Market Outlook 5th Nov 2009

INTRADAY calls for 5th Nov 2009

Buy SuryaPharma-119 at 115 for 127-131+ with sl 112

Buy PTC-108 at 103 for 117-119+ with sl 99 

 

NIFTY FUT
RESISTANCE
4772
4773
4822
SUPPORT
4695
4669
4618
4569
4488
4439

 

Strong & Weak  futures

This is list of 10 strong futures:

Dr Reddy, Asian Paints, Ashok Ley, Crompton Greaves, PTC, Pir Health, Cummins India, Dabur, Colpal & National Alum.  

And this is list of 10 Weak futures:

IOC, Suzlon, RCom, GMR Infra, EKC, MLL, Aban Off shore, Punj Lloyd, JP Hydro & Unitech.

Nifty is in Down trend  

 

NIFTY FUTURES (F & O):  

Rally may continue up to 4722 level for time being.

 

Support at 4669 & 4695 levels. Below these levels, expect profit booking up to 4618-4620 zone and thereafter slide may continue up to 4569-4571 zone by non-stop.

 

 

Buy if touches 4488-4490 zone. Stop Loss at 4439-4441 zone.

 

 

On Positive Side, cross above 4771-4773 zone can take it up to 4820-4822 zone by non-stop. If crosses and sustains this zone then uptrend may continue.

 

Short-Term Investors:

 1 Week: Bearish with a SL of 5165.00. Target at 4671.20.

1 Month: Bearish with a SL of 6289.00. Target at 4620.00.

 

3 Months: Bearish with a SL of 5080.00. Target at 2951.00.

 

1 Year: Bullish with a SL of 2575.00. Target at 6201.65.

 

BSE SENSEX:  

Buy with a SL of 15330.56. Target at 15957.06.  

Short-Term Investors:

 

1 Week: Bullish with a SL of 15720.73. Target at 16606.95.

1 Month: Bullish with a SL of 14937.03. Target at 18381.96.

 

3 Months: Bearish with a SL of 17361.47. Target at 12425.52.

 

1 Year: Bullish with a SL of 15197.60. Target at 18289.88.

 

	4710.80	( 3.22 %)	146.90
		1	2	3
Resistance		4764.07	4817.33	4916.87
Support		4611.27	4511.73	4458.47

	15912.13		( 3.29 %)	507.19
			1	2	3
Resistance			16064.82	16217.52	16505.94
Support			15623.70	15335.28	15182.58

 

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	04-Nov-2009	2676.48	2442.17	234.31

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	04-Nov-2009	1723.15	1165.96	557.19

 

Interesting findings on web:

U.S. stocks erased most of a 156- point rally in the Dow Jones Industrial Average after a House bill to curb credit-card rates spurred concern about bank earnings, outweighing the Federal Reserve's plan to keep interest rates at a record low.

 

Stocks ended mixed Wednesday, giving up bigger gains after the Federal Reserve kept interest rates unchanged and said it will keep them low for an extended period.

 

The Dow Jones industrial average .DJI gained 30.23 points, or 0.31 percent, to end at 9,802.14, after rising as much as 156.13 points, or 1.6 percent, in the hour after the FOMC statement to touch a session high at 9,928.04. The Standard & Poor's 500 Index .SPX edged up 1.09 points, or 0.10 percent, to finish at 1,046.50. But the Nasdaq Composite Index .IXIC slipped 1.80 points, or 0.09 percent, to close at 2,055.52.

 

RUSSELL563.12-7.50-1.31%

 

TRAN3733.04-56.85-1.5%

 

UTIL364.322.52+0.7%

 

S&P 100485.830.93+0.19%

 

S&P 400666.72-3.31-0.49%

 

NYSE6830.4317.73+0.26%

 

NAS 1001680.671.47

 

Stocks rose through the early afternoon as investors welcomed a pair of labor market reports that signaled the pace of layoffs is slowing. But markets were volatile in the afternoon, cutting gains after the Fed announcement, recharging the advance in the late afternoon, and then abandoning most of the gains by the close.

 

Although the market pretty much got what it wanted from the Fed, trading is typically volatile on Fed days, said Michael Sheldon, chief market strategist at RDM Financial Group.

 

He said that the late-day selloff could be attributed to both a bearish banking call by influential analyst Meredith Whitney -- and the S&P 500's inability to hang on above a key technical level.

 

"I think investors are getting a little nervous, and that's reflected by the fact that the market has pulled back a bit over the last few weeks," Sheldon said.

 

Some traders may have sold shares in anticipation of the Nov. 6 report on the U.S. job market. The unemployment rate increased to 9.9 percent in October, according to the median economist estimate in a Bloomberg survey.

 

"It's such a big number, people would rather wait on stocks," said Walter Todd, who manages $750 million as co-chief investment officer at Greenwood Capital Associates LLC in Greenwood, South Carolina. "There's a lot of people taking a wait-and-see approach to Friday's number."

 

The central bank opted to hold interest rates steady at historic lows near zero, as expected, following its two-day policy meeting.

 

In its closely watched statement, the bankers said economic activity is likely to remain weak for some time. As a result, "the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability."

 

This provided some reassurance to investors who were concerned about how and when the Fed plans to unwind the billions of dollars in stimulus it has pumped into the economy in the wake of the financial crisis.

 

"The statement was unsurprising," said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. "It was more optimistic, but that was in line with the recent data."

 

He said that at whatever point the Fed does began preparing to raise rates, it will begin preparing the market well in advance.

 

"This doesn't change much. It's hard to figure out how this could be helpful for the upside, though it easily could have been negative," said Jordan Posner, portfolio manager at Matrix Asset Advisors in New York.

 

"The good news is more an absence of anything bad."

 

The European Central Bank and Bank of England will issue statements tomorrow and investors will be closely watching for any signs of a shift in monetary policy. Central banks in Australia and Norway have already started to raise rates and some say the ECB may also raise rates soon.

 

Two reports Wednesday morning suggested the pace of job losses is slowing, raising hopes that Friday's big monthly report will continue that trend.

 

Payroll services firm ADP said Wednesday that employers in the private sector cut 203,000 jobs from their payrolls in October after cutting 227,000 in September. A consensus of economists surveyed by Briefing.com expected 198,000 job cuts.

 

A separate report, from outplacement firm Challenger, Gray & Christmas, showed the number of planned layoffs slowed to 55,679 in October, down 16% from September.

 

In other economic news, the Institute for Supply Management's reading on the services sector of the economy fell to 50.6 in October from 50.9 in September. Economists thought it would rise to 51.5.

 

The Mortgage Bankers Association said applications for home loans increased after interest rates slipped below 5 percent.

 

Time Warner (TWX, Fortune 500), the parent of CNNMoney.com, reported weaker quarterly sales and earnings that topped forecasts.

 

The company also boosted its full-year 2009 forecast and said that its outlook has improved, although it expects to take a $100 million charge in the quarter as it restructures its Time Inc. division.

 

Dow component Kraft Foods (KFT, Fortune 500) reported weaker quarterly earnings that topped estimates on weaker revenue that missed estimates. The company also boosted its 2009 earnings forecast and cut its revenue outlook. Shares fell 3%.

 

Merck (MRK, Fortune 500) rallied after it said it expects annual earnings growth of nearly 10% until 2013.

 

Comcast (CMCSA, Fortune 500) reported higher quarterly earnings that topped forecasts.

 

Of the 382 companies in the S&P 500 that have published quarterly earnings since Oct. 7, 84 percent exceeded estimates, according to data compiled by Bloomberg. That would mark the highest full-quarter proportion in data going back to 1993.

 

After the close, Cisco Systems (CSCO, Fortune 500) reported weaker quarterly earnings and revenue that beat estimates. Chief Executive John Chambers said current-quarter revenue would top estimates and that business conditions had bottomed at least six months ago. Cisco shares gained 4% in extended-hours trading.

 

Nearly two-thirds of Dow components finished higher: Merck [MRK  32.64    1.97  (+6.42%)   ], McDonald's [MCD  60.34    1.10  (+1.86%)   ] and Microsoft [MSFT  28.06    0.53  (+1.93%)   ] led the pack. Kraft [KFT  26.66    -0.88  (-3.2%)   ] and DuPont [DD  32.18    -0.37  (-1.14%)   ] were the biggest decliners.

 

Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. led financial shares to the steepest loss among 10 industries as the vote moved up the start date of many rule changes that will make it more difficult for lenders to raise rates on existing credit cards.

 

"The credit-card regulation and regulation in general, how much Congress is going to clamp down on financial company activities, is important," said Giri Cherukuri, who helps manage $1.5 billion at Oakbrook Investments in Lisle, Illinois. "To the extent that Congress keeps their hands off of things, that's better for financial stocks and financial stock prices."

 

The S&P 500 Financials Index slumped 1.5 percent, the most among 10 industries, after the House vote and as analyst Meredith Whitney said the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed prepares to end its $1.25 trillion purchase program.

 

Bank of America Corp., JPMorgan Chase, Citigroup and Wells Fargo increased holdings of so-called agency mortgage-backed securities by 44 percent from the third quarter of 2008 to the second quarter of 2009, Whitney said in a note yesterday to investors. Those increases came as the Fed began buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in an attempt to keep mortgage rates low and spur housing demand, she wrote.

 

JPMorgan fell 1.2 percent to $42.21, while Wells Fargo slid 3.1 percent to $26.82 and Citigroup lost 1.7 percent to $3.97.

 

Hartford Financial Services Group Inc. erased earlier gains and fell 5.3 percent to $24.44. The insurer, whose new chief executive officer is conducting a review of businesses, said it will halt sales of some of its life products sold to companies.

 

Baker Hughes Inc. slipped 5.9 percent to $40.89. The oilfield-services provider that agreed in August to buy BJ Services Co. said third-quarter profit plunged 87 percent after energy prices tumbled.

 

Health insurers led the market higher earlier on speculation that opposition to Democrats' health-care reform will be bolstered by Republican victories in governor races in New Jersey and Virginia. Democratic leaders signaled they're ready for the House to begin debating the legislation and vote on its passage and yesterday's elections won't affect how the House proceeds.

 

The Morgan Stanley Healthcare Payor index .HMO jumped 4.7 percent, while the S&P Healthcare index .GSPA added 1.3 percent.

 

Healthcare stocks also got a boost from Wellcare Health Plans Inc(WCG.N), which climbed 6.7 percent to $28.09 after the managed care company posted a quarterly profit above analysts' estimates even as membership fell about 8 percent from a year earlier.

 

Aetna Inc., the third-largest U.S. health insurer, jumped 5.2 percent to $28.01. Cigna Corp. climbed 5.2 percent to $29.78. A group of health-care equipment and service companies jumped 1.2 percent, after earlier rising as much as 3 percent for its biggest intraday gain since June.

 

An index of raw-material producers erased earlier gains and fell 0.1 percent. Freeport-McMoRan Copper & Gold Inc. climbed 1.2 percent to $77.70 as gold advanced to a record of $1,096.50 an ounce, while copper led industrial metals higher.

 

Ambac Financial Group Inc. surged 35 percent to $1.50. The world's second-largest bond insurer reported third-quarter net income of $2.19 billion, reversing a year-earlier loss, after unrealized mark-to-market gains in its credit derivatives portfolio. MBIA Inc., the biggest bond insurer, advanced 7.5 percent to $4.42 for the biggest gain in the S&P 500.

 

Walt Disney Co. rallied 1.5 percent to $28.03. The company received Chinese government approval to build a theme park in Shanghai, its first resort investment on the mainland, to tap rising incomes in the fastest-growing major economy.

 

Merck & Co. jumped the most in the Dow, rising 6.4 percent to $32.64. The drugmaker said that following the acquisition of Schering-Plough Corp., earnings for the combined company, excluding some costs, will increase at a "high single-digit" percentage rate each year through 2013. The company expects cost savings of at lease $3.5 billion annually after 2011 to come from all areas across the company.

 

Pulte Homes Inc. rose 3.5 percent to $9.55. The U.S. builder that bought competitor Centex Corp. in August boosted its estimated cost savings from the deal by 25 percent and said it reduced debt by $1.7 billion in the third quarter. Lennar Corp. and DR Horton Inc. gained more than 3 percent.

 

Intel Corp (INTC.O) rose 1.3 percent to $18.59 even after it was sued by New York Attorney General Andrew Cuomo, who accused the world's largest chipmaker of threatening computer makers and paying billions of dollars in kickbacks to maintain its market dominance.

 

Garmin [GRMN  26.84    -4.57  (-14.55%)   ] was the biggest percentage decliner on the Nasdaq as the GPS maker beat earnings expectations but revenue dropped 10 percent and investors remained worried about competition from the Google [GOOG  540.33    3.04  (+0.57%)   ] navigation application on the Droid phone, which hits store shelves on Friday. Palm [PALM  10.86    -0.50  (-4.4%)   ] also fell sharply.

 

Oracle [ORCL  20.90    0.01  (+0.05%)   ] and Sun Microsystems [JAVA  8.32    -0.03  (-0.36%)   ] skidded as the Financial Times reports that the European Union is close to formally objecting to Oracle's $7.4 billion takeover of Sun on antitrust grounds — which could be a step on the way to blocking the deal.

 

Auto industry news: Nissan is changing its annual loss forecast to a profit, Toyota is bailing out of Formula One racing because of the weak economy, and General Motors has decided to keep its European Opel unit rather than selling it.

 

VIX27.72-1.09-3.78%.

 

Oil,Gold & Currencies:

 

U.S. light crude oil for December delivery rose cents 80 cents to settle at $80.40 a barrel on the New York Mercantile Exchange.

 

COMEX gold for December delivery climbed $2.40 to settle at $1,087.30 an ounce and hit an intraday record high of $1,098.50 an ounce in electronic trading.

 

The dollar fell versus the yen and gained against the euro.

 

The yen rose against the euro as Asian stocks declined amid concerns the global economic recovery will be slow, boosting demand for Japan's currency as a refuge.

 

The yen advanced against all 16 major counterparts before a report tomorrow forecast to show the U.S. jobless rate climbed last month. The New Zealand dollar dropped after Reserve Bank Governor Alan Bollard said the nation's recovery from the global recession will be slower than Australia's and the statistics bureau said the jobless rate climbed to a nine-year high.

 

"Falling stocks are boosting demand for the yen," said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. "The yen continues to be bought when risk aversion hits the market."

 

The yen rose to 134.28 per euro at 11:10 a.m. in Tokyo from 134.85 in New York yesterday. It climbed to 90.46 per dollar from 90.72. The dollar gained to $1.4840 per euro from $1.4861.

 

The Nikkei 225 Stock Average fell 1.2 percent, and the MSCI Asia Pacific Index of regional shares dropped 0.4 percent.

 

The jobless rate in the U.S. probably swelled to 9.9 percent last month from 9.8 percent in September, according to the median estimate of economists in a Bloomberg News survey. U.S. employers eliminated 175,000 jobs in October after a reduction of 263,000 in September, a separate Bloomberg survey showed. The Labor Department is due to report the data tomorrow.

 

Risk Aversion

 

New Zealand's jobless rate increased to 6.5 percent from 6 percent in the previous three months, Statistics New Zealand said in Wellington today. The median estimate of seven economists surveyed by Bloomberg News was for 6.4 percent.

 

The yen also gained on speculation exporters purchased the Japanese currency.

 

"The weak kiwi data is reversing risk trades," said Masafumi Yamamoto, Tokyo-based chief foreign-exchange strategist at Barclays Bank Plc. "Exporters should be happy to see the 91 yen level, which is capping any upside to the dollar."

 

Large Japanese manufacturers expected the yen to average 94.50 per dollar in the 12 months to March 2010, according to the Bank of Japan's quarterly Tankan survey released Oct. 1. The forecast in the previous report was for a rate of 94.85.

 

New Zealand's dollar fell to 65.11 yen today from 65.70 yesterday in New York. It dropped 0.6 percent to 71.97 U.S. cents.

 

ECB Speculation

 

Losses in the euro may be limited on speculation the European Central Bank may today signal it's moving closer to withdrawing emergency stimulus measures. Policy makers meeting in Frankfurt will keep the benchmark interest rate at a record low of 1 percent, according to all economists in a Bloomberg News survey.

 

Council member Axel Weber said last week commercial banks need to prepare for a "gradual withdrawal" of the ECB's liquidity, and signaled next month's sale of 12-month loans may be the last such offering. Other policy makers have expressed concern the economy remains too fragile to remove stimulus measures and may want more evidence of a recovery before committing to action.

 

"Unwinding of ECB extraordinary measure may be faster than in the U.S. or Japan, so the euro will remain relatively strong," said Susumu Kato, chief economist in Tokyo at Calyon Securities, the investment banking unit of Credit Agricole SA. "Now is a good opportunity to long the euro." A long position is a bet an asset will rise.

 

The Federal Reserve yesterday reiterated its intention to keep interest rates "exceptionally low" for "an extended period" as long as inflation expectations are stable and unemployment fails to decline. Policy makers held the target rate for overnight lending between banks at zero to 0.25 percent.

 

Bonds:

 

Treasury prices fell, raising the yield on the 10-year note to 3.49% from 3.47% Tuesday. Treasury prices and yields move in opposite directions.

 

What to expect:

 

THURSDAY: Retailers report October sales; BOE, ECB statements; weekly jobless claims; Earnings from Toyota, CVS, Sirius, Unilever, CBS, Nvidia and Starbucks

 

FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks

 

Other Important Headlines:

 

Microsoft's Ballmer Says Windows 7 Sales Were `Fantastic,' Exceeding XP

 

Bank Of Japan Says Ending Emergency Programs Isn't Precursor to Rate Rise

 

China Should Withdraw Monetary Stimulus to Fix `Imbalances,' Aberdeen Says

 

U.S., EU Ask WTO to Probe Chinese Curbs on Exports of Manganese, Bauxite

 

Health-Care Overhaul Vote Set by House, Undeterred by Republican Victories

 

Homebuyer Tax Credit, Jobless Benefit Extension Passed in 98-0 Senate Vote

 

Galleon Says Firms are Enquiring About Employees

 

Former Citi President's Fund Up 84% This Year

 

Berkshire Hathaway AAA Rating May Be Cut by S&P After Burlington Takeover

 

UBS Gets Fewest `Buys' Among Biggest Banks as Analysts Fret, Clients Flee

 

JPMorgan Ends SEC Alabama Swap Probe for $722 Million

 

Qualcomm Forecasts Profit That May Top Predictions

 

Chrysler Projects Breaking Even Next Year, Net Profit in 2011

 

Two Days of Talks Said to Sway GM Board, Chief on Opel's Value

 

Countrywide ex-CEO Mozilo must face SEC fraud case

 

SEC to firms: Cut the "mind numbing" disclosures

 

Mousavi supporters clash with police in Tehran

 

Israel says seized big Hezbollah-bound arms ship

 

Asia:

 

Asian stocks fell, led by consumer companies and banks, as South Korea said it's "unclear" whether the economic rebound will be sustained and New Zealand's unemployment rate rose to a nine-year high.

 

Samsung Electronics Co., Asia's biggest maker of chips and mobile phones, lost 1.9 percent in Seoul as the country's finance ministry said factory production is likely to have slowed in October. Doosan Heavy Industries & Construction Co. sank 5.8 percent after brokerages cut their share-price targets. Australia & New Zealand Banking Group Ltd. lost 1.4 percent in Wellington, where the statistics bureau said the jobless rate climbed to 6.5 percent in the third quarter.

 

The MSCI Asia Pacific Index dropped 0.4 percent to 114.93 as of 10:38 a.m. in Tokyo. The gauge has slumped 5.2 percent from a 13-month high on Oct. 20 amid concerns the withdrawal of stimulus measures will cause the global recovery to falter. The index is still up 63 percent from a five-year low on March 9.

 

"The market is now reaching the point where monetary stimulus stops pushing up asset prices and earnings becomes the main focus," said Koichi Kurose, who helps oversee $4.6 billion as chief strategist at Resona Bank Ltd.

 

Japan's Nikkei 225 Stock Average declined 1.1 percent to 9,735.35. Sanyo Electric Co. tumbled 18 percent as Panasonic Corp. started a bid for company at a discount. Acom Co., Japan's largest consumer finance lender by market value, gained 5.6 percent after Citigroup Inc. upgraded the stock.

 

Australia's S&P/ASX 200 Index lost 0.6 percent, while New Zealand's NZX 50 Index fell 0.4 percent. South Korea's Kospi Index dropped 1.4 percent.

 

Interest Rates Near Zero

 

Futures on the Standard & Poor's 500 Index slipped 0.3 percent. The gauge rose 0.1 percent yesterday as the Federal Reserve said it will keep interest rates near zero for "an extended period" and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline.

 

"There's no telling how long the term 'extended period' will remain in Fed statements, but because they've explicitly stated the conditions for raising rates, the market knows that at some time things will change," said Resona's Kurose.

 

Stocks in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for Europe's Dow Jones Stoxx 600 Index.  

 

 

Nikkei 225 9,730.68     -113.63 ( - 1.15%). (08.44 AM IST)

 

HSI 21441.04 -173.73 -0.8%. (08.45 AM IST)

 

SSE Composite 3128.54 3134.46 3154.24 3128.92 + 0.19. (08.46 AM IST)  

 

 

Rupee:

 

The partially convertible rupee INR=IN ended at 47.05/06 per dollar on yesterday, stronger than its previous close of 47.40/41.

 

INDIA:

 

Bombay Stock Exchange's Sensex ended at 15,912.13, up 507.19 points or 3.29 per cent. The broader index hit a high of 15929.09 and low of 15487.97 intraday.

 

The 30-share Sensex, which had lost 1,405 points in the past six trading sessions, bounced back to record a notable gain of 507.19 points to end at 15,912.13 on tremendous buying support, particularly in blue-chips RIL and Infosys attracted.

 

National Stock Exchange's Nifty ended at 4710.80, up 146.90 points or 3.22 per cent. The index touched a high of 4717.80 and low of 4565 during trade.

 

The BSE Midcap Index was up 3.54 per cent and BSE Smallcap Index moved 2.18 per cent higher.

 

Amongst the sectoral indices, BSE Realty Index surged 9.65 per cent, BSE Metal Index rallied 5.36 per cent and BSE IT Index moved 3.99 per cent higher.

 

Jai Prakash Associates (9.42%), Hindalco Industries (9.16%), DLF (8.48%), Sterlite Industries (6.63%) and Reliance Industries (5.49%) were amongst the Sensex gainers.

 

Sun Pharmaceuticals (-0.78%), Grasim Industries (-0.39%) and Tata Power (-0.19%) were amongst the losers.

 

Market breadth was positive on the BSE with 1,774 advances and 946 declines.

 

Stocks post biggest rise in 3-½   mths after falling 6 days

 

Energy giant Reliance Industries (RELI.BO: Quote, Profile, Research) rose 5.5 percent to 1,920.65 rupees, erasing most of its 5.7 percent fall on Tuesday. A legal dispute between billionaire Mukesh Ambani-led Reliance Industries and Reliance Natural Resources (RENR.BO: Quote, Profile, Research), controlled by younger brother Anil, was disrupted on Wednesday when a judge withdrew from a Supreme Court hearing, citing potential conflict of interest.

 

Foreigners have moved more than $14 billion into Indian stocks since the start of January, helping the benchmark rise nearly 65 percent in 2009. But, the index is down 9 percent from 17,493.17, its highest in 2009 which was set on Oct. 17.

 

Software services companies rose on expectations of better growth outlook. Second-largest software services exporter Infosys Technologies (INFY.BO: Quote, Profile, Research) climbed 4.7 percent to 2,239.60 rupees while leader Tata Consultancy (TCS.BO: Quote, Profile, Research) rose 3 percent to 625.85 rupees. Infosys, is in a "sweet spot of growth", with banking financial services and insurance vertical leading the charge, JM Financial analyst Gopal Agarwal said in a note.

 

Engineering and construction firm Jaiprakash Associates (JAIA.BO: Quote, Profile, Research) rose 9.4 percent to 212.65 rupees after it said cement shipments in October rose 41.3 percent from a year earlier to 0.816 million tonnes.

 

Sterlite Industries (India) Ltd., the nation's biggest copper and zinc producer, jumped 6.7 percent to 771.85 rupees after its price estimate was raised to 665 rupees from 581 rupees at Citigroup Inc.

 

The stock also gained as metal prices rallied. Copper for three-month delivery rose $140, or 2.2 percent, to $6,600 a metric ton on the London Metal Exchange. December-delivery copper gained 1.6 percent to $3.003 a pound on the New York Mercantile Exchange's Comex unit.

 

Hindalco Industries Ltd., the biggest aluminum producer, soared 9.3 percent to 119.15 rupees as the metal rose 0.9 percent at $1,925 a ton on the London Metal Exchange.

 

Overseas funds bought a net 7.36 billion rupees of Indian stocks on Oct. 30, the Securities and Exchange Board of India said on its Web site. The funds have bought 684.3 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.

 

The following were among the most active stocks on the exchange:

 

Hindustan Zinc Ltd. (HZ IN) gained 4.5 percent to 896.45 rupees. The price estimate of the metal producer was raised to 842 rupees from 588 rupees at Citigroup Inc.

 

Tata Motors Ltd. (TTMT IN) climbed 3.2 percent to 570.2 rupees. India's biggest truckmaker and owner of Jaguar Land Rover Ltd. will build as many as 25,000 Jaguar XJ luxury car annually starting next quarter in a bid to take customers from Bayerische Motoren Werke AG's 7 Series and Daimler AG's Mercedes S Class, Ian Callum, Jaguar's design director, said in an interview in Detroit.

 

Titan Industries Ltd. (TTAN IN) advanced 1.5 percent to 1,288.6 rupees. India's biggest watch and jewelry retailer was raised to "overweight" from "underweight" at Morgan Stanley, which said the company's business is likely to improve.

 

Realty was the biggest gainer today; Unitech shot up 10.04% and DLF rose 8.48%.

 

Technology stocks remained on the buyers' radar. Infosys surged 4.7%. Tech Mahindra, TCS, Wipro and HCL Tech gained 2-3%.

 

In the banking space, ICICI Bank rallied over 5%. Axis Bank, SBI, Kotak Mahindra, PNB, HDFC Bank and Bank of Baroda were up 1-3%.

 

Huge buying was seen in oil & gas space, especially big boy Reliance Industries, which was up 5.5%. Among others, Cairn India, ONGC, HPCL, GAIL and IOC went up 0.7-3%.

 

In the FMCG sector, United Spirits, United Breweries, ITC, HUL and Tata Tea moved up 1.7-5%.

 

All stocks gained in the healthcare segment. Ranbaxy Labs surged 5.5%. Biocon, Wockhardt, Dishman Pharma, Dr Reddys Labs, Lupin, Piramal Health, Apollo Hospital and Cipla were up 2-3.8%. However, Sun Pharma declined 1%.

 

In the auto pack, Bharat Forge and Escorts were up 6-7%. M&M, Tata Motors, Maruti Suzuki, Ashok Leyland, Bajaj Auto and Hero Honda went up 1-3.7%.

 

Hindalco shot up 9.16% and Sterlite Industries up 6.63% in the metal space, JSW Steel, Jindal Saw, Tata Steel, Jindal Steel and Sesa Goa were up 5-6%. SAIL and NALCO gained 1-1.9%.

 

In the power pack, Torrent Power, GVK Power and GMR Infra were up 7.5-8.5%. Reliance Infrastructure, NTPC, Power Grid Corp and Reliance Power advanced 1-3.6%. However, Suzlon Energy plunged over 5%.

 

Capital Goods like Punj Lloyd, Siemens and L&T were up 1.4-3.4%. BHEL rose 0.50% while ABB fell 0.9%.

 

In the telecom pack, MTNL surged 5.86%. Reliance Communication, Bharti Airtel and Tata Teleservices went up 1.7-2%. Idea Cellular and Tata Communication gained 0.8% each.

 

In the cement space, Ambuja Cements jumped 5% and ACC rose over 4% while Grasim declined 0.4%.

 

The market breadth was positive; about 1,930 shares advanced while 1,075 shares declined on the NSE. Nearly 758 shares remained unchanged.

 

Indiabulls group companies' shares bounced back sharply after yesterday's bleeding. Indiabulls Real Estate was up 15.76%, Indiabulls Financial Services was up 5.74% and Indiabulls Securities was up 9.09%.

 

In the midcap space, Educomp Solutions surged 15.55%. Religare Enterprises, Kingfisher Airlines and HDIL gained 10-12.6%. However, KGN Industries, REI Six Ten, Ipca Labs, HCL Info and Blue Dart fell 1.6-5%.

 

In the smallcap space, Glodyne Tech, HBL Power, Agro Tech Foods, Tata Coffee and Sasken Communication were up 10-11% while Webel SL Energy, Prime Securities, Shree Ram Urban, Garden Silk Mills and Phillips Carbon declined 5-10%.

 

The markets reported total traded turnover of Rs 93,605.10 crore. This included Rs 16,237.76 crore from the NSE cash segment, Rs 72,239.34 crore from the NSE F&O and the balance Rs 5,128 crore from the BSE cash segment.

 

Ashok Leyland's October 2009 volumes increased by 57% year on year; the stock ends 2.49% higher.

 

Vishal Retail inks CDR pact for Rs730 crore; the stock ends the day 2.02% up.

 

Reliance Communications joins per-second billing war; the stock ends 2.08% higher.

 

Tata Chemicals launches i-Shakti cooking soda; the stock is up by 2.17%.

 

Mahindra Satyam ties up with defense firm Saab; the stock ends the day 4.24% higher.

 

Reliance Industries the index bellwether bounced back from its 200 DMA.

 

Among the 30-components of Sensex, 27 stocks ended in the green and only Sun Pharma, Grasim and Tata Power ended in the negative terrain.

 

Outside the frontline indices, the big gainers in the broader market were Indiabulls RealEstate, Educomp, Lic Housing, India Cement and Jet Airways. On the other hand, losers included Union Bank, Cummins India, Marico and Castrol India.

 

Sugar stocks climbed despite the UP government announced that it has banned import of raw sugar. Bajaj Hind and Balrampur Chini were up a day after a proposed M&A deal between the two companies fell through.

 

JSW Steel announced that it has posted 34% increase in Crude steel production for October 2009.

 

TCS is chosen as a strategic IT partner for 15 years by the City Council of Cardiff in Britain.

 

Shares of M&M advanced by 3.5% to Rs927 after Domestic sales for the month of October 2009 stood at 17796 units, as compared to 14800 units for the same period last year, an increase of 20%.

 

Tata Communications closed up by 0.76% at Rs. 357. The company and Carlson Wagonllt Travel announced that they will team up to provide CWT Telepresence- an enhancement to the company's broader demand management offering- which will allow CWT clients to access Tata Communications network of public Cisco Telepresence Suites around the World.

 

IVRCL surged 4.55% to close at Rs. 353.85 as the company in joint venture with M/s Unity Infraprojects has bagged orders valued at Rs. 1,145.88 crore under International Competitive Bidding.  

 

 

SBI not to change home loan rates soon

 

Govt to resolve new FDI norms for banks?

 

Govt may announce more sops for exports

 

FDI dips 54% in September

 

Rogers says Roubini is wrong on bubbles

 

Flagship programmes may run out of cash

 

No liberalisation of FDI in retail

 

Gold @ life high, oil above $80/bbl

 

MF industry assets hit record high

 

Govt in talks with RBI on new FDI norms

 

Over 500 million Indians own telephones

 

Kingfisher to lay off nearly 100 pilots

 

India to raise drug seizure issue

 

CBI seeks govt nod for probe on Sibal

 

Toyota to pull out of Formula-1

 

RBS sacrifices more than Lloyds

 

ICAI clean chit for PW, Delhi

 

Plan panel for aggressive disinvestment

 

Royal Enfield launches two bikes

 

Govt to push ahead with reforms; welcomes inflows

 

Govt mulls package for tea industry

 

Punjab National Bank in JV with three firms

 

No decision taken on fuel price revision - oil secy

 

NCAER cuts India FY10 growth f'cast to 6.9 pct

 

India 2009/10 crude oil output to rise 11 pct - govt

 

Cairn India to supply crude oil to Reliance Ind

 

Indian Stock Valuations 'Attractive' After Drop, Nomura Says

 

Indian stocks, Asia's worst performers in the past month, entered "attractive territory" after the retreat from this year's high, according to Nomura Holdings Inc.

 

Indiabulls Real Estate Ltd., Glenmark Pharmaceuticals Ltd. and HCL Technologies Ltd. are among the stocks that offer the best "buying opportunity" following the decline, Nomura analysts Prabhat Awasthi, Nipun Prem and Sanjay Kadam wrote in a report dated yesterday. The market is now trading at about 15.3 times estimated earnings, compared with its three-year average of 15.4 times, they added.

 

The benchmark Bombay Stock Exchange Sensitive Index gained 3.3 percent yesterday, trimming its slump from this year's high to 8.2 percent. Shares have retreated amid concern accelerating inflation will prompt the central bank to raise interest rates and as companies including Hindalco Industries Ltd. reported declines in profits.

 

"Market valuations have now moved from being fairly valued -- in the context of continuing build-up of industrial momentum and an economic growth rate that is among the highest in the world amidst the currently anemic global economic landscape -- into attractive territory," the analysts said.

 

The Sensex, as the benchmark index is known, may rise 18 percent, based on Nomura's September 2010 target of 18,800, according to the report.

 

Indiabulls Real Estate, a developer, offers "potential upside" of 40 percent, Nomura said, citing its share-price estimate for the stock. A recovering economy may spur leasing activity in the company's central Mumbai office space, while the sale of apartments in the Indian city will also boost its cash flows, the analysts added.

 

Glenmark and HCL Technologies may both gain 38 percent, they also said.

 

INVESTMENT VIEW 

IVRCL Infra-Highlights FH2010 Earnings

 

 

Sell

 

 

 

-Order Book Of Rs 19,000 crore not converting into Revenues

 

 

-Interest Outgo is as high as post tax profits for FH FY10.

 

 

-Government/State Government unable to release payment on time to contractors.

 

 

-IVRCL has grudgingly accepted and paid Rs 140 crore as back taxes after withdrawal of Sec 80I benefits.

 

 

-Post payment historical taxes, FH10 earnings come to minus Rs 56 crore.

 

 

-Company has moved Rs 141 crore out of Special Reserves into P&L account to neutralise tax outgo.

 

 

-Company has made no disclosure of additional liability pertaining to interest and penalty on the Rs 140 crore of back taxes paid-off.

 

 

-IVRCL Infra intends to transfer two subsidiaries into IVR Prime through a stock swap. This move may not be of benefit to shareholders of IVRCL.

 

 

-So what is this 27PE being paid for on estimated FY10 earnings?

 

 

-Stock is a Sell with a target of Rs 140.

  

(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.)

 

POSITIONAL BUY:

Buy VELAN HOTELS (BSE Cash & BSE Code: 526755)  

Buy with a Stop Loss of 16.16. Above 19.32, it will zoom.

 

 

Today: May hold on gains.

 

 

1 Week: Bullish, as per current market conditions.

 

 

1 Month: Bullish, as per current market conditions.

 

 

3 Months: Bearish, surprisingly going up.

 

 

1 Year: Bullish, as per current market conditions.

 

Buy LOTUS CHOCOLATE (BSE Cash & BSE Code: 523475)  

Buy with a Stop Loss of 46.50. Above 51.60, it will zoom.

 

 

Today: May hold on gains.

 

 

1 Week: Bullish, as per current market conditions.

 

 

1 Month: Bullish, as per current market conditions.

 

 

3 Months: Bearish, surprisingly going up.

 

 

1 Year: Bullish, as per current market conditions.

 

 

 

(Correction: We made a mistake yesterday. It should have been typed as " Buy with a Stop Loss of 41.40. Above 46.50, it will zoom.".

 

We typed as "Buy with a Stop Loss of 40.35. Above 49.85, it will zoom.". Error is regretted.)

 

 

--

Arvind Parekh

+ 91 98432 32381

 

 

Market Outlook 4th Nov 2009

INTRADAY calls for 4th Nov 2009

Buy Ashokley-46 for 49-51+ with sl 44

Buy RECLtd-200 above 205 for 215-222+ with sl 200

NIFTY FUTURE LEVELS
SUPPORT
4520
4443
4367
RESISTANCE
4569
4592
4671
4747
4823
4899

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

Dr Reddy, Asian Paints, Ashok Ley, Crompton Greaves, PTC, Pir Health, Cummins India, Dabur, Colpal & National Alum.

And this is list of 10 Weak futures:

IOC, Suzlon, RCom, GMR Infra, EKC, MLL, Aban Off shore, Punj Lloyd, JP Hydro & Unitech.
Nifty is in Down trend

NIFTY FUTURES (F & O):
Selling may continue up to 4520-4522 zone for time being.

Hurdles at 4569 & 4592 levels. Above these levels, expect short covering up to 4669-4671 zone and thereafter expect a jump up to 4745-4747 zone by non-stop.

Sell if touches 4821-4823 zone. Stop Loss at 4897-4899 zone.

On Negative Side, break below 4443-4445 zone can create panic up to 4367-4369 zone by non-stop. If breaks & sustains this zone then downtrend may continue.

Short-Term Investors:
1 Week: Bearish with a SL of 4671.20. Target at 4424.30.
1 Month: Bearish with a SL of 4620.00. Target at 2951.00.

3 Months: Bearish with a SL of 5080.00. Target at 2951.00.

1 Year: Bullish with a SL of 2575.00. Target at 6201.65.

BSE SENSEX:
Sell with a SL of 15742.13. Target at 15302.17.

Short-Term Investors:
1 Week: Bearish with a SL of 15720.73. Target at 14834.51.
1 Month: Bearish with a SL of 18381.96. Target at 14937.03.

3 Months: Bearish with a SL of 17361.47. Target at 12425.52.

1 Year: Bullish with a SL of 15197.60. Target at 18289.88.

INVESTMENT BUY:
Buy VINYL CHEM (BSE Cash & BSE Code: 524129)
Buy with a Stop Loss of 5.40. Above 6.93, it will zoom.

Today: May hold on gains.

1 Week: Bullish, as per current market conditions.

1 Month: Bearish, surprisingly going up.

3 Months: Bearish, surprisingly going up.

1 Year: Bullish, as per current market conditions.

Buy LOTUS CHOCOLATE (BSE Cash & BSE Code: 523475)
Buy with a Stop Loss of 40.35. Above 49.85, it will zoom.

Today: May hold on gains.

1 Week: Bullish, as per current market conditions.

1 Month: Bullish, as per current market conditions.

3 Months: Bearish, surprisingly going up.

1 Year: Bullish, as per current market conditions.

SPOT LEVELS

	4563.90	( -3.14 %)	-147.80
		1	2	3
Resistance		4683.00	4802.10	4874.35
Support		4491.65	4419.40	4300.30

	15404.94		( -3.09 %)	-491.34
			1	2	3
Resistance			15797.81	16190.69	16424.31
Support			15171.31	14937.69	14544.81

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	03-Nov-2009	2839.92	3714.18	-874.26

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	03-Nov-2009	2159.11	1407.16	751.95

Interesting findings on web:
The S&P 500 and Nasdaq rose slightly on Tuesday as news of a major railroad acquisition helped sentiment, but the Dow edged lower on caution before a Federal Reserve statement on interest rates and the economy.

Morgan Stanley's downgrade of semiconductor stocks also limited a broad advance.

The Dow Jones industrial average .DJI slipped 17.53 points, or 0.18 percent, to end at 9,771.91. But the Standard & Poor's 500 Index .SPX added 2.53 points, or 0.24 percent, to finish at 1,045.41. The Nasdaq Composite Index .IXIC advanced 8.12 points, or 0.40 percent, to close at 2,057.32.

RUSSELL570.628.22+1.46%

TRAN3789.89190.05+5.28%

UTIL361.8-0.86-0.24%

S&P 100484.9-0.25-0.05%

S&P 400670.037.87+1.19%

NYSE6812.727.76+0.41%

NAS 1001679.26.29+0.38%

The S&P 500 climbed for a second day as Buffett's takeover spurred optimism that equities will continue to rebound after $11.6 trillion in government spending, lending and guarantees returned the economy to growth following four straight quarters of contraction. The S&P 500 has rallied 55 percent from a 12- year low in March.

The Nasdaq has been down five of the past eight sessions.

Stocks struggled Tuesday, ending mixed, as investors mulled improved auto sales, surging commodity prices and Warren Buffett's buyout of railroad Burlington Northern Santa Fe.

The first day of the Federal Reserve's two-day policy meeting and some bearish news in the financial sector were also in play.

"There's a lot of speculation right now that the long-expected correction is here, but I don't think that's true," said Tommy Williams, president at Williams Financial Advisors.

"What we're seeing is a consolidation of a market that has run too far, too fast," he said. "It may run sideways for a few weeks or even into the end of the year, but there is nothing to suggest a big correction."

He thinks the market will avoid a major drop thanks to the improving corporate and economic news, the government stimulus, and all the money idling in money market funds and low-yielding cash equivalents.

"I'm not worried that the market is going to fall apart," said Jack Ablin, chief investment officer at Harris Private Bank. "I think we're in the process of toning down expectations and understanding that a lot of what we've seen has been because of artificial stimulus."

Factory orders rose 0.9% in September after falling 0.8% in the previous month. Economists surveyed by Briefing.com thought it would rise 0.8%.

Data showed new orders received by U.S. factories rose more than expected in September but had little impact on the broader market.

Most major automakers reported that sales bounced back in October following a weak September, as more cars became available.

Among the standouts: Ford Motor (F, Fortune 500) said sales rose 3% versus a year ago, topping forecasts for a decline of 3%. Sales also jumped 21% from September.

Toyota Motor (TM) reported sales that were pretty flat versus a year ago, but that was better than the decline of 6% that analysts expected. Results were also up 21% from September.

General Motors said October sales rose 5% versus a year ago, but that was short of expectations.

Dow component Johnson & Johnson (JNJ, Fortune 500) said it is cutting 7% of its global workforce as part of a cost-cutting plan that could save the company up to $1.7 billion by 2011. Shares lost less than 1%.

The Federal Open Market Committee began a two-day meeting on Tuesday. While investors expect the Fed to leave rates close to zero, they are nervous to hear what the officials say about the economic outlook.

Federal Reserve Chairman Ben S. Bernanke, who convenes a meeting of the Federal Open Market Committee today, is gambling that by March, he can stop the purchases of mortgage-backed securities that have propped up the housing market. The FOMC will release its monetary policy statement tomorrow.

People "are going to be looking for any indication that the Fed is signaling that it's eventually going to pull back on monetary stimulus," said Keith Wirtz, chief investment officer at Fifth Third Asset Management Inc., which oversees $18.6 billion in Cincinnati. "They're going to sit and read through all the words one by one."

The central bank's two-day policy meeting got underway Tuesday, with a statement due Wednesday afternoon.

The Fed is widely expected to hold the fed funds rate, a key bank lending rate, at historic lows near zero. As always, investors will be attuned to what the Fed says about the economic outlook in its statement. The Fed could also provide hints as to when it might start withdrawing some of the trillions in stimulus it put into the system over the last year to temper the impact of the financial crisis.

The bank is not expected to boost interest rates until sometime next year.

Of 358 companies in the S&P 500 that have reported quarterly earnings since Oct. 7, 84 percent exceeded estimates, poised for a record percentage in data going back to 1993.

The Dow Jones Transportation Average.DJT rose 5.3 percent as Warren Buffett's Berkshire Hathaway (BRKa.N: Quote, Profile, Research) agreed to buy Burlington Northern Santa Fe Corp (BNI.N: Quote, Profile, Research) in a deal that values the railroad company at $34 billion, Berkshire's biggest deal ever.

Most U.S. stocks rose after Warren Buffett agreed to buy Burlington Northern Santa Fe Corp. and Stanley Works said it will take over Black & Decker Corp., while technology shares fell on an analyst downgrade of chipmakers.

Burlington Northern surged 28 percent after Buffett made what he called an "all-in wager" on the nation's economy. Black & Decker rallied 31 percent, the most since at least 1980. Energy and raw-materials producers increased as oil advanced and gold climbed to a record. Intel Corp. led the Dow Jones Industrial Average lower as Morgan Stanley reduced its rating on U.S. semiconductor stocks to "cautious."

"When Warren Buffett puts money behind something, people then seem to get on it," said Christopher Sheldon, the Boston- based director of investment strategy at BNY Mellon Wealth Management, which oversees $142 billion globally. "People who are looking at the lackluster jobs growth and the constrained consumer have to look at the other side of this, which is probably what Warren Buffett is doing, which is the outlook for profits."

"One of the themes we've been pointing toward is that the next catalyst after earnings is M&A activity, and we've had some big ones," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut. "People consider companies to be cheap."

The news gave a boost to transports — and not just railroad stocks. FedEx and UPS rose, as did major airlines. The Dow Jones transportation index rose 5.3 percent.

But Ford [F 7.48 -0.10 (-1.32%) ] and other auto makers declined amid worries about auto sales: Ford said its sales fell, while GM said sale rose last month.

Burlington Northern jumped 28 percent to $97. The takeover, the largest ever for Berkshire, will cost the company $26 billion, or $100 a share in cash and stock, for the 77.4 percent of the railroad that Buffett's company doesn't already own. Including its previous investment and debt assumption, the deal is valued at $44 billion, Berkshire said in a statement. Berkshire's Class A and B shares climbed at least 1.7 percent.

At $100 a share, Buffett is paying 18.2 times Burlington's estimated 2010 earnings of $5.51 a share, according to the average analyst projection in a Bloomberg survey.

That compares with the 13.4 multiple for the S&P 500 as of yesterday's close. Omaha, Nebraska-based Union Pacific Corp.'s ratio was 13, while Jacksonville, Florida-based CSX Corp.'s was 13.1, Bloomberg data show. They are the biggest U.S. railroads behind Burlington by 2008 sales. On March 9, Burlington fetched 7.8 times next year's profit projection. Union Pacific and CSX gained more than 7.3 percent, while Norfolk Southern advanced 5.4 percent.

A group of 10 transportation stocks in the S&P 500 jumped 5.8 percent, the most since April. An index of industrial shares, which includes railroads, rallied 1.4 percent for the biggest advance among 10 industries.

Black & Decker surged 31 percent to $62. The maker of DeWalt power drills and Price Pfister faucets agreed to be purchased by Stanley Works for $3.5 billion in stock. Stanley Works rallied 10 percent to $49.69. Cognizant Technology Solutions Corp. added 8.2 percent to $41.97. The computer-services provider to Aetna Inc. and Kimberly-Clark Corp. said third-quarter profit rose 21 percent as sales increased more than analysts anticipated.

Intel, the world's biggest computer-chip maker, slid 2.7 percent to $18.50 as Morgan Stanley reduced its rating on semiconductor stocks and downgraded Intel to "equal-weight." The brokerage also downgraded Novellus Systems Inc., which fell 5.2 percent to $19.71, and KLA-Tencor Corp., which lost 3.5 percent to $31.70.

Raw-material producers gained 1.2 percent, adding to yesterday's 1 percent advance. Newmont Mining Corp. jumped 6.7 percent after PT Aneka Tambang, Indonesia's second-largest nickel producer, was appointed by the Indonesian government to buy a 14 percent stake in company's local unit.

Owens-Illinois Inc., the world's largest maker of glass containers, and AK Steel Holding Corp., the fourth-largest U.S.- based steelmaker, each added at least 3.9 percent.

Energy stocks in the S&P 500 rose 1.1 percent as a group. Crude oil for December delivery added 1.9 percent to $79.60 a barrel.

Rowan Cos. advanced 6.3 percent to $24.83 after reporting third-quarter profit excluding some items of 54 cents a share, 5.5 percent higher than the average analyst estimate in a Bloomberg survey.

Denbury Resources Inc. lost 1.5 percent to $12.90. The U.S. oil and natural-gas producer fell for a second day after it said it will buy Encore Acquisition Co. for about $4.5 billion to add fields in the Rocky Mountains and Gulf of Mexico.

Microsoft Corp. fell 1.3 percent to $27.53. The world's largest software maker said it is cutting its price for running customers' e-mail systems, as it tries to keep clients from switching to Google Inc.

Rockwell Collins Inc. lost 3 percent to $49.24. The maker of cockpit instruments and radios said it is looking for "bolt- on, tuck-in acquisitions" after generating a record level of operating cash flow from higher military sales and job cuts. Sales and profit fell in the third quarter as business-jet builders cut production and airlines put off maintenance.

MasterCard (MA, Fortune 500) reported higher-than-expected quarterly earnings, reversing a year-ago loss. The credit card processor also reported a higher quarterly revenue that topped estimates.

Looking forward, MasterCard said that fiscal-year 2009, 2010 and 2011 revenue growth will come in shy of the long-term objective of 12% to 15%. Shares fell 1.6%.

On the earnings front, Swiss bank UBS [UBS 16.22 -0.56 (-3.34%) ] reported its fourth straight quarterly loss and missed analysts' target.

That, plus news that Britain's Royal Bank of Scotland and Lloyds Banking Group are selling hundreds of branches, rattled the U.S. banking sector. Dow components Bank of America and JPMorgan struggled to hold gains for any length of time. Citigroup and some regional banks were even harder hit.

Initially, the banking sector woes weighed on a variety of bank shares, lowering the KBW Bank (BKX) index by 1%. But the index erased losses by the close.

Industrial and material stocks continued to benefit from the encouraging manufacturing readings from all over the globe yesterday: Dow componets Caterpillar, DuPont and United Technologies all advanced, despite the overall downward pull on the market today.

Hartford Financial Services Group Inc. (HIG:US) gained 3.2 percent to $26.65. The insurer boosted its full-year profit forecast after third-quarter adjusted earnings exceeded analysts' estimates.

Maxwell Technologies Inc. (MXWL:US) slid 5.1 percent to $18. The maker of electronic components posted a loss excluding some items of 7 cents a share in the third quarter, 84 percent wider than the average analyst estimate in a Bloomberg survey.

Pacer International Inc. (PACR:US) surged 18 percent to $3.20. The provider of trucking, freight and transportation logistics services posted third-quarter profit of 2 cents a share. Analysts surveyed by Bloomberg on average estimated the company would have a 2 cent per-share loss.

Stec Inc. (STEC:US) slumped 32 percent to $15.70. The maker of memory chips forecast fourth-quarter sales of $103 million at most, trailing the $106.6 million average estimate of analysts surveyed by Bloomberg.

True Religion Apparel Inc. (TRLG:US) declined 11 percent to $23.75. The seller of jeans forecast 2009 profit of $1.86 a share at most, missing the $1.87 average per-share estimate of analysts surveyed by Bloomberg.

After the bell today, we'll get results from Dow component Kraft Foods [KFT 27.53 -0.11 (-0.4%) ].

S&P 500 - Risers

Black Decker Corp. (BDK) $62.00 +30.97%

Burlingtn N Sante Fe (BNI) $97.00 +27.51%

American International Group Inc. (AIG) $39.22 +14.31%

Stanley Works The (SWK) $49.69 +10.06%

GANNETT CO INC (GCI) $10.54 +7.99%

Union Pacific Corp. (UNP) $59.41 +7.90%

S&P 500 - Fallers

Novellus Systems Inc. (NVLS) $19.65 -5.42%

Vulcan Materials Co (VMC) $45.06 -4.37%

Kla-Tencor Corp. (KLAC) $31.51 -4.10%

Sandisk Corp. (SNDK) $20.04 -3.95%

Applied Materials Inc. (AMAT) $11.89 -3.31%

Rockwell Collins Inc. (COL) $49.24 -3.03%

Dow Jones I.A - Risers

Caterpillar Inc. (CAT) $56.46 +1.75%

Alcoa Inc. (AA) $12.66 +1.44%

Bank Of America Corp. (BAC) $14.80 +1.16%

American Express Inc. (AXP) $36.04 +1.01%

Du Pont E I De Nemours and Co. (DD) $32.55 +0.87%

United Technologies Corp. (UTX) $63.20 +0.86%

Dow Jones I.A - Fallers

Intel Corp. (INTC) $18.50 -2.68%

Merck & Co. Inc. (MRK) $30.67 -1.89%

Hewlett-Packard Co. (HPQ) $47.51 -1.35%

Microsoft Corp. (MSFT) $27.53 -1.26%

Verizon Communications Inc. (VZ) $29.07 -1.16%

Coca-Cola Co. (KO) $53.12 -1.12%

VIX28.81-0.97-3.26%

Oil,Gold & Currencies:

U.S. light crude oil for December delivery rose cents $1.47 to settle at $79.60 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery rallied $30.90 to settle at $1,084.90 an ounce after earlier hitting an intraday record high of $1,087 an ounce.

The dollar gained versus the yen and fell against the euro.

Typically, a stronger dollar would pressure dollar-traded commodities such as oil and gold, but that wasn't the case Tuesday.

The yen rose against the euro for a second day on concern that the global economic recovery is slowing, after a government report showed Australian retail sales unexpectedly dropped.

The yen strengthened against 15 of 16 major counterparts after Japanese Finance Minister Hirohisa Fujii today said the government will probably cover a tax revenue shortfall with debt sales, adding to signs the nation's economic recovery will take time. The U.S. dollar fell against the yen on speculation the Federal Reserve will today repeat its pledge to keep the benchmark interest rate near zero for an "extended period."

"The unexpected slump in Australian retail sales is sparking worries about the sustainability of the recovery there," said Takashi Kudo, director of foreign-exchange sales in Tokyo at NTT SmartTrade Inc., a unit of Nippon Telegraph & Telephone Corp. "This is causing risk aversion and buying of the yen and the dollar as safe-haven currencies."

The yen advanced to 132.70 per euro at 11:28 a.m. in Tokyo from 133.01 in New York yesterday. Japan's currency strengthened to 90.17 against the dollar from 90.33. The greenback traded at $1.4716 per euro from $1.4724.

The Australian dollar weakened for a second day against the greenback after a report showed retail sales in Australia fell 0.2 percent in September after rising 0.7 percent in August. Economists surveyed by Bloomberg News expected a 0.5 percent gain.

The data came a day after the Reserve Bank of Australia said it was "prudent to lessen gradually" the stimulus provided by low borrowing costs.

Risk Aversion

"The market is a bit sensitive after the RBA was more dovish than expected yesterday and so we're seeing a relatively sharp reaction to modestly weaker data," said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. "You have declining risk appetite in markets at the moment, and therefore there's more focus on the negatives."

Australia's dollar dropped 0.3 percent to 90.02 U.S. cents. It fell 0.4 percent to 81.17 yen.

Fujii had said last month Japan's budget deficit for the year ending March 31 may be "quite large" as tax revenue falls, an indication bond sales may exceed 50 trillion yen.

Tax Revenue Down

Tax receipts may drop below 40 trillion yen in the fiscal year, less than the earlier 46 trillion yen forecast, Fujii said on Oct. 20.

"The idea of covering falling tax revenue with debt damps the economic outlook," said Koji Fukaya, a senior currency strategist in Tokyo at Deutsche Bank AG. "That may be adding to risk aversion," boosting demand for the yen.

The Fed will release its monetary policy statement today at the end of a two-day meeting. Policy makers will hold the benchmark interest rate target in a range between zero and 0.25 percent, according to the median estimate of economists in a Bloomberg News survey.

"The Fed will have no choice but to keep interest rates for a while," said Minoru Shioiri, Tokyo-based chief manager of foreign exchange trading at Mitsubishi UFJ Securities Co. "There's still too much supply of the dollar in the market. The bias is for the dollar to weaken at least by year-end."

Bonds:

Treasury prices fell, raising the yield on the 10-year note to 3.47% from 3.41% Monday. Treasury prices and yields move in opposite directions.

What to expect:

WEDNESDAY: Weekly mortgage applications; ISM services index; weekly crude inventories; Chrysler business plan; Fed statement; Earnings from Comcast, Time Warner, Martha Stewart, Cisco, News Corp., Prudential and Qualcomm

THURSDAY: Retailers report October sales; BOE, ECB statements; weekly jobless claims; Earnings from Toyota, CVS, Sirius, Unilever, CBS, Nvidia and Starbucks

FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks

Other Headlines:

IMF Chief Strauss-Kahn Says Chinese Yuan Is `Undervalued,' Will Appreciate

Disney Gets Chinese Government Approval to Build Theme Park in Shanghai

Raj Rajaratnam Said to Keep Personal Investments in Sri Lanka Amid Probe

RBA's Stevens Signals Jump in Currency Gives Scope to Slow Rate Increases

Virginia Republicans Sweep Top Jobs, Delivering Political Setback to Obama

Iran Increases Uranium Output as Photos Show Need for Wider Nuclear Checks

German Opel Workers Bitter After GM Shock

Bitterness, anger and disbelief mixed with betrayal and even resignation are just some of the emotions boiling within Germany following Tuesday's shocking news that General Motors will scrap its sale of Opel.

GM Board Changes Its Mind, Decides to Keep Opel

Buffett Needed No Bankers for Burlington Deal

IMF sees East Asia economies surpassing euro zone: report

Bailed-Out Banks Preparing Pay Bonanza: Study

Oracle-Sun Micro Deal May Be Rejected by EU: Report

Taiwan's Via Telecom may supply China Mobile's 4G chips

HSBC to cut 1,700 jobs as its restructures in Britain

Morgan Stanley Said to Seek Bids for Joint-Venture Stake in China's CICC

Wednesday Preview: Market Taking Its Cue From Fed Statement

Traders have been talking about tomorrow's Fed statement for days now, because even a subtle tilt in the Fed's posture on interest rates could unhinge the popular "risk on" trade, where investors bet against the U.S. dollar and throw money into risky assets such as stocks and commodities.

"No change of policy is likely. If there are any changes in the language, it's just to give flexibility for when there is a change, so that the comment made now doesn't sound too iron clad," said Pimco senior strategist Tony Crescenzi in a recent interview.

The statement is expected to be released at 2:15 p.m., after the Federal Open Market Committee winds down its second day of meetings. The November meeting is the Fed's second to last of the year, and it is widely anticipated it will do nothing before January, at the earliest.

"It's pretty clear they're not going to pull the trigger this week," said Stephen Stanley, chief economist at RBS. "I don't think they're on the cusp of changing the language because I don't think they have any expectation they are going to be tightening any time soon. We look at that and say it's more of a January proposition, and if you thought they were changing the language in January, then they're maybe moving at mid-year."

The Fed's low-rate policy and the growing U.S. deficit have been weights on the dollar, but the low rate environment has also helped to reflate the stock market.

Crescenzi, in a note, said the Fed should indicate more specifically the type of economic and financial conditions that would justify the current language that it sees "exceptionally low levels of the federal funds rate for an extended period." If it were to do that, investors would have a better idea of what would determine a change in policy and would respond incrementally to changing economic conditions rather than suddenly to a shift in the Fed policy statement.

"The market is very sensitive to even modest changes in the wording. You can see how nervous people are by looking at the short end of the (Treasury) curve," said Marc Chandler, head currency strategist at Brown Brothers Harriman.

The target Fed funds rate has been at zero to 0.25 percent, and the part of the Fed statement traders have been chattering about is the part that says the Fed will keep rates low for an "extended period."

"If they dropped that extended period, I think the dollar would react positively even if the stock market sells off," said Chandler.

Economists say the Fed is likely to acknowledge an improved economic outlook, but it is watching for a turn in the employment picture before it changes its stance. The next good look at the jobs situation is Friday, when the government releases its October employment report.

Even if it doesn't make a change, Fed committee members are expected to spend time discussing change, which will make the minutes of the meeting important to markets when they are released next month.

"There's this massive chasm at the FOMC between the hawks and the doves. Maybe more than I've ever seen. I think these policy debates are pretty...heated...is the right word. But there is some pretty substantive disagreement among the committee members about where we are and where we're likely to be headed," Stanley said.

Traders look to the Fed to make other moves that could push rates higher. For instance, traders believe the Fed could carry out reverse repos which would be a way to move rates higher without changing the target Fed funds rate. They also look to the Fed to withdraw its quantitative easing over the next couple of months.

Already, the Fed wound down last week its $300 billion program to buy Treasurys. It plans to discontinue its program to buy $1.25 trillion in mortgage backed securities in March.

"December of last year is when they contemplated buying Treasurys," said Cantor Fitzgerald Treasury strategist George Goncalves.

"We've come full circle. I don't think they'll do anything major now or in December and we'll see how the payroll numbers come, now and in December," said Goncalves.

He said a bigger story for the Treasury market Wednesday could actually be the refunding announcement from Treasury. "Tomorrow's a bigger day for the Treasury market than some other markets. You'll get some insight into where the Treasury's head is at," he said. The Treasury is expected to hold auctions of TIPS and 3-, 10- and 30-year notes next week.

Stocks Tuesday finished mixed, with the Dow down 17 at 9771, and the S&P 500 off 2 at 1045. Except for the 2-year, Treasurys moved lower along the curve, and the dollar was higher against a basket of currencies. The 10-year yield rose to 3.473 percent.

Chandler said the dollar has been moving higher not because of new long positions but because investors are reducing shorts. He said one thing they making the market nervous is the European Central Bank meeting Thursday, where the ECB could signal an end to a bank lending program that allows banks to borrow an unlimited amount of money at 1 percent for a year. That could strengthen the euro.

But perhaps the most interesting market move Tuesday was the sharp rise in gold, which jumped to a record $1,085, and touched a high of more than $1,088 per troy ounce after a major gold purchase by the Indian government. The move in gold was an unusual break in the "risk" trade, where both commodities and the dollar typically rise.

In addition to the Fed meeting Wednesday, there is some important data ahead in the morning. ADP releases its private sector payrolls report at 8:15 a.m. The October ISM non manufacturing index is reported at 10, and weekly oil inventory data is released by the government at 10:30 a.m. Weekly mortgage applications are released at 7 a.m.

Companies reporting earnings ahead of the open include Comcast, Devon Energy, El Paso, Foster Wheeler, Marsh McLennan, Molson Coors, Time Warner, Total, Automatic Data, Baker Hughes, and Becton Dickinson. Cisco reports after the closing bell.

Wednesday EarningsCMCSA14.51---UNCH024,218,586DVN66.451.47+2.26%4,326,522EP9.790.11+1.14%13,185,033FWLTZ8.77---UNCH0237,275MMC23.36-0.12-0.51%4,782,212TAP49.38-0.34-0.68%1,298,185TWX30.160.01+0.03%9,018,065ADP40.650.21+0.52%4,255,006BHI43.431.22+2.89%4,767,918BDX

Asia:

Most Asian stocks rose as gains by metal producers on record-high gold prices overshadowed a downgrade on semiconductor companies.

Newcrest Mining Ltd., Australia's largest gold producer, gained 3.3 percent. Toyota Motor Corp. added 0.8 percent in Tokyo after the Yomiuri newspaper said the company had raised its global production plan for this year. Tokyo Electron Ltd., the world's second-largest maker of semiconductor equipment, slumped 4.1 percent as Morgan Stanley downgraded U.S. semiconductor companies.

The MSCI Asia Pacific Index rose 0.3 percent to 114.61 as of 10:24 a.m. in Tokyo, with four stocks advancing for every three that declined. The gauge has surged 62 percent from a more than five-year low on March 9 on signs government stimulus measures are reviving the global economy.

Japan's Nikkei 225 Stock Average was little changed at 9,808.13. Australia's S&P/ASX 200 Index climbed 1 percent. South Korea's Kospi Index gained 1 percent.

Futures on the U.S. Standard & Poor's 500 Index added 0.2 percent. The gauge rose 0.2 percent yesterday as Warren Buffett agreed to buy Burlington Northern Santa Fe Corp. and Stanley Works said it will take over Black & Decker Corp.

Newcrest climbed 3.3 percent to A$34.47, while Lihir Gold Ltd. added 4.1 percent to A$3.30. Gold jumped to a record $1,088.50 an ounce in New York yesterday after India's central bank purchased 200 metric tons of the metal from the International Monetary Fund. Crude oil rose 1.9 percent to settle at $79.60 a barrel.

Toyota Production

Toyota, the world's largest carmaker, added 0.8 percent to 3,600 yen. The company lifted its global production plan for fiscal 2009 to 7 million vehicles from the previous target of 6.67 million units, the Yomiuri newspaper reported.

Tokyo Electron sank 4.1 percent to 4,900 yen, while Sumco Corp., which makes silicon wafers, retreated 2.8 percent to 1,665 yen. Morgan Stanley reduced its rating on U.S. semiconductor shares to "cautious" and downgraded Intel Corp. to "equal-weight."

Stocks in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 16 times for Europe's Dow Jones Stoxx 600 Index.

Nikkei 225 9,796.28 -6.67 ( - 0.07%). (08.21 AM IST).

HSI 21568.14 +328.08 +1.54%. (08.22 AM IST)

Chinese stocks open 0.16% higher on Wed

Chinese stocks opened higher on Wednesday morning, tracking gains from the previous closing.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 3,119.31 points, up 0.16% or 5.08 points from the previous closing.

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.2% or 26.23 points higher at 12,886.1 points.

Rupee:

The partially convertible rupee ended at 47.40/41 per dollar on Tuesday, weaker than its previous close of 46.96/97.

India:

Traders pressed the panic button on fears that global economic recovery would come to a halt if stimulus packages are withdrawn. Some disappointing quarterly earnings also led to the sharp fall in share prices.

Bombay Stock Exchange's Sensex ended at 15,404.94, down 491.34 points or 3.09 per cent. The index hit intra-day low of 15,330.56 and high of 15,957.06.

National Stock Exchange's Nifty closed at 4,563.90, down 147.80 points or 3.14 per cent. The 50-share index fell to a low of 4,538.50 and high of 4,729.85 in today's trade.

The BSE Midcap Index was down 3.74 per cent and BSE Smallcap Index slipped 4.50 per cent.

Amongst the sectoral indices, BSE Realty Index plunged 9.76 per cent, BSE Metal Index fell 5.95 per cent and BSE Oil&gas Index was down 4.10 per cent.

Hindalco Industries (-10.50%), DLF (-9.04%), Jaiprakash Associates (-7.52%), Sterlite Industries (-6.40%) and ACC (-6.20%) were amongst the top Sensex losers.

Index heavyweight Reliance Industries fell a massive 5.73 per cent on the BSE.

Bharti Airtel (2.67%), Maruti Suzuki (1.13%) and Sun Pharmaceuticals (0.31%) were the only Sensex gainers.

Reliance Communications reported 51.66 per cent decline in its consolidated profit at Rs 740 crore for the second quarter due to provisions for foreign exchange fluctuation or derivative losses. The company had consolidated net profit of Rs 1,531 crore in the same quarter last fiscal. The stock tumbled 6.45 per cent on the NSE.

Hindalco Industries reported a 52% drop in standalone net profit for the quarter ended September, due to a sharp drop in metal prices on the London Metal Exchange. The Aditya Birla group flagship company said its net profit in the July-September period fell to Rs 344 crore from Rs 720 crore last year, while sales in the same period was down 13.4% to Rs 4,917 crore. The stock plunged 10.45 per cent.

Suzlon Energy posted Rs 356-crore loss in the quarter ended September 30, 2009 compared to a Rs 22.84-crore loss posted in the same period last year, owing to lower volumes. Its total consolidated revenues, during the period, declined to Rs 4,793-crore as compared to Rs 6,921-crore a year-ago. The stock tanked 13.39 per cent on the NSE.

Market breadth was negative on the BSE with 2171 declines against 534 advances.

Manufacturing growth slows in October 2009

Orchid Chemicals reported net loss of Rs13.20 crore in Q2

Hindustan Unilever's topline grew by 5% in Q2

Bharat Electronics net up by 92% in Q2

SBI's bottomline rise by 10.2% in Q2

The biggest fall before this was on August 17 when it tanked 600 points. In the previous five trading sessions, it had lost 914.53 points.

* Shares fall for sixth session, longest losing run in a year *

Indian shares dropped 3.1 percent on Tuesday, a sixth straight fall that took the market to its lowest close in two months.

Reliance Industries fell 5.7 percent to 1,820.65 rupees,its lowest close in nearly four months, ahead of the resumption of a court hearing over terms of a deal to supply gas to Reliance Natural Resources (RENR.BO: Quote, Profile, Research).

Reliance Communications (RLCM.BO: Quote, Profile, Research) fell 5.7 percent to 165.90 rupees, its lowest close in more than seven months.The stock is down over 46 percent since the end of September.

Top lender State Bank of India (SBI.BO: Quote, Profile, Research) fell 4 percent to 2,103.50 rupees on concerns over asset quality, even after it reported a 10.2 percent rise in quarterly profit on the weekend.

Aluminium producer Hindalco (HALC.BO: Quote, Profile, Research) declined 10.5 percent to 109.15 rupees, after its September quarter net profit halved.

Consumer goods maker Hindustan Unilever (HLL.BO: Quote, Profile, Research) fell 3.6 percent to 272.75 rupees, reporting its September quarter net profit dropped 21.6 percent.

Top mobile operator Bharti Airtel (BRTI.BO: Quote, Profile, Research) bucked the weaker trend on the day, rising 2.7 percent to 299.95 rupees, although it is still down more than 28 percent since the end of September.

Top car maker Maruti Suzuki (MRTI.BO: Quote, Profile, Research) climbed 1.1 percent to 1,418.80 rupees, after its October sales rose an annual 32.4 percent .

The 50-share NSE index .NSEI fell 3.14 percent to 4,563.90, its lowest close in 2-½ months.

Markets at lowest level since Sept 2009

Markets edge lower for 6th consecutive day

Markets see longest loosing streak since Nov 2008

Markets witness biggest pt loss since 17 Aug 2009

Nifty ends below 4600 mark

Markets down in 9 of last 10 trading sessions

Sensex looses 350 pts, Nifty edges 170 pts lower

Sensex swings over 600 pts, Nifty gyrates 190 pts

Total turnover at Rs

Advance decline ratio at 1:7 on NSE

Breadth of markets dismal for 11th trading session

All sectoral indices end in red

Realty index collapses by 10%

Metal index melts over 6%

Oil and Gas index looses over 4%

Small cap down 4.6%, Mid cap down 3.8%

Broader markets under perform Sensex

Reliance Industry drags Sensex by 130 pts

Infosys, ITC, SBI drags Sensex by 115 pts

Stimulus packages to continue: FM

Mahindra Satyam-SAAB announce $300m deal

SBI may withdraw 8% home loan scheme

BSNL, Sistema Shyam to share towers

Govt mulls PSU disinvestment

Lloyds to raise capital from CoCo

Govt planning regulators for coal sector

Himalaya signed a deal with US firm

Govt mulling over import of 2 MT rice

India's global trade rises to 54% of GDP

China concern over India's visa policy

Atul Chaturvedi takes over as Steel Secy

Honda Siel launches new variant of CR-V

INVESTMENT VIEW

Suzlon: Sell And Never Look Again
Suzlon Energy Ltd, the world's third-largest wind turbine supplier, has scaled down its sales forecast for the current year to 1,900-2,100 megawatts (Mw) from the 2,400-2,600 Mw guidance given earlier, owing to delay in execution of orders.

The troubled wind energy major has also embarked upon a cost control and operational improvement initiative under 'Project ACE' (Achieving Collective Excellence) to get out of losses and mounting debts.

Suzlon, which had to rectify rotor blades of its entire V2 type S88–2.1 Mw turbine fleet owing to manufacturing defects, had posted a Rs 355.5 crore loss for the third quarter ended September, against a loss of Rs 22.8 crore in the previous year's corresponding quarter.

For the first six months of the current financial year, Suzlon's losses were Rs 808 crore. Consolidated revenue for the quarter also shrank by 44.4 per cent to Rs 4,793 crore, against Rs 6,921 crore in the corresponding previous year quarter.

"During the first half of 2009-10, conversion of booked orders to revenue showed some slowing down. Potential new orders were postponed, owing to the weak global macroeconomic and financing environment," said Sumant Sinha, chief operating officer.

Suzlon alone has an order book of 1,488 Mw worth Rs 8,285 crore, with 1,365 Mw in international orders and 123 Mw in domestic orders. Its German subsidiary REpower reported a contractually confirmed order volume of ¤1.6 billion, as on September 30, 2009.

Sumant Sinha said sales may be skewed towards the end of the financial year. The market conditions remain challenging in the short-term, but long-term outlook remains positive, as policy changes in key markets give strong impetus for growth.

"We are starting to see a recovery across global markets with finance returning. New energy policies and stimulus packages in the EU, US, China, Australia, India and emerging markets, indicate rising acceptance of the challenges of climate change and a growing appetite for renewable energy solutions," said Tulsi Tanti, chairman and managing director.

Suzlon said the company had appointed Boston Consulting Group (BCG) to advise on business strategies to adapt to evolving marketplace and to have a strong focus on operational efficiency improvements.

The company, sitting on a debt of over Rs 11,000 crore, mainly owing to acquisitions of REpower and Hansen, has launched Project ACE, a comprehensive exercise assisted by BCG, aimed at optimising operational efficiencies and to achieve excellence across our value chain.

"We have mapped more than 100 processes, and have identified 12 critical processes with improvements across several operating parameters. Phase-I of this initiative is complete and Phase-II is underway," said a Suzlon press release.

Sinha said Suzlon was undertaking a series of cost and operational improvement initiatives. "We continue our tight focus on cost control to achieve better liquidity and debt management. We have undertaken a comprehensive debt refinancing exercise to improve the capital structure and increase financial flexibility. We are also working with Boston Consulting Group to optimise our end-to-end delivery capability to adapt to a rapidly evolving marketplace," he said.

Further, Suzlon has brought in more professionals to manage the company. The company has appointed John O'Halloran, former executive director of engineering at Cummins as president (technology). It has also hired former Ford India president and managing director Arvind Mathew as President, Nacelle manufacturing.

(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 3rd Nov 2009

INTRADAY calls for 3rd Nov 2009

Short ALBK-119 for 114-111+ with sl 122

Buy Ashokley-45 around 43 for 47-49+ with sl 41

 

RESISTANCE
4745
4811
4874
4938
5002
SUPPORT
4698
4680
4616
4552

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

Crompton Greaves, Balrampur Chini, McDowell-N, Ashok Leyl, Dr Reddy, Yes Bank, PTC, Asian Paints, OFSS & Hind Zinc. 

And this is list of 10 Weak futures:

IOC, EKC, RCom, GMR Infra, RNRL, Suzlon, Punj Lloyd, Nagar Fert, MLL & Bank Of India.
 Nifty is in Down trend  

 

NIFTY FUTURES (F & O):  
Above 4745 level,  expect short covering up to 4809-4811 zone and thereafter expect a jump up to 4872-4874 zone by non-stop.

Support at 4698 level. Below this level, selling may continue up to 4680-4682 zone by non-stop.

Below 4616-4618 zone, expect panic up to 4552-4554 zone by non-stop.

On Positive Side, cross above 4936-4938 zone can take it up to 5000-5002 zone by non-stop. Supply expected at around this zone and have caution.
 
Short-Term Investors:  
1 Week: Bearish with a SL of 4918.10. Target at 4671.20.
1 Month: Bearish with a SL of 6289.00. Target at 4620.00.

3 Months: Bearish with a SL of 5080.00. Target at 2951.00.

1 Year: Bullish with a SL of 2575.00. Target at 6201.65.
 
BSE SENSEX: 
 Sell with a SL of 16182.09. Target at 15742.13.
 
Short-Term Investors: 
 1 Week: Bearish with a SL of 16606.95. Target at 15720.73.
1 Month: Bearish with a SL of 18381.96. Target at 14937.03.

3 Months: Bearish with a SL of 17361.47. Target at 12425.52.

1 Year: Bullish with a SL of 15197.60. Target at 18289.88.
 

 POSITIONAL BUY:
Buy TECHTRAN POLYLEN (BSE Cash & BSE Code:523455) 
Buy with a Stop Loss of 23.30. Above 25.00, it will zoom.
 

Today: May hold on gains.

1 Week: Bearish, surprisingly going up.

1 Month: Bullish, as per current market conditions.

3 Months: Bearish, surprisingly going up.

1 Year: Bullish, as per current market conditions.
 
Buy VINYL CHEM (BSE Cash & BSE Code: 524129) 
Buy with a Stop Loss of 5.40. Above 6.93, it will zoom.
 

Today: May hold on gains.

1 Week: Bearish, surprisingly going up.

1 Month: Sideways,  surprisingly going up.

3 Months: Bearish, surprisingly going up.

1 Year: Bullish, as per current market conditions.
 

 

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	30-Oct-2009	3966.63	3390.58	576.05

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	30-Oct-2009	2400	1807.07	592.93

 

 

SPOT LEVELS

	4711.70	( -0.82 %)	-38.85
		1	2	3
Resistance		4814.40	4917.10	4980.55
Support		4648.25	4584.80	4482.10

 

	15896.28		( -0.97 %)	-156.44
			1	2	3
Resistance			16236.37	16576.47	16792.05
Support			15680.69	15465.11	15125.01

Interesting findings on web:
U.S. stocks rose, with the Standard & Poor's 500 Index rebounding from its biggest weekly drop since May, as Ford Motor Co.'s profit and gauges of manufacturing, home sales and construction spending topped projections.

On Monday, the Dow rose 76.71, or 0.8 percent, to 9,789.44, its fourth gain in 10 days. The broader Standard & Poor's 500 index rose 6.69, or 0.7 percent, to 1,042.88, and the Nasdaq composite index rose 4.09, or 0.2 percent, to 2,049.20.

RUSSELL562.4-0.37-0.07%

TRAN3599.84-13.50-0.37%

UTIL362.66-0.38-0.1%

S&P 100485.152.84+0.59%

S&P 400662.163.01+0.46%

NYSE6784.9445.49+0.67%

NAS 1001672.915.78

After the close, Stanley Works (SWK) said it would buy Black & Decker (BDK, Fortune 500) in a $4.5 billion all-stock deal.

Stocks rallied in the morning after a key manufacturing index spiked to its highest level in three and a-half years in October. An upbeat reading on pending home sales and Ford Motor's big profit report also added to the morning bounce, giving investors a reason to jump back into stocks after last week's selloff.

But the morning rally turned sour in the afternoon as weakness in financial, tech and transportation shares spearheaded a broader retreat. By the last hour, short-term investors used the selling as an opportunity to jump back in and scoop up a variety of shares.

Analyst Kenny Landgraf of Kenjol Capital Management said further volatility in the coming weeks would not be a surprise, but that stocks should manage to move higher through year end. He expects the Dow will end the year around the 10,500 mark.

A trio of economic reports released in the morning helped reassure investors that the recovery is on track.

A survey by the Institute for Supply Management showed nationwide manufacturing activity jumped to 55.7 in October, from 53 the previous month. Economists surveyed by Briefing.com had predicted a more modest gain to 54. Numbers above 50 signal growth, while figures below 50 suggest contraction.

The Commerce Department said construction spending rose unexpectedly by 0.8%. Economists surveyed by Briefing.com were anticipating a 0.5% decline.

Meanwhile, the National Association of Realtors reported that the number of signed sales contracts to buy homes rose in September for the eighth straight month. Pending home sales rose much more than expected, by 6.1%, in September. Analysts were looking for a 1.2% increase.

"What we're seeing is a general improvement in the economy as reflected in that ISM number," said Kevin Caron, a market strategist at Stifel Nicolaus & Co. in Florham Park, New Jersey, which manages about $98 billion in client assets. "Beyond that we saw some fairly decent numbers out of new home construction as well, so that's also a positive. So long as the data continues to come in positive like we saw today, the market will take comfort in that."

Of 334 companies in the S&P 500 that reported quarterly earnings since Oct. 7, 84 percent topped estimates, according to data compiled by Bloomberg. Sales have exceeded predictions by 58 percent.

Wall Street analysts are forecasting S&P 500 earnings will increase 25 percent in 2010, the fastest growth in two decades. Investors are paying the lowest so-called price-to-earnings growth ratios since 1995, according to Bloomberg data.

Companies in the gauge traded for an average of 15.4 times annual profit this year, or 0.6 times equity analysts' projection for 2010 earnings growth, according to data compiled by Bloomberg. That's the lowest so-called PEG ratio since 1995 and half the median of 1.3 since 1961.

Financial shares helped drag down the indexes after an official from the Federal Reserve, which begins a two-day policy meeting tomorrow, said Monday that big banks may suffer big losses on commercial mortgages and that some of them don't have the capital to withstand those losses. Concerns about commercial real estate investments have been brewing for months since residential mortgages crippled the financial system last year. The SPDR KBW Bank ETF ( KBE - news - people ) gained 1.1% for the day after giving up morning gains.

Ford, the only major U.S. automaker to avoid bankruptcy, rallied 8.3 percent to $7.58. The company reported third-quarter profit, excluding extraordinary items, of 26 cents a share, beating the 20-cent loss estimated by analysts in a Bloomberg survey.

Ford rallied 8.3 percent, the most since July, following its first operating profit since early 2008. American Express Co., United Technologies Corp. and General Electric Co. climbed at least 1.5 percent. Benchmark indexes pared gains after Jon Greenlee, associate director of the Federal Reserve division that regulates banks, said banks still face threats from defaults on commercial-real estate.

This came a day before automakers report their October sales. Analysts say sales likely rose last month but caution that they are still at 1980s levels.

Varian Medical Systems Inc. added 5.4 percent to $43.18. The maker of radiation equipment used to treat cancer was raised to "buy" from "hold" at Soleil Securities.

BB&T Corp. rose 4.8 percent to $25.06 after it was raised to "hold" from "sell" at Sandler O'Neill. SunTrust Banks Inc. gained 4 percent to $19.88 after the analysts raised it to "buy" from "hold."

CIT Group Inc. plunged 65 percent to 25 cents. The company filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout.

Eight of 10 industry groups in the S&P 500 advanced today, led by gains of more than 1 percent in consumer-staples companies and raw-materials producers.

"This is the post-Halloween pick-up," said Burt White, chief investment officer at LPL Financial in Boston, which oversees $234 billion. "Ford's earnings today were very, very good. I think that a lot of folks were concerned about the CIT bankruptcy, but the market is kind of shaking it off pretty resoundingly."

Motorola Inc. added 5.4 percent to $9.03. The biggest U.S. mobile-phone maker was raised to "buy" from "hold" by analysts at Citigroup Inc., who said the company will introduce a "compelling" offer of handsets at a "time when many investors have given up."

The analysts reduced their recommendations on Palm Inc. and Research In Motion Ltd. to "sell," from "hold" and "buy" respectively. Research in Motion Ltd. lost 5.1 percent to $55.74. Palm slid 6 percent to $10.91. The recommendation changes came in a report to investors dated Nov. 1.

American Express gained 2.4 percent to $35.68. The biggest U.S. credit-card company by purchases can issue another $12.1 billion in asset-backed securities under a U.S. government emergency-lending program, according to an Oct. 30 filing.

JPMorgan up by [JPM  42.58    0.81  (+1.94%)   ].

General Electric rose 1.5 percent to $14.47.

United Technologies Corp. added 2 percent to $62.66. A subsidiary of the maker of Otis elevators and Carrier air conditioners signed a two-year F-16 spare parts supply contract with SABCA, a Brussels-based aerospace engineering and manufacturing company. 

Financial shares in the S&P 500, which have fallen 10 percent since Oct. 14, tumbled as much as 1.8 percent before paring losses.

Citigroup Inc., the bank that is 34 percent owned by the U.S. government, lost 2.4 percent to $3.99.

Traders said it was one-two punch for financials that caused that midday bobble: It was in part Citi's drop below $4 but also testimony from Jon Greenlee, director of the Fed's Division of Banking Supervision and Regulation, to a House panel, warning about banks' potential losses from commercial real-estate loans.

"Although conditions and sentiment in financial markets have improved in recent months, significant stress and weaknesses persist," said Greenlee, who works at Fed's Division of Banking Supervision and Regulation in Washington, in testimony to a House Oversight subcommittee hearing in Atlanta. "The condition of the banking system is far from robust."

Denbury Resources Inc. tumbled 10 percent to $13.09, the biggest drop in the S&P 500. The oil and natural-gas producer said it will buy Encore Acquisition Co. for about $4.5 billion to add fields in the Rocky Mountains and Gulf of Mexico.

Dean Foods Co. lost 8.5 percent to $16.69. The biggest U.S. dairy processor said fourth-quarter earnings may fall more than analysts estimate amid rising prices for raw milk.

Telecoms Verizon and AT&T [T  25.58    -0.09  (-0.35%)   ] were among the drags on the Dow as investors took profits after the sector's recent gains.

Intel [INTC  19.00    -0.11  (-0.58%)   ] also dragged on the Dow as techs were weak after a report showed chip sales rose in the third quarter but revenue remains below year-ago levels.

A couple days before retailers report on their October sales, Wal-Mart [WMT  50.28    0.60  (+1.21%)   ] once again slashed its toy prices. Wal-Mart shares rose 1.2 percent.

Retailers are expected to report an uptick in sales but analysts remain wary about the outlook for the holiday season.

Retailers started the day mostly lower but recovered and finished the day mostly higher. Department stores Sears [SHLD  67.13    -0.73  (-1.08%)   ] and Bon-Ton [BONT  9.20    -0.05  (-0.54%)   ] skidded, while Gap [GPS  21.79    0.45  (+2.11%)   ] and Bed, Bath & Beyond [BBBY  36.39    1.18  (+3.35%)   ] were among the sector's notable gainers.

In the morning's other earnings news, Clorox [CLX  59.45    0.22  (+0.37%)   ] reported its profit jumped 23 percent as consumers stocked up on disinfectant products amid swine-flu fears. Its shares rose 0.3 percent.

Human Genome Sciences [HGSI  24.41    5.72  (+30.6%)   ] shares soared 35 percent after the company said its experimental lupus drug was successful in a second clinical trial. It would be the first new lupus treatment in 50 years.

Also in the sector, Vertex Pharma [VRTX  36.15    2.59  (+7.72%)   ] shares leaped 7.7 percent after the company said a phase II study showed that twice-daily treatments of its experimental hepatitis C drug telaprevir worked as well as three times a day. 

Elsewhere, Royal Caribbean [RCL  20.64    0.41  (+2.03%)   ] shares gained after an upgrade from Wells Fargo, and Progressive [PGR  16.23    0.23  (+1.44%)   ] shares jumped after Barron's said the insurer was set to expand earnings and revenue for the first time in years.

In M&A news this morning, Denbury Resources [DNR  13.08    -1.52  (-10.41%)   ] has agreed to buy Encore Acquisition [EAC  44.57    7.50  (+20.23%)   ] for $3.2 billion in cash and stock, creating one of North America's largest oil production and exploration companies. The deal represents a 35 percent premium for Encore shareholders.

Denbury shares fell 10 percent, while Encore shot up 21 percent.

Another gainer was Loews Corp. ( LTR - news - people ), the New York conglomerate controlled by the Tisch family, which reported earnings of $1.08 a share, well ahead of estimates and a reversal from last year's quarterly loss. Revenues increased 26% from 2008. Loews stock gained 2.4%.

The Chicago Board Options Exchange's Volatility Index, known as Wall Street's fear gauge, crept up to 31.84 Monday — a fresh four-month high — before ending at 29.78.

"It's a flip of a coin right now," said Jeffrey Frankel, president of Stuart Frankel & Co. "You never know what you're going to get the next day when you come in to work."

Oil, Gold & Currencies:

U.S. light crude oil for December delivery gained $1.13 to settle at $78.13 a barrel on the New York Mercantile Exchange after tumbling in the previous session.

COMEX gold for December delivery rose $19.10 to settle at $1,059.50 an ounce.

The dollar gained versus the yen and the euro.

The yen and the dollar declined for a second day against the euro as Asian stocks advanced amid renewed optimism the global economy is recovering, encouraging investors to buy higher-yielding assets.

The yen weakened versus all of its 16 major counterparts before a U.S. report that economists said will show factory orders rebounded in September, damping demand for the relative safety of Japan's currency. The dollar fell on speculation the Federal Reserve will this week keep interest rates near zero and refrain from signaling a withdrawal of stimulus measures. Australia's dollar rose for a second day before a central bank meeting today where policy makers may raise borrowing costs.

"Risk-taking appetite is returning, given that equities are rising and economies are improving," said Norifumi Yoshida, vice president of the trading section at Mizuho Corporate Bank Ltd. in Singapore. "The yen is being sold."

The yen dropped to 133.74 per euro as of 11:04 a.m. in Tokyo from 133.32 in New York yesterday, when it declined 0.5 percent. The dollar fell to $1.4801 per euro from $1.4775. Japan's currency weakened to 90.36 versus the dollar from 90.21.

Foreign-exchange movements may be more volatile than usual in Asia today amid ample liquidity even as Japan has a national holiday, Yoshida said.

The MSCI Asia-Pacific Index of regional shares rose 0.2 percent and futures on the Standard & Poor's 500 Index climbed 0.3 percent. The Standard & Poor's 500 Index advanced 0.7 percent yesterday.

Fed Statement

The dollar weakened versus 13 of the 16 major currencies before the Fed releases its monetary policy statement tomorrow at the conclusion of its policy meeting. The central bank has retained a commitment to keep interest rates near zero for an "extended period."

The U.S. banking system is still "far from robust," hurt by a decline in commercial real-estate values and threatened by rising prospects for defaults on such loans, Jon Greenlee, associate director of the Fed's Division of Banking Supervision and Regulation in Washington, said yesterday in testimony to a House Oversight subcommittee hearing in Atlanta.

"The Fed is unlikely to revise the 'extended period' language, given the fragile economic recovery," said Takashi Yamamoto, chief trader in Singapore at Mitsubishi UFJ Trust & Banking Corp., a unit of Japan's biggest bank. "The dollar is a favored funding currency globally, so its weakening trend is likely to persist."

U.S. factory orders climbed 0.8 percent in September after a 0.8 percent decline in August, according to a Bloomberg News survey of economists before the Commerce Department releases the report in Washington today.

Australian Dollar

The Australian dollar strengthened for a second day before the central bank sets interest rates today. Reserve Bank of Australia Governor Glenn Stevens will increase the overnight cash rate target to 3.5 percent from 3.25 percent at 2:30 p.m. in Sydney, according to 18 of 22 economists surveyed by Bloomberg News.

"The Australian dollar has benefited from improved sentiment with a host of U.S. economic data beating expectations last night," said Amanda Tan, an economist at St. George Bank Ltd. in Sydney. "A 25 basis point rate hike could potentially see a sell-off in the currency given that some in the market are looking for a more aggressive 50 basis point hike."

Australia's currency rose 0.4 percent to 90.78 U.S. cents and advanced 0.6 percent to 82.06 yen. New Zealand's dollar gained 0.7 percent to 72.28 U.S. cents and climbed 0.8 percent to 65.32 yen.

Benchmark interest rates are 3.25 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations' higher-yielding assets. The risk in such trades is that currency market moves will erase profits.

Bonds:

Treasury prices slipped, raising the yield on the 10-year note to 3.41% from 3.38% Friday. Treasury prices and yields move in opposite directions.

What to expect:

TUESDAY: Two-day Fed meeting begins; Auto makers report October sales; Madoff accountant hearing; election day; factory orders; Earnings from UBS, MasterCard, Viacom and Kraft

WEDNESDAY: Weekly mortgage applications; ISM services index; weekly crude inventories; Chrysler business plan; Fed statement; Earnings from Comcast, Time Warner, Martha Stewart, Cisco, News Corp., Prudential and Qualcomm

THURSDAY: Retailers report October sales; BOE, ECB statements; weekly jobless claims; Earnings from Toyota, CVS, Sirius, Unilever, CBS, Nvidia and Starbucks

FRIDAY: October jobs report; Geithner speaks; Droid phone launches; wholesale trade; consumer credit; Fed's Duke speaks

Karzai named Afghan leader 

Iran Guards warn opposition against rallies

U.N. assembly draft urges action on Gaza "war crimes"

China launches "strike hard" crackdown in restive west

China Said to Plan Review of Developer Loans on Concern at Surging Prices

Australia May Raise Interest Rate to At Least 3.5% as Economy Strengthens

Stanley Works to Buy Black & Decker for $3.5 Billion as Toolmakers Combine

Ford Raising $3 Billion to Pay Down Credit Line, Achieve Investment Grade

Locke Was `Imprecise' in Comments on Second Stimulus Plan, Spokesman Says

JPMorgan Consolidates Fixed-Income Business Under Executives Pinto, Zames

Sarbanes-Oxley Exemption for Small Companies Said to Be Pushed by Emanuel

BOJ: Recovery to moderate into 2010

IMF sells 200 tonnes of gold to RBI

No more overreliance on consumer spending - Volcker

Ford to Extend Revolving Credit, Raise $3 Billion Equity

Obama to Karzai: Crack down on corruption 

Tuesday Preview: Stocks to Seesaw, Economy in Focus

Seesaw moves in the stock market have not discouraged some strategists who believe the market remains in an uptrend, despite near-term choppiness.

Stocks Monday rose early on a strong ISM report and a surprise profit from Ford, but they gave back a triple-digit gain at midday as the financial sector came under selling pressure. But buyers stepped in, taking stocks from negative levels to gains once more. The Dow finished the day at 9789, up 76, and the S&P 500 rose 6 to 1042. Financials ended higher, up 0.8 percent, even as Citigroup, which led the decline, finished lower.

Monday's intraday move though was volatile but mild compared to the sharp snap up last Thursday on Q3 GDP, and the big let down Friday when the Dow lost 249 points after a weak consumer spending report.

Monthly auto sales, factory orders and dozens of earnings reports, from such names as UBS[UBS  16.80    0.21  (+1.27%)   ], Archer-Daniels[ADM  30.48    0.36  (+1.2%)   ], Marathon Oil[MRO  31.96    -0.01  (-0.03%)   ], Viacom [VNV  22.85    -0.0934  (-0.41%)   ]and MasterCard[MA  222.47    3.45  (+1.58%)   ], could influence trading Tuesday. The Fed also starts its two-day meeting, which concludes Wednesday with its 2:15 p.m. statement.

Investment strategist Richard Bernstein said the market's choppiness is normal and it should continue.

"We have a market that was expecting improvement in the economic numbers more rapidly," he said, adding the market could continue to trade up and down with the health of the economic statistics for now.

Bernstein, CEO of Richard Bernstein Capital, said he's been bullish since early summer, and he's still bullish but he's not a "raging bull."

Traders have been speculating for days now that the Fed may take some steps this week to show it could tilt toward a higher rate environment in the next couple of months. But Bernstein believes the Fed will remain on hold and keep the language in its statement on hold as well for some time to come. The low rate environment has been one of the big drivers for stock.

"They have removed the risk of systemic bank failure but they haven't focused on restoring normal credit in the economy," he said.

Fed watchers have also said the Fed is not likely to make a move or drop the language that it will keep rates low for an "extended" time until it sees improvement in employment. This week is also the week that unemployment could potentially break the 10 percent level, when the October employment report is released Friday.

Laszlo Birinyi, who has also been bullish, said he still believes the market remains in an uptrend, but it could be choppy for now. "My view all along is the gains that we had were totally unsustainable. I wasn't necessarily looking for a decline," he said.

"I think we continue to go higher, but in a lot of a less smooth fashion than we have," he said in a brief interview.

Birinyi said the market's behavior reflects a general realization that the gains have been significant. "A lot of stocks had a lot of moves. You have the bulk of earnings behind us. There's a lot of realization that we've made some very historically stretched gains over a short period of time. It wouldn't be bad to sit out a round or two," Birinyi said.

Birinyi said the market continues to have strong underpinnings. For instance, it is resilient and has been able to stand up, even in the face of bad news. He is telling investors though that it is not a time to be aggressive.

As the stock market moved up Monday, the dollar slipped against a basket of currencies. The dollar lost ground against the euro, to a level of $1.4766 per euro, but the yen slipped against the dollar. In the Treasury market, sellers came in on the stronger economic report, pushing yields higher along the curve. The 10-year was yielding 3.424 percent, and the two-year was yielding 0.921 percent.

Econorama

MKM chief economist Michael Darda said Monday's ISM reading and the rapid rise of the ISM index during the last four months is more consistent with a V-shaped recovery than a U-shaped recovery. ISM was reported at 55.7 for October, its highest reading since April, 2006.

In a brief interview,  he said he tracked the ISM in recessions since 1960. "If you look at the ISM as it relates job growth, there's an important correlation coming out of every recession since 1960. When the ISM crossed above 55, the three month moving average for non farm payroll growth was positive, except for 1960, and it went positive the next month," he said.

Darda said he is looking to adjust his outlook for non farm payrolls for October, but will do so after ISM nonmanufacturing data is released Wednesday. Friday's employment report is the next big data item markets are looking ahead to, and the consensus is for a loss of about 170,000 non farm payrolls.

"We were at -150,000, but it might be even better than that," he said.

"Folks who are saying it's different this time, well it's not different this time..payrolls this week should be interesting. We'd hope and expect to see a significant tapering off of job losses. The indicators that would tend to lead have been doing what they should be doing," he said.

"I think people have been way too quick to judge this recovery based on temporary government stimulus factors. I think there's an underlying real estate recovery here that goes beyond the the tax credit. I think there's an underlying auto recovery that goes beyond clunkers," he said.

"This has V-shaped recovery written all over it," he said. "The deeper the recession the stronger the bounce back."

Citigroup economist Steve Wieting said ISM was encouraging on a lot of levels, including the 7-point jump in the employment index to 53.1. But he said there's one aspect of the report that causes some concern. "The fact that the production readings eclipsed the order readings is not good," he said.

"The orders index has slowed its growth rate for the past two months," he said. "I would argue that the very sharp snap back that you saw in manufacturing in the third quarter, that you don't accelerate it."

"I think we're headed to plenty of more growth in manufacturing output. That's going to be uninterrupted, but the speed of the recovery is showing signs of exhaustion," he said.

Auto sales are expected to top September levels when they are reported individually by manufacturers throughout the day Tuesday. Wieting expects sales to show a 10.4 million annualized rate.

He too expects the Fed to hold off from making any moves when it meets this week.

Earnings Central

Earnings reports are also expected Tuesday morning from American Tower, Emerson Electric, Intercontinental Exchange, Och-Ziff Capital, Cameron International, Amerisource Bergen, Rowan Cos, Health Net and Cognizant Tech. Kraft and Hartford Financial report after the close.

Companies Reportingamt37.090.27+0.73%3,664,093emr38.100.35+0.93%7,943,460ice102.972.78+2.77%994,973ozm11.95-0.18-1.48%355,970cam37.370.40+1.08%4,149,880abc22.510.36+1.63%3,992,896roc19.81-0.07-0.35%534,166ctsh38.760.11+0.28%4,408,394kft27.620.10+0.36%11,793,292hig24.790.27+1.1%9,976,416

No hints, winks, nods from Fed about rate hikes

Central bankers will maintain 'extended period' language -- for now

The Federal Reserve will not give the market any hints, winks or nods about its battle plan for pushing interest rates higher after their meeting concludes on Wednesday, economists said.

The overwhelming consensus is that the Fed will hold the federal funds rate steady at near-zero, where the Fed's target has been since last December. The Federal Open Market Committee begins its two-day meeting on Tuesday. An announcement is expected Wednesday at about 2:15 p.m. Eastern.

"The facts on the ground -- high unemployment, low inflation, no net private-sector job creation -- suggest to us that it is inconceivable that policy will actually change on Nov. 4," said the economic team at Credit Suisse in a report to clients.

A report in the Financial Times on Oct. 23 set off a firestorm when it suggested that the Fed was considering scrapping its promise to keep rates "exceptionally low" for "an extended period."

The 'extended period' phrase has been in place since March. As the dust has settled, most Fed watchers have concluded that Wednesday is too early for the central bank to edit the language.

"We don't expect them to move away from the extended-period language," said Dean Maki, chief U.S. economist at Barclays Capital Inc., in New York.

Veteran Fed watcher David Jones of DMJ Advisors agreed: "I don't see them really coming up with anything new," he said.

"I think they will stick with interest rates in the zero to quarter-point range and will mention that economic conditions are better, but still justify rates at low levels for an extended period," Jones said.

Worried about growth, or spooked by inflation?

Analysts still believe that the majority at the Fed, clustered around Fed Chairman Ben Bernanke, remains worried about the economic outlook and the consequences of signaling a tightening too soon.

The U.S. economy grew at a 3.5% annual rate in the third quarter, its fastest growth rate in two years.

Economists generally believe that growth will be moderate going forward, in the range of 2% to 3.5%. And there remains a key unanswered question about whether the economy can stand on its own without massive government stimulus.

For the Fed majority, agreeing to a change in language now risks accelerating the market's expectations of a rate hike, Maki said.

Maki doesn't expect the Fed to raise rates until next September.

"What is the point changing the language, if not to signal tightening is commencing relatively soon?" Maki asked.

On the other side of the equation are several regional Fed bank presidents, who remain much more worried about the inflation outlook. They support a change in language because it would give the Fed flexibility to move quickly if the economy turns out to be much stronger than expected.

Some analysts agree scrapping the 'extended period' language is justified.

"The current circumstances suggest that the existing guidance on interest rates...is probably due for a change," said economists at Morgan Stanley.

Some economists admit their expectation of no change in language is based on a hunch that the Fed would have wanted to do a better job of signaling the move, and that the Fed would have given hints that it was thinking of altering the language.

"Fed speakers did not sound particularly hawkish during the inter-meeting period," noted economists at BNP Paribas.

However, former Fed Gov. Lawrence Meyer was one of the first analysts to note that the central bankers were not sticking to the exceptionally-low-rates-for-extended-period script during their remarks since the last meeting.

But Meyer thinks there is an "extremely low probability" that the language will be changed on Wednesday.

Looking past this week

After this meeting, however, all bets on language change are off.

Of course, upcoming economic data play the central role in the Fed's decisions, analysts said.

The language could be altered as early at the last FOMC meeting of the year on Dec. 15-16. Most economists, at the moment, have penciled in a wording change early next year and a rate hike sometime after June.

Lou Crandall, chief economist at Wrightson ICAP, said Fed watchers would be wise to circle a speech that Bernanke is scheduled to make to the Economic Club of New York on Nov. 16.

"It is not inconceivable that the FOMC might start to fiddle with the adjectives in its statement as soon as the December FOMC meeting. With this issue looming over the market, Chairman Bernanke's speech...will be a hot ticket," Crandall said.

Asia:

Asian stocks fluctuated as concern over the withdrawal of stimulus measures overshadowed Ford Motor Co.'s unexpected profit and a rally in gold prices.

National Australia Bank Ltd. sank 1.5 percent ahead of what economists predict will be the country's second interest-rate increase in four weeks. Hyundai Motor Co., which controls 4.4 percent of the U.S. auto market, added 2.9 percent in Seoul as Ford said it expects to be "solidly profitable" in 2011. Zijin Mining Group Co., China's No. 1 gold producer, rose 3.4 percent in Hong Kong after the precious metal climbed to a one-week high.

The MSCI Asia Pacific excluding Japan Index swung between gains and losses at least six times and was little changed at 388.76 as of 10:55 a.m. in Hong Kong. The gauge has surged 90 percent from a three-month low on March 2 on signs government stimulus measures will revive the global economy.

"We're tending towards the view that we will see some relapse next year as people basically lose faith in governments' ability to continue to come to the rescue," said Peter Elston, a Singapore-based strategist at Aberdeen Asset Management Plc, which had about $234 billon under management as of Sept. 30.

Japanese markets are closed for a holiday. China's Shanghai Composite Index climbed 1 percent and Hong Kong's Hang Seng Index lost 0.3 percent. Australia's S&P/ASX 200 Index and South Korea's Kospi Index both dropped 0.2 percent.

Futures on the U.S. Standard & Poor's 500 Index added 0.2 percent. The gauge advanced 0.7 percent yesterday as the Institute for Supply Management's factory index rose to a three- year high.

Higher Interest Rates?

National Australia Bank, the country's third-largest by market value, lost 1.5 percent to A$28.46, while Westpac Banking Corp., the second biggest, dropped 1.3 percent to A$25.26.

Australia's central bank will raise its overnight cash rate target to 3.5 percent from 3.25 percent at 2:30 p.m. in Sydney, according to 18 of 22 economists surveyed by Bloomberg News. The rest expect a half-point increase. Futures traders are betting on a quarter-point boost.

Australia on Oct. 6 became the first Group of 20 nation to raise interest rates amid signs of strength in its economy, while the Bank of Japan said last week it will let its programs of buying corporate debt expire at the end of the year.

Investor concern about the withdrawal of stimulus policies and lower-than-estimated profits at companies from PetroChina Co. to National Australia Bank Ltd. have dragged the MSCI Asia Pacific Index, which includes Japan, down by 5 percent from this year's high on Oct. 20.

Hyundai Motor, Kia

The measure lost 1.3 percent last month, the first drop since February. Stocks on the MSCI gauge trade at an average 22 times estimated profit, the lowest level since May 14, according to Bloomberg data.

"Further improvements in the economic and corporate news will help justify valuations," said Jason Teh, who helps manage $3.2 billion at Investors Mutual in Sydney. "A lot of stocks have had a good run, making it harder to find value in this market."

Ford, the only major U.S. automaker to avoid bankruptcy, posted an unexpected third-quarter net income of $997 million, its first operating profit since early 2008 on smaller discounts and higher sales. The company's shares surged 8.3 percent yesterday.

In Seoul, Hyundai Motor rose 2.9 percent to 105,000 won. The company controlled 4.4 percent of the U.S. auto market at the end of September, according to Autodata Corp. Kia Motors Corp., which got 30 percent of its revenue last year in North America, gained 2 percent to 18,000 won.

Zijin Mining rose 3.4 percent to HK$7.92 after gold futures in New York gained 1.2 percent in after-hours trading. Prices jumped 1.3 percent to $1,054 an ounce in New York yesterday, the highest closing level since Oct. 23.

Newcrest Mining Ltd., Australia's largest gold producer, climbed 4.8 percent to A$33.65, while Lihir Gold Ltd. added 3.6 percent to A$3.15.

Nikkei 225

Japan's market was shut because of a public holiday.

HSI 21529.99 -90.2 -0.42%. (08.51 AM IST).

SSE Composite 3076.65 3110.84 3114.13 3078.94 + 1.11%. (08.52 AM IST)

India:

Sensex on Friday closed below 16,000 level.

Among 30 sensex stocks, 19 declined and 11 ended with gains.

The 30-share BSE Sensex declined 156.44 points or 0.97%, to settle at 15,896.28, after seeing a fall of 464.6 points loss from its day's high 16,360.88. The 50-share NSE Nifty touched an intraday low of 4687.50 and corrected nearly 142 points from its day's high of 4853.65. It slipped 0.82% or 38.85 points, to close at 4711.70. The benchmark indices plunged 5.44% and 5.7% in five days, respectively.

The selling spread to select other heavyweights like BHEL, Larsen & Toubro, ONGC and IT stocks, which saw the index slide to a low of 15,805 - down 556 points from the day's high. Eventaully, the index ended with a loss of 156 points at 15,896.

In the process, the Sensex recorded losses throughout the week and was down 5.4% (915 points) for the week.

Bears reigned the markets for the whole week and hammered the Sensex, which closed below the 16,000 mark for the first time in 36 sessions. The Nifty also touched the 4,700 mark during the day.

Volumes remained above the Rs 1 lakh crore mark for the fourth day in a row. The Nifty futures turned in discount after a long time.

Today's listing, Indiabulls Power ended its first trading session at a hefty discount of 15.11% to its issue price of Rs 45. The share closed at Rs 38.20 on the NSE.

Total traded turnover was at Rs 1,04,704.24 crore. This included Rs 20,177.44 crore from the NSE cash segment, Rs 78,337.49 crore from the NSE F&O and the balance Rs 6,189.31 crore from the BSE cash segment.   

While the Sensex, which soared to 16,360.88 in early trade but tumbled to 15,805.20 around mid afternoon, ended the session with a loss of 156.44 points or 0.97% at 15,896.28, the broader 50-stock Nifty index of the National Stock Exchange closed at 4711.70, netting a loss of 38.85 points or 0.82%. The Nifty touched a high of 4853.65 and a low of 4687.50 today.

It shed 7.2% in October--it's biggest monthly loss since a slide of 23.9% in October 2008.

Sensex sheds 7.2 pct on Oct; 5.4 pct this week

The Sensex is still up 64.8% this year.

BSE Sensex posts worst monthly loss in a year

Sensex down all sessions this week

NSE, BSE to extend timing by next month

ICICI staff may get bonus

CAG audit of RIL KG D6 a/cs this month

Maruti October sales rise 32%

Bajaj Auto Oct. motor cycle sales mounts 52%

GM India Oct sales up by 15 per cent at 7,413 units

Hyundai India total sales stands at 11 per cent, domestic jumps 41.4 per cent in October

TVS Motor posts 12 per cent growth at 131,029 units in Oct'09

Hero Honda grows by 1,707 units in Oct this year

Eicher Motors Q3 gross income jumps 63.4 per cent to Rs. 927.2 crore

Skoda Auto India Oct sales grow 98 per cent to 1,753 units

MTN looking at Asia without Bharti

Unitech moves HC to recover dues

Nagarjuna Construction Q2 net up 4%

MTNL to offer 3G connections for Rs 109

Patni Q3 net up 25%

Suzlon Q2 net loss of Rs 355cr

JK Cement Q2 net down 7% at Rs 65 cr

Great Offshore Q2 net up 86%

Omaxe Q2 net up 50% at Rs 23 cr

J&K Bank Q2 net up 16%  

 

INVESTMENT VIEW

Rishi Laser-Wildcard

BSE CodeL526861
 

Construction equipment (CE) constitutes around 40-45% of sales of company. However, there were virtually very little sales to this sector in H2 FY'09 as the whole industry was facing over capacities and lower demand. 

Broadly according to management, the Construction Equipment industry can be divided into two-Light CE and Heavy CE. The lighter ones which includes pavers, compactors etc have already reached to Mar'08 levels after de-growth in FY'09 particularly the H2 FY'09. But the industry is not able to grow at above 10-15% currently and the company expects the same level for FY'10. From FY'11 onwards the momentum will catch up in the CE industry and the high growth of around 25-30% will return to the industry. All this depends purely on the infrastructure spends. If the infrastructure spending continues to remain strong, then growth and orders will continue to flow. 

CE industry sales are largely catered from two Bangalore plants of the company and one unit of Pune. One Bangalore plant for which the company had incurred the capex of around Rs 20 crore and put to operation in FY'09 was hived off from the company to a subsidiary named Rishi Consfab in Aug'09. In this subsidiary, the company hived off 26% stake to L&T Finance and remaining 74% stake is held by the company.

 

This subsidiary became a dedicated vendor for various assemblies used in manufacturing Excavators for L&T Komatsu. These assemblies include manufacturing arm, platform, doors, and such other parts of structure of excavators. With that gross block of Rs 20 crore along with debt of about Rs 10 crore will be passed to this subsidiary. 

The other Bangalore plant is dedicated for Volvo, BEML, JCB and other small vendors. The company supplies structures for compactors and other finished sheet metals to Volvo. The company supplies the tailor made sheet metals and other structures to BEML both for railways and for earth moving equipments and some structures and welded products to JCB.

 

This plant has capacity to generate sales of about Rs 3 crore per month, it was scaled down to about Rs 1 crore in H2 FY'09 but now has reached around Rs 1.5 crore per month sales. 

Pune plant is the one with constitutes about 40% of total turnover of the company and is operating at underutilized capacity. The company caters to Automotive industry, construction equipment industry, heavy engineering industries, Metro railways, Paint shops, and such other engineering, welding and cutting activities in this plant.

 

The entire plant is divided into three units. One unit dedicates to automotive industry in which the company sells the steel fabrications to Taco Hendrickson's unit, which manufactures Truck Axles for more than 26 tons. The other unit is for JCB CE Pune factory and for Metro railways and for other job work contracts of welding and cutting of steel sheets. The unit has got all the authorization and certification to supply structures to Metro coaches.

 

Rishi Laser has exclusive tie up with Bombardier Transportation (BT) for supply of various structures for Metro rail coaches. This includes, railway roof, Stainless Steel assemblies, doors, cabinets, windows and such other welding and cutting activities. This will be in job work form. Presently the company is having job work order of Rs 18 crore from BT, which is executable over one and half year period. 

The third unit in Pune caters to heavy fabrication for heavy engineering industries. This includes activities of Oven shops for cars, steel plants, heavy structures like blades used in heavy turbines for Hydro generation plants etc. The company has necessary building and shed to undertake any heavy fabrication activities.

 

The company plans to venture into manufacturing of heavy bodies like chimney stands, transformer structure, pressure vessels, heat exchangers etc as there is no capex involved and the job involves more of welding, testing and dedicated skilled labour. The company is in discussion with BHEL for some of boiler stands manufacturing and Walchandnagar for manufacturing of conveyers for coal plants. 

The Baroda plant caters to Textile industry and Power Generation and Distribution industry. In textile industry the company supplied components, panels etc but the sales never picked up because the industry as a whole never performed as per the expectation. However, the Power Generation and Distribution segment is picking up very well. The company supplies SS box and switchgear kits to ABB, Areva, Alstom and such other power distribution players.

 

The company supplies base sheets used in Hitech pumps from this plant. The low and high-end switchgear industry was hit badly last year and is picking up slowly. Luckily the company caters more to medium voltage switchgear and supplies to players like Schneider. The activities involve simple cutting, blending, zinc plating etc. Further the company is working strongly with Alstom for supply of motors, blades, steel sheet gates for open/close doors of water flow etc. 

Savli plant was commissioned last year largely to cater to BT orders. BT has indicated that the future Metro orders will be provided only to those vendors who are in near locality and are dedicated to the company's activities. BT's Metro rail plant in India is the largest among all the plants that it has in the world and it also plans to cater the Middle East metro rail orders from this plant. Rishi Laser expects good business in form of job work activities form BT in future. 

The company started plant in Ahmedabed in FY'09 largely for Ingersol Rand. Ingersol Rand provided land, building etc and company just had to put in some machinery and paint shops which it transferred from its Pune plant where capacity was lying idle. Ingersol Rand has in its internal report indicated that it will provide business to the company of around Rs 25 lakh per month and in next four years business of around Rs 1.5 crore per month. Activities involve steel fabrication, compression and such other assembling. 

Thus from supply of tailor made flat steel parts to many customers the company now has become a dedicated vendor for most of big vendors. 

The company has term loan of about Rs 40 crore and working capital loan of about Rs 30 crore. The company intends to pay the term loan portion, as there is no more capex required till 2012 baring some small normal capex. The company overall is operating at around 60% of its normal capacity. The company with its current capacity has potential to generate sales at consolidated level of more than Rs 180-200 crore. 

The company expects margins to return back to normal level of 17-18% by the last quarter. FY'10 sales will largely be in the range of Rs 125-130 crore (as against Rs 114 crore for FY'09. However job work activities which in included in above sales figure, which stood at Rs 8.5 crore for FY'09 will be substantially higher because of the BT job work. For the first 5 months of FY'10 the sales stood at Rs 44 crore (Rs 51 crore for 5 months of corresponding previous period) however the July and Aug combined sales stood at Rs 19 crore (Rs 18 crore for two months of corresponding previous period). 

(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.)
 

 

 Index Outlook: The long-awaited correction

Sensex (15,896.3)

The breezy roller-coaster ride that we had expected turned in to a scary hurtle downward as the Sensex plunged 914 points last week recording the largest weekly decline in the last three months. The cut was much deeper in mid and small stocks especially those reporting adverse earnings as tolerance to negative news nosedived. The truncated week ahead is likely to be influenced by the Federal Open Market Committee meeting scheduled next week and the signals that are flashed from there.

Sudden reversal in stock prices made volumes soar sky-high, especially in derivative segment. Volumes in futures and options segment reached record levels mid-week close to the expiry of October contracts. The vicious side of the market was amply demonstrated in the way it waited for the belief in the current rally's invincibility to get all-pervasive before reversing lower: waiting for the last bear to turn in to a bull. Sensex' close below the 50-day moving average is a negative as is the close below the previous peak of 16,002. 10-day rate of change indicator declined in to the negative zone for the first time since August and the 14-day relative strength index has declined to 32. The weekly oscillators are however still in the positive zone implying that though the short-term trend is very weak, the medium term trend is not overtly so yet.

Though we had anticipated a correction last week, the magnitude was far greater than envisaged. We had expected a terminal corrective wave that moved sideways for a few weeks before the move from July lows ended. But the decline last week throws up a zigzag formation from July lows that could mark the completion of the C wave from March lows.

But we will wait for a confirmation of one more week to see if this decline prolongs and leads the index to a firm close below 16,000. Another fight-back by the bulls from these levels can result in a sideways move between 16,000 and 18000 for the rest of this year, indicated in our previous columns.

If the Sensex records a strong close below 16,000 next week, it would mean that an intermediate term correction is in progress that has the minimum targets of 14659 and 13885 – the opportunity that those who have missed the rally so far, are waiting for.

A rebound next week can take the Sensex higher to 16,450, 16,650 or 16,848. Failure to move above the first resistance would imply that weakness will persist to drag the index down to 14917 or 14740.

Nifty (4,711.7)

It was a harsh 285-point tumble in the Nifty last week. The supports at which we had expected the index to halt were pierced effortlessly.

We had expected one more leg higher to 5200 or 5300 followed by some sideways movement before the entire move from the 3918 low ended. But the decline last week implies that the move from this low has ended at 5182. It is a little early to decide if this is the end of the rally that began in March. The current decline needs to prolong next week and Nifty needs to record a strong close below 4700 to signal an intermediate term correction that has the minimum targets of 4389 and 4170.

The short-term trend in the index is down. A brief pull-back can take Nifty to 4876, 4940 or 4993.

Failure to move past the first resistance would be the cue to initiate fresh shorts with a stop at 5000. Downward targets for the week are 4581 and 4497.

Global Cues

The much-awaited correction finally materialised in global equity markets and many benchmarks gave up over 5 per cent last week. CBOE Volatility Index jumped above 30 on Friday, the highest level seen since this July.

Key resistance for the VIX is at 33 where the 200-day moving average is positioned. Close above this level will imply that the investor sentiment will stay edgy for a few more months.

Surprisingly the chart of the Dow appears much more resilient when compared to other global indices.

The short-term trend has been roiled by the 250-point decline on Friday but the index is holding above the 50-day moving average at 9725. Oscillators are however pointing towards the decline continuing in the near term. Medium-term target for the index is 9350.

Latin American benchmarks recorded deep cuts following decline in commodity prices.

Asian markets did not fare too badly last week though some such as the Seoul Composite Index, Thailand's SET and Sri Lanka All share Index are already in a medium-term down trend.

 

Pivotals: Reliance Industries (Rs 1,931.2)

RIL took the downward trajectory last week and closed 116 points lower. The stock is sustaining below the 50-day moving average for the second consecutive week and its 10-day rate of change oscillator has been declining deep in to negative territory.

This indicates that the stock is in a medium-term down-trend that can prolong. Targets for the C wave from the Rs 2,490 top are Rs 1,827 and Rs 1,532. Presence of 200-day moving average at Rs 1,805 makes the first target critical.

Short-term trend in the stock is down but it has strong support around Rs 1,900 from where a bounce to Rs 2,080 or Rs 2,125 is possible.

Failure to move above the first support will be the cue for initiating fresh short positions.

SBI (Rs 2,191)

SBI plummeted to an intra-week low of Rs 2,118 by Wednesday before making an attempt to stabilise itself. A three-wave zigzag from March lows appears to have been completed at the recent peak of Rs 2,500. Minimum target of the decline that will now follow is Rs 1,900 with the 50-day moving average at Rs 2,044 providing some interim support.

Near-term resistances for SBI are at Rs 2,270 and Rs 2,360. A close above the second resistance is required to mitigate the bearish outlook. Reversal below the first resistance will drag the stock to Rs 2,062 or Rs 1,918.

Tata Steel (Rs 471.6)

The 11 per cent cut received by Tata Steel last week has marred the medium-term outlook and has opened the possibility of the termination of the up-trend that began from the March low of Rs 148. It needs to be noted that Tata Steel is one of the underperformers among the pivotals since it has retraced only half the losses made in 2008 while some of its peers are perched well above their 2008 peaks.

But the stock has already retraced 30 per cent of the move made since the March trough completing the minimum retracement requirement for a correction. The decline can halt here.

If it continues, next target would be Rs 427.

Short-term trend in the stock is down and rallies will face resistances at Rs 515, Rs 530 and Rs 548. Reversal from the first resistance will give traders the perfect place to initiate fresh short positions.

Infosys (Rs 2,205.4)

Infosys bore the bear's onslaught pretty well last week, recording a mild weekly decline of 2 per cent. Immediate support for the stock is at Rs 2,120 and the short-term trend will turn down only on a close below this level. Subsequent targets remain at Rs 1,936 or Rs 1,906.

Key resistance for the week is at Rs 2,318 and investors ought to stay wary as long as the stock trades below this level. Strong move above Rs 2,415 is needed to make the outlook gung-ho once again.

ONGC (Rs 1,132.7)

ONGC too fared relatively better last week and closed with a mild Rs 42 loss.

The stock has, however, closed below the 50-day moving average at Rs 1,179 and the oscillators in both the daily as well as the weekly chart denote bearishness.

Fresh shorts are however recommended only on a decline below Rs 1,120. Next target is Rs 1,080.

Medium-term view will stay negative as long as the stock trades below Rs 1,200. Medium-term target on a decline below Rs 1,080 is Rs 965.

Maruti Suzuki (Rs 1,403)

Maruti wasn't spared from the sell-off last week and the stock closed 7 per cent lower. Rallies would face strong resistance at Rs 1,500 and Rs 1,525. Medium-term target if the decline continues is Rs 1,250.

Index Strategy: Bear spread to play the market weakness

The steep decline in Nifty last week appears to have turned the market mood on its head, from a positive growth one to the present dilly-dallying, doubtful one. Besides, with the earnings season now behind us there is also little to speak of in terms of near-term upside triggers for the market. In keeping with the sombre mood, we suggest traders to set a bear put spread on the index to benefit from further weakness. You can do this by buying Nifty November 4,700 put option and simultaneously selling Nifty November 4,600 put. This would result in a net initial debit as the strategy involves buying in the money put as against selling one that is out of money. In this case, you will have to shell out Rs 138 for buying Nifty November 4,700 put while you will receive Rs 97 when you write Nifty November 4,600 put. On the whole, the spread will cost you Rs 41/share. While it is advisable to execute both the legs of the strategy simultaneously to benefit from lower margin money requirement, you can time the purchase and sale of options depending on the day's market movement.

Maximum profit potential: The maximum profit for this spread will occur when Nifty moves below the strike price of the sold option, i.e. 4,600. The maximum profit potential will be limited to the difference between the two strikes minus the net debit paid or the cost of setting the spread. In this case, the maximum profit will be Rs 59 [(4,700-4,600) – Rs 41].

Maximum loss potential: When your spread is totally out of money i.e. when Nifty value is higher than the 4,700, the maximum loss that you can suffer will be limited to the net debit paid, Rs 41 – that is the money that was spent initially in setting the bear put spread.

So, in essence you will be taking a maximum risk of Rs 41 to earn a maximum profit of Rs 59. Traders with a slightly more bearish view can tweak the strike prices further low using Nifty November 4,700 put and Nifty November 4,500 put. The spread will entail an initial cost of Rs 71 for a maximum profit potential of Rs 129.

When to exit?

Traders should consider booking profits and closing the positions as soon as the underlying trends below the strike price of the sold put option. But in the meanwhile, if you feel that the likelihood of the underlying moving down is low, you can consider closing the position prematurely

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Arvind Parekh
+ 91 98432 32381

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Arvind Parekh
+ 91 98432 32381