Market Bolstered By CSO’s Growth Forecast Of GDP - Feb 9, 2009

Expectations as interim budget will strengthen sagging growth and US stimulus package will be approved, supported the momentum of the market. Further, the ruling government will unveil an interim railway budget on February 13, 2009 followed by a mini general budget on February 16, 2009. It is expected that the government will take measures to boost growth, especially in sectors where jobs are at stake. Hopes of a recovery in Chinese economy added fuel to momentum.

On the sectoral front, traders on-loaded position across sectors. Metal stocks rose on speculation that the stimulus packages proposed by the governments of the US and China will boost demand for commodities. Banking stocks advanced on expectation that the interim budget will provide Rs. 2,000 crore for bank recapitalization and also on hopes that lower interest rates will boost lending growth. IT stocks rose on hopes for US stimulus measures to take action sooner.

The Market breadth, indicating the overall strength of the market, was strong. On BSE, out of 2,308 stocks traded so far, 1,357 shares advanced while 868 shares declined. Nearly 83 shares are unchanged.

At 1.30PM, the BSE Sensex is trading higher by 133.69 points at 9,434.55 and NSE Nifty is up by 34.05 points at 2,877.15.

The BSE Mid Cap is trading higher by 29.96 points at 2,912.77 and Small cap is trading up by 45.91 points at 3,325.15.

Gainers from the BSE Sensex pack are Sterlite Ind advanced by 5.04% to Rs. 278.10 along with Jaiprakash Associates by 4.93% to Rs. 72.35, Tata Steel by 4.32% to Rs. 194.20, Housing Development Finance Corp by 3.92% to Rs. 1,468.10, Hindalco Ind by 3.29% to Rs. 45.55, ONGC by 2.96% to Rs. 701.20, and Reliance Infra by 2.34% to Rs. 553.30 among others.

Losers from the BSE Sensex Pack are Wipro Ltd by 1.00% to Rs. 221.70 along with ITC Ltd by 0.82% to Rs. 181.00, Mahindra & Mahindra by 0.60% to Rs. 272.50 and Grasim Indus by 0.31% to Rs. 1,409.00.

The BSE Metal index is higher by 181.19 points or 3.55% at 5,283.83. Stocks trading in green are JSW Steel advanced by 6.67% to Rs. 224.60, NMDC by 6.44% to Rs. 169.30, Welspun Gujarat by 5.65% to Rs. 69.15 and Sterlite Ind by 5.04% to Rs. 278.10 among others.

Reliance Industries Ltd rose 1.83% to Rs. 1,368.15 on reports the petroleum ministry is seeking re-introduction of the seven-year income-tax holiday for natural gas producers in an attempt to make the next round of NELP (New Exploration and Licensing Policy) bidding attractive.

Dr Reddy''s Laboratories gained by 0.78% to Rs. 462.90, after the company said its promoters have pledged more than one crore shares or 6.19% stake.

Tata Steel rose 5.08% to Rs. 195.60 after the company said its steel sales rose 26% to 5,11,000 tons in January 2009 over January 2008.

Piramal Healthcare rose 1.67% to Rs. 197.65 on reports British pharma company GlaxoSmithKline Plc is in discussions to acquire the company for around $1.5 billion.

Nagarjuna Construction Company jumped 5.71% to Rs. 49.10, on bagging orders aggregating to Rs. 712 crore.

Subex Ltd advanced by 4.92% to Rs. 27.70 as it entered into partnership with Swisscom, to co-operate in the field of management in order to improve fraud protection for next generation fraud management.

Mahindra & Mahindra''s Big Plans For The Retail Space - Jan 17, 2009

In 2007-2008 there was a lot of noise around Mahindra & Mahindra''s big plans for the retail space. Then it seemed that M&M put on those plans. But now, it''s clear the company was always calmly working its strategies in the space.

Staying under the radar with an almost secretive soft launch and after months of speculation on just what retail play Mahindra is deploying, the brand name is out and so is the retail format. It is a niche lifestyle segment offering, which caters to the needs of mothers and infants and will be operated under the brand name Mom & Me or M&M.

The first two stores have opened their doors in Ludhiana and Ahmedabad. With a total investment so far of Rs 100 crore, M&M plans a phased roll out of stores across India. Although it will scrutinize mall presence in bigger cities but is not keen on multi-genre, large scale formats. Mahindra is presently identifying other locations for expanding its store chain. The priority at this stage is to ensure that the new business gets off the ground and says it will tread cautiously given the submission many players who made massive investments have seen recently.

Rupee Falls In Sync With Stocks

MUMBAI: Cues from Asian markets and indications of recession in the US caused the rupee to marginally lose ground against the dollar on Wednesday, despite huge foreign fund inflows. The rupee ended the day at 39.29/30 against the dollar, slipping from Tuesday’s close of 39.26/27.

The Sensex fell for a second consecutive day, hampering sentiment for the local unit. Other Asian indices were affected by Citigroup reporting a huge loss, raising fears of the US going into a recession.

However, the effect of foreign funds which continued to flow in for the upcoming IPOs was quickly cancelled out by the central bank which intervened by buying dollars through nationalised banks.

Forward premia on the one-month contract rose to 2.34% (2.21%) while rates on the six-month contract slipped to 2.08% (2.11%) and the annual contract ended the day at 1.74% (1.78%).

Meanwhile, inflationary concerns stemming from a possible fuel price hike pushed bond yields up. The yield on the 10-year benchmark bond ended the day at 7.56%, a notch above Tuesday’s close of 7.55%. Yields have also been pushed up by fresh supplies, with the excess liquidity in the system prompting the central bank to issue market stabilisation scheme (MSS) bonds after a gap of six weeks.

Treasury bills of two different maturities worth Rs 6,500 crore were auctioned by the Reserve Bank of India (RBI) on Wednesday, of which Rs 5,000 crore was the MSS component.

A cut-off yield of 7.10% was announced on the 91-day T-bill and a yield of 7.38% was announced on the 364-day bill. The central bank will auction a further Rs 4,000 crore of MSS bonds on Thursday.