The head of the IMF said China and other developing Asian economies are leading a global recovery

International News:

The head of the IMF said China and other developing Asian economies are leading a global recovery that is faster and stronger than expected, but warned that money rushing into emerging markets could lead to asset bubbles. Dominique Strauss-Kahn, the managing director of the International Monetary Fund, strongly suggested Monday that the IMF would raise its 2010 global growth forecast from the 3.1 percent it projected in October. Kraft Foods Inc. is close to an agreement to buy Cadbury Plc after raising its offer 9 percent to about 12 billion pounds ($19.7 billion) to overcome months of resistance by the U.K. chocolate maker, three people with knowledge of the matter said. Asian stocks fluctuated as Australian banks and Japanese exporters of cars and electronics fell, while commodity producers rose on oil and metal prices. Japan Airlines is expected to file for bankruptcy protection Tuesday, ending months-long speculation about its fate and launching a massive overhaul to shed the fat and inefficiency that hobbled Asia's biggest airline. With debts of 1.5 trillion yen ($16.5 billion) as of November, the carrier will go down in Japanese corporate history as one of its biggest failures. The Government expects to mop up Rs.24000 crore in this fiscal with four more public issues of state-owned companies hitting the capital markets in the next two-and-a-half months. Standard & Poor’s has said that India will regain and sustain its pre-crisis GDP growth rates of about 9% starting 2011, provided it hastens policy reforms in areas that include taxation, education and foreign investment regulations. The government may take the first step towards fiscal budget consolidation in Budget 2010-2011 by partially rolling back tax cuts given to the industry last year.

Corporate news:

Carrefour, Europe’s biggest retail chain, is close to signing a deal with Pantaloon Retail to set up franchisee stores in India. Reliance Capital is looking to sell up to 20% stake in Reliance Mutual Fund to a strategic foreign partner. GAIL will pick up 4% in Myanmar – China Project. Golden Tobacoo received shareholder’s approval at an extra-ordinary general meeting to develop property at Vile Parle in Mumbai. L&T will invest around Rs.25000 croreto build its thermal power business in the next five years. Oberoi Realty has filed a draft application with the market regulator to sell 12% of its equity. The company plans to raise Rs.1000 crore through the IPO route. ICICI Bank has raised rates for deposits of select maturities. Reliance Infratel plans to raise Rs.2500 crore from a pre-IPO placement.

Derivative news:

Nifty near contracts ends the day up by 16.75 points adding OI by 1.1% at a marginal discount of 3.70 points. Nifty OI PCR in active options stood at 1.339 compared to 1.290 in the last session. Nifty VIX at 21.55 from 21.34 last session.
28.69 Lakh Nifty puts was added over the day and Nifty calls added 4.57 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 UCOBANK, TRIVENI, COLPAL, ALBK, HEROHONDA, MRPL, FEDERALBNK, KOTAKBANK, VIJAYABANK, INDIAINFO, ZEEL & HDFCBANK etc. Short build up seen over the day in ULTRACEMCO, BALRAMCHIN, BAJAJHIND, LITL & KFA etc. FII side sees short build up in Nifty and stock futures and Nifty options was bought.

Outlook and Analysis:

Nifty 5200 and 5300 puts saw addition during the day and Nifty 5200 and 5300 Jan calls saw paring of OI with indications of bias turning positive. For the day resistances seen in Nifty near contracts around 5350 levels. Supports seen around 5220 levels.