Economic growth on track; GDP at 7.4 per cent

he growth figures for the 2009-10 fiscal have been announced. The country’s economy grew at 8.6 per cent in the fourth quarter taking the GDP to 7.4 per cent for the last fiscal. The GDP for the third quarter was revised upwards from 6 per cent to 6.5 per cent.

The farm sector has grown by 0.7 per cent, manufacturing grew by 16.3, mining sector grew by 14 per cent and services grew by 8.4 per cent in the fourth quarter of the last fiscal to take the Q4 GDP to 8.6 per cent.

Earlier official estimates had pegged the growth figure for the last fiscal at 7.2 per cent. But most economists had expected that the growth would top the advance estimate of 7.2 per cent. For the fourth quarter, economists expect the economy to have grown anywhere between 8.7 and 9.3 per cent.

The first three quarters of the last fiscal grew by 6.1 per cent, 7.9 per cent and 6 per cent in that order.

The government’s chief statistician Pronab Sen had recently pegged FY10 growth between 7.2 and 7.5 per cent while the chief economic advisor Kaushik Basu had predicted the fourth quarter growth of over 8.6 per cent and FY10 growth of 7.2 per cent.

Economic growth slowed down to 6.7 per cent in 2008-09 after over 9 per cent growth in the previous three fiscals because of global financial crisis.

Government’s stimulus to the industry pushed growth to 7.9 per cent in the second quarter of 2009-10, much higher than 6.1 per cent in the first quarter. However, growth again slipped to 6 per cent in the third quarter as agriculture production contracted by 2.8 per cent and community, social and personal services slipped by 2.2 per cent.

Read more at: http://beta.profit.ndtv.com/news/show/economic-growth-on-track-gdp-at-7-4-per-cent-64203?u=1126&cp

Source http://beta.profit.ndtv.com/news/show/economic-growth-on-track-gdp-at-7-4-per-cent-64203?u=1126

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Rupee gains as risk taking resumes globally

The rupee strengthened on Friday as shares climbed after risk appetite got a boost from China's calming comments on its investments in debt-ridden Europe, but the dollar's gains against majors limited the rise.

At 10:10 a.m. (0440 GMT), the partially convertible rupee was at 46.62/63 per dollar, 1.4% stronger than 47.29/30 at close on Wednesday. The market was closed on Thursday for a local holiday.

"China's statement lifted sentiment globally, but I did not really expect equities to rally so much," said Nitesh Kumar, an inter-bank dealer with Development Credit Bank. "The GDP data on Monday may be the next tipping point."

The People's Bank of China said a Financial Times report that the State Administration of Foreign Exchange (SAFE) was concerned about its exposure to euro zone debt was groundless, lifting global stocks.

% in the March quarter from a year earlier—it’s strongest since December 2007—the median forecast of 20 economists showed.

Most emerging market currencies were higher compared to the dollar. However, the index of the dollar against six major currencies was up half a %.

"Can't say exactly whether this is a trend reversal, but tensions have eased a bit," said Vikas Chittiprolu, a senior foreign exchange dealer at state-run Andhra Bank, predicting a 46.50-46.80 range for the day.

Indian shares rose more than 1 %, with Reliance Industries and ICICI Bank leading the rise, taking cues from firm world markets.

Foreign fund flows into and out of the sharemarket are a key trigger for the rupee. So far in May, foreigners have withdrawn USD 2.3 billion in their biggest monthly pullout since October 2008.

"Given the near-term bias for extension of gains both in EUR/USD and Sensex, the rupee should extend its gains into 46.50-46.65," said J. Moses Harding, head of global markets at IndusInd Bank.

The euro steadied on Friday, benefiting from a short-covering bounce after China assured investors it was not losing confidence in euro zone assets, while higher-yielding currencies held on to broad gains.

One-month offshore non-deliverable forward contracts were quoted at 46.71, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were both at 46.76, with the total traded volume on the two exchanges at about USD 1.4 billion.

Source http://www.moneycontrol.com/news/rupee/rupee-gains-as-risk-taking-resumes-globally_460847.html

Sensex erases early losses, up 116 points in morning trade

Erasing early losses, the Bombay Stock Exchange's benchmark index, Sensex, rose by almost 116 points in morning trade today as speculators covered pending short positions amid selective buying by funds.

The index, which lost 56.74 points in opening trade, bounced back by 115.91 points, or 0.70 per cent, to reach 16,503.75 points at 1045 hrs. Auto, capital goods and oil and gas sector stocks led the recovery.

Similarly, the wide-based National Stock Exchange index Nifty rose 32.25 points, or 0.65 per cent, to 4,949.65 points. Brokers said apart from covering up of outstanding short positions by speculators -- with today being the last session of monthly expiry in the derivatives segment -- buying by funds at select counters also helped stocks reverse the weak trend that had set in earlier in the day.

They added reports of a rebound on the other Asian bourses also influenced the trading sentiment. In the auto segment, Mahindra and Mahindra was being traded 2.95 per cent higher at Rs 534.75 after the company acquired a majority stake in electric car-maker REVA. Other gainers were Tata Motors, up 1.78 per cent at Rs 721.90, and Maruti Suzuki, which rose 0.76 per cent to Rs 1,208.40.

source http://www.hindustantimes.com/Sensex-erases-early-losses-up-116-points-in-morning-trade/H1-Article1-549111.aspx

Mahindra to buy stake in electric car firm source

India's leading utility vehicle maker, Mahindra & Mahindra (MAHM.BO), is set to announce on Wednesday it is buying a stake in an electric car company, a source with direct knowledge of the matter said on Wednesday.

Mahindra, also India's largest tractor maker, will make an announcement at 11:45 a.m. (0615 GMT) in the southern city of Bangalore, where the Reva Electric Car Company is headquartered, he said.

Details of the transaction were not immediately available.

Mahindra shares, valued at $6.4 billion, were up 2.6 percent at 529.70 rupees by 0410 GMT after falling 4.4 percent in the last two trading sessions. The main index .BSESN was up 1.3 percent.

The shares have fallen about 2 percent this year, while the main index is down nearly 7 percent.

A deal will mark Mahindra's entry into the electric vehicles segment and push it a step closer to being a complete automotive vehicles manufacturer.

"Mahindra wants to consolidate its position as a company which wants to manufacture everything on wheels," said Arun Kejriwal, director of KRIS Research. "This acquisition would go a long way in helping achieve this."

Last year, Mahindra had launched a range of scooters and later made a foray into commercial vehicles with one-tonne Maxximo.

It is also scheduled to launch pick-up trucks in the United States towards the end of this year. [ID:nSGE64I0DF]

"Mahindra can leverage on Reva's technology to bring out more products," Kejriwal said.

Reva, founded by technocrat Chetan Maini in 1994, is an Indo-U.S. joint venture with California's AEV LLC and has launched more than 3,000 cars. Maini is its deputy chairman and chief technology officer.

The cars are priced between 300,000 and 360,000 rupees ($6,329-$7,595) in India, and mostly run in Bangalore and London.

It struck a deal last year with the Indian unit of General Motors [GM.UL] to develop electric cars and work has started on an electric version of the Chverolet Spark, which is scheduled to hit the roads in October.

In this year's budget the Indian government gave a fillip to the electric vehicle industry by removing customs duties on import of critical components used in such vehicles.

The Times of India reported on Wednesday that Mahindra was close to a deal and valued Reva at about $100 million. ($1=47.4 rupees) (Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan)

Nifty ends near 4800 in global meltdown

Indian markets ended near 3-month lows on Tuesday, reacting to fears over a widening debt crisis in Europe and rising hostility between South and North Korea. Stocks from metals, capital goods and banks were amongst the worst beaten sectors.

Equities opened gap-down on reports that North Korea was readying its military against any action by South Korea and the US. The fall was triggered further by negative opening of Europe which led to the benchmarks slipping below crucial support levels.

National Stock Exchange’s Nifty ended at 4806.75, down 137.20 points or 2.78 per cent. The index breached the crucial support of 4800 and touched an intraday low of 4786.45.

Bombay Stock Exchange’s Sensex closed at 16,022.48, down 447.07 points or 2.71 per cent. The 30-share index fell below 16,000 to touch an intra-day low of 15,960.15.

“Breaching 4,800 is not a comfortable sign. Given the negative cues from across the globe, there is a good possibility of 200 points fall on Nifty. In the short term, the market looks over-sold and we may see a bout of profit booking before the May F&O expiry,” said Anu Jain, Vice President, IIFL Private Wealth Management, India Infoline.

The BSE Midcap Index plunged 3 per cent and BSE Smallcap Index fell 3.43 per cent.

Amongst the sectoral indices, BSE Metal Index fell 5.10 per cent, BSE Capital Goods Index declined 3.09 per cent and BSE Bankex fell 2.62 per cent.

“Most traders are short on the market and they should partially cover their positions, whereas investors must identity value stocks and start buying in small quantities on dips in next 15-30 days,” Jain said.

Reliance Communications (-6.32%), Hindalco (-5.43%), Tata Motors (-4.66%), Sterlite Industries (-4.49%), and Tata Steel (-4.45%) were amongst the top Sensex losers.

Cipla (0.05%) was the only gainer.

Market breadth was negative on the BSE with 1210 losers against 115 gainers.

Europe continued to reel and the US markets are also seen opening sharply lower. At 4:30 pm IST, Dow Jones futures was down 2.11 per cent, S&P 500 futures fell 2.44 per cent lower and Nasdaq 100 declined 2.06 per cent.

Ambani truce opens int’l lines for RComm again

The patch-up by Ambani brothers by scrapping their non-compete agreement has paved the way for Anil group’s flagship firm, Reliance Communications Ltd (RComm), to explore a combination of foreign tie-ups for expansion.

While company officials were not available for comments, analysts maintain that with the right of first refusal (RoFR) also going away with the non-compete agreement, RComm and South Africa’s MTN could once again look at a merger possibility, making the Anil Ambani firm part of the South African telco, something rival Bharti had refused to do in 2008. “The canvas is now wide open for RComm since it was this right of first refusal clause which restrained the company from getting into a potential transaction,” said Prashant Singhal of E&Y. However, a deal with MTN could entail huge cash outflows for RComm this time since valuations of telecom companies in India have taken a hit in the last two years, he pointed out.

Romal Shetty of KPMG, however, ruled out RComm getting into any immediate talks. With valuations plummeting, acquisition or merger would not be a good proposition for the company, he felt, adding RComm had bagged spectrum in 13 circles for Rs 8,600 crore in the recently concluded 3G auctions.

RComm, which is the country’s second largest mobile operator with a total subscriber base of 102 million, needs to scale up because rival Bharti Airtel has widened the gap with the recent acquisition of the African operations of Zain Telecom.

An RComm-MTN combine could today throw up a total subscriber base of 225 million, thus giving a major leg-up to Anil Ambani’s telecom dreams. Further, MTN, which is present across 21 countries, is quite keen on an emerging market like India, the fastest growing telecom market in the world. Further, with Bharti competing directly on its home turf through the Zain buy, the pressure on MTN would also be to scale up.

The Bharti-Zain combine has a total subscriber base of 179 million with operations across 20 countries and ranks as the world’s fifth largest mobile firm by user base. An RComm-MTN combine, if it happens, would easily beat it.

In 2008, after the Bharti-MTN merger talks collapsed the first time as the latter wanted the Indian entity to become its subsidiary at the last moment, RComm had entered into exclusive negotiations with the South African telco. RComm had agreed to become part of MTN, with Anil Ambani becoming the single largest shareholder in the combined entity.

However, the talks could not proceed when the Reliance Industries Ltd (RIL) waved the RoFR clause, which mandated that in case the promoters’ equity in group companies of either brother fell below majority, the first right of refusal lay with the other brother. Had the deal fructified then, the joint entity would have emerged as the sixth largest mobile operator in the world with a combined subscriber base of over 116 million.

Sensex firm, Reliance stocks up sharply

Trading remained firm on the Dalal Street after the markets consolidated broad based gains on account of the positive deal between the two Ambani brothers who scrapped their 'non-compete' agreement yesterday. The benchmark indices rose close to a per cent and three quarters with the Sensex gaining 291 points to 16,737 while Nifty adding 90 points.

The Nifty broke the key resistance of its 200 day moving average and was trading above the psychological 5,000 mark.

Stocks from the Reliance stable- Mukesh's and Anil's- rose sharply. RIL was up 3.8 per cent and significantly contributed to the rise in the index. RNRL was up 23.8 per cent. Reliance Infra was up 10.6 per cent, Reliance Communications rose 10.8 per cent and Reliance Capital rose 7.9 per cent.

All the sectoral indices were in the green with oil and gas leading the broad based gains. The oil index was up 2.8 per cent mainly on account of RIL doing well. Metals rose 2.3 per cent while realty gained 1.5 per cent.
The broader markets were in the green. The BSE small cap index was up 2.3 per cent while the mid cap index was up 1.7 per cent.

Other gainers were Godrej Consumer Products Limited that rose 1.06 per cent on the back of its acquisition of Issue group in Argentina. ICICI Bank rose 1.4 per cent while Bank of Rajasthan rose 9.9 per cent.

Among the losers were TCS, Cipla and HDFC.

Asian stocks markets were mostly higher today. China was leading the gains with the
Shanghai Composite gaining 3.48 per cent while there was some weakness as far as Japan was concerned. Japan's Nikkei was down 0.27 per cent. South Korean Kospi was up 0.3 per cent while the ASX 200 index in Australia rose 2 per cent.

In New York on Friday, the Dow Jones industrial average rose 1.3 percent to 10,193.39, making back some of the steep losses recorded recently amid renewed worries about Europe's debt problems.

The broader Standard & Poor's 500 index rose 1.5 percent to 1,087.69, and the Nasdaq composite index added 1.1 percent to 2,229.04

World stocks tumble on euro zone debt fears

European stocks fell again on Friday despite German approval of a euro zone rescue package, as markets remained unconvinced the aid would resolve the debt crisis. The euro, however, found support from short covering. Wall Street was also set to open lower, after plunging nearly 4 percent in the previous session. In the general flight to safety bund futures extended their gains, up 28 ticks on the day to 128.59, with the German 10-year government bond yield hitting a record low at 2.656 percent.

"We are heading into the U.S. session here and the markets want to be better bid. The market is just anticipating more risk aversion trades ... People are still shedding risk and risk assets," a bond trader said. World stocks as measured by the MSCI All-Country index were down 0.41 percent, with the more volatile emerging markets component down 0.38 percent.

The euro continued to benefit from hedge funds scrambling to cover short positions and rose 0.32 percent to $1.2501. Germany's lower house of parliament approved a law allowing the country to make the biggest contribution to a 750 billion euro emergency debt package to help protect the euro, but markets remained troubled by what they perceive as poor co-ordination amongst European members in tackling the crisis.

European finance ministers were meeting later on Friday to discuss changes to budget rules to prevent another Greek-style debt crisis. The FTSEurofirst 300 index of top European shares was down 2.2 percent, extending sharp falls over the previous two sessions after Germany's decision to ban naked short selling on some assets raised fears about a lack of coordination between European policymakers.

The UK's FTSE 100 slipped below the key 5,000 mark for the first time since November 2009. "Valuations have cheapened, but the underlying fundamental issues have not been addressed and will continue to dog risk asset markets in the months ahead," said analysts at RBC Capital Markets in a note. "The lack of political cohesion within the euro zone is becoming more apparent by the day and this can only undermine risk appetite and conviction in the longer-term outlook for investing in the region."

FINANCIALS HAMMERED

Energy shares were among the biggest losers on concerns that any setback to economic growth would hit demand for oil as the oil price fell towards $70 a barrel. Financial stocks also took a hammering following Thursday's approval by the U.S. Senate of a sweeping Wall Street reform bill. Earlier in Japan, the Nikkei closed down 2.5 percent and lost 6.5 percent on the week, its biggest weekly drop in more than a year.

The euro, meanwhile, was also supported by rumours of possible central bank intervention to prop up the ailing currency. "The intervention threat doesn't have to feel realistic, when the market is in an extreme position even just a muttering (of intervention) can cause a reaction," said Daragh Maher, senior currency analyst at Credit Agricole CIB. The U.S. dollar was up 0.42 percent to 85.92 against a basket of currencies as investors sought safe-haven assets. U.S. Treasuries also benefited.

Sensex cuts some losses but still in deep red

Indian markets pulled off from the day's low but were still trading in the red on weak global cues. The benchmark indices - Sensex and Nifty- both opened more than a per cent down. The Sensex was down 223 points while Nifty was trading 67 points down from yesterday's close.

Stocks have declined to the lowest in three months. The Nifty was trading below 4,900 for the first time since February 26 this year.

The S&P 500 Nifty and most Asian indices were trading below the 200 daily moving average (DMA). Among the sectoral indices, high beta realty and metal were the worst hit.

The Sensex and Nifty closed in the green yesterday despite negative global cues on the back of the oil and gas index doing well led by index heavyweight ONGC that gained 8 per cent. But there was no saviour for the Dalal Street today. ONGC recoverd from a 2.5 per cent slump and was trading down 0.65 per cent.

All the sectoral indices were trading in the red and the fall was led by metals and realty. Realty was down 2.9 per cent while metals lost 2.73 per cent. The market breadth was negative and the broader indices were in red. The BSE smallcap was down 2.1 per cent and BSE midcap was down 1.84 per cent.

Among individual stocks, Bank of Rajasthan rose 9.98 per cent while ICICI Bank fell 1.48 per cent.

Among the top gainers were Piramal Healthcare (3.9 per cent), Cipla (1.54 per cent), GAIL (1.81 per cent) and IOC (0.58 per cent). ITC was up 0.36 per cent. The company will announce its results today.

Among the losers were HDIL (4.3 per cent), Hindalco (4.25 per cent), Lanco Infra (4.22 per cent), IVRCL Infra (3.69 per cent), JP Associates (3.47 per cent).

Jaypee Infratech got listed BSE today at Rs 92. Its issue price was Rs 102.

Japan's benchmark index, the Nikkei 225, was down 2.79 per cent and was trading at 9,750. The Shanghai Composite was down 0.39 per cent while the Australian index, the S&P ASX 200 was down 0.58 per cent. The Australian market slumped to its 10 month low at one time.

Earlier, the S&P 500 broke its 200 day moving average while the Dow posted a 376 point decline, its biggest since March 5, 2009. Analysts said more investors seemed to be grasping the possibility that the U.S. recovery could be in jeopardy, and that many were realizing that the stock market's big rebound since March 2009 may not have been justified.

European markets fell for a second session on Thursday to a two-week closing low.

Telecom stocks see mixed trend

Telecom stocks witnessed mixed fortunes on the bourses, a day after the completion of the 3G spectrum auctions, with most scrips, including Bharti Airtel, settling in the positive terrain today.

Shares of Bharti Airtel closed marginally higher by 0.23 per cent at Rs 260.15 and Idea Cellular closed at Rs 53.25, up 0.95 per cent on the Bombay Stock Exchange, after a good intra-day rally.

The auction for 3G mobile spectrum licences closed yesterday, leaving finance minister Pranab Mukherjee with Rs 67,719 crore (around USD 15 billion), which is almost twice the revenue he expected to raise. Other telecom gainers were TTML (0.76 per cent) and Tata Communications (0.10 per cent).

Meanwhile, stocks which bucked the trend and closed down were Reliance Communications (0.73 per cent) and HFCL (0.19 per cent).

The pan-India bid for a third generation radio frequency stood at Rs 16,750.58 crore and the Anil Ambani-led RCom bagged the highest number of 13 circles, followed by Bharti in 12, Idea in 11 and Vodafone and the Tatas in nine circles each, according to the department of telecom.

The government had estimated to raise Rs 35,000 crore from 3G spectrum sale and broadband wireless access (BWA). But with the auction for BWA spectrum yet to begin, the revenue mop-up could go up further.

3G auction ends: How will it impact telcos EPS?

As the auction concluded on Wednesday, the successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.

The 3G spectrum auction finally ended yesterday after 34 days of hectic bidding. The government netted in USD 14.6 billion from the 3G auctions which will give it elbow room to deal with the rising deficit. The all-India 3G licence is worth USD 3.6 billion.

Commenting on the same, Sanjay Chawla of Anand Rathi Securities, a close telecom watcher, said he expected the pan India 3G license to cost USD 2 billion. "It is good that there is no pan India player."

Impact on telcos:
Bharti is likely to pay Rs 12,300 crore for 13 circles. While Reliance Communications and Idea will pay Rs 8,600 crore and Rs 5,769 crore for 13 circles each. (Read: Who gets what? & Who's the real winner?) He does not see any EBIDTA contribution from 3G for the next two years.

On Bharti:
He stated that Bharti's FY12 EPS could be impacted by 12-13%. "The total outgo for Bharti is lower than the earlier estimate. The worst case net debt to EBIDTA for Bharti would be 2.5 times. Hence, we have no real worries over Bharti's balance sheet." Bharti not going for a pan India licence is positive for stock, he added. (Also see: 3G auction ends: Bharti cries foul)

On Idea:
Idea's FY12 EPS impact could be 40-50% on account of 3G, Chawla said. Post auction, he feels Idea deserves a premium over Bharti, Reliance Communications. "On an enterprise value to EBIDTA basis, Idea is trading at a discount to R-Comm."

On BSNL/MTNL:
State-run telecom players like BSNL and MTNL have to pay the price determined in the 3G auction for the licences that were allotted earlier. This has led to questions on whether they can afford to pay such huge sums and whether there will be a waiver. To this, Chawla said he expects a special discount/waiver for BSNL, MTNL.

Rupee posts biggest 1-day fall in 15 months

RBI study makes case for rupee as alternative global currency

The Hindu RUPEE POWER: The study, authored by RBI Director Rajiv Ranjan and Assistant Advisor Anand Prakash, has mooted the idea of floating the rupee as a global currency.

The Indian rupee posted its biggest single-day fall in 15 months on Wednesday as emerging market stocks tumbled following Germany's decision to tighten financial regulation while the euro's decline hurt sentiment. The partially convertible rupee closed at 46.36/37 per dollar after hitting 46.41, its weakest since Feb. 25 and 1.64 percent below Tuesday's close of 45.60/61.

This is the rupee's biggest single-day fall since Feb. 17, 2009, when the rupee had dropped 1.65 percent. "The weak global cues will pull the Sensex down to 16,350-16,500 which is expected to form a strong short term base.

EUR/USD holding above 1.1700 and Sensex above 16,350 is essential and critical to arrest rupee weakness beyond 46.75," said J. Moses Harding, head of global markets at IndusInd Bank. "If not, it would be tough time for RBI (Reserve Bank of India) to arrest the rupee's weakness," he said. The euro hit a four-year low against the dollar on Wednesday after Germany banned naked short selling of some securities, sparking uncertainty and a fresh wave of risk aversion which lifted the dollar and yen.

Dealers said sporadic dollar selling by exporters helped limit a sharper fall in the local unit. The central bank can intervene through state-run banks to prevent a steep fall in the rupee, but that was unlikely most traders said as long as the unit moved in line with fundamentals. "The central bank did not come in today despite the sharp fall and there was no reason that they should have. The rupee's move was in line with global dollar moves and world equities," a senior dealer with a private bank said.

"Broadly I think that the USD/INR is near a top but would not exclude a blow out of 46.50 and then it will depend on what happens with the euro and stocks," he added. Indian shares <.BSESN> fell the most in more than three-and-a-half months to close 2.8 percent lower, its lowest close since late February, as global stocks tumbled after Germany's move to sharpen financial regulation raised doubts about the global recovery, triggering a flight to safety.

Foreign funds have already pulled out around $886 million from Indian equities so far in 2010, and there are concerns the pressure may continue until the euro zone situation improves. These outflows have played a role in pushing the rupee down 4.3 percent in May, bringing down its gains in 2010 to just 0.4 percent. Last year record inflows of $17.5 billion had helped the rupee rise 4.7 percent.

One-month offshore non-deliverable forward contracts were quoted at 46.52, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX closed at 46.38 and 46.3925 respectively, with the total traded volume on the two exchanges at about $8.7 billion.

Banks, metals weigh Nifty down; 200-day DMA crucial support

Equities in India weakened further, as Asia peers sank a three-month low after Germany’s financial regulator BaFin banned naked short-selling in government bonds and concerns over EU deficit saw shares of financial services’ companies drop.

At 10:30 am, the Sensex was trading at 16,674.74, down 201.02 points or 1.26 per cent wiping out Tuesday’s gains. The Bombay Stock Exchange’s sensitive index had opened gap-down at 16,802.39 against the previous close of 16,875.76. The 30-share index has touched a low of 16,641.37 in trade so far.

National Stock Exchange’s Nifty was at 5002, lower by 64.20 points or 1.27 per cent. The 50-share index opened the day at 5065.10 versus Tuesday’s close of 5066.20. The benchmark has so far seen a low of 4994.65.

“Indian markets are likely to remain weak and volatile throughout the session. 4980 on Nifty, a 200-day DMA is a crucial support, which the market has managed to hold since the last few sessions. Hence, a break below that level could lead to further sell off during the day. Among the sectoral indices, Metals, Auto & Banks are looking weak & could underperform,” an HDFC Securities report said.

Banking, metals and realty continued to languish, while IT stocks bounced back to trade in the positive territory on gains in Infosys. BSE Bankex was down 2.05 per cent, BSE Metal Index lower by 1.78 per cent, and BSE Realty Index weaker by 1.68 per cent.

The biggest losers among the 50 Nifty stocks were ICICI Bank, which was down 4.35 per cent at Rs 850.50. The boards of ICICI Bank and Bank of Rajasthan (BoR), a private sector bank with 463 branches and assets of around Rs 172 billion, have given in-principle approval for a merger.

Anand Rathi has retained buy on ICICI Bank with the target price at Rs 1,140, based on sum-of-parts valuation. It values the subsidiaries at Rs 224. The brokerage believes this transaction to be value accretive for ICICI as it would expand its existing branch network by 27 per cent, and strengthen its presence in north India.

If approved, the proposed share swap (25 shares of ICICI Bank for 118 shares of BoR) could lead to a dilution of 3.1 per cent for ICICI Bank. This implies Rs 188 per share for BoR and valuations of 2.9x PBV, 5.5x PABV (9M10), which are not cheap. Yet, at Rs 65.9 million per branch, the deal is reasonable, at a 9 per cent premium to that of old private sector peers, the brokerage said in a report.

The other big losers were Idea Cellular weaker by 4.04 per cent, Motors (-3.06%), Sterlite Industries (2.89%), Unitech, Bharti Airtel, Cairn India, Jindal Steel, DLF, Reliance Communications.

Nifty gainers comprised Reliance Infrastructure (1.58%), Reliance Power (1.02%), Infosys (0.56%), Hero Honda Motors, Cipla, ACC, and NTPC.

On the markets, Anand Rathi Securities has a cautious view for the very short term and sees support for Nifty around 4950 levels. “Reversal of the short term negative trend could be seen above 5200 levels. If Nifty closes above 5200 levels then we may see further buying interest at higher levels to touch the 5400 levels,” said the brokerage, advising stock specific action.

Vodafone 2009 profits double

Vodafone company advertisement on boats in Delhi. Vodafone had benefited from its focus on emerging markets, with India providing strong revenue growth, Vittorio Colao said. Photo: Ramesh Sharma

Britain’s leading mobile phone company Vodafone on Tuesday reported a steep rise in profits, achieved mainly through increased revenues in the emerging markets of Asia and Africa, the company said.

Pre-tax profits for the year to the end of March totalled 8.7 billion pounds (12.6 billion dollars), more than double the figure reported in the previous financial year.

The company has 341 million customers, with 8.5 million added in the last three months alone.

“We are creating a stronger Vodafone, which is positioned to return to revenue growth during the 2011 financial year, as economic recovery should benefit our key markets,” Vodafone chief executive Vittorio Colao said.

Vodafone had benefited from its focus on emerging markets, with India providing strong revenue growth, he said. The company reported falls in revenues in some of its more established European markets.

Rupee pulls away from 2-month lows, shares help

The rupee pulled away from more than two-month lows on Tuesday as higher share prices raised expectations of more capital inflows, but lingering worries about euro zone's debt problems checked the local currency's gains. The partially convertible rupee was at 45.5350/54 per dollar, after dropping to 45.6950 in early trade.

It had closed at 45.62/63 on Monday after falling to 45.77 during trade, its weakest since March 5. The benchmark BSE share index was up about 0.5 percent, recovering from intraday losses, mirroring a recovery in European markets. The benchmark has dropped over 3.6 percent so far this month, with foreign funds pulling out around $665 million from Indian equities. Still, they have invested a net of about $5.9 billion so far in 2010, adding to a record $17.5 billion last year.

The euro was near a four-year low against the dollar as the euro zone's debt problems and fiscal tightening by governments raised worries on regional growth. One-month offshore non-deliverable forward contracts were quoted at 45.72, weaker than the onshore spot rate.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX were at 45.5425 and 45.54 respectively, with the total traded volume on the two exchanges at about $5.7 billion.

Sensex trades with marginal gains; oil & gas, FMCG up

At 2.34 pm, the Sensex was trading with marginal gains. The BSE capital goods index outperformed the sectoral indices; it was up nearly 2%. Buying was also seen in oil & gas, FMCG stocks. However, metal, auto, and realty indices were trading negative. Stocks like Reliance, L&T, ITC, SBI and ONGC were the positive contributors to the Sensex.

The Sensex was up 34.18 points or 0.20% at 16869.74, and the Nifty was up 7.05 points or 0.14% at 5066.95.

About 1780 shares advanced, 1128 shares declined, and 378 shares were unchanged.

Top gainers on the Sensex were L&T at Rs 1,662.05 up 3.52%, Wipro at Rs 661.85 up 2.56%, Reliance Comm at Rs 145 up 2.40%, Grasim at Rs 2,642 up 1.74% and Jaiprakash Asso at Rs 127.60 up 1.47%.

However, top losers on the Sensex were Tata Motors at Rs 768.05 down 2.65%, Tata Power at Rs 1,297.80 down 1.65%, HDFC Bank at Rs 1,902 down 1.4%, Sterlite Ind at Rs 690.35 down 1.39% and Hero Honda at Rs 1,830 down 1.34%.

Top gainers on the BSE Midcap: Wockhardt, Novartis India, Motherson Sumi, Sun Pharma Advance and AstraZeneca were up 5-8%.

Top losers on the BSE Midcap: Bajaj Finserv, Gee Kay Finance, Shriram City, Usha Martin and Anant Raj Industries were down 3-7%.

Top gainers on the BSE Smallcap: Zandu Realty, English Ind Clay, Abbott India, Gabriel India and Aegis Logistics were up 14-20%.

Top losers on the BSE Smallcap: Subhkam Capital, Ankur Drugs, Orbit Corporation, Geometric and Hitachi Home were down 3.72-5%.