Bears on top.... Admittedly bears have won another day where were successful in breaking the bulls back. More than 1 crs shares buying was seen in RIL and RPL in last 1 week yet the seller had more strength on the given day. Macquarie one foreign broking house has sold stocks worth Rs 500 crs plus today. Though few FII and foreign broking houses have gone on record saying that they will come forward for buying at 12000 it seems very clear that a borrow and sell strategy of the bears have succeeded in current scenario. The market has been falling since last Friday the day 11% inflation was announced and the fall is 12% over and above the 30% fall though the growth rate might taper by less than 10%. The same speed may take maximum of another 3 to 4 days to test 12000. I think if the next Govt which comes to power is not UPA then they should first think of band in share market first instead of price band mechanism in oil. We are for sure exposed that our systems are still easy to manipulate on either side and too at will. Congress very firmly announced to go ahead with Nuke deal as well as elections. This once again brings ruling party at a stage where LEFT will withdraw support yet Govt will not fall as S P will support. Political scenario is not that bad for market to over react. Oil may not hurt too long to India as RPL oil production will start soon and RIL will get enough gas to convert major oil consumption to gas. Market has been over reacting to all the negative things which have come to fore and at present the PE ratio has come to as low as 11. Even if economy is slowed a bit the valuations are already done with. FII which have been respected in India as God’s are the most dangerous animals to kill the country’s strength. If we are trader and prepared to take risk in equity then only trade in futures or just stay away from trading. I think we have been repeating this since 2005 that futures is not cup of tea of normal investors. Few bears are also circulating emails that Nifty is set to touch 2500. I am flashing this because those who still feel that it is bear run and Nifty is set to travel to that levels must join bears and start selling. They may sell IFCI till it become Rs 10. We have no problem. We are bull’s side and will remain so. Those who feel that they are misguided must exit from our site. In fact, I read an article today where it states the FII have sold stocks worth 7 bn USD by lending it to a cartel. The stocks were lying in P notes. If it true then we are most idiots to allow P note which is used for stock manipulations. Any way it is very difficult to prove unless Govt agencies step in to find out the truth. In any case, if it is true the covering will also be equally strong. At present traders are set their eyes on OIL God the LAGAAN way. It is not so simple. Whenever oil satta break it will be a vertical fall. It could take some more time before the speculators give up. Traders must go long only in selective of 4 to 5 scrips so that they can withstand the downside. While entering it they should know that market at present is being hammered intentionally be bears so that nobody dares to come back this market for next decade. If you survive the onslaught then you could able to participate in the upside rally. Those too only strong traders should do it. All broking houses will shut down very soon as the retail participation has come to naught. Only HNI who has not leveraged positions like IDEVELOP itself have survived in this market and will always survive. Wherever we find value we are still buyer and we will remain buyer. We always believe that buying should be done only in such times. Meanwhile value buying can be done in only in select counters where you feel that the returns will be nothing less than 10 times on DCF valuation. Follow your bliss and the universe will open doors for you where there were only walls.

Half Empty Half Full It is absolutely true that the growth will taper as a consequence of the CRR rate hike. But market knew it that it could happen and market has corrected 1400 points in last 4 sessions alone on this pretext. GDP was factored in as low as 7% by all FII’s in India and therefore if the CRR rate hike brings down GDP from 8.5% to 7.75% how does it matter…? At 12 PE 09 market has factored in all these negatives and now from hereon if market has to fall then more negative news has to come. If inflation becomes 13% then you can’t stop from market going to even 12000 and if inflation touches 15% then even 9000 is possible. What are the probabilities…? Inflation rose from 8.75% to straight to 11% purely on account of rise in petrol. Now that another petrol price hike is impossible before elections and hence the most of the negativity has been factored in. The real inflation on of food was nominal. Only rise which can come this week is on account of consequential rise in transport cost and other costs due to increase petrol could rake inflation by another 50 basis point. Thereafter inflation has to fall and it will fall. Yesterday the white house discussed a plan to intervene oil speculation by introducing margin and other constraints. Their estimate is that they can bring down the oil to as low as 70 USD in less than 30 days. Whether this will happen or not in such as short span of time I am not sure. But I had predicted 72 USD by March 09 and I precisely believe that this will happen. Now white houses as well as at least dozen foreign analysts too are singing the same tune. What will happen if this happens...? Will Govt reduce the petrol prices by Rs 5 or more in view of election……..? If this happens then will Sensex touch again 20000 with almost zero ownership patterns? The mad sellers so far in India could turn out to be buyers again. This is future which is nobody knows…? The present also suggest the enough damage is already done and we are at the rock bottom end if not at the exact bottom and hence risk raking is must for traders as well as informed investors. Those who go with the wind will never find place in equity market and ideally they should choose MF route and RIL MF is the best outperforming fund at present. Not because they have not earned much but simply because they preserved the cash which they are now deploying heavily. In comparison to others they will outperform in any given market because of their corporate image and support. The heaviest short counter in today’s scenario is J P Associates. Each and every technical expert has sell on this co whereas fundamentally the stock is going at just 10% of their intrinsic value. In pull back this stock will definitely outperform. The average person puts only 25% of his energy and ability into his work. The world takes off its hat to those who put in more than 50% of their capacity, and stands on its head for those few and far between souls who devote 100%

Deal will come to Parliament, allow us to go to IAEA, NSG: PM Prime Minister Manmohan Singh today offered to bring the controversial Indo-US nuclear deal to Parliament before operationalising it provided the government is allowed to complete negotiations with IAEA and NSG. Noting the concerns about the deal, he said "I agree to come to Parliament before I proceed to operationalise (the deal). What can be more reasonable than this?" Breaking his silence on the nearly fortnight-long standoff between the UPA and the Left parties on the issue, he told senior journalists "If Parliament feels you (government) have done some wrong, so be it." "All that I want is the authority to proceed with the process of negotiations through all stages like the IAEA and NSG that will not not tie down the hands of the country," he said in reply to questions at his residence after he launched the National Action Plan on Climate Change. Playing down the Left parties' threat of withdrawal of support if the government went ahead with the deal, Prime Minister said there was nothing new in what they said but hoped that the government would be able to address concerns of all including the Left parties on the deal. When asked speculation over the possibility of early polls because of political problems over the deal, Singh said "I don't see elections". Initially the Prime Minister, who appeared relaxed despite the political stalemate, said he would not not like to speak on the nuclear issue maintaining that silence was better but later came out with his comments in reply to questions. "I have said it before. I will repeat it again that I have told them (Left) you allow us to complete the process. Once the process is over, I will bring it before Parliament and abide by the House," he said. PTI

Fuel price hike led to double digit inflation: FM Inflation for the week-ended June 7 is at 11.05% Vs 8.75%. Inflation at 13 yr high The finance ministry had cautioned the cabinet about the effect of raising fuel prices on India's inflation, Finance Minister P. Chidambaram said here on Friday soon after inflation reached 11.05 percent. He also hinted at stronger monetary measures. As inflation for the week ended June 7 hit a 13-year high, Chidamabaram told reporters: "The increase in petroleum product prices has contributed 94 percent to the inflation recorded." The central government had on June 4 raised petrol prices by Rs.5 a litre, diesel by Rs.3 and cooking gas by Rs.50 a cylinder. "Double digit inflation was expected after the government decided to increase fuel prices," Chidambaram said. "We had cautioned the cabinet about this."

Inflation the Villain One more field day where inflation made major dent to the sentiments of investors. Market was expecting 10.2% whereas I was expecting 9.8% and the actual no has come 11.05%. I think Indian economy is growing at pace larger than anybody’s expectations which is reflected in inflation rise. The question is whether all the negative has come in one week and this inflation is topped one….? Or will it rise to 12% next week…? Some political hiccups could resolve this embargo… It seems Madam Sonia has patched up with S P which was reflected in the SC battle and then solution through RBI in a leading gr’s case where SP has a large say. This equation was enough to call cards on N deal which Madam did call. Left too know this position and at the most can dare to just walk out and withdraw support but have lost the power to destabilize the Govt. Neither NDA nor Left would like to take the debit of destabilizing the Govt just ahead of elections. Therefore at least political front now seems to be alright. Market reaction to 11% inflation in not fully unwarranted. But at the end of the day market run on positions and most of the traders are short in the market. Nifty O I stands at 11.50 cr shares and put alone accounts for 5 cr plus and futures at 4 crs shares which means the PCR is as high as 3 which makes me to compare market with the 1.28 lac crs position in Dec 07 on long side. The boat is over tilted on one side and hence it has to sink with all passengers on board too will sink. It is better to travel next time. I mean either take calculated risk and go long where the risk reward will remain in your favour irrespective of all odds at the moment. Alternatively just stay away from the market. But do not be on selling side. So far we have seen only worst and worst factors and now it is time to see good factors surfacing from hereon. Next week itself oil will start falling. Suadi may raise oil production whereas Iraq too ready to supply oil after Osaba promised to withdraw troops from Iraq. The 190 bn USD satta in oil is unsustainable and will break any time. Monsoon is on track which will bring down food prices in next 2 months. This will control inflation. N deal will be a pleasant surprise. This was the last shock I was expecting which will set all speculation at rest. Since market has decisively breached 14700 which was never envisaged there is possibility of another 500 to 700 points downside if my projections of oil falling steeply does not come through. If oil falls then chances today’s low could make a bottom. Yet I would stick my neck in taking risk at this level so that my risk reward ratio remains in my favour. This has given vibrant impact only because this was timed along the rollover dates. Only Rs 14000 crs OI is rolled over out of Rs 86000 crs and just 4 days left for doing the same. The lack of buying depth will not allow to rollover positions at very low carrying cost. There will remain huge upside irrespective of huge inflation nos. If oil is sustaining at these levels then at least one co needs mention is Minda which will the largest beneficiary. Honda came out to announce a hybrid car for Rs 22 lacs in order to resolve the oil issue. Tata launched new CNG car and Martui too launched 800 cng version. Toyato has announced Innova and Corrola with CNG im Mumbai and Delhi. The excise differential of 8% for hybrid car makes CNG kit free rather lower than the normal car. I think the expected top line from CNG kit could be close to Rs 600 crs which will be added in MAGL in which Minda holds 23% stake. This is a high margin biz which is making some investors to consolidate holding in this co. Counter has completely dried up and chances of flare up is not ruled out. I am not trying to boost the stock but for sure it shows that this stock has failed to buzz in any falling market. Yet only long term investors should hold this stock. Jeyswal Neco reported net profit of Rs 86 crs which is stunning. At cmp of Rs 47 it trades at pe of 5 and based on 09 estimates it is at 2 pe which makes a very strong case of investment. You cannot live on other people's promises, but if you promise others enough, you can live on your own

MEDIUM TERM COUNT Market goes to 12500

The break of the A-B trendline and failure to go beyond the long term trendline both were indicative that the previous low of 14677 seen in March will break. Last week we went marginally below that but did not sustain there. The weekly lower Bollinger band at 14640 provided support. Last week i mentioned that if market halts there it could attempt splitting wave C into wave IV of C with a rally to 15750 odd possible. For this 15400 would have to be crossed. The candle pattern last weeks chart called 'on neck line' I have seen on 3-4 ocasions and each one was followed by an exhaustive last sell off in the next week before a bottom formed. So that indicates that soon 14650 will get tested again before a possible rally in the market.

11% Inflation shock; lowest close for mkts since Aug 07

Inflation in double digit has bruised the markets very badly; the Sensex lost over 500 points. Blood-thirsty bears marched harshly on bulls and remained active through the day. The Sensex and Nifty hit new 2008 lows; it was lowest closing for both indices since August 2007. Indices of rate sensitive sectors like Bankex, Realty and Auto also touched new 2008 low. Advance:Decline ratio was pathetic. All BSE indices battered severely. Experts say that RBI will have to use monetary tools to contain inflation.

Inflation Internals
Fuel, power, lubricants	7.80%
ATF prices	14%
Diesel	21%
LPG	20%
Naptha	17%
Furnace Oil	15%
Food articles	-1.10%
Non-food articles	1.40%
Manufactured pdts	0.30%
Edible Oil Major Gainer
Sunflower oil	6%
Groundnut	3%
Soybean/vanaspati	2%
Mustard seed	4%

Wholesale Price Index for the week ended June 7 stood at 11.05% as against 8.75% in earlier week. This is way above markets' estimation, which was expected around 9.93%. It is at 13-year high; last time inflation touched a high of 11-11% in May 1995. Inflation for April revised to 7.95% versus 7.33% earlier.

Oil price hike, which declared on June 4, 2008, was the main reason behind this higher inflation. Commerce Secretary says that they see high inflation for next 2 months and will consider food grain, vegetable price control to contain inflation.

Finance Minister says, "Rise in inflation was expected and we will have to look at stronger steps on fiscal, monetary side. Hike in petrol price is unavoidable."

Analysts feel that fuel price hike has not fully reflected in inflation numbers. It will see more impact in the next few weeks. They expect that the RBI will hike CRR or Repo rate before Monetary Policy. It will affect growth in infrastructure sectors as capital availability become scare, squeeze banks margin and impact on auto sales.

Moody's says, "RBI looks set to further tighten Monetary Policy and not to wait until next formal review. Inflation and tightening monetary policy will weigh on investor sentiment."

Broader indices have shattered completely and hit new 2008 lows again in just 10 days after June 10. The Sensex and Nifty hit new 2008 lows of 14,519.27 and 4333.60, which broken earlier lows of 14645.3 and 4369.8. Volumes were very high today; total turnover traded by the markets stood at Rs 85088.58 crore. This includes Rs 21056.2 crore from NSE Cash segment, Rs 58533.66 crore from NSE F&O and the balance Rs 5498.72 crore from BSE Cash segment.

The Sensex crashed nearly 569 points and the Nifty 171 points while touching day's low. The Sensex closed at 14,571.29, down 516.70 points or 3.42% and the Nifty at 4347.55, down 156.7 points or 3.48%. All BSE and NSE indices closed in red. ONGC is the only stock, remained strong through the day.

Amongst frontliners, Zee Entertainment was down -8.45%, Reliance Communication -6.68%, Reliance Ind -6.63%, Hindalco -6.39% and Jaiprakash Associates -6.03% while ONGC was up 1.56%.

Market breadth was weak; about 514 shares have advanced while 2328 shares declined. Nearly 284 shares remained unchanged.

Realty Index was the worst hit and hit new 2008 low. Index fell by 250.79 points or 4.45% at 5,383.81 due to huge selling in HDIL, Akruti City, Sobha Developers, Parsvnath, Indiabulls Real, DLF, Omaxe and Unitech.

Metal stocks like NALCO, Hindalco, Tata Steel, Sesa Goa, Jindal Steel, SAIL and Sterlite Ind lost shine. Index was down 603.80 points or 3.99% at 14,528.06.

Bankex lost 208.40 or 2.97% to settle at 6,804.78. Major losers were Bank of India, Bank of Baroda, IOB, SBI, Union Bank, Kotak Mahindra, ICICI Bank and HDFC Bank. Deutsche Bank says, "We see another 1/2 quarter of double-digit inflation and more RBI tightening."

Oil & Gas stocks took huge beating; Index fell 5.03% or 498.96 points at 9,419.89 as selling pressure seen in RNRL, Essar Oil, Reliance Ind, Cairn, GAIL and BPCL. Reliance Industries has hit new 2008 low and closed down by 6.63% at 2,099.20.

FMCG Index went down 2.51% at 2,234.23 on the back of weakness in GSK Consumer, United Breweries, Colgate, HUL, ITC, Marico and Dabur India.

Power stocks like Torrent Power, Reliance Infra, Reliance Power, Power Grid Corp, Tata Power, NTPC, CESC and Suzlon Energy have lost ground. Index plunged 2.5% at 2,539.84.

Auto stocks like TVS Motor, Bharat Forge, Hero Honda, Ashok Leyland, Tata Motors, Maruti Suzuki and Punj Tractors lost the road. Index was down 101.27 points or 2.44% at 4,042.86. Ashok Leyland says that such high inflation may result in incresae in interst rates; CRR hike will affect the CV industry and overall industry.

IT Index also caught into bears' grip, lost 101.28 points or 2.35% at 4,204.62. Major losers were Satyam, Patni Computer, Tech Mahindra, Wipro, TCS, HCL Tech and Infosys. S Gopalakrishnan of Infosys says that higher inflation will increase the cost of doing business.

Capital Goods stocks also hammered a lot. This includes Gammon India, Praj Industries, Siemens, Rel Ind Infra, Crompton Greaves, Punj Lloyd, BEML, Bharat Elec, ABB, L&T and BHEL. Index fell 267.90 points or 2.3% at 11,399.79. Lanco Infratech says that Inflation concerns are in the direction of interest rates and rising rates will be a concern for the infrastructure sector as a whole. They see hardening of interest rates by 50 bps from now.

Pharma stocks like Piramal Healthcare, Sun Pharma Adv, Aurobindo Pharma, Matrix Labs, Biocon, Dr Reddy's Labs, Wockhardt, Cipla and Ranbaxy Labs lost ground. Index fell 101.52 points or 2.29% at 4,325.40.

Midcap Index slipped 3.17% or 197.74 points at 6,032.43. Amongst midcap stocks, UB Holdings, Gammon India, Rajesh Exports, Corporation Bank, National Fert, BGR Energy, IFCI, Akruti City, Piramal Healthcare, Walchandnagar, Torrent Pharma, Deccan Aviation and Usha Martin were down over 7%.

In the small cap segment, Sical Logistics, OCL India, ETC Networks, Rain Commodities, Suprajit Eng, Hind Nat Glass, English Ind Cla, Arrow Webtex, Tata Metaliks, Automotive Axle, Zenotech Labs, Gayatri Project and Panchmahal Stee crashed over 9%. Small Cap index fell 262.76 points or 3.43% at 7,397.66.

Most active counters on the bourses were Reliance Industries, L&T, Reliance Comm, Ranbaxy Labs, ICICI Bank and HDFC.

On weekly basis, the markets smashed out cruelly. Sensex plunged 4% and the Nifty 3.7%; respective indices slipped nearly 1200 points and 325 points from weekly highs. BSE Capital Goods, Oil & Gas, Realty and Metal Indices were down 5%. Reliance Industries lost -7.5%, Bharti Airtel -6%, Reliance Communication -9.5%, TCS -5% and DLF -4.5%.

On the global front, Asian markets ended mixed; Nikkei was down -1.33%, Taiwan Weighted -1.8%, Hang Seng -0.23% and Kospi -0.56% while Shanghai was up 3.01% and Straits Times 0.31%. European markets were trading flat, at the time of writing market report.

Markets Snapshot

• Sensex, Nifty hits new 2008-lows as inflation accelerates to 11.05% at 13-year high
• Lowest closing for Sensex, Nifty since August 2007
• Sensex ends down 516.7 pts at 14571.2; Nifty down 157 pts at 4347.5
• RIL hits new 2008 lows; closes down 6.6% at 2100
• CNX Midcap Index down 3.4%, BSE Small-cap Index down 3.4%
• All BSE Sectotal Indices end in the red
• BSE Oil & Gas Index down 5%; RIL down 6.6%, Cairn India down 5.6%
• BSE Realty Index down 4.5%; DLF down 4.3%, Unitech down 2.4%
• BSE Metal Index down 4%; Tata Steel down 4.8%, SAIL down 3.3%
• Index Losers; Zee Ent down 8.5%, R Comm down 6.6%, Hindalco down 6.4%, Nalco down 6.3%, Tata Comm down 6%
• Loser; Pyramid Saimira down 20%, SICAL Logistics down 16.6%, OCL India down 13.5%, Rain Comm down 10.6%
• Loser; IFCI down 8.2%, GHCL down 8.8%, Sasken Comm down 7.9%, Indiabulls Fin down 8.4%, HDIL down 9.3%
• NSE Advance Decline at 1:11
• Total market turnover at Rs 85088 cr Vs Rs 56589 cr on Thursday
• F&O turnover at Rs 58533 cr Vs Rs 42696 cr on Thursday

F&O Snapshot

• Nifty July futures end at 20 pts discount; June ends flat
• Nifty July futures add 30 lakh sharees in OI; add 43.7 lakh shares in June series
• Fresh shorts seen across realty, banking
• Unwinding seen in momentum stocks
• Nifty June 4500 Call adds 7.5 lakh shares ; 38% OI buildup
• Nifty June 4400 Call adds 5.8 lakh shares; 58% OI buildup
• Nifty June 4300 Call adds 5.65 lakh shares
• F&O Stocks
  RPL down 5%; add 38.5 lakh shares in July series
  Ispat down 5%; add 27.5 lakh shares in July series
  IFCI down 8%; add 20 lakh shares in July series
  TTML down 5.2%; add 18.8 lakh shares in July series
  RNRL down 6.6%; add 15.2 lakh shares in July series
  Parsvnath down 6.5%; add 12.8 lakh shares in July series
• Rollover
  Ultratech: 61%
  NDTV: 58%
  India Cememt: 55%
  HDFC Bank: 27%
  Sesa Goa: 26%
  NTPC: 25%
  DLF: 25%
  R Power: 20%

Markets This Week

• Sensex down 4%, Nifty down 3.7%
• Sensex down nearly 1200, Nifty down nearly 325 points from weekly highs
• CNX Midcap Index down 3.5%, BSE Small Cap Index down 2.5%
• BSE Cap Goods, Oil & Gas, Realty, Metal Indices down 5%
• BSE Bankex down 3.5%; SBI down 6.2%, ICICI Bank down 4.2%, HDFC Bank down 2%
• Index losers: RIL down 7.5%, Bharti down 6%, Rel Comm down 9.5%, TCS down 5%, DLF down 4.5%
• Non-Index losers: IFCI, Chambal Fert down 11%, RNRL down 7.5%, Nagarjuna Fert down 8.2%, RPL down 4.3%
• Non-Index losers: IDFC, GHCL down 10%, Mercator down 12.5%, Punj Lloyd down 9%
• Non-Index Gainers: Sasken Comm up 15%, Bajaj Hind up 5%, SRF up 8%

Rel Infra bid for Sewri-Nhava Sheva link void: Maha govt The Maharashtra government says Reliance Infrastructure bid for Sewri-Nhava Sheva link is void. Reliance Infrastructure failed to extend the bid validity beyond June 12. The Maharashtra government plans to form a special purpose vehicle for the Sewri-Nhava Sheva link project.

Reliance Infra to invest $7 bn for expansion Reliance Infrastructure Ltd(RIL), a power generator controlled by billionaire Anil Ambani, plans to invest $7 billion in the next three years to expand its engineering and construction business in India and acquire assets overseas. The company, formerly called Reliance Energy Ltd, will borrow as much as 8% of the funds, director Lalit Jalan said in an interview in Mumbai , without elaborating. ‘‘We’re looking for a good asset at a good price,’’ he said. chairman Ambani changed the company’s name in May to reflect the widened scope of its business to include roads and airports as India spends $500 billion to improve infrastructure by 2012. “Reliance, which started a Shanghai office last year, expects to unveil a venture in China in the next two months and aims to develop a global business,” Jalan said. ‘‘It sounds easy on paper but the proof of success only comes after projects are completed,’’ said Mahesh Patil, who helps manage $9 billion in debt and equity at Mumbai-based Birla Sun Life Asset Management. ‘‘This company is getting into too many projects. It may be plausible but it’s going to be a big, big challenge.’’ Reliance Infrastructure’s stock, the best-performer on India’s 30-share Sensitive Index last year, has declined 52% since the start of this year. The proposed investments will be separate from the $28 billion that its 45% owned unit Reliance Power, plans to spend on adding generation capacity in India in five years. Reliance Infrastructure’s total debt amounts to about 70% of the company’s equity.” It seeks to partner Chinese companies for a technology, services or production venture,” Jalan said, declining to give details.

MIDC allots plot to REL in Butibori The Maharashtra Industrial Development Corporation (MIDC) has recently alloted plots to industrial houses like Reliance and HCL at its five star industrial estate in Butibori here. Reliance has acquired 175 acres of land for its proposed coal-fired 300 mw power generation plant while HCL, the computer major, has taken 80 acres of land for IT park. Reliance has already selected boundary fencing to earmark the area, official sources told. In a major drive MIDC has taken back possession of 200 industrial plots from buyers who had not taken any initiative to set up industry. By an amendment in rules, MIDC changed the period of seven years alloted to plot buyers to set up their units to five years. It recently reduced it further to three years. There were 384 plots for which the specified period had ended and they failed to come up with industrial units while 93 of them were within the period of three years. Out of the cancellations, MIDC reallotted 175 plots to new buyers. The Butibori MIDC industrial estate, known as five star estate, has a total area of 2385 hectares and a total of 2127 plots. About 1,889 plots including medium and big ones measuring 500 sq mts to 1,000 sq mts and above. Few plots are vacant for residential purposes.

Ess Dee to revive Vedanta`s India Foils Ess Dee Aluminium, India's biggest pharmaceutical packaging company, has won a regulatory approval to bail out India Foils, which is owned by Vedanta Group, ahead of a possible takeover. Ess Dee, based in Mumbai, has been cleared by the Board for Industrial and Financial Reconstruction (BIFR) to help revive Kolkata-based India Foils, part of billionaire Anil Agarwal-controlled Vedanta group. Ess Dee and Vedanta's Madras Aluminium (Malco), the holding company of India Foils, will form a special purpose vehicle (SPV) to turnaround India Foils, which is saddled with liabalities of over Rs 300 crore. The SPV will invest in about Rs 50 crore immediately to upgrade the three manufacturing facilities to US Food and Drug Administration (FDA) standards, eyeing exports to developed markets with value added products and contract manufacturing options, said sources. ICICI Bank, the agency appointed to implement the rehabilitation process, suggested various options and the approval has been given for a mix of these suggestions. Once the company comes out of red, the Vedanta group may hand over India Foils to Ess Dee Aluminium, they said. "We do not have any specific timeframe in mind for the turnaround. The rehabilitation process will begin once we get a formal nod from BIFR. We are awaiting it," said Sudip Datta, chairman and managing director, Ess Dee Aluminium. Datta added that it was still early to predict whether Ess Dee would take over the company. "We have to see how the business prospers and the manner in which it adds value to Ess Dee's business." India Foils, which has a turnover of around Rs 300 crore, and Ess Dee (Rs 800 crore) are the only two major aluminium packaging manufacturers in India. India Foils, the only sick company in the fold of multi-billion metal and mining global major Vedanta, employs about 400 people. Started way back in 1905 as Venesta Foils, the company went on to become one of the largest pharmaceutical packaging companies in Asia with a capacity of 19,000 tonnes per annum and pioneered many new packaging solutions for the Indian pharmaceutical industry. "Vedanta is predominently a mining and metal manufacturer. India Foils' pharmaceutical packaging is a totally different business for the group. Returns were not attractive for Vedanta and, hence, the management did not focus on the company," said an analyst. Sources said India Foils will add another 19,000 tonnes per annum of capacity to Ess Dee Alumium, which faces supply constraints due to lack of capacity. At present, Ess Dee has a capacity of 18,000 tonnes per annum.

King is King... Inflation will be 9.8% tomorrow and there is no dispute that market has corrected for global clues as well as inflation. At the same time the robust advance tax nos as well as TDS collections can’t be brushed aside. This proves that the valuations have over reacted and growth will sustain at 25% plus levels whereas Senses has factored in 10% growth in corporate earnings. To that extent there is a surprise element is market correction and hence the PE of 14 is fully unjustified. Buying will surface on these nos. In any case the severity with FII were selling papers has stopped and instead value buying has started. Some feathers like rollover will remain which create huge volatility in the market. In absence of required depth from retail the cost of carrying will remain very high and for that the volatility has to remain high. We do not expect market to go below 15000 or worst case scenario 14700 and hence for last 300 odd points if you are getting golden opportunity to enter the market you must enter it. For traders this is the best market. Risk of max of 300 odd points which is really nothing given the way market have corrected and on upside you have at least 3000 points to eat if not more. The risk reward ratio clearly favors bulls at this point in time and therefore traders will do well to take risk at this point in time. You can catch proper momentum and earn good returns then the profit can help you cushion from further losses which could be a money winning formulae. My favorite stocks are back to SBI, Century, B Dyeing, RPL, RIL, Reliance Capital, SAIL, J P, MTNL, IFCI, IDBI and R Com. We will focus on these shares for next 3 months to make our fortunes. Please cut and paste today’s prices all these scrips as I will need feedback from you in Nov 2008 where I will be proving that all these stocks have delivered 25 to50 % return. Not acceptable yet you preserve this. The current correction is at the behest of BULLS and therefore I have reasons to believe that markets will rise in style. KING is KING. It is easier to be critical than correct.

Rollover pain... Just before market started showing weak signals our S C team matured all pending calls which were recently introduced in S C section. We had 90% strike rate in round II. We believe that market has become overbought in some counters as majority of traders and technical guys were expecting market to go up to 4730. The rollover pain has started and will continue for next 2 days. Only 6 trading sessions are left for rollover. Normally market used to move up very sharply for rollover but nowadays market has to fall sharply because the overall positions are of sell side. Traders have to take advantage of the range and trade in the given circumstances. We after keeping you away from major trading in A gr for almost 6 months have now trying to create a good platform for trading. Most of the people even believed that our calls were not good and boring. It was market like that and knowingly we have tried to keep you away so that you are saved from making further losses. I heard that a leading technical analyst and fund manager said in public forum that if a gun is put on their head and asked where they would buy and answer was 4000. Cool…What was the need to express the same in the public forum…? Whole world come to know the deals and buying and selling of these people and whether such kind of statements at 4350 or 4400 was ever justified…? If market has tolerated from 6200 to 4400 then market has capacity to tolerate them eve till 4000 if required. Any way, I am not expert to comment on what compelled them to issue such as a statement but for sure I do not think that 4000 will even come. The level of cash is very high is funds and also fresh funds are coming back in India and hence buying had to start sooner than later and if I am fund what makes difference for me whether I buy at 4000 or 4400 …? Can I deploy entire cash in one day and answer is no. If it took 6 months for FII to sell stocks worth just 5 bn USD in India the domestic funds sitting on equal amount of cash can’t even buy desired level of stocks in the market. The only way of deploying cash is search block deals. First it was 2 cr shares deal in idea. Then it was Ranbaxy, torrent etc. Now Templeton has sold 3% stake to RIL gr in Unichem. This is the way stock will change hands and new hands will make new profits and their NAV will outperform. MSP Steel is an integrated player in steel and power and has applied to license for iron ore with M P Govt. worth Rs 400 crs. In my opinion it could take around 6 months for getting the mining lease. It has a gr co with large iron ore in Orissa. The merger will add real value in MSP Steel Ltd. At present the gr is interested in building assets silently and therefore the stock price oscillates between Rs 45 to 60. The weakness will remain for next 2 days for rollover. We will generate buy calls at appropriate time in order to create more opportunities for you. But for sure market will recover from hereon to new levels with every settlement. Work isn't to make money; you work to justify life.

US ready to work on nuclear deal till January 20, 2009 Ahead of the UPA-Left meeting to resolve differences over the Indo-US civilian nuclear deal, Washington has said it would make every effort to get the pact through Congress by January 20 next year when the new President assumes office.

Oil falls below $136 as Nigeria strike averted Oil fell on Thursday as supply concerns in Nigeria eased after the country's oil ministry prevented a potentially crippling strike by workers at Chevron. But falling U.S. oil stocks and comments from the White House that Saudi Arabia was unlikely to raise output in the near term supported prices, which have climbed 40 percent this year. U.S. crude fell 73 cents to $135.95 a barrel by 1:58 a.m. EDT, after settling up $2.67 at $136.68 a day ago on the Nigerian worries. London Brent crude slid 66 cents to $135.78.

The Sensex had a better week

The Sensex had a better week when compared to the previous one, with a good support at the 15,000.00 levels. The Sensex after losing 5 percent last week, lost another 2.5 percent this week to close at 15,189.00 and the Nifty lost the same 4,517.00. Midcap and Smallcap indices performed relatively well sliding by 1.5 percent each. Interest rate hike by the RBI took its toll on the Realty and Banking stocks. The sectoral index for Realty sector ended down by 9 percent and banking lost 3 percent for the week.IT as a sector lost nearly 5.5 percent on fears of US recessions and Nasscom's comments that the growth of IT exports might drop by 3-4 percent. Healthcare , which is considered a defensive sector in turbulent times in the market was the top gainer inching up by nearly 4.6 percent. News of Japanese pharma major Daiichi Sankyo buying out the promoters stake in Ranbaxy has propelled the pharma stocks. Analysts expect some more acquisitions in this space in the coming years, as foreign companies are looking at increasing their generic drug portfolio to boost their profitability and diversify their product portfolio. Stocks closed lower in 4 of 5 trading sessions this week, with Monday being the worst day with Sensex losing more than 500 points. Thursday was the only 'green' day for the Sensex as the indices made a smart recovery on higher growth in industrial output. The much awaited interest rate hike happened this week as the RBI raised the interest rate by 25 basis points from 7.75 to 8.00 percent. Inflation numbers continue to make new highs as the new numbers came in at 8.7 percent which is the highest since 2001.FII's after selling equities worth Rs 33bn last week sold Rs 35 bn in equities this week, continuing their selling spree. Wall Street had relatively a better week when compared to the domestic indices.The Dow industrial gained 0.8%, the S&P 500 0.05% and the Nasdaq ended in the red with a loss of 0.8% for the week. The decline in crude prices, strengthening dollar and encouraging economic data helped the indices recover towards the end of the week. The key for the markets from here is the direction of Crude prices and the Fed's meeting in the coming week, which might give us an idea about the Fed's plan for more interest rate hikes in the future to combat inflation. Key Events for the coming week: * Some more Q4 numbers. US Markets: * Tuesday - Industrial Production numbers * Wednesday - Crude Oil and gasoline supply date * Thursday - Jobless benefits data Stocks to Watch in the coming week * Finolex Ind - Rs 63.00 * Zee Entertainment- Rs 220.00 * Zee News - Rs 52.00 * Aurobindo Pharma - Rs 329.0 * Solar Explosives- Rs 390.00

BPCL posts net profit of Rs 58 cr State-run Bharat Petroleum Corporation (BPCL) has posted a net profit of Rs 58.4 crore for the quarter ended March 31, 2008 as compared to Rs 670 crore for the quarter ended March 31, 2007.Total income of the company has increased from Rs 24,400 crore for the quarter ended March 31, 2007 to Rs 32,712 crore during the quarter. The company has posted a net profit of Rs 1580 crore for the year ended March 31, 2008 as compared to Rs 1805 crore for the year ended March 31, 2007. Total Income has increased from Rs 98,312 crore for the year ended March 31, 2007 to Rs 1,11,786 crore for the year ended March 31, 2008.

Eyeing mines in Canada, Mozambique, Australia: SAIL

Eyeing mines in Canada, Mozambique, Australia: SAIL

· Eyeing mines in Canada, Mozambique, Australia: SAIL

Goldman puts $50 million in Shapoorji co Goldman Sachs, the global financial powerhouse, has picked up a minority stake in Sterling & Wilson, a Shapoorji Pallonji group company, for $50 million. No other financial details were available. Sterling & Wilson is one of the leading mechanical, electrical and plumbing (MEP) contracting companies in the country. It is one of those few companies in India that offer this kind of services, people acquainted with the industry said. The fund infusion by Goldman Sachs would supplement the existing support from the Shapoorji Pallonji group and enable the company to accelerate its growth plans both domestically and internationally, a top company official said. Avendus Capital was the financial advisor for the transaction. While realty industry as a whole is estimated to grow at an annual rate of about 20% fro the next few years, there's a growing trend towards consolidation and organised structure.