Asian stocks advanced

International News:

Asian stocks advanced, lifting the MSCI Asia Pacific Index for a second day, after U.S. pending home sales increased and commodity prices gained. The National Association of Realtors' pending home sales index rose 1%, in line with expectations. The index fell 16.4% in the previous month. Testifying at a Senate Banking Committee meeting, White House economic adviser Paul Volcker sought to expand on Obama's call for greater limitations on bank trading. U.S. auto sales rose 6% in January, although results were generally disappointing. Sales were hurt by weak demand from consumers and the well-publicized problems at Toyota Motor.

Domestic News:

Fiscal Deficit for the current year is likely to drop to 6.5%, on account of revision of the base year form 1999-2000 to 2004-05. Industry chamber Assocham expects WPI inflation to surge to double digits by this fiscal-end, much higher than the Reserve Bank of India's (RBI) projections of 8.5 per cent, because of rising prices of steel, cement and coal due to short supply. Fitch has revised its rating for the Telecom sector from “stable” in 2009 to “stable to negative” for 2010, due to stiff competition and a faster than expected decline in tariffs. Auto manufacturers in India plan to add 2.5 million units in manufacturing capacity in four years, which could lead to overcapacity. Top steel companies have seen their sales volumes increase upto 30%, in January 2010, on a y-o-y basis. Raw sugar prices may ease on bumper Brazilian output.

Corporate news:

Infosys, TCS to go on hiring spree in Q4. Great Offshore has deferred its plan to raise funds through the issue of securities. Adani Power Ltd (APL), belonging to the $5 billion Adani group, will set up a coal-based thermal power project of 1320 MW, in Chhindawara district in Madhya Pradesh. Siemens Ltd plans to invest Rs. 500 cr, over the next three years, to build wind turbines for the Indian market. GVK Power and Infrastructure (GVKPIL) has managed to arrange debt funding of Rs. 2400 cr for its 540 mw coal-based power plant in Punjab. Titan plans a new plant at Pantnagar to make watches. Wipro Consumer Care and Lighting is in advanced talks to buy Nigeria based Tura International. Reliance Communications has found few callers after more than a month of putting its biggest global assets (including its prized FLAG undersea cable network) up for sale. ITC to open nine more of its Fortune brand of hotels this year. Bharat Electronics Ltd. (BEL) to get Rs. 4279 cr IAF order for Akash Missiles.

Derivative View:

Nifty near contracts ends the day down by 77.70 points at a discount of 8.35 points adding OI by 8.2% with indications of short build up. Nifty OI PCR in at 1.103 compared to 1.139 in the last trading session. Nifty puts sees addition of 32.49 Lakhs and calls sees addition of 43.86 Lakhs over the day. 4800 and 4500 Feb strike Nifty puts adds the most during the day and 4900 and 4800 Feb strike calls add the most during the day. Highest OI in Nifty calls seen at 5000 Feb strike and puts at 4800 Feb strike. Nifty VIX at 26.69 from 25.13 last day. Long build up seen over the day in DRREDDY & MPHASIS. Short build up seen in CIPLA, IDFC, TATACOMM, RANBAXY, RENUKA, MTNL, PTC, TULIP, YESBANK, UNITECH & GVKPIL ETC. FII side sees short build up in Nifty futures long build up in stock futures and Nifty options was seen to be written.