Rupee seen holding at 13-mth lows

The rupee is expected to hold at 13-month lows on Thursday as investors wait for the stock market to gauge foreign appetite for local assets, with a dip in the oil price offering some slight respite from recent falls.

The partially convertible rupee ended down 0.8 percent at 42.45/46 per dollar on Wednesday, off an intraday low of 42.67, which was its weakest since April 13, 2007, according to Reuters data. It had closed at 42.10/11 on Tuesday, and has fallen 4.6 percent so far this month.

Oil , India’s biggest import, traded below $124 a barrel, after touching a record near $127 on Tuesday. High global oil prices raise the risk of widening India’s trade deficit and putting downward pressure on the rupee.

Foreign funds have been net sellers of nearly $3 billion of stocks this year, with the benchmark index down 16.3 percent since the close of 2007.

15.65 lakh demat accounts stay frozen for lack of PAN details

They form 10% of the total number of accounts Freeze zone 7.42 lakh accounts have shares lying in them. Accounts frozen by NSDL contain shares worth Rs 35,000 cr.There is talk of CBDT attaching the accounts after the fresh deadline passes.

The number of demat accounts that remain frozen for lack of PAN details is still substantial. It has been more than two years since PAN was made mandatory for maintaining these accounts.

There are close to 15.65 lakh frozen demat accounts, more than 10 per cent of the total number of accounts, data provided by the depositories NSDL and CDSL show.

Out of these, 7.42 lakh accounts have shares lying in them. At NSDL, frozen demat accounts number 6.24 lakh, and the value of shares they contain is close to Rs 35,000 crore, said sources.

Why investors would pass up an opportunity to claim ownership of demat accounts which have shares of value lying in them raises doubts about the genuineness of ownership of these accounts, said market participants. It also raises the question of why account holders would not claim their accounts when talks are doing the rounds that the Central Board of Direct Taxes might attach these accounts if PAN details were not provided within the new deadline to be issued.

“A majority of the frozen accounts are likely to contain black money and account holders cannot provide PAN details,” said Mr Sanjay Someshwar, a broker with Ventura Securities, which is also a Depository Participant. “There is a possibility that some of these accounts might belong to people who are dead, but their heirs do not have proper legal documents to claim those accounts,” he added.

(SEBI made PAN mandatory for new demat accounts from April 1, giving existing accounts a deadline of December 2007 for furnishing PAN. Over 30 lakh demat accounts without PAN were frozen after that date.)

“Ten per cent of the letters sent by the depositories to the addresses supplied with the frozen accounts have come back,” said an official with a Depository Participant.

The fact that many people do not have any further intention of trading after having made a one-time use of their account, is also a factor that has to be taken into account, according to DP officials. Some of the accounts could be associated with cases related to the IPO scam where the objective of opening many demat accounts was to get more allotment in a public offering of shares.

“In cases such as these the people are scared that tax authorities, SEBI or even CBI might pursue them, and they do not want to claim such accounts even when there are shares lying in them. Also we have reason to believe that most of these frozen accounts are benami accounts (close to 90 per cent of them) and their ultimate owners are simply trying to lie low,” said an official with a depository participant.

The total number of frozen accounts – with and without balance – numbered 15.65 lakh as at April end. They constitute more than 10 per cent of the total demat accounts with both the depositories.

Ten per cent is a large proportion, and it is bound to raise our antennae, said a tax department official.

CBDT officials would not confirm whether they intended to attach the accounts after issue of a fresh deadline for furnishing PAN. “CBDT will take action only on specific information on tax evasion,” said an official.

Nifty Outlook for the day

The market has added on to its morning gains. Sensex is currently trading at
17,223, up 245 points from the previous close. Nifty is at 5081, up 69 points.
CNX Midcap index is up 1.1% and BSE Smallcap index, up 1.2%. All sectoral
indices, but that of FMCG, are trading higher. Capital goods, IT and banking
stocks are the favourites today. Market breadth is strong with 925 advances
against 232 declines on the NSE

Res:5072,5130,5180,5210

Sup:4958,4905,4865,4810

Mkts strong; banks, capital goods, realty stks up

The markets have rallied further and are trading strong as banking, capital goods, realty, metal, power and oil & gas stocks are witnessing buying interest. Midcap and small cap stocks are also in positive momentum. Market breadth is encouraging, 890 shares advanced while 165 shares declined. On the global front, Asian markets were trading higher barring Hang Seng

At 10:30 am, the Sensex was up 240 points at 17,219 and the Nifty up 63 points at 5,074. BSE Midcap and Small Cap indices rose over 1%.

Markets @ 9:56 am : Mkts open higher on positive Asian cues

The markets have opened higher following positive global cues and getting buying support from cement, capital goods, metal and telecom stocks. Market breadth is strong, 473 shares advanced while 78 shares declined.. Midcap and small cap stocks are positive.

At 9:56 am, the Sensex was up 116 points at 17094 and the Nifty up 30 points at 5041.

Reliance Infra, ONGC, Idea, Rel Petro, ICICI Bank, Hindalco, Infosys, PNG, Sterlite, BHEL, L&T, ACC, Grasim and Bharti were gainers while Satyam lost ground.

L&T moved up as Lafarge acquired L&T’s concrete business for enterprise value of Euro 226 million.

Cement stocks gained in early trade on the news that cement companies will cut prices by up to Rs 7/bag in some states.

Lanco Infratech continued its upmove and rose nearly 4% as the company won Rs 8000 crore Vizhinjam international terminal container project in Kerala.

GHCL also gained nearly 4% as the company is eyeing US firm Linens n Things.

Asian markets were trading higher barring Hang Seng. Nikkei 225 Average was up 230.14 points or 1.63% at 14,348.69. Jakarta Composite rose 0.75% or 18.28 points at 2,467.62.. Straits Times was up 0.51% or 16.43 points at 3,214.94. Seoul Composite surged 1.89% or 34.90 points at 1,878.65. Taiwan Weighted was up 1.30% or 117.66 points at 9,136.08. Shanghai Composite gained 0.54% or 19.65 points at 3,677.08. However, Hang Seng lost 0.34% or 88.09 points at 25,445.39.

US markets finished higher, despite profit booking in the last half-hour of trading. The Dow Jones ended 66 points higher at 12898, the Nasdaq shut shop at 2497, up just 2 points. the S&P 500 closed 6 points higher at 1,409.

Market cues:
FIIs net buy $46.2 m in equity on May 13
Domestic MFs net sell Rs 305.4 cr in equity on May 13
NSE F&O Open Interest up Rs 1,400 cr at Rs 74,606 cr

F&O cues:

Futures Open Interest up Rs 614 cr
Options Open Interest up Rs 786 cr
Nifty Futures shed 8 lakh shares in Open Interest
Nifty May Futures shed 13.3 lakh shares in Open Interest
Nifty June Futures add 5.19 lakh shares in Open Interest
Nifty Open Int PCR at 1.41 Vs 1.43
Nifty Puts add 5.87 lakh shares in Open Interest
Nifty Calls add 7.06 lakh shares in Open Interest
Nifty 4900 Put adds 2.29 lakh shares in Open Interest
Nifty 4900 Put added 5.29 lakh shares in 2 days
Nifty May 5000 Put adds 65 thousand shares in Open Interest
Nifty May 5000 Call adds 1.55 lakh shares in Open Interest
Nifty May 5100 Call adds 1.55 lakh shares in Open Interest
Nifty May 5100 Call added 4.15 lakh shares in Open Int in 2 days
Stock Futures adds 1.94 cr shares in Open Interest

Oil falls below $124 on higher US stocks

Oil fell below $124 on Thursday as rising US distillates stocks and Iran’s reassurances that it would not cut crude exports added to a strengthening US dollar to limit the upside.

US light crude for June delivery was down 48 cents a barrel at $123.74 by 0205 GMT, after having settled down $1.58 at $124.22, and having brought to an end a series of seven consecutive days of intraday record highs.

London Brent crude, whose frontmonth June contract expires by the end of Thursday was down 32 cents at $121.54.

"The market is on a downtrend given the US stocks announcement. And it comes after the EIA’s forecast of weaker oil demand for 2008," said Gerard Burg, a Melbourne-based analyst at National Australian Bank.

"But there is always potential for a rebound. And we really see little downside over the next few months, with prices remaining around where they are now," he added.

Weekly US inventory data showed a larger-than-expected 1.4 million barrels rise in distillates stocks- that include heating oil and diesel fuel-, easing concerns about a tightening distillates market that has sent heating oil futures to record-highs this week.

"Should we get some further US distillate inventory improvement in the weeks ahead, there MIGHT be some softening of prices, although any reduction as it relates to crude oil prices could be short-lived, since the market will likely find a new poster child for strong pricing," said FirstEnergy Capital in a weekly note.

US crude stocks rose by only 200,000 barrels as imports dropped and refiners boosted utilization rates, while gasoline inventories, which are expected to take center stage soon with the start of the US driving season by the end of the May, fell by 1.7 million barrels.

Also helping to cap prices, a senior Iranian official said on Wednesday Iran had no plans to cut exports to world Markets.

On Tuesday, a report had quoted Iranian President Mahmoud Ahmadinejad as saying a proposal to reduce the country’s output was being reviewed by experts.

Adding to the softer tone on Thursday, the dollar rose against the yen to near a 2-month high on recent stability in US share prices, higher US bond yields and growing perception that the worst of the credit crisis may be over.

Oil prices and dollar moves have grown closely intertwined over the past few months, with investors piling into oil and other commodities as a hedge against the falling dollar.

India's Rupee Falls a Fourth Day as Refiners Buy More Dollars

India’s rupee declined for a fourth day, reversing earlier gains, on speculation refiners are buying more dollars to pay for imports of crude oil after the commodity climbed to a record this week.

The rupee weakened as much as 0.2 percent to 42.51 per dollar, before trading at 42.485 as of 9:10 a.m. in Mumbai, according to data compiled by Bloomberg.