Reserve Board raised the discount rate charged to banks

The Federal Reserve Board raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent and said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs. Asian stocks and U.S. equity futures fell, while the dollar rose as an increase in the Federal Reserve’s discount rate spurred concern the economic rebound will slow as stimulus programs are unwound. Singapore’s government said the economy will expand faster than initially expected this year, adding to evidence of a sustained regional recovery that has prompted policy makers to end some stimulus measures. Gross domestic product will increase 4.5 percent to 6.5 percent in 2010 after shrinking 2 percent last year, the trade ministry said in a statement today. Greece replaced its debt management chief as declines in the country’s bonds roil European markets. The number of Americans filing new claims for unemployment rose to 473,000 last week from a revised 442,000 in the previous week. Economists surveyed by Briefing.com expected 438,000 claims. Continuing claims, a measure of Americans who have been receiving benefits for a year or more, held steady at 4.563 million versus forecasts for a drop to 4.5 million. Overall, Wal-Mart's overseas growth and a concerted cost-cutting campaign pushed profit up 22 percent in the fourth quarter. Wal-Mart earned $4.63 billion, or $1.21 per share, up from $3.8 billion, or 96 cents per share, in the same quarter last year. Excluding businesses that the company no longer operates, it earned $1.23 per share. Food inflation rose marginally to 17.97 per cent for the week ended February 6 against 17.94 per cent in the previous week. The government has decided to raise the retail price of urea by 10 per cent from April 1, 2010 and allowed manufacturers to fix the rates of DAP and MOP fertilisers. The Reserve Bank of India (RBI) would stick to its projection of inflation standing at 8.5 per cent by the end of the current fiscal, even as rate of price rise has already breached the central bank's target. Banking, financial services and insurance (BFSI) sector's spending on technology is expected to grow to $2.7 billion in 2013 against a spending of $1.6 billion in 2009. Cement prices have risen by 2-6% in northern and western India following wagon shortage and an increase in demand. Costly newsprint to hit the bottomline of publishing companies. Tata Steel's European arm Corus will start the process of shutting down some of the mills of its Teesside Cast Product (TCP) plant in England from today.
FMCG major Nestle India is looking to set up a few new facilities, which would enhance its current production capacity by 20-30 per cent to meet the growing demand for its products in the long term. Godrej Consumer Products is in talks with some domestic and international firms and plans to acquire them within the next 12 months. Hindustan Petroleum Corporation (HPCL) is planning to increase the number of retail outlets in rural areas, which generate over 20 per cent of its topline, to 9,000 by next year from the existing 8,500. Adani Group is keen on setting up a large port in Orissa coast and developing an industrial zone, including a power plant, at an investment of Rs 98,000 crore. The government has permitted ONGC and GAIL to pick a 12.5 per cent stake in a pipeline that China is building in Myanmar, and allowed them to invest another $1billion in fields that will provide gas to be shipped to China through the pipeline. Bharat Petroleum Corporation's (BPCL) overseas partner, Anadarko Petroleum Corporation, has encountered more than 145 net meters of natural gas in Windjammer exploration well, Rovuma Basin, offshore Mozambique. Dr Reddy’s Labs is shifting production of more drugs from its German subsidiary, Betapharm, to India to remain competitive. Shipping Corporation of India plans to spend Rs.9300 cr on fleet addition. Bharti Airtel may sell shares to Singapore Telecommunications to part fund its purchase of Zain’s Africa assets. L&T plans to venture into wind and hydropower generation in a big way. ØNifty near contracts ends the day down by 19.55 points at discount of 0.95 points paring OI by 0.3%. ØNifty OI PCR at 1.091 compared to 1.095 yesterday. ØNifty puts sees addition of 3.6 Lakhs and calls sees addition of 5.42 Lakhs over the day. ØHighest OI in Nifty calls seen at 5000 Feb strike and puts at 4800 Feb strike. 4900, 4500 & 4700 March strike Nifty Puts saw addition in OI during the day. 4900, 4700 & 4500 Feb strike Nifty puts saw paring of OI during the day. 5000 & 4900 Feb strike Nifty calls & 4900 March strike Nifty calls saw addition of OI during the day. ØNifty VIX at 29.76 from 29.04 last day. Long build up seen in BPCL, NAGARFERT, AXISBANK & CHAMBLFERT. Short build up seen in RECLTD, PFC, IBREALEST, UNITECH, RELIANCE, DISHTV, SUZLON, PRAJIND, ASHOKLEY & RELMEDIA etc. Long liquidation seen IDFC, TATACHEM, NTPC & CHENNPETRO etc. FII side sees long liquidation and marginal short build up in Nifty futures. Nifty options was bough and long build up was seen in stock futures during the session.