US new claims for unemployment posted a surprisingly large tumble last week

International News:

economists who were expecting orders to rise 0.5%. Orders for goods meant to last three years or more gained 2% in September. (Source: CNNMoney) US new claims for unemployment posted a surprisingly large tumble last week, falling to 466,000, a 14-month low. US new home sales rose to a 430,000 annual unit rate in October from a 405,000 unit rate in September. Economists expected sales to dip to a 404,000 annual unit rate. US personal income and spending climbed in October, according to a Commerce Department report released in the morning. Income rose 0.2% after rising 0.2% in September. US orders for durable goods fell 0.6% in October, surprising .Most Asian stocks rose, led by commodity producers after oil and metal prices climbed. Japanese automakers and electronic companies declined as the U.S. dollar traded close to a 14-year low against the yen.

Domestic News:

The Department of Economic Affairs, the Ministry of Commerce and Industry and the Reserve Bank of India have come to a consensus that foreign institutional investment in a company should be monitored on a monthly or a quarterly basis to ensure that there is no breach of sectoral caps under the proposed foreign direct investment guidelines. TRAI is set to come out with revised rates for all cable TV channels by December-end. The central government has created a new division within the NHAI for developing expressways in the country. The Government also plans to seek USD 2.95 billion loan from World Bank. The Banks may get more time for NPA provisioning till March 2011 from the earlier proposed deadline of September 2010. Sugar mills in Uttar Pradesh have agreed to pay farmers a price of up to Rs.190-195 per 100 kg.

Corporate news:

ITC announced that the company is not disinclined to the idea of a fight for East India Hotels. Bajaj Hindusthan has lined up a capex of Rs.1600 crore for power capacity expansion. Welspun Gujarat raised USD250 million by way of institutional placement of shares and bonds issues. Oman Oil has paid a full 50 per cent premium for a re-entry into the Rs.11397 crore Bina Refinery of BPCL. Infotech Enterprises plans two buy outs in US for up to USD40 million. Tata Communications has signed an agreement with the Qatar-based Qtel for a new undersea cable network that will connect a number of regional operators in the Gulf region with the country. Lanco Infratech is tying up funds for three power projects entailing total investments of over Rs.15000 crore.

Technical View:

Nifty: (5108): The index opened on a positive note and remained range bound throughout the day’s trading session. It ended the day with gain of 0.35%. The index is witnessing consolidation around the 5100 level. It can see range bound trading around this level. On the downside index has support around the 5050-5000 level, near term bias will be considered positive till index sustains above the 5000 level on a closing basis. Intra day index has support around 5050.On the upside index faces resistance around 5150 level. Nifty Nov contract ends the day up by 21. points at a premium of 0.10 points in Nov contracts adding OI by 7.9% across all active Nifty contracts. Nifty Open Int PCR at 1.711 compared to 1.659 last day on back of addition of 8.50 Lakh Nifty puts and paring of 9.78 Lakhs calls. Nifty VIX at 24.85 from 26.09 the last day. Highest OI in Nifty put at 4800 Nov strike and calls is at 5200 Nov strike. FII side saw long build up in Nifty futures over the day and short build up in stock futures over the day. Long build up over the day seen BPCL, ORCHIDCHEM. GAIL, IOC, BAJAJ-AUTO, HINDPETRO, IOB etc. Short build over the day seen in MPHASIS, NAGARFERT, TECHM, HDIL, IBREALEST & DLF etc. Market wide rollover seen at 64.38% compared to 3 month average of 59.9% and 58.99% last expiry. Nifty rollover at 63.68% compared to 64.40% in last expiry. 3 month average rollover at 61.35%. 6.6% ( 27449 contracts) higher no of Nifty contracts gets rolled over compared to last expiry.

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Japan’s exports fell at the slowest pace in a year in

Japan’s exports fell at the slowest pace in a year in October as worldwide government spending boosted demand, sustaining the economic recovery. The broadest measure of the nation's economic growth grew at a slower pace last quarter than initially thought, adding to bets that the US recovery will be sluggish. US home prices rose 3.1% in the third quarter versus the second, but remained almost 9% lower versus a year ago, according to an S&P/Case-Shiller study of the 20 largest metropolitan areas. Prices rose 0.3% in September versus August, but fell versus a year ago. The US Consumer Confidence index rose to 49.5 in November from 48.7 in October versus forecasts for a reading of 47.5. The dollar weakened against higher- yielding currencies, reversing earlier gains, as renewed signs that the global economy is recovering spurred investors to buy riskier assets.

Domestic News:

Subir Gokarn, Deputy Governor of RBI warned that the Indian Economy is on a better footing compared to last year but recovery is still sluggish and not broad-based.
The Auction of 3G spectrum is likely to be deferred by a few weeks as the DoT and the defence ministry need to co-ordinate and assign the airwaves vacated by the armed forces. The Government has decided to double the limit of authorized capital in public sector banks to help some banks such as Uco Bank, Syndicate Bank, Oriental Bank of Commerce raise funds. The rupee gained 9 paise against the dollar to settle at Rs.46.37. RIL plans to fund its acquisition of LyondellBasell Industries by selling treasury stock. Unitech will raise USD700 million through foreign currency convertible bonds. The company has sought approval from DIPP and RBI to raise funds through convertible instruments. Hindalco has raised USD600 million from a qualified institutional placement of shares. JSW Steel may sell up to 40 per cent stake in its upcoming project in West Bengal. Infosys Technologies plans to stay away from top auto customers in its engineering services business and shift its focus from commoditized and price-sensitive projects. BHEL has bagged a Rs.5600 crore order for setting up the upcoming 1980MW Prayagraj Thermal Power Project. IL & FS’s open offer for acquiring an additional 20% stake in Maytas Infra opens today. Essar Oil is likely to seal the deal with Royal Dutch Shell to buy its three refineries – two in Germany and one in the UK. Infosys may acquire companies in Europe for USD400-500 million. The Central Bureau of Investigation has unearthed additional fraud of Rs.4739 crore in Satyam. Gujarat Fluorochem plans to invest Rs.500 crore in doubling its existing capacities in Bharuch, Gujarat. Sanghvi Movers has planned a capex of Rs.350 crore for FY’11. The company plans to acquire 60 new cranes.

Technical View:

Nifty: (5090): The index opened on a negative note and remained range bound throughout the day’s trading session. It ended the day with loss of 0.25%. The index exhibited range bound consolidation post its sharp upmove. It has closed around the 5100 level. On the upside index faces resistance around the 5150 level. Index can see consolidation around the current levels. On the downside index has support around 5050 level, intra day declines should find support around this level. Lower support is around 5000. Nifty Nov contract ends the day down by 21.05 points at a discount of 3.30 points in Nov contracts adding OI by 4.5% across all active Nifty contracts. Nifty Open Int PCR at 1.659 compared to 1.649 last day on back of addition of 15.18 Lakh Nifty puts and Lakhs calls. Nifty VIX at 26.09 from 26.69 the last day. Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. FII side saw short build up in Nifty futures over the day and long build up in stock futures over the day. Long build up over the day seen DENABANK, HINDZINC, SINTEX, NAGARFERT & JSWSTEEL etc. Short build over the day seen in ASHOKLEY, TATASTEEL, KOTAKBANK, BEML, MOSERBAER, RELINFRA & JINDALSTEL etc. Market wide rollover seen at 44.56% compared to 3 month average of 40.79% and 37.80% last expiry. Nifty rollover at 53.50% compared to 50.69% in last expiry. 7.63% higher no of Nifty contracts ( 24601 contracts ) rolled over compared to the previous expiry.

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Japan’s Nikkei 225 Stock Average fell for the fifth day on concern deflation

International News:

Japan’s Nikkei 225 Stock Average fell for the fifth day on concern deflation will deepen and banks will sell more shares to replenish capital. The dollar and the yen rose as investors pared bets on higher-yielding assets. Bank of China Ltd. is studying “various options” to replenish capital in order to ensure sustainable growth, and has no detailed plans to disclose yet, the lender said in an e-mailed statement today. Existing home sales in October surged to the highest level since February 2007, according to a National Association of Realtors report released Monday morning. Hewlett-Packard Co.'s profit jumped 14 percent in the latest quarter, proof that cost-cutting and a push into rival IBM Corp.'s stronghold of technology services is helping the company absorb a falloff in sales in most of its major divisions. Indian companies borrowed USD2.58 billion in the month of October 2009, an increase of 70%. The Reserve Bank of India could allow systematically strong banks to increase their exposure to the capital market beyond the current ceiling. The Government is expected to set up easier norms for FDI lock-in period in real-estate. Aluminium prices will be supported for the next three years by rising production costs in China and a recovery in global demand. RIL has hired advisory firm, Perella Weinberg Partners, to guide it on LyondellBasell stake acquisition.
The Securities and Exchange Board of India has issued a show-cause notice to RIL with regard to alleged-insider trading in the shares of RPL. Pantaloon has raised a sum of Rs.500 crore by issuing shares at a price of Rs.316. Tata Motors is exploring the possibility of buying the equity stake of private equity firm, Actis in Swaraj Mazda. Arcellor Mittal may set up a steel plant in Karnataka, valued at Rs.30,000 crore. Hindalco Industries initiated the process of raising up to Rs.2900 crore by selling shares to institutional investors in order to part-finance three greenfield projects. JSW Energy will enter the primary market on December 7, 2009 to raise Rs.2900 crore. HCL Technologies has bagged an order worth USD200 million from a UK-based insurance firm, Equitable Life Assurance Society. New York-based asset management firm, Apollo Management, is picking up an 11% stake in Dish TV for Rs.465 crore. Axis, PNB and five other firms have acquired 51% stake in the Indian venture of Experian UK. McNally Bharat is gearing up for major restructuring with an accent on consolidation, increasing its global presence and expanding into newer areas.
Promoters of Patni Computers have sold 0.52% stake in the company for a consideration of Rs.33.6 crore.

Technical View:

Nifty: (5103): The index opened on a positive note and remained firm throughout the day’s trading session. It ended the day with gain of 1.10%. The index is exhibiting strength post closing above the 5000 mark. The near term bias is positive as index is maintaining above the 5000 mark on closing basis. On the upside index can test 5150-5200 level. On the downside index has support around 5150 mark, intra day declines should find support around this level. Lower support is around 5100.

Derivative View:

Nifty Nov contract ends the day up by 42.05 points at a premium of 4.75 points in Nov contracts adding OI by 1.3% across all active Nifty contracts. Nifty Open Int PCR at 1.649 compared to 1.569 last day on back of addition of 21.96 Nifty puts and paring of 10.05 Lakhs calls. Nifty VIX at 26.69 from 26.64 the last day. Highest OI in Nifty put at 4800 Nov strike and calls is at 5000 Nov strike. FII side saw long build up in Nifty futures over the day and short build up in stock futures over the day. Long build up over the day seen HINDZINC, CIPLA, GAIL, AUROPHARMA, ITC, TATASTEEL, HCLTECH, UNIPHOS, SINTEX, KFA & ULTRACEMCO etc. Short build over the day seen in BALRAMCHIN, BHARTIARTL, IDEA, MPHASIS, GESHIP, RENUKA & TRIVENI etc. Market wide rollover seen at 31.43% compared to 3 month average of 28.56% in last expiry. Nifty rollover at 34.90% compared to 31.34% in last expiry. 25% higher no of Nifty contracts (43556 contracts) rolled over compared to the previous expiry.

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Thailand’s economy contracted the least in a year last quarter

Thailand’s economy contracted the least in a year last quarter as a nascent global recovery and government spending began to pull the nation out of its first recession in a decade. Sixty-five world leaders have said they will attend the Copenhagen climate summit in December, and several more have responded positively to invitations, Danish officials said Sunday. An Iraqi official says insurgent attacks caused a 4 percent drop in the country's oil exports in October compared to the previous month, but that revenues were up due to higher prices. The government plans to spend approximately Rs.7,800 cr to improve the employment scenario and improve infrastructure for skilled-based training. A CII survey says that India’s manufacturing sector is on the road to recovery. Oil Marketing Companies (OMC) are ready to pay Rs.26 a litre for ethanol. However the sugar industry is seeking Rs.28 a litre. The RBI has decided to withdraw a facility that allowed Indian firms to buy back FCCB’s issued to overseas investors.

Corporate news:

BSNL to float a global tender for setting up the optical fibre cable network for the defence forces on December 7, 2009. RIL received its first consignment of Cairn India’s Rajasthan crude oil. RIL to get seven such consignments totaling to about 1.5 million barrels a day. Future Group is expanding its private labels in various categories and is looking to enter 10-15 new categories every year. GIC Re, the designated national reinsurer has taken a hit of Rs.100 cr on account of the recent fire at IOC’s depot in Jaipur. The government plans to offer six loss-making public sector units on long-term lease to private players for periods up to 99 years, as it looks to bypass the divestment norms that make these firms unattractive for buyers. The companies that may be offered on lease are HMT, Hindustan Fertiliser, Scooters India, Hindustan Cables, Triveni Structurals and NEPA. Tata Consultancy Services (TCS), Infosys and Wipro, are set to gain offshoring projects worth around $1 billion over the next one to two years. Reliance Industries could pay up to $12 billion for bankrupt petrochemicals company LyondellBasell. Suzlon shifts global headquarters back to India (Pune). Nalco is in talks with banks for Rs.10,000 cr Iran project. Emami is scouting for acquisitions in the domestic and overseas markets.

Derivative View:

Nifty: (5052): The index opened on a negative note and dipped down in the morning trade after which it witnessed a strong rally. It ended the day with gain of 1.27%.
The index witnessed support around the 4900 level; it dipped down towards 4930 levels and saw a strong intra day rally. The level of 4900 is a critical support level for near term upswing.Intra day support is around 5000 level. On the upside index faces resistance around 5100-5150 band. Nifty Nov contract ends the week up by 63.60 points at a premium of 13.80 points in Nov contracts adding OI by 2.4% across all active Nifty contracts. Nifty Open Int PCR at 1.569 compared to 1.556 last week on back of addition of 32.56 Nifty puts and 16.75 Lakh calls. Nifty VIX at 26.64 from 29.09 the last week. Highest OI in Nifty put at 4800 Nov strike and calls is at 5000 Nov strike. FII side saw long liquidation and short build up in Nifty futures over the week and short build up in stock futures over the week. Long build up over the week seen DENABANK, UCOBANK, JPHYDRO, BANKINDIA, SYNDIBANK, JINDALSAW, VIJAYABANK, ALBK, BHUSANSTL, HEROHONDA, GTOFFSHORE, ABAN, ACC, GTLINFRA & SESAGOA etc. Short build over the week seen in PATNI, MPHASIS, HDIL, IBREALEST, UNIPHOS, RELINFRA, PATELENG, BHARTIARTL & TV-18 etc. Market wide rollover seen at 20.97% compared to 21.6% in last expiry. Nifty rollover seen at 26.73% compared to 25.17% in the last expiry. 20% (28247) higher no of Nifty contracts rolled over compared to the previous expiry. Long rolls is seen in Nifty.

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The Bank of Japan left its benchmark interest rate at 0.1 percent at a policy meeting in Tokyo

International News:

The Bank of Japan left its benchmark interest rate at 0.1 percent at a policy meeting in Tokyo. Asian stocks fell for a fourth day, the longest losing streak since July, after Sony Corp. pushed back its profitability targets and Dell Inc. posted lower-than- estimated earnings. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Chinese growth is likely to be hurt by an absence of consumer demand from trading partners such as the U.S. Interest on U.S. debt is at $4.8 trillion.. More than half of the $9 trillion in debt that U.S is expected to build up over the next decade will be interest. In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year. The Organisation for Economic Co-operation and Development(OECD) in its latest report has projected that the Indian Economy is expected to grow 7% in FY’10. Business Confidence among the country’s 545 large firms has surpassed even the level that prevailed before the global financial crisis hit sentiments, according to NCAER-Master-Card Worldwide Index of Business Confidence. Food Inflation stood at 14.6% for the week ended November 7, 2009 against 10% during the corresponding period last year. 3G auctions are expected to be on schedule, as per the Empowered Group of Ministers (EGoM).

Corporate news:

Corporation Bank, Andhra Bank and Dena Bank are amongst the prospective candidates for acquisition by large PSU Banks. Bhushan Steel may sell 5% stake for a consideration of Rs.400 crore. Suzlon has sold 35% stake in Belgian arm, Hansen for a consideration of Rs.1720 crore. These proceeds would be used by Suzlon to reduce its debt levels. JSW Steel has announced a strategic alliance with Japan’s second largest steel-maker, JFE Steel. Edelweiss and Tokio Marine have agreed to float a joint venture in the life insurance business and are expected to submit their application to the regulator shortly. HDFC expects interest rates to go up by 25 to 50 basis points in the first quarter of next fiscal. Setco Automotives is on the look-out for acquisitions in Europe and the US. NALCO is eyeing mineral properties in Namibia. NDTV Group has sold its stake in lifestyle subsidiary for USD55 million.

Technical View:

Nifty: (4989): The index opened on a negative note and declined throughout the day’s trading session. It ended the day with loss of 1.30%. The index witnessed profit taking around the 5050 level and saw sharp intra day decline. The level of 5050-5100 ia a stiff resistance level. On the downside index has support around 4950. Break below 4950 can see index test lower levels around 4900. Nifty Nov contract ends the day down by 68.45 points at a discount of 2.40 points paring OI marginally. Nifty Open Int PCR at 1.465 compared to 1.540 yesterday on back of paring of 24.41 Lakh Nifty puts and addition of 8.32 Lakh calls. Nifty VIX at 28.55 from 26.39 yesterday.
Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. Nifty put option addition seen in 4700 Nov Strike. 5000, 4900, 5100 strike Nov puts pared OI. FII side saw short build up in Nifty futures stock futures and Nifty options was bought.

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Singapore said its economy will expand next year

Singapore said its economy will expand next year after exiting the deepest recession since independence in 1965, adding to evidence of a regional recovery that’s prompted some policy makers to start removing stimulus. The economy will grow 3 percent to 5 percent in 2010 after shrinking as much as 2.5 percent this year, the trade ministry said in a statement today. Gross domestic product climbed a revised annualized 14.2 percent last quarter from the previous three months. The non-partisan Congressional Budget Office has estimated that the Senate health care bill would cost $849 billion over 10 years, according to a senior Democratic source and an administration official. Wells Fargo & Co. agreed to repay customers about $1.4 billion to settle a lawsuit and regulatory investigations alleging the company improperly marketed risky investments as safe. Asian stocks fell, dragging the MSCI Asia Pacific Index down for a third day, as share-sale plans at Japanese companies raised concern. The Prime Minister, Dr. Manmohan Singh, and the US President, Barack Obama, will attempt to resolve the remaining issues on the Indo-US nuclear deal during the forthcoming visit of the PM to the US. For the first time in last 21 years, the government is considering importing rice.

Corporate news:

Hero Honda can announce a very high amount of dividend this year as the company has surplus cash of about Rs.3500 crore in its books. Bharati Shipyard and ABG Shipyard have got SEBI approval to launch open offers to shareholders of Great Offshore. ONGC is eyeing new energy blocks in Ghana, in a bid to expand its presence in the African continent. Blackstone is planning to delist Gokaldas Exports. JSW Steel is entering into a strategic alliance with a global steel company that could see the foreign firm buying a minority stake and offering technology to the company. Exide Industries has decided to raise capital through a QIP to primarily fund research and development initiatives and adoption of fresh technologies to cope with future challenges. Indian Hotels is planning to open 30 more hotels in the mid-segment premium brand by 2015. Lodha Developers plan to invest a sum of Rs.6000 crore over the next three years on construction of its existing projects. RIL plans entry into low-cost housing projects. The company is also planning to spend USD3 billion for a new petrochemical complex at Jamnagar. Indian Oil Corporation is looking to invest upto Rs.1500 crore in its maiden nuclear venture in partnership with Nuclear Power Corporation of India. Pratibha Industries has bagged an order worth Rs.294.30 crore from UP Jal Nigam. Bajaj Electricals is planning to raise funds through the QIP route.

Derivative View:

Nifty Nov contract ends the day marginally down by 8.35 points at a marginal premium of 0.35 points adding OI by 3.0%. Nifty Open Int PCR at 1.540 compared to 1.535 yesterday on back of addition of 14.28 Lakh Nifty puts and 7.58 Lakh calls. Nifty VIX at 26.39 from 26.78 yesterday. Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. Nifty put option addition seen in 4800, 4900 & 5000.
FII side saw long build up in Nifty futures stock futures and Nifty options was bought. Long build up over the day seen in DENABANK, MLL, BHUSANSTL, IDFC, PANTALOONR, GTLINFRA, SUNTV, TRIVENI, ORIENTBANK & ISPATIND etc. Long liquidation seen SINTEX, JSWSTEEL, LITL & HDIL etc. Short build up seen in MPHASIS, RELINFRA, RELMEDIA, EDUCOMP & HINDPETRO etc.

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Crude oil gained for a third day after an industry report showed U.S.

International News:

Crude oil gained for a third day after an industry report showed U.S. stockpiles declined after a hurricane in the Gulf of Mexico. Oil rose as much as 0.9 percent to $79.85 a barrel on the New York Mercantile Exchange after the American Petroleum Institute said yesterday crude inventories fell by 4.37 million barrels last week to 333.1 million. The Obama administration announced a government-wide task force to combat financial fraud after the U.S. recession led to an increase in economic crimes. The Fed reported that the Industrial production edged up 0.1 percent last month. It was the poorest showing since output fell 0.4 percent in June. Since then, industrial output had posted strong gains, helped by a rebound in auto production. But auto output slipped 1.7 percent last month. That helped drag down total factory output, the biggest portion of industrial production. Goldman Sachs Group Inc., said that it was teaming up with Warren Buffett to provide assistance to 10,000 small businesses in the U.S. The $500 million charitable effort coincides with one of the Obama administration’s top economic priorities: spurring hiring at smaller companies.

Corporate news:

L N Mittal has pulled out of a project to develop an oil block in Kazakhistan with joint venture partner ONGC Videsh. L&T is set to consolidate its integrated engineering services business into a separate entity. CMD of RIL indicated in the AGM that an overseas acquisition might be on cards. Infosys Technologies COO has said that margin expansion is unlikely this year. US-based fuel control service provider Gilbarco said it will acquire the petroleum dispensing pump(PDP) business of L&T. SAIL will spend a sum of Rs.60, 000 crore on capex over the next five years.
Ruchi Soya plans to merge a group firm, Mac Oil. Hindalco Industries has received approval from its shareholders for raising funds up to Rs.2900 crore. J P Associates plans to mop up Rs.1500 crore from the primary market by IPO of Jaypee Infratech.

Derivative View:

Nifty Nov contract ends the day almost unchanged paring OI by 3.2%. Nifty Open Int PCR at 1.535 compared to 1.580 yesterday on back of addition of 1.49 Lakh Nifty puts and 14.66 Lakh calls. Nifty VIX at 26.78 from 27.95 yesterday. Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. Nifty call option addition seen in 4900 Dec, 5100 & 5000 Nov strike. 4800 and 4900 Nov calls saw paring of OI.
5100 Nov strike and 4800 and 5000 Dec strike saw addition during the day. Put option paring was seen in 4600 & 4900 Nov Strike. FII side saw long liquidation in Nifty futures and short build up in stock futures and Nifty options was bought. Long build up over the day seen in CROMPGREAV, NAGARFERT, DISHTV, ABIRLANUVO & FSL etc. Long liquidation seen in RELCAPITAL, SINTEX, ABAN & TCS etc. Short build up seen in PATNI, HDIL, UNIPHOS, DLF, TV-18 & PTC etc.

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The International Monetary Fund sold 2 metric tons of gold to the central bank of Mauritius

Ben S. Bernanke said it’s “not obvious” that asset prices in the U.S. are out of line with underlying values after a 64 percent jump in the Standard & Poor’s 500 Index from its March low. The International Monetary Fund sold 2 metric tons of gold to the central bank of Mauritius for about $71.7 million, a move that may be followed by emerging-market nations trying to diversify their currency reserves. Ben Bernanke said the central bank will monitor the sliding U.S. dollar but pledged anew to keep interest rates at record lows to nurture the economic recovery. Retail sales rose more than expected in October largely due to a big rebound in auto sales. But broader consumer spending remains under pressure, raising questions about the durability of the recovery. Warren Buffett almost doubled his stake in Wal-Mart, adding 18 million shares in the discount retailer, Wal-Mart, in the third quarter of 2009 and adds new stakes in Nestle, Exxon Mobil and Republic Services. Stimulus package would remain for some more time and an exit at any point of time in future would be in a gradual manner. 14% appreciation in rupee since the month of March is affecting the exporters. FII investment in Indian equities could reach record high levels this year, as global investors borrow cheap in developed nations and invest in high-yielding assets of emerging markets such as India which may push up policymakers to consider measures to contain the inflows, although reluctantly. Engineering BPO revenues are set to hit USD55 billion with newer customers, including automakers Renault, Volkswagen and Harley Davidson, looking to outsource their complex design engineering projects to India. State-owned oil firms raised fuel price, by 2.4 per cent, second time this month. The RBI survey is bullish about corporate profits this year. The disinvestment in SAIL and NMDC is expected to fetch the government a sum of Rs.30,000 crore. A possible merger between SpiceJet and GoAir has hit a roadblock after the two sides failed to arrive at a consensus on valuation and branding related issues. Bharat Forge is planning an investment of up to Rs.50,000 crore in the power sector. Shopper Stop will invest Rs.250 crore in the next three years to add another 15 stores. HDFC Standard Life Insurance expects to break even by 2011-12 as it aims to bring down operating expense ratio to about 20% in the present financial year. ICICI Bank is planning to put car and truck loans on the fast track. However, the Bank would be cautious in lending to 2-wheelers. SAIL has cut steel prices of some of its products by Rs.500 per tonne. Aban Offshore has raised USD150 million through the QIP route. Michelin plans to invest a sum of Rs.4000 crore in Chennai plant for manufacturing truck and bus radial tyres.

Technical View:

Nifty: (5058): The index opened on a positive note and saw strength throughout the day’s trading session. It ended the day with gain of 1.18%. The index has closed on a positive note above the 5000 level suggesting strength should continue in the near term. On the upside sustaining above 5000 can see index test higher level. Resistance levels are around 5100-5160 levels. On the downside index has support around 5025,lower support is around 4990. Nifty Nov contract ends the day up by 59.80 points at a premium of 4.40 points in Nov contracts adding OI by 0.7% across all active Nifty contracts. Nifty Open Int PCR at 1.580 compared to 1.556 yesterday on back of addition of 12.51 Lakh Nifty puts and .901 Lakh calls. Nifty VIX at 27.95 from 29.09 yesterday. Highest OI in Nifty put at 4800 Nov strike and calls is at 5100 Nov strike. FII side saw long liquidation in Nifty futures and short build up in stock futures and Nifty options was bought. Long build up over the day seen in ABAN, DLF, EKC, ICSA, FINANTECH, ZEEL, SESAGOA, DCHL, NOIDATOLL etc. Long liquidation seen in PANTALOONR, HINDZINC, PFC, LITL, STER, GVKPIL, JSWSTEEL & MARUTI etc.

Analysis and Outlook:

Nifty Nov 5000 strike pared OI during the day and highest OI in Nifty calls has now shifted to 5100 strike indicating resistances moving up to 5150 levels with the chances of markets retesting the recent highs highly likely. Nifty OI PCR has continued to move up and VIX was seen moving down over the day indicating positive bias.

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Japan’s economy expanded at the fastest pace in more than two years in the third quarter

Japan’s economy expanded at the fastest pace in more than two years in the third quarter, led by a rebound in domestic demand that may ease concern of a return to recession next year. (Source: Bloomberg). Foreign direct investment in China climbed for a third month in October from a year earlier as companies bought into a strengthening economic recovery. (Source: Bloomberg). Airbus SAS and Boeing Co. the biggest commercial-plane makers, predicted airlines will emerge from a slump next year as the global economy rebounds from the worst recession in decades and fuels air travel. The 27 –nation block in the European Union plans to impose value-added tax on services delivered from non-EU nations, including India. This move is expected to put a pressure on the profit margins of companies such as TCS, Infosys and Wipro. The country’s top auto makers are struggling to meet an unexpected spurt in year-end demand, with component manufacturers failing to match a sustained surge in sales since August. FIIs reduce have reduced their holding in one-third of BSE 500 stocks. Significant selling is seen in media and entertainment sector. WPI Inflation for the month of October stood at 1.34%.

Corporate news:

The Aditya Birla Group has approved a proposal to merge the newly-created unit with its existing cement arm, UltraTech, consolidating the group’s cement business. The swap ratio is set at 4 shares of UltraTech for every 7 shares of Samruddhi. Reliance Industries Ltd. may join global oil majors in search of shale gas. Essar Group announced that they had bought a controlling stake in African telecom business from the Dhabi Group. Cairn India has successfully drilled and completed its first horizontal well at Rajasthan’s Barmer field that will add 11,000 barrels of oil per day. Future Brands is looking at creating a vertical out of licensing and franchising, which is a part of their IPR business. Grupo Mexico SAB can regain control of its bankrupt US copper miner, a judge in Texas ruled, rejecting a competing offer from Sterlite Industries. Oman Oil Company will pick up additional equity in the Bina Refinery for Rs.1220 crore.

Technical View:

Nifty: (4999): The index opened on a positive note and a saw strength throughout the day’s trading session. It ended the day with gain of 0.93%. The index has closed on a positive note around the 5000 level suggesting a near term positive bias. On the upside sustaining above 5000 can see index test higher level. Resistance levels are around 5050-5100 level. On the downside index has support around 4950,lower support is around 4905.

Derivative View:

Nifty Nov contract ends the week up by 212.5 points at a premium of 3.70 points in Nov contracts adding OI by 3.7% across all active Nifty contracts. Nifty Open Int PCR at 1.556 compared to 1.263 last week on back of addition of 1.61 Crore Nifty puts and 19.7 Lakh calls. Nifty VIX at 29.09 from 29.04 the last week. Highest OI in Nifty put at 4800 Nov strike and calls is at 5000 Nov strike. FII side saw short covering in Nifty and long build up in stock futures during the day. Long build up over the week seen TECHM, LICHSGFIN, CNXIT, SCI, NEYVELILIG, INDHOTEL, HCC, JSWSTEEL, ZEEL, OPTOCIRCUI, TATAMOTORS, TCS, ORCHIDCHEM, CENTURYTEX, INFOSYSTCH, VOLTAS, HCLTECH, RELINFRA, WIPRO, MCDOWELL-N & IDFC etc. Short build over the week seen in IOC, AUROPHARMA, IBREALEST, BHARTIARTL, EDUCOMP, SUNTV & GTLINFRA etc.

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1. China and Taiwan are poised to sign an agreement giving their banks

Wal-Mart Stores reported diluted earnings per share from continuing operations for the third quarter of fiscal year 2010 of $0.84, exceeding the company’s guidance of $0.78 to $0.82. (Source: CNNMoney). China and Taiwan are poised to sign an agreement giving their banks, insurers and brokerages wider access to each other’s markets as relations between the two adversaries are at their best in 60 years. (Source: Bloomberg). The federal deficit hit a record for October as the new budget year began where the old one ended: with the government awash in red ink. (Source: Yahoo Finance). The US Labor Department released its weekly report on initial jobless claims, which said there were 502,000 new filers last week. That's the lowest level since Jan. 3. Economists were expecting 510,000 claims. (Source: CNNMoney). President Obama said he will hold a jobs forum at the White House in December, as the country faces a 10.2% unemployment rate. (Source: CNNMoney).Industrial output grew by 9.1% in September 2009 compared to the corresponding period last year. (Source: ET). Despite falling by over 10% in the previous quarter, prices of cement are expected to soften further by Rs.7 per 50 kilo bag across the country on December 1, say industry executives who cited capacity glut and stagnant demand for the price fall. (Source :ET). A committee set up by the Government is examining whether four slots can be auctioned in all circles even if there is no spectrum available immediately. (Source: BL). Domestic Airlines witnessed 27% surge in passenger traffic in the month of October compared to the same period last year. (Source: BL). The Government has allowed duty-free raw sugar imports till January 2011. (Source: BL). Food Inflation for the week ended October 31 stood at 13.7%. (Source: ET). Infosys has acquired US-based BPO McCamish for USD38 million. (Source: ET).The Patni brothers are demanding higher premiums for their stake in Patni Computer Services that what is being sought by General Atlantic, the second-largest shareholder in the company. (Source: ET). L&T is likely to raise over Rs.300 crore by selling one-third of its stake in Mahindra Satyam by Friday. (Source: ET).
Tata Steel approved a proposal to exchange USD875 million for new convertible bonds that it says will reduce costs and lower repayment obligations. (Source: ET).22. Nifty: (4952): The index opened on a flat note and a saw profit taking. It ended the day with loss of 1.03%. The index encountered resistance around 5000 level and saw profit taking. Index faces resistance around 5000-5150 level; intra day rise will face resistance around this level. On the downside index has supportaround 4905, lower support is around 4850. Intra day dips should find support around 4905 levels. 28. Nifty Nov contract ends the Day down by 56.45 points at a marginal premium of 0.45 points in Nov contracts paring OI by 0.6% across all active Nifty contracts. Nifty Open Int PCR at 1.491 compared to 1.559 yesterday on back of paring of 4.55 Lakh Nifty puts and addition of 17.46 Lakh calls. Nifty put options addition was seen in 4800 Nov strike. Nifty p options addition was seen 5000 & 5100 Nov strikes. Nifty put option paring was seen in 4700, 4900 & 4600 Nov strike.

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