Indian Stocks Post Fourth Weekly Gain; Banks, Tata Steel Advance

India's Sensitive Index rose, posting its fourth weekly advance. Tata Steel Ltd. and State Bank of India gained on expectations corporate earnings are weathering slowing economic growth.

Tata Steel Ltd., the country's largest maker of the alloy, rose to its highest in almost three weeks. State Bank of India, the nation's largest lender, gained the most in a week.

``Earnings for the quarter ended June were decent,'' said Mahesh Patil, who helps manage $9.6 billion in assets at Birla Sunlife Asset Management in Mumbai. ``Investors were expecting earnings to be much worse than what companies reported.''

The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 300.94, or 2.1 percent, to 14,656.69. The gauge climbed 2.7 percent this week. The S&P CNX Nifty Index on the National Stock Exchange gained 80.60, or 1.9 percent, to 4,413.55.

Tata Steel rose 3.8 percent to 679.85 rupees, its highest since July 14. State Bank rose 6.2 percent to 1,504.55 rupees, the most since July 23.

Tata Steel, India's largest producer of the metal, posted a 22 percent gain in first-quarter profit, excluding contributions from unit Corus Group Plc, after the company increased prices on higher demand. Net income rose to 14.9 billion rupees in the three months ended June 30, beating the 13.1 billion rupee median profit estimate of analysts surveyed by Bloomberg News.

State Bank, the nation's biggest, reported profit that beat analysts' estimates on July 26 as fees from selling mutual funds and insurance almost tripled.

Overseas investors bought a net 5.97 billion rupees ($148 million) of Indian equities on July 31, reducing their net outflow this year from stocks to $6.62 billion, according to the nation's stock market regulator.

The following were among the most active stocks traded on the Bombay and National Stock Exchanges. Stock symbols are in parentheses after company names:
Bajaj Hindusthan Ltd. (BJH IN) added 11.75 rupees, or 7.6 percent, to 165.65, the most since July 2. India's biggest sugar producer said its third-quarter loss narrowed 41 percent after prices of the sweetener increased. The net loss in the quarter ended June 30 was 354.1 million rupees compared with 604.7 million rupees a year earlier. Sales fell 4 percent to 4.59 billion rupees.

Essar Oil Ltd. (ESOIL IN) rose 10.05 rupees, or 5.3 percent, to 198.70, the highest since June 27. The company, which owns India's newest refinery, swung to a profit in the first quarter. Net income was 299.3 million rupees in the three months ended June 30. It had reported a loss of 56.7 million rupees a year earlier.

HEG Ltd. (HEG IN) dropped 28 rupees, or 10 percent, to 240.80. India's biggest graphite electrodes maker by market value fell the most in a month after deferring a stock buyback plan.

Housing Development Finance Corp. (HDFC IN) rose 124.4 rupees, or 5.5 percent, to 2,401.75, the highest since June 4. India's largest mortgage company raised its benchmark lending rate by 75 basis points. The company raised the lending rate for its best customers to 15 percent from the 14.25 percent set on June 30, making it the second increase in a month. A basis point is 0.01 percentage point.

Maruti Suzuki India Ltd. (MSIL IN) fell 13.5 rupees, or 2.4 percent, to 562.15. The maker of half the cars in the country posted its slowest sales growth in four months in July as rising interest rates and accelerating inflation damped demand. Sales climbed 1.1 percent last month to 58,543 cars, vans and sport- utility vehicles.
Reliance Communications Ltd. (RCOM IN) dropped 64.65 rupees, or 13 percent, to 436, the most since June 8, 2006. India's second-largest mobile-phone operator reported first-quarter net income growth slowed. Profit rose 24 percent to 15.1 billion rupees for the three months ended June 30, missing the 15.5 billion rupee median estimate of seven analysts surveyed by Bloomberg.

Index Mutual funds are good for passive investors

Index funds have been popular with investors. Over the last year, the returns from index funds have been pretty good - about 30 percent. This is higher than the returns equity schemes posted in the market .

An index fund is a type of mutual fund that invests in securities of the target index in the same proportion or weightage. Index funds are targeted to popular indices like the BSE Sensex or Nifty. There may be index funds benchmarked to sector-specific indices as well. For example, pharma, IT or FMCG sector indices.

These funds are expected to provide returns that closely track the benchmark index and are also subject to all the risks associated with the class of securities invested in. When the market falls, the securities comprising the index fund also fall, and the returns from index funds fall too. Their objective is to ensure that the returns do not vary far from returns from the index that the fund is linked to. These funds do not eliminate or reduce market risk.

Index funds are used by investors who are risk-averse . In comparison to actively managed funds, index funds have lower expense ratio, lower transaction costs, better control of risk through diversification and less prone to risk of fund manager's performance. Among institutional investors, index funds are used by pension and insurance funds.

Among individuals, investors who do have knowledge of the markets or are averse to sector-specific risks prefer index funds. Index funds can be either for equity funds or debt funds. Indexing is popular with investors who prefer steady returns through a conservative, long-term and lowrisk investment strategy.
Indexing is an investment approach that attempts to match the investment returns of a specified stock market benchmark or index. The fund attempts to replicate the investment results of the target index by holding all or a representative sample of the securities in the index. No attempt is made to use traditional stock management, take positions on individual stocks, or narrow industry sectors in an attempt to outpace the index.

Indexing is a relatively passive investment approach. Index funds are generally evaluated on the basis of the tracking error, i.e., the annualised standard deviation of the difference in returns between the index fund and its target index. It is the difference between returns from the index fund to that of the index.

An index fund needs to calculate tracking error on a daily basis. The lower the tracking error, closer are the returns of the fund to that of the target index. The tracking error is calculated against the total returns of the index, inclusive of dividends.

It indicates how closely the fund is tracking the index. It refers to the ratio of how close the weightages of the stocks in the portfolio are to the weightages of the stocks in the index. The more closely the weightage of the stocks are tracked in the index, lower will be the tracking error.
The factors that affect tracking error are inflows or outflows in the fund, corporate actions, change of index constituents, level of cash maintained in the fund, costs that are routinely deducted from fund returns like transaction costs including commissions , bid and ask spread, etc.

The higher the expenses incurred, greater will be the tracking error. Because of the tracking error, the returns from the index funds are usually lower than the benchmarked index. However, in case the tracking error is zero or negative, the index fund may deliver returns superior to that of benchmarked index.

Index funds are primarily meant for the passive investors. The portfolio of the index fund comprises stocks in a particular benchmark index. The composition of the portfolio is similar to the benchmark index, any movement in the underlying index would affect the fund. The NAV of the scheme replicate the underlying index. So the investor can swim and float with the index.

These funds are cost-effective . The schemes are pretty transparent. The investor knows in which companies his money is going to be invested. For example, if one invests in an index fund linked to the BSE Sensex, the investor knows that his money would be invested in the companies comprised in the BSE Sensex only and not in any other company. These funds are ideal for investors having a medium term view of the market.

As presently the stock markets are subdued , and are expected to rise in the times to come - over a time horizon of 1-2 years - one may consider including investments in index funds in his portfolio to get good returns.

Indian bombings raise concerns among foreign investors

Major Indian cities remain on high alert following 17 blasts in a space of an hour in the western city of Ahmedabad and seven bombings here late last week.

On Tuesday (July 29), panic gripped the city of Surat, in the northwestern state of Gujarat, where police recovered and defused 17 bombs. During the blasts over the weekend, more than 50 people were killed and another 150 injured.

All the explosions bore uncanny similarities; all were smaller charges and were placed in bicycles and lunch boxes.

Officials have yet to capture the culprits, but numerous theories have been floated to explain the motivation behind the bombings. According to a report in The Times of India, India continues to suffer at the hands of terrorists, indigenous as well as from Pakistan and Bangladesh. "The recently initiated attempts of the clerics and other leaders of the Muslim community to condemn the resort to terrorism is not yet having any impact on the younger elements," B. Raman, a noted security expert and former head of India's intelligence outfit, the Research and Analysis Wing, wrote in an article.

An Islamist group calling itself the "Indian Mujahideen'' claimed responsibility for the attacks in Ahmedabad. The organization emerged when it claimed responsibility in May for similar bomb attacks that killed 63 people in the northwestern city of Jaipur and in three other northern Indian cities last November in which more than a dozen people were killed and 80 injured.

Security analysts described the Indian Mujahideen as a relatively unknown group that could be a new terrorist network formed by Indian fundamentalists or as an extension of a foreign militant organization.

"Whenever there is a major terrorist strike anywhere in India, I immediately receive a large number of telephone calls from journalists and others in India," Raman said. After the July 25 attacks in Bangalore, Raman said "I got more telephone calls and messages from abroad than from India. Many were executives of foreign corporate houses having offices in Bangalore and wanted to know whether the blasts were meant to convey a message to foreign investors [and] businessmen."

The large concentration of U.S. companies here has made it a target for more than two years. "If doubts arise as a result of incidents like those of July 25, [Bangalore's] reputation for security could be dented, thereby affecting the flow of foreign investments," Raman said.

Still, motives behind the bombings remain unclear. Intelligence agencies speculated that they could be the result of political discord between pro-Hindu members of the ruling Bharatiya Janata Party and an anti-Muslim party acting as the opposition to the ruling government. Other observers like Raman believe the bombings stem from the Indianization of a pan-Islamic holy war.

"It is only a question of time before the extremists from Pakistan and al Qaeda itself set up their own outfits or sleeper cells in India consisting only of Indian Muslims," Raman said.

UCO Bank Net Up marginally

UCO Bank posted a marginal increase of 0.42 percent in net profit during the first quarter of the current fiscal at Rs.1.33 billion, against Rs.1.32 billion over the same period last year.

Announcing the first quarter results Saturday, bank chairman-cum-managing director S.K. Goel said: "Deposits increased by 24.07 percent and advances by 29.26 percent. The total business of the bank stood at Rs.1.34 trillion with deposits at Rs.782.35 billion and advances at Rs.557.25 billion at the end of June, 2008."

The total business of UCO Bank grew by 26.18 percent in the April-June quarter compared to the corresponding period of the previous fiscal.

The board of directors of the bank approved the proposal to float a subsidiary within the next six months for its fee-based operations.

Sector Scan: Information Technology

India's information technology (IT) industry was hit by a slowdown in 2007-08, causing the revenue growth of the top 20 players to drop to 24 percent from 41 percent the year before, an industry survey released Sunday said.

The top 20 IT services exporters also saw a dip in their growth, growing 29 percent as against the 45 percent recorded the year before, according to the Dataquest Indian IT Industry Survey 2008 conducted by Dataquest magazine, a publication of specialty media chain CyberMedia.

The finding is in line with what the National Association of Software and Service Companies (Nasscom), the organisation representing the Indian software industry, said earlier.

In its annual report released July 9, Nasscom said IT services exports grew 28.2 percent to gross $23.1 billion in 2007-08, while the business process outsourcing (BPO) sector showed an increase of 30 percent, fetching $10.9 as compared to $8.4 billion the previous fiscal.

However, the Nasscom report said the industry clocked a combined growth rate of 28.2 percent in 2007-08, as against Dataquest's figure of 24 percent. It said the growth was expected to slow down to between 21-24 percent in the current financial year, the figure Dataquest quoted for last fiscal.

“A stronger rupee adversely impacted the exports-heavy Indian IT industry in [the] financial year 2007-08 when the average value of rupee in comparison to dollar rose nine percent, with a vast majority of the IT companies still unfazed by a slowdown in the global outsourcing industry,” the Dataquest report said.

In Dataquest's listing of the top 20 IT companies in India, the top seven positions remained unchanged, with TCS, Wipro, Infosys, HP India, IBM India, Ingram Micro and Satyam Computer Services retaining their positions in that order.

Last year, foreign companies Accenture, SAP and Dell replaced three Indian firms, Teledata, Patni and Moser Baer.

“After three years of strong growth, financial year 2007-08 was a challenging year for IT companies in several ways, not least of all due to the exchange rate which meant an over 10 percent hit right away in rupee earnings for exporters," said CyberMedia publisher Pradeep Gupta.

Reserve bank of India may increase the interest rate to cool down Inflation

India's central bank may raise interest rates for the third time in less than two months to combat inflation running at a 13-year high.

The Reserve Bank of India will increase the benchmark repurchase rate to 8.75 percent from 8.5 percent, according to 16 of 22 economists in a Bloomberg News survey. The bank, which will release its quarterly monetary policy tomorrow at noon in Mumbai, will also raise the cash reserve ratio to 9 percent from 8.75 percent, 10 of 21 economists said.

Governor Yaga Venugopal Reddy, whose term at the Reserve Bank ends in September, is intensifying efforts to cool inflation that has accelerated to more than double his goal. Prime Minister Manmohan Singh, fresh from winning last week's confidence vote, is looking to Reddy to spearhead the fight against rising prices as he prepares for elections before May.

``We expect another rate hike,'' said Krishnamoorthy Ramanathan, who manages $1.9 billion in Indian debt at ING Investment Management Pvt. in Mumbai. ``The government has exhausted fiscal measures and hence is relying on monetary policy to bring inflation under control.''
India's key wholesale price inflation has accelerated to 11.89 percent even as the government cut import duties on edible oils, steel products and gasoline, foregoing revenue. The government also banned the export of corn, pulses, rice, wheat and edible oil to spur local supplies.

Standard & Poor's said this month that India's BBB- credit rating, the lowest level in the investment grade, may be cut to junk if faster inflation and higher government spending ahead of the election widens the budget deficit.

`Fiscal Headroom'
``The fiscal headroom available to relieve the inflation stress is fast reducing,'' said Shuchita Mehta, senior economist at Standard Chartered Bank in Mumbai. ``A higher budget deficit not only will crowd out private investment, but also is likely to be inflationary.''

Reddy, who has been tightening monetary policy since 2004, was caught wrong-footed as inflation in India surged in the past two months after the government was forced to increase energy prices by as much as 17 percent to cut losses at refiners.

Since June, Reddy has raised rates by 75 basis points and the cash reserve ratio by half a percentage point. The governor is trying to discourage lending from banks that could stoke consumer demand and add to inflation fanned mainly by higher prices of oil. Money supply is growing at about 21 percent, more than the central bank's 17 percent target.

Faster inflation is prompting other Asian central banks to also increase interest rates. The Philippine central bank has raised rates at its last two meetings, while Bank Indonesia has boosted borrowing costs for three straight months.

Weaker Rupee
Reddy has also had to contend with a weakening rupee this year, which has pushed up the cost of imported goods.

India's $912 billion economy may grow as little as 8 percent this year, Reddy estimates. The rupee has weakened 8.3 percent and the benchmark stock index fell by a third since January. The yield on India's benchmark 10-year bonds has gained 91 basis points this year on inflation expectations.

Prime Minister Singh extended his four-year tenure last week by proving his majority in parliament after his main ally, the communist parties, withdrew support on opposition to a nuclear energy accord pursued by the government with the U.S.
By averting early elections, Singh, who has suffered electoral reverses in nine of the past 11 state polls, has won more time to gain control over inflation.

Oil Prices
Singh may succeed in reining in inflation before the national elections if oil prices, which have dropped 13 percent in the past two weeks, sustain their downward trend. India imports 70 percent of its oil requirement.

Lehman Brothers Holdings Inc. expects India's inflation rate to start falling ``decisively'' from January, based on their assumption that growth will slow to 7.3 percent this year and the price of oil drops to $90 a barrel in the first quarter of 2009.

``Our inflation pulse measure is starting to turn, but pressure on producers to pass on input costs remain heavy,'' said Sonal Varma, a Mumbai-based economist at Lehman. ``A rate hike will help anchor inflation expectations.''

Sensex slumps after Bangalore blasts

Equities ended lower for second straight day as investors booked profits following subdued results from Reliance Industries. Weak European market and bomb blasts in outskirts of IT city Bangalore dampened sentiments further.
Bombay Stock Exchange’s Sensex closed at 14,283.53, down 493.48 points or 3.34 per cent. It touched a high of 14,484.39 and low of 14,210.63.

National Stock Exchange’s Nifty ended at 4320.65, down 2.55 per cent or 113 points. It touched a high of 4,440.85 and low of 4,297.15.

Tier II and III stocks showed some resistance to the bears onslaught. BSE Midcap Index closed at 5,582.36, up 0.03 per cent and BSE Smallcap Index closed 0.11 per cent lower at 6,788.37.

Biggest index losers comprised ICICI Bank (-9.73%), HDFC Bank (-7.35%), Reliance Industries (-7.09%), HDFC (-4.96%) and Jaiprakash Associates (-4.44%)

Ranbaxy Laboratories (3.17%), ACC (2.54%), Hindustan Unilever (2.26%), Grasim Industries (1.9%) and Satyam Computer (1.25%) were the index gainers.

Market breadth on BSE showed 1161 advances and 1447 declines.

Meanwhile, stocks in Europe fell as credit-related concerns mounted. The FTSE 100 fell 0.88 per cent, DAX 30 declined 1.44 per cent and CAC 40 was down 0.88 per cent.

Anil Ambani's group stocks: Star performer of day

Anil Ambani's stocks have been the star performers today in one of the biggest rallies for Sensex. Stocks have clocked double digit return in terms of percentage for investors. With UPA crossing the hurdle of trust vote, bulls have outprformed bears for last 5 trading sessions. However, this victory has not come for UPA as effortless as expected.

After Left pulling out their support to UPA on Nuke deal it was Amar Singh's Samajwadi Party who came to the rescue. Number’s game pendulum shifted in favour of UPA thanks to Amar Singh's support of 35 MP's. Amar Singh has been in the news for past few weeks foe demanding windfall profit tax on oil exploring companies, extra charges for additional spectrum allocation to GSM players above 6.5 GHz & asking PM to intervene in Ambani brothers feud. It clearly suggests that Amar Singh favours younger brother of the two siblings of Dhirubhai Ambani.

With UPA winning the trust vote with better margins, markets anticipate that Anil Ambani group will get a share of pie from UPA in return of Amar Singh's contribution to their victory. One can expect some reforms going in favour of Anil Ambani's group stocks. Bombay High Court will hear Reliance Industries-RNRL KG basin case daily from Thursday. Ambani brothers feud over gas supply has been one of the catalyst for the bitter relationships between the two.

Anil Ambani's Stocks	Previos Close	Today's close	% CHG
Reliance Power	142	171	20
RNRL	74	90	23
Reliance Capital	1,178	1,349	15
Reliance Communication	468	525	12
Adlabs	435	507	17

Market closes firm ahead of vote of confidence

The BSE Sensex wrapped the day on a firm note on expectation that the UPA Government will win the trust vote of confidence. If all goes well, the early election will not happen in India and there will be progress in nuclear deal. FMCG, Power, Metal and Banking stocks were in the limelight today, whereas Auto index was under selling pressure.

The 30-share index Sensex opened flat at 13,837.64, up 12.4 points in the early trades. Later the index gained ground and touched the psychological mark of 14,000.

BSE Midcap rose 1.69% and Smallcap index was up 1.53%.

Reliance Infra, BHEL, ITC, Tata Steel, ACC, SBI, Hindalco were the major contributors in the upward rally.

The Sensex ended the day with a gain of 254.16 points, or 1.84% at 14,104.20 after touching a high of 14,206.13 and a low of 13,798.18. The broad-based NSE Nifty gained 80.6 points, or 1.94% at 4,240.10.

Asian stocks slipped today (July 22) barring Japanese benchmark index Nikkei, on concern of global economic slowdown.

Out of the total 2,657 shares traded at BSE, 1,849 advanced, 734 declined while 74 remained unchanged.

Most of the sectoral indices at BSE closed on a positive note, led by FMCG (4.35%), Power (4.29%), Metal (3.96%), Bankex (3.12%) and Consumer Goods (3.10%). However Auto declined (0.96%).

Major gainers in the 30-share index were Reliance Infra, BHEL and ITC, which soared over 6% each to Rs 919.30, Rs 1,597.50 and Rs 189.90 respectively. Cipla, Reliance Comm, Tata Steel, ACC, SBI, Hindalco, HDFC, TCS and L&T were among the other gainers.

On the other hand Maruti (9.29%), Jaiprakash Associates (4.26%) and Bharti Airtel (2.47%) were the major losers in the Senses. DLF and Tata Motors also slipped.

Results

Thermax announced a steady growth in its standalone net profit for the quarter ended June 2008. During the quarter, the profit of the company rose 13.75% to Rs 637.09 million from Rs 560.10 million in the same quarter, previous year.

Net sales for the quarter rose 7.57% to Rs 7,169.74 million, while total income for the quarter rose 7.52% to Rs 7,271.55 million, when compared with the prior year period.

Lupin reported a substantial rise in its standalone net profit for the first quarter ended June 2008. During the quarter, the profit of the company rose 38.45% to Rs 1,085.20 million from Rs 783.80 million in the same quarter, previous year.

Net sales for the quarter rose 18.39% to Rs 7,124.20 million, while total income for the quarter rose 18.53% to Rs 7,312.30 million, when compared with the prior year period.

IDBI Bank, a leading public sector lender, reported a marginal rise in its standalone net profit for the first quarter ended June 2008.

Interest earned for the quarter went up 34.85% to Rs 24,176.40 million, while total income for the quarter climbed 24.90% to Rs 27,391.20 million, when compared with the prior year period.

NIIT Technologies announced a sharp drop in its standalone net profit for the first quarter ended June 2008. During the quarter, the profit of the company declined 15.34% to Rs 244.40 million from Rs 288.70 million in the same quarter, last year.

Net sales for the quarter jumped 46.22% to Rs 1,242.60 million, while total income for the quarter rose 41.64% to Rs 1,291.60 million, when compared with the prior year period.

Oil Rises From Six-Week Low on Tropical Storm, Iran Tensions

Crude oil rose from a six-week low as a tropical storm entered the Gulf of Mexico, and Iran, the world's fourth-biggest producer, resisted demands to suspend nuclear research.

Tropical Storm Dolly may become a hurricane as it moves toward the U.S.-Mexican border, the U.S. National Hurricane Center said. Iran risks ``further isolation'' if it doesn't respond in two weeks to an offer of economic aid in return for ending uranium enrichment, U.S. officials said July 19.

``We're watching Tropical Storm Dolly because of the strong possibility that it will strengthen and head into the Gulf,'' said Tom Bentz, a broker at BNP Paribas in New York. ``The meeting with Iran ended in a stalemate. There were hopes that tensions might subside, instead they are being cranked up.''

Crude oil for August delivery rose $2.32, or 1.8 percent, to $131.20 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures are up 74 percent from a year ago.

Futures settled at $128.88 on July 18, the lowest close since June 5. Prices dropped 11 percent last week, the most in more than three years, on signs of slowing global economic growth and faltering U.S. fuel demand.

A hurricane watch was issued for the Texas coastline from Brownsville to Port O'Connor at 11 a.m. East Coast Time by the Miami-based hurricane center. Dolly moved over the Yucatan Peninsula earlier today.

No Evacuation

Petroleos Mexicanos, Mexico's state oil company, produces about 1.07 million barrels of oil a day in the Bay of Campeche, which is south of the projected track of the storm. Dolly isn't expected to reach company platforms after it enters the Gulf, Petroleos Mexicanos spokesman Javier Delgado Pena said in a telephone interview today.

Dolly's center was about 475 miles (765 kilometers) east- southeast of the Rio Grande valley on the Texas-Mexico frontier, and heading west-northwest above the area's warm waters, the U.S. National Hurricane Center said at 1 p.m. central time. Sustained winds were about 50 miles per hour.

``It's hard to talk about a safe storm track, but this one is relatively benign when it comes to oil infrastructure,'' said Tim Evans, an energy analyst for Citi Futures Perspective in New York. ``Dolly is moving too far north to bother Mexican production in the Bay of Campeche. It appears to be moving too far south to hit U.S. refining capacity or platforms.''

The northern Gulf of Mexico accounts for about 25 percent of U.S. oil production.

U.S. crude oil and fuel production plunged as prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf of Mexico coast in August and September 2005. Katrina shut 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the hurricanes.

Hair-Trigger Market

``This market is on a hair trigger as we look at the storm path projections and this will remain the case throughout the season,'' said John Kilduff, senior vice president of risk management at MF Global Inc. in New York. ``In the post-Katrina world oil companies are going to be proactive with evacuations and other preparations when a storm approaches.''

Royal Dutch Shell Plc, Europe's biggest oil company, has started evacuation of personnel from oil platforms in the Gulf of Mexico because of the approaching storm. The company removed about 125 people from its operations in the western part of the Gulf yesterday, and is planning to evacuate another 60 today, it said in an e-mailed statement.

``No further evacuations are planned at this time after today, and based on current information and forecast we do not expect any impact on Shell-operated production in the Gulf of Mexico,'' The Hague-based Shell said.

Exxon Mobil Corp., the world's biggest energy company, said it was preparing platforms for heavy rain and high winds.

The North Atlantic hurricane season runs June through November. September is historically the busiest month for storms and hurricanes.

Nuclear Enrichment

Iran snubbed Western efforts to get it to suspend nuclear enrichment at talks in Geneva on July 19, setting the stage for new sanctions if the Middle East's second-largest oil producer doesn't respond to an existing proposal within two weeks.

``Iran now has a clear choice to make,'' U.K. Prime Minister Gordon Brown said in a speech to the Knesset in Jerusalem today. It must ``suspend its nuclear program and accept our offer of negotiations or face growing isolation and the collective response not of one nation but of many nations.''

Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, borders the Strait of Hormuz and has in the past threatened to close the waterway carrying about a fifth of the world's oil deliveries.

Brent crude oil for September settlement rose $2.95, or 2.3 percent, to $133.14 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $147.50 on July 11.

This week Market update

It was a spectacular session for markets, which ended second straight day on a stronger note. Stunning performance was seen from banking, realty, oil, capital goods, power and FMCG stocks. The Sensex gained over 1100 points and Nifty 300 points from weekly lows of 12,514 and 3,790, respectively.

Reliance Industries, Bharti Airtel, ICICI Bank, ONGC, HDFC and L&T were top contributors in the gain of indices.

Sensex surged 572.42 points to hit an intraday high of 13,684.27. It closed at 13,635.40, a jump of 523.55 points or 3.99% over previous close.

Nifty clawed back above 4100 and touched a high of 4110.55 with a gain of 163.35 points. But it ended at 4092.25, gain of 145.05 points or 3.67%.

On the weekly basis, Sensex jumped up around 1.3% and Nifty up around 1.2%. BSE IT Index plunged 8.3% due to weak guidance from tech giants like Satyam and Wipro. BSE Metal Index fell 7.5%. Top buzzers are BGR Energy, ORG Info and Essar Shipping, which rose 33%, 25% and 11%, respectively.
Ranbaxy hammered a lot, down 17.5% in this week, on concerns that probe by USFDA may hit sales of the company. It closed at 437.45, down 3.26% for the day.
Banking stocks were outperformers of the day, index shot up by 461.29 points or 8.05% to settle at 6,188.89.

Total turnover traded by markets stood at Rs 70983.73 crore. This includes Rs 12870.69 crore from NSE Cash segment, Rs 52794.98 crore from NSE F&O and the balance Rs 5318.06 crore from BSE Cash segment.
Markets This Week
Sensex up 1.3%; recovers nearly 1,121.4 pts from week's low of 12,514

Nifty up 1.2%; recovers nearly 302.25 pts from week's low of 3,790

CNX Midcap Index down 1.5%, BSE Smallcap down 3.6%

BSE IT Index down 8.3%; Satyam down 13.5%, Wipro down 10.5%, Infy down 7.5%

BSE Metal Index down 7.5%; Tata Steel down 10%, SAIL, Sterlite down 9%

BSE Oil & Gas Index up 4.3%; ONGC up 11.5%, RIL up 5.3%, Cairn down 9%

BSE Cap Goods Index up 3.7%; L&T up 8%, ABB up 6%

BSE Bank Index up 2.6%; PNB up 11.5%, SBI up 7%, ICICI Bk up 4.5% Ranbaxy down 17.5% on concerns that probe by USFDA may hit sales Buzzers: BGR Energy up 33%, ORG Info up 25%, Essar Shipping up 11% Buzzers: SpiceJet down 18%, Moser-Baer down 17%, Mundra Port down 15%
Markets @ 3:12; Nifty above 4100; Bankex up 8%

Markets are witnessing huge buying interest and getting support from banking, realty, power, oil, FMCG and capital goods stocks. Market breadth is positive; about 1,756 shares have advanced while 1147 shares declined. Nearly 247 shares are unchanged. However, technology and select metal stocks are weak.
Top gainers are HDFC, HDFC Bank, Reliance Infra and DLF while losers - Satyam, Wipro, Infosys and HCL Tech.

Sensex back to 13k; up 448 pts

The 30-share Index, Sensex bounced back to 13,000 level by making further inroads into the positive terrain. Intense buying interest was seen in realty, banking, consumer goods, IT, power stocks. It touched an intraday high of 13,099.61.

BSE Midcap and Smallcap rose 0.97% and 1.00% respectively.

All sectoral indices are trading in positive, led by BSE Realty (4.57%), BSE Bankex (4.54%), Consumer Goods (4.43%), Auto (3.78%), IT (3.05%) and Power (3.02%).

The market breadth is positive. Out of the total 2,537 shares traded at the BSE, 1,552 advanced, 908 declined while 77 remained unchanged.

Major gainers in the 30-share index were HDFC and Maruti which soared over 7% each, DLF surged 6.18%. The other gainers were M&M, TCS, ACC, ICICI Bank, Satyam, Larsen & Toubro, Infosys and BHEL.

Laggards at the BSE Sensex include Ranbaxy (plunged 4.59%) and Tata Steel (fell 2.89%) . There were no other losers at the BSE Sensex.

World oil prices rebound at USD 134 a barrel

World oil prices rebounded in Asian trade on Thursday after sharp falls on a bigger-than-expected rise in US crude reserves and the BSE Sensex gained 524 points and regained the 13,000 level in early trade on fresh buying by funds as well as investors, tracking the global markets.

New York’s main futures contract, light sweet crude for August delivery, had dropped more than 10.50 dollars over two days.

The benchmark contract today rose 23 cents to 134.83 dollars a barrel after closing on Wednesday at 134.60.

CNBC-TV18 poll sees inflation surging to 12.03%

The weekly inflation data will be out today. The government has shifted the date of release of the inflation data from this week to Thursday evening, 5 pm.

A CNBC-TV18 poll sees inflation surging to 12.03% for week ended July 5. The RBI governor YV Reddy has already told a Parliamentary panel that inflation will start moderating only after six months. So, we can expect the market to be volatile for next 6 months atleast

TCS Q1 net rises to Rs 1,290.61 crore

Tata Consultancy Services reported a very good growth in its net profit for the first quarter ( TCS Q1 )results ended June 2008. During this first quarter, the profit of the company rose to 12.12% which was in rupees 12,040.10 million from Rs 10,738.50 million in the same quarter, previous year.
The company posted earnings of Rs 12.30 for a share during the first quarter, which is 12.12% growth rate over last year period.
Net sales for the first quarter of Tata consultancy services rose 24.69% to Rs 52,120.00 million, while total income for the quarter rose 22.74% to Rs 53,218.80 million, when compared with the prior year period prices.

Indian oil corporation losing 413 Crore per day

The steepest hike in petrol, diesel and domestic LPG prices notwithstanding, Indian Oil Corp (IOC) is losing Rs 413 crore per day on fuel sales.“Last month’s hike and cut in customs and excise duties were not sufficient to cover the gap between domestic retail price and cost of imported raw material (crude oil),” a senior company executive said.IOC and sister state-run firms Hindustan Petroleum and Bharat Petroleum are currently selling petrol at a loss of Rs 16.70 per litre, diesel at Rs 27.61 a litre, kerosene at Rs 38.09 per litre and domestic LPG at a discount of Rs 338.53 per 14.2-kg cylinder.“Our daily loss based on the average price of first fortnight of July was Rs 413 crore. For the industry the figures would be close to Rs 800 crore,” he said.IOC, he said, was losing Rs 34 crore per day on sale of petrol, Rs 270 crore on diesel, Rs 76 crore on kerosene and Rs 33 crore per day on LPG.“For the full 2008-09 fiscal, we anticipate our total under-realisation (of revenue) at around Rs 121,015 crore. This when clubbed with losses of HPCL and BPCL, the under- realisation would be Rs 222,785 crore,” he said.Before the June 4 hike in petrol price by Rs 5 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 50 per cylinder, the total revenue loss of the three companies was put at a staggering Rs 246,000 crore.But with firming up of crude oil prices, the gains from price hike and duty cuts have almost been washed away.Government is slated to provide oil bonds worth Rs 94,000 crore to the three firms to partly compensate them for selling fuel at below cost while upstream firms like ONGC and OIL will chip in another Rs 48,000 crore.Ways have to be found to meet the remaining deficit.

Market may remain weak

The market might extend today's fall on gloomy domestic and global scene. Higher crude oil prices, rising inflation, weak industrial production numbers, fears of further rise in interest rates, fluid domestic political situation and tension in Middle East will weight on the investor sentiment.

Infosys kickstarted the Q1 June result season on 11 July 2008 on a positive note. Infosys has revised upwards earnings and revenue guidance for the year ending March 2009 (FY 2009). Infosys has forecast 24.4% to 26.6% growth in earnings per share as per Indian GAAP at between Rs 98.79 to Rs 100.51 in FY 2009 over the year ended March 2008 (FY 2008). It has forecast a between 27.5% to 29.5% growth in revenue at between Rs 21278 crore and Rs. 21622 crore in FY 2009 over FY 2008.

The overall earnings of the corporate sector are seen rising about 15% in Q1 June 2008 over Q1 June 2007. That would be well below the 20-25% growth seen over the past few years.
Political uncertainty will continue to haunt the bourses. Prime Minister Manmohan Singh is likely to seek a vote of confidence in parliament shortly following Left’s withdrawal of support to the government over the India-US civil nuclear agreement. There was speculation that the government may choose a date around 22 July 2008 to call a special Lok Sabha session for the vote.

With Left parties withdrawing support to the United Progressive Alliance (UPA) government, India Inc. hopes the slow-moving economic reforms program will now be put on the fast track. Over the last four years, Left parities had stalled privatisation of state-run firms, pension reforms, higher foreign limits in insurance and more liberal norms for foreign bank.
Capping inflation has been a major priority for India’s central bank. Inflation based on the wholesale price index rose 11.89% in 12 months to 28 June 2008, above the previous week’s annual rise of 11.63%, government data released on 11 July 2008, afternoon showed. It was at highest level in more than 13 years.

Reserve Bank of India on 24 June had hiked both repo rates and cash reserve ratio by 50 basis points each to tame rising inflation. There are expectations of further monetary tightening in quarterly monetary policy review of RBI scheduled on 29 July 2008 as inflation is showing no signs of abatement.

Industrial production rose 3.8% in May 2008, much lower than revised 6.2% growth in April 2008, the government data released on Friday, 11 July 2008, showed. Industrial production growth for April 2008 revised downwards to 6.2% from earlier 7%.
Crude oil has created a major havoc on global bourses. Crude oil for August delivery rose as much as $1.54, or 1.5%, to $143.19 a barrel on Friday 11 July 2008 on the New York Mercantile Exchange as Brazilian oil workers threatened a strike and on concern that Middle East and Nigerian supplies may be disrupted.

In the light of above worries, foreign institutional investors (FIIs) sold shares worth Rs 1,012.20 crore in the month of July 2008 so far, till 9 July 2008. FIIs sold shares worth Rs 26,477.50 crore in the calendar year 2008. Mutual funds have bought shares worth Rs 712.30 crore in the month of July so far.