the U.S. government "will never" lose its sterling credit rating despite big budget deficits

International News:

Treasury Secretary Timothy Geithner (GYT'-nur) says the U.S. government "will never" lose its sterling credit rating despite big budget deficits and a newly increased debt limit that now tops $14 trillion. Geithner says in an interview broadcast Sunday that in times of economic crisis, international investors will continue to buy U.S. Treasury bonds because the bonds are a safe investment. The euro fell toward the lowest level in eight months against the dollar on speculation mounting budget deficits in some European nations will keep policy makers from raising interest rates. The chief executive of German software company SAP AG, Leo Apotheker, has resigned after his contract was not renewed and will be succeeded by two co-CEOs, the company said Sunday. Apotheker, who has been with the company since 1988, became co-CEO in April 2008 and took the helm alone less than a year ago.

Domestic News:

PE investments in India double in Jan '10 (y-o-y) to $386 mn. The Planning Commission has said that investment in the infrastructure sector has doubled in the past five years from 4 per cent to 8 per cent of GDP. The National Highways Authority of India (NHAI) plans to increase the outlay on building roads for 2010-11 by 64.6 per cent to Rs 47,736 crore. The government may not tinker with the corporate tax rates in the Budget 2010-11 despite pressure from India Inc to slash rates or at least do away with surcharge and cess. Government plans to raise about Rs. 30,000 cr in the next financial year from stake sale in public sector firms, in an attempt to bring down the fiscal deficit. Indian telecom companies will together save at least $1.5 billion this fiscal in capital expenditure due to sharing of towers and other accompanying infrastructure. New value-added tax (VAT) rule introduced in European Union from January this year, may squeeze margins for India’s tech firms like TCS, Infosys and Wipro.

Corporate news:

Larsen & Toubro (L&T), is eyeing a revenue of Rs 3,700 crore this fiscal from its electrical systems business, which manufactures switchgears, metering systems, petrol dispensing pumps and medical equipment, among others. India’s biggest sugar refiner Shree Renuka Sugars will put in the final bid for Brazil’s Equipav Acucar E Alcool next week. McNally Bharat Engineering Company has bagged two orders worth Rs 56.64 crore from Hindalco, for construction related works. Indiabulls Group will develop a Special Economic Zone (SEZ) at Sinnar near Nashik in association with the Maharashtra Industrial Development Corporation. Kohinoor Foods plans to manufacture Thai and Italian ready-to-eat packaged foods at its two existing facilities in Haryana by end-2010. Maruti looks to export Ritz to SE Asia, Middle East. Cadila Pharmaceuticals’ plan to develop H1N1 (swine flu) vaccine may get delayed as the government has shown caution in giving go ahead for the clinical trials.

Derivative View:

Nifty near contracts ends the extended week down by 126.30 points at a discount of 7.90 points with unchanged OI. Nifty OI PCR in at 1.031 compared to 1.152 at the close of last week. Nifty puts sees addition of 1.08 Crores and calls sees addition of 1.55 Crores over the day. Highest OI in Nifty calls seen at 5000 Feb strike and puts at 4800 Feb strike. Nifty VIX at 29.22 from 26.13 last day. During the Fridays session 4400, 4700 4500 & 4600 Feb strike Nifty puts adds 35.28 Lakhs in OI during the Friday session. 4700, 4600, 4900 & 5100 Feb strike calls add 24.58 Lakhs during the Friday session. 4800, 4900 & 5000 Feb puts saw unwinding 33.2 Lakhs in OI during the session. No significant unwinding was seen in Nifty calls during the session. Short covering was seen in Nifty futures over the week and Index options was seen to be bought. Stock futures saw long build up during the week.