobindo Pharma, Lupin, Jindal Saw, Orchid Chem, KFA, Canara bank, HDIL & Nagarjuna Const.

And this is list of 10 Weak futures:

Bharti Airtel, Idea, Rcom, TV-18, MTNL, Grasim, Suzlon, HCL Tech, Tulip & Aditya Birla.
 Nifty is in Up trend

 

NIFTY FUTURES (F & O):  
Above 5022 level, rally may continue up to 5032-5034 zone and thereafter expect a jump up to 5052-5054 zone by non-stop.

Support at 4982 & 4992 levels. Below these levels, expect profit booking up to 4950-4952 zone and thereafter slide may continue up to 4930-4932 zone by non-stop.

Buy if touches 4920-4922 zone. Stop Loss at 4900-4902 zone.

On Positive Side, cross above 5062-5064 zone can take it up to 5082-5084 zone by non-stop. If crosses and sustains this zone then uptrend may continue.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop. 

BSE SENSEX:  
Higher opening expected. Uptrend should continue. 

Short-Term Investors:  
Short-Term trend is Bullish and target at around 17671.82 level on upper side.
Maintain a Stop Loss at 16613.22 level for your long positions too.

 

POSITIONAL BUY:
Buy VISHNU CHEMICALS (BSE Cash) 
Surprisingly gone up, and bulls may lose control today.

1 Week: Bullish, as per current indications.

1 Month: Surprisingly going up, opposite to bearishness.

3 Months: Surprisingly going up, opposite to bearishness.

1 Year: Bullish, as per current indications.
 
Buy PASSARI CELLULOS (BSE Cash) 
Surprisingly gone up, and bulls may hold on gains today.

1 Week: Bearish, as per current indications.

1 Month: Bearish, as per current indications.

3 Months: Bearish, as per current indications.

1 Year: Bullish, as per current indications
 
 FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	08-Oct-2009	4090.81	4466.81	-376

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	08-Oct-2009	1810.13	1830.96	-20.83

Global Cues & Rupee 

The Dow Jones Industrial Average closed at 9,786.87. Up by 61.29 points.
The Broader S&P 500 closed at 1,065.48. Up by 7.90 points.

The Nasdaq Composite Index closed at 2,123.93. Up by 13.60 points.

The partially convertible rupee INR=IN ending at 46.34/35, above Wednesday's close of 46.66/67.
 
Interesting findings on web:
U.S. stocks rose on Thursday as a surprising quarterly profit from Alcoa Inc (AA.N) got third-quarter earnings off to a strong start.

Stocks rallied Thursday, with the major indexes flirting with 2009 highs, after Dow component Alcoa posted better-than-expected earnings and a report showed an unexpected drop in jobless claims.

The stock market resumed its rally after getting encouraging readings on two of the best gauges of the economy's health: consumer spending and corporate profits. Traders pounced on news that retailers last month had their first sales gains in more than a year. That followed late Wednesday's good news from Alcoa Inc. The company surprised investors with its first profit in nine months.

Alcoa gained 1.1 percent to $14.35 and rose as high as $15.10, a day after the Dow component posted its first profit after three consecutive quarterly losses, on cost savings and higher aluminum prices.

Despite the upbeat results from Alcoa and its strong move at the start of trading, the aluminum producer didn't end the day as a superstar, turning in a lacklustre 1.1 per cent gain. (Premarket activity had the stock pegged at a 7 per cent rise.)

The S&P materials index .GSPM gained 2 percent.

The Dow Jones industrial average rose 61.29, or 0.6 percent, to 9,786.87.

The Standard & Poor's 500 index rose 7.90, or 0.8 percent, to 1,065.48.

The Nasdaq composite index rose 13.60, or 0.6 percent, to 2,123.93.

RUSSELL607.755.67+0.94%

TRAN3868.3584.49+2.23%

UTIL374.961.17+0.31%

S&P 100492.632.83+0.58%

S&P 400697.129.85+1.43%

NYSE6990.6778.02+1.13%

NAS 1001717.797.34+0.43%

For the week:

The Dow is up 299.20, or 3.2 percent.

The S&P is up 40.27, or 3.9 percent.

The Nasdaq is up 75.82, or 3.7 percent.

For the year:

The Dow is up 1,010.48, or 11.5 percent.

The S&P is up 162.23, or 18.0 percent.

The Nasdaq is up 546.90, or 34.7 percent.

Stocks steadily moved higher as the session wore on, with the Dow briefly posting triple-digit gains, as 21 of 30 components rose.

The rally lost some of its steam in the afternoon as the latest U.S. bond auction was poorly received after two previous successful debt sales, prompting some investors to trim holdings in U.S. assets.

Adding to positive sentiment, U.S. retailers posted generally strong same-store sales figures, while the Labor Department said the number of U.S. workers filing new jobless claims slid to a nine-month low last week.

"You had more positive economic news, and Alcoa numbers were better than expected on both revenue and net income. So that lends credibility to the bulls' thesis that the economy is gaining momentum," said Jim Awad, managing director at Zephyr Management in New York.

U.S. retailers posted their first monthly sales increase in more than a year, suggesting that recession-battered consumers might be regaining their ability, and desire, to spend again.

"I think the market is clearly moving on expectations of better-than-expected earnings," said Tom Hepner, financial adviser at Ruggie Wealth Management. "But I'm just not sure we're going to see that. There are still plenty of reasons to think that the market has gotten ahead of the recovery."

Third-quarter S&P 500 earnings as a whole are expected to decline more than 20% from a year ago, with materials, energy and industrials leading the decline. That means S&P 500 earnings will have slumped for nine straight quarters, the longest streak since earnings tracker Thomson began calculating the numbers.

But separate from the big picture, Wall Streeters are looking to see if individual companies are starting to see any earnings growth, beyond the impact of cost-cutting. In the second quarter, more than 70% of companies reported results that topped estimates, due to reducing costs. But few market-moving companies reported sales growth or revenue that topped estimates.

Cost-cutting is expected to continue to drive results this quarter, but topline growth could be improving at least in some sectors, if Alcoa is an indication.

The aluminum maker reported quarterly earnings and revenue that dropped from a year ago, but handily beat estimates. Shares rallied in extended-hours trading and also gained 2% Thursday.

"Alcoa set the tone and backed it up," said Michael Feser, president of Zecco Trading.

Around 521,000 Americans filed new claims for unemployment last week versus forecasts for 540,000, the Labor Department reported. The number was the lowest in more than 9 months. Around 554,000 Americans filed unemployment claims in the previous week.

Continuing claims, a measure of those who have been receiving benefits for a week or more, fell to 6.040 million from 6.112 million the previous week.

The Commerce Department said wholesale inventories fell 1.3% in August versus forecasts for a drop of 1%. Inventories fell 1.6% in the previous month.

Investors were encouraged that consumer spending could finally be starting to recover. Retailers last month saw their first sales gains in more than a year. A closely watched gauge of sales at major retailers showed an increase of 0.1% for September, compared with a 1.0% drop a year ago.

While still tepid, it was the first monthly gain in the International Council of Shopping Centres-Goldman Sachs tally since July 2008.

"People are dialing up their equity exposure a bit, particularly with the Alcoa earnings," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland.

Bank of America-Merrill Lynch put out a note today with six reasons why investors should stay bullish on stocks, including the fact that earnings are on track for sustainable year-over-year growth starting in the fourth quarter, and that valuations remain attractive.

The Federal Reserve said commercial paper jumped by $US67.6 billion this week, a substantial increase.

A weak dollar, along with rising oil and gold prices, gave a lift to dollar-sensitive multi-nationals such as Dow components 3M (MMM, Fortune 500), GE (GE, Fortune 500) and Johnson & Johnson (JNJ, Fortune 500). The oil rise lifted Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500) and other commodity names.

Store chains such as Macy's Inc (M.N) rose 5.1 percent to $19.53 and Abercrombie & Fitch Co (ANF.N) gained 5.5 percent to $34.46. Kohl's Corp (KSS.N) rose 2.4 percent to $59.97. The Standard & Poor's Retail Index .RLX added 1.8 percent.

Target [TGT  49.35    0.84  (+1.73%)   ] among the early winners, posting smaller declines than expected. Target also went so far as to say third-quarter earnings would beat expectations. Target advanced 1.7 percent.

Home builders' shares rallied as members of Congress discussed a possible extension of an $8,000 federal tax credit that covers first-time home buyers. The tax credit is set to expire on November 30. A Dow Jones index of home builders' stocks .DJUSHB rose 6.2 percent, its best day since mid-May.

U.S. crude oil futures prices gained $2.12, or 3 percent, to settle at $71.69 a barrel, pushing shares of Chevron (CVX.N) up 1.3 percent at $71.45.

On the Nasdaq, shares of Adobe Systems (ADBE.O) rose 3.2 percent to $34.33 after Deutsche Bank raised its price target on the company.

On the downside was PepsiCo (PEP.N), whose shares slipped 1.3 percent to $60.39 after the world's second-largest soft drink maker reported weaker-than-expected quarterly revenue on Thursday. Its profit, however, topped expectations.

Bill Stone, chief investment strategist at PNC Wealth Management, expects bearish traders will find fault with revenue figures that remain depressed from year-ago levels, as they did at PepsiCo ( PEP - news - people ) Thursday. The beverage maker lost 1.3% after its $11.1 billion quarterly sales was shy of estimates.

In other moves, American Express Co. rose 2.9 per cent, and Microsoft Corp. rose 2.3 per cent.

Rounding out the Dow's top three were Home Depot [HD  26.90    0.76  (+2.91%)   ] and DuPont [DD  32.59    0.81  (+2.55%)   ] — both stocks gained more than 2.5 percent.

Smallcap Century Aluminum (CENX.O), the only aluminum stock in the S&P 1500 other than Alcoa, jumped 11.7 percent to $10.78. Activity was heavy in the options market, where 12 call options (an option to purchase a stock by a given date and certain price) traded for every put option (an option to sell by a certain date and price).

The S&P MidCap Materials index .4GSPI gained 2 percent while the S&P SmallCap Materials index .6GSPI rose 1.8 percent.

Retailer American Eagle Outfitters Inc (AEO.N) rose 8.5 percent to $18.08. The company was one of several retailers to report better-than-expected monthly sales results and boost profit forecasts.

The teen apparel retailer was subsequently upgraded by Needham to "buy" from "hold."

The S&P MidCap 400 index .MID rose 1.2 percent while the S&P SmallCap 600 index .SML climbed 1.3 percent, outdistancing the 0.6 percent gain on the large cap S&P 500 .SPX.

Liz Claiborne (LIZ.N) surged 26.5 percent to $6.58 as the top-performing smallcap after agreeing to a deal with JC Penney Co (JCP.N) that will move its namesake brand into department stores.

Among the sector's biggest winners, Lennar [LEN  14.39    1.21  (+9.18%)   ] jumped 9.2 percent, while Hovnanian [HOV  4.30    0.33  (+8.31%)   ] gained 8.3 percent.

Techs were right back up there today, as investors are growing more optimistic about the recovery — and tech spending. Dell [DELL  15.82    0.46  (+2.99%)   ] rose 3 percent and Palm [PALM  17.01    0.57  (+3.47%)   ] gained 3.5 percent.

Barnes & Noble shares [BKS  21.00    -2.89  (-12.1%)   ] tumbled 12 percent after the bookseller predicted lackluster same-store sales for fiscal 2010. That came as a disappointment as the company's recent purchase of College Booksellers was expected to juice sales.

"Despite what mathematically looks like an accretive acquisition, our concern is that Barnes & Noble has doubled its exposure to technology change by acquiring another retailer that may be even more vulnerable to digitization than its core," Credit Suisse analyst Gary Balter wrote in a research note.

Outside of the rapidly digitizing book sector, retailers rallied as many beat September sales expectations, helped by a late Labor Day and delayed back-to-school shopping. Plus, a cool September helped several retailers that are more impacted by weather.

IBM [IBM  122.29    -0.49  (-0.4%)   ], however, faltered. The company is the subject of a Justice Department antitrust probe regarding its behavior in the mainframe computer market. IBM says there is no basis for any such claims.

It's been an active season as well for mergers and acquisitions, but one deal faces troubles: In a provisional ruling, Britain's competition regulator said a deal between Ticketmaster Entertainment [TKTM  11.90    -0.56  (-4.49%)   ] and Live Nation [LYV  8.14    -0.48  (-5.57%)   ] could lead to higher prices and less competition. The US Justice Department also is examining the deal, which was announced earlier this year.

Hotel operator Marriott International's shares slipped 0.8% after it posted a loss that was smaller than Wall Street forecasts.

Top Percentage Gainers S&P

LENLennar Corp9.2%DHID.R. Horton Inc8.0%NYTNew York Times Co7.0%ODPOffice Depot Inc6.7%IPInternational Paper Co6.5%BDKBlack & Decker Corp6.3%DNRDenbury Resources Inc6.3%EOGEOG Resources Inc5.9%MCOMoody's Corp5.7%MWWMonster Worldwide Inc

Top Percentage Losers S&P

WLPWellPoint Inc6.2%HUMHumana Inc5.3%CIENCiena Corp5.0%AIGAmerican International Group Inc4.7%BRCMBroadcom Corp4.7%AETAetna Inc4.4%CICigna Corp4.2%CVHCoventry Health Care Inc3.8%UNHUnitedHealth Group Inc3.6%MIMarshall & Ilsley Corp3.2%

Top Percentage Gainers NASDAQ

IPIIImperial Industries Inc34.2%CLWTEuro Tech Holdings Ltd30.7%TXICUTongxin International Ltd27.8%ASTCAstrotech Corp27.5%CARTCarolina Trust Bank23.0%PLUGPlug Power Inc21.8%CAMPCalAmp Corp20.9%SMCGUMillennium India Acquisition Co Inc19.4%BCARBank of the Carolinas Corp18.4%WSBWSB Holdings Inc

Top Percentage Losers NASDAQ

RPRXRepros Therapeutics Inc27.4%ELGXEndologix Inc19.7%IFSBIndependence Federal Savings Bank18.8%HWFGHarrington West Financial Group Inc15.2%JAXBJacksonville Bancorp Inc (FL)14.7%ROIARadio One Inc13.8%QGLYQuigley Corp13.4%CAFICamco Financial Corp13.0%PBHCPathfinder Bancorp Inc12.9%SVNTSavient Pharmaceuticals Inc11.8%

Top Percentage Gainers Dow

AXPAmerican Express Co2.9%HDHome Depot Inc2.9%DDE I du Pont de Nemours and Co2.6%CATCaterpillar Inc2.3%MSFTMicrosoft Corp2.3%MMM3M Co1.9%DISWalt Disney Co1.8%CVXChevron Corp1.3%PGProcter & Gamble Co1.2%UTXUnited Technologies Corp

Top Percentage Losers Dow

TRVTravelers Companies Inc1.2%TAT&T Inc0.9%JPMJPMorgan Chase & Co0.9%VZVerizon Communications Inc0.7%MCDMcDonald's Corp0.5%KOCoca-Cola Co0.4%IBMInternational Business Machines Corp0.4%HPQHewlett-Packard Co0.2%BACBank of America Corp0.1%

VIX24.18-0.50-2.03%.

Oil,Gold & Currencies:

U.S. light crude oil for November delivery rose $2.12 to settle at $71.69 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery rose $11.90 to settle at a record $1,056.30 an ounce, the third straight record high for the precious metal.

The dollar fell versus the euro and yen, extending its recent slide against a basket of currencies.

The dollar rose against the yen for the first time in five days after Federal Reserve Chairman Ben S. Bernanke said the bank is ready to tighten monetary policy once the economy improves, increasing the appeal of U.S. assets.

The euro advanced against the yen after European Central Bank President Jean-Claude Trichet said yesterday the region's economy is emerging from a period of "free fall," damping demand for Japan's currency as a refuge. The Australian dollar headed for its biggest weekly gain since May amid wagers the central bank will raise interest rates twice more this year after a surprise increase on Oct. 6.

"Bernanke is shifting to a hawkish tone in terms of the timing of exit strategy following moves by other central banks, especially the Reserve Bank of Australia," said Takeshi Tokita, vice president of foreign exchange sales at Mizuho Corporate Bank Ltd. in Tokyo. "That's benefiting the dollar."

The U.S. currency strengthened to 89.06 yen as of 10:41 a.m. in Tokyo from 88.39 yen in New York yesterday. The dollar climbed to $1.4752 per euro from $1.4794. Europe's single currency rose to 131.32 yen from 130.76 yen.

Australia's dollar traded at 90.33 U.S. cents from 90.62 cents in New York yesterday when it touched 90.90 cents, the strongest level since Aug. 7, 2008.

The dollar gained against 15 of its 16 most-traded counterparts after Bernanke said in prepared remarks at a conference in Washington "when the economic outlook has improved sufficiently, we will be prepared to tighten."

Bernanke's comments echoed those by Kansas City Fed President Thomas Hoenig, who on Oct. 6 said raising interest rates wouldn't derail the U.S. economic recovery.

'Incremental Increases'

"Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy," Hoenig said in Denver. "I would not support a tight monetary policy in the current environment, but my experience tells me that we will need to remove our very accommodative policy sooner rather than later."

White House economic adviser Lawrence Summers repeated the administration's commitment to a strong dollar, citing recent comments by U.S. Treasury Secretary Timothy Geithner.

"He made it very clear that our commitment is to a strong dollar based on strong fundamentals," Summers said today at a forum in New York organized by Bloomberg LP, the parent of Bloomberg News.

Trichet signaled the ECB will keep interest rates at a record low to spur growth.

"The current rates remain appropriate," Trichet said at a press conference in Venice after policy makers left the main refinancing rate at 1 percent. "Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," he said, reiterating the Group of Seven's statement on currencies.

Australia Rates

The yen dropped against all 16 of its major counterparts as a report showed Japan's machinery orders gained less than forecast as depressed demand forces companies to cut costs.

"The data adds to speculation Japan will be the last to recover," said Toshiya Yamauchi, a Tokyo-based manager of the foreign-exchange margin trading department at Ueda Harlow Ltd. "As other nations lead the global economic recovery, the yen will likely be sold as a funding currency."

Orders, an indicator of business spending in three to six months, advanced 0.5 percent in August after falling 9.3 percent in July, the Cabinet Office reported today in Tokyo. The median estimate of 27 economists in a Bloomberg News survey called for a 2.1 percent gain.

The yen is likely to weaken over the next 12 months as "momentum" fades from a tax break on overseas earnings, according to Brown Brothers Harriman & Co. Since April 1, Japanese exporters have been able to bring back income earned outside the country without paying the combined 40 percent tax.

'Momentum Trading'

"It's largely momentum trading right now and we're pushing it because we haven't reached a pain threshold of anything to stop us," said Marc Chandler, global head of currency strategy at Brown Brothers in New York. "The reason the Japanese stock market underperforms despite having a strong yen is precisely because they have a strong yen. It's eroding corporate profits."

Japan's currency will probably fall to between 105 and 110 versus the dollar in the next 12 months, Chandler predicted.

Australia's currency has gained 4.4 percent this week versus its U.S. counterpart, the most since the five days ended May 8. Investors are certain the Reserve Bank of Australia will raise the overnight cash rate target on Nov. 3 by a quarter percentage point, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange.

They're wagering on a 96 percent chance he follows with another increase in December to end the year with a cash rate at 3.75 percent.

Bonds:

Treasury prices tumbled, raising the yield on the 10-year note to 3.24% from 3.18% late Wednesday. Treasury prices and yields move in opposite directions. 

What to expect:

FRIDAY: Market peak 2-year anniversary (Dow at 14,164.53); international trade

Bernanke Sees Tighter Policies as Economy Heals

Federal Reserve Chairman Ben Bernanke said on Thursday that while the U.S. central bank's vast support for the economy will likely be needed for a while, the Fed will have to remove those measures as the economy heals to ward off inflation.

The Fed has cut interest rates to near zero percent and pumped hundreds of billions into the financial system to counter the worst financial crisis since the Great Depression.

"Accommodative policies will likely be warranted for an extended period," he said in remarks prepared for delivery at a monetary policy conference at the Fed.

"At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road."

Bernanke, in a detailed description of the bank's balance sheet -- which has ballooned from around $900 billion to near $2.1 trillion -- said the Fed has the tools and the ability to pull back its flood of cash and loans to the economy and to raise interest rates when the time is right.

"When the economic outlook has improved sufficiently, we will be prepared to tighten the stance of monetary policy and eventually return our balance sheet to a more normal configuration," Bernanke said.

As the economy appears to be pulling out of a painful and lengthy recession, observers are watching closely for signs of when and how quickly the Fed intends to pull back its help.

Bernanke said the Fed could remove its easy money policies even while its balance sheet remains bloated.    

To do so, it would raise interest rates on reserve balances that banks keep at the Fed and by other actions -- specifically reverse repurchase agreements, term deposits to banks, and sales of holdings of longer-term assets. Those steps would drain cash from the system and help raise short-term interest rates, he said.

Asian Central Banks Intervene as US Dollar Sags

Asian central banks bought U.S. dollars early in the global session on Thursday to weaken their own currencies, traders said, as the slumping greenback threatens smaller export-driven economies.

US Lawmakers Seek FCC Probe into Google Voice

U.S. lawmakers urged regulators to investigate Google's [GOOG  514.18    -3.36  (-0.65%)   ] ability to block expensive calls to rural areas to slash expenses, marking the latest spat between the Internet giant and AT&T [T  25.94    -0.24  (-0.92%)   ].

New email shows fund "blow-up risk" fear at Bear

One of two former Bear Stearns managers indicted for fraud over the collapse of hedge funds in 2007 feared a "blow up risk" to investors as early as November 2006, according to an email released on Thursday.

Liz Claiborne in J.C. Penney deal, shares jump

Liz Claiborne Inc <LIZ.N> will move its namesake brand to JC Penney Co Inc Department Stores and take a line by celebrity designer Isaac Mizrahi off department store shelves in a strategy shift that pushed shares up nearly 33 percent to their highest level in 11 months.

Asia:

Most Asian stocks rose, with the MSCI Asia Pacific Index set for its biggest weekly gain in a month, as investors favored companies linked to the global economic recovery over haven assets including utilities shares.

Samsung Electronics Co., the world's No. 1 memory-chip maker, climbed 4 percent after chip prices rose to a 16-month high. Record gold prices drove Zijin Mining Gold Co. up by 10 percent in Shanghai, where markets traded after an eight-day holiday. Electric Power Development Co. sank 2.2 percent in Tokyo, leading declines by utilities. Treasuries fell after Federal Reserve Chairman Ben S. Bernanke said the bank is ready to tighten monetary policy once the economy improves.

The MSCI Asia Pacific Index was little changed at 118.47 at 11:48 a.m. in Tokyo, having swung between gains and losses at least 11 times. Nine stocks advanced for every seven that declined. The index climbed 3.5 percent this week as a report showed U.S. service industries expanded and signs of growth prompted Australia to raise interest rates.

"We're all hoping the global recession is winding to a close," said Rob Patterson, who helps manage $3.4 billion at Argo Investments Ltd. in Adelaide. "Certainly, the economic indicators are getting less worse. But I don't imagine the U.S. will be raising rates any time soon."

China's Shanghai Composite Index climbed 3.6 percent, leading gains in the region, while Hong Kong's Hang Seng Index added 0.1 percent. South Korea's Kospi Index rose 1.7 percent.

Nikkei 225 9,891.66     +59.19 ( +0.60%). (08.19 AM IST).

Japan's Nikkei average rose 0.6 percent on Friday, with resource-related stocks climbing after gold hit a fresh all-time high, while Fast Retailing (9983.T) jumped after forecasting a record profit for this business year.

The benchmark Nikkei .N225 added 59.19 points to 9,891.66, pulling further away from an 11-week intraday low of 9,628.67 hit on Tuesday.

The broader Topix inched up 0.3 percent to 890.39.

HSI 21494.63 +1.73 +0.01%. (08.20 AM IST)

Hong Kong shares slipped in early trading Friday in spite of overnight gains on Wall Street and a post-holiday bounce in Shanghai, as investors looked to lock in profits after the market advanced in the previous four sessions. The Hang Seng Index fell 0.2% to 21,459.92 after opening higher, while the Hang Seng China Enterprises Index was flat at 12,457.71. But shares of Wynn Macau /quotes/comstock/22h!1128 (HK:1128 0.00, 0.00, 0.00%) jumped on their debut, opening at 11 Hong Kong dollars ($1.41) compared with their initial public offering at 10.08 Hong Kong dollars. The stock saw heavy trading, with more than 170 million shares having changed hands in the first few minutes. Among other movers, Aluminum Corp. of China /quotes/comstock/22h!e:2600 (HK:2600 9.19, +0.05, +0.55%) lost 1%, while bourse operator Hong Kong Exchanges & Clearing /quotes/comstock/22h!e:388 (HK:388 140.90, -0.70, -0.49%) fell 1.1%.

SSE Composite  2875.80  + 3.47. (08.27 AM IST)

Chinese stocks open 2.18% higher after holiday

Chinese stocks opened higher on Friday morning, the first trading session after the eight-day National Day holiday.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,840.13 points, up 2.18% or 60.71 points from the previous closing.

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 2.61% or 292.85 points higher at 11,499.7 points.

COSCO Pacific sees growing mainland container throughput

BOE Technology to buy 50% equity interest in BMCC 

Xpress sells a 10.1% stake in Singapore's Novena

CNPC inks RMB 2.08-bln deal with UAE's NDC

JPMorgan Chase raises stake in China Shanshui Cement 

Chinese stocks open 2.18% higher after holiday 

Li Ka-shing raises stake in Hutchison Telecom to 67.01% 

Taifook Securities reaps HK$189 mln in 18 months 

Dalian Port seeks A share listing

GM to review business plan for next two years

California home prices expected to further increase

U.S. files WTO case against EU over poultry restrictions

Marriott reports third-quarter loss

Japanese Machinery Orders Rise 0.5% From Record Low

Google wins business customers in Japan: report

Singapore's OCBC said to be bidding for ING's Asian assets
 
MARKET BUZZ:
 
(May not be useful for day-traders.)

Gold: A New Bull Orbit
 
 
 
With Washington treating the dollar like confetti, many of the world's greatest investors are buying up gold at a feverish pitch.
 

For example...

Peter Monk, chairman of $31.56 billion Barrick Gold, reveals, "I have had more phone calls in the past six months, from people who have $120,000 inherited from grandmother, and from hedge fund managers with millions."

 

John Paulson, the investor who made billions by pegging the housing bust and credit

crisis, just shelled out $1.3 billion for an 11% piece of AngloGold... adding to his gold position (he also has a big stake in Kinross Gold).

 

Hedge fund manager David Einhorn, the man who predicted Lehman Bros' collapse, just bought gold for the first time. 

Citibank analysts John Hill and Graham Wark see gold at $1,000 an ounce by year's end, then, they say, gold looks to "double to triple in the long term." 

John - Sprott Asset Management's chief investment strategist - anticipates $1,500 gold before year-end - also anticipates the beginning of worldwide hyperinflation that may take many Americans by surprise. And while John is bearish on world economies for the next few years, within that same time he looks toward "numerous 5 and 10-baggers" among small-cap gold producers and junior explorers with solid projects. 

Adam Hamilton of Zeal Intelligence sees gold soaring to $5,000 an ounce and more in the next 5 to 7 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 for 8th Oct 2009

INTRADAY calls for 8th Oct 2009

BUY LITL-491 for 508-519+ with sl 485

BUY IBR-279 for 286-293+ with sl 272

BUY BGREnergy-473 for 488-504+ with sl 468

BUY Uniphos-175 for 188+ with sl 171

 

Positional

BUY Cipla-281 for 300+ with sl 275

BUY Welguj-268 for 300+ with sl 260

BUY YesBank-208 for 225+ with sl 200

 

NIFTY FUTURE LEVELS
'SUPPORT
4952
4909
4866
RESISTANCE
4986
5003
5049
5092
5135
5179
Buy UNIMERS;BHANSALI ENGG 

 

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

IOB, Lupin, Pirmal Health, DCHL, Orchid Chem, Canara bank, Sesa Goa, Aurobindo Pharma, Jindal Saw & Yes Bank.

And this is list of 10 Weak futures:

Idea, Bharti Airtel, Rcom, TV-18, MTNL, Suzlon, Grasim, Finance Tech, Unitech & Tulip.
Nifty is in Up trend
 

NIFTY FUTURES (F & O): 
 Selling may continue up to 4952-4954 zone for time being.

Hurdles at 4986 & 5003 levels. Above these levels, expect short covering up to 5047-5049 zone and thereafter expect a jump up to 5090-5092 zone by non-stop.

Cross above 5133-5135 zone, can take it up to 5177-5179 zone by non-stop. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 4909-4911 zone. Stop Loss at 4866-4868 zone.
 
Short-Term Investors:  
Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop. 

BSE SENSEX:  
Lower opening expected. Recovery should happen. 
Short-Term Investors:
 
Short-Term trend is Bullish and target at around 17671.82 level on upper side.
Maintain a Stop Loss at 16613.22 level for your long positions too.
 
POSITIONAL BUY:
Buy UNIMERS (BSE Cash) 
Bulls may hold on gains today.

1 Week: Bullish, as per current indications.

1 Month: Bullish, as per current indications.

3 Months: Surprisingly going up, opposite to bearishness.

1 Year: Bullish, as per current indications.
 
Buy BHANSALI ENGG (BSE Cash) 
Surprisingly gone up, and bulls may lose control today.

1 Week: Surprisingly going up, opposite to bearishness.

1 Month: Surprisingly going up, opposite to bearishness.

3 Months: Bullish, as per current indications.

1 Year: Bullish, as per current indications.

 

Global Cues & Rupee  
The Dow Jones Industrial Average closed at 9,725.58. Down by 5.67 points.
The Broader S&P 500 closed at 1,057.58. Up by 2.86 points.

The Nasdaq Composite Index closed at 2,110.33. Up by 6.76 points.

The partially convertible rupee INR=IN closed at 46.66/67 per dollar on yesterday, above its previous close of 46.89/90.

 

Interesting findings on web:
Investors braced for the start of earnings season by pulling out of AT&T, Verizon and other telecommunications companies, but buying banks such as Bank of America in a light-volume session Wednesday.

Stocks seesawed Wednesday, with blue chips weaker and techs a bit higher as a two-day advance petered out amid a mixed dollar, lower oil prices and some jitters at the start of the quarterly financial reporting period.

The Dow Jones industrial average fell 5.67, or 0.1 percent, to 9,725.58.

The Standard & Poor's 500 index rose 2.86, or 0.3 percent, to 1,057.58.

The Nasdaq composite index rose 6.76, or 0.3 percent, to 2,110.33.

RUSSELL602.080.10+0.02%

TRAN3783.864.22+0.11%

UTIL373.79-1.00-0.27%

S&P 100489.81.57+0.32%

S&P 400687.270.29+0.04%

NYSE6912.6512.97+0.19%

NAS 1001710.455.20+0.3%

For the week:

The Dow is up 237.91, or 2.5 percent.

The S&P is up 32.37, or 3.2 percent.

The Nasdaq is up 62.22, or 3.0 percent.

For the year:

The Dow is up 949.19, or 10.8 percent.

The S&P is up 154.33, or 17.1 percent.

The Nasdaq is up 533.30, or 33.8 percent.

"A lot of people are looking for every reason to not believe this rally," said Frank Ingarra Jr., co-portfolio manager of Hennessy Funds. "And while I think it's for real, there is real risk in the short term as this earnings season will have a big impact on what we do this winter."

"Investors are holding tight here," said Eric Ross, director of research at Canaccord Adams. "There are people on both sides of the fence. A lot of people think this market is going to keep running and running and then others that are very nervous."

Many investors are waiting to see how the earnings turn out before they either pile back into stocks in a big way or back out more aggressively. Currently, analysts expect third-quarter profits to have fallen around 24% versus a year ago, with the heaviest percentage losses expected in the materials, energy and industrials' sectors.

Investors are cautious both about earnings and because of the fast pace of the run since the March lows, said Harry Clark, founder and CEO at Clark Capital Management Group.

"I think people are looking at the weakness in the jobs market and the run-up stocks have already seen, and they're a bit nervous," Clark said.

However, he said that the last few days have indicated that any small selloff will be greeted with renewed buying interest. Also, as the end of the year draws nearer, hedge funds and portfolio managers will have to turn more cash into investments. That could give the market a year-end boost.

Investors are aware that October has historically been a tough month, Clark said, citing the 1929 and 1997 crashes and major selloffs in the late '70s. But it can also be a positive month, particularly when it follows a strong September, like it did this year.

Besides, 2009 has been a year that has consistently defied historical trends.

Since bottoming at a 12-year low on March 9, the S&P 500 has gained 56%, and the Dow has gained 49% as of Tuesday's close. After hitting a six-year low, the Nasdaq has gained nearly 68%.

Fred Dickson at DA Davidson & Co said the market has shown resilience in the face of any selling pressure.

"The stock market rally over the last couple of days once again leads us to conclude that institutional investors with lots of cash are continuing to scramble to put money to work in the stock market on small dips," he said.

"The stock market also appeared to be helped by global traders moving money into stocks as a hedge against continuing dollar weakness."

Investors should purchase stocks during declines in the market and "stay bullish" because the rebound in the S&P 500 is "quite moderate" compared with past recoveries from bear markets, wrote a team of Bank of America Corp. (NYSE: BAC) analysts led by chief U.S. equity strategist David Bianco. Over the last seven months, the S&P 500 has recouped about 43 percent of its tumble from a record in October 2007, compared with an average recovery of 65 percent by this point, the analysts wrote.

"This rally hardly seems overdone to us," the analysts wrote. A decline of 5 percent to 10 percent in the S&P 500 "would not be surprising, but we would view such a pullback as a buying opportunity," they wrote.

Techs started to push higher after an analyst upgrade on Cisco. Banks also gained after a couple of upgrades on the sector recently as analysts say stocks valuations are too low for earnings potential.

Boeing (BA, Fortune 500), United Technologies (UTX, Fortune 500), 3M (MMM, Fortune 500) and Travelers Companies (TRV, Fortune 500) were among the biggest decliners on the blue-chip average. They were also among the biggest gainers in the early-week rally.

But a late-session rally in a variety of financial stocks gave the market a boost.

Among the leading financials, Bank of America climbed 35 cents, or 2.1%, to 17.35, and Fifth Third gained 28 cents, or 2.8%, to 10.15.

Commodities companies were also strong again, aided by more gains for metals prices and continued weakness for the dollar. Mining giant Freeport-McMoRan was particularly strong, up 3.17, or 4.6%, to 72.78.

Oil and gas giant ConocoPhillips rose 1.29, or 2.7%, to 49.70, after saying it would trim $10 billion in assets over the next two years, cut expenditures and raise dividends in a bid to shore up its finances and restore confidence among investors.

Telecom giants AT&T and Verizon Communications paced the index lower as the Federal Communications Commission chairman said he intends to proceed with Internet openness rules for cellular carriers. AT&T closed down 56 cents, or 2.1%, to 26.18, while Verizon fell 31 cents, or 1%, to 29.38.

In other trading, shares of Verisk Analytics Inc. shot up 23.7 percent in their market debut, rising $5.22 to $27.22. The insurance data specialist raised $1.9 billion in one of the year's largest initial public offerings.

DuPont [DD  31.76    -0.13  (-0.41%)   ] slipped 0.3 percent after the chemicals maker said it doesn't expect earnings to match 2008 levels until 2012.

Financials gained 1.2 percent after Wells Fargo raised its rating on Bank of America [BAC  17.35    0.35  (+2.06%)   ] to "outperform," the latest in the string of upgrades on the sector.

Bank of America was the second-biggest percentage gainer on the Dow, up 2.1 percent, followed by JPMorgan [JPM  45.71    0.80  (+1.78%)   ], up 1.8 percent.

Citigroup [C  4.64    -0.03  (-0.64%)   ] shed 0.6 percent. The bank is said to be exploring a possible sale of its Phibro commodities unit — that's the one with the star trader due a $100 million pay package.

Cisco [CSCO  23.61    0.26  (+1.11%)   ] gained 1.1 percent after a William Blair analyst upgraded his rating on the stock to "outperform" from "market perform." The analyst said Cisco is winning new deals and generally benefiting from the recovery amid pent-up demand.

Microsoft [MSFT  25.09    -0.02  (-0.08%)   ] finished flat after CEO Steve Ballmer said he doesn't expect the launch of Windows 7 to boost PC sales.

Amazon [AMZN  93.97    3.06  (+3.37%)   ] was the top percentage gainer on the Nasdaq, up 3.4 percent, after the online marketplace lowered the price of its Kindle e-reader, while expanding its marketing overseas.

Google [AMZN  93.97    3.06  (+3.37%)   ] jumped 3.8 percent after the search engine said the worst of the advertising slump was over.

Rumor has it that News Corp. [NWS  13.68    0.09  (+0.66%)   ] chief Rupert Murdoch is in Asia right now, scouting out potential partners for his own e-reader. Shares of News Corp. rose 0.7 percent.

Anheuser-Busch InBev [BUD  46.65    -0.01  (-0.02%)   ] announced that it's selling its theme-parks division, which include SeaWorld and Busch Gardens, to private-equity firm Blackstone Group for at least $2.3 billion.

Avis Budget Group [CAR  12.50    -0.78  (-5.87%)   ] dropped 5.9 percent after the car-rental company warned that a transaction against it could impact earnings. Avis on Tuesday offered $250 million in notes along with a warrant transaction.

And Burger King [BKC  17.47    0.09  (+0.52%)   ] rose 1.2 percent after the fast-food chain announced an extensive revamp of its 12,000 worldwide locations.

Coca-Cola Co. (NYSE: KO) gained 0.9 percent to $54.81. The largest soft-drink maker was raised to "buy" at Deutsche Bank, which cited a "better currency and commodity outlook, stable volumes and improved domestic bottler relations."

Video game publisher Electronic Arts was another NASDAQ stock flying high after it said it sales of FIFA 2010 hit a record 1.7m copies in the first week of release in Europe.

Housebuilders such as Pulte, KB Homes and D R Horton were hit by speculation from Deutsche Bank that US lawmakers may not extend a tax credit to first-time house buyers when the tax break expires in November.

S&P 500 - Risers

Wyndham Worldwide (WYN) $17.47 +7.44%

Freeport Mcmoran B (FCX) $73.00 +4.87%

Estee Lauder Cos Inc. (EL) $38.56 +4.44%

Halliburton Co (HAL) $28.05 +4.43%

Micron Technology (MU) $8.22 +4.18%

Google Inc. (GOOG) $517.60 +3.78%

S&P 500 - Fallers

Pulte Homes Inc. (PHM) $10.06 -3.82%

AT&T Inc. (T) $26.18 -3.57%

Lennar Corp. Class A (LEN) $13.21 -3.44%

Cephalon Inc. (CEPH) $54.50 -2.83%

Interpublic Group (IPG) $6.91 -2.83%

Lockheed Martin Corp. (LMT) $74.03 -2.82%

Dow Jones I.A - Risers

Alcoa Inc. (AA) $14.20 +2.23%

Bank Of America Corp. (BAC) $17.35 +2.06%

JP Morgan Chase & Co. (JPM) $45.70 +1.76%

American Express Inc. (AXP) $33.99 +1.40%

International Business Machines Corp. (IBM) $122.70 +1.11%

Cisco Systems Inc. (CSCO) $23.58 +0.99%

Dow Jones I.A - Fallers

AT&T Inc. (T) $26.18 -3.57%

Verizon Communications Inc. (VZ) $29.38 -2.62%

Travelers Company Inc. (TRV) $48.93 -1.21%

3M Co. (MMM) $73.12 -1.10%

Merck & Co. Inc. (MRK) $32.19 -0.98%

Hewlett-Packard Co. (HPQ) $46.56 -0.96%

Earnings season unofficially kicked off after the bell today, with the first Dow component, Alcoa [AA  14.20    0.31  (+2.23%)   ], reporting after the bell.

Analysts say companies are going to have to bring it this quarter: They're looking for revenue growth, not just an improved bottom line due to cost-cutting measures. Plus, they'll also be looking at companies' outlooks for signs of the recovery.

And that's exactly what Alcoa delivered: The aluminum giant beat on both earnings and revenue.

Alcoa was the biggest gainer on the Dow, up 2.2 percent, during regular trading, and

After the bell, the stock jumped more than 5 percent.

Still, the overall season is expected to be bumpy: The current expectations are for a 25-percent drop in the blended earnings of S&P 500 companies.

Aluminum maker Alcoa Inc. was the first of the 30 companies that make up the Dow Jones industrial average to report results after the end of trading. The company's revenue and earnings topped expectations.

Alcoa's report is typically seen as the symbolic start of the reporting period, as it is usually the first Dow component to report.

Alcoa, the largest U.S. aluminum producer, reported an unexpected third-quarter profit as it benefited from rising metal prices and cost reduction by slashing jobs and raw-material costs.

    The company achieved a profit of 4 cents a share, exceeding analysts' average estimate for a 9-cent loss. Net income fell to 77 million U.S. dollars, or 8 cents a share, from 268 million dollars, or 33 cents, a year earlier. Revenue tumbled 34 percent to 4.62 billion dollars from the same period a year earlier, but was up 9 percent from the second quarter of 2009.

    Alcoa is the first among 30 Dow component companies to report the third quarter results and its rosy results were a relief after three straight quarterly losses, as investors desired to look for more evidence of economic recovery.

While it was a positive omen, investors are likely going to remain on edge until the end of the month, when a majority of the earnings have been released.

"In the vaccuum of earnings news, Alcoa's results are good, particularly because they beat on revenue," said Donald Selkin, chief market strategist at National Securities.

"But Alcoa will only have a nominal effect on the market Thursday," he said, noting that it is the least-influential component on the price-weighted Dow. "Next week brings the heavyweights."

Intel (INTC, Fortune 500), Google (GOOG, Fortune 500), Goldman Sachs (GS, Fortune 500) and a number of other financials are on the docket for next week.

Financials are expected to post the best results of any sector, due to easy comparisons against an abysmal third quarter of 2008. The sector is expected to see earnings growth of 59%.

The broad S&P 500 is expeced to see a drop in profits for the ninth quarter in a row, the worst since Thomson began tracking results a decade ago.

Early on Wednesday, Family Dollar Stores Inc. (NYSE: FDO: 28.2, -0.28) reported that fourth-quarter earnings were $60 million, or 43 cents a share, compared to $53 million, or 38 cents a share, in the year-ago period. Revenue rose to $1.81 billion from $1.77 billion a year ago. For fiscal 2010, the company expects net sales will increase 5% to 7% and same-store sales to grow 3% to 5%. Shares fell 27 cents or 0.95% to $28.21.

Among the earnings reports trickling in Wednesday, Costco Wholesale Corp. said profits fell 6 percent, partly due to a stronger dollar and increased employee benefit costs, but results still beat analysts' expectations. Shares rose $1.07 to $59.

Monsanto Co., the world's biggest seed maker, said its loss widened to $233 million as revenue fell. Adjusted earnings narrowly beat estimates. Shares fell $1.03 to $74.33.

JPMorgan Chase & Co call options look attractive ahead of its Oct. 14 quarterly earnings. "We expect the stock to go higher," wrote Goldman Sachs derivative strategists in a note. Goldman rated the stock conviction buy, with 20 percent upside to their 12-month, $54 price target.

The strategists estimate JPMorgan options are pricing in a 5 percent up or down swing on earnings, in line with the historical average earnings move for the stock. With term structure downward sloping and JPMorgan reporting just before October expiration, Goldman said it prefers buying November options. With the stock currently trading at $44.91, they recommend buying November $46 calls for $2.20.

Call buyers risk losing the full premium paid.

It was light on the economic news today but a couple of quick points: Mortgage applications rose to their highest level since mid-May as interest rates continued to drop.

And consumer borrowing fell for a seventh straight month as more Americans opted to pay off debt and banks cut credit-card limits.

VIX24.68-1.02-3.97%.

Oil,Gold & Currencies:

U.S. light crude oil for November delivery fell $1.31 to settle at $69.57 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery rose $4.70 to settle at $1,044.40 an ounce after ending the previous session at a record $1,039.70. The previous record close of $1,020.20 was set two weeks ago.

The dollar gained versus the euro and fell against the yen, reversing its recent slide against a basket of currencies.

Oct. 8 (Bloomberg) -- The dollar fell toward a two-week low against the euro as signs the global economy is recovering spurred demand for higher-yielding assets.

The U.S. currency dropped against 15 of its 16 major counterparts as Asian stocks gained before reports that economists say will show German industrial output rose for a second month and Japan's machine orders advanced in August. The Australian dollar jumped to a 14-month high after employment unexpectedly increased in September.

"People believe that the worst is over, which makes sense," said Phil Burke, chief dealer for foreign-exchange spot trading at JPMorgan Securities in Sydney. "Overall, the dollar is still in a mid-term downtrend."

The dollar fell to $1.4748 per euro at 10:50 a.m. in Tokyo from $1.4691 in New York yesterday. It touched $1.4762 on Oct. 6, the lowest since Sept. 24. The euro was at 130.38 yen from 130.18 yen. The yen was at 88.41 per dollar from 88.61. Yesterday it rose to as high as 88.01, the strongest level in more than eight months.

The MSCI Asia Pacific Index of regional shares rose 1.3 percent, and Japan's Nikkei 225 Stock Average added 0.5 percent. The Standard & Poor's 500 Index increased 0.3 percent in New York yesterday, while gold climbed to a record for the second straight day.

The dollar declined as economists in a Bloomberg News survey forecast German industrial output expanded 1.8 percent in August following a 0.9 percent drop in July. The Economy Ministry in Berlin is set to report the data today.

A separate survey forecast Japan's factory output gained 2.1 percent in August following a 9.3 percent drop in July. The data is due tomorrow in Tokyo.

'Rebounding'

"The global economy is rebounding," said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. "That's what the equity market is telling us and commodity markets are telling us. On that basis, I'm bullish on the euro."

The European Central Bank will hold its main refinancing rate at a record low of 1 percent, and the Bank of England will keep its main rate at an all-time low of 0.5 percent, according to Bloomberg surveys. Both central banks meet today.

The Federal Reserve will start raising its benchmark rate in the third quarter of 2010, according to analysts' forecasts compiled by Bloomberg.

Australia's dollar rose as much as 1.2 percent to 90.18 U.S. cents, the highest level since August 2008, from 89.12 cents yesterday in New York.

The number of people employed rose 40,600 last month from August, the statistics bureau said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg was for a decline of 10,000. The jobless rate fell to 5.7 percent from 5.8 percent.

'Uncomfortable' Level

New Zealand's dollar climbed to 73.95 U.S. cents from 73.64 yesterday. Earlier it touched 74.21 cents, the strongest since July 2008. New Zealand Finance Minister Bill English said he's "uncomfortable" with the level of its currency.

"Generally when we've had a recession, a low dollar has helped us kick-start out of that recession," English said in an interview in London late yesterday. "That's clearly not going to be the case this time."

New Zealand is being "bundled" with Australia by investors when its economy has not performed as well, exacerbating the currency's strength, he said.

Bonds:

Treasury prices rallied, lowering the yield on the 10-year note to 3.19% from 3.25% late Tuesday. Treasury prices and yields move in opposite directions. 

What to expect:

THURSDAY: Chain-store sales; foreclosure report; BOE, ECB rate decisions; weekly jobless claims; wholesale trade; Fed's Hoenig speaks; Earnings from Pepsi, Marriott, Chevron (interim)

FRIDAY: Market peak 2-year anniversary (Dow at 14,164.53); international trade

Australia September Jobs Surge, Unemployment Dips

Australian employment surged past all expectations in September and the jobless rate dropped in what might be a turning point months earlier than anyone thought, adding to the case for more rises in interest rates this year.

US Justice Department Opens IBM Antitrust Probe

The U.S. Justice Department has opened an investigation into allegations that International Business Machines [IBM  122.78    1.43  (+1.18%)   ] abused its dominance of the mainframe business to squeeze rivals, said Computer and Communications Industry Association chairman Ed Black on Wednesday.

Alcoa's Profit a Positive Start For 'Show Me' Earnings Season

Third-quarter earnings got off to a positive start Wednesday with Alcoa's surprising profit, but investors will be watching corporate results closely in the coming weeks to see if they justify a continued rally in stock prices.

Fresh Quakes Renew Tsunami Fears for Pacific

Pacific nations braced for a fresh tsunami on Thursday after two huge subsea quakes struck the region, sending islanders fleeing for higher ground, only a week after a series of deadly tsunamis devastated the Samoa islands.

Celebrity photographer Irving Penn dies

Irving Penn, whose photographs revealed a taste for stark simplicity whether he was shooting celebrity portraits, fashion, still life or remote places of the world, died Wednesday at his Manhattan home. He was 92.

Baucus Health-Care Bill Would Cost $829 Billion

Health care legislation drafted by a key Senate committee would expand coverage to 94 percent of all eligible Americans at a 10-year cost of $829 billion, congressional budget experts said Wednesday, a preliminary estimate likely to power the measure past a major hurdle within days. 

Obama, Lawmakers, Weigh New Steps to Spur Economy

U.S. President Barack Obama met on Wednesday with the two top Democrats in Congress to discuss ways to spur the economy and reverse a climb in the U.S. unemployment rate, which is now at a 26-year-high.

Asia:

Asian stocks advanced for a third day, driving the MSCI Asia Pacific Index to a two-week high, after Australian employers unexpectedly added workers last month and Alcoa Inc. reported earnings that beat analyst estimates.

National Australia Bank Ltd. climbed 4.1 percent after the statistics bureau said the country's jobless rate fell. Alumina Ltd., Alcoa's partner in the world's biggest producer of the material used to make aluminum, climbed 5.2 percent in Sydney. Mitsui O.S.K. Lines Ltd. and Nippon Yusen K.K., Japan's two largest shipping lines, climbed more than 6 percent after being upgraded at Bank of America-Merrill Lynch.

The MSCI Asia Pacific Index climbed 1.2 percent to 118.53 as of 11:31 a.m. in Tokyo, set to close at the highest level since Sept. 23. The gauge has climbed 68 percent from a five- year low on March 9 as better-than-estimated economic and earnings reports boosted speculation the global economy is recovering from the worst slowdown since World War II.

"Valuations are no longer particularly cheap in Asia, but they don't appear to be overly excessive either," said Robert Horrocks, who helps manage $9.9 billion including Asian equities at Matthews International Capital Management LLC. "Markets now are going to be driven by the ability of companies to sustain a reasonable level of growth over the long term."

Australia's S&P/ASX 200 Index climbed 1.4 percent, the biggest advance in the region, as the statistics bureau said in Sydney today that the number of people employed rose 40,600 from August. The median estimate of economists surveyed by Bloomberg was for a decline of 10,000.

Alcoa Profit

Japan's Nikkei 225 Stock Average added 0.5 percent, while Hong Kong's Hang Seng Index gained 0.4 percent. All key indexes in the region advanced except in the Philippines. China's markets resume trading tomorrow after an eight-day holiday.

Futures on the U.S. Standard & Poor's 500 Index climbed 0.9 percent. The gauge added 0.3 percent yesterday as Alcoa, the largest U.S. aluminum producer, reported third-quarter profit, while analysts had estimated a loss. The company was the first in the Dow Jones Industrial Average to release results.

"The chances are high that other U.S. companies will follow Alcoa in reporting better-than-expected results and have positive impacts on markets here," said Kenichi Hirano, general manager at Tokyo-based Tachibana Securities Co.

National Australia, the country's third-largest bank by value, climbed 4.1 percent to A$31.24. Commonwealth Bank of Australia, the nation's largest, gained 2.9 percent to A$52.80. Fairfax Media Ltd., Australia's second-largest newspaper owner, rose 4.4 percent to A$1.65 on optimism an economic revival will help boost advertising revenue.

Risk of Contraction

Two days ago, Australia became the first country in the so- called Group of 20 nations to boost borrowing costs since the start of the credit crisis. The "risk of serious economic contraction" has passed, Glenn Stevens, governor of the Reserve Bank of Australia, said the same day.

Alumina jumped 5.2 percent to A$1.94. Alcoa's third-quarter profit excluding certain items of 4 cents a share exceeded the average analyst estimate for a 9-cent loss as metal prices climbed and the company cut costs.

In Tokyo, Mitsui O.S.K. surged 6.6 percent to 569 yen, Nippon Yusen gained 8.2 percent to 371 yen and Kawasaki Kisen Kaisha Ltd. advanced 9.1 percent to 371 yen.

BOA-Merrill lifted its ratings on all three shipping lines to "neutral" from "underperform." The Baltic Dry Index, a measure of rates for shipping commodities, also rose 4.3 percent yesterday in London, the most in almost three months. 

Nikkei 225 9,849.41     +49.81 ( +0.51%). (08.47 AM IST)

Japan's Nikkei average rose 0.5 percent on Thursday as exporters such as Tokyo Electron (8035.T: Quote, Profile, Research) gained on short-covering, while Nikon Corp (7731.T: Quote, Profile, Research) jumped after a brokerage upgrade.

Shipping firms extended gains after the Baltic Exchange's main sea freight index .BADI rose to a seven-week high on Wednesday with expectations of fresh Chinese demand driving momentum.

After moving in and out of negative territory, the benchmark Nikkei .N225 ended the morning up 49.81 points at 9,849.41. It advanced 1.1 percent the previous day.

The broader Topix .TOPX gained 0.5 percent to 889.80.

HSI 21312.21 +70.62 +0.33% .(08.49 AM IST)

Hong Kong shares stretched their winning run to a fourth straight session Thursday after a mixed finish on Wall Street, with commodity producers and property developers in the lead. The Hang Seng Index rose 0.4% to 21,319.91, and the Hang Seng China Enterprises Index rose 0.4% to 12,365.02 in early trading. The performance of the three new stocks that listed Thursday was mixed after opening higher. Shares of China Vanadium Titano-Magnetite Mining /quotes/comstock/22h!893 (HK:893 0.00, 0.00, 0.00%) opened at 3.57 Hong Kong dollars (46 U.S. cents) versus its initial public offering at 3.50 Hong Kong dollars, but later eased to 3.47 Hong Kong dollars. But Yingde Gases /quotes/comstock/22h!2168 (HK:2168 0.00, 0.00, 0.00%) rose to 7.36 Hong Kong dollars from its IPO at 7 Hong Kong dollars, while Ausnutria Dairy /quotes/comstock/22h!1717 (HK:1717 0.00, 0.00, 0.00%) climbed to 4.34 Hong Kong dollars from its IPO at 4 Hong Kong dollars. 

SHANGHAI STOCK EXCHANGE:

•The SSE will close from October 1 (Thursday) to October 8, 2009 (Thursday) and open for trading on October 9, 2009 (Friday).   

 

Hang Seng Index opens 176 points higher on Thu 

ZTE says no interest in buying Nortel assets 

Morgan Stanley retains "neutral" rating for China High Speed 

Tsinghua Holdings to issue RMB 1 bln in short-term bills 

PCCW Chairman Li raises his stake again 

Beijing Capital Land's contracted sales hit RMB 1.4 bln in Sep 

COFCO Property to raise up to RMB 3.54 bln 

Yum Brands profit in China up 32% in Q3 

Pudong Dev't Bank raises RMB 15 bln through private placement 

Taiwan's exports hit US$19.07 bln in September 

Guangzhou R&F Property to issue RMB 5.5 bln in bonds in Oct 

NWS Holdings net profits down 34% in FY 2009 

Primus Financial Holdings wins bid for AIG's Taiwan business 

China bolsters global luxury car market in Sep 

China Minsheng Bank to seek controlling stake in UCBH

GlaxoSmithKline to set up child vaccine JV in China 

New World Department Store accelerates mainland expansion

U.S. oil giant ConocoPhillips selling assets to improve financial position  
 
INVESTMENT VIEW
C&C Constructions Limited

FY09 (Jun) EPS Rs 22; Revenues Rs 750 crore, PAT Rs 41 crore
 
 
As a footnote to the Consolidated Annual Results for the year ending June 2009, C&C Construction has disclosed that it has bagged the Rigid Pavement and Granular Layer Packages C1 and C2 for the prestigious Yamuna Expressway commencing milestone 0.500 to 110 kms; worth Rs 375 crore. 
The corporate which has dominated road construction in Bihar, Afghanistan and other parts of India now carries an order book in excess of Rs 3000 crore.

(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.)
 

 

SPOT LEVELS TODAY

	4985.75	( -0.83 %)	-41.65
		1	2	3
Resistance		5050.85	5115.95	5154.90
Support		4946.80	4907.85	4842.75

FUN

	16806.66		( -0.90 %)	-151.88
			1	2	3
Resistance			17030.12	17253.59	17386.61
Support			16673.63	16540.61	16317.14

FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	07-Oct-2009	4007.09	3372.55	634.54

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	07-Oct-2009	1668.72	1367.12	301.6

 

 

 

--

Arvind Parekh

+ 91 98432 32381

 

 

Market Outlook for 7th Sep 2009

INTRADAY calls for 7th Oct 2009

BUY REL-1283 for 1325-1355+ with sl 1270

BUY ITC-247 for 253-257+ with sl 245

BUY IRB-226 for 241-252 with sl 222

 

NIFTY FUTURES LEVELS
RESISTANCE
5057
5075
5107
5123
5155
SUPPORT
5029
5005
4954
4922
4906
4874
Buy ROBINSON LEASE;Buy NOVOPAN INDS

 

stocks that are in news today:
-L&T may exit Satyam after lock in expires on October 14 – BS
-JSW Steel Q2 crude steel production up 54% at 15.39 lakh tonnes
-Govt to split Chiria mines, SAIL to get half – BS
-BSNL, MTNL offered majority in Zain SPV – Bs
-Sunil Mittal says Bharti Airtel may also bid for WiMax
-KS Oils buys 53,000 acres land in Indonesia to develop palm oil plantations – BS
-Renault Strongly denies asking Bajaj to pick M&M stake in JV
-Dr Reddy's launches aesthetics drugs Strea C10 & Strea A15 in India
-Gitanjali Gems acquires 100% stake in Alliance Jewelleries
-Pyramid Saimira denies reports RBD Group buys 40% stake in company and production arm

 

RIL files affidavit against RNRL SLP in SC
RIL affidavit:
-Family MoU not binding on corporate entity
-RNRL trying to corner gas & make undue profits
-No power plant in existence & in position to receive any gas
-No such power plant can come into existence within 3 years
-By its own admission RNRL will sell gas at market price
-Market price could exceed govt approved $4.2/mmBtu
-MoU was signed by Mukesh Ambani in personal capacity

RIL-RNRL case update: exclusive
-6 RIL directors file standalone affidavits
RIL directors say
-MoU never seen, read by RIL board
-RIL board never accepted, approved MoU

 

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

IOB, Rolta, DCHL, KFA, Ranbaxy, ICICI Bank, Jindal Saw, Lupin, Orchid Chem & Aurobindo Pharma.

And this is list of 10 Weak futures:

Idea, Bharti Airtel, TV-18, MTNL, Rcom, Grasim, Finance Tech, Suzlon, TTML & Unitech.
Nifty is in Up trend
 

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	06-Oct-2009	4060.84	4217.81	-156.97

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	06-Oct-2009	1354.51	2122.08	-767.57

 

NIFTY FUTURES (F & O):

 Above 5057 level, rally may continue up to 5073-5075 zone and thereafter expect a jump up to 5105-5107 zone by non-stop.

 

Support at 5005 & 5029 levels. Below these levels, expect profit booking up to 4954-4956 zone and thereafter slide may continue up to 4906-4908 zone by non-stop.

 

 

Buy if touches 4922-4924 zone. Stop Loss at 4874-4876 zone.

 

 

On Positive Side, cross above 5121-5123 zone can take it up to 5153-5155 zone by non-stop. If crosses and sustains this zone then uptrend may continue.

 

Short-Term Investors:

Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop.  

 

BSE SENSEX:

 Higher opening expected. Uptrend should continue.  

 

Short-Term Investors:  

Short-Term trend is Bullish and target at around 17671.82 level on upper side.

Maintain a Stop Loss at 16613.22 level for your long positions too.

 

POSITIONAL BUY:

Buy ROBINSON LEASE (BSE Cash)  

Surprisingly gone up, and bulls may hold on gains today.

 

1 Week: Surprisingly going up, opposite to bearishness.

 

 

1 Month: Surprisingly going up, opposite to bearishness.

 

 

3 Months: Surprisingly going up, opposite to bearishness.

 

 

1 Year: Surprisingly coming down, opposite to bullishness.

 

Buy NOVOPAN INDS (BSE Cash)  

Surprisingly gone up, and bulls may hold on gains today.

 

1 Week: Bullish, as per current indications.

 

 

1 Month: Surprisingly going up, opposite to bearishness.

 

 

3 Months: Bullish, as per current indications.

 

 

1 Year: Bullish, as per current indications.

 

Global Cues & Rupee  

The Dow Jones Industrial Average closed at 9,731.25. Up by 131.50 points.

The Broader S&P 500 closed at 1,054.72. Up by 14.26 points.

 

The Nasdaq Composite Index closed at 2,103.57. Up by 35.42 points.

 

The partially convertible rupee ended at 46.89/90 per dollar on yesterday, above Monday's close of 47.525/535.

 

Interesting findings on web:

Wall Street rallied Tuesday, gaining for a second straight session as a weaker dollar boosted commodities and dollar-sensitive stocks, fostering a broad-based advance.

 

The runup had been stronger through midday, but lost some steam as the dollar cut losses and financial shares turned mixed to negative.

 

Higher commodity prices and indications that the global economic recovery might have arrived sent the Dow soaring again to a second day of triple-digit gains.

 

Gold closed at a record high and is in its ninth annual gain in a row since 2001 when it traded near $275.

 

"On the one hand, there's spending and stimulus to the economy," said Peter Jankovskis, who helps manage $1.4 billion at Oakbrook Investments in Lisle, Ill. "But any extra spending at this point is an additional contribution to the deficit."

 

Dow Jones Industrial Average increased 131.50 or 1.4% to a close of 9,731.25, S&P 500 Index added 14.26 or 1.4% to 1,054.72, and Nasdaq Composite Index added 35.42 or 1.7% to close at 2,103.57.

 

RUSSELL601.9810.87+1.84%

 

TRAN3779.6420.93+0.56%

 

UTIL374.793.23+0.87%

 

S&P 100488.236.48+1.35%

 

S&P 400686.989.54+1.41%

 

NYSE6899.68104.55+1.54%

 

NAS 1001705.2529.61

 

All 30 Dow stocks finished higher, led by Alcoa [AA  13.89    0.47  (+3.5%)   ], Intel [INTC  19.63    0.53  (+2.77%)   ] and JPMorgan [JPM  44.92    1.12  (+2.56%)   ].

 

"I think most people believe that stocks are going to generally keep drifting higher for the next few months," said Gary Webb, CEO at Webb Financial Group. "So while nothing fundamental has changed this week, investors are taking opportunities to buy on the lows."

 

"We've seen a lot of these elevator moments over the last month, these short, sharp pullbacks that ended up bringing people back in," said Fred Dickson, chief market strategist at D.A. Davidson & Co. "That's what we're seeing here."

 

Sustainable economic growth and low interest rates worldwide will spur a "multi-year" bull market in equities, led by developing nations, Fidelity International's Anthony Bolton said in an interview on Bloomberg Television in Hong Kong.

 

The economy is on the mend and housing is poised for a rebound, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, told Bloomberg Radio. Economic growth will reach 3 percent next year, "maybe a little more," LaVorgna said. Economists surveyed by Bloomberg News last month projected the world's largest economy will expand 2.4 percent in 2010, according to the median estimate.

 

Nobel Prize-winning economist Joseph Stiglitz said U.S. unemployment will keep rising and should be the focus for policy makers, and gains in the stock market show investors have been "irrationally exuberant" about a recovery.

 

Investors also welcomed reports that Australia became the first major economy to lift interest rates since the start of the financial crisis.

 

Australia became the first of the major developed economies to raise interest rates, a move investors viewed as a further sign of global economic recovery.

 

The hike in a key lending rate by the Australian central bank "is a confirmation that things are picking up in my opinion," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland. "It's a good barometer as to what is going on in that part of the world."

 

The weak U.S. currency was also good for the stocks of multi-national companies that benefit from a weaker dollar.

 

A weaker-than-expected response to a government debt auction dulled some of the shine on the rally.

 

The broad advance benefited a number of stocks and sectors.

 

Materials and commodities stocks surged, including Dow components Alcoa (AA, Fortune 500), DuPont (DD, Fortune 500), Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500).

 

The Dow's other biggest gainers were Caterpillar (CAT, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and United Technologies (UTX, Fortune 500).

 

The third-quarter earnings reporting period unofficially kicks off Wednesday with Dow compenent Alcoa, as is typical. The aluminum maker is expected to post a loss versus a profit a year ago, demonstrating the weak quarter expected for the materials sector.

 

General Electric Co. (NYSE: GE) and Intel Corp. (Nasdaq: INTC) are among the Dow and S&P 500 companies that will report in the next two weeks. Analysts' estimates compiled by Bloomberg predict companies will report a ninth straight quarter of declining profits before returning to growth in the final three months of the year.

 

While there's considerable optimism about upward earnings revisions, the market is at a particularly volatile point. Should earnings reveal the limits of cost cutting and reduced inventory without some pickup in sales growth, market sentiment could pivot sharply.

 

"I think expectations that we are in a recovery phase are running very, very high," said Curt Lyman, managing director at HighTower Advisors. "The focus is going to be on the quality of earnings. If that doesn't pan out, and there are downside surprises, the herd is skittish and they can turn on a dime. If that happens, the exits get very, very narrow."

 

"I think expectations going into the quarter are for a fairly positive earnings season. Last quarter about 70 percent of companies beat estimates on the heels of aggressive cost cutting and very weak consensus estimates," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

 

Since the economy has shown some signs of improvement since then, it's reasonable to think corporate results will do better, he said.

 

Third-quarter earnings for S&P 500 companies are still expected to have declined 24.8 percent from a year ago, according to data from Thomson Reuters.

 

Ahead of the first big batch of results, a few companies issued warnings about their just-completed quarter.

 

Dow component Boeing (BA, Fortune 500) said it will take a $1 billion charge in the third quarter because of higher costs to produce its 747-8 airplanes amid rough market conditions. The stock was little changed.

 

St. Jude Medical (STJ) warned Tuesday that third-quarter results would miss earlier forecasts because hospitals bought fewer of its medical devices. Shares fell nearly 13% in unusually active New York Stock Exchange trading.

 

Avocent Corp surged 20% after it agreed to be acquired by Emerson Electric for $25 a share or $1.2 billion. The Mosaic Co first quarter profit falls to $100.6 million. Pepsi Bottling quarterly net rises.

 

St Jude Medical led the decliners in the S&P 500 index with a loss of 12.7% followed by losses in Ciena Corporation of 7.9%, in Dynegy Inc of 4.8%, in Prologis of 3.2% and in Marshall & Ilsley of 1.2%.

 

Hartford Financial led gainers in the S&P 500 index with a rise of 7.9% followed by gains in Newmont Mining Corporation 7%, in Office Depot Inc of 6.6% and in Anadarko Petroleum of 6.1%.

 

Shares of industrial companies sensitive to the economy's cycles also rose. Shares of United Technologies Corp <UTX.N>, the world's largest maker of elevators and air conditioners, climbed 1.8 percent at $61.49.

 

On Nasdaq, Microsoft Corp <MSFT.O> increased 1.9 percent to $25.11 after introducing new software for mobile phones to compete with Apple Inc's <AAPL.O> iPhone. Apple shares rose 2.1 percent at $190.01.

 

Dow energy components ExxonMobil [XOM  68.66    1.08  (+1.6%)   ] and Chevron [CVX  70.56    1.17  (+1.69%)   ] gained 1.6 percent and 1.7 percent, respectively.

 

Newmont Mining (NYSE: NEM), the largest U.S. gold producer, surged 7 percent to $46.21. Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), the world's biggest publicly traded copper producer, gained 3.4 percent to $69.61. Exxon Mobil (NYSE: XOM), the largest U.S. oil company, rose 1.6 percent to $68.66.

 

Corning (NYSE: GLW) added 4.7 percent to $15.50 after being upgraded to "Buy" from "Neutral" by UBS (NYSE: UBS), which cited "more robust" sales in China and an eased glut of supply.

 

NutriSystem [NTRI  17.46    2.41  (+16.01%)   ] shares rallied 16 percent after the company announced that it will sell its 14-day Starter program at Wal-Mart, [WMT  49.45    0.39  (+0.79%)   ] the first time the company has sold its products in the retail channel.

 

Wal-Mart rival Target [TGT  48.14    1.21  (+2.58%)   ] gained 2.5 percent after the company announced that it will match Wal-Mart's price cuts on toys for the holiday season.

 

There are no major economic reports on the calendar today, and very few notable earnings reports. After the bell, investors will get quarterly numbers from Yum Brands, [YUM  34.88    0.03  (+0.09%)   ] the parent of the KFC, Taco Bell, and Pizza Hut chains.

 

S&P 500 - Risers

 

Hartford Fin Svc (HIG) $28.32 +7.89%

 

Newmont Min Corp. (NEM) $46.21 +6.97%

 

Office Depot Inc. (ODP) $6.89 +6.66%

 

Family Dollar Stores (FDO) $28.48 +5.72%  

 

 

S&P 500 - Fallers

 

St. Jude Medical (STJ) $33.45 -12.53%

 

Dynegy Inc. Holdings Co (DYN) $2.38 -4.80%

 

Sunoco Inc. (SUN) $27.06 -3.60%

 

Prologis Sbi (PLD) $11.18 -3.20%  

 

 

Dow Jones I.A - Risers

 

Alcoa Inc. (AA) $13.89 +3.50%

 

Intel Corp. (INTC) $19.66 +2.93%

 

JP Morgan Chase & Co. (JPM) $44.91 +2.53%

 

Merck & Co. Inc. (MRK) $32.51 +2.33

 

The market has gone up when it was supposed to go down and vice versa in 2009 -- a terrible omen for the rest of the year.

 

Historically, January is one of the market's strongest months. But in January 2009, the Dow Jones Industrial Average plummeted 9%. "Sell in May and stay away" would have been a terrible idea with the Dow tacking on 16% from May 1 to Aug. 31. And while everyone went into September on edge -- September being the market's worst month historically -- the Dow industrials rose 2.3% in September.

 

"November and December, you usually get this rip to the finish. Maybe you get the opposite this year," said Gary Flam, a portfolio manager with Bel Air Investment Advisors.

 

VIX25.7-1.14-4.25.

 

Oil,Gold & Currencies:

 

U.S. light crude oil for November delivery settled up 47 cents to $70.88 a barrel on the New York Mercantile Exchange.

 

COMEX gold for December delivery rose $21.90 to settle at a record $1,039.70 an ounce, after rising as high as $1,045, an intraday record.

 

The dollar tumbled versus the euro and the yen, resuming its recent plunge against a basket of currencies.

 

The dollar rose for a fifth day against the pound after a Federal Reserve official said the central bank should start raising interest rates "sooner rather than later," boosting demand for U.S. assets.

 

The dollar gained for the first time in four days against the euro as a technical indicator signaled the U.S. currency's decline was excessive. The yen fell versus the dollar as Asian stocks extended a global rally amid signs the worldwide economy is recovering, damping demand for Japan's currency as a refuge.

 

"The Fed is showing signs to exit, which is positive for the dollar," said Toshiya Yamauchi, a Tokyo-based manager of the foreign-exchange margin trading department at Ueda Harlow Ltd. "While U.S. economic data continue to show mixed results, it's clear the economy has reached the bottom and is beginning to rebound."

 

The dollar rose to $1.5882 per pound at 11:50 a.m. in Tokyo from $1.5922 in New York yesterday. The greenback gained to $1.4685 per euro from $1.4722 yesterday, when it reached $1.4762, the weakest level since Sept. 24. The U.S. currency strengthened to 88.96 yen from 88.82 yen. The euro was at 130.63 yen from 130.76 yen.

 

The dollar advanced against 14 of its 16 major counterparts after Kansas City Fed President Thomas Hoenig yesterday said raising interest rates wouldn't derail the U.S. economic recovery.

 

"Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy," Hoenig said in a speech in Denver. "I would not support a tight monetary policy in the current environment, but my experience tells me that we will need to remove our very accommodative policy sooner rather than later."

 

Fed Comments

 

Hoenig's comments came after Australia yesterday became the first among Group of 20 economies to raise borrowing costs since the start of the financial crisis. The comments echoed those by Fed Governor Kevin Warsh, who said on Sept. 25 the central bank may need to tighten "with greater force than is customary," and Richmond Fed President Jeffrey Lacker, who said on Oct. 1 that rates may need to be raised even with unemployment near 10 percent.

 

The euro weakened as the currency's 14-day stochastic oscillator versus the dollar rose to 66.5 yesterday from 45.9 on Oct. 5, nearing the 80 level some traders use as a signal that an asset has risen too quickly and is poised to decline.

 

Short-Covering

 

"The dollar is undergoing some short-covering as its losses may be overdone a bit," said Nobuaki Kubo, vice president of foreign exchange in Tokyo at BBH Investment Services Inc., a unit of New York-based Brown Brothers Harriman & Co. "However, the greenback's rebound is likely to be limited, given that Asian stocks are rising."

 

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in an asset's value. A short position is a bet an asset will decline.

 

The yen dropped as Japan's Nikkei 225 Stock Average rose 0.9 percent, and the MSCI Asia Pacific Index of regional shares advanced 1.1 percent. The Standard & Poor's 500 Index gained 1.4 percent in New York yesterday.

 

"Stock gains are weighing on the yen, encouraging investors to take risk," said Takashi Kudo, director of foreign-exchange sales at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp.

 

Bonds:

 

Treasury prices fell, raising the yield on the 10-year note to 3.25% from 3.22% late Monday. Treasury prices and yields move in opposite directions.

 

What to expect:

 

WEDNESDAY: Weekly mortgage applications; weekly crude inventories; consumer credit; Earnings from Costco, Family Dollar, Alcoa

 

THURSDAY: Chain-store sales; foreclosure report; BOE, ECB rate decisions; weekly jobless claims; wholesale trade; Fed's Hoenig speaks; Earnings from Pepsi, Marriott, Chevron (interim)

 

FRIDAY: Market peak 2-year anniversary (Dow at 14,164.53); international trade

 

Santander Raises $8.05 Billion in Record Brazil IPO

 

Banco Santander's Brazilian unit raised 14.1 billion reais ($8.05 billion) in a record initial public offering in Brazil and the largest IPO on a U.S. exchange in 18 months.

 

Gold Eases, But Hovers at Record High

 

Gold surged to a record high above $1,040 per ounce on Tuesday, as investors piled into the metal to preserve the value of their dollar-denominated assets against erosion by a weakening dollar and inflation.

 

Both spot gold prices and U.S. gold futures have benefited from a convergence of factors, including technical buying, a report that some oil producers could switch to other currencies to price their crude and worries about the potential inflation impact of unprecedented global fiscal stimulus.

 

"In an environment where interest rates are virtually zero, the incremental cost of moving into gold is nil. It stands to reason for investors that gold is more desirable," said Jack  Ablin, chief investment officer at Harris private bank in Chicago.

 

Spot gold hit a historic $1,043.45 per ounce, and was last up 1.9 percent at $1,036.10 at 2:36 p.m. EDT (1836 GMT), against $1,016.65 quoted late in New York on Monday.

 

Bullion surpassed its previous record $1,030.80 set in March 2008. Year to date, the metal has gained 18 percent.

 

However, Tuesday's all-time high was still sharply below the inflation-adjusted record pinpointed by analysts. Metals consultancy GFMS put that figure as high as $2,079 an ounce.

 

Most-active U.S. gold December futures hit an all-time high $1,045. December settled at $1,039.70 an ounce, up 2.2 percent or $21.90.

 

Bullion also hit six-month highs when priced in sterling and euros, breaking above 700 euros an ounce for the first time since early April.

 

The dollar slipped sharply after U.K. newspaper the Independent said Gulf Arab states were in secret discussions to end the use of dollars in oil trading. Big oil-producing countries later denied the report.

 

An interest rate hike in Australia also reinforced expectations the Federal Reserve will lag other central banks in ending its loose monetary policy.

 

Gold's rally was driven primarily by fears over currency depreciation. A weaker dollar, however, will eventually lead to import-led inflation down the road, analysts said.

 

"This is more a concern about the dollar than inflation so it has become very much more a dollar story. At the end of the day, everyone concludes all roads seem to lead to a weaker dollar at the moment," said Chris Turner, head of currency strategy at ING in London.

 

A weaker dollar makes gold and dollar-priced assets cheaper for holders of other currencies. Gold is also used as a hedge against inflation.

 

A positive technical picture for gold fueled buying on the fund side, traders said. However, the weight of near-record long positions in New York gold futures still leaves the market

 

vulnerable to a correction, analysts said.    

 

Physical Demand Rising

 

Physical demand for the metal was also rising. The largest gold exchange-traded fund, New York's SPDR Gold Trust, said its holdings rose for a second consecutive day and were up 1.5 tonnes as of Oct. 5.

 

Traders said they were also seeing rising demand in India, the largest consumer of gold last year, ahead of Diwali, a major gold-buying festival, on Oct. 19.

 

Mark Cutifani, chief executive of AngloGold Ashanti, the world's third largest and Africa's top gold producer, said he saw gold prices at $950 to $1,100 an ounce in the next 12 months, and they could break $1,100 if the U.S. economy continued to dip and investment demand rises.

 

The yellow metal's gains helped lift silver to a two-week high of $17.36 an ounce as investors bought it as a cheaper proxy for gold. It was last at $17.22 against $16.59.

 

Gold hits its highest since August last year at $308.50. It was last at $306.50 against $298.50.  

 

 

Two Front-Runners Emerging for BofA CEO Spot

 

Chief Risk Officer Greg Curl and Head of Retail Operations Brian Moynihan are the two most likely internal candidates to replace Bank of America CEO Ken Lewis, sources close to the situation told CNBC.

 

BofA: Won't Raise Card Rates Before Law Enforced

 

Bank of America on Tuesday pledged not to hike credit card interest rates or fees before a new law intended to reform industry practices takes effect in February.  

 

 

China: IMF Should Fix World's Monetary "Defects"

 

The IMF needs to fix "intrinsic defects" in the world's monetary system, China said on Tuesday as officials from around the globe wrestled with how best to ward off future financial crises.

 

Sluggish Growth, More Job Loss in 2010: El-Erian

 

The US economy could be facing more problems with job losses and slower growth in 2010, Pimco's Mohamed El-Erian told CNBC Tuesday.

 

Too Early to Pull US Economy Support: Fed Official

 

A U.S. Federal Reserve official said on Tuesday that while the U.S. economy is clearly rebounding, it is too soon to begin to withdraw the Federal Reserve's massive support.

 

"I see nothing that conflicts with the widely held opinion that we are in recovery," Kansas City Fed President Thomas Hoenig said at an economic conference.

 

"I would not support a tight monetary policy in the current environment," Hoenig said in his written remarks.

 

However, he warned that it will be important for the Fed to pull back from its ultra-low interest rates and withdraw the vast amounts of cash it has put into the financial system before igniting inflation.

 

"Monetary policy has to think ahead a year, or more," said. Hoenig cautioned that benchmark interest rates, which are now near zero, would be accommodative even at 1 percent or 2 percent.    

 

"My experience tells me that we will need to remove our very accommodative policy sooner rather than later."    

 

Besides cutting interest rates, the Fed has more than doubled the size of its balance sheet as it has sought to pull the United States out of its worst financial crisis since the Great Depression.    

 

The Fed noted in September that the economy may be picking up after a long contraction, but recent evidence of lingering weakness in the labor market raised questions about the pace of the recovery.    

 

Hoenig said government spending and tax relief programs should complement the Fed's efforts and prevent the economy from backsliding.    

 

"A vast amount of stimulus has been put in place to spark this recovery, and I believe it will prevent a double-dip recession."

 

Hoenig urged the U.S. Congress to quickly put in place a system of winding down failing major financial institutions.

 

Congressional efforts to cap executive compensation may not have the desired effect of controlling risk, he said. By ensuring that major firms could fail -- costing senior executives their jobs -regulators could do a far better job or ensuring the soundness of the financial system, he said.

 

Asia:

 

Asian stocks rose for a second day, led by mining companies and banks, as gold prices surged to a record and brokerages upgraded companies including Sumitomo Mitsui Financial Group.

 

BHP Billiton Ltd., the world's biggest mining company, gained 2.7 percent and Newcrest Mining Ltd., Australia's largest gold producer, surged 6.4 percent in Sydney. Sumitomo Mitsui Financial Group Inc., Japan's second-largest publicly traded bank by market value, jumped 6.3 percent in Tokyo after Nomura Holdings Inc. raised its share-price target.

 

The MSCI Asia Pacific Index gained 1.1 percent to 116.96 as of 12 p.m. in Tokyo, extending yesterday's 1.7 percent advance. The gauge has risen 63 percent in the past seven months on signs the global economy is emerging from its worst slowdown since World War II. Australia unexpectedly raised interest rates yesterday amid indications of economic growth.

 

"The improvement in Asian stocks can be attributed to further evidence the global economy is on the mend," said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. "Investors waiting for a pullback to increase equity exposure continue to be disappointed."

 

Australia's S&P/ASX 200 Index climbed 1.7 percent. Crane Group Ltd., the country's biggest distributor of plumbing supplies, was upgraded at Credit Suisse Group AG. In Tokyo, Hitachi Ltd., a nuclear reactor maker, added 8.1 percent as Mizuho Securities Co. raised its recommendation on the stock.

 

Japan's Nikkei 225 Stock Average increased 0.9 percent as Mitsui O.S.K. Lines Ltd. advanced 3.1 percent after a gauge of shipping fees increased the most since July. Hong Kong's Hang Seng Index rose 1.8 percent, while Taiwan's Taiex Index gained 0.7 percent.

 

U.S. Earnings

 

Futures on the U.S. Standard & Poor's 500 Index were little changed. The gauge added 1.4 percent yesterday on speculation third-quarter earnings will top estimates. Alcoa Inc. is scheduled to release third-quarter results later today, the first company in the Dow Jones Industrial Average to report.

 

Material stocks accounted for 22 percent of the MSCI Asia Pacific Index's advance today after gold futures climbed as much as 2.7 percent to a record $1,045 an ounce in New York, while copper increased for a second day with a 2.1 percent increase. Crude oil rose 0.7 percent.

 

BHP gained 2.7 percent to A$37.64, while Rio Tinto Group, the world's third-largest mining company, climbed 4.3 percent to A$60.20. Newcrest jumped 6.4 percent to A$35.02. Inpex Corp., Japan's largest oil explorer, rose 2.3 percent to 750,000 yen.

 

Dollar Decline

 

Raw-material prices climbed as the dollar's decline spurred demand for commodities as a hedge against inflation. The Dollar Index, which measures the U.S. currency against six major counterparts, traded near a two-week low as speculation the Federal Reserve will trail other central banks in raising interest rates made the greenback less attractive.

 

"Commodities are priced in dollars and a weak U.S. currency inevitably raises their prices," said Yoji Takeda, who manages the equivalent of $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. "Gains in commodities are generally positive for resource companies."

 

The dollar weakened to as much as 88.65 yen from 88.98 at the 3 p.m. close of Tokyo stock trading yesterday. The U.S. currency's decline came as Australia's surprise interest-rate hike yesterday boosted demand for higher-yielding assets.

 

The Reserve Bank of Australia's decision to lift the overnight cash rate target to 3.25 percent from a 49-year low of 3 percent followed the first expansion this year in U.S. service industries. Manufacturing in emerging markets increased the most in the past three months since the second quarter of 2008, according to the HSBC Emerging Markets Index of data from purchasing managers.

 

Rising Valuations

 

Speculation of a global recovery has driven the MSCI Asia Pacific Index up by 66 percent from a more than five-month low on March 9. That's lifted the average price of companies on the gauge to 23 times estimated earnings from 21 times at this year's trough.

 

"The weight of conviction is edging towards the recovery view," said Michael Auyeung, who manages about $500 million as chief investment officer at Pacific Mutual Fund Bhd. in Petaling Jaya, outside Kuala Lumpur. "The stop-start nature of some of the economic data flows should be expected, but the trends are discernibly more to the upside."

 

Sumitomo Mitsui jumped 6.3 percent to 3,360 yen, while market leader Mitsubishi UFJ Financial Group Inc. climbed 5.3 percent to 500 yen. Nomura raised its price estimate on Sumitomo Mitsui by 8.9 percent to 4,900 yen, saying the bank was starting to cut costs to boost profit.

 

Hitachi climbed 8.1 percent to 295 yen after Mizuho Securities raised its investment rating on the company to "strong buy" from "hold." Australia's Crane rose 2.3 percent to A$10.78 after Credit Suisse upgraded the stock to "neutral" from "underperform."  

 

 

Mitsui O.S.K., Japan's No. 2 shipping line, added 3.1 percent to 533 yen. Smaller rival Kawasaki Kisen Kaisha Ltd. gained 3 percent to 340 yen. The Baltic Dry Index, a measure of shipping costs for commodities, rose 3.3 percent yesterday in London, the steepest climb since July 16.

 

Nikkei 225 9,778.25     +86.45 ( +0.89%). (08.31 AM IST)

 

The Nikkei advanced 0.9 percent, buoyed by banks after U.S. corporate earnings boosted Wall Street.  

 

HSI 21178.85 +367.32 +1.76% (08.31 AM IST)

 

Hong Kong shares rallied for a third successive day Wednesday, cheering overnight gains on Wall Street and buoyant regional markets, with exporters, property developers and resource stocks leading an across-the-board rally. The Hang Seng Index rose 1.3% to 21,082.49 and the Hang Seng China Enterprises Index rose 1.7%, with Li & Fung /quotes/comstock/22h!e:494 (HK:494 31.20, +1.70, +5.79%) rising 4.3%, Hang Lung Properties /quotes/comstock/22h!e:101 (HK:101 29.60, +0.80, +2.78%) up 2.4% and PetroChina Co. /quotes/comstock/13*!ptr/quotes/nls/ptr (PTR 116.10, +3.15, +2.79%) /quotes/comstock/22h!e:857 (HK:857 9.17, +0.26, +2.92%) climbing 2.7%.

 

SHANGHAI STOCK EXCHANGE:

 

•The SSE will close from October 1 (Thursday) to October 8, 2009 (Thursday) and open for trading on October 9, 2009 (Friday).  

 

 

W Hotels cancels contract with Sun Hung Kai Properties: report.  

 

COFCO, Longfor, local firm buy land in Chengdu for RMB 4 bln.  

 

Shin Kong Life Insurance wins bid for commercial land in Taipei.  

 

Fabulous Group to boost capital for urban renewal projects.  

 

Huafa Industrial to issue RMB 1.8 bln in corporate bonds.  

 

IHG's Hotel Indigo Hong Kong QRE to open in 2012.

 

Boeing expects billion dollar charge.

 

U.S. government opens new defect probe into Toyota.  

 

Indonesia to focus on markets for post quake recovery.

 

Economists warn of hot money danger in Indonesia.  

 

 

INVESTMENT VIEW

 

Hindustan Dorr Oliver-Building Upon Orders  

 

Hindustan Dorr Oliver Ltd has bagged an order from BALCO (a Vedanta Group of Company) worth Rs. 130 Crores for Design, Engineering, procurement, manufacturing, supply, civil works, erection/ construction, testing & commissioning of Fume Treatment plant for their Smelter Expansion Project at Korba. Fives Solios, France a world class expert in this field is the Technology partner for this project.

 

 

The total order value along with Fives Solios, France is worth Rs. 276 Crores. Execution of the said Project shall be completed within a period of 20 months. The Company has already successfully completed similar project with Vedanta group for its existing smelter project at Jharsuguda, Orissa.

 

 

(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