‘Super-spike’ to lift oil to $200: Goldman

Oil could shoot up to $200 within the next two years as part of a ‘super-spike’ driven by poor growth in oil supplies, investment bank Goldman Sachs said in a research note.

"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," Goldman said in the note made available to Reuters on Tuesday.

Oil hit a new record near $121 a barrel on Tuesday, continuing an advance that has seen it double over the past 12 months.

"The possibility of $150-$200 per barrel seems increasingly likely over the next 6-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," Goldman said.

Goldman, which was one of the first to point to a triple digit oil price more than two years ago, said it believed the market was approaching the crunch in the ‘super-spike’.

The ‘super-spike’ theory argues that a lack of adequate supply growth along with price-insulated demand growth in non-OECD countries will lead to a dramatic and continuous rise in oil prices that will ultimately lead to a sharp correction in oil demand.

Goldman analysts said the underlying drivers of the rise in oil prices remained firmly in place, noting poor growth in non-OPEC supplies, low OPEC spare capacity, restriction on foreign investment in key oil producing nations and healthy demand growth in non-OECD economies.

"In our view, a gradual rally in prices is likely to be longer lasting than a sharp, sudden spike," the note written by U.S.-based analyst Arjun Murti said.

Goldman said it had raised its spot oil price forecasts for U.S. WTI crude for 2008 through to 2011 to $108 rising to $110 and $120 a barrel, up from from $96 rising to $105 and $110 respectively in its earlier forecast.

"We see risk to our 2008 and 2009 forecasts as distinctly to the upside," it said.

Mumbai is world's 7th largest billionaire city: Forbes

Country’s financial capital Mumbai is the worlds’ seventh largest city in terms of billionaire population, says Forbes, the American business magazine famous for its annual list of richest people on the globe.

Mumbai is ranked seventh ahead of San Francisco, Dallas and Tokyo, according to a list of top 10 cities for billionaires available on the website of Forbes.

In terms of average wealth of resident billionaires, Mumbai comes on top of all the 10 cities with an average net worth of 7.6 billion dollars.

The Russian capital city Moscow has bagged the numero uno position in terms of billionaire population. Moscow houses the largest number of billionaires, as much as 74, while New York and London are home to 71 and 36 billionaires respectively.

"Moscow knocked off New York from its perennial No 1 position since 2001," the magazine said. New York is home to 71 billionaires with an average net worth of 3.3 billion.

The other cities, which find a place for themselves in the league of top 10 billionaire cities in the world, include Istanbul which boasts of 34 billionaires, Hong Kong (30) and Los Angeles (24).

Moscow may be housing the largest number of billionaires, but when it comes to the degree of affluence, the Indian city of Mumbai transcends the Russian capital with an average wealth of around 7.6 billion dollars.

Moscow is home to as many as 74 billionaires with an average net worth of 5.9 billion dollar while Mumbai boasts of 20 billionaires, with an an average worth of 7.6 billion dollar, says Forbes.

Hong Kong is the most popular city for billionaires in Asia. As many as 30 billionaires live in this former British colony. But "Mumbai, earns bragging rights as the city on our list with the richest billionaires," the magazine added.

"Mumbai’s 20 billionaires, including two of the world’s 10 richest (brothers Mukesh and Anil Ambani), are worth an average 7.6 billion dollar, handily besting Moscow’s 5.9 billion dollar average," the magazine added.

The US has more cities in the top 10 than any other country: four including New York, Los Angeles, Dallas and San Francisco.

London houses just 36 billionaires whose primary residence is the UK capital. But interestingly 18 of them are citizens of other countries.

Leading that list is Indian steel tycoon Lakshmi Mittal, who ranked fourth in our March wealthiest billionaires list (he was worth 45 billion dollar then).

Other notable foreigners calling London home include Iceland’s richest citizen Thor Bjorgolfsson and shipping tycoon John Fredriksen, who switched his citizenship from Norway to Cyprus recently but chooses to live in London.

Meanwhile, New York City has just one foreign billionaire who claims residence there, and Moscow is home only to Russian billionaires.

The attributes that make a city particularly attractive to billionaires include gourmet restaurants, world-class nightclubs, favourable tax breaks and proximity to the world’s financial centres.

Cobra targets 20 mn beer cases in India

In tune with its plan to increase its capacity to 20 million cases per annum by 2012, UK-based Cobra Beer is looking for acquiring three more breweries in the current year.

The company has earmarked around 100 million dollars for its expansion plans in India and a major portion of this would be spent on acquisitions.

"In order to achieve the target of 20 million cases in the next four years, we are looking for acquiring three more breweries in India," Cobra Beer Chairman Karan Bilimoria said.

Presently, the company has around nine breweries in the country with the capacity of about five million cases per annum. It has chalked out plans to double the capacity to 10 million cases in the next four years.

However, It is planning to add another 10 million cases through these acquisitions by the end of the year. "Currently, talks are in the advance stage with local brewers for the acquisition and in the next three months, we may be able to complete the whole process," he added.

Although, the company has also prepared the plans for green field plants in case it is not able to acquire these breweries. These acquisitions will be similar to the one it has acquired in Bihar, Billimoria said.

Cobra Beer would also add to its range from the current offerings of two products, King Cobra and normal Cobra.

The company is also going to introduce cane-beer in the next two months and diet and flavoured beer by the end of current year.

Cobra would manufacture these cane-beers in its ’Som Brewery’ located in Madhya Pradesh and Bihar-based Iceberg brewery, which the company has recently acquired. Besides this, it is also looking for the listing its subsidiary in the country.

"We have plans to tap capital market and we are looking for listing in both India as well as in UK," Billimoria said while adding, "Listing of Indian subsidiary will be done first and after that it may list the parent company in London."

Besides this, the company is also in the process of revamping its UK business as it plans to shift its manufacturing to UK from Poland which allows it save more than 10 million dollars in two years time.

Reliance shuts all of its 1,432 petrol pumps

Reliance Industries has shut all of its 1,432 petrol pumps in the country after sales dropped to almost nil as it could not match the subsidised price offered by public sector competition.

The company owned less than three per cent of the 36,936 petrol pumps in the country. Of the total retail outlets, state run Indian Oil, Bharat Petroleum and Hindustan Petroleum own 34,304 pumps, while the remaining belong to private sector Essar Oil and Shell India.

"Reliance has informed that sales at their retail outlets was negligible due to selling price differential between private and public sector Ros, leading to the closure of all their 1,432 pumps in the country with effect from March 15," Petroleum Minister Murli Deora informed the Rajya Sabha on Tuesday.

Public sector currently sell petrol at a loss of Rs 13.97 a litre and diesel at a discount of Rs 20.97 per litre. This revenue loss is made up by the Government through issue of oil bonds and subsidy share from upstream firms like ONGC and GAIL.

Private firms such as Reliance were not entitled for the subsidy and priced fuel from their pumps at Rs 8-10 a litre higher than public sector competition, leading to fall in market share.

"The price of sensitive petroleum products are fixed by the public sector oil marketing Companies in consultation with the Government," Deora said. "Private oil Companies are not subject to pricing restrictions by the Government and are free to take their pricing decisions on commercial considerations."

However, Essar Oil and Shell India have not closed their petrol pumps, he said.

Reliance had highest number of petrol pumps in Gujarat with 246 outlets, followed by Maharashtra (160), Uttar Pradesh (132), Andhra Pradesh (129) and Rajasthan (107).

Deora said IOC, BPCL and HPCL plan to set up 1,830 more petrol pumps in the country during 2008-09 fiscal.

The gross under-recoveries of the state-run retailers on sale of petrol, diesel, domestic LPG and kerosene in 2007-08 are estimated at Rs 77,303 crore, he said.

The Government issued oil bonds to IOC, BPCL and HPCL worth Rs 20,333 crore and upstream oil Companies contributed Rs 15,873 crore to partially compensate the under-realisation for April-December period.

"For the same period, the impact absorbed by the oil Companies after the issue of bonds and subsidised by the upstream oil Companies, is likely to be Rs 11,413 crore," he added.

No Yahoo, Microsoft remains alone on the web

Now that Microsoft Corp has shelved its bid for Yahoo Inc, it must convince investors it has a viable ‘Plan B’ to fix an online business that has racked up nine straight quarters of losses.

That may be difficult for investors with long memories.

Six months ago, Microsoft Chief Executive Steve Ballmer told a who’s who of Silicon Valley that the software company was prepared to take an ‘independent’ path in its challenge of Google Inc.

Ballmer said at the Web 2.0 summit in San Francisco that while a combination with Yahoo might make sense in the future, Microsoft believed the independent steps it was taking -- capital investment, research and development and smaller acquisitions -- would, ultimately, lead to success.

When Microsoft then offered $44.6 billion for Yahoo a few months later, and said it had been pursuing Yahoo for more than a year, many wondered whether Microsoft ever believed its ‘go it alone’ strategy. After ending talks with Yahoo over the weekend, that strategy’s viability could be tested.

"It is imperative that in relatively short order Microsoft’s management articulates a viable and credible new strategy for the online services business in the absence of Yahoo," Bernstein Research analyst Charles Di Bona wrote in a note to clients on Monday.

"With the caveat that returning to the prior, pre-Yahoo plan is likely to be neither credible nor well received."

Microsoft’s online unit, which accounts for 5 percent of revenue, is central to the company’s future. It expects online advertising generated by the business to one-day rival its bread-and-butter licensing revenue.

The division will also guide Microsoft’s transition in offering software that is delivered over the Web as a service instead of running locally on a computer’s hard drive.

On Monday, the first trading day after it yanked its $47.5 billion offer for Yahoo, Microsoft shares fell 16 cents, or 0.55 percent, to $29.08. The stock rose 3 percent in early trading before giving back those gains.

Analysts attributed the fall to a view that Microsoft was playing hardball with Yahoo and the deal was not actually dead, but others suggested the collapse of the Yahoo deal shed light on the challenges facing its online business.

Windows live vs MSN

So far, Microsoft’s rebranded Windows Live platform of Web services including e-mail and online photos has left some users confused about how it fits with existing MSN properties. Its Web search continues to lose market shareto Google, even after a revamp.

"A future without Yahoo is a negative for Microsoft’s online unit, as we have long believed that Microsoft needs to get more aggressive in order to close the gap with Google," FBR Capital Markets analyst David Hilal said in a research note.

Meanwhile, in an e-mail to employees, Ballmer argued that Microsoft can achieve its goals without Yahoo. "We have a strategy in place to do so and we will continue to expand on this strategy and accelerate our progress."

In advocating the Yahoo deal, Microsoft Chairman Bill Gates and Ballmer had said Yahoo was the best and fastest way to gain the necessary scale for its online business to compete.

In the last few years, Microsoft has worked to build and refine a Web search engine of its own, creating a new search advertising system called adCenter. More recently, it bought aQuantive, an online ad company, for $6 billion.

Those steps have yet to deliver significant progress toward its goal, building an advertising powerhouse to rival Google.

The company was prepared to spend as much as $47.5 billion on Yahoo and it may choose to use that money to go on an Internet shopping spree instead.

Time Warner Inc’s AOL unit could give Microsoft a stronger position in online display advertising, while social networking sites like Facebook and MySpace, owned by News Corp, may supply a large and loyal audience.

But putting all those pieces together would require focused execution on a clear vision, something Microsoft’s online business unit hasn’t demonstrated in the past.

Since the start of 2006, Microsoft’s Web business has racked up losses totaling nearly $1.7 billion.

Meanwhile, it has spent billions of dollars on massive data centers to provide the computing and storage infrastructure for services ranging from free e-mail to hosting business management software.

"Microsoft has tried for a long time and it hasn’t really gotten anywhere with its online initiatives," said Morningstar analyst Toan Tran. "If it’s going to catch Google, it’s got to get big, quick. Every day, Google gets stronger and stronger."...

Source: Reuters

HDFC Bank launches fund transfer on mobile network NGPAY

DFC Bank on Tuesday launched fund transfer on mobile commerce network, NGPAY.

With this launch, HDFC Bank said it has become the first bank in India to offer, on one single platform, a full suite of banking and commerce services over the mobile including accessing bank accounts, shopping, ticketing, and payments.

HDFC Bank customers who are registered for fund transfer facility under the Bank’s NetBanking services can download the NGPAY application on their mobile handsets and begin transferring funds immediately.

"Fund transfer will happen in real-time between two HDFC Bank accounts and within 48 hours when transferring to a non-HDFC Bank account", Rahul Bhagat, Country Head – Retail Liabilities, Marketing & Direct Banking Channels, HDFC Bank, said.

ngpay CEO Sourabh Jain, said starting next month, HDFC Bank customers will also be able to buy and sell units of different HDFC Mutual Fund schemes through NGPAY.

Fidelity ties up with Federal Bank

Fidelity Fund Management has tied up with Kerala-based Federal Bank for distributing its various financial products.

Fidelity’s entire suite of mutual funds would now be available at more than 600 branches of the bank throughout the country, Federal bank Chairman M Venugopalan said in Kochi.

An MOU in this regard was signed between Federal bank and Fidelity Fund Management Managing Director and Country head Ashu Suyash.

With this partnership, customers would have easier access to Fidelity’s range of funds. This is another step towards offering customers holistic financial solutions of Fidelity Fund’s mutual funds for retail investors to participate in the equity Markets, Venugopalan said.

Suyash said the tie up would enable Fidelity to reach out to more customers across India.

Distribution holds the key to the growth of Indian mutual fund industry and banks with their extensive branch networks and close relationships with customers have a key role to play in popularising mutual funds as a preferred investment option, she said.

Sensex closes lower by 118 points

The Markets ended in red on Tuesday with the Bombay Stock Exchange benchmark Sensex losing nearly 118 points on sustained selling by funds in heavyweight stocks, mainly those belonging to the realty sector.

The 30-share Sensex, which had lost 109 points in the previous day’s trade, declined further by 117.89 points at 17,373.01, after touching the day’s low of 17,237.68 and a high of 17,502.15 points.

The wide-based National Stock Exchange index Nifty also dropped 47.60 points at 5,144.65. It touched a low of 5,110.90 and a high of 5,206.50 points.

Marketmen said trading sentiments turned bearish as most of realty stocks witnessed a sharp fall on selling pressure by funds as well as general investors.

Realty sector suffered the most by 404.36 points at 8,337.03, followed by capital goods index by 255.48 points at 13,954.55. PSU sector index fell by 109.10 points at 8089.30.

However, IT stocks, led by Infosys, gained 66.02 points at 4,383.36 and saved the market from a major fall.

Stock Picks

Sharekhan has a price target of Rs 2035 on Aditya Birla, reports CNBC TV18. The stock is currently trading at Rs 1498, down 0.51% on the BSE

NIIT Technologies earns 50% revenues from Europe and plans to reduce its dependency on US market, says Arvind Thakur, CEO of the company, reports NDTV Profit. The company plans to focus on airlines, insurance and e-governance business, he adds. The stock is currently trading at Rs 143, down 2.69% on the BSE

Citi has a price target of Rs 2071 for Britania, reports CNBC TV18. The stock is currently trading at Rs 1355, up 0.66% on the BSE

Mkts still in red but off day’s low; Realty down over 2%

Markets are still trading in red but off its day’s low. The BSE realty, IT, power indices are witnessing selling pressure. However, FMCG and metal indices are trading positive. Markets breath is negative about 1179 shares have advanced, 1675 shares declined.

At 13.03 p.m., the Sensex is down 68.59 points or 0.39% at 17422.31, and the Nifty down 22.50 points or 0.43% at 5169.75.

Top losers on the Sensex are DLF at Rs 682 down 3.27%, Reliance Infra at Rs 1,468 down 3.23%, and Bharti Airtel at Rs 865 down 3.23%.

However, ITC, Tata Steel, HUL, Sterlite Industries and Cairn India are top gainers on the bourses.

INR Chart

If INR closes above 40.70,INR could see 41.50. And, If INR closes below 40.50, INR may slip to 39.50

GLOBAL MARKETS & INDIAN MARKET UPDATES

GLOBAL MARKETS UPDATE ( 12:52 PM IST ) : FTSE down 7.70 ( 0.12 % ) , DAX down 11.45 ( 0.14 % ) , CAC down 0.60 ( 0.01 % ) , HANG SENG UP 55.42 ( 0.20 % ) , SHANGHAI down 14.89 ( 0.40 % )

The market is witnessing a sticky session. Sensex is trading at 17409, down 81 points and Nifty is at 5176, down 16 points from the previous close. The CNX Midcaps index is down 0.30% and BSE Smallcaps index is down 0. 24%. The market breadth is negative with advances at 478 against declines of 737 on the NSE

Ballarpur Industries has support at Rs 30 and may face resistance at Rs 35, says Hormuz Maloo of Geojit Financial Services, on NDTV Profit. The stock is currently trading at Rs 34, up 2.3% on the BSE

Unity Infraprojects has received two orders aggregating to Rs 222.54 crore. The stock is currently trading at Rs 611.85, up 1.9% on the BSE

If HDIL falls below Rs 745, then it can fall further, says Vijay Bhambwani, technical analyst, on CNBC Awaaz. On the upside, it will face resistance at Rs 900-920, where one should look to book atleast 50% of the profits, he suggests.

Once Reliance Petroleum crosses Rs 200-205, one can expect it to go to its earlier highs, says PK Agarwal of Bonanza Portfolio, on NDTV Profit. It has support at Rs 180, he adds. The stock is currently trading at Rs 200, down 0.4% on the BSE

Sensex Chart

If Sensex closes above 17500, market could see 19000. And, If Sensex closes below 17500, Market may slip to 16500.

Stock Picks

GTL Infra has support at Rs 46 and may face resistance at Rs 80, says Hormuz Maloo of Geojit Financial Services, on NDTV Profit. The stock is currently trading at Rs 56.15, down 2.2% on the BSE

Godrej Industries is a good bet for the long term and has the potential to outperform the market going forward, says Vijay Bhambwani, technical analyst, on CNBC Awaaz. As long as it stays above Rs 250, there should be no concerns, he says. On the upside, once Rs 365 is crossed, it can go up to Rs 450-475 in the next 6 quarters, he adds. The stock is currently trading at Rs 309.95, down 2% on the BSE.

As long as GMR Infra stays above its support level of Rs 154, it will continue to remain in an uptrend, says Hormuz Maloo of Geojit Financial Services, on NDTV Profit. On the upside, it will face some resistance close to Rs 200, he adds. The stock is currently trading at Rs 161.75, down 2.7% on the BSE

Nifty Chart

If Nifty closes above 5180, market could see 5400. And, If nifty closes below 5180, Market may slip to 5000.

Sensex is now at 17,380

Sensex is now at 17,380, down 110 points from the previous close. Nifty is at 5165, down 26 points. CNX Midcap index is down 0.25% and BSE Smallap index, down 0.27%. Market breadth has turned negative, with 466 advances against 717 declines on the NSE

As long as Adlabs stays above Rs 650, one can expect it to continue to move up, says Vijay Bhambwani, technical analyst, on CNBC Awaaz. But as it approaches Rs 900, it will face stiff resistance and it will take a long time to cross Rs 930, he adds. The stock is currently trading at Rs 762.10, down 1.1% on the BSE

JP Morgan is overweight on BILT and has a target price of Rs 47 on the stock, reports NDTV Profit. It is currently trading at Rs 34.25, up 2.9% on the BSE

Mutual fund assets jump 7% in April

With the market staging a gradual recovery, the mutual fund industry recouped as well with its assets growing by Rs 36,584 crore in the past month.

The combined assets under management of all the fund houses soared to Rs 5,65,441.03 crore at the end of April as against Rs 5,28,857.07 crore in the previous month, according to latest data available on the Association of Mutual Funds in India (AMFI).

Experts believe the growth in the mutual fund assets is due to attractive valuations of the stocks after the correction in March.

Reliance Mutual fund, which had also seen its assets fall in the previous month, retained its position as the top fund house in the country.

However at the end of April, there was a jump of Rs 5,448.46 crore in the AUM of Reliance MF which stood at Rs 96,386.40 crore compared to previous month’s Rs 90,937.94 crore.

ICICI Prudential follows at the second position with its assets growing by Rs 1,386 crore to Rs 55,708.52 crore in April.

Assets of state-run UTI MF increased to Rs 52,549.40 crore in April and it continues to be at the third place amongst the fund houses.

Among the top five mutual funds HDFCMF and Franklin Templeton’s AUMs also increased to Rs 51,770.81 crore and Rs 28, 631.63 crore, respectively.

However, Reliance MF, which was aiming to become the first fund house in the country to cross the Rs one trillion mark in assets under management, fell short by less than Rs 4,000 crore. Prior to the release of AUM figures, media reports had said Reliance MF had achieved the Rs 1 trillion mark in AUM in the last month.

In April, mutual funds have been net buyers in the equity Markets worth Rs 160.70 crore.

India's Rupee Falls as Oil Near Record Stokes Demand for Dollar

India’s rupee fell on speculation the country’s refiners will increase dollar purchases to pay for imports of crude oil after the commodity rose to a record.

The currency declined to near a seven-week low after oil price in New York rose to an all-time high $120.36 per barrel yesterday, stoking concern a rising import bill will widen India’s trade and current account deficits. The rupee also dropped on concern equity losses will prompt funds based abroad to slow investments in the nation’s financial market.

``With crude at $120, oil-related bids are coming in for the dollar,’’ said Vikas Babu, a foreign-exchange trader at state-owned Andhra Bank in Mumbai. ``That has kept the rupee under pressure. The market is factoring in some oil-fueled deterioration in the trade and current account balances.’’

The rupee weakened 0.2 percent to 40.68 per dollar as of 11:10 a.m. in Mumbai, according to data compiled by Bloomberg. Its 3.1 percent loss this year is the second-worst performance among the most-traded Asian currencies, after the South Korean won. The rupee’s three-month decline through April is its longest losing streak since May 2006.

Overseas purchases of oil by Asia’s third-largest economy, which imports three-quarters of its energy needs, climbed to a record $8.6 billion in March as the commodity became costlier, government data show. Crude oil has gained 95 percent in the past 12 months, according to Bloomberg data.

The South Asian nation’s trade deficit, the amount by which its imports exceed exports, rose to a record $25.4 billion in the three months through December, according to the central bank. The current account shortfall, a measure of trade and investment flows, increased to $5.4 billion in the same quarter from $4.7 billion in the previous three months.

Falling Stocks

The rupee also weakened as the nation’s benchmark share index declined for a second day, adding to concern funds based abroad will reduce investments in local assets.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost as much as 0.7 percent today, following yesterday’s 0.6 percent decline. The MSCI Asia Pacific excluding Japan Index lost 0.2 percent.

``The negative trend in the Sensex is also damping the sentiment on the rupee,’’ Andhra Bank’s Babu said.

Global investors sold Indian equities worth $2.4 billion more than they bought this year, after making net purchases worth a record $17.2 billion in 2007, according to the Securities and Exchange Board of India, the Mumbai-based capital markets regulator.

Stocks Pick

Unitech has the potential to go upto Rs 350-355, so continue to hold the stock with a stoploss of Rs 315, says Sudhanshu Pandey of LKP Shares, on NDTV Profit. It is currently trading at Rs 327.30, down 1.1% on the BSE

Kotak Mahindra Bank is a hold at current levels, says Vijay Bhambwani, technical analyst, on CNBC Awaaz. The stock has short to medium term support at Rs 740 and may face resistance at Rs 955, he adds. It is currently trading at Rs 853, down 1.9% on the BSE

Indian Bank can go up to Rs 167 and probably Rs 180 too, says Ashwani Gujral, technical analyst, on CNBC-TV18. It has support at Rs 137, he adds. It is currently trading at Rs 151.30, down 0.13% on the BSE.

HCC is a buy on dips or even at current levels, says Sudhanshu Pandey of LKP Shares, on NDTV Profit. The stock can go up to Rs 180-185 in two months or sooner, he adds. It is currently trading at Rs 148, up 2.4% on the BSE.

The market has fallen further.

The market has fallen further. Sensex is at 17,346, down 143 points from the previous close. Nifty is at 5161, down 30 points. CNX Midcap index is down 0.4% and BSE Smallcap index is down 0.2%. FMCG stocks are popular today, while realty stocks are being dumped

There seems to be a positive undercurrent in the Gujarat NRE Coke, which is holding it, says Mandar Jamsandekar of Precision Technicals, on NDTV Profit. One can continue to hold the stock with a trailing stoploss of Rs 140, he suggests. The stock is currently trading at Rs 157.30, up 0.5% on the BSE

One can look at averaging or buying Reliance Communications at Rs 485-500, says Gaurang Shah of Geojit Financial Services, on Zee Business. It is a good stock, in a good sector, he adds. It is currently trading at Rs 552, down 0.4% on the BSE

Mkt trading weak; Bharti Airtel, Maruti top losers

The markets continue to trade quiet on low volumes with negative bias. The BSE realty, IT, auto indices are witnessing selling pressure while FMCG, consumer durable and metal stocks are trading positive.

At 10.40 am, the Sensex is down 114.12 points or 0.65% at 17376.78, and the Nifty down 25.70 points or 0.49% at 5166.55.

About 1383 shares have advanced, 1472 shares declined, and 229 shares are unchanged.

ITC, Cipla, ONGC, Cairn India and Sterlite Ind are top gainers on the bourses.

Bharti Airtel, Maruti Suzuki, M&M and Unitech are top losers on the bourses.

Most active shares on BSE are Bharti Airtel, Rel Capital and DLF.

Stock picks

Allahabad Bank can go up to Rs 100-115, says Ashwani Gujral, technical analyst, on CNBC-TV18. It has support at Rs 85-86, he adds. The stock is currently trading at Rs 91.80, down 1.2% on the BSE.

In the next few weeks, PFC may witness selling pressure between Rs 200 and Rs 210, says Sudhanshu Pandey of LKP Shares, on NDTV Profit. The stock has support at Rs 178, he adds. It is currently trading at Rs 181.85, down 2.6% on the BSE

One should have a long term view on JP Associates, as there’s nothing much for it in the short term, says Mandar Jamsandekar of Precision Technicals, on NDTV Profit. The stock has support at Rs 270 and resistance at Rs 295, where it may consolidate for a few weeks, he says. But int he next 3-4 months, it can go up to Rs 380-400, he adds. The stock is currently trading at Rs 286.25, down 0.1% on the BSE

Bharti Airtel Falls on Concern MTN Bid May Strain Finances

Bharti Airtel Ltd., India’s biggest mobile-phone company, fell in Mumbai trading on concern that it may have to raise debt or sell shares to fund a takeover of African operator MTN Group Ltd.

Bharti fell 2.9 percent to 868 rupees as of 9:59 a.m. on the Bombay Stock Exchange. Bharti and Johannesburg-based MTN Group said in separate statements that talks are ``exploratory’’ and may not lead to a deal.

Bharti has arranged $12 billion of financing and may seek to buy 51 percent of MTN, valuing the company at about $39 billion, the Financial Times reported yesterday. The acquisition would be the biggest by an Indian company, eclipsing Tata Steel Ltd.’s $13 billion takeover of Corus Group Plc last year.

``History indicates markets worry about overpayment and dilution first before looking at synergies and extended growth opportunities,’’ Citigroup Inc. analysts Anand Ramachandran and Rhys Summerton wrote in a report today, citing Tata Steel’s takeover of Corus.

Tata Steel fell 10 percent in the fourth quarter of 2006 as it had to raise its bid for Corus to fend off a rival takeover offer for the U.K.-based steelmaker.

Bharti spokesman Senjam Raj Sekhar today declined to comment beyond yesterday’s statement. Pearl Majola, a spokeswoman for MTN, couldn’t immediately be reached for comment.

MTN, which generates more revenue than its Indian suitor through services in Nigeria, Iran and South Africa, has climbed 13 percent to a record in Johannesburg trading since the Financial Times reported on April 25 Bharti may make an offer.

Singapore Telecommunications Ltd., Southeast Asia’s largest telephone company, may be ``directly’’ involved in a potential acquisition of MTN, Citigroup said.

Singapore Telecom, which owns a 30.5 percent stake in Bharti said in a statement today that the company was ``pleased’’ the Indian operator is in talks with MTN.

Connie Ling, a Hong Kong-based spokeswoman at Goldman Sachs Group Inc. declined to comment. Goldman is advising Singapore Telecom, the Financial Times said.

MTN climbed 3.8 percent to 150 rand yesterday, raising its market capitalization to about $37 billion, or about 10 percent less than Bharti’s value.

Source : Bloomberg

India, China responsible for rising oil prices: US

Close on the heels of President George W Bush’s remarks linking Indians’ food habits to rising global prices of commodities, the United States has now partly attributed the surge in oil futures to the increased demand in India and China.

"There are a lot of different ways that we can reduce our dependence, but we have more to do and it’s just – and also I would point out that, obviously, the demand for oil is growing around the world," White House Deputy Spokesman Scott Stanzel said in a briefing.

"Many developing nations like India or China are having greatly increased demand, which obviously is having an impact on price," the senior White House official said responding to a question on the crude oil price crossing USD 120-mark.

The senior White House official stressed that it was important for the United States to become less dependent on foreign sources of energy.

Highlighting the need for "domestic exploration", he said. "We also have to do more in terms of building refineries. We haven’t built refineries in about 30 years".

Stanzel also spoke regarding Bush’s remarks, which have drawn a lot of flak from every section in India, saying the United States saw "higher living standards" of people there as a "good thing".

"We think that it is a good thing that countries are developing; that more and more people have higher and higher standards of living," he said.

However, he apparently did not go back on Bush’s point that Indian food habits were contributing to spiralling prices of commodities, which in turn, were worsening the global food crisis.

Oil spikes to a new record above $120

World oil reached a new record price above USD 120 a barrel onTuesday as concerns over the United States Economy eased, analysts said.

New York’s main oil futures contract, light sweet crude for June delivery, reached an all-time high in electronic trade of USD 120.3 a barrel, breaking the last record of USD 120.20 reached during intraday trade on Monday.

After breaking the symbolic USD 120 ceiling for the first time, the contract was trading today in Asia at USD 120.15 a barrel against a record closing price of USD 119.97 reached yesterday on the New York Mercantile Exchange.

In London, Brent North Sea crude for June delivery hit an intraday record high of USD 118.58 before settling up USD 3.43 at a record USD 117.99.

Trading volume in London was light as Britain marked a bank holiday.

Oil futures prices on both sides of the Atlantic have nearly doubled in a year.

Stock Picks

In private sector banks, HDFC Bank can move up to Rs 1,700 and Kotak Mahindra Bank to Rs 950, says Ashwani Gujral, technical analyst, on CNBC-TV18. HDFC Bank is currently at Rs 1,542, up 0.8% and Kotak is at Rs 858.65, on the BSE

TTML can go up to Rs 43-44 in a few weeks time, says Sudhanshu Pandey of LKP Shares, on NDTV Profit. The stock is currently trading at Rs 37.85, up 0.7% on the BSE.

The long term charts of Jet Airways are in a downtrend, says Mandar Jamsandekar of Precision Technicals, on NDTV Profit. The stock has support at Rs 575 and a relief rally can take it to Rs 700-740, he adds. On should try to exit the counter there, he suggests. The stock is currently trading at Rs 589, up 1.4% on the BSE

Ashok Leyland can go up to Rs 49-50 in a week’s time, says Sudhanshu Pandey of LKP Shares, on NDTV Profit. the stock is currently trading at Rs 43.05, up 0.4% on the BSE

Asian Stocks Fall for First Time in Three Days; Banks Decline

Asian stocks declined for the first time in three days, led by financial companies, after Kookmin Bank and St. George Bank Ltd. reported profit fell amid turmoil in credit markets.

Kookmin, South Korea’s biggest bank, dropped to a one-week low, while St. George Bank, Australia’s fifth-largest, tumbled the most in three weeks. Shinhan Financial Group Ltd. retreated in Seoul on lower net income, while Cathay Financial Holding Co. declined in Taipei after UBS AG cut its rating on the stock.

``Results so far are not showing that things are turning around, especially in the financials,’’ said Leslie Phang, Singapore-based head of private client investments at Schroders Plc, which manages $275 billion. ``Earnings estimates in Asia haven’t been lowered enough to take into account the macroeconomic headwinds.’’

The MSCI Asia Pacific excluding Japan Index lost 0.2 percent to 498.29 as of 11:10 a.m. in Hong Kong, halting a two-day, 2 percent advance. Financial shares fell 0.9 percent, the biggest decline among the regional benchmark’s 10 industry groups.

Japan’s markets are closed for a holiday. Australia’s S&P/ASX 200 Index lost 0.5 percent. Benchmarks also retreated elsewhere in the region, except for South Korea, Malaysia and Hong Kong.

BHP Billiton Ltd., the world’s biggest mining company, advanced after crude oil prices surpassed a record $120 a barrel and copper futures gained. South Korea’s Posco rose after it agreed to buy a stake in Sandfire Resources NL, an Australian minerals explorer.

Banks Drop

U.S. stocks fell yesterday, sending the Standard & Poor’s 500 Index lower for the first time in three days. Macy’s Inc. led a decline among retailers on concern record oil prices will damp consumer spending and Yahoo! Inc. tumbled the most in almost two years after Microsoft Corp. abandoned its $50 billion bid for the company.

Kookmin, South Korea’s biggest bank, slipped 3.2 percent to 69,200 won, declining for the first time since April 24. The company said first-quarter net income fell 47 percent, prompting Morgan Stanley and UBS AG to cut their ratings on the stock.

Shinhan fell 4.2 percent to 56,400 won, set for its largest loss since Jan. 3. South Korea’s second-largest financial company said first-quarter profit dropped 35 percent on higher funding costs.

St. George, Maybank

``While the thinking prevalent a month ago that the world is over for the financial markets is no longer there, you’ll still see some more writedowns by banks,’’ said David Ng, who helps manage about $1 billion at Hwang-DBS Asset Management Sdn. in Kuala Lumpur. ``We don’t doubt there will still be credit weaknesses’’ in some banks, he said.

St. George dropped 3 percent to A$26.90, the biggest retreat since April 14, after saying net income declined 10 percent. Chief Executive Officer Paul Fegan cut his forecast for earnings per share growth to 8 percent to 10 percent for the full-year, from 10 percent estimated in February.

Cathay Financial, Taiwan’s largest financial-services company, declined 1.4 percent to NT$80.30 after UBS cut its recommendation to ``neutral’’ from ``buy’’ and HSBC Holdings Plc lowered its rating to ``neutral’’ from ``overweight.’’

Malayan Banking Bhd. dropped 3.8 percent to 7.70 ringgit, set for the lowest close since January 2004, after Citigroup Inc., UBS and Macquarie Group Ltd. cut their share-price forecasts for the Malaysia’s largest bank. The company said yesterday it will pay as much as 60.3 billion rupees ($916 million) for a 20 percent stake in Pakistan’s MCB Bank Ltd.

Oil, Copper

Limiting declines, BHP Billiton advanced 0.6 percent to A$44.40. Rio Tinto Group, the world’s third-biggest mining company, rose 1.3 percent to A$140.81.

Crude oil for June delivery yesterday rose to an intraday high of $120.36 a barrel after the Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the U.S. economy, grew for the first time since December, signaling higher energy use.

Meanwhile, copper prices advanced 3.3 percent yesterday in New York, while gold added 1.9 percent.

Newcrest Mining Ltd., Australia’s largest gold producer, added 2.6 percent to A$29.03. Cnooc Ltd., China’s biggest offshore oil explorer, jumped 2.8 percent to HK$13.88 in Hong Kong.

Posco, Asia’s third-biggest steelmaker, climbed 3.1 percent to 509,000 won, on course for its highest close since April 7. The company agreed to buy a 19.9 percent stake in Sandfire Resources for A$7.2 million ($6.7 million).

Shares of Sandfire surged 7.9 percent to 48 Australian cents.

Source : Bloomberg

Mkt opens flat; Metal, realty, pharma marginally up

The markets have opened flat. Modest buying interest is seen in metal, realty, pharma and banking indices. However, IT, auto stocks are trading in red.

At 09.56 am, the Sensex is down 61.86 points or 0.35% at 17429.04, and the Nifty down 6.80 points or 0.13% at 5185.45.

About 1499 shares have advanced, 1359 shares declined, and 226 shares are unchanged.

Relaince Petroleum, Idea Cellular, Sterlite Industries and Cairn India are among major gainers.

TCS, Infosys, Bharti Airtel, NTPC are among major losers.

Asian Markets

Asian markets were trading lower. China’s Shanghai Composite dropped 1.80% or 67.81 points at 3,693.20. Hong Kong’s Hang Seng fell 0.35% or 91.10 points at 26,092.85. Taiwan’s Taiwan Weighted was down 0.18% or 16.11 points at 8,820.96. Singapore’s Straits Times declined 0.22% or 7.28 points at 3,240.76. However, South Korea’s Seoul Composite was up 0.13% or 2.32 points at 1,850.59.

US Markets

US markets fell on worry that Bank of America may renegotiate its deal to buy Countrywide, while record oil prices above USD 120 a barrel increased worry about consumer spending. The Dow shed 89 points to close at 12,970. While the Nasdaq lost 13 points and shut at 2,464. The S&P 500 also lost 6 points and shut shop at 1,407.

Market cues:
FIIs net buy $178.5 mn in equity on May 2
MFs net sell Rs 76.2 cr in equity on May 2
NSE F&O Open Int up by Rs 1021 crore at Rs 67706 crore

F&O cues:
Futures Open Int down by Rs 165 cr, Options Open Int up by Rs 1185 crore
Nifty Futures add 2.5 lakh shares in Open Int
Nifty Open Int Put-Call ratio at 1.41 Vs 1.40
Nifty Puts add 11.4 lakh, Calls add 7.3 lakh shares in Open Int
Nifty 5200 Put adds 3.6 lakh shares in Open Int
Nifty 5200 Call adds 4 lakh shares in Open Int
Stock Futures’ Open Int unchanged