View on Banking sector

After a strong close in the last week and hopes for higher levels, the intermediate uptrend fizzled out on Monday when the Sensex and the Nifty dropped below their respective targets indicating that the intermediate trend is down or at the most sideways. The Sensex will have to move back past 16,237 and the Nifty past 4,916.75 for the intermediate uptrend to be reinstated.

As of now the intermediate uptrend, which had started on the. March 18, fizzled out on the. March 28, lasting for just ten days, which is quite usual in a bear market. The trading volumes remain thin indicating a very low trading activity as the disgruntled bulls continue to remain sellers at all levels. The CNX Mid-Cap index dropped into an intermediate downtrend on Friday as the last intermediate rise lasted for a few more days and ended on the April 2 with a high of 6,388.35.

The bulls continue to shift from the leaders of the past four years to the defensive sectors like the FMCG and healthcare sectors. In the last week, the BSE Capital Goods sector was the largest loser ending 12.69% lower and was followed by the BSE Power sector ending 10.23% lower. The defensive sectors fared better as the BSE Healthcare sector lost 0.24% and the BSE FMCG sectors ended 1.11% lower. The Sensex lost 6.28% and the Nifty ended 5.97% lower.

The Sensex has a support at the 14,500 level and below this level the Sensex will be heading towards the next support of 13,300. The Nifty has support at 4,050 and below this level the Nifty is headed towards 3,850 levels. On the other hand, if these indices are able to build a base at these levels, which is the 61.8% retracement level, than we could see a new bull run after a couple of months once the basebuilding is over. However, if this does not happen, than the bear market will witness a deeper correction and the indices will continue to exhibit descending intermediate tops and bottoms.

The market breadth remained weak throughout the week as the declines scored over advanced. The trading volumes remained thin and were well below the 50 days moving average indicating that the indices and the stocks continued to decline on thin volumes. This means that the investors are willing to part with their investments at lower levels.

SBI

SBI is in a major downtrend as the stock has been exhibiting descending intermediate tops and bottoms and is trading below its 30 WMA. The stock is currently at the strong support of 1,580-1,600 level and a drop below 1,580 will result in a strong downward momentum and will give position traders an opportunity to look for short positions.

The weekly MACD indicator for the stock is trading well below its trigger line indicating a weak momentum and lower levels in the next intermediate decline. A drop below the support of 1,580-1,600 will result in the stock testing the next support at 1,375.

Axis Bank

Axis Bank is one of the private banks which has lead the earlier bull run and is now leading the ear run. The stock has been falling faster than the indices and as a result the relative strength line for the stock has turned weak. The weekly MACD histogram has been making new lows indicating higher weakness in the next intermediate downtrend and any pull back or rallies must be used to look for short positions.

The stock is at the support of 700 and a drop below these levels could take the stock to test the next supports at 660 and 600. Position traders must use the breakdown from this support to add to the short positions. The stock has witnessed a sell-off in the last few weeks with a strong surge in trading volumes indicating that big investors are booking profits in the stock.

ICICI Bank

ICICI Bank is one of the weakest stocks in the private sectors as the relative strength line for the stock is very weak and will soon test the one year lows. This means that the stock is underperforming the indices. The stock has already broken the strong support at the 800 level and is headed towards the next support of 630.

Investors who are still holding long positions must look to get out in the next rally or if the stock breaks down the recent support of 720 with high volumes. Traders must use rallies to look for short positions.

ICICI Bank introduces `Global Indian Account`

ICICI Bank, India`s second largest bank, announced the launch of the `Global Indian Account` facility. The facility being the first of its kind in India addresses the comprehensive banking needs of Indians moving overseas. These customers, prior to their departure from India, will have a bank kit comprising the host country bank account, debit card and internet banking deliverables, subject to regulatory requirements.

The Global Indian Account facility will be available for Indians moving to UK, US and Canada for work, study or immigration. Customers will have the opportunity to complete the documentation required for the host country account in India itself. Along with this account, they would also get a non-resident rupee account in India, which would facilitate instant money transfers between their host country account and their India account. This would help them manage their India banking requirements when away from India.

Sonjoy Chatterjee, executive director, responsible for corporate & international banking, at ICICI Bank said, ``We are leveraging on our international presence to offer a seamless banking service to Indians moving overseas, with access to local banking facilities from the time they enter that country``.

ICICI Bank is India`s largest private sector bank and the second largest bank in the country, with consolidated total assets of USD 115 billion as of Dec. 31, 2007. ICICI Bank`s subsidiaries include India`s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank`s presence currently spans 19 countries including India.

Rising inflation, CRR hike fears haunt markets

Negative newsflows have spooked the markets badly today. Rising inflation and due to which rumours of likely hike in CRR by RBI worried the markets. Capital Goods, power, banks, telecom and auto stocks were worst hit. All BSE Indices ended with sharp fall. Market breadth has remained 1:4 after inflation announcement.

This whole week has been very bad for the markets, Sensex lost more than 1000 points and the Nifty down 5.2%. Capital goods, metals, realty and banking stocks were the biggest losers.

Inflation has worried the markets, it has hit a three-year high of 7% this week as against 6.68% in the previous week. Government has been trying ways to cool off the inflation because it has crossed RBI's targeted 5% level. Experts feel that monetary tightening may be there in near term from RBI by way of CRR hike. These fears has hammered banking stocks a lot.

The Sensex has touched a low of 15,303.04 (down 528 points) before closing the day at 15,343.12, down 489.43 points or 3.09% and the Nifty down 2.61% or 124.60 points at 4647.

Exchanges has touched total turnover of Rs 50,773.03 crore, inclusive of NSE cash at Rs 12095.44 crore, NSE F&O at Rs 33723.32 crore and BSE cash at Rs 4954.27 crore.

Market breadth has remained weak through the day. About 978 shares have advanced, 2014 shares declined, and 79 shares remained unchanged.

BSE Midcap and Small Cap Indices were down 1.95% or 124.38 points at 6,262.85 and 1.60% or 125.30 points at 7,714.99, respectively. The CNX Midcap fell 2% at 6110.30.

Top losers were BHEL, HDFC, M&M and L&T while gainers - Ranbaxy Labs, Tata Steel, Sterlite Industries, Suzlon Energy and Hero Honda.

Capital goods stocks have witnessed huge selling pressure, continued downtrend from yesterday itself. The BSE Capital Goods Index slipped 4.5% or 594.38 points at 12,620.35 on the back of selling pressure in stocks like Crompton Greaves, Alstom Projects, BHEL, L&T, Praj Industries.

The BSE Bankex closed at 7,589.96, down 230 points or 2.95% as banking stocks like IOB, Oriental Bank, Kotak Mahindra, Bank of Baroda, Allahabad Bank, Axis Bank and ICICI Bank have lost gains.

Power stocks have also knocked back heavily. The BSE Power Index fell 2.99% at 2,964.08. Crompton Greaves, BHEL, ABB, Tata Power, Punj Lloyd and Areva T&D were losers which have led Power Index to slip.

Telecom stocks like Reliance Communication, Bharti Airtel and Idea Cellular also lost ground.

Amongst auto space, Mah and Mah, TVS Motor, Amtek Auto, Maruti Suzuki and Escorts were major losers. The BSE Auto Index fell 2.5% at 4,378.54.

Oil and Gas stocks like Reliance Natural, Reliance Industries, Petronet LNG, GAIL and Essar Oil also dropped. The BSE Oil & Gas Index finished at 10,282.64, down 2.37% or 249.24 points.

Realty space also collapsed like pack of cards. Anant Raj Ind, HDIL, Unitech, Phoenix Mills, Ansal Properties and DLF have led the fall. The BSE Realty Index ended at 7,346.96, down 2.34%.

FMCG stocks including United Breweries, ITC, Tata Tea, Bata India, GSK Consumer also cracked. the BSE FMCG Index fell 2.21% at 2,292.76.

Technology stocks have lost ground after yesterday's sharp surge, the BSE IT Index closed at 3,687.40, down 2.06%. Wipro, Infosys, Tech Mahindra, HCL Tech and TCS were major losers.

Metal stocks like Maha Seamless, Ispat Industries, Hind Zinc, Nalco and Sesa Goa have lost shine. The BSE Metal Index fell 1.09% at 13,440.35.

The BSE Healthcare Index ended at 3,845.83, down 1.08% due to selling pressure in pharma stocks like Dr Reddy's Labs, Cipla, Sun Pharma, Pfizer and GSK Pharma.

Markets This Week

• Indian markets underperform major Asian markets as inflation hits 3-year high at 7%
• Sensex down 6.3% at 15343; NIfty down 6% at 4647
• CNX Midcap Index down 3.8%, BSE Small-cap Index down 2.4%
• All BSE Sectoral Indices end in the red
• BSE Capital Goods Index crashed after BHEL numbers disappoint market
• BSE Capital Goods Index down 12.7%; BHEL down 22%, L&T down 14.7%, Siemens down 9.7%
• BSE Metal Index down 8.3%; SAIL down 16.7%, Tata Steel down 7.6%, Nalco down 7.2%
• BSE Bank Index down 7.5%; OBC down 10%, ICICI Bank down 8.5%, HDFC Bank down 8%
• Midcap gainers; Dhanus Tech up 28%, Orchid Chem up 24%, HOEC up 10%

Markets Today

• Markets slide after inflation surged to 3-year high at 7%
• Sensex down 490 pts at 15343 and Nifty down 125 pts at 4647
• CNX Midcap Index down 2%, BSE Small-cap Index down 1.6%
• All BSE Sectoral Indices end in the red
• BSE Capital Goods Index continue to be under pressure after BHEL disappointing numbers
• BHEL down 6.8%, L&T down 5.6%, ABB down 4.5%
• BSE Bankex down 3%: ICICI Bank, HDFC Bank down nearly 2.8% each
• Index losers; HDFC down 7%, M&M down 6.2%, Wipro down 4.9%, Bharti down 4.4%
• NSE Advane Decline at 2:7
• Non-index losers; Orbit Corp down 10% due to supply of pre-ipo shares
• Mid-cap Cap Goods under pressure: Voltas down 8.4%, Crompton Greaves down 7.2%, Alstom Projects down 7.2%
• Total market turnover at Rs 50773 cr Vs Rs 49886 cr Yesterday

FNO Snapshot

• Turnover continues to remain low:
• NSE FNO turnover at Rs 33723 cr Vs Rs 32513 cr Yesterday
• Nifty sees significant short buildup at higher levels; some shorts book profit at lower levels by day end
• Nifty April future ends day at a 19 pts premium after going into a discount post inflation data
• 4800 & 5000 Call Add significant Open Interest
• 4500 put continues to add Open Interest
• No major unwinding of 4600 and 4700 puts

Asia Today

• Asian markets end mixed ahead of US Job data
• China, Hong Kong & Taiwan mkts shut for Tomb sweeping day
• Nikkei, Straits Times, Thailand end marginally in the red

Mkts spook by CRR hike fears: Banks, cap gds down

Negative newsflow of rising inflation and due to which, experts expecting the monetary tightening by increasing CRR further have weighed heavily on markets, which slipped further; Sensex was down over 450 points and the Nifty down over 120 points. Capital Goods and banking stocks have hit badly. Market breadth is negative - 1:4 as 245 shares have advanced while 964 shares declined. On the global front, Asia ended lower. European markets are trading higher.

At 13.03 hrs IST, the Sensex was down 437.30 points or 2.76% at 15395.25, and the Nifty down 117.00 points or 2.45% at 4654.60. About 1018 shares have advanced, 1973 shares declined, and 80 shares are unchanged.

All BSE Indices are in the red; BSE Capital Goods Index own over 4%, Bankex down 3.4%. BSE IT, Power, TEck, Realty and Auto indices fell over 2.5%. BSE Midcap and Small Cap indices were down more than 1.5% each.

L&T, BHEL, ICICI Bank and Nalco were amongst the top losing counters.

Inflation has continued its rise for this week as well, rose to 7% as against 6.68% in previous week. Experts believe that RBI may look at monetary tightening. HSBC says there is expectation of policy measures inclusive CRR hike from RBI and another financial firm, Morgan Stanley says there is probability of monetary tightening increasing

Markets plunge; Inflation at 3-yr high - 7%

The markets have taken a knock back approach after inflation numbers announcement, which are high by quite a percentage points as against earlier numbers of 6.68%. Today it touched a 7% mark, which is ahead of markets expecations of 6.52%. Capital Goods, technology, auto, banking, power and telecom stocks have hit hard. Market breadth is negaitve with ratio of 1:3 as 318 shares have advanced while 900 shares declined.

At 12.02 hrs IST, the Sensex was down 239.71 points or 1.51% at 15592.84, and the Nifty down 70.35 points or 1.47% at 4701.25. About 1267 shares have advanced, 1710 shares declined, and 94 shares are unchanged.

BHEL, HDFC, L&T and M&M were top losing counters while gainers - Ranbaxy, HUL, Tata Steel and Hero Honda gainers.

Finally, inflation has hit 7% mark today for the week ended March 22 as against 6.68% in the previous week. Vegetable prices went up 4.9%, primary articles WPI up 1.8%, minerals WPI up 38.2% and metallic minerals WPI up 42.8%.

Midcap and small cap stocks have slipped further. Reliance Petro, BHEl, Tulsi Extrusion and Reliance Industries were most active counters.

Mkts slip further: L&T, BHEL, HDFC Bank top losers

The markets have slipped further as the selling pressure continues in capital goods, technology, banking, auto, telecom and power stocks. Market breadh is also negative, 467 shares have advanced while 674 shares declined on the NSE. However, some buying interest has seen in pharma and metals stocks.

At 11.28 hrs IST, the Sensex was down 137.69 points or 0.87% at 15694.86, and the Nifty down 29.60 points or 0.62% at 4742.00. About 1516 shares have advanced, 1465 shares declined, and 89 shares are unchanged.

Capital goods, technology and banking stocks are under bears' control, the BSE Capital Goods, IT and Bankex fell, 2.3%, 1.6% and 1.5%, respectively.

L&T, BHEL, Marut Suzuki and HDFC Bank were top losers while Ranbaxy Labs, Tata Steel, HUL and Hero Honda gainers.

Reliance Petroleum, Tulsi Extrusion, BHEL, and L&T were most active shares on the bourses.

ACC's March Cement sales went up by 4.9% at 1.92 MT versus 1.83 MT. The stock was up marginally by 0.13% or Rs 1.10 at Rs 828.

Indian rupee has fallen to 39.98 per dollar as against its previous close.

Mkts rangebound: Tech, cap goods, bank stocks down

The markets have lost their footings a bit and are trading lower as selling pressure has seen in technology, capital goods, banking, FMCG and telecom stocks. Market breadth is negaitve, about 1477 shares have advanced, 1505 shares declined, and 88 shares are unchanged. Midcap and small caps are flat. On the global front, Asian markets were trading lower.

At 10.29 hrs IST, the Sensex was down 84.80 points or 0.54% at 15747.75, and the Nifty down 18.70 points or 0.39% at 4752.90.

Top losers were Infosys, HDFC Bank, L&T and Sun Pharma while gainers - Tata Steel, Grasim, Ranbaxy Labs, RPL and SAIL.

Technology stocks have lost ground after yesterday's sharp increased in their respective prices.

Reliance Petroleum, Essar Oil, GSS America, BHEL and L&T were most active shares on the bourses.

Markets choppy in opening trade

The markets have opened higher but selling pressure weighed immediately a little bit by bears and markets turned into the red. Capital goods, power, banking, technology and FMCG stocks are under bears control. However, oil stocks are witnessing buying interest. Market breadth is also in negative. On global front, Asian markets are trading lower.

Ambuja Cements, BHEL, SBI, HDFC Bank, HUL, Tata Power, Reliance Energy and Hero Honda were losers in early trade.

At 9:57 am, the Sensex was down 13 points at 15,818 and the Nifty down 0.40 points at 4771.

Asian markets were trading lower. Japan's Nikkei plunged 0.68% or 90.92 points at 13,298.98. Singapore's Straits Times declined 0.38% or 11.92 points at 3,159.63. South Korea's Seoul Composite dropped 0.16% or 2.85 points at 1,760.78.

US stocks ended higher with marginal gains amid choppy session. The Dow Jones industrial average advanced 20.20 points, or 0.16%, to 12,626.03 and the Nasdaq composite index added 1.90 points, or 0.08%, to 2,363.30.

Market cues:

• FIIs net sell $5 mn in equity on Apr 2
• MFs net sell Rs 128 cr in equity on Apr 2
• NSE F&O Open Int up Rs 1,173 cr at Rs 52,414 cr
• Reports suggest govt weighs price cap on key items to curb inflation

F&O cues:

• Futures Open Interest up by Rs 193 crore and Options Open Interest up by Rs 980 crore
• Nifty Futures shed 5 lakh shares in Open Interest; at 13-point premium
• Nifty Open Interest Put-Call ratio at 1.26 Vs 1.25
• Nifty Puts add 10.8 lakh shares in Open Interest
• Nifty Calls add 7.7 lakh shares in Open Interest
• Nifty 4700 Put adds 2.5 lakh shares in Open Interest
• Nifty 4400 Put adds 2.1 lakh shares in Open Interest
• Nifty 5000 Call adds 2.2 lakh shares in Open Interest
• Nifty 4800 Call adds 1.5 lakh shares in Open Interest
• Stock Futures add 1 cr shares in Open Interest

SEBI bans Bellary Steel, three others for five years

Market regulator SEBI today banned Bellary Steels and Alloys along with three other entities and their directors from accessing capital markets for five years in a case involving issuance of duplicate shares.

The other entities which have been banned include S N Finance, Kodiganti Finance and Panchloha Hotel.

While issuing the order SEBI also directed Bellary Steels to cancel the duplicate shares lying in the demat account of Panchloha Hotel and take "appropriate steps... to recognise the valid shares pledged with the Karnataka State Financial Corporation (KSFC) in the books of the company/STA (share transfer agent)/depositories".

SEBI passed the order after investigating a complaint by KSFC in January 2006 that Bellary Steel has issued duplicate shares with the same distinctive numbers "with the malafide intention to cheat KSFC".

The regulator in its interim order on February 1, 2006 had directed BSAL not to issue any more shares or alter the share capital till further directions.

Reliance Industries To Set Up Two Manufacturing Facilities

In order to ramp up company’s expansion in the technology sector, Reliance Industries Ltd. (RIL) has submitted a proposal to the Union Government for setting up two manufacturing facilities (a semiconductor wafer fabrication plant and solar PV module unit).

The motive of this proposal under the Government’s scheme is to promote semiconductor technology with a total investment of Rs. 30,000 crore.

Other companies that have submitted their plans under the Government’s scheme include Videocon Industries, Moser Baer PV Technologies, Titan Energy System, KSK Energy Ventures, and Signet Solar

According to the officials, till now seven investment proposals totalling Rs. 65,000 crore have been received from six companies.

Reliance Industries Ltd is also eyeing to manufacture a variety of items including Polysilicon, wafers, solar cells, solar photovoltaic modules (SPV) liquid crystal display (LCD), integrated circuits-advanced logic, memory and embedded system on chip, including ATMP facility for semiconductor devices.

RIL is still undecided on the location, but it is likely to be in Navi Mumbai, Hyderabad, Mysore or Haryana.

Mr A. Raja, Communications and IT Minister said, “There has been a tremendous response among investors both in India and outside. Within a short span of seven months, seven proposals envisaging investments of Rs 62,915 crore have been received.”

It is expected that about 4,000 people would be employed for the fabrication and ATMP units.

The second Reliance plant is likely to come up at a cost of Rs. 11,631 crore at Jamnagar in Gujarat.