The Federal Reserve restated its intention to cease buying $1.25 trillion of mortgage-backed securities in March

International News:

The Federal Reserve restated its intention to cease buying $1.25 trillion of mortgage-backed securities in March and maintained its pledge to keep interest rates near zero for an “extended period,” opening a rift among policy makers for the first time in a year. New home sales plunged to a 9-month low, according to a Census Bureau report released Wednesday. Sales fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from a revised rate of 370,000 in November. China’s banking regulator told lenders to step up scrutiny of property loans while pledging to satisfy “reasonable” financing needs as it seeks to control credit growth and prevent asset bubbles.

Domestic News

Bank of Baroda, Union Bank, IDBI Bank plan to tap the overseas debt market to mop up $1.5-2 billion in the next month or so. A high level panel, headed by the Finance Secretary, has cleared four port expansion projects entailing an estimated investment of Rs.4120.29 cr in three states. Fitch ratings’ outlook for the real estate sector in 2010 is negative with a slightly stable bias. Air India may get Rs.1,200 cr equity support from the government. The government has deceided to allow companies executing Ultra Mega Power Projects to use surplus coal from their captive blocks to fuel their other power projects. Air India may get Rs.1,200 cr equity support from the government. The government is considering selling its stakes in L&T and ITC in tranches to state run FII’s. Air India may get Rs.1,200 cr equity support from the government.

Corporate news:

Easun Reyrolle will invest Rs.100 cr to set up a facility to manufacture solid insulated switchgear. ONGC Videsh has signed a MOU with the national oil company of Angola, Sonangol. Tata Communications plans to invest about $50 million over the next two years into the newly formed Global Media and Entertainment Solutions group. Edelweiss has agreed to aquire the retail broking firm Anagram Capital for Rs.164 cr, in an all-cash deal.

Derivative news:

Nifty near contracts ends the day down by 153.9 and adds OI by 18.2% at a discount of 4.95 points compared to the discount of 5.85 points last day. Nifty OI PCR in active options at 0.904 compared to 1.019 last day. Nifty VIX at 28.92 from 25.82 last day. 14.68 Lakh Nifty puts was added over the day and Nifty calls added 17.13 Lakh during the day. Highest OI in Nifty put at 5000 Jan strike and calls is at 5300 Jan strike. Short build up seen over the day in TECHM, IBREALEST, TATASTEEL, BAJAJ-AUTO, AXISBANK, CNXIT, HCLTECH, BHUSANSTL, NTPC, GTLINFRA, HDFCBANK, SAIL, MCDOWELL-N, LICHSGFIN, NAGARCONST, MARUTI, JPASSOCIAT, KFA, JSWSTEEL & TATACHEM etc.
FII side saw short build up in Nifty futures, short covering in stock futures.
Nifty rolls over 59.75% of the positions compared to 58.10% in last expiry and six month average of 60.98. Highest rolls in no of contracts rolled over in the past six months. Market wide rolls at 58.40% compared to 66.65% in Dec expiry and 6 month average of 60.9% Stocks with significant rise in rollover are CONCOR, BOSCHLTD, SYNDIBANK, TECHM, TATACHEM, IBREALEST, PUNJLLOYD, UCOBANK, YESBANK, ASIANPAINT, MINIFTY, NATIONALUM, GTLINFRA, SINTEX, IOB, HINDPETRO, NIFTY, BEML, NTPC & TATASTEEL etc.