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.

Reliance Energy spends Rs 220 cr to buy-back

Anil Ambani-led Reliance Energy said it has bought shares worth over Rs 220 crore on Friday, representing 25 per cent of the buyback offer.

The company has completed the buyback of 17.80 lakh equity shares worth Rs 220.97 crore till friday, a company release said.

Reliance Energy bought back four lakh equity shares on Friday, which marks a significant increase as compared to an average buyback of about 1.5 lakh shares since the commencement of the offer on March 25.

The last date for the buyback would be March 4, 2009, a year from the date of the Board's approval for the offer on March 5, 2008.

The company's Board of Directors had approved the buyback of shares worth about Rs 800 crore. Shares of Reliance Energy closed at Rs 1166.35, down 1.94 per cent, on the BSE.

HOT STOCKS FOR 04 - 04 - 08

STATISTICS :

Markets today will be rangebound with volatility continuing, today inflation will be out and is expected to be around 7%, so can see some pressure in banking sectors,
Nifty will trade between 4700 - 4900 levels. Nifty has some support @ 4730, and resistance @ 4825, Sensex will trade between 15696 - 16300 levels, with resistance @ 16105 level.

INTRADAY :

WIPRO : sell for a tgt of 424, sl @ 443

SAIL : buy for a tgt of 174, sl @ 166.5

RCOM : buy for a tgt of 522, sl @ 508.5

FUTURES :

SAIL : buy for a tgt of 194+, sl @ 160 :: hold for minimum of 1 week

WIPRO : sell above 438 for a tgt of 415, sl @ 449

BHEL : buy for a tgt of 1920, sl @ 1690

SATYAM : sell above 433 levels for a tgt of 410, sl @ 442

RCOM : buy for a tgt of 542+, sl @ 502 :: hold for minimum of 1 week

NIFTY : buy for a tgt of 4900+, sl @ 4650

OPTIONS :

NIFTY : buy call 4900 for a tgt of 150+, sl @ 60

SAIL : buy call 170 @ 11 for a tgt of 30+, sl @ 5

SAIL : buy call 190 below 5 for a tgt of 15+, sl @ 2

SATYAM : buy put 400 for a tgt of 16+, sl @ 6rs

RCOM : buy call 540 below 12 for a tgt of 25+, sl @ 5

RCOM : buy call 560 below 7 for a tgt if 14+, sl @ 3.5

BHEL net profit up 17%; turnover tops Rs 20,000 cr

Firming up joint venture with Nuclear Power Corporation Kamal Narang

Number crunch: Mr K. Ravi Kumar, CMD, BHEL, with Mr C. P. Singh, Director, at a press conference in the Capital on Thursday. —

Our Bureau

New Delhi, April 3

Faced with sluggish topline growth and higher provisioning denting its fourth quarter margins, Bharat Heavy Electricals Ltd (BHEL) announced a lower-than-expected 17 per cent rise in net profit at Rs 2,815 crore in 2007-08, according to provisional numbers released by the company on Thursday. The state-owned equipment major’s turnover rose 15 per cent to Rs 21,608 crore during the fiscal, from Rs 18,739 crore in 2006-07.

Q4 margins hit

Announcing the results at a pres conference here, BHEL’s Chairman and Managing Director, Mr K. Ravi Kumar, said that the company’s fourth quarter numbers have taken a hit on account of higher provisioning done in employee wages and in meeting certain “contractual obligations.”

“Fourth-quarter margin was lower due to a high wage bill. An increase of one per cent in raw material costs and contractual obligations also impacting by another 2.5 per cent,” he said, without elaborating on the quantum of the margin.

While the company’s topline growth was marginally below the 18 per cent jump in output clocked by the capital goods segment in latest industrial production data for April-January 2007-08, and way below the 29 per cent registered by the company in 2006-07, the engineering firm said it does not expect a slowdown in orders this year.

Mr Kumar said he was confident that rising input costs will not impact margins much in the long-term, as BHEL has already placed long-term orders for commodities such as steel and other metals in sync with their order book.

BHEL’s cumulative order book for execution in 2008-09 and beyond stood at about Rs 85,500 crore, of which orders worth over Rs 50,000 crore was secured during the last fiscal itself. “The order inflow rose 41 per cent to Rs 50,265 crore in 2007-08, up from Rs 35,643 crore in 2006-07,” Mr Kumar said.

The big jump in the order book position was primarily on account of the Ministry of Power’s directive that all utilities place order for project execution before the end of the last fiscal with equipment suppliers such as BHEL and others.

BHEL is also getting into a pact with Nuclear Power Corporation of India to float a joint venture for manufacturing equipment for nuclear power plants. BHEL is also expected to shortly incorporate a joint venture with NTPC Ltd to manufacture power equipment and offer EPC services to power producers.

RIL, ONGC in Forbes' top global firms list

After billionaire businessmen, it is the turn of companies from India to shine on the Forbes radar with as many as 48 firms making it to a list of the world's biggest companies compiled by the US magazine.

Led by India's most valued firm Reliance Industries and PSU major ONGC, all these 48 Indian firms named in the 'Global 2000 List' have a billion-dollar size in terms of market value.

The rankings, topped by British banking behemoth HSBC, has been compiled on the basis of a composite score of sales, profit, assets and market capitalisation.

HSBC is followed by industrial conglomerate General Electric, Bank of America, JPMorgan Chase and ExxonMobil — all four from the US — in the top five positions.

Two Indian firms, Mukesh Ambani-promoted RIL and ONGC are among the top 200 companies at 193rd and 198th ranks.

Reliance to foray into semi-conductors business

Mukesh Ambani's Reliance Industries is all set to chip into the semi-conductor market in India and to that end, two proposals have been sent to the IT department.

In all, Reliance wants to invest about Rs 30,000 crores over the next 10 years

Hyderabad, Mysore, Haryana and Navi Mumbai are the likely centres for setting up semi-conductor wafer fabrication facility units. Reliance is considering setting up a photovoltaic facility in Jamnagar, as well.

It is open to acquiring facilities in Taiwan or Korea and is in talks with Infineon, TI and Qualcomm for a tie-up.

When contacted by sources, Reliance Industries said, "The group is currently evaluating an investment in an integrated semi-conductor facility. Group will make necessary announcements when the plans are final."

SEBI allows institutional clients to have direct market access

Brokers’ manual intervention is not needed

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What it means

This move offered clients direct control over orders, faster execution, reduced risk of errors associated with manual orders and better audit trails.

The move will also reduce the cost of transaction besides curbing possible ‘front- running’ by employees of broking outfits

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Our Bureau

Mumbai, April 3 Institutional investors now can have direct market access (DMA) without brokers’ manual intervention if suitable infrastructure is created by brokers, a SEBI circular addressed to the BSE and the NSE said here on Thursday.

SEBI said DMA offered clients direct control over orders, faster execution, reduced risk of errors associated with manual orders and better audit trails.

Commenting on the nature of the new arrangement, Mr Raamdeo Agrawal, Director of Motilal Oswal Financial Services, said, “What the SEBI directive has implied is that institutional investors (such as FIIs, mutual funds, insurance companies, banks and hedge funds) too, could have a trading terminal similar to that of sub-brokers, in their offices.”

The physical location of the trading terminal is potentially an evidence of the place from where the order is emanating. That could lead to tax complications as it could be construed as evidence of ‘place of business’ – an important attribute for determining tax liability, said an expert with long years of experience in taxation and regulatory matters.

Mr Anil Saxena, CFO of Religare Enterprises, said that the move will reduce the cost of transaction besides curbing possible ‘front- running’ by employees of broking outfits. The improved confidentiality of trades might attract foreign hedge funds that were not willing to do business here earlier, he added.

Mr Sandeep Singal, Co-Head, Institutional Derivatives Business of Emkay Shares and Stock Brokers Ltd, said, “This allows execution of various products based on quantitative and algorithmic models that were not possible so far.

“It would lead to further consolidation in the institutional segment of broking business. Institutional players might prefer to pass their substantial business through their captive broking outfits.”

The broker shall enter into a specific agreement with the clients for whom they permit DMA facility. The client shall use the facility only to execute his own trades and not on behalf of any other person, SEBI said.

SEBI has also directed the brokers to carry out appropriate validation of all risk parameters including quantity limits, price range checks, order value, and credit checks before the orders are released to the Exchange.

Bulk deal: Premier tops the chart at BSE

On the BSE, Citigroup Global Market sold 796,694 shares at Rs 90.01 a share and Laxmi Jain bought 383,191 shares at Rs 90 a share and Sushma Jain bought 400,000 shares at Rs 90 a share of Premier.

Newgen International sold 200,000 shares at Rs 6.05 a share of Cat Technologies.

Committed Trading bought 200,000 shares at Rs 6.02 a share of Media Matrix Worldwide.

Macquarie Bank sold 539,193 shares at Rs 174.29 a share and Solrex Pharmaceuticals Company bought 1,062,040 shares at Rs 172.94 a share of Orchid Chemicals & Pharmaceuticals.

Bhavook Tripathi bought 165,277 shares at Rs 78.07 a share and Ralph Henry Kenney sold 165,050 shares at Rs 78 a share of R Systems International.

BSE, NSE fix new circuit filter limits

A movement of 1,575 points in the Sensex and 470 points in the Nifty would bring trading to a halt through the current quarter ending June, as per the new circuit filter limits set by the country's two premier bourses BSE and NSE. This circuit w ould be applicable on movements on either side of gain or loss, circulars on both the bourses said.

While a movement of 1,575 points in Sensex or 470 points in Nifty, representing 10 per cent of the closing value of the respective indices in the previous quarter, would bring about a halt for one hour, the halt periods would be greater in case of bigger falls after the trading resumes. The exchanges fix the circuit limits at the beginning of every quarter.

According to the circuit-breaker system, a 10 per cent movement before 1300 hrs triggers a one-hour halt, a gain or loss of 15 per cent before 1300 hours halts the trading for two hours, while a movement of 20 per cent leads to the trading being halted f or the remainder of the day.

The exchanges have fixed 10-per cent circuit at 1,575 points, 15 per cent circuit at 2,350 points and 20 per cent at 3,125 points for the Sensex. Similarly, for the Nifty, the points equivalent to 10 per cent circuit are 470, for 15 per cent it is 710 po ints and for 20 per cent, it has been fixed at 950 points, the circular added. The percentages are calculated on the closing index value of the previous quarter.

These percentages are translated into absolute points of index variations (rounded off to the nearest 25 points in case of Sensex). At the end of each quarter, these absolute points of index variations are revised and made applicable for the next quarte r. The Sensex had ended the last quarter ended March 31 at 15,644.44 points.

Videocon bids for Motorola's mobile handset biz

Consumer electronics major Videocon Group on Tuesday said it has bid to acquire Motorola Inc's global mobile handset business.

"Yes, we have sent them an expression of interest to acquire their global mobile handset business. It is in the initial stages and will take time but we are the only one from India to do so," Videocon Group Chairman Venugopal Dhoot said.

He said the company's move to acquire Motorola's mobile phone business was in line with its expanding interest in the mobile telephony business. "We have already got licenses for offering GSM-based mobile services in all 22 circles in India and we see a synergy," Dhoot added.

Asked what could be the value of the deal he said: "It is too early to talk about numbers".

When contacted, a Motorola India spokesperson declined to confirm the development saying "we do not comment on market speculation".
According to reports, Motorola's non-profitable handset business has been estimated to be worth about $3.8 billion as evaluated by Merrill Lynch.

While Videocon itself is on the prowl, US telecom giant AT&T is eyeing a stake in its subsidiary Datacom, which has been issued a license recently for mobile services throughout India.

However, the deal is expected to take shape only after the government allocates spectrum for wireless telecom services to new players, as a mere license may not fetch a good value.

Datacom is first in the list to get spectrum, except in Delhi and Mumbai, as and when the government starts allocating the radio frequency.

Govt unveils measures to fight inflation

In a slew of measures to combat inflation, the government on Monday decided to scrap import duty on crude palm and soya oils and ban export of non-basmati rice and pulses.

The decisions were taken at a meeting of the Cabinet Committee on Prices at Prime Minister Manmohan Singh's official residence in New Delhi.

The CCP approved ban on export of non-basmati rice with immediate effect and decided to extend the ban on pulses export for one more year from Monday, Finance Minister P Chidambaram said after the meeting that lasted over three hours.

Speaking about the whole development, CPM general secretary Prakash Karat said, “The government does one thing with the right hand and the other with the left back to back.”

“The UPA has betrayed aam aadmi,” said Bharatiya Janata Party leader Ravishankar Prasad, attacking the government over the inflation menace.

However, the decisions of the government will come into effect from midnight tonight, but a notification would be issued on Tuesday, he said.

Edible oils

Chidambaram said all edible oils in crude form can be imported at zero duty, while the duty on oils in the refined form would be 7.5 per cent.

The government also decided to raise the minimum export price of Basmati rice to $1,200 per ton from $1100, to discourage export and increase availability in the domestic market. It also cut import duty on butter and clarified butter (ghee) from 40 per cent to 30 per cent.

Import duty on maize scrapped

Besides, the CCP also decided to scrap import duty on maize from 15 per cent at present.

The Union Government also advised states to impose limits on stocks of commodities under the Essential Commodities Act, besides asking steel producers not to raise prices.
Asked whether these measures would help in containing inflation, which has touched 6.68 per cent for the week ended March 15, Chidambaram said: "I sincerely hope so."

Deferred duty reduction on iron and steel

The meeting of CCP, which was attended by Commerce and Industry Minister Kamal Nath, Agriculture Minister Sharad Pawar, Railway Minister Lalu Prasad, besides Chidambaram, deferred a decision on duty reduction on iron and steel as Steel Minister Ram Vilas Paswan is away from the country.
The CCP was informed that the ministries of commerce and industry and steel are trying to bring together iron ore and steel producers to work out ways to moderate prices.

Steel producers have increased prices between Rs 3,500 to Rs 4,000 per tonne during the past three months, triggering concerns among dealers and realty developers.

The meeting between the two ministries and producers is likely to be convened on Tuesday or the day after, Chidambaram said. On maize, he said zero duty would be applicable on import of up to five lakh tons.

Stock position of various commodities
He said only 5-6 states have started collecting data on stock position of various commodities, although the Centre had empowered them 18 months ago to impose "restrictions on stock limits under the Essential Commodities Act."

"There is a large onus upon state governments to exercise the power, which they wanted and which was given to them 18 months ago," Chidambaram said.

Earlier, the Left parties gave the government two weeks to work out measures for containing prices.

The Congress, which heads the multi-party UPA government, too decided to ask the government to ban futures trading in more farm items to keep prices under check. Futures trading is already banned on staple commodities like rice, wheat and pulses - urad and tur.

Also during the day, the Consumer Affairs Ministry called a meeting of the three national commodity exchanges today to seek their views on whether a few more essential commodities like potato and edible oils be banned from the futures trading to check prices.

CPI on price rise

CPI on Tuesday described the Government's decisions aimed at curbing prices as "too little too late" and said it would make no difference to the situation.

Reacting to the decisions taken by the Cabinet Committee on Prices last night to cut down duties on food imports, party MP D Raja said the impact of these measures would take a lot of time to fructify.

He regretted that nothing has been done to streamline the public distribution system and to ensure supply of essential commodities at affordable prices to the poor.

Raja said the party would go ahead with its planned agitation on price rise on April 17-18.

Airtel tests 3G services; set to launch operations

Bharti Airtel on Tuesday said it has successfully tested 3G applications with various equipment suppliers and is all set to start services as and when the spectrum was allocated.

"We have tested 3G applications at three places – Delhi, Mumbai and Bangalore – on a trial indoor spectrum given to us," Bharti Airtel President (Mobility) Sanjay Kapoor said.

The Department of Telecom (DoT) has already announced to allot 3G spectrum through auction and the existing players like Airtel are gearing to start 3G service which enables subscribers much faster downloading facility and also wireless broadband.
Asked whether Bharti Airtel has the technology to offer 3G mobile services, Kapoor said, "We as an operator have 3G services in Seychelles. Our license for Sri Lanka is for 3G services as well and by the time 3G services are launched in India we will have enough experience.

"Moreover, we have SingTel as our partner who has wide experience of offering 3G services," he said adding that for an operator who has 2G operations, 3G is just an incremental service.
On the equipment suppliers, with whom Bharti tested the services, Kapoor declined to specify their names but said they engaged more than one network companies.

Currently Swedish network company Ericsson and Nokia of Finland are vying for market share in the 3G space besides Chinese companies like Huawei and ZTE.

Bharti Airtel has offered the 3G services contract to Huawei in Sri Lanka. "Once we start here we will negotiate with all the players before taking a final decision," Kapoor said.

Asked how long the company would take to offer services once the spectrum was alloted, he said, "We will take 6-9 months from the date of allotment of spectrum. But we are still waiting for the final guidelines to be announced by the DoT."

On the issue wi-max, Bharti official said the High Speed Data Packet Access (HSDPA) would be the right technology for wireless broadband as this is a tested technology in various parts of the world.

He also said the company is getting applications ready for the 3G contents. "We have started working on that and should be ready by the time services start."

Parekh had major role in GTB's closure

Ketan Parekh played a major role in the closure of the Global Trust Bank (GTB) three years later, according to official investigators.

The broker is also accused of manipulating the stock markets in what became a multibillion-rupee scandal in 2001.

According to top sources in the Central Bureau of Investigation (CBI), records have been found of five bank accounts that were used to transfer a sum of over Rs 4 billion from the Hyderabad-headquartered GTB from 1999 to 2001 to Parekh. These funds were never returned.

"We have found bank records indicating that money from these accounts was sent to Parekh," a top official of the agency said.

Worse, the CBI has sufficient evidence to show that the funds were used by Mumbai-based Parekh in the scandal that rocked the stock markets in 2001.

"We were surprised to find money dealing in his name while investigating the closure of the bank," said the official. He added that preliminary investigations have revealed these figures but the probe could reveal a bigger amount of fraud.

The CBI is now trying to widen the scope of the investigations.

"We believe that some top bank officials were involved with Parekh because a fraud of such a huge amount could not be carried out without the help of bank officials."

Official sources said the CBI could only investigate cases that involved fraud of at least Rs 5 billion.

The CBI official said after the closure of GTB, the government had ordered an inquiry into the dealings that led to its becoming non-functional.

Parekh used to buy stocks at rock bottom prices and then push them up through market manipulation with funds borrowed from banks. He was arrested by the CBI on August 10, 2001, but is out on bail.

The stock market scam carried out by Parekh involved the siphoning off of Rs 13 billion from the Madhavpura Mercantile Cooperative Bank (MMCB) and the State Bank of India (SBI).

Officials said Parekh had played a major role in the closure of the Gujarat-based MMCB by defrauding it of Rs 10.5 billion. In that case, CBI officials said some of the bank officials were involved in the scam.

Similarly, Parekh had allegedly siphoned off Rs 2.5 billion from SBI for the sale and purchase of shares by his K-10 companies.

However, a CBI official said, "If we don't find the money, we will not let him enjoy it either."

CBI sources also said they might never be able to recover at least Rs 2.78 billion, which were transferred to Britain through investments made by companies operating in Mauritius.

"These funds were first transferred to Mauritius and from there they were transferred to bank accounts in England. We know who the people involved are but we do not have much proof to strengthen our case," said a source.

"We know about the remaining sum but we might never be able to recover this amount from Parekh," said the source.

Investigators following the money trail also suspect that a few non-resident Indian businessmen in Britain were involved in carrying out Parekh's operations in that country.

The officials also said some key conspirators of the scam were hiding in Britain but since the government of India did not have an extradition treaty with that country, it could not bring them to India.

SEBI for strengthening Know Your Customer norms

Market regulator Securities and Exchange Board of India has proposed that brokers should limit trading exposure of their clients based on their financial position, a move intended to avoid any default from investors.

"The exposure or turnover limit given by the trading members should be commensurate with the financial details of the clients reported in the Know Your Customer (norms)," SEBI said in its draft proposals on improving sales practice by the members of the stock exchanges.

The exposure limit shall be in proportion to the financial details of the client, said the proposals on which SEBI has invited public comments by April 15.

The limits will have to be specified in KYC and will have to be strictly adhered to, SEBI said adding that if the details require modification, they should be appropriately altered.

Also, the regulator said only those who have a financial standing comparable to that of the client can act as introducers.

To ensure the identity of investor, documents like PAN card, income tax return and proof of residence have to be maintained along with the KYC norms.

These KYC norms were introduced under the Prevention of Money Laundering Act, 2002 as a part of the client identification process.

SEBI had prescribed certain requirements to know about clients. These included verification of identity and address, providing information of financial status, occupation and such other demographic information.

BSE to launch Sensex futures on US bourse: Report

India's leading bourse Bombay Stock Exchange, which is planning listing on its own platform, is all set to launch benchmark Sensex-based futures on the US Futures Exchange in Chicago this week, a media report said on Monday.

"Futures based on its benchmark Sensex index are set to launch on the US Futures Exchange in Chicago this week," the Financial Times reported.

The BSE could list on its own platform through an initial public offering or a direct listing this year, the daily said.

Speaking to the newspaper, BSE's managing director and chief executive Rajnikant Patel said a number of issues, including whether to hold an IPO and raise cash or to list the shares directly on the market, were yet to be resolved.

"In terms of time to market, listing without an IPO would be the quickest way. We don't need additional cash as of now," Patel was quoted as saying by the newspaper in an article published in its online edition.

According to the report, there were technical issues which need to be addressed by the regulators such as the question that with whom the BSE would sign its listing contract.

Currently, firms listing on the bourse ink a contract with the exchange itself. Another issue was how the exchange would be regulated. The easiest option would be direct monitoring by market regulator SEBI of the exchange's activities to ensure it is conforming with the listing requirements, it added.

Pointing out that once these matters were resolved, a listing could be held in a matter of months, Patel told the newspaper, "Suppose we received SEBI and other regulatory approvals, whatever is required, it would take 90-100 days".

Further, the report added that the move to list BSE, part of "efforts to reform India's second-largest equities market after its demutualisation in 2005, comes as it seeks to raise its international profile."

Infy, TCS among 1,000 to lose mkt wealth in FY'08

Investors mostly got a raw deal from the stock Markets with as many as 1,000 Companies, including top five IT firms Infosys, TCS, Wipro, Satyam and HCL Tech, collectively losing over Rs 2,50,000 crore in market value in 2007-08.

The total market cap of all the listed Companies in the country, however, rose by about Rs 18,00,000 crore during the fiscal, counting close to 100 that got listed during the year.

But as many as 1,000 Companies including newly listed firms, recorded a fall in their market capitalisation, while another 1,400 firms managed to add about Rs 15,00,000 crore to their valuations.

Those that witnessed a fall in their market cap include the big names of IT sector, such as Infosys, Tata Consultancy Service, Wipro, Satyam Computer, HCL Technologies, Tech Mahindra, i-Flex, MphasiS, Patni Computer and Moser Baer.

Besides, firms like Tata Motors, Dr Reddy's, Cipla, Hindustan Zinc, Mahindra and Mahindra, Zee Entertainment, Jet Airways, Parsvnath, Videocon Industries, Financial Technology, United Breweries, Indian Hotels and Container Corporation also shed value.

Infosys, TCS and Wipro lost Rs 18,000-42,000 crore, while Satyam, HCL Tech and Patni lost Rs 2,000-4,500 crore. Tata Motors, M&M, Hindustan Zinc, Cipla, Container Corp, Dr Reddy's, Tech Mahindra, i-Flex, Videocon, MTNL, Bharat Forge, Sobha Developers, United Breweries, Amtek Auto, Cadila, Wockhardt, Aventis Pharma, Ansal Properties, Aurobindo Pharma, Mindtree Consulting, Hexaware, Subex and NIIT Tech all lost between Rs 1,000-10,000 crore each.

Together these 1,000 firms saw their market value falling to about Rs 7,24,000 crore, from about Rs 9,82,000 crore at the end of fiscal ended March 31, 2007.

In comparison, the market capitalisation of 1,400 other Companies rose to about Rs 40,40,000 crore from about Rs 25,40,000 crore at the end of previous fiscal.

The most prominent gainers included Reliance Industries, ONGC, NTPC, Bharti Airtel, NMDC, MMTC, Reliance Comm, SBI, BHEL, L&T, ICICI Bank, ITC, SAIL, Reliance Petro, HDFC, Indian Oil, Tata Steel and Sterlite Industries.

RIL, NMDC and MMTC each recorded gains of more than Rs 1,00,000 crore, while market capitalisation of MMTC rose by about Rs 98,000 crore.

Besides, market values of Companies, like ONGC, NTPC, SBI, BHEL, L&T, Reliance Petro, ITC, SAIL, HDFC, Tata Steel, Sterlite Industries and Jindal Steel rose between Rs 20,000 crore to Rs 50,000 crore.

Firms like Reliance Communications, HDFC Bank, Unitech, Cairn India, Suzlon Energy, GAIL India, Reliance Capital, Reliance Energy, Nalco, Axis Bank, GMR Infra, Tata Power, Essar Oil, Neyveli Lignite, RNRL and Hindustan Copper also saw their market capitalisations growing by over Rs 10,000 crore.

Collectively, the market capitalisation of all the listed Companies, including those that made a debut on the bourses during the year, rose by over 50 per cent during the fiscal.

The total market capitalisation of all the listed firms currently stands at Rs 53,09,319 crore, as against Rs 35,44,979 crore at the end of previous fiscal.

Besides, the market capitalisation of the 30 Sensex Companies rose to Rs 23,26,429 crore from Rs 17,11,241 crore at the end of the previous year -- representing a gain of about 36 per cent or over Rs 6,00,000 crore