Rupee fall: Low margins lure more to futures trade

MUMBAI: The rise in the rupee's volatility in the spot market has fuelled retail participation in the currency derivatives segment.
Some of these clients are lured by a few brokers, who are twisting the rules to increase business, while a few others expecting remittances from relatives abroad are tapping the futures market to hedge, at a time the rupee has plunged to 53.52 against the dollar, down nearly 19% this year.
According to a south-based broker, a few of his rivals have slashed margins on the trade to almost a fourth of what's normally charged. So, instead of the normal 3.5-4% margin to trade, clients are being asked to pay just 1% or even lower on an intraday basis.
"What this tantamounts to is increasing leverage and making a trade riskier," said the person cited above. "It's happening on an intraday basis and if the client's bet goes wrong the position is squared off by the broker, who stands to earn higher broking fees because of rising trades. If there is a gain, the broker transfers the same to his client. The position is not carried over to the next day but still is risky as it becomes more leveraged."
A client can trade a single contract of $1,000 or over Rs 53,000 by putting up 3.7% or nearly Rs 2,000 as margin. However, some brokers are reportedly allowing clients to trade by paying just Rs 500 during a session. So, instead of getting levered 26 times (53,000/2,000), the client can lever herself 106 times (53,000/500).
A futures market allows people to bet or cover themselves against asset price movements by locking into a price at which (s)he chooses to buy or at a future date. This position is taken by paying just a fraction of the asset value, called margin, to a broker.
The margin allows a client to lever herself. The higher the leverage, the riskier the trade. Currency futures trades, regulated jointly by RBI and equity market regulator Sebi, obviate the need for underlying exposure -- an entity need not have foreign currency exposure to trade.
"At the retail end, it's mainly equity speculators and maybe a few NRI families who are trading on dollar-rupee contracts," said CJ George, MD, Geojit BNP Paribas Financial Services. "We are observing a shift of speculators from the equity markets, which has been beaten down, to currencies." The strategy being followed by most is selling the dollar forward as they feel that the dollar rally has been overdone with the rupee at historic lows.
Hitesh Daga of Hrim Finance, a Mumbai-based jobber, said those expecting remittances from abroad were basically selling the dollar. If their bets go wrong, or the dollar rises, they cover the loss by converting the dollar receivable at a higher rate in the spot market. "These levels haven't been seen before," said Daga. Harish Galipelli, research head, JRG Wealth Management has a USbased NRI's family among his clients.
The client has hedged anticipated dollar receivables from his son by shorting it at 49. However, since the dollar broke past 50 subsequently he made a loss until October. In November, when he sold at 52.5 while the contract settled at 51.98, he made a gain of 52 paise.
Clients can trade currency futures - dollar, euro, GBP and yen - and dollar-rupee options on NSE and USE. They can trade only currency futures on MCX-SX, , which has the second-highest volumes after NSE.

Dr. Pranab Mukherjee is likely to correct the "horrendous blunders" of P Chidambaram...

Finance ministry takes up a review of the Securities Transaction Tax (STT) regime after a meeting with stock exchange officials.
The cost of trading in shares is likely to go down. The Union finance ministry has taken up a review of the current Securities Transaction Tax (STT) regime after a meeting with top exchange officials yesterday.
While a waiver of STT in the soon-to-be-launched small and medium enterprises (SMEs) segment of the exchanges is a done deal, a similar change of rule for the equity segment was being looked into, sources in the ministry informed.
Top officials from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), MCX-SX and United Stock Exchange were present at the meeting.
Prior to 2008, STT was allowed as a rebate against tax liability under Section 88E of the Income Tax Act, if the income from securities on which the tax was levied was included under the head 'profits and gains of business and profession'. This allowed brokers to pay less tax and generate more volumes.
The changes to the income tax rule on STT were announced in 2008 by then finance minister P Chidambaram. This put arbitrageurs and jobbers, who generated nearly 30 per cent of volumes, out of business. Trading sentiment is at a nadir due to low liquidity.
The NSE pays a little over Rs 5,000 crore as annual STT and the BSE pays Rs 2,000 crore.
Arbitrage trades have shifted to the commodity segment, as no transaction tax is levied. A Commodities Transaction Tax was discussed but there was intense lobbying and the finance ministry has put off the proposal. The absence of a transaction charge in commodities has aided volumes in this segment. Average daily trades worth Rs 50,000 crore are generated daily.
While the cost of trading equity, including brokerage, in the US and Europe is around Rs 500 on trades worth Rs 1 crore, it is as high as Rs 1,300 in India. This includes Rs 850 as STT. While Rs 200 goes to the exchange, Rs 200 is paid as stamp duty and Rs 21 as service tax. Also, Rs 10 is collected by the Securities and Exchange Board of India. In addition, there is a brokerage. If trades are delivery-based, they attract depository and demat charges as well. While it may seem miniscule in percentage terms, it is a major burden, as traders can make profit in India only after 28 ticks, while in the US and the UK, just one favourable tick on index futures can generate a profit. In the US, the spread on the S&P contract, or one tick, is 25 cents. So, if a trader gets just one tick right, he can take home 20 cents, as the trading cost there is just five cents. This is the reason why the US markets are more liquid.
The exchanges also expressed their views on extension in trade timings and allowing foreign institutional investors (FIIs) and non-resident Indians to trade in the currency segment. On an average, trades worth Rs 30,000 crore are reported in currency derivatives, mainly generated by stock brokers in Mumbai, Delhi and Calcutta. Among the three exchanges where currency trading takes place, one was not in favour of allowing FIIs in the currency derivative segment.

The India's "Purchased" media tries to do damage control for the UPA, as the FIIs pump out money from the Indian markets to negate the new found "Nehruvian Socialism":

[My addition: The Indian media who might have been paid heavily the UPA bosses to write goodies like it did in the last 5 years, is trying hard to save the face of UPA. One such news is presented below where there was an attempt to create an impression as if FIIs were willing to invest in this new found “Nehuruvian Socialist Economy”. The news which ought to have the headline as: "FIIs only pump Rs.3, 500 Cr in the equities since budget, as mass exodus continues", has been presented in such a way as if FIIs are waiting with basket full of cash to be poured in the Indian Bourses.

On the contrary the FIIs could be looking for newer pastures, elsewhere, especially in other emerging economies, where is no threat of a so called “aam admi” budget. FIIs might have feared that this kind of non-reform oriented budget might lead to a situation, where there would be “aam”, but no “aadmi” to sell “aam”— the dreaded word “Recession”.

All the goodies created by the 5 (five) year of the NDA rule has been wasted, by the UPA in their earlier stint, and now the ills that started to form a pile has now turned into a mountain and is looking unmanageable by the incumbent FM of the UPA. Now they have no option but to shovel the dirt accumulated over 5 years; and the smell is coming out, which his just natural.

The FM has scrapped the Commodity Transaction Tax (CTT) in the Union Budget for 2009-10. While presenting the budget, FM said, “The decision is in step with the recommendation of the Prime Minister's Economic Advisory Council.” So now we learn that PM Economic Advisory Coucil also gives wrong advices. Also, though, FMC Chairman B C Khatua and spokespersons of NCDEX and MCX hailed the decision, but it I think it was a wrong decision. Because such tax could have stopped a bit of speculation of the commodities market. But then if FM is desperately trying to increase the price of commodities, I do not understand why he says it is an “aam admi” budget—quite strange!!. The FM increased the MAT, which will only increase the problem for the corporate world who are already struggling to tide over the financial bottlenecks. The companies would come up with less Net Profit leading to the decrease in the EPS of the Sensex and Nifty.

The result: Sensex may not touch 18, 000--19, 000 at the end of CY09, as was predictedearlier. So we the "Poor Scapegoats" (investors) of the Indian markets now have to witness double kicks on our bottoms: First from the exodus of the FIIs and the 2nd from the latter.

The FM has tried to deliver huge amounts (Rs.39, 000) to a bottomless pit called NREGS. This money like the previous year would only fill the pockets of “Netas and Babus”. In order to provide growth the total expenditure rose to 36% over FY09, which essentially means the UPA Government has to borrow around Rs.6 lakhs crore, which raises heart beat. In other words though the UPA tried to project this budget as pro poor and good, but I feel that it is another “Lost Opportunity” for the UPA Government to give a direction to the investing community. There is a sanskrit saying, "Rinong Kritya Ghritong Pibet" (Eat Ghee taking loan from money lenders)--so the UPA wants to do infrastructure expansion by opening "loans melas".

The FM says, 6.8% fiscal deficit (excess of government expenditure over its income) is nothing compared to US----"Hey Bhagwan" now our economy is being compared with the chequered economy of the US???????!!!!!!!!!!!!!!! Moreover, on including off-budget items such as fertiliser and oil bonds, the deficit figure will stand at about 12% of GDP. Also, did the FM consider the fiscal deficit of the states also......Now calculate the combined fiscal deficit of this great country.....Isn't it look scary??!! If M K Gandhi were there, he would have said, "Hey Ram"...

The Finance Minister's 'no comments' in the recent budget on how he will be lowering India's fiscal deficit in the years to come has made rating agency S&P quite concerned over the country's outlook. "We continue to believe that such high levels of government deficits are unsustainable in the medium term, although we weren't surprised by the number itself," said S&P in a statement. Currently, the agency has given a rating of BBB- which is one step away from the 'junk' status. Any downward revision on this rating could lower India's appeal with foreign investors.

Now if FM wants to kill the capital market, like the Left wanted to do in the last few years when they had their umbilical chord tied with the UPA, then it will be a grave mistake. It is because if there is no vibrant capital market, then from where will the corporates raise funds for expansion??!! Will they have to knock the doors of banks/NBFCs every time they need funds??!! This is another example of “Marxist Utopia”.

The FM in the midst of budget speech suddenly talked of the Nationalisation of Banks---that gave a very bad signal to the FIIs, who wants government to be out of business of business.

In light of this, while the government's focus on restoring India's growth to 9% of GDP may be laudable, the million dollar question is - will the fiscal deficit really allow India to grow the way it had done in the past? Readers would do well to recall that during the last two years when India had been logging in growth rates of 9% plus, the fiscal deficit situation had been under control at a little above 3%. Hence, for India to replicate its growth story, the fiscal deficit will have to be brought down.

Surprisingly, no measures were announced by the FM in terms of how the government was planning to bring this down.

With not much being done in terms of reducing subsidies and the credit crunch keeping interest rates high, the non-plan expenditure is only set to gallop. This has left little room to focus on infrastructure development, education and healthcare even though the FM has emphasized the importance of the same.

Printing more money is not an option as that will only fuel higher inflation going forward. The FM's silence on the FDI front also does not bode well given that the same can play a significant role in enhancing the performance of the economy in the long term. India's rising deficit means that the possibility of its rating being downgraded cannot be entirely ruled out. If this happens, borrowings will have to be done at higher interest rates, which will further exert pressure on government finances.

FM should note that killing the golden goose called the “FII Investments” with the “Nehruvian Socialism” will only be called myopic. The sooner the UPA learns this lesson, the better will be for the Indian economy. The Congress in its new “Socialist” avatar will get little cheer from the FII benches and from the stock market participants].

FIIs invest Rs.3,500 Cr in equities since Budget

[Wrong headline]

New Delhi: Foreign institutional investors (FIIs) have made a net investment of Rs3,500 crore in the Indian stock markets since the presentation of the Budget in Parliament on 6 July, even as the benchmark index Sensex lost over 9% in the same period.

An analysis of FIIs activity in the domestic markets shows that overseas investors were the net purchaser of Indian stocks worth Rs3,499.5 crore during the last week.

FIIs were the gross buyer of shares worth Rs17,092.1 crore during the week, while they sold equities valued at Rs13,592.6 crore, resulting in a net inflow of Rs3,499.5 crore, as per the data available with the Securities and Exchange Board of India (Sebi).

Significantly, during the past week, the Bombay Stock Exchange’s benchmark index Sensex - composed of 30 bluechip stocks - dropped 9.44% to end at 13,584.22 points.

On the Budget day, FIIs booked profit and sold shares worth Rs351.3 crore, dragging the benchmark indices in the negative zone. The Sebi compiles the trade data one day late.

On 6 July, the day finance minister Pranab Mukherjee presented general Budget in the lower house of Parliament, Sensex suffered the biggest fall on any Budget day and in the year too by plunging over 870 points on concerns of high fiscal deficit.

Mukherjee said the fiscal deficit may rise to 6.8% of gross domestic product in the year 2009-10, the highest since 1994.

In five trading sessions from 6 July to 10 July, FIIs were the net seller for three sessions, while, for other days they remained net purchaser.

During the week, the foreign investors also put in money worth Rs2,984.9 crore in the debt market segment, while so far this year, FIIs are the net seller of Rs1,356.10 crore in debt instruments. [From Internet]

Investors bet on base metals to rake in the moolah:

17th October, 2007:

NEW DELHI: Booming global metal markets have enthused the investors as they bet on base metals, hoping for a windfall, analysts on Wednesday said.

"We are expecting good returns from this sector," commodity brokerage firm Karvy Comtrade analyst Harish G said, adding most of the base metals, including copper, zinc and nickel have seen gains of more than 100 per cent in the past one-two years.

These metals have also seen increased participation of investors on the London Metal Exchange (LME) as well as on the Multi Commodity Exchange (MCX).

"It is a safe bet to invest in base metals as the market is moving firm. According to the current market movement, investors can easily earn good returns in copper, lead and nickel. However, one should be cautious while trading in zinc as prices seem to be a bit volatile," Religare Commodities analyst Suganda Sachdev said.

"The prices of nickel, zinc, lead and copper would remain high for some period. Demand from developing countries like China and India is driving the prices of base metals in the global market."

With China and India emerging as two of the fastest growing economies, the world is experiencing a massive build-out and modernisation of global infrastructure. China's demands for the base metals have been surging in view of the upcoming Olympics games for which it has undertaken to build massive physical infrastructure.

Even India's smelting capacity of refined copper has increased from a mere 0.5 per cent to 5 per cent of the global share. [From Internet]

Soma Textiles and Industries Ltd rises from Ashes, hits 20% Buyer Freeze: Jhunjhunwala Vanaspati hits the buyer Freeze: Radhe Developers Ltd hits the buyer Freeze on early trade on rumours of Rights issue and some headway in the Nepal Government issue:

Premier Explosives Ltd is available at the price of penny. The company could get the benefits from the Indo-US nuclear ties. The company is now fully focussed on defence. There are some good news in the offing in the counter:

Bharat Seats Cools down a bit after buoyancy in the early morning trade:

TV Channels Should stop bringing the analysts who have no Knowledge about Vishal Exports. It is not a "Penny Stock" by any yardstick. These fools whom TV Channels call analysts also said the same thing on another of my Multi-bagger--> Hazoor Media and Power Ltd:

Crude Rises again, so buy Selan Exploration Technology or Alphageo:

Dow Ends Down 48 at 12,738, Nasdaq Ends Up 5 at 2,518 on Continued Concern About US Inflation. The inflation news and Fed comments followed a profit report from Hewlett-Packard Co. that dampened sentiment on Wall Street.The Nasdaq composite index closed at a six-year high. Only last week Wall Street rallied after Federal Reserve Chairman Ben Bernanke told Congress that inflation appeared to be moderating as the economy was showing sustainable growth:Amid Iran's nuclear defiance, the U.N. nuclear watchdog finalized a report to be released Thursday that is expected to formally confirm the Islamic republic's refusal to freeze enrichment — a conclusion that could subject it to tougher U.N. sanctions:

Today the markets will be cautious ahead of F & O expiry and taking global cues into consideration: Keep buying fundamentally good stocks in the Mid and Small cap space, as the rally in this space will start again:Please Stop Viewing the markets on a Daily basis:

STOCKS Which LOOKS GOOD for Superb RETURNS:

1.Jhunjhunwala Vanaspati Ltd: This is an Inflation Positive Stock, which means that it will rise along with the inflation. Since the price of Oil and oil products are shooting over the roof, the company should benefit from this move. Besides this the company has a whooping book value of Rs.62.4 and EPS of Rs.18.45, which could take the stock past Rs.150. In the December, 2006 quarter taking the help of the buoyancy in the prices of its products the company’s operating profits (Rs.4.4 Cr against Rs.2.29 Cr) took a quantum jump. The Gross Profit also improved from Rs.4.51 to Rs.5.8 Cr. The Net profit shot up from Rs.3.60 Cr to Rs.4.31 Cr. Synopsis: Jhunjhunwla Vanaspati: One of the fastest growing professionally run industrial group - Jhunjhunwala Vanaspati Limited ( JVL ), Varanasi ( U.P.) India, is the single largest unit manufacturing Vanaspati Ghee & Refined oil and is headed by Mr. D.N. Jhunjhunwala, Chairman & Managing Director a person with razor sharp business acumen & entrepreneurship. The company is ISO 9001: 2000 certified with its national & global presence. It has a work force of 1000+ employees with a running turn over of Rs. 500+ Crores & projected growth of Rs. 1000 Crores in near future. The company has also its strong presence in the market with its Distributors, Depots & C & F agents at different locations all over the country. For the benefit & convenience of its consumers, the company is having diversified range of products which are economical too. JVL is importing crude Palm Oil, Soyabean Oil & Hydrogenated Vegetable Oil from Malaysia, Indonesia, Singapore, Argentina, Brazil & Sri Lanka in larger quantities. Besides this the Centre's decision to de-canalise and allow duty-free vanaspati imports of up to 2.5 lakh tonnes (lt) annually from Sri Lanka has created a jubilation to some of the players who have manufacturing Units in Sri-Lanka in the 7,000-crore plus industry. Units producing from Sri Lanka have to pay a nominal $25 per tonne. Cost difference on the final product is around Rs 8,000 per tonne. There are around a dozen vanaspati units set up in Sri Lanka by Indian companies. Among them are Mr Kailash Shahra's Ruchi Group (through Paras Industries Pvt Ltd), Adani Wilmar (Pyramid Lanka Pvt Ltd), Mr Vijay Gupta's Gujarat Ambuja Exports, Mr Ramesh Chandra Agarwal's Dainik Bhaskar Group, Mr Ravi Jaipuria's Accor Industries Pvt Ltd (`Cream Bell' brand), Mr Vijay Data's Vijay Solvex Ltd, Mr D.N. Jhunjhunwala's Jhunjhunwala Vanaspati Ltd, Mr B.K. Goenka's Foods, Fats & Fertilisers and the Vadodara-based Continental Vanaspati. All of them have been licensed by the Sri Lankan Government and are eligible exporting entities for supplying the 2.5-lt duty-free quota. So, they stand to benefit from the November 21, 2006, public notice issued by the Directorate General of Foreign Trade (DGFT). The notice has said importers wanting to bring in duty-free vanaspati from the island nation will have to enter into pre-purchase agreements with any of the eligible exporters. Since the Sri Lankan Government has made it clear that no further licences will be issued under the Indo-Sri Lanka Free Trade Agreement, the ones who qualify as eligible exporters will make a killing. Interestingly, out of the 16-odd licences issued, Indian companies account for a dozen. With bulk vanaspati prices in India ruling at roughly Rs 50 per kg, the total value of 2.5-lt duty-free imports would be about Rs 1,250 crore. On the other hand, there are many leading domestic players without a manufacturing base in Sri Lanka. They include the likes of Agro Tech Foods (`Rath'), Bunge India (`Dalda'), Siel Ltd (`Panghat'), Amrit Banaspati (`Gagan' and `Ginni'), Wipro, Liberty Oil Mills, Punjab Markfed, Rasoi Ltd, Kanchan Oil Industries, Dinesh Oils and Kanpur Edibles. The units here are at a disadvantage — they have to import crude palm oil (the main raw material) at 78.2 % duty, whereas those producing from Sri Lanka have to pay a nominal $25 per tonne. The cost difference on the final product comes to Rs 8,000 per tonne or Rs 20 crore for a factory with 25,000 tonnes per annum capacity. Besides Sri Lanka, there is a similar provision to import up to one lt at nil duty under the Indo-Nepal Treaty of Trade. Again, the facility to import raw material at zero duty has encouraged Indian companies to produce vanaspati in Nepal. THIS COMPANY OF THINKING OF MAKING A KILLING IN THIS FRONT ALSO.

FOCUS : a).To be right at the top in the field of Vanaspati Ghee & Refined Oil. b).Gearing up its expansion program overseas specially in Sri Lanka. c). Further development & diversification projects, as the company has already acquired 300 acres of land near Varanasi. HENCE JHUNJHUNWLA VANASPATI IS NOW ALSO A REAL ESTATE STORY. 2. Radhe Developers Ltd: Some rumours are floating in the market that the company could come up with the Rights Issue (declared earlier at Rs.17.5) soon. The promoters' have increased stake in the company and it seems there is something cooking in the counter. There are also rumours that the company has progressed somewhat in the Nepal Government issue. One of the sources confirmed that the company has good amount of land in and around Ahmedabad. The company is also going a number of Real Estate projects in Gujarat. BUT THE CURRENT BUZZ SEEMS TO BE DUE TO RIGHTS ISSUE OR A PROPOSED IPO. THE RESULTS OF THE LAST QUARTER WAS NOT UPTO THE MARK AND THIS IS ALREADY FACTORED IN THE CURRENT PRICE. IF THE COMPANY IS ABLE TO PUT PRIVATE PLACEMENT AS PROPOSED EARLIER THE STOCK COULD SHOOT PAST RS.60.KEEP ADDING ON ALL DECLINES. 3. Selan Exploration Technology Ltd: The company would benefit from the recent buoyancy in the Crude oil market. Two of the drilling and exploration companies like Aban Lloyd and Alphageo (hitting circuits for some days), are doing extremely well on the bourses. The Selan Exploration Technology has almost finished renovating 10 of its wells in Bhakrol Oil field in the oil rich Cambay basin. The company has completed the drilling in some of the wells, where it is now almost confirmed that the company has found crude oil. Since the company undertakes drilling in the proven oil and gas field and hence it will be impossible to think that the company has gone in for drilling and have not found oil. Once the news about the Oil find become public and get attested from the company souces the stock will head towards Rs.500 mark. Keep buying and do not sell a single stock.. 3. Soma Textile Industries Ltd: Yesterday the Scrip hit the buyer freeze on sustained buying. The company has recently completed the Rs.87 Cr expansion and also the company would benefit from the cheap electricity it is getting from the state government. Also there are talks of private placement at a higher price. There are also rumours of company making joint venture with an Overseas retailing giant. The company has a healthy order book position and the FRUITS OF EXPANSION WILL START TO SHOW UP IN THE BALANCE SHEET FROM FOLLOWING QUARTER. I am placing a first target of Rs.70 and if the government comes up with some incentives to this sector the stock h as the ability to cross Rs.120 mark. Keep watch!! 4. Vamshi Rubber Ltd: The company would complete the expansion plan in the next month. The December, 2006 quarter results were excellent. This company has a major presence in the Retreading tyre space. Also the company makes Gum and Machinery for the tyre industry. The company gets technological assistance from one of the Top International Giant in this field. I hope the stock would cross Rs.24—Rs.30, with May, 2006. The company has 4 acres of land in Hyderabad. The best part is that the company is able to pass on the increased cost of raw materials to the end users. Also keep holding Bharat Seats with a SL of Rs.106 and Also, keep holding Vishal Exports Overseas Ltd with a SL of Rs.1.9. Those persons who do not know anything about the company are coming to the TV Channels uttering whatever they like. I saw someone telling that it is a penny stock. I do not know what is the definition of a Penny Stock, but it is definitely a good company, having presence in lot of Verticals. Off late promoters could have sold some shares to fund some of the Expansion plans of the company—but I am not sure on this front. The company has recently tied up with Adani Group of Gujarat for Mega Power project. I am accumulating the stock on all declines. I see this stock reaching at least Rs.8—Rs.9 within the next 12—18 months time. The same story is for Zigma Software Company Ltd. Please keep holding this stock which came out with positive results(as predicted earlier), in the December, 2006 quarter. Keep accumulating the stock on all declines. Chandra Prabhu International’s Jatropha Plants might start to bear fruits from the end of this Year(2007). The company would start to implement the Overseas contract, from the end of this year according to a source close to me. The company would start drilling and exploration of Coal in Collaboration with an Overeas Partner, within a short time. The company was about to start drilling from the last month, but due to some government’s policies, it has decided to go slow on this issue.

Yesterday’s Market round up:

The BSE Sensex remained volatile throughout the day. Althought trading was devoid of wild swings, the benchmark Sensex frequently moved in and out of the red. After opening weak, the Sensex had recovered but finally succumbed to pressure at higher levels in the late afternoon. Volatility is expected to continue tomorrow (Thursday, 22 February) as well, when the February derivative contracts are scheduled to expire. The 30-shares BSE Sensex lost 64.89 points, at 14,188.49. It recovered from the day's low (14,157.72), and went on to strike a high of 14,312.88 on back of short-covering. The S&P CNX Nifty lost 10.75 points (0.26%), to settle at 4,096.2. The total turnover on BSE amounted to Rs 4086.7 crore, compared to Rs 3886 crore on Tuesday. The market-breadth, a measure of strength in the broader market, ended negative. Out of the 2,647 shares traded on BSE, 1,079 advanced, and 1,514 declined. Just 54 shares were unchanged. The market-breadth was strong in the opening session, but turned negative, as selling in small-cap and mid-cap stocks set in by early afternoon. Among the 30-Sensex pack, 15 advanced while the rest declined. Hero Honda was the top gainer, up 3.27% to Rs 739.5. It had struck a high of Rs 743, and a low of Rs 720.10. Auto stocks are rejoicing after the recent cut in fuel prices. Maruti Udyog (up 0.22% to Rs 896) and Tata Motors (up 0.37% to Rs 858.90) were the other gainers in the auto segment. Housing finance firm HDFC gained 1.20% to Rs 1672.55, on reports that it may announce a hike in interest rates during this week. Bharti Airtel (up 1.88% to Rs 806.30) and Gujarat Ambuja Cements (up 0.85% to Rs 131.15) were the other big gainers. Metal producers Hindalco (up 1.38% to Rs 150.50) and Tata Steel (up 2.49% to Rs 455.20) gained on the back of firm metal prices globally. FMCG major Hindustan Lever (HLL) was down 2.10% to Rs 195.50, on high volumes of 22.98 lakh shares. During trading hours on Tuesday, HLL reported 1.9% fall in net profit in the December 2006 quarter to Rs 511 crore from Rs 521 crore in the December 2005 quarter. Index heavyweight Reliance Industries was down 0.59% to Rs 1406.15, extending Tuesday’s rise. Ranbaxy Labs was the top loser, down 3.29%, to Rs 382.50. The Indian pharma behemoth had slipped to a low of Rs 381.90, while investors worried over possible equity dilution if Ranbaxy acquired Merck's generics drug business. The company, however, scotched reports that it was planning an issue of shares in the US, or any dilution of stake by founders to fund the acquisition. Frontline IT stocks were under pressure. Infosys (down 2.25% to Rs 2312.90), TCS (down 0.87% to Rs 1285.95) and Satyam Computers (down 3.16% to Rs 462.20) suffered. L&T lost 0.63% to Rs 1657.30. It plans to invest Rs 10 billion ($226 million) to build a shipyard for very large crude carriers, a newspaper reported on Wednesday. Bosch Chassis Systems India (erstwhile Kalyani Brakes) jumped 6.20% to Rs 933.75, after its board recommended a 1:1 bonus issue. Bosch Chassis posted a net profit of 5.97 crore in Q4 December 2006 compared with Rs 11.53 crore in Q4 December 2005. Net sales in Q4 December 2006 rose to Rs 124.65 crore from Rs 112.36 crore in the year ago quarter.

Yokogawa India advanced 3.90% to Rs 466.20, after Yokogawa Electric Corporation, Japan (Acquirer), accepted the offer at the discovered price of Rs 478 per fully paid share and will pay for all the valid shares submitted to delist the company. Gail India slumped 4.20% to Rs 282.75, on 10.88 lakh shares after it scheduled a meeting of the board of directors on 6 March 2007, to consider the proposal of a special interim dividend for the financial year 2006-07. IFCI topped the volume chart for the eighth consecutive day since NSE allowed fresh positions in the derivative segment of the scrip last week. IFCI surged 5.02% to close at Rs 30.35 on garnering a huge volume of 3.14 crore shares, while Zee News surged 4.45% to close at Rs 41.05, on a big volume of 74.37 lakh shares for the same reason as IFCI. Lupin surged 8% to Rs 634.65, after the company on Tuesday inked a pact with Laboratoires Servier, France, for the sale of certain patent applications and intellectual property rights for a blood-pressure drug. The agreement for the drug, perindopril, holds good for multiple countries. Apollo Hospitals Enterprise gained 3.8% to Rs 498.30, following a report that the company is readying itself for a major acquisition in the United Kingdom. SKF India gained 3.5% to Rs 311.30. After the company posted a net profit of Rs 31.73 crore for the quarter ended December 2006 compared to Rs 10.25 crore for the quarter ended December 2005. Total income increased from Rs 256.47 crore for the quarter ended December 2005 to Rs 381.66 crore for the quarter ended December 2006. SKF India also posted a net profit of Rs 101.96 crore for the year ended December 2006 compared to Rs 64.07 crore for the year ended December 2005. Total income for the fiscal increased from Rs 816.01 crore (Rs 1350.83 crore). Sintex Industries jumped 5.2% to Rs 224.20, after it won an order worth Rs 750 crore from the Gujarat Government. Manugraph India surged 3.27% to Rs 202, after the company said on Tuesday that Reliance Mutual Fund had acquired a further 3.7% in the company, taking its stake to 5.96%. On 15 February 2007, Reliance Mutual Fund purchased shares of 11.25 lakh shares of Manugraph (3.7% stake) at Rs 185 through the open market purchases on BSE– of which 9.08 lakh shares were obtained from foreign fund Citigroup Global Markets. Arcelor Mittal, the world's largest steelmaker, reported a 2006 core profit of $15.3 billion on Wednesday, slightly below market expectations. Analysts had estimated EBITDA (earnings before interest, tax, depreciation and amortisation) on average at $15.4 billion. The steel giant had previously told investors it expected core earnings between $15.2 - 15.4 billion. It was the first time the newly formed group presented annual results after Mittal Steel's successful takeover of Luxembourg-based Arcelor in 2006. The Hang Seng index was up 0.41%, while the Japanese Nikkei 225 index was down 0.14%. The Bank of Japan (BoJ) raised its key short-term interest rate from 0.25% to 0.5% - the first hike since July 2006. The hike is in line with analysts' expectations. The move came after the country's economy was confirmed to have recorded stronger-than-expected growth during October-December 2006. The nine-member BoJ Policy Board voted 8-1 in favour of a rate hike at the end of a two-day meeting. The bank had refrained from tightening credit for seven months after ending its zero-interest-rate policy. Japan's gross domestic product grew an annualised 4.8% in the October-December period from the preceding three months in real terms, extending its rising streak to eight quarters. The pace of expansion was faster than the average market projection of an annualised 3.8%, and 0.8% marked in the July-September period. US stocks rose on Tuesday, as investors scooped up recently battered tech shares amid a flurry of merger deals, including one between Sirius Satellite Radio and XM Satellite Radio, and as oil prices eased. The Dow Jones industrial average gained 19.07 points, or 0.15%, to a record 12,786.64. The Standard & Poor's 500 Index added 4.14 points, or 0.28%, to 1,459.68. The Nasdaq Composite Index climbed 16.73 points, or 0.67%, to 2,513.04. The Dow earlier touched 12,795.93, a new lifetime high for the average. US crude prices fell for a third day, down 22 cents, to $58.63 a barrel, after a cold spell in the world's top consumer ended, with some forecasters expecting moderate March weather. Meanwhile, companies are expected to breathe a bit easy as statutory taxation rates are likely to be reduced by 3% in the Union Budget, either through abolition of 10% surcharge, or reduction of corporate tax from the current level of 30%. Either corporate tax rate is likely to be reduced to 27%, or surcharge will be abolished to give 3% relief to companies, reports said. The statutory rate of taxes on companies stands at about 33.66% with corporate tax of 30% and surcharge of 10% along with education cess of 2%. Corporates are demanding around 5% cut in taxes, which is not likely to be accepted entirely, sources said adding the cut may be limited to 3% only. The government collected close to 50% more corporate tax, at Rs 97,315 crore during the first 10 months of this fiscal against Rs 65,094 crore during April-January period of the previous fiscal. In the previous Union Budget, Finance Minister P Chidambaram had cut corporate tax rate to 30% from earlier 35%, but increased surcharge to 10% from 2.5%. Meanwhile, gold was locked in sideways trade amid extreme volatility in the currency markets, COMEX gold slipped after hitting a high of $665 and was currently trading at $662, up $1 as markets concentrated on the upcoming US CPI data, which can spell a further sell off for the US dollar, assisting Gold. MCX gold also traded in a sideways manner following these moves. MCX April was confined to a range of Rs 9459 -9509 and shed 1.81% in open interest.[With inputs from Internet]

I AM FACING SOME SERIOUS INTERNET RELATED ISSUES AND HENCE DELAY IN GIVING UPDATES iN THIS BLOG AND IN THE YAHOO GROUP....PLEASE BEAR WITH ME. KEEP BUYING / HOLDING AND REMAIN HAPPY.

More in the following positings...

Best wishes,

Suman Mukherjee

India.

www.eindiabrokers.com

http://finance.groups.yahoo.com/group/SumanSpeaks/

Dow Ends Up 101, Nasdaq Gains 43 on Earnings Report From Goldman Sachs, Drop in Oil Prices to near Five-Month Low; After IEA Lowers Demand Forecast:

The US markets rallied for a third straight session, Yesterday, propelling the Dow Jones Industrials to rise more than 100 points, after Goldman Sachs Group Inc. reported results that beat expectations and investors grew more confident that the continuing drop in crude oil prices would boost consumer spending. After seven days of oil price declines, investors pushed shares of consumer-oriented stocks higher. Companies such as General Motors Corp., home improvement chain Home Depot Inc. and Best Buy Co. all showed strong gains. "I think the concerns about September that led the market lower last week are basically waning because oil prices are declining," said Scott Fullman, director of investment strategy at Hapoalim Securities USA. "The major benchmarks are performing extraordinarily well. What we've been seeing is the movement of assets out of commodities stocks and into more traditional growth stocks such as health care and technology," he said.

Meanwhile, Crude oil yesterday traded near a five-month low after falling for a seventh day as the International Energy Agency (IEA) lowered consumption forecasts citing slowing demand growth in the U.S. Global oil demand will average 84.7 million barrels a day this year, 100,000 barrels less than was forecast last month, the Paris-based IEA said yesterday. The crude oil stockpiles in the U.S. , the world's biggest consumer, are about 12 percent higher than the seasonal average the past five years. The IEA cut its forecast by 160,000 barrels citing lower demand in North America and in Asia Pacific members of the Organization of Economic Cooperation and Development. ``We're going to see much more crude oil on the market'' in the next couple of months, said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``We're going to start seeing builds in crude and draws on gasoline'' as refiners start pre-winter maintenance, he said. Crude oil for October delivery was at $63.72 a barrel, down 4 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:45 a.m. in Sydney. Prices today are 1 percent higher than a year ago. The contract fell $1.85, or 2.8 % , to $63.76 yesterday, the lowest close since March 22. Futures have declined for seven trading days, the longest stretch since October 2003.

``We're in the midst of a tectonic change,'' Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant said yesterday. ``The rally that's lasted almost five years may be over. We keep seeing lower demand estimates which show the impact of very high prices.''

U.S. oil stockpiles held 330.6 million barrels on Sept. 1, 12 percent more than the five-year average for the period, according to the Energy Department. Supplies probably fell 2 million barrels last week as refiners ran down stocks before shutting units to prepare for winter fuel production, according to a Bloomberg news survey of 14 analysts.

Oil reached a record $78.40 a barrel on July 14. Prices have plunged 19 percent the past two months on signs demand growth is slowing and as the risk of the United Nations Security Council imposing sanctions on Iran have eased. ``I don't see us going much further,'' Excel's Waggoner said. ``It's probably going to consolidate around that $62.50, $62-even level.'' The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, is concerned by the pace of the decline in prices, group president Edmund Daukoru said Sept. 11. OPEC agreed that day to keep its output target unchanged at 28 million barrels a day. Iran, the group's second-largest producer, will lobby for a cut in quotas if prices fall below $60 a barrel, Kazem Vaziri- Hamaneh, the country's oil minister, said yesterday.

Investors also saw momentum from financial services stocks after Goldman Sachs reported better-than-expected third-quarter results, although profits fell as its trading business slowed. Not only did Goldman's earnings bode well for rival investment banks due to report this week, but also signaled that companies have not pulled back from going to the markets with equity deals. The rally helped lift the Dow to a four-month high, the tech laden Nasdaq composite index and Standard & Poor's 500 index to three-month highs. The Dow rose 101.25 oiubts, or 0.89 %, to end at 11,498.09, while the S&P 500 was up 13.57 points or 1.04 % , at 1,313.11. The Nasdaq composite index rose 42.57 point, or 1.96 %, to 2,215.82, its highest point gain since Aug. 15, when it rose 45.97 points. Bonds also advanced, with the yield on the benchmark 10-year Treasury note falling to 4.77 percent from 4.80 percent Monday. The dollar was mixed against other major currencies, while gold prices declined after falling below $600 an ounce Monday for the first time in more than two months.

Here in Asia, Bank of Japan board member Atsushi Mizuno said policy makers remain committed to gradually raising interest rates even after recent signs that economic growth slowed and inflation was lower than economists expected. ``Things are in line with our scenario'' that prices are rising and the economy is expanding, Mizuno said in an interview in Tokyo yesterday. ``I want to emphasize that that means fine adjustments will continue to be made to interest rates.'' Japanese bond yields fell to a six-month low after consumer prices rose less than expected, prompting speculation that the bank would leave rates, the lowest among Group of Seven nations, unchanged this year. The central bank raised rates from near zero in July, the first time in almost six years. Mizuno said next month's Tankan survey of business confidence and spending plans will provide a broader picture of the economy's strength. ``We have been seeing some mixed reports recently with both strong and weak sides,'' Mizuno said. ``We don't necessarily interpret data the same way the market does.'' A report published Aug. 25, in which the government reshuffled the items it examined, showed consumer prices grew 0.2 percent in July from a year earlier, less than half the pace forecast by economists. Industrial production unexpectedly fell in July, the government said on Aug. 31. Those surveys helped push yields on Japan's benchmark 10- year bonds to a six-month low of 1.6 % on Sept. 1.

``We still believe it is fully possible that the BOJ will make an additional rate hike this year,'' Tetsufumi Yamakawa, chief economist at Goldman Sachs Japan Ltd. in Tokyo., wrote in a report on Sept. 6. ``The impact of the `CPI shock' caused by the consumer price index rebasing is gradually abating.'' Mizuno said the decline in yields partly reflected a drop in yields in the U.S. and Europe. Yields on U.S. Treasury 10-year notes and German bunds dropped to five-month lows on Sept. 1. on concern that growth in the world's largest economies is slowing. ``Financial-market participants seem to have started mentioning the effects of declining long-term interest rates in the U.S. and Europe as well as the difficulty the BOJ will likely have in raising interest rates further because of the change in the CPI standards,'' Mizuno said. ``We will need to continue to watch further moves in long-term yields closely.''

The bank will release its semi-annual forecasts for prices and the economy on Oct. 31. In April, board members projected the economy would expand 2.4 percent in the year ending March 31 and prices would rise 0.6 percent. The inflation forecasts were made under the old method of calculating consumer prices. ``We plan to conduct policy in an appropriate and unprejudiced way by carefully examining economic data,'' Mizuno said. Six of 15 economists surveyed by a News Agency between Aug. 31 and Sept. 5 expect the bank to raise rates again by December, 2006.

US Markets:

Oil prices declined for the seventh straight day, falling $1.85 per barrel to $63.76 on the New York Mercantile Exchange as mentioned earlier. It marked the lowest close for crude since late March and it occurred despite a foiled attack on the U.S. embassy in Damascus. Peter Cardillo, chief market analyst at S.W. Bach & Co., said that September, often a sour month for stocks, has so far proven decent, thanks in large part to falling oil prices. "Oil prices and commodity prices are coming down and if that continues we could be headed for a strong fourth quarter," he said. Cardillo also said Wall Street's decision not to dwell on a record trade deficit figure released Tuesday helped push stocks higher. The Commerce Department reported that the country's trade deficit ballooned to a record $68 billion in July amid high oil prices, jumping 5 percent from the June imbalance. An expectation that oil prices will improve consumer confidence helped propel General Motors up $1.39, or 4.37 %, to $33.23, a new 52-week high. Also, Home Depot added $1.60, or 4.56 percent, to $36.66.

Investors rallied behind financial shares after Goldman beat Wall Street projections for the third quarter, although profits fell as its trading business slowed. Goldman rose $7.29, or 4.83 %, to $158.29.

The Russell 2000 index of smaller companies rose 16.91, or 2.39 percent, to 724.48. Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where final consolidated volume came to 2.95 billion shares compared with 2.66 billion shares traded Monday.

Japanese Stock Market:

Japanese stocks rose today, after oil prices fell to the lowest in more than five months, reducing costs, and the yen weakened against the dollar, boosting exporters' revenue. Toyota Motor Corp. paced gains. ``The markets are set for a rather large rebound today,'' said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. ``With oil at a more than five-month low, it's looking like companies will report profits on the higher end of expectations next month.'' The Nikkei 225 Stock Average climbed 209.39, or 1.3 %, to 15,928.73 till this report was being prepared in Tokyo. The broader Topix index added 18.46, or 1.2 percent, to 1604.44. Both indexes rallied from two days of declines. All except one of the 33 industry groups included in the Topix advanced. Stocks also gained after better-than-expected profit from companies including Goldman Sachs Group Inc. increased confidence earnings will continue to grow in the U.S.

It is to be noted that a weak Yen increases the value of Japanese exporters' dollar denominated sales when converted back into local currency, while their products become more competitive abroad.

The net inference from above, both the Nekkei and Sensex are set to rise today. Nikko's Nishi estimated the Nikkei may rise as high as 16,050 today. Accprding to my estimates, the Sensex will start with green and end in green, it may also touch 12 and till this report is being prepared Crude was trading in MCX at $62 per barrel. It seems the oil prices are heading towards $50-$55 mark. Also the base metals and non-ferrous metals are down till this report is being prepared. Yesterday mid-cap counters rose more than small cap scrips. So continuously explore the possibilities of investing in both the Mid and Small cap space.

Yesterday, E....M....which hit the circuits was EMA India Ltd, which except the shareholding pattern, still looks good and could be taken at around Rs.130 for price taget of Rs.160---Rs.175 in the short term. Y...I..mentioned there was Yuken India Ltd which also rose to Rs.151 before closing a tad below at Rs.144.40. The company is all set to reach Rs.180 in the short term but it was a daily call not delivery like EMA India Ltd.

Hazoor Media came down a bit after some profit booking was advised, the stock is near its resistance level and will some more good news from the company to give its share a push. I have exited the counter yesterday and will again enter on some specific news.

Glass stocks advanced, with Asahi and Alembic Glass( recommended on last Friday) both registering gains.

One thing I would like to mention here: I have seen while chatting that some people do not read all my messages and hence come to dubious conclusions. They look only at Chandra Prabhu International Ltd and Monnet Ispat & Power Ltd [Both of them rose after they were recommended second time at Rs.6 and Rs.149.50] as my only recommendations, while I recommended at least 30-40 stocks in the last 6 months starting from TISCO to Tilaknagar Industries Ltd and the Accuracy Rate or Success Rate as u may call, is stupendously high; near 95% levels. Also, the accuracy rate of rising on the first day of recommendation is also high at around 70-80%. My recent Recommendations lke Shree Ganesh Forging, Alembic Glass [third straight upper freeze], EMA Ltd, Yuken India Ltd.( it was mentioned as Y...I....at Rs.135, yesterday) rose on the first day of Recommendation. So, please read all my postings before arriving at some Solid Conclusion. Besides, even if u do not invest on my recommendation (which many of you do I am sure, because of being badly informed by some guys here and there, and I am not at all worried.. As making money is more important than niggling at such minute details and truth always prevails at the end), U can read the Asian and world market briefings, which I am sure will help you while investing in the bourses.

Today all the Brewerie companies are set to rise on the news that wine will be sold on Super Markets.....look at United Breweries, Shaw Wallace, Champagne Indage Ltd, Tilaknagar Industries Ltd. etc. for some investment opportunities but not for drinking opportunity....lol...I do not Drink Alcohol, neither do I Smoke, so please do not take this otherwise, while I go on mentioning about brewerie companies in postings.

It is because this sphere is expected to take a quantum jump, due to a number of factors, I have already mentioned. I would like to mention again:

1. Huge disposable income in the hands of middle class.

2. Western Culture is being sprayed through various Movie and Music channels

3. The festive season is near

4. Winter season normally is the highest volume and margin period, for brewerie companies

5. Many of the companies are either on an expanions & Acquisition spree (UB group) or restructuring heavily(Champagne Indage Ltd, Tilaknagar Industries Ltd) or going in for some revoulutionany business plans--->Tilaknagar Industries Ltd(their joint venture with the West Indian Brewerie company will kick start either at the end of this year or the beginning of the next year. The new factory has already started production from March, 2006). Yesterday the stock ended flat...while Shaw Wallace hit the buyer freeze.

6. Change in attitute of the urban middle class.

7. Increased spread throughout the nation

8. Many good restraunts and Hotels are now having license to serve alcohol,

9. The most important for Indian Made Foreign Liquor Companies (IMFL) like Tilaknagar Industries Ltd, is that they will benefit immensely from the fall in Molassses Prices, which is a by-products of Sugar Companies. Sugar prices are likely to fall further due to a number of reasons mentioned earlier. Hence keep away from Sugar Companies and enter Liquor Companies instead.....and So on....

More on the following mails.....................I am very busy these days and may not be able to send briefings everyday, so please bear with me. Use ur own discretion while investing and exiting the bouses. Only invest, if you are convinced with the growth story of a particular company. Never invest on Half Coked News / Briefs and on Tips and Rumours, unless u are a Gambler or have Huge Cache of Disposable Cash at your hand, to play on. [With inputs from Internet]

Best wishes,

Suman Mukherjee

India.

http://finance.groups.yahoo.com/group/SumanSpeaks/

www.bcozindia.com