Obama administration wants to increase taxes

International News:

The Obama administration wants to increase taxes on Americans earning more than $200,000 by almost $970 billion over the next decade and take in an additional $400 billion from businesses even as it retooled a proposed crackdown on international tax-avoidance techniques. President Barack Obama’s $3.8 trillion fiscal 2011 budget puts an emphasis on job creation with $100 billion in additional stimulus spending, along with higher taxes for the wealthy in an attempt to narrow the deficit. The spending blueprint forecasts this year’s budget shortfall will hit a record $1.6 trillion, following a $1.4 trillion deficit in 2009. The 2011 deficit is predicted to be $1.3 trillion, with deficits remaining above $700 billion for the rest of the decade, according to the projections. JPMorgan Chase & Co. may drop plans to acquire the North American operations of Sempra Commodities LLP after President Barack Obama said he would seek to curb banks’ proprietary trading activities. Australia’s central bank may raise its benchmark interest rate by a quarter percentage point today for a record fourth straight meeting as the nation’s economic expansion fuels a surge in employment.

Domestic News:

Major auto companies, including Maruti Suzuki, Mahindra & Mahindra and General Motors, have reported record sales for January, 2010. Planning Commission Deputy Chairman, Montek Singh Ahluwalia, has expressed confidence that in the years to come India could emerge as the fastest growing economy in the world, beating China as the nation has yet to achieve its full growth potential. Govt may decide on freeing petrol, diesel pricing this week according to Petroleum Minister Murli Deora. Price of petrol may go up by Rs. 4.7 and diesel by Rs. 2.3 a litre. Cement makers have reported double-digit growth in January 2010 sales driven by increased demand from the housing sector, especially of low-cost homes, and infrastructure. India's economy to grow 7.5-8 per cent in fiscal 2010-11 and 2011-12 according to World Bank. India’s imports moved to positive territory for the first time since the financial crisis, clocking a growth of 27% in December 2009. RBI Governor, Subbarao, has hinted at curbs on capital inflows in the short term to avoid stark economic imbalances. Government fixes NTPC follow-on issue price at Rs. 201 per share. Zylog Systems has announced the acquisition of Brainhunter, a consulting and engineering services company in Canada, for Rs. 150 cr. Maruti Suzuki’s January 2010 sales at 95,649 units marked its highest ever sale for a month till now, up 33.3 per cent over the same month last year. Cox & Kings India is scouting for acquisitions in countries like the US, Canada, England, Australia and New Zealand. IVRCL Infrastructures & Projects has bagged a road project worth Rs 1,125 crore from National Highways Authority of India (NHAI). Global steel giant Arcelor Mittal has acquired 29 per cent stake in Uttam Galva for Rs 422 crore through open offer, taking its holding in the domestic firm to 34.42 per cent. Parsvnath Developers will invest Rs 7,000 crore over the next five years in construction of its ongoing projects and plans to raise up to Rs 300 crore through private equity by March-end Mercator Lines is looking to add 4-5 ships in the tanker segment, over the next three months, as the prices of vessels have come down sharply.

Derivative View:

Nifty near contracts ends the day up by 23.80 points at a marginal discount of 0.25 points adding OI by 0.4%. Nifty OI PCR in at 1.139 compared to 1.152 in the last trading session. Nifty puts sees addition of 17.98 Lakhs and calls sees addition of 20.513 Lakhs over the day. 4900 and 4700 Feb strike Nifty puts adds the most during the day and 5000 and 5100 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 25.13 from 26.13 last day. Long build up seen over the day in TITAN, BEL, CUMMINSIND, NAGARCONST, SUNTV, BPCL, TULIP, TRIVENI, BHUSANSTL, IOC, HINDPETRO, ASHOKLEY, GRASIM, TATAMOTORS, M&M, ORIENTBANK, SESAGOA, AXISBANK, DABUR & GAIL. Short build up seen in ICSA, ANDHRABANK, SBIN, HDFCBANK & RELCAPITAL. FII side sees short covering in Nifty futures marginal long build up in stock futures .