Mkts: Bharti Airtel, Rcom Post Smart Gains @ 10:52 Hrs

The Sensex, which plunged by around 230 points to 17,042.97 from a high of 17,271.56 earlier this morning, has regained some lost ground now thanks to some strong buying at lower levels in a few frontline stocks.

At 17,130.16, the Sensex is up with a small gain of 4.18 points. The Nifty, which had slipped to a low of 5093.15 earlier this morning, has edged up to 5116.30, up 4.60 points over its previous closing mark.

Consumer durables, PSU and select pharma, realty and metal stocks have posted smart gains. Auto and FMCG stocks remain quite subdued. Bank stocks, which opened a bit positive, have drifted lower on selling pressure. Power, Oil, IT and capital goods stocks have declined sharply from their opening levels.

At present, mid and small-cap stocks have performed relatively better. While the Midcap index has surged 0.64%, the Smallcap has edged up by a little over half a per cent.

Telecom stocks Reliance Communications and Bharti Airtel are up in the positive territory with sharp gains. While the former has notched up a gain of 2.5% at Rs 591.10, the latter, at Rs 943, is up by nearly 2% over its previous closing price.

HDFC Bank has gained 2.3% at Rs 1532. Jaiprakash Associates has climbed up 1.95% to Rs 250.40. HDFC, NTPC and Maruti Suzuki are up by around half a per cent. Ranbaxy Laboratories, DLF, Hindustan Unilever, BHEL, Reliance Energy and Grasim Industries have posted minor gains.

Wipro, the most prominent loser among Sensex stocks, is down 1.75% at Rs 458. Tata Steel, ONGC and State Bank of India have lost more than a per cent.

ICICI Bank, which shot up to Rs 947 in early trade today, has slipped to Rs 907.60, netting a loss of 0.9%. Larsen & Toubro, Cipla, Tata Consultancy Services, ACC, Infosys Technologies, Hindalco, Reliance Industries, Mahindra & Mahindra and Ambuja Cements are down by 0.25% - 1%. ITC and Satyam Computer Services have declined marginally.

Sesa Goa has moved up nearly 7% to Rs 3743 on strong buying support. On the National Stock Exchange, the Sesa Goa counter has clocked a volume of around 1.75 lakh shares this morning.

Sensex Up 162 Pts @ 10:45 Hrs

After a rousing start and a subsequent move up north, the Sensex has shed a portion of its gains now following a mild bout of profit taking in a few front line stocks. Still, at 16,405.85, the barometer remains well placed in the positive territory with a handsome gain of 161.66 points or 1%.

The Nifty, which spurted to a high of 4966.85 in early trade, has eased to 4935.80 but is still fairly high up in the positive zone with a strong gain of 48.50 points or 0.99%.

FMCG major Hindustan Unilever has lost around 0.65% at Rs 239.45. ITC has shed most of its gains and is up just marginally over its previous closing price now. PSU power equipment maker BHEL has suffered a marginal loss.

ACC, Ambuja Cements, Cipla, Maruti Suzuki and ONGC hang on in the positive territory with marginal gains. Reliance Industries, Hindalco, Larsen & Toubro, Mahindra & Mahindra, NTPC, Ranbaxy Laboratories, Reliance Energy and Tata Motors are up with modest gains.

IT heavyweights Infosys Technologies (3.8%), Satyam Computer Services (3.25%), Wipro (2.2%) and Tata Consultancy Services (1.8%) rule firm on strong buying support.

Tata Steel, State Bank of India, Jaiprakash Associates, ICICI Bank, HDFC Bank, HDFC, Reliance Communications and Bharti Airtel are also up in the positive territory with impressive gains.

Midcap stock MindTree Consulting has vaulted impressively following a sharp jump in its net profit for the quarter ended 31 March 2008. The company's net profit rose 45.19% to Rs 35.63 crore in the quarter ended March 2008 as against Rs 24.54 crore during the previous quarter ended March 2007. At Rs 467, the stock is up by as much as 14.5% over its previous closing price now.

Chambal Fertilizers & Chemicals, Coromandel Fertilizers, Bombay Dyeing, IVR Prime Urban, National Fertilizers, FSL, Renuka Sugars, Tata Teleservices, Triveni Engineering, BF Utilities, Nagarjuna Fertilizers, JM Financial Services, Gulf Oil Corporation, Shree Precoated Steels, Rashtriya Chemicals & Fertilizers, Balrampur Chini, Praj Industries, Torrent Pharma and Bajaj Hindustan are among the other top gainers from the midcap space.

Stocks To Watch On Thursday

MUMBAI: Equities are likely to be rangebound amid mixed global cues.

Even as the market is jittery over forex derivatives losses ahead of earnings season, a Credit Suisse report says that the size of the potential mark-to-market losses of companies on forex derivative products is pegged at between Rs 120,00 crore to Rs 200,00 crore.

Crude oil for May delivery jumped 2.2 percent, to settle at record $110.87 per barrel on the New York Mercantile Exchange. In intra-day trade it touched an all-time high of $112.21 per barrel. Higher oil crude oil prices will keep oil marketing companies under check.

As steel prices soar to nearly Rs 40,000 a tonne for hot rolled coils, the government is preparing a set of counter measures: restriction on export of steel and inputs in the form of export cesses, scrapping/reduction of customs and excise duties and rollback of the hike in railway freight on steel. There is also a controversial proposal to suspend futures trading in iron and steel for the next six months. In another development, gas-fired steel companies that account for a fifth of the country’s total steel output are actively considering a production cut, as prices of key raw materials such as natural gas and iron ore spiral out of control. This is likely to have an impact on shares prices of steel companies.

In a move that will impact new entrants as well as existing telcos, the finance ministry is learnt to have written to department of telecom seeking that all players be charged a one-time fee of RS 1,312 crore for every Mhz of radio frequency allotmed to them. If implemented, this will imply that all new entrants who have paid Rs 1,651 crore entry fee, which guarantees them 4.4 Mhz if GSM spectrum, will now have to shell an additional Rs 4121 crore.

Around ten companies including Videocon-controlled Datacom Solutions, Birla's Idea Cellular, Swan Telecom, Unitech, ByCell Telecommunications, Spice Communications and Shyam Telelink will make their foray across various telecom circles. The shares of the new entrants like Spice Communications ended 0.72 per cent lower at Rs 34.45, Shyam Telecom rose 4.44 per cent to Rs 88.30, Videocon closed at Rs 318.75, Unitech declined 2.23 per cent to Rs 263.35 and Idea Cellular gained 3.66 per cent to Rs 101.95. Among existing players, Bharti Airtel shares fell 1.04 per cent to Rs 819.95 and Reliance Communications was down 0.84 per cent to Rs 496.35.

India’s largest private sector steel maker Tata Steel is forming a special purpose vehicle (SPV) with state-owned MMTC for acquiring gold and diamond mining businesses abroad. MMTC would hold 26% stake in the proposed venture, leaving 76% to the Tatas. Shares of Tata Steel ended at Rs 678.90, up 3.44 per cent on the BSE.

The price of newsprint, imported or indigenous, is set to touch $1,000 per tonne, from $760 a tonne in March, reports The Business Standard . This will keep share prices of newspaper publishers under check.

Consolidation is gaining momentum in the banking space. Mumbai-based mid-sized private sector bank, Development Credit Bank, is looking to merge with a larger bank, reports The Financial Express.

Stocks Soar As Global Financial Woes Ease

MUMBAI: Equities shot up at the open triggered by a rally in markets across the globe after a Lehman Brothers share offering triggered hopes that the worst of the credit crisis may have ended.

At 10:05 am, the Bombay Stock Exchange’s Sensex was up 539 points or 3.45 per cent at 16,165.41.

Biggest Sensex gainers were ICICI Bank (up 6.4%), HDFC Bank (5.39%), DLF (4.94%), Wipro (4.89%), Larsen & Toubro (4.84%), HDFC (4.67%) and BHEL (4.18%).

There were no losers in the 30-share index. Market breadth on BSE showed 789 advances and 25 declines.

The National Stock Exchange’s Nifty was up 152 points or 3.21 per cent at 4891.60.

“The outlook is positive today following cheerful global cues.

Sensex faces resistance at 15,874 and while support comes at 15,338. The Nifty faces resistance at 4,817 and support lies at 4,645,” Networth Stock Broking said in a note.

Asian stocks advanced the most in seven weeks, led by banks and technology companies, on speculation financial companies will be able to overcome a freeze in credit markets and shore up global economic growth. The Nikkei 225 rose 3.72 per cent, the Hang Seng increased 4.22 per cent and the Straits Times added 2.59 per cent.

US stocks on Tuesday celebrated the start of a new quarter, rallying as Lehman Brothers Holdings Inc.'s equity offer drew a warm reception, fueling the Dow Jones to its 8th-biggest point jump ever. The index gained 3.19 per cent. The Standard & Poor's 500 Index rose 3.59 per cent and the Nasdaq Composite Index jumped 3.67 per cent.

US Stocks: Wall St Surges On Hopes Of Easing Credit Crunch

New York: U.S. stocks jumped on Thursday, capping a tumultuous week, on optimism that giving Fannie Mae and Freddie Mac a bigger role in the mortgage market will ease a credit crunch that claimed Bear Stearns as its biggest victim.

Stocks closed out their best week in nearly two months on the strength of financial shares, which bore the brunt of investors' wrath since the credit crisis unfolded last summer. The benchmark Standard & Poor's 500 gained 2.4 per cent for the day and rose 3.2 per cent for the week.

Fannie Mae and Freddie Mac delivered eye-popping gains for a third session, each rising more than 50 per cent since Monday. Meanwhile, major banks such as Bank of America, JPMorgan and Citigroup rose between 8 per cent and 10 per cent each on Thursday, while the Dow Jones index of home building stocks soared 8.3 per cent.

Industrial heavyweight General Electric helped lead the Dow higher with a 5.3 per cent gain to $37.49 after Merrill Lynch raised its rating on the stock as a safe bet in a slowing economy.

A second day of plunging oil and gold prices helped ease fears of inflation getting out of control, spurring gains across the board. Energy-sensitive sectors such as airlines and consumer discretionary companies gained about 3 per cent.

Financial "stocks are moving inversely to what's been going on in the commodities markets with commodities prices falling in the last couple of days," said Matt Kaufler, portfolio manager and equity analyst at Clover Capital Management, in Rochester, New York.

"And the overarching assumption to all of this being that the worst of it is likely behind us."

The Dow Jones industrial average gained 261.66 points, or 2.16 per cent, to 12,361.32. The Standard & Poor's 500 Index climbed 31.09 points, or 2.39 per cent, to 1,329.51. The Nasdaq Composite Index rose 48.15 points, or 2.18 per cent, to 2,258.11.

Fannie Mae rose 11.7 per cent to $34.30, while Freddie Mac climbed 9 per cent to $32.58 after Keefe, Bruyette & Woods upgraded them, saying recent government actions will help the mortgage giants in stabilizing the ailing housing market.

Crude oil fell 70 cents to $101.84 a barrel, after earlier sliding to a session low below $99 a barrel. That pullback in oil prices alleviated worries about the effect of high energy costs on consumers and businesses.

Shares of Wal-Mart Stores Inc, the world's largest retailer, rose 4.8 per cent to $53.23.

Stocks had rallied early in the day after a survey from the Philadelphia Federal Reserve Bank showed factory activity in the U.S. Mid-Atlantic region shrinking for the fourth consecutive month in March, but by slightly less than the median forecast.

Helping the Nasdaq were shares of Intel Corp, up 3.1 per cent to $21.75 after the chip maker raised its quarterly dividend by 10 per cent, while Apple Inc rose 2.8 per cent to $133.27.

Shares of Nike Inc jumped 8.8 per cent to $67.27 after the company posted a third-quarter profit that handily beat estimates.

Markets will be closed for Good Friday. The U.S. bond market closed early on Thursday.

Trading was extremely heavy on the New York Stock Exchange, with about 2.77 billion shares changing hands, well above last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.68 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones on the NYSE by about 3 to 1 and by about 2 to 1 on Nasdaq.

US Stocks: Stocks Sink On Commodities Slide, Merrill Nerves

New York: U.S. stocks fell on Wednesday as plunging gold and oil prices drove energy and mining shares lower, and speculation that Merrill Lynch & Co may need to take more write-downs deflated growing optimism that the credit crisis was abating.

The drop of more than 2 per cent in all three major stock indexes came a day after the S&P 500 rang up its biggest one-day jump in more than five years following stronger-than- expected earnings from investment banks and the Federal Reserve's deep cut in official interest rates.

Gold prices slid in their biggest one-day drop in nearly two years and oil posted its worst slide in seven months, weighed down by persistent worries about the U.S. economy's health. The Standard & Poor's index of materials stocks dropped 6.3 per cent.

A lawsuit filed by Merrill Lynch against a bond insurer fanned speculation the big broker and investment bank may not have enough protection against losses from its exposure to securities at the heart of the credit crisis. That may lead to more write-downs.

"Commodities are also getting tanked here. That's a positive for the market, but it also hurts energy and other stocks," said Todd Leone, head of listed trading at Cowen & Co. in New York. "We had a great rally yesterday and probably came too far. There are rumors about Merrill. All brokerage stocks are down."

The Dow Jones industrial average sank 293.00 points, or 2.36 per cent, to 12,099.66. The Standard & Poor's 500 Index dropped 32.32 points, or 2.43 per cent, to 1,298.42. The NASDAQ Composite Index shed 58.30 points, or 2.57 per cent, to 2,209.96.

Shares of Merrill Lynch fell 11.1 per cent to $41.45, a drop that Joe Saluzzi, co-manager of trading at Themis Trading, attributed to rumors about further write-downs.

"Either way something stinks over there and the way the market has been lately ... people shoot first and ask questions later. Nothing has been verified by anybody," Saluzzi said.

FEAR FACTOR

Energy shares were among the biggest drags on the market as the price of oil slid nearly $5 a barrel after worries about the economy overshadowed bullish weekly data.

An index of energy shares fell 5.4 per cent -- its biggest one-day percentage drop since October.

Exxon Mobil shares were the S&P's biggest laggard, falling 4.6 per cent to $84.43, while Conoco Phillips slid 6 per cent to $73.61 and Chevron fell 4.9 per cent to $81.89.

Meanwhile, the Chicago Board of Options Exchange Volatility Index -- Wall Street's favorite fear gauge -- jumped 15.7 per cent a day after its fourth-biggest daily drop in 14 years.

Shares of Alcoa Inc fell 7.7 per cent to $35.62 and Caterpillar Inc dropped 4.1 per cent to $73.73.

VISA'S SPARKLING DEBUT

A bright spot, though, was provided by the housing sector. Shares of Fannie Mae climbed 8.8 per cent to $30.71, while Freddie Mac shot up 14.9 per cent to $29.90 after they won approval to pump $200 billion into the distressed U.S. housing market.

Shares of Visa Inc soared as much as 38 per cent in their debut on the New York Stock Exchange, with the rally driven by expected growth in global credit card usage. That handed a much needed payday to the beleaguered U.S. banks among Visa's stakeholders.

Visa ended NYSE trading at $56.50, up 28.4 per cent, or $12.50 from its initial public offering price of $44.00 a share. The IPO, which was priced on Tuesday night after Wall Street's huge rally, raised a record $17.9 billion.

Trading was heavy on the New York Stock Exchange, with about 1.97 billion shares changing hands, above last year's estimated daily average of roughly 1.90 billion, while on NASDAQ, about 2.33 billion shares traded, above last year's daily average of 2.17 billion.

Declining stocks outnumbered advancers by a ratio of more than 2 to 1 on both the NYSE and the NASDAQ.

Mkts Remain Buoyant; Bank, Realty Stocks In Demand @ 10:56 Hrs

With a few frontline stocks encountering strong resistance, the market has come off its higher levels now. Ambuja Cements (down marginally), Tata Steel (up 0.3 per cent) and Ranbaxy Laboratories (up 0.25 per cent) have dropped down sharply from their earlier highs. Tata Consultancy Services and Cipla are up by just around 1.3 per cent and 1.4 per cent respectively.

Jaiprakash Associates, which had shot up by around 12 per cent in early trade, has eased to Rs 215.15, trimming down its gain to 7.25 per cent. HDFC Bank (5.35 per cent), ICICI Bank (5.45 per cent) and State Bank of India (4.4 per cent) continue to trade firm.

Wipro, Tata Motors, Satyam Computer Services, Reliance Energy, Reliance Industries, Reliance Communications, ONGC, NTPC, Maruti Suzuki, Mahindra & Mahindra, Larsen & Toubro, Infosys Technologies, ITC, HDFC, Hindustan Unilever, Grasim Industries, DLF, BHEL, ACC and Bharti Airtel are up by 2 per cent - 5 per cent.

The Sensex, which had vaulted to 15,465.81 earlier this morning, has slipped to 15,274.54, but still remains fairly high up in the positive territory with a strong gain of 441.08 points or 2.97 per cent at present.

The Nifty is up 2.68 per cent or 121.30 points at 4654.30. Earlier, after opening at 4534.75, the Nifty has hit a high of 4718.40 this morning.

Besides sector heavyweight DLF, Unitech, Akruti City, Ansal Infrastructure, HDIL, India Bulls Real Estate, Mahindra Lifespace, Omaxe, Parsvnath Developers, Puravankara Projects and Sobha Developers are the other strong gainers from the realty index.

These stocks are up by 2 per cent- 5 per cent over their previous closing levels now. Penland and Phoenix Mills have also posted sharp gains. Anant Raj Industries has eased by around 1.2 per cent due to lack of support.

Besides heavyweights ICICI Bank, HDFC Bank and State Bank of India, a host of other bank stocks including Bank of Baroda, Bank of India, Allahabad Bank, Canara Bank, Centurion Bank of Punjab, Federal Bank, Indian Overseas Bank, Karnataka Bank, Kotak Bank, Punjab National Bank, Union Bank of India, Yes Bank, Bank of Maharashtra, Central Bank of India, Corporation Bank, IDBI, Indian Bank, Syndicate Bank and UCO Bank and Dena Bank have also posted smart gains

Sensex Pares Some Gains; HUL, Hindalco Slip @ 14:48 Hrs

FMCG, power, auto and realty stocks have come off their higher levels and a few stocks from these sectors have even slipped into the red due to lack of support. Pharma, metal, oil and capital goods stocks hold on in the positive territory with a good portion of their gains intact. Information technology and bank stocks continue to demand attention.

A fair amount of selling is seen at several midcap and smallcap counters this afternoon. The Midcap index, which had spurted to 6230.94 earlier in the day, has slipped to 6028.86, netting a small loss. The Smallcap barometer is down with a loss of 0.78% at 7307.96.

The market breadth has turned quite negative now. Out of a total of 2711 stocks traded on BSE, as many as 1690 stocks are down in the negative territory at present. 940 stocks are up in the positive zone and 81 stocks trade flat.

The Sensex, which has slipped to 15,082.92, around 380 points from its high, is up with a gain of 249.46 points or 1.68% at present. At 4598.40, the Nifty is 1.44% or 65.40 points ahead of its previous closing mark.

Hindustan Unilever has slipped by 2.6% to Rs 225. Hindalco is down with a sharp loss of 1.55%. Grasim Industries and Maruti Suzuki have eased by 0.75% and 0.55% respectively while Ranbaxy Laboratories, the other loser in the Sensex, is down marginally from its previous closing price.

Essar Shipping, Gujarat NRE Coke, Welspun Gujarat, Bharat Electronics, Godrej Industries, Spice Telecom, CESC, Hindustan Construction Company, Jai Corp and Reliance Industrial Infrastructure have lost 5% - 8%.

Thermax, Jet Airways, GVK Power, Voltas, Axis Bank, Cummins India, Shree Precoated Steels, Edelweiss Capital, Chambal Fertilizers & Chemicals and Hero Honda are among the other prominent losers.

Asian Stocks Hit 7-Week Low, Dollar Weak

HONG KONG: Asian stocks hit their lowest in nearly seven weeks on Monday, while the dollar was near a record low against the euro and an eight-year low against the yen after weak employment data fuelled US recession fears.

Malaysian stocks were among the region's biggest decliners, falling as much as 7.6 per cent to a seven-month low after the ruling coalition suffered its worst election result in decades.

Inflationary pressures remain a concern around Asia. Data on Monday showed South Korean producer prices rose 6.8 per cent in February from a year before, the biggest gain in over three years, while Chinese producer prices were up 6.6 per cent.

Oil prices remained near a record high despite the worsening global economic outlook, held up by cold weather in parts of the United States, while gold moved back above $975 an ounce.

"We keep hearing bad news, and expect to receive more unfavourable sets of data and figures for some time. Markets will continue to test the bottom in the meantime," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in Seoul.

The MSCI measure of Asian stocks outside Japan was down 2.4 per cent by 0338 GMT after hitting its lowest since January 23.

The prospects of a US recession and worsening global credit conditions have hit Asian stocks hard this year, with the MSCI index down 14 per cent as of last week, worse than the 12 per cent fall in the Standard & Poor's S&P 500 or the 10 per cent drop in the Dow Jones industrial average.

Exporters such as Sony Corp, which depend on US consumers, dropped after data published on Friday showing US employers unexpectedly cut jobs last month at the steepest rate in nearly five years.

Financial firms fell on concerns about more writedowns worldwide after US housing loan provider Thornburg Mortgage Inc said on Friday it could not meet its own lenders' demands for $610 million of cash or collateral.

"The subprime problem is a creeping disease. It initially infected relatively few people, but the contagion has spread to a much greater portion of the credit market," MF Global analyst Edward Meir said.

Japan's Nikkei average hit its lowest level since September 2005 and was down 1.6 per cent at 0418 GMT.

Shares in China, Taiwan and Singapore were down more than 2 per cent, while stock markets in South Korea, Hong Kong and Australia were down nearly 2 per cent.

China Railway Construction made a weaker-than-expected Shanghai debut after raising a combined $5.4 billion in a dual listing with Hong Kong in the world's largest initial public offering this year.

Mid-, Small-Cap Stocks On A Crash Course

Mid- and small-cap stocks bore the brunt of the market slide, indicating that panicky high net-worth investors (HNIs) and smaller investors may be exiting these stocks in a hurry to meet margin requirements on their highly-leveraged equity derivatives trading.

On a day when the Sensex tumbled by 3.42 per cent, small and mid-cap indices were down by a sharp 4.35 and 4.55 per cent, respectively.

At one point, the mid-and small-cap indices were down nearly 6 per cent.

The BSE Mid-cap and Small cap indices settled at 6,804.39 points and 8,409 points, respectively at the end of today’s trading session.

Analysts attribute this fall to large leveraged positions of investors in the derivatives segment. Investors were forced to sell in small and mid-cap stocks to provide margins for their leveraged positions in derivatives.

BSE’s mid cap index has fallen 32 per cent since the beginning of this calendar year and the small-cap index has fallen 38 per cent since January 1.

Both these indices had touched a high on January 8, when the mid- cap index galloped to 10,245 points.

Some analysts are also of the view that people have been selling mid-cap stocks to buy into large caps stocks as valuations have become quite attractive.

Ajit Roongta, Fund Manager, IDBI capital markets said: “These stocks have been falling in the last two-three weeks and did not participate in the market rally. The Undertone has been bearish in this sector and investors, who have huge positions in the F&O segment, are selling in cash, mainly mid- and small-caps, to fund these positions. Liquidity has become a major issue and that is why people are selling irrespective of fundamentals.”

A few months ago, several mutual funds had launched schemes dedicated to mid-caps and small-caps.

However, going by BSE data, it seems there have been hardly any buyers of these stocks.

Adds Roongta: “It might be that mutual funds are sitting on cash fearing redemption pressures on March 31, the deadline for advance tax payment”. Birla SunLife Mid Cap Fund has a cash position of 10 per cent in this fund.

A. Balasubraniam, chief investment officer, Birla SunLife Mutual fund said: “There has been a liquidity crunch in Indian markets and the sentiment has become so weak that nobody is willing to buy. Uncertain global cues has made the risk appetite poor, so profit booking is taking place. But, valuations look decent now.”

The major losers among mid-caps were Ansal Industries, down 13.59 per cent to Rs 165, Adlabs Films, down 13.18 per cent to Rs 607.95, Chambal Fertilizers, down 11 per cent to Rs 45.30 and Educomp Solutions, down12.82 per cent to Rs 3,383.70.

Among small-caps, the stocks that slumped were Alok Industries (down 8.59 per cent to Rs 59.05), CenturyPly (down 6.22 per cent to Rs 633), Deepak Fertilisers (down12.15 per cent to Rs 99.45).

The only major gainer among small-caps was English Indian Clays, gaining by 20 per cent to Rs 699.

US Stocks End Mixed With Best Buy Down, Priceline Up

Stocks had a mixed day as Best Buy slashed its profit forecast, Priceline jumped on a surge in earnings and Continental Airlines climbed on merger related news.

Stocks had a quiet trading session, at least when compared to the volatility of recent weeks. Friday was the first day this year that the Dow Jones Industrial Average did not have an intraday swing of 100 points or more.

"The markets have really gotten oversold and the pessimism is really building up among individual investors," said Bruce Bit tles, chief investment strategist at RW Baird.

"I think we should be looking for a short-term relief rally. There is only so many times you can sell on the same news."

The Dow Jones Industrial Average fell 28.77 points, or 0.23%, to 12384.21. It gained 1.4% for the week, but is down 6.9% for the year. The Nasdaq lost 10.74, or 0.46%, or 2321.80. The Nasdaq gained 0.7% for the week, and lost 13% for the year. The Standard & Poor's 500 added 1.13, or 0.08%, to 1349.99. It gained 1.4% for the week, and lost 8.1% for the year.

The industrial average was in the news for other reasons this week. Dow Jones & Co., a unit of News Corp. and publisher of this newswire, announced that Bank of America and Chevron will replace Altria and Honeywell in its benchmark Dow Jones Industrial Average, effective Feb. 19. Bank of America rose 1.3% during the week, while Chevron added 5.5%.

Promoters Hike Stake In Indiabulls Financial To 28%

MUMBAI: The promoters of Indiabulls Financial Services (IBFSL) have increased their stake in the company to a little over 28% by purchasing another 1.5% stake in the company for Rs 190 crore.

On Friday, the promoters — Sameer Gehlaut and Rajiv Rattan — bought 18 lakh and 9 lakh shares respectively for Rs 700 per share, amounting to around Rs 190 crore. On Friday, IBFSL shares were down by 2.73% to close at Rs 650, on the Bombay Stock Exchange.

Given the market conditions and the fact that most financial services stocks including banks are down 20-30% from their peaks of early January, this deal might actually start a trend where promoters believe that the prices have become very attractive for them to increase their stake, industry sources said.

Indiabulls has been in the news off late with announcements of plans to raise Rs 4,000 crore via an equity or long-term debt offering and had very recently announced a joint venture to set up an insurance company. Sources said the company is awaiting an asset management company licence.

SEBI For 25% Price Band On IPOs Up To Rs 250 cr

MUMBAI: Stock market regulator SEBI has proposed a 25% first-day price band for IPOs up to Rs 250 crore, to enable “steady and sustained price discovery over a period of time”.

Once enforced, a price-band will put off several punters and leveraged investors who borrow money to pocket the listing premium by selling the shares soon after trading begins, a practice that’s known as ‘first day first show’ in Dalal Street.

Some forthcoming IPOs raising less than Rs 250 cr
The move has evoked a mixed response. “Why single out the smaller players... abnormal price movements have been witnessed in larger issues as well in the past,” said Prime Database MD Prithvi Haldea. “What needs to be addressed first, is the price discovery mechanism in IPOs.

Second it is imperative that the free float is increased,” he adds. “If 75-85% of the market cap is effectively in large companies, why penalise small companies. What of the significant rise in DLF post its listing?” said an investment banker. SEBI has invited public comments on the imposition of circuit filters on the first day of listing of shares.

At present, stock exchanges do not impose price bands on the day of listing of IPOs. The price fixed by the company , in consultation with its lead managers, is left open to price discovery. And, after the day of listing, there is a regular price band of 20%. This, however, would not apply to stocks which get relisted.

For IPO issue sizes that are greater than Rs 500 crore, price bands are not imposed even after the day of listing, if such scrips are available for trading on the derivative segment. It may be recalled that the SEBI chairman had suggested a price band in April 2007 on the grounds that it would check any irregular movements in stocks.

In the same month SEBI had banned seven brokerages from debut trading in newly-listed shares for their alleged role in huge price movements recorded in stocks like Cambridge Technology, Mindtree and Pyramid Saimira Theatre on their first day of trading. Some of these stocks witnessed unprecedented jump in their share prices immediately after the listing.

In a note on Thursday, SEBI said it has been noticed that there are significant price and volume spikes/volatility on the day of listing of IPOs. This was particularly true of IPOs which were below Rs 250 crore.

For several such IPOs where the stock is available for trading in the hands of public, after excluding shares of promoters and others that face a lock in period, is 25-30% of the equity capital of the company, the price may not sustain on subsequent days. This may disappoint long-term investors, said SEBI.