INDIAN STOCK MARKET END-SESSION 29THJAN

The key benchmark indices staged a strong intraday rebound albeit in choppy trade, extending gains for the straight second day, as European stocks and US index futures rose. Closer home, investors also heaved a sigh of relief as the central bank kept key interest rates unchanged at a quarterly policy review. There was also an increase in economic growth forecast for the current fiscal year from the central bank. State Bank of India chairman O P Bhatt said he did not see any upward pressure on lending rates in the next six months.

The BSE 30-share Sensex rose 51.09 points or 0.31%, up close to 375 points from the day's low and off close to 35 points from the day's high. Banking, realty and capital goods stocks gained. Index heavyweight Reliance Industries (RIL) edged higher. But FMCG and metal stocks fell.

The Reserve Bank of India at its quarterly monetary policy review today raised banks' cash reserve ratio (CRR) by 75 basis points to suck out excess liquidity from the banking system. Soon after the announcement at about 11:15 IST, the BSE Sensex fell below the psychological 16,000 mark in mid-morning trade. It soon regained that mark.

Intraday volatility on the bourses was high today. The market edged lower at the onset of the trading session tracking weak Asian stocks. The market cut losses in morning trade on the eve of the central bank's policy announcement. A bout of volatility was witnessed as the market cut losses after an initial steep fall triggered by the central bank's decision to raise the CRR. The market weakened again in early afternoon trade. The market once again pared losses in afternoon trade. The market slipped into the red after turning positive for a brief period in mid-afternoon trade. The market regained positive zone later.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, declined for the second day in a row after a steep rise on Wednesday, 27 January 2010. It declined 3.08% to 26.13. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days

Stocks had recovered slightly on Thursday, 28 January 2010, after a steep fall in the preceding six trading sessions. The BSE 30-share Sensex rose 17.05 points or 0.1% to 16,306.87 on Thursday, 28 January 2010. Earlier, from a high of 17,641.08 on 18 January 2010, the Sensex had lost 1,351.26 points or 7.65% to 16,289.82 on Wednesday, 27 January 2010.

At a press conference after the policy review RBI chief D Subbarao said interest rate rise would have had unpredictable impact on liquidity and said it is important to absorb predictable amount of liquidity before taking other steps.

The Reserve Bank of India (RBI) hiked the cash reserve ratio (CRR) by 75 basis points in two stages to 5.75% to absorb excess liquidity from the banking system. The first phase of 50 basis points CRR hike is effective from 13 February 2010 and the second stage effective from 27 February 2010. The two-phased CRR hike will soak Rs 36000 crore from the banking system. The CRR is the percentage of deposits which banks must keep with the central bank.

The central bank kept the key policy rates viz. the repo rate, the reverse repo rate and the bank rate unchanged.

Finance secretary Ashok Chawla said the Reserve Bank of India (RBI) has taken a balanced view on managing economic recovery and prices. He added that cash reserve ratio hike was appropriate and adequate, but said interest rate are unlikely to go up after the RBI's policy review. He agreed that food inflation was a matter of concern and added that economic growth was on track.

Though the inflationary pressures in the domestic economy stem predominantly from the supply side, the consolidating recovery increases the risks of these pressures spilling over into a wider inflationary process, RBI said in its third quarter review today. The central bank lifted its wholesale price index inflation forecast for the end of the fiscal year in March 2010 to 8.5% from its earlier forecast of 6.5%, but said it expected inflation to moderate starting in July 2010, assuming a normal monsoon and global oil prices holding at current levels.

It also lifted its forecast for GDP growth in the current year to 7.5%, from an earlier target of 6%, and said that the current rate of growth is likely to be sustained in the financial year that ends in March 2011.

The RBI joins other central banks in Asia in taking steps to start unwinding ultra-loose monetary policy. On Thursday, the Philippines raised a short-term lending rate, and this month China started to tighten policy by raising banks' reserve requirements and accepting higher yields at bill auctions. Australia was the first Group of 20 country to begin raising rates as the global economy recovers from its worst downturn since the Great Depression. The Reserve Bank of Australia has raised its key cash rate by 75 basis points since October 2009.

The Reserve Bank of India called on the government to get its fiscal house in order and said monetary policy would be ineffective unless the government rolls back its borrowing, which is on track to hit a record Rs 4.5 lakh crore ($96.9 billion) this fiscal year.

There are expectations of higher tax rates and massive disinvestment in the coming Budget to help reduce the huge fiscal deficit from 6.8% of GDP this year to 3% over the next five years. Finance minister Pranab Mukherjee will reportedly package his higher indirect tax rates as an exit from the fiscal stimulus of 2008-09 and a return to the path of fiscal responsibility.

Meanwhile, the UPA government's proposed comprehensive indirect tax reform, goods and services tax (GST), will reportedly miss its scheduled rollout of 1 April, 2010, a temporary setback to creation of a unified national market for goods and services in the country, but experts say this will give more time to the centre and states to prepare a more robust framework.

RBI today said a consolidating economy recovery will encourage the central bank to clearly and explicitly shift its monetary policy stance from 'managing the crisis' to 'managing the recovery'. A growing confidence in the recovery justifies in moving further in reversing the crisis-driven expansionary stance, it said. The central bank said its policy instruments are all currently at levels that are more consistent with a crisis situation than with a fast-recovering economy. It is, therefore, necessary to carry forward the process of exit from the monetary policy further, the central bank said

The central bank also simultaneously said the economic recovery is yet to fully take hold. Strong anti-inflationary measures, while addressing one problem, may precipitate another by undermining the recovery, particularly by deterring private investment and consumer spending, it said. The Reserve Bank of India said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted.

With regard to capital inflows, the central bank said the inflows so far have been absorbed by the current account deficit. However, sharp increase in capital inflows, above the absorptive capacity of the economy, may complicate exchange rate and monetary management, it said

European shares rose on Friday, bouncing back after their worst sell-off in a year, led by the banking sector as investors await US Q4 December 2009 GDP numbers to gauge the health of the global economy. The key benchmark indices in France, Germany and UK rose by beween 0.79% to 0.95%.

The US economy likely grew at its fastest pace in nearly four years in the fourth quarter as businesses made less aggressive cutbacks on inventories, a US government report is expected to show later in the global day

Meanwhile, there were signs on Friday that the economic backdrop is improving in the UK, with the Nationwide Building Society stating that UK house prices rose 1.2% in January, bringing an annual increase to 8.6%.

Also, the GfK NOP Consumer Confidence Index rose by two points this month to negative 17, according to research carried out by GfK NOP on behalf of the European Commission.

Asian shares fell on Friday, weighed down by tech stocks after lacklustre sales outlooks from some sector heavyweights and as worries about the fiscal health of Greece and Portugal undermined investor confidence. The key benchmark indices in Hong Kong, Japan, China, South Korea, Singapore and Taiwan fell by between 0.16% to 2.44%.

SouthGobi Energy made a disappointing debut in Hong Kong, falling 13.2% from its IPO price, hurt both by poor market sentiment and by its failure to stand out from other already-listed coal plays.

Japan's industrial production rose and unemployment fell in December, signaling a continued recovery, while central bankers considered the threat to the economy from exchange rates.

US index futures reversed early losses. Trading in US index futures indicated Dow could rise 14 points at the opening bell on Friday, 29 January 2010.

US stocks dropped on Thursday as poor outlooks from Motorola and Qualcomm dented optimism in the technology sector while worries about Greece's fiscal health dragged on sentiment. The Dow Jones industrial average fell 115.70 points, or 1.13%, to end at 10,120.46. The Standard & Poor's 500 Index lost 12.97 points, or 1.18%, to 1,084.53. The Nasdaq Composite Index declined 42.41 points, or 1.91%, to close at 2,179.00.

The government data showed new orders for durable goods, or long-lasting manufactured goods such as washing machines and refrigerators, edged higher in December, and the number of workers filing claims for jobless benefits fell last week, signalling that the US economy remains on the path to recovery. However the jobless claims were more than estimated.

The US Senate on Thursday backed Ben Bernanke for a second four-year term running the Federal Reserve, the world's most powerful central bank, despite deep misgivings over his perceived policy missteps. Bernanke survived a revolt by lawmakers angry at big banks and their regulators, including the Fed. He still faces acute political pressure to ease economic strains at a time when the US central bank is showing divisions over how much support the economy needs.

US President Barack Obama welcomed the Senate vote and said he looked forward to working with Bernanke going forward.

Meanwhile, top policymakers warned on Thursday the world economy is not out of the woods and a global recovery is still far from secure, urging caution as central banks work on withdrawing critical support. China's Vice Premier Li Keqiang, the man tipped to become the country's next premier, said there were still "twists and turns" ahead as the world pulls out of recession, echoing calls to caution from bankers and other leaders at the annual World Economic Forum in the Swiss ski resort of Davos.

Bankers, however, warned also of the risk of pulling out too late, potentially leading to distortions in competition.

Closer home, the BSE 30-share Sensex rose 51.09 points or 0.31% to 16,357.96. The Sensex rose 83.44 points at the day's high of 16390.31 in late trade. The Sensex fell 324.79 points at the day's low of 15,982.08 in mid-morning trade.

The S&P CNX Nifty gained 14.80 points or 0.3% to 4,882.05. Nifty February 2010 futures were at 4,886.75, at a premium of 4.70 points as compared to the spot closing of 4,882.05. Turnover in NSE's futures & options (F&O) segment was Rs 92,503.91 crore, much lower than Rs 1,66,193.03 crore on Thursday, 28 January 2010.

The BSE Mid-Cap index rose 1.01% and the BSE Small-Cap index rose 1.2%. Both the indices outperformed the Sensex.

Most of the sectoral indices on BSE were in green. Banking sector index Bankex (up 2.99%), BSE Realty index (up 2.6%), BSE Capital Goods index (up 1.26%), BSE Power index (up 1.12%), BSE PSU index (up 1.05%), BSE Oil & Gas index (up 0.43%), BSE Auto index (up 0.37%), and BSE Consumer Durables index (up 0.34%), outperformed the Sensex. BSE FMCG index (down 1.86%), BSE Metal index (down 1.56%), BSE IT index (down 0.76%), underperformed the Sensex.

The market breadth, indicating the overall health of the market, turned positive. The breadth was weak earlier in the day. On BSE, 1464 shares advanced as compared with 1385 that fell. A total of 63 shares remained unchanged.

Among the 30 share Sensex pack, 17 fell and rest rose.

BSE clocked a turnover of Rs 5679 crore, higher than Rs 5007.43 crore on Thursday, 28 January 2010.

Index heavyweight Reliance Industries (RIL) rose 0.88% to Rs 1046.55. The stock came off the day's low of Rs 1018. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

Rate sensitive banking shares jumped after RBI kept interest rates steady. India's largest private sector bank by net profit ICICI Bank jumped 5.29%. Its ADR fell 2.42% on Thursday. India's largest bank by net profit and branch network State Bank of India rose 2.72%. SBI chairman O P Bhatt said deposit rates may not go up immediately but there is no room for deposit rates to come down. India's second largest private sector bank by net profit HDFC Bank rose 2.25%. Its ADR fell 2.29% on Thursday.

India's largest power equipment maker by sales Bharat Heavy Electricals rose 3.1%. Bharat Heavy Electricals said on Wednesday it would sign an agreement with the Madhya Pradesh state utility to jointly set up a 1,600 megawatts thermal power plant in the central Indian state.

Among other capital goods stocks, Siemens, ABB, Thermax, BEML and Praj Industries rose by between 1.49% to 4.29%.

But, India's largest engineering and construction firm by sales Larsen & Toubro fell 0.43%. The government is reportedly considering selling its stakes in the firm in tranches to state-run financial institutions.

Rate sensitive realty shares reversed early losses after RBI kept interest rates unchanged. Ackruti City, Indiabulls Real Estate, Unitech, Housing Development & Infrastructure, rose by between 1.28% to 4.5%.

India's largest realty player by sales DLF rose 2.54%. The company's net profit rose 26.04% to Rs 224.43 crore on 109.03% rise in sales to Rs 887.16 crore in Q3 December 2009 over Q3 December 2008. The company announced the Q3 result after market hours on Wednesday.

Shares of India's largest cigarette maker by sales ITC fell 1.67%. The government is reportedly considering selling its stakes in consumer goods maker ITC in tranches to state-run financial institutions. The company posted 26.67% rise in net profit to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on 22 January 2010.

India's largest FMCG major by sales Hindustan Unilever fell 4.44%. The company's net profit rose 5.4% to Rs 649 crore in Q3 December 2009 over Q3 December 2008.

Among other FMCG stocks, Tata Tea, United Spirits, Nestle India and Britannia Industries fell by between 0.68% to 2.28%.

Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 3.59% on Thursday, 28 January 2010. India's largest private sector steel maker by sales Tata Steel fell 2.83%. The company's net profit surged 155.6% to Rs 1191.75 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours on Thursday. The stock had rallied 4.8 % on Thursday after forecast-beating third-quarter results.

Tata Steel will report consolidated third-quarter results, to include the Corus numbers, next month. The Indian operations account for a quarter of the group's annual global capacity of about 30 million tonnes.

Steel Authority of India (Sail) fell 2.57%. Sail on Wednesday reported a 99% jump in its net profit at Rs 1,675.55 crore in Q3 December 2009 over Q3 December 2008.

India's largest non-ferrous metal firm by capacity Sterlite Industries India fell 1.43%. The company's net profit slumped 77.16% to Rs 46.59 crore on a 39.83% increase in sales to Rs 3611.99 crore in Q3 December 2009 over Q3 December 2008. The stock had lost 4.04% on Wednesday.

India's largest private sector aluminum maker by sales Hindalco Industries fell 0.54%. The company's net profit fell 21.60% to Rs 427.10 crore on a 29.56% increase in sales to Rs 5286.10 crore in Q3 December 2009 over Q3 December 2008.

National Aluminium Company fell 0.2%. The company's net profit declined 29.3% to Rs 155.18 crore in Q3 December 2009 over Q3 December 2008.

NTPC fell 0.67%. The company's net profit rose 5.06% to Rs 2364.98 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours today.

IT stocks extended recent losses on fears the Obama administration's bank reform plan will crimp outsourcing demand. India's largest IT exporter by sales Tata Consultancy Services fell 0.67%. India's second largest IT exporter by sales Infosys lost 0.71% as its ADR fell 3.84% on Thursday. India's third largest software services exporter Wipro fell 3.8% as its ADR fell 2.26% on Thursday. Wipro said on Wednesday it signed a multi-year outsourcing deal with British American Tobacco Plc, the world's second-biggest cigarette maker.

Stocks from interest rate sensitive auto sector were mixed after RBI's quarterly monetary policy review. India's largest tractor maker by sales Mahindra and Mahindra (M&M) fell 0.34%. The stock had slumped 5.64% on Wednesday after Monday's over 5% slide

M&M's net profit surged 849% to Rs 413.70 crore on a 56.32% rise in sales to Rs 4478.70 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Monday, 25 January 2010. Meanwhile, the company on Monday also approved a 2-for-1 stock split.

India's top truck marker by sales Tata Motors fell 2.92% ahead of its Q3 December 2009 earnings today, 29 January 2010. India's top small car maker by sales Maruti Suzuki India rose 0.3%.

India's largest motorbike maker by sales Hero Honda Motors rose 1.38%. After market hours on 25 January 2010, the company reported a 78.34% rise in net profit to Rs 535.77 crore on a 32.72% rise in sales to Rs 3814.42 crore in Q3 December 2009 over Q3 December 2008.

State Bank of India clocked the highest turnover of Rs 255.18 crore on BSE. ICICI Bank (Rs 212.81 crore), Aban Offshore (Rs 210.96 crore), Tata Steel (Rs 177.16 crore) and Housing Development & Infrastructure (Rs 125.61 crore) were the other major turnover toppers in that order.

Cals Refineries clocked the highest volume of 2.34 crore shares on BSE. Unitech (1.36 crore shares), IFCI (1.33 crore shares), Hindustan Fertiliser & Chemicals (1.19 crore shares) and Suzlon Energy (0.92 crore shares) were the other volume toppers in that order.

INDIAN STOCK MARKET ENS SESSION

28THJAN2010
The key benchmark indices provisionally closed with small gains in what was a choppy trading session. Volatility was the order of the day as traders rolled over positions in the derivatives segment ahead of the expiry of the near-month January 2010 futures & options contracts today, 28 January 2010. The BSE 30-share Sensex was provisionally up 40.30 points or 0.25%, off close to 195 points from the day's high and up close to 150 points from the day's low. Capital goods stocks fell. But, healthcare, banking, realty and metal stocks rose. The market breadth was weak. Global stocks were firm.

The key benchmarks moved in an erratic manner. The market pared gains after a firm start triggered by higher Asian stocks. The market regained strength in morning trade. The market pared gains again in mid-morning trade after hitting fresh intraday high in morning trade. The market further trimmed gains in early afternoon trade after the government released the weekly inflation data. The market recovered from lower level in afternoon trade. The market moved between positive and negative zone for a while. Volatility surged in mid-afternoon trade.

The US Federal Reserve on Wednesday, 27 January 2010, said conditions in the world's largest economy are showing signs of improvement. The Fed said it intended to end some emergency lending and asset-buying programs while sounding more upbeat on the economy overall. The Fed also left its benchmark interest rate in a range between zero and 0.25% and renewed its pledge to keep the rate near zero to promote economic recovery.

World stocks rose after US President Obama moderated his tone on bank restrictions. In his annual State of the Union address on Wednesday, Obama pledged to slap tough new regulation on Wall Street but said he was "not interested in punishing banks." Obama said he would continue financial reform to fight against excessive speculation and also vowed he would veto any finance bill that does not contain "real reform." Investors will now pay attention to Treasury Secretary Timothy Geithner's speech in Minnesota later in the global day for fresh cues about bank regulation plans. The US earlier this month proposed plans that would limit banks' risk-taking capability.

Obama pledged to double exports in five years to help create jobs, prompting some market players to think the US government may seek a weak dollar to promote exports

Meanwhile, the Fed and other major central banks around the world on Wednesday decided to end emergency dollar lending operations on 1 February 2010 due to improvement in financial markets. The decision marks the first unified retraction by central banks around the world of extraordinary support measures to boost lending after credit markets seized up in late 2007, causing the global economic downturn.

The Fed announced in December 2007 that it had authorized so-called liquidity swap lines with the European Central Bank and the Swiss National Bank. The agreement was extended to include several other central banks in April 2009. Under the arrangements, central banks around the world provided each other with foreign currency - the Fed made US dollar liquidity available elsewhere, with the ECB providing euros and the Bank of England providing sterling. The agreements added up to hundreds of billions of dollars.

The aim was to improve liquidity conditions in US and foreign financial markets after banks became nervous of lending to each other amid concerns about the state of balance sheets across the industry.

Equities worldwide fell sharply over the past few days following reports China has directed banks to pull back lending activity in a bid to stave off overheating in its economy. China's economy grew by 10.7% in the fourth quarter. Weak global cues and sustained selling spree by foreign investors had weighed on the domestic bourses in recent trading sessions. From a high of 17,641.08 on 18 January 2010, the Sensex had lost 1,351.26 points or 7.65% to 16,289.82 on Wednesday, 27 January 2010.

In the derivatives segment, rollover of Nifty futures from January 2010 series to February 2010 series was about 60% and for Mini Nifty futures it was about 64% at the end of Wednesday's trading. Among individual stocks, higher rollover has been seen in stocks like Idea Cellular, Hindustan Unilever, Bhel, Tata Steel, and Mahindra & Mahindra. Stocks where rollover is low include Sun Pharma, Andhra Bank, ONGC, Bajaj Hindustan and Orchid Chemicals.

On the macro front, the government said today that food price index rose 17.40 % in the year to 16 January 2010 slightly higher than previous week's rise of 16.81%. Fuel price index rose 5.70% while primary articles price index rose 14.66% in the year to 16 January 2010 .

The Reserve Bank of India need not take monetary measures to contain food inflation, farm minister Sharad Pawar said on Wednesday. Pawar also said the wholesale sugar prices have already come down and retail prices may also follow suit soon.

Market men expect a 50 basis point increase in the cash reserve ratio (CRR), or the proportion of deposits banks must keep with the Reserve Bank at the Reserve Bank of India (RBI)'s quarterly monetary policy review scheduled to be announced on Friday, 29 January 2010. Statements from the central bank in its macro-economic review would be watched as it will provide final clues on the policy outlook.

Inflation has surged, primarily driven by a sharp rise in food prices after a weak monsoon. Signs of economic recovery are also evident in strong GDP and industrial output data. The RBI says the rise in inflation driven by food prices is a supply-side issue that monetary policy cannot address. Still, it is worried about inflation pressures spilling over to the broader economy, and will watch for signs of demand-side price pressures in indicators such as asset prices, credit growth, and manufacturing prices.

The widely watched wholesale price index rose in December by 7.3% over a year earlier, its fastest pace since November 2008 and jumping from 4.8% in November 2009. 16.81%

European equities gained on Thursday, bouncing back from a sharp one-week slide after Obama moderated his tone on bank restrictions in the State of the Union speech. The key benchmark indices in France, Germany and UK were up by between 0.9% to 1.18%.

Asian stocks gained on Thursday after Federal Reserve left interest rates unchanged at record low. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan rose by between 1.04% to 2.15%.

However, the upside in Chinese stocks was capped by lingering concerns over credit tightening. The Shanghai Composite index rose 0.25%.

Trading in US index futures indicated Dow could gain 38 points at the opening bell on Thursday, 28 January 2010.

US stocks eked out gains led by tech stocks and financials on Wednesday, which rebounded amid relief that the Fed's statement offered no surprises. Stocks had languished for much of the day amid some disappointing earnings outlooks and an unexpected drop in home sales but recovered in late trade. Annualized new home sales for December declined 7.6% against expectations of 3% rise. The Dow Jones Industrial Average added 41.87 points, or 0.4%, to 10,236.16. The Standard & Poor's 500 index gained 5.33 points, or 0.5%, to 1,097.50, while the Nasdaq Composite Index added 17.68 points, or 0.8%, to 2,221.41.

Closer home, as per provisional figures, the BSE 30-share Sensex was up 40.30 points or 0.25% to 16,330.12. It shed 107.68 at the day's low of 16,182.14 in afternoon trade. The Sensex rose 234.87 points at the day's high of 16524.69 in morning trade.

The S&P CNX Nifty was up 22.95 points or 0.47% to 4876.05 as per provisional figures.

BSE clocked a turnover of Rs 4989 crore, lower than Rs 5782.95 crore on Wednesday, 27 January 2010.

The market breadth, indicating the overall health of the market, was weak. That was in complete contrast to a strong breadth earlier in the day. On BSE, 1022 shares advanced as compared with 1790 that fell. A total of 69 shares remained unchanged.

Among the 30 share Sensex pack, 12 rose and rest declined.

The BSE Mid-Cap index rose 0.37%. The BSE Small-Cap index rose 0.03%.

Index heavyweight Reliance Industries (RIL) rose 1.2% to Rs 1038.25. The stock was volatile. It hit a high of Rs 1046 and a low of Rs 1025.10. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

India's largest engineering and construction firm by sales Larsen & Toubro fell 1.99% and was the top loser from the Sensex pack. The government is reportedly considering selling its stakes in the firm in tranches to state-run financial institutions.

India's largest power equipment maker by sales Bharat Heavy Electricals fell 0.24%. Bharat Heavy Electricals said on Wednesday it would sign an agreement with the Madhya Pradesh state utility to jointly set up a 1,600 megawatts thermal power plant in the central Indian state.

Among other capital goods stocks, Areva T&D, BEML and Praj Industries fell by between 0.33% to 5.79%.

Havells India gained 2% after net profit jumped 418.75% to Rs 58.93 crore in Q3 December 2009 over Q3 December 2008.

Metal stocks rose on bargain hunting after recent sharp fall. India's largest private sector steel maker by sales Tata Steel rose 5.52% as net profit surged 155.6% to Rs 1191.75 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours today. Tata Steel will report consolidated third-quarter results, to include the Corus numbers, next month. The Indian operations account for a quarter of the group's annual global capacity of about 30 million tonnes.

Jindal Saw, JSW Steel, Sesa Goa, Jindal Steel & Power rose by between 1.12% to 3.07%.

Steel Authority of India (Sail) rose 1.73%. Sail on Wednesday reported a 99% jump in its net profit at Rs 1,675.55 crore in Q3 December 2009 over Q3 December 2008.

India's largest non-ferrous metal firm by capacity Sterlite Industries India rose 0.32%. The company's net profit slumped 77.16% to Rs 46.59 crore on a 39.83% increase in sales to Rs 3611.99 crore in Q3 December 2009 over Q3 December 2008. The stock had lost 4.04% on Wednesday.

But, India's largest private sector aluminum maker by sales Hindalco Industries fell 1.2% reversing early gains. The company's net profit fell 21.60% to Rs 427.10 crore on a 29.56% increase in sales to Rs 5286.10 crore in Q3 December 2009 over Q3 December 2008.

National Aluminium Company lost 5.7% after net profit declined 29.3% to Rs 155.18 crore in Q3 December 2009 over Q3 December 2008.

Rate sensitive realty shares gained on bargain hunting. Unitech, Omaxe, Housing Development & Infrastructure and Indiabulls Real Estate rose by between 0.12% to 2.47%.

India's largest realty player by sales DLF rose 2.37%. The company's net profit rose 26.04% to Rs 224.43 crore on 109.03% rise in sales to Rs 887.16 crore in Q3 December 2009 over Q3 December 2008. The company announced the Q3 result after market hours on Wednesday.

Rate sensitive banking shares also rose on bargain hunting. India's largest bank by net profit and branch network State Bank of India rose 1.2%. The bank's net profit remained flat in the third quarter ended December 2009 to Rs 2,479 crore against Rs 2,478 crore in the year-ago period. Net interest income increased by 9.69% in the quarter under review compared with the same period in the previous fiscal. However, net interest margin declined to 2.82% from 3.10%.

India's second largest private sector bank by net profit HDFC Bank rose 0.2% even as its ADR fell 4% on Wednesday. But, India's largest private sector bank by net profit ICICI Bank fell 0.2%. Its ADR fell 0.75% on Wednesday.

Banks' outstanding loans fell by Rs 11,900 crore in the two weeks to 15 January 2010 because companies repaid some loans as is typical at the beginning of a quarter, the central bank's data showed on Wednesday. The Reserve Bank of India data showed loans fell to Rs 30,08,000 crore in the two weeks to 15 January 2010 and deposits fell by around Rs 22,000 crore to Rs 42,43,000 crore. In the two weeks to 1 January 2010, outstanding loans rose by a massive Rs 78,192 crore and deposits also went up by Rs 82,769 crore.

IT stocks reversed early gains on fears the Obama administration's bank reform plan will crimp outsourcing demand. India's largest IT exporter by sales Tata Consultancy Services fell 0.42%. India's second largest IT exporter by sales Infosys fell 0.16%. Its ADR rose 0.68% on Wednesday. But, India's third largest software services exporter Wipro rose 2.82%. Wipro said on Wednesday it signed a multi-year outsourcing deal with British American Tobacco Plc, the world's second-biggest cigarette maker. Its ADR fell 3.03% on Wednesday.

Healthcare stocks rose after healthcare firms reported good Q3 result. Pfizer, Dr Reddy's Laboratories, Biocon, Sun Pharmaceutical Industries, Ranbaxy Laboratories rose by between 0.33% to 4.54%. Cipla rose 1.8% ahead of its Q3 result today.

INDIAN STOCK MARKET END SESSION/27JAN2010

Key benchmark indices suffered a severe setback as blue-chip stocks collapsed like a pack of cards in what was a highly volatile trading day. Markets extended their five-day losing trend today as they played a catch-up with rest of its Asian peers which had witnessed a sell-off on Tuesday, 26 January 2010. Indian markets were closed on 26 January 2010 on account of Republic Day. The BSE 30-share Sensex was down 538.16 points or 3.21%, off 466.30 points from the day's high and up 11.45 points from the day's low.

The market breadth was extremely weak as small and mid-cap shares succumbed to selling pressure. Shares from interest rate sensitive sectors - banking, realty and auto pack dominated the slide. Today's sell-off was wide-based with stocks across sectors being hammered brutally. IT and metal stocks were not spared either. Index heavyweight Reliance Industries slipped in highly volatile trade.

Sentiment remained edgy with latest quarterly earnings from select pivotals falling short of street estimates and following the recent selling drive by the foreign institutional investors. The S&P CNX Nifty dipped below the psychological 5,000 level in opening trade.

Meawhile, the Finance Ministry has made a case for a uniform threshold for goods and services for Central GST (CGST) and State GST (SGST). The Revenue Department has suggested that this annual turnover threshold for registration could be Rs 10 lakh or more. Also, the Centre may come up with a composition scheme up to gross turnover limit of Rs 50 lakh if the threshold for registration is kept at Rs 10 lakh.

These suggestions formed part of the Revenue Department's comments to the first discussion paper on GST released by the States in November last year. India is looking to introduce dual GST.

Global cues were negative with Asian and European markets sliding as investors turned cautious ahead of the conclusion of a two-day policy meeting by the U.S. Federal Reserve later in the day. This is the final meeting of Ben Bernanke's term as chairman of the Federal Reserve.

As the economy remains fragile, the statement from the Federal Open Market Committee (FOMC) is expected to be bland. The FOMC is not expected to make any change in the near-zero target Fed Funds rate which has been in effect since December 2008 or in its other programs which were designed to increase the flow of credit.

European markets opened on a weak note today led by bank stocks. Key benchmark indices in UK, Germany and France were down by between 0.84% and 1.23%

Asian stocks fell for the eighth straight day on Wednesday on fears that China's heightened efforts to rein in soaring credit growth could hamper the global economic recovery. Key benchmark indices in Japan, Hong Kong, Singapore, South Korea, Taiwan and China were down by between 0.38% and 1.09%.

Asian stocks had suffered steep losses ranging from 2% to 3.5% on Tuesday, 26 January 2010, on the back of implementation of a clampdown on lending by China and cut in rating outlook on Japan by Standard & Poor's.

US markets were little changed on Tuesday, 26 January 2010, as news that the senate has scheduled a hearing on President Obama's bank proposal for next week rattled the market.

The Dow Jones industrial average was down 2.57, or less than 0.1%, to 10,194.29. The S&P 500 index was down 4.61 points, or 0.4%, to 1,092.17. The Nasdaq Composite Index was down 7.07 points, or 0.3%, to 2,203.73.

In economic data watch, consumer confidence hit its highest level since September 2008. Its measure of confidence ticked up to 55.9 from an upwardly revised 53.6 in December.

In other news, the national retail federation reported that retail sales are likely to rise 2.5% this year, after a 2.5% drop in 2009.

Trading in US index futures showed the Dow could fall 8 points at the opening bell on Wednesday, 27 January 2010. The Dow futures indicated a firm start in the US markets earlier during the day.

Back home, the undertone remains cautious ahead of derivatives expiry, RBI's monetary policy and earnings from frontline companies.

Aggregate results of 757 Indian companies showed 48.10% advance in net profit on 18.5% rise in sales in quarter ended December 2009 over the quarter ended December 2008.

Equities are likely to remain volatile in a truncated week as traders roll positions in the derivative segment from January 2010 series to February 2010 series ahead of the expiry of the near-month January 2010 contracts on Thursday, 28 January 2010. Rollover so far is substantially lower at 36% from 49% on comparable day last month.

The Reserve Bank of India (RBI) will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank.

A CRR increase would have little impact on market, as investors have mostly factored in at least a 25 basis points increase in banks' reserve requirement and steady interest rates. Increases in both the CRR and interest rates could however weigh on shares of banks as well as sectors such as auto and property on concerns loan demand may slow.

Core sector, which comprises six key infrastructure industries, grew 6% in December 2009, compared with 5.3% growth in November 2009. The growth, signifying a recovery in industrial manufacturing, was primarily led by an increase in the production of finished steel, cement and electricity last month. The core sector growth stood at 0.7% in December 2008, due to the economic slowdown.

The sector, which accounts for 26.7% of the index of industrial production (IIP), grew 4.8% in April-December 2009 period, against 3.2% in the corresponding period of 2008-09, the commerce and industry ministry data showed on 23 January 2010.

As per reports, the government is considering an across-the-board increase in excise duty in Budget 2010-11, as it faces pressure to withdraw fiscal stimulus measures in the wake of a 16-year high fiscal deficit of 6.8% in the current financial year. One option being considered is an increase in Cenvat rate by 2% while leaving the service tax rate unchanged at 10%, reports citing an unnamed finance ministry official indicated. Cenvat refers to the median excise duty, tax on manufacture of goods, levied on nearly 90% of the goods made in the country.

Also more services could be brought under the tax net to allow the government to keep service tax rates unchanged. An alternative proposal is also under consideration which seeks an increase in excise rates in sectors that are doing well such as automobiles, instead of an across-the-board hike.

As per provisional figures on NSE, the foreign funds sold shares worth Rs 1002.60 crore and domestic funds bought shares worth Rs 716.22 crore on Monday, 25 January 2010.

The BSE 30-share Sensex plunged 538.16 points or 3.21% to 16,242.30, as per provisional closing. The Sensex opened 71.86 points lower at 16,708.60, also its day's high so far. It lost 549.61 points at day's low of 16,230.85 in late trade.

The S&P CNX Nifty was down 170.75 points or 3.41% to 4837.15 as per provisional closing. The Nifty crashed below the psychological 5,000 mark to hit a low of 4833.05 in late trade

Weak global cues and a sustained selling spree by foreign investors have weighed on the market which extended its fall to the fifth trading session. From the recent high of 17,641.08 on 18 January 2010, the Sensex fell 860.62 points or 4.87% to 16,780.46 on Monday, 25 January 2010.

The market breadth, indicating the overall health of the market, was weak. On BSE, 2615 shares declined as compared with 335 that rose. A total of 26 shares remained unchanged.

The total turnover on BSE amounted to Rs 5759 crore as compared with Rs 4390 crore by 14:25 IST

ITC was the lone gainer from the 30-member Sensex pack. Shares of India's largest cigarette maker by sales rose 0.45% to Rs 256, extending recent gains after posting 26.67% rise in net profit to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on 22 January 2010.

Index heavyweight Reliance Industries (RIL) was down 1.72% to Rs 1023.80, off day's high of Rs 1049.85 on selling pressure. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

Metal stocks declined after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.81% on Monday, 25 January 2010.

India's largest private sector steel maker by sales Tata Steel slumped 9.09% to Rs 555 ahead of its Q3 December 2009 results on 28 January 2010. It was the top loser from the Sensex pack.

Jindal Saw (down 10.49%), Sail (down 3.29%), Sesa Goa (down 4.75%), and National Aluminum Company (down 3.60%), declined.

India's largest private sector aluminium maker by sales Hindalco Industries declined 5.09% after net profit fell 21.60% to Rs 427.10 crore on a 29.56% increase in sales to Rs 5286.10 crore in Q3 December 2009 over Q3 December 2008.

India's largest non-ferrous metal firm by capacity Sterlite Industries India shed 4.31% after net profit slumped 77.16% to Rs 46.59 crore on a 39.83% increase in sales to Rs 3611.99 crore in Q3 December 2009 over Q3 December 2008.

Stocks from interest rate sensitive sectors were the worst hit in today's market meltdown. Auto stocks underwent profit booking after auto major Mahindra & Mahindra's earnings fell short of street expectations.

India's largest tractor maker by sales Mahindra and Mahindra (M&M) slumped 5.63%, extending Monday's over 5% slide after it reported lower-than-expected earnings for the latest quarter ended December 2009 during market hours on 25 January 2010.

M&M's net profit surged 849% to Rs 413.70 crore on a 56.32% rise in sales to Rs 4478.70 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Monday, 25 January 2010. Meanwhile, the company on Monday also approved a 2-for-1 stock split.

India's largest motorbike maker by sales Hero Honda Motors plunged 4.39%. After market hours on 25 January 2010, the company reported a 78.34% rise in net profit to Rs 535.77 crore on a 32.72% rise in sales to Rs 3814.42 crore in Q3 December 2009 over Q3 December 2008.

India's top truck marker by sales Tata Motors lost 7.06% ahead of its Q3 December 2009 earnings on 29 January 2010.

India's top small car maker by sales Maruti Suzuki India fell 6.24%.

Banking shares declined as investors turned cautious on rate sensitive stocks ahead of the Reserve Bank of India's (RBI) monetary policy review meet on 29 January 2010.

India's largest bank by net profit and branch network State Bank of India slumped 5.59% after the bank's net profit remained flat in the third quarter ended December 2009 to Rs 2,479 crore against Rs 2,478 crore in the year-ago period. Net interest income increased by 9.69% in the quarter under review compared with the same period in the previous fiscal. However, net interest margin declined to 2.82% from 3.10%.

India's second largest private sector bank by net profit HDFC Bank fell 4.07%. India's largest private sector bank by net profit ICICI Bank lost 5.81%.

Rate sensitive realty shares also declined ahead of the RBI's quarterly monetary policy review meet on 29 January 2010. DLF (down 9.08%), Unitech (down 9.20%), HDIL (down 9.25%), and Indiabulls Real Estate (down 13.17%), slipped.

High beta considered shares related to infrastructure sector extended recent fall. High beta stocks are highly volatile stocks which generally outperform benchmark index in a firm market and underperform it in a weak market.

Reliance Infrastructure (down 3.11%), Larsen & Toubro (down 2.73%), Bhel (down 1.42%), and Jaiprakash Associates (down 3.45%), declined.

IT stocks declined on fears the Obama administration's bank plan will crimp outsourcing demand. India's largest IT exporter by sales Tata Consultancy Services fell 1.69%. India's second largest IT exporter by sales Infosys fell 1.38%. India's third largest software services exporter Wipro lost 5.71%.

Cummins India surged 3.68% after net profit rose 11.1% to Rs 148.16 crore on a 8.7% increase in net sales to Rs 814.83 crore in Q3 December 2009 over Q3 December 2008. The company announced the results after market hours on Monday, 25 January 2010.

GOLD SILVER AND CRUDE OIL WEEKLY REPORT/24THJAN

GOLD REPORT:

Gold's fall from 1163 extended further to as low as 1083 last week and the development suggests that whole decline from 1127.5 is resuming. Initial bias remains on the downside this week for 1075.2 support first. Break will confirm the bearish view and target 100% projection of 1227.5 to 1075.2 from 1163 at 1010.7 next. On the upside, above 1117.8 will turn intraday bias neutral and bring recovery. But upside should be limited below 1163 resistance and bring fall resumption.

In the bigger picture, gold has made a medium term top at 1227.5 and correction from there is likely still in progress to 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level. However, we'd expect such correction to be contained there at around 1000 psychological level and bring resumption of the whole up trend from 2008 low of 681. A break above 1163 will indicate that such correction has completed and will turn outlook bullish for another high above 1227.5.

In the long term picture, rise from 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.

SILVER REPORT :

Silver's fall from 18.925 extended further to as low as 16.88 last week and the development indicates that rebound from 16.765 has completed and whole decline from 19.50 is likely resuming. Initial bias remains on the downside for 16.765 low first. Break there will bring fall resumption to 100% projection of 19.50 to 16.756 from 18.925 at 16.19, which is close to 16.12 support. On the upside, above 17.52 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 18.925 resistance holds.

In the bigger picture, the sharp fall from 18.925 suggests that whole decline from 19.50 is still in progress and is resuming. The development revives that case that silver has already topped out in medium term at 19.50. Break of 16.19 projection target will suggest that fall fro 19.50 is developing into an impulsive move which further affirm the reversal scenario and bring deeper decline to lower medium term trend line at 14 level.

On the upside, above 18.925 will suggest that silver has not topped out yet. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall.

In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.

CRUDE OIL REPORT:

Crude oil's fall from 83.95 extended further to as low as 74.01 last week. The break of 61.8% retracement of 68.59 to 83.95 at 74.46 argues that whole rise from 68.59 is completed. Initial bias remains on the downside this week and further fall should be seen to retest 68.59 support next. On the upside, above 76.68 resistance will turn intraday bias neutral and bring consolidations. But break of 79.16 resistance is needed to indicate that fall from 83.95 has completed. Otherwise, short term risk will remain on the downside.

In the bigger picture, upside momentum is clearly diminishing as seen in bearish divergence condition in daily MACD. However, there is no confirmation that medium term rise has topped out yet as long as 68.59 support holds. Such medium term rise could still continue and above 83.95 will target 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, even in such case, we'll continue to look for reversal signal and expect crude oil to top out finally as it approaches 90 level. ON the downside, break of 68.59 support will confirm that a medium term top is in place and will turn outlook bearish for a retest on 33.2 low as correction from 147.27 resumes.

In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.

DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.

FOREX WEEKLY OUTLOOK 24THJAN

EUR/USD Weekly Outlook :
EUR/USD resumed fall from 1.5143 last week and dived to as low as 1.4028 before turning sideway. Initial bias is neutral this week and some sideway trading might be seen. Nevertheless, upside of the recovery is expected to be limited below 1.4334 support turned resistance and bring fall resumption. Below 1.0428 will target next key cluster support at 1.3737.

In the bigger picture, medium term rise from 1.2456 has completed at 1.5143 on bearish divergence conditions in daily MACD. Focus now turns to 1.3737 cluster support (50% retracement of 1.2329 to 1.5143 at 1.3736). Decisive break there will also confirm the case that three wave consolidation from 1.2329 has finished at 1.5134 too. In other words, whole medium term term fall from 1.6039 should be resuming for a new low below 1.2329. On the upside, however, break of 1.4578 resistance will leave the fall from 1.5143 in three wave corrective structure and mixes up the outlook.

In the long term picture, the lack of impulsive structure of the rise from 1.2329 argues that it's the second wave of the wide range correction that started from 1.6039. Another medium term decline should still be seen to 1.2329 and below. Break of 1.1639 support is possible based on 100% projection of 1.6039 to 1.2329 from 1.5143. But downside will likely be contained by 61.8% retracement of 0.8223 to 1.6039). After all, the long term up trend from 0.8223 is set to resume after completing the three wave medium term correction from 1.6039.

USD/JPY Weekly Outlook
USD/JPY's fall from 93.74 extended further to as low as 89.77 last week despite some brief intra week recovery. Initial bias remains on the downside this week and further fall should be seen to 87.36 support next. As noted before, whole rise from 84.10 should have completed with three waves up to 93.74 already. Break of 87.36 will confirm this case and indicate that medium term down trend is indeed resuming for another low below 84.81. ON the upside, above 90.56 minor resistance will turn intraday bias neutral and bring consolidations. But recovery should be limited below 91.86 resistance and bring fall resumption.

In the bigger picture, USD/JPY is still trading below medium term trend line resistance at 94.71 and 55 weeks EMA at 94.07. Whole down trend from 124.13 is likely still in progress and a break of 84.81 will target 1995 low of 79.75. However, note bullish convergence condition is seen in weekly MACD. Sustained trading above the medium trend line resistance will be the first signal of medium term reversal and in such case, focus will turn to 101.43 resistance for confirmation.

In the long term picture, fall from 124.13 is still in progress after breaking out of the long term triangle pattern and a test on 79.75 low made in 1995 should be seen. The structure of the current fall from 101.43 will be important to determine whether 79.75 will be taken out decisively. Acceleration of the current fall from 101.43 will build up downside momentum which should then pull monthly MACD away from the signal line and will indicate that fall from 124.13 is resuming the multi-decade down trend. However, loss of downside momentum in the coming fall will indicate that it's possibly just part of a long term sideway pattern from 79.95 and strong support should be seen after breaching 79.75 to conclude the medium term fall.

GBP/USD Weekly Outlook
GBP/USD edged higher to 1.6456 last week but reversed below mentioned 61.8% retracement of 1.6875 to 1.5829 at 1.6475 and falls sharply to as low as 1.6086. The development indicates that corrective rise from 1.5829 has completed with three waves up to 1.6456 already and whole decline from 1.6875 should be resuming. Initial bias is on the downside this week for 1.5829 support first. Break will confirm this bearish case and target 1.5706 key cluster support. On the upside, though, above 1.6284 minor resistance will delay the bearish view and turn focus back 1.6456 resistance

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503. However, note that break of 1.6456 resistance will in turn shift favor to the case that recent price actions from 1.7043 are merely developing into consolidations to the larger rise from 1.3503. That is, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.

In the longer term picture, the corrective nature of the multi-decade advance from 1.0463 (85 low) to 2.1161 as well as the impulsive nature of the fall from there suggests that GBP/USD is now in an early stage of a long term down trend. Rebound from 1.3503, which is treated as correction in the larger down trend, should be limited by resistance zone of 1.7332/8236 and bring down trend resumption towards 1.4063 low. We'll hold on to the bearish view as long as 1.8236 fibonacci level holds.

USD/CHF Weekly Outlook
USD/CHF surged to as high as 1.0494 last week but lost momentum ahead of 1.0506 resistance and retreated. Initial bias is neutral this week and some sideway trading might be seen. Nevertheless, current development indicates that whole rise from 0.9919 should be resuming. Hence, downside of the retreat from 1.0494 should be contained above 1.0291 resistance turned support and bring rally resumption. Break of 1.0506 will target 1.0590 medium term support turned resistance next.

In the bigger picture, medium term fall from 1.1963 has completed with five waves down to 0.9916 already, on bullish convergence condition in daily MACD. Also, the three wave consolidation from 1.2296 should be finished too. Current rise from 0.9916 is expected to extend further to medium term trend line resistance first (now at 1.0996). Sustained trading above the trend line will affirm the case that long term rise from 2008 low of 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 1.0131 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for another low below 0.9916.

In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in daily MACD. USD/CHF failed to take out 55 months EMA and reversed again and thus gives no confirmation of long term reversal yet. We're neutral in the long term outlook for the moment and would wait for further evidence from the markets before making a stance.

AUD/USD Weekly Outlook
AUD/USD's fall from 0.9327 extended further to as low as 0.8981last week and remains weak. Outlook in AUD/USD is quite mixed for the moment considering that dollar has been impressively strong elsewhere. Question is whether fall from 0.9327 is just a correction to rise from 0.8734 or it's developing into a larger decline. Nevertheless, in any case, initial bias remains on the downside this week as long as 0.9145 minor resistance holds and further fall should be seen to 61.8% retracement of 0.8734 to 0.9327 at 0.8961. Sustained break there will shift favor to the case that fall fro 0.9327 is resuming the whole decline from 0.9404 and AUD/USD should drop through 0.8734 support. On other hand, strong rebound from 0.8961, or a break of 0.9145 minor resistance, will indicate that fall from 0.9327 is likely just a correction and will flip intraday bias back to the upside for 0.9327 and then 0.9404.

In the bigger picture, the failure below 0.9404 high and deep pull back from 0.9327 mixes up the outlook of AUD/USD and we'll turn neutral for the moment. Nevertheless, one thing to note is that AUD/USD is losing upside momentum as seen with bearish divergence in daily MACD. Hence, even in case of another rise, we'd expect strong resistance as AUD/USD approaches 2008 high of 0.9849 and bring reversal. On the downside, break of 0.8734 support will in turn revive the case that whole medium term rise from 0.6008 has completed and will turn outlook bearish for deeper correction towards 0.7702/0.8626 support zone.

In the longer term picture, as noted before, long term correction from 0.9849 has likely completed at 0.6008 already, after being supported slightly above 76.4% retracement of 0.4773 (01 low) to 0.9849 (08 high). Rise from 0.6008 is possibly developing into a new up trend which extend the long term rise from 0.4773. We'll continue to favor the long term bullish case as long as 0.7702 support holds and expect an eventual break of 0.9849 high. However, a break of 0.7702 support will firstly argue that whole rise from 0.6008 has completed. Secondly this will open up the case that AUD/USD is in phase of a long term consolidation and will gyrate in the large range of 0.6008/0.9849 for some time.

USD/CAD Weekly Outlook
USD/CAD rebounded strongly last week and the break of 1.0412 resistance confirms that fall from 1.0744 has completed at 1.0223, ahead of 1.0205 key support as expected. Initial bias remains on the upside this week for 1.0744 resistance next. Break there will also affirm the bullish view that choppy correction from 1.0851 has finished too. Stronger rise should then be seen to this 1.0851 resistance next. On the downside, below 1.0462 minor support will indicate that a short term top is possibly in place and bring consolidation. But downside should be contained above 1.0313 support and bring rally resumption.

In the bigger picture, we're still favoring the case that whole medium term fall from 1.3063, which is viewed as a correction to long term rise from 0.9056, has completed at 1.0205 already. Break of 1.0851 will confirm this case by completing a double bottom reversal pattern (1.0205, 1.0223). In such case stronger rally should be seen to 61.8% retracement of 1.3063 to 1.0205 at 1.1971 at least. Also, in such case, we'll tentatively treat rise from 1.0205 as resumption of the whole up trend from 2007 low of 0.9056 and focus on the structure of the rise from 1.0205 for confirmation.

In the longer term picture, the three wave structure of the fall from 1.3063 to 1.0205 revived the case that it's a correction to rise from 0.9056. Sustained trading above 61.8% retracement of 1.3063 to 1.0205 at 1.1971 will indicate that whole rise from 0.9056 might be resuming for another high above 1.3063.

EUR/GBP Weekly Outlook
EUR/GBP's fall extended to as low as 0.8650 last week before recovering. From a short term angle, some more recovery might be seen initially this week. But upside should be limited below 0.8855 support turned resistance and bring fall resumption. Below 0.8686 minor support will flip intraday bias back to the downside and bring fall resumption to 100% projection of 0.9410 to 0.8833 from 0.9153 at 0.8576 next.

In the bigger picture, current development indicates that rebound from 0.8399 has completed at 0.9410 already and fall from there could be the third leg of the whole correction pattern that started at 0.9799. Outlook will remain bearish as long as 0.9153 resistance holds. Correction from 0.9799 could extend further to 0.7693/0.8186 support zone, with 100% projection of 0.9799 to 0.8399 from 0.9410 at 0.8010 in between.

In the long term picture, current development suggests correction from 0.9799 is still in progress and the long term up trend from 2000 low of 0.5680 is not ready to resume yet. Nevertheless, correction from 0.9799 is expected to be contained by 0.7963/0.8186 support zone to conclude the correction and bring up trend resumption. Rise from 0.5680 is still expected to continue to 261.8% projection of 0.5680 to 0.7258 from 0.6535 at 1.0666 eventually.

EUR/CHF Weekly Outlook
EUR/CHF dropped further to as low as 1.4673 last week but continued to lose downside momentum and recovered. Touching of 1.4740 minor resistance turns intraday bias neutral and some consolidations could be seen in initially this week. Nevertheless, another fall is still expected as long as 1.4808 resistance holds. Below 1.4673 will target next key support level at 1.4577. However, note that break of 1.4808 will indicate that a short term bottom is formed with bullish convergence condition in 4 hours MACD. In such case, stronger rebound would be seen to 1.4894/4988 resistance zone.

In the bigger picture, with EUR/CHF still staying well below 55 weeks EMA, fall from 1.5880 is likely still in progress. Current decline should have a test on 1.4577 support first and break will target 2008 low of 1.4315. On the upside, break of 1.5007 support turned resistance is needed be the first signal to indicate that fall from 1.5446 has finished. Otherwise, medium term outlook will remain bearish.

In the long term picture, the corrective three wave structure of the rise from 1.4391 to 1.6827 is arguing that fall from 1.6827 is resumption of long term down trend from 1.8234. EUR/CHF's failure to take out 55 weeks EMA suggests that whole fall from 1.6827 is still in progress. A break of 1.4577 support will affirm this case and bring another low below 1.4315 to resume the long term down trend.

EUR/JPY Weekly Outlook
EUR/JPY's fall fall from 134.36 extended further last week and the break of 126.88 support confirms that whole decline from 138.47 has resumed. Initial bias remains on the downside this week and further fall should be seen to 124.35 support and then 100% projection of 138.47 to 126.88 from 134.36 at 122.77 next. On the upside, above 128.38 minor resistance will argue that a short term bottom might be in place on oversold condition and bring recovery. But upside should be limited below 131.49 support turned resistance and bring fall resumption.

In the bigger picture, the break of 126.88 support revives that case that medium term rebound from 112.10, which is treated as correction to long term down trend from 169.96, has completed last year at 139.21. Break of 124.35 support will further affirm this case. By then, we'll expect such long term down trend to resume for a new low below 112.10. On the upside, break of 134.36 resistance is needed to invalidate this bearish view and suggest that EUR/JPY is still in consolidation to rise from 112.10 only. Otherwise, outlook will remain bearish.

In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. The corrective nature of the rise from 112.10 to 139.21 argues that whole fall from 169.96 is note completed yet. A break below 112.10 low will confirm that whole fall from 169.96 has resumed and should then target 61.8% projection of 169.96 to 112.21 from 139.21 at 103.45 or further to 100 psychological support next.

GBP/JPY Weekly Outlook
GBP/JPY's sharp fall last week and break of 145.96 support suggests that choppy rise from 139.26 has completed completed at 150.68 already. Also, consolidation pattern from 139.69 should have also finished too. Initial bias will remain on the downside this week for 141.99 support first. Break will affirm this bearish case and target 139.26 low next. On the upside, though, above 147.18 minor resistance will mix up the near term outlook and we'll stay neutral first in such case.

In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Fall from 163.05 is possibly resuming as consolidation pattern from 139.69 has likely finished at 150.68 already. Break of 139.26 will confirm this bearish case and target 61.8% retracement of 118.81 to 163.05 at 135.70 next. Break will further affirm the case that whole down trend from 2007 high of 251.90 is resuming for another low below 118.81. This will remain the preferred view as long as 150.68 resistance holds.

In the longer term picture, fall from 251.09 is treated as resumption of multi decade down trend. Note that the fall from 215.87 is not treated as the fifth wave, but the third wave inside the third wave that started at 241.35. On resumption, the down trend will extend to 61.8% projection of 215.87 to 118.81 from 163.05 at 103.03 next, which is close to 100 psychological support.

INDIAN STOCK MARKET WEEK AHEAD 24JAN/2010

Overall indications are negative on weak global markets, and we expect volatility with huge downward bias as we enter the expiry week; possible announcements from the government before the budget on the fiscal stimulus withdrawal too can impact marke

The week ended 22nd January 2010 was extremely disappointing for the global market as there were concerns or signals from the Chinese authority that they would start withdrawing the stimulus provided earlier in order to rein in the visible overheating. Thus the market around the world corrected on fears that the Chinese demand would slow as Beijing taps the brakes on its roaring growth to stave off inflation and keep the economy from overheating. China had curbed lending by banks after raising banks reserve requirement ratios by 50 basis points earlier. The Indian market also corrected and some of the disappointments from key corporate earnings exasperated the bearish sentiment. US President Barack Obama's proposed new restrictions on banks, which would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund continued to keep the sentiment bearish. The benchmark S&P CNX Nifty corrected 58.15 points to close at 5036 on Friday 22nd January 2010.
For the full week the nifty corrected 216.20 points and the nifty future closed at discount all throughout the week thus emitting negative undertone. The nifty future discount widened to 16.35 points on Friday. Longs in the January series were seen getting covered; while fresh shorts in February series was seen created. The nifty January series shed 2.80 lakh shares in open interest (OI) to take the total OI to 2.50 crore shares. The February series added 25.77 lakh shares in OI on Friday to take the total OI to 72.75 lakh shares. The volumes increased considerably to wards the end of the week and on Friday the volumes in the F&O segment increased to Rs 1.32 lakh crore. Some of the major stock future counter also witnessed similar trends with rollover of the current series and fresh shorts being created in the February series. The January series stock future shed 11.58 crore shares in OI, while the February series added 11.65 crore shares on Friday. Fresh short being created both at the Nifty and the stock future front is a major negative indicator.

Besides, the trend in the nifty option front was not positive either with calls being written from 4900 to 5200 strikes. The overall trend looks absolutely negative. Now that most of the major companies have already declared their results, the trigger till the budget would be the trend in the global markets.
FOR THE PAST WEEK :

Overall the market wide OI on Friday stood at 222.10 crore shares, thus rising by 1.42 crore shares as compared to the previous day. Additions as compared to the previous week was 17.17 crore shares. Major activity was witnessed in the index and stock options segment.


The most active options in the January series were the 4900 to 5200 strikes. The call option on the above mentioned strikes witnessed aggressive writing, while the puts at these strikes were wound up. The OI in 5000, 5100 and 5200 call increased by 28.53 lakh shares, 7.83 lakh shares and 6.23 lakh shares respectively while puts of these strikes shed OI. Thus as we enter the expiry week 5000 levels for the nifty would be the key level below which the market looks extremely bearish.


5000 at the nifty level could act as a psychological support. Overall the sentiment looks bearish as evident from such shorts being created both at the nifty and the stock futures. In the absence of any major domestic triggers the global markets will remain the key trigger. There could be some announcements from the government before the budget on the fiscal stimulus withdrawal. Thus the overall indications are negative. Expect volatility with huge downward bias as we enter the expiry week.
FOR THE PAST TRADING DAY:

INDIAN STOCK MARKET END SESSION 22NDJAN

A sell-off in global stocks and disappointment from key corporate earnings pulled the domestic bourses sharply lower in choppy trade. Stocks fell in four out of five trading sessions of the week. The BSE Sensex fell below the psychological 17,000 mark. Global stocks tumbled after US President Barack Obama on Thursday proposed new restrictions on banks, which would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.

The restrictions could limit leverage in the financial system and the role of risk-taking by hedge funds. The rules would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit. These bets have been enormously profitable for the banks but can hold huge risks for the financial system if they go wrong.

Global markets had already recoiled in recent weeks on fears that Chinese demand would slow as Beijing taps the brakes on its roaring growth to stave off inflation and keep the economy from overheating. China had curbed lending by banks after raising banks' reserve requirement ratios (RRR) by 50 basis points earlier.

The BSE Sensex fell 694.62 points or 3.96% to 16859.68 in the week ended Friday, 22 January 2010. The S&P CNX Nifty tumbled 216.20 points or 4.11% to 5,036.

The BSE Mid-Cap index slumped 266.75 points or 3.78% to 6,783.66 in the week. The BSE Small-Cap index dipped 309.29 points or 3.45% to 8,661.17. Both the indices outperformed Sensex.

The food price index rose 16.81% in the 12 months to 9 January 2010, while the fuel index was up 6.34%, the government said on Thursday. The rise in food price index was lower than an annual rise of 17.28% in the previous week.

The annual wholesale inflation rose to 7.31% in December 2009, compared with 4.78% in November and 6.15% a year ago. Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said. He also promised more measures to check the rise in the prices of essential commodities.

Union food and agriculture minister Sharad Pawar on Wednesday suggested that the prices of milk and related products were set to rise because of the demand-supply mismatch.

Food prices will cool off in 1-2 months and inflation will turn around, finance ministry's chief economic advisor Kaushik Basu said in a newspaper interview published on Wednesday. The Reserve Bank of India will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank.

The timing and sequence of exit from an easy policy is still a challenge, Reserve Bank of India Governor D Subbarao said on Monday, 18 January 2010. Subbarao, who was speaking at a conference in Goa, also said the challenge was to support growth without compromising price stability. The Reserve Bank of India will review monetary policy on 29 January 2010.

The October-December 2009 quarter economic growth is expected to be lower than the previous quarter, chief statistician Pronab Sen said on Thursday, due to a contraction in farm output. Indian economy, which grew at 7.9% in the September quarter, is expected to grow 6-6.5% in the December quarter, Sen said.

He expects the Indian economy to grow at 6.5-7.5% for the fiscal year ending in March 2010. The annual farm output in the December 2009 quarter is expected to contract by 6-7%, he added. Monthly inflation may touch double digits by March 2010, Sen had said earlier this week

Economic growth will accelerate this year, Commerce and Industry Minister Anand Sharma said on Tuesday as he demanded better access to China's markets to help exports. Sharma's call for greater access for goods comes amid a widening trade gap between the two countries. Trade between the two grew rapidly to $50 billion in 2008, making China India's second-largest trading partner, but fell back to $43 billion in 2009 as global trade declined. Sharma called for more Chinese direct investment in India, especially in infrastructure, while noting that Indian firms are already present in China.

India is on course to return to pre-crisis growth rates of about 9% from 2011, if key reforms continue, having emerged from the global economic crisis less scathed than most other nations. That's according to a guest opinion article recently published by Standard & Poor's Ratings Services, titled "Why India Will Continue To Gain Stature In The Global Economy." The guest opinion article says that India's large, young, and growing population, the rising income of the middle class, and the country's high savings rate continue to support strong domestic demand, tempering the impact of weak export markets and other external stimuli.

Meanwhile, the government reportedly proposes to ease the norms for foreign direct investment (FDI) approval. Presently projects worth more than Rs 600 crore require the final approval of the Cabinet Committee on Economic Affairs (CCEA). The department of industrial policy and promotion (DIPP) has proposed that this ceiling be raised to anywhere between Rs 1,000 crore and Rs 1,500 crore. The new norms are likely to be notified after the introduction of a consolidated FDI policy framework on 1 April 2010.

FDI inflows increased to $27 billion in 2008-09 from $3.2 billion in 2004-05. During the period April-September 2009-10, FDI inflows reached $15 billion. The government has set a target of achieving $50 billion annual FDI by 2012 and $100 billion by 2017.

Meanwhile, the World Bank has raised its forecast for global growth in 2010 but warned that the recovery may lose momentum in the second half of the year as government stimulus programs wind down and unemployment persists. The world economy will expand 2.7% this year after the worst recession since the end of World War II, compared with an estimate in June of a 2% expansion, the Washington- based poverty-reduction agency said in an annual report. Growth may reach 3.2% in 2011, the bank said.

The market edged higher on Monday, 18 January 2010 on reports banks are unlikely to raise lending rates in the near term even if the central bank signals a tightening of the monetary policy by hiking the cash reserve ratio (CRR). The BSE 30-share Sensex rose 86.78 points or 0.49% at 17,641.08 on that day.

The key benchmark indices lost ground in choppy trade on Tuesday, 19 January 2010 as weakness in world stocks weighed on investor sentiment. Global stocks fell as investors awaited key earnings reports from the US. The BSE 30-share Sensex fell 155.02 points or 0.88% to 17,486.06 on that day.

The key benchmark indices ended a choppy trading session lower on Wednesday, 20 January 2010, extending losses for the second straight day as weak global stocks weighed on investor sentiment. The BSE 30-share Sensex fell 11.57 points or 0.07% to 17,474.49 on that day.

The market extended losses for the third straight day on Thursday, 21 January 2010 on disappointing Q3 results from frontline companies. Markets across the globe were gripped with volatility as bullish economic data from China raised concerns Beijing may tighten policy. The BSE 30-share Sensex lost 423.35 points or 2.42% to 17,051.14 on that day.

The key benchmark indices ended a volatile trading session lower on Friday, 22 January 2010 after US President Barack Obama proposed limiting risk-taking at US banks. The BSE 30-share Sensex fell 191.46 points or 1.12% lower at 16,859.68.

India's largest engineering & construction firm by sales Larsen & Toubro (L&T) slumped 10.83% in the week. The company cut its revenue growth target to 10% from 15% at the time of announcing Q3 results on Thursday. L&T said profit after tax from ordinary activities rose 15% to Rs 696 crore in Q3 December 2009 over Q3 December 2008. Gross sales revenue declined 6% to Rs 8139 crore. The result was announced during trading hours on Thursday, 21 January 2010.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) ended flat for the week at Rs 2372.20. The company's the net profit rose 35.67% to Rs 1072.59 crore on a 17.28% rise in total income to Rs 7422.51 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on 21 January 2010.

Index heavyweight Reliance Industries (RIL) fell 5.05%. RIL's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on Friday, 22 January 2010.

RIL's gross margin from refining a barrel of crude was $5.90 a barrel in the latest quarter, compared with $10 a barrel a year earlier. The company added said it has increased production at the D6 gas block in the Krishna-Godavari basin, off India's east coast, to 60 million metric standard cubic meters per day.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation dropped 8.1%. The company posted a 23% rise to Rs 3054 crore on 24% rise in net sales to Rs 15373 crore in Q3 December 2009 over Q3 December 2008. The results, which lagged street estimates, were announced after market hours on 21 January 2010.

India's largest cellular services provider by sales Bharti Airtel gained 1.26%. On consolidated basis, the company's net profit rose 13.2% to Rs 2236.90 crore on a 6.6% increase in total income to Rs 10327.57 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Friday, 22 January 2010.

India's largest cigarette maker by sales ITC fell 1.26% The company's net profit rose 26.67% to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on Friday, 22 January 2010.

India's largest private sector bank by net profit ICICI Bank ended flat for the week at Rs 840.65. The bank's net profit declined 13.44% to Rs 1101.06 crore on a 25% fall in total income to Rs 7762.71 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Thursday, 21 January 2010.

INDIAN STOCK MARKET OPENING SESSION /22NDJAN

NIFTY FUTURES LEVELS
R1 5172 R2 5258 R3 5307 PP 5121 S1 4902 S2 4989 S3 5038

BANK NIFTY FUTURE LEVELS
R1 9039 R2 9168 R3 9239 PP 8968 S1 8839 S2 8768 S3 8639

The market is seen extending last three day fall following dismal global cues following the Obama administration announcing a new plan to curb risk. The S&P CNX Nifty futures for January 2010 expiry were trading 82 points lower in Singapore.

Among the key Q3 December 2009 results for the day include Bharti Airtel, Reliance Industries, ITC, Punj Lloyd and Tech Mahindra.

Aggregate results of 415 companies showed 51.10% advance in net profit on 8.4% rise in sales in quarter ended December 2009 over the quarter ended December 2008.

The food price index rose 16.81% in the 12 months to 9 January 2010, while the fuel index was up 6.34%, the government said on Thursday. The rise in food price index was lower than an annual rise of 17.28% in the previous week.

The annual wholesale inflation rose to 7.31% in December 2009, compared with 4.78% in November and 6.15% a year ago. Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said. He also promised more measures to check the rise in the prices of essential commodities.

Food prices will cool off in 1-2 months and inflation will turn around, finance ministry's chief economic advisor Kaushik Basu said in a newspaper interview published on Wednesday. The Reserve Bank of India will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank. Food prices rose near 20% in December from a year earlier, their highest in 11 years.

India's October-December 2009 quarter economic growth is expected to be lower than the previous quarter, chief statistician Pronab Sen said on Thursday, due to a contraction in farm output. Indian economy, which grew at 7.9% in the September quarter, is expected to grow 6-6.5% in the December quarter, Sen said.

He expects the Indian economy to grow at 6.5-7.5% for the fiscal year ending in March 2010. The annual farm output in the December 2009 quarter is expected to contract by 6-7%, he added. Monthly inflation may touch double digits by March 2010, Sen had said earlier this week

Union food and agriculture minister Sharad Pawar on Wednesday suggested that the prices of milk and related products were set to rise because of the demand-supply mismatch.

Excise, customs and service tax collections are continuing to show a negative growth. Excise duty collections between April to December 2009 are down by 13% at close to Rs 70,000 crore. Revenues by way of customs duty are also down by a whopping 28% at around Rs 59,000 crore while service tax collection is also down over 6% with the government collecting slightly over Rs 36,000 crore.

This takes the total collection of indirect taxes in the first nine months to about Rs 1,66,000 crore, down by 18% as compared to last fiscal. The government has set itself a target to collect around Rs 2,70,000 crore by the end of fiscal year ending March 2010.

Meanwhile, the government reportedly proposes to ease the norms for foreign direct investment (FDI) approval. Presently projects worth more than Rs 600 crore require the final approval of the Cabinet Committee on Economic Affairs (CCEA). The department of industrial policy and promotion (DIPP) has proposed that this ceiling be raised to anywhere between Rs 1,000 crore and Rs 1,500 crore. The new norms are likely to be notified after the introduction of a consolidated FDI policy framework on 1 April 2010.

FDI inflows increased to $27 billion in 2008-09 from $3.2 billion in 2004-05. During the period April-September 2009-10, FDI inflows reached $15 billion. The government has set a target of achieving $50 billion annual FDI by 2012 and $100 billion by 2017.

Economic growth will accelerate this year, Commerce and Industry Minister Anand Sharma said on Tuesday as he demanded better access to China's markets to help exports. Sharma's call for greater access for goods comes amid a widening trade gap between the two countries. Trade between the two grew rapidly to $50 billion in 2008, making China India's second-largest trading partner, but fell back to $43 billion in 2009 as global trade declined. Sharma called for more Chinese direct investment in India, especially in infrastructure, while noting that Indian firms are already present in China.

Asian stocks fell for a fifth day today amid concern China will take more steps to curb price increases in an economy that has led the global recovery. Key benchmark indices in China, Hong Kong, South Korea, Japan, Singapore and Taiwan were down by between 1.36% and 2.72%.

In US markets, the Dow logged its biggest two-day drop since June 2008 on Thursday as big financials led decline as President Obama rattled the market with plans to crack down on Wall Street risk taking.

The Dow Jones Industrial Average slipped 213.27, or 2%, to 10,389.88. The broader Standard & Poor's 500 Index declined 21.56 points, or 1.9%, to 1,116.48. The Nasdaq Composite Index was down 25.55 points, or 1.1%, to 2,265.70.

President Barack Obama proposed new limits on the size and activities of the nation's largest banks, pushing a more muscular approach toward regulation that yanked down bank stocks and raised the stakes in his campaign to show he's tough on Wall Street.

Developing Asian economies face the risk of asset bubbles or overheating as the region's growth outpaces the rest of the world this year, the World Bank said in a report on Wednesday. In South Asia, policy makers will be particularly responsive to signs of building inflationary pressures because of a strong aversion to food-price increases, the World Bank said.

The World Bank raised its forecast for global growth in 2010 but warned that the recovery may lose momentum in the second half of the year as government stimulus programs wind down and unemployment persists. The world economy will expand 2.7% this year after the worst recession since the end of World War II, compared with an estimate in June of a 2% expansion, the Washington- based poverty-reduction agency said today in an annual report. Growth may reach 3.2% in 2011, the bank said.

The World Bank report also includes figures on last year's downturn, with an estimate that the global economy declined 2.2%, compared with the 2.9% decrease projected in June. Growth in emerging nations is expected to reach 5.2% this year, compared with a June estimate of 4.4%, the bank said. China will expand 9% this year and India 7.5%, it said.

The World Bank also raised its forecast for US growth in 2010 to 2.5% growth, after predicting 1.8% in June. Japan's gross domestic product will expand 1.3% this year, more than the 1% predicted in June. The euro area's economy is forecasted to grow 1%, compared with the earlier estimate of 0.5% expansion.

Back home, the key benchmark indices extended losses for the third straight day on Thursday on disappointing Q3 results from frontline companies. The BSE 30-share Sensex declined 423.35 points or 2.42%.

As per provisional figures on NSE, the foreign funds sold shares worth Rs 853.75 crore and domestic funds bought shares worth Rs 231.36 crore on Thursday, 21 January 2010.
FOR THE TAST FIVE DAYS

GOLD SILVER AND OIL OUTLLOK

22NDJAN2010
GOLD OUTLOOK :

Gold's break of 1119.2 minor support indicates that choppy recovery from 1075.2 has completed at 1163 already and whole correction from 1227.5 is possibly resuming. Intraday bias is now on the downside for 1075.2 support first. On the upside, in case of recovery, break of 1144.8 minor resistance is needed to indicate that fall from 1163 has completed. Otherwise, outlook will remain cautiously bearish.

In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Correction from 1227.5 is still in progress and is in favor to extend further towards 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level. However downside will likely be contained there and bring strong rebound. On the upside, a break of 1163 resistance is needed to indicate that fall fro 1227.5 has completed. Otherwise, more downside should be in favor.

SILVER OUTLOOK :

Silver's break of 18.055 minor support indicates that rise from 16.765 is already finished at 18.925. Intraday bias is flipped back to the downside and further fall should now be seen to 16.675 support next. On the upside, above 18.062 minor resistance will turn intraday bias neutral and bring recovery. But risk will now remain on the downside as long as 18.925 resistance holds.

In the bigger picture, medium term rise from 12.435 could still be in progress and another high above 19.50 cannot be ruled out. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall. So, we'll continue to look for reversal signal on next rise. On the downside, break of 16.765 support will revive the case that silver has topped out in medium term and will bring deeper decline towards lower medium term trend line at 14 level.

CRUDE OIL OUTLOOK :

Intraday bias in crude oil remains neutral as it's still staying is tight range above 76.76. Another fall is expected as long as 79.62 minor resistance holds and below 76.76 will target 83.95 towards 61.8% retracement of 68.59 to 83.95 at 74.46. But downside should be contained there and bring rally resumption. On the upside, above 79.26 minor resistance will flip intraday bias back to the upside for retesting 83.95 resistance first. Further break of 83.95 high will target upper trend line resistance at 87/88 level again. However, note that sustained trading below 74.46 fibo support will argue that rise from 68.59 has completed and will turn focus back to this key support level.

In the bigger picture, whole medium term rise from 33.2 is still in progress but after all, there is no change in the view that it's merely a correction to fall from 147.27. Therefore, we'd continue to look for reversal signal in case of another rise and as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, however, considering continuous bearish divergence condition in daily MACD, a break of 68.59 support will confirm that a medium term top is in place and will turn outlook bearish for a retest on 33.2 low as correction from 147.27 resumes.

DISCLAIMER

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.