China’s growth rate accelerated to the fastest pace since 2007

International News:

China’s growth rate accelerated to the fastest pace since 2007 in the fourth quarter, signaling a need to rein in credit growth that threatens to destabilize the world’s fastest growing major economy. Gross domestic product rose 10.7 percent from the same period a year ago, more than the median forecast of 10.5 percent in a Bloomberg News survey, a statistics bureau report showed in Beijing today. For the full year, GDP gained 8.7 percent, beating Premier Wen Jiabao’s 8 percent target. Dow component Bank of America said losses widened to $5.2 billion in the fourth quarter of last year, partly due to the bank paying back government bailout funds. BofA said the repayments shaved $4 billion off its bottom line. The company was expected to post a loss of $3.9 billion, according to forecasts. On a per-share basis, BofA lost 60 cents versus forecasts for a loss of 52 cents. Shares were barely changed. Morgan Stanley its second-straight quarterly profit, one year after posting a massive loss. The financial firm said it earned $617 million for the quarter versus a loss of $11 billion a year ago. The stock fell around 1.7%. Wells Fargo reported a surprise profit of $2.82 billion, or 8 cents a share, versus forecasts for a small loss. The bank benefited from stronger fee income, even as it repaid $25 billion in bailout money. Shares fell 1.6%. Building permits, a measure of builder confidence, rose to a 653,000 unit annual rate in December from a 589,000 rate in November, the government reported. Permits were expected to rise to a 590,000 rate, according to a consensus of economists surveyed by Briefing.com. But housing starts fell to a 557,000 unit annual rate from a 580,000 unit rate in November. Economists thought starts would fall to a 572,000 unit rate. The Producer Price Index (PPI), a measure of wholesale inflation, rose 0.2% in December after climbing 1.8% in the previous month. Economists thought it would hold steady. The so-called core PPI, which strips out volatile food and energy prices, was flat versus forecasts for a gain of 0.1%. Core PPI rose 0.5% in the prior month.

Domestic News:

The government is keen to bring metals and mining companies at the front of the divestment queue. An estimated Rs.53000 crore of IPOs/FPOs are expected to hit the markets. Auto Industry may be heading for excess capacity by 2012. LIC, largest shareholder in L&T has opposed the company’s intention to enter the insurance business. Mercator Lines, India’s second largest shipping company, has bagged over Rs.1000 crore, seven-year contract for chartering a mobile offshore production unit and a floating storage tank. HDIL has raised Rs.425 crore as debt, in addition to Rs.400 crore raised last month. Lupin has received clearance from the US drug regulator for its plant at Mandideep in Madhya Pradesh. Hyundai Motors is expected to increase the prices of its car models from February 1, 2010. Whirlpool is targeting to treble its AC business by the year-end. Future Group’s home retailing has seen a turnaround after months of decline, on the back of improved consumer sentiments and focused merchandising plans.

Derivative news:

Nifty near contracts ends the day down by 5.95 points adding OI by 1.4% at a discount of 6.95 points. Nifty OI PCR in active options stood at 1.293 compared to 1.285 in the last session. Nifty VIX at 22.29 from 22.35 last session. 19.9 Lakh Nifty puts was added over the day and Nifty calls added 12.69 Lakh during the day.
Highest OI in Nifty put at 5200 Jan strike and calls is at 5300 Jan strike. Long build up over the day seen in SUNTV, BANKBARODA, ABB, BHUSANSTL, TATASTEEL & ICSA etc.
Short build up seen over the day in POLARIS, PIRHEALTH, HINDPETRO, PUNJLLOYD, PETRONET, UNITECH, HINDZINC, JPASSOCIAT, BEML & MTNL etc. FII side sees long liquidation in Nifty and short covering and long build up in stock futures and Nifty options was seen to be bought.