No 2008 action replay for FIIs

Foreign funds investing in India are in the exit mode again. So far this month, FIIs have taken out over $2.1 billion from the stock market, the highest monthly outflow in 18 months. While this outflow is attributed to the troubles in Europe, the spate of FII selling is also bringing back memories of similar outflow in 2008, on the back of the sub-prime crisis, Lehman Brothers crash and their effects on the global economy.

Market analysts feel that foreign fund managers are playing it safe — a rush towards risk aversion in market parlance — and taking money off the table from the emerging markets to keep cash in hand. “Global investors have witnessed two crises in the last three years. So naturally they tend to be more cautious,’’ said Jamal Mecklai, CEO, Mecklai Financial Services.

This time around, however, there is a silver lining to the outflow . Most market players assure that the Indian economy is in much better shape now than it was when the sub-prime crisis struck the global economy. So chances are that FII outflows could reverse the trend over the next 3-6 months, compared to about 18 months that foreign fund managers took after the subprime jolt, to come back to the Indian market in a big way. Sebi data showed that between October 2007 and March 2009, FIIs had taken out nearly $7 billion from the Indian market. And the BSE sensex, after rallying to its historic high of 21K in January 2008, had crashed to 7,700 within 10 months.

“Unlike the impact from the Lehman bust, this time round, the broader macro setting for India and the pressure points are significantly different from what they were in 2008,’’ said a note by Rajiv Malik of Macquarie Securities. He pointed out that during the Lehman bust, the investment cycle and foreign borrowings of Indian companies were at or near their peaks, and India had witnessed record capital inflows around the same time. “This time, the capex upturn is yet to take off and overseas borrowing by Indian corporates has not been unnerving. Further, policy flexibility still exists,’’ Malik said.

Economists are also looking at the Q4 GDP numbers, set to be out on Monday. A report from domestic broking major Religare estimated that the Indian economy could post a 9.3% growth in the January-March quarter, taking the annual growth for 2009-10 to 7.5%. Institutional dealers feel that such robust growth numbers, along with the moderation of inflation numbers and lowering of fiscal deficit because of higher-then-estimated inflows from 3G auction, should put the Indian economy on a better footing and attract more long-term FIIs to India.

From here, brokers said, other than global factor, only a bad monsoon could stop foreign funds from returning to D-Street . So far the forecast for monsoon has been good, but last year, at the start of monsoon, a HSBC economist was quoted: “Although weather experts are predicting some catch-up in (monsoon) the next few weeks, we all know that economists are not the only people in the forecast business to be wrong on occasion!’’

courtsey:http://timesofindia.indiatimes.com

Ambani brothers decide to bury differences:

In a major development, the two Ambani brothers -- Mukesh and Anil -- on Sunday decided to bury their differences and create an environment of harmony, co-operation and collaboration between their groups.

"All existing non-compete agreement between the two groups executed in January 2006 cancelled," the Anil Ambani group said in a statement.

The harmony comes within a few days of the Supreme Court declining to give any relief to the younger brother in the gas dispute.

"A new, simpler non-compete agreement executed limited to only gas-based power generation. RIL (Mukesh) and RNRL (Anil) will expeditiously negotiate gas supply arrangement as per the Supreme Court order and hope to conclude negotiations very soon," the statement added.

The cancellation of the existing non-compete agreement will provide enhanced operational and financial flexibility to both groups and greater ability to participate in high-growth sectors such as oil and gas, petrochemical, telecom, power and financial services, the Anil Ambani Group said.

However, RIL has agreed not to enter into the gas-based power generation business for the period up to March 2022.

In an identical statement, Reliance Industries said, "RIL, led by Mukesh D Ambani, and Reliance ADA Group companies, Reliance Communications Reliance Infrastructure, Reliance Natural Resources and Reliance Capital led by Anil D Ambani, have today approved and signed an agreement canceling all existing non-compete arrangements entered into between the two groups in January 2006 pursuant to the scheme of reorganisation of the Reliance Group and entered into a new simpler, non-compete Agreement with respect to only gas-based power generation. These developments will eliminate any room for further disputes between the two groups, on matters relating to the scope and interpretation of the non-compete obligations."

"RIL and Reliance Natural Resources will expeditiously negotiate gas supply arrangements in accordance with the orders of the Supreme Court of India . We hope to conclude these negotiations very soon," the RIL statement further said.

"RIL and Reliance ADA Group are hopeful and confident that all these steps will create an overall environment of harmony, co-operation and collaboration between the two groups, thereby further enhancing overall shareholder value for shareholders of both groups," the RIL statement added.

source:business.rediff.com

Dow Slumps 3.6%: "We Are On Schedule for a Very, Very Long Bear Market," Prechter Says

The global selloff in stocks accelerated Thursday, sending the Dow down 3.6% to 10,068 while the S&P 500 lost 3.9% to 1,071.59 and the Nasdaq shed 4.1% to 2,204.

All major U.S. averages are now down for the year and at least 10% below their 2010 highs, meaning the downturn has officially entered "correction" territory.

Unfortunately (for bulls), there's much more selling ahead, according to Robert Prechter, president of Elliott Wave International and author of Conquer the Crash.

"We should be in for [another] week or two of pretty serious selling," Prechter says. "They'll be bounces along the way...but I think this should last a long time. We should be on schedule for a very, very long bear market period."

In the near-term, the veteran market watcher predicts a "dramatic increase in volatility," beyond what's already occurred. The CBOE Volatility Index (VIX) rose another 30% today and is now up about 180% from its late April lows.

Notably, today's selling occurred despite a rally in the euro amid reports of central bank intervention. Joe Brusuelas of Brusuelas Analytics says, "The capitulation in today's market has more to do with the unwinding of the easy money [carry] trade on commodities," which fell again today, with notable weakness in energy and palladium.

Meanwhile, Treasury prices continued to benefit from the "risk aversion" trade with the yield on the benchmark 10-year note falling to 3.21%.

Broken Record or Market Sage?

Other than to say "a long way down," Prechter wouldn't say how much further he thinks the market will fall, suggesting a repeat of the 1930-32 scenario when "extremely sharp rallies" kept investors interested and "feeling like a bottom [was] forming."

Anyone familiar with Prechter knows he's been predicting doom for a long time so it's tempting to dismiss his latest warning -- a veritable repeat of what he said here in February. But he's not a perma-bear and did turn bullish ahead of the bottom in March 2009.

More dramatically, in 1978 he co-authored Elliott Wave Principle - Key To Market Behavior, which predicted a great bull market similar to the 1942-1966 rally. By his own admission, Prechter underestimated the extent of that historic rally, which ran from 1982-2000 and saw the Dow rise 1,500% from 777 to 11,723.

Prechter says the market has spent the past 10 years building a "major head and shoulders" top from those 2000 highs, even though they were exceeded in 2007. Ultimately, he expects a "corrective mode that's going to retrace virtually the entire" 1982-2000 bull market.

"The best place for most people to be is in cash" and equivalents, he says. "You want maximum liquidity until this thing blows over."

courtsey:finance.yahoo.com

NIFTY MAY SEE HUGE VOLATILITY IN NEXT FEW DAYS AND MAY TRADE IN 4995-5137 RANGE THIS WEEK.

STRATEGY:
SELL NEAR 5120-5130 WITH SL ABOVE 5165
BUY NEAR 5000-5010 WITH SL BELOW 4960

NEXT WEEK NIFTY MAY SEE BREAKDOWN BELOW 4995 FOR TARGETS 4884 AND 4861 WITH SOME RECOVERY IN BETWEEN AND THEN MAY SEE FRESH UNINTERRUPTED UPMOVE FOR 5250-5311 IN JUNE..(CAUTION:THIS IS JUST MY GUESS AND I MAY BE TOTALLY WRONG ALSO SO PLEASE TAKE IT JUST AS A SALT IN THE MEAL AND TRADE UPON YOUR OBSERVATIONS)

We live in a nation ,
· Where Pizza reaches home faster than Ambulance police,
· Where you get car loan @ 5% and education loan @ 12%,
· Where rice is Rs 40/- per kg but sim card is free,
· Where a Billionaire can buy a cricket team instead of donating the money to any charity,
· Where the footwear, we wear ,are sold in AC showrooms, but vegetables, that we eat, are sold on the footpath,
· Where everybody wants to be famous but nobody wants to follow the path to be famous,
· Where we make lemon juices with artificial flavours and dish wash liquids with real lemon.
· Where people are standing at tea stalls reading an article about child labour from a newspaper and say,"yaar bachhonse kaam karvane wale ko to phansi par chadha dena chahiye" and then they shout "Oye chhotu 2 chaii laao.....
" Incredible India, Mera Bharat Mahaan.

WEEKLY ANALYSIS(17/5-21/5):

NEXT WEEK NIFTY MAY TRADE IN 4960-5166 RANGE,
IF BREAKS AND SUSTAINS BELOW 4960 MAY SEE SWIFT DOWNMOVE TO 4884

RESISTANCES:5137-5166-5215

SUPPORTS:5027-4960-4884

US: 8 top banks under probe for duping rating firms:

The New York attorney general has begun an investigation into eight banks to determine whether they provided misleading information to agencies that rate mortgage securities, The New York Times reported on Thursday.

New York Attorney General Andrew Cuomo's office issued subpoenas late on Wednesday notifying the banks of his investigation, the Times reported on its Web site, citing two people with knowledge of the probe.

According to the report, the probe's targets are Goldman Sachs, Morgan Stanley, UBS, Citigroup, Credit Suisse, Deutsche Bank, Credit Agricole and Merrill Lynch, now owned by Bank of America.

The inquiry by Cuomo suggests he thinks the rating agencies may have been duped by one or more of the targets of his investigation, the report said.

The Times said spokespeople for Morgan Stanley, Credit Suisse and Deutsche Bank declined to comment and other banks did not immediately respond to requests for comment.

The companies that rated the mortgage deals were Standard & Poor's, Fitch Ratings and Moody's Investors Service, the report said.

Cuomo was also interested in ratings agency employees hired by bank mortgage desks to help create mortgage deals that got better ratings than they deserved, the newspaper reported, citing the sources, who were not authorized to discuss the matter publicly.

No end in sight for commodity bull market: Jim Rogers:

Oil prices are on an indefinite path higher as dwindling supplies fail to keep pace with demand, while the latest European debt-crisis is the beginning of the end for the euro, influential US investor Jim Rogers said.
"If the fundamentals weren't right the price would not go up. Many people invested in commodities in the 1980s and 90s and didn't make any money because the fundamentals were bad, now people are investing and making money because the fundamentals are good," Rogers said.

"EURO WILL DISAPPEAR"

This month the euro has come under extreme pressure following a Greek debt-crisis that threatened to spread across the continent, prompting policymakers to make available a $1 trillion rescue package, which Rogers said could spell the end for the European currency.

"It was a terrible thing to do, it ensures that the euro will disappear some day because now it means anyone can do whatever they like because they're going to be bailed out.

"I own the euro but after what they did the other day I'm having serious second thoughts. The euro will continue to corrode from within and someday we won't have a euro at all."
source:the economic times
http://economictimes.indiatimes.com/No-end-in-sight-for-commodity-bull-market-Jim-Rogers/articleshow/5927999.cms

5280-5300 WILL BE THE RANGE OF STRUGGLE BETWEEN BULLS AND BEARS.

TODAY NIFTY MAY OPEN NEAR 5250 AND IF SUSTAINS ABOVE IT MAY TARGET 5280 WHERE PROFIT BOOKING IS EXPECTED.

IF NIFTY OPENS NEAR 5250 AND COULD NOT CROSS ABOVE IT THEN NIFTY MAY CONTINUE TO TRADE IN RED COLOURED CHANNELL

ABOVE 5300 IF HOLDS THEN WILL AGAIN MOVE IN UPTRENDING GREEN CHANNELL

IN NEXT TWO WEEKS NIFTY MAY TARGET 4888-4850-4812 LEVELS WHICH WILL FORM AN IMMEDIATE BOTTOM FROM WHERE A STRONG RECOVERY MAY BE EXPECTED

IF BREAKS BELOW 4812 THEN MAY SEE MORE DOWNMOVE TILL PREVIOUS LOWS OF 4675

ANY POSITIONAL LONGS TAKEN NEAR 4880-4850 SHOULD HAVE SL BELOW 4800 FOR TARGETS 5180-5310-5440

LEVELS TO WATCH

STRONG SUPPORTS:(4950-4962)
61.8% RETRACEMENT OF 4675-5400:NEAR 4950
200 SMA:4962

BELOW 4950 VERY STRONG SUPPORT AT 50WSMA:4888

RESISTANCE TO UPMOVE MAY COME NEAR 5114-5130 ASSUMING IF NIFTY TAKES SUPPORTS AT 4960

38.2% RETRACEMENT OF 4675-5400:NEAR 5125
100SMA:5114
38.2% RETRACEMENT OF 5400-4960:5128
20WSMA:5122

Videocon barred from doing business with World Bank for 3 years

Accusing Venugopal Dhoot-led Videocon of indulging in fraud and corrupt practices in dealings with it, the World Bank has blacklisted the Indian company for three years, ending January 11, 2013.

Videocon Industries Ltd has been barred from doing any business with World Bank for violating "procurement guidelines", for a period of three years, beginning January 11, 2010, a notification on the Bank's website said.

China may 'crash' in next 9-12 months:

Marc Faber

Investor Marc Faber said China’s economy will slow and possibly “crash” within a year as declines in stock and commodity prices signal the nation’s property bubble is set to burst.

The Shanghai Composite Index has failed to regain its 2009 high while industrial commodities and shares of Australian resource exporters are acting “heavy”, Faber said. The opening of the World Expo in Shanghai last week is “not a particularly good omen”, he said, citing a property bust and depression that followed the 1873 World Exhibition in Vienna.

“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong on Monday.

“The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
*** ***** **** **** **** **** **** **** **** ***
Faber joins hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff in warning of a crash in China. China is “on a treadmill to hell” because it’s hooked on property development for driving growth, Chanos said in an interview last month.

As much as 60% of the country’s gross domestic product relies on construction, he said. Rogoff said in February a debt-fuelled bubble in China may trigger a regional recession within a decade.

MARK GALASIEWSKI

Sensex at 1,00,000 points? Possible by 2025:

Technical charts

Looking at 6000 on Nifty before retracement:
Elliot Wave Intl


It may sound utopian in the backdrop of months-long downslide on bourses, but a US-based equity research group sees India's benchmark index Sensex scaling a milestone of 1,00,000 points within next 15 years.

This would mean an unimaginable rally of over 10-times from the level seen just a few days ago, when Sensex was toiling below 10,000-point mark after a meltdown that began more than a year ago.

The Sensex had more than halved to trade below 8,000-point mark in October last year after scaling a record high of over 21,000 points on January 10, 2008.

Unperturbed by the sharp fall, US-based global equity research group Elliott Wave International, which specialises in analysis of technical charts of stock movements, believes that the recent surge in Indian market is the beginning of a long-running bull cycle that could continue for 15 years.

The recent upsurge began on March 9 and the Sensex has gained over 2,500 points or by more than 30 per cent.

"If the price and time proportions between the waves in the 2003-2008 rally continue, the Sensex should hit 100,000 in about 15 years," research group's Asia-Pacific Financial Forecast editor Mark Galasiewski told PTI over phone.

In its report for Asia-Pacific markets, based on analysis of technical charts, Elliottt Wave has said there were strong indications of "a resumption of the bull market in Indian stocks".

Extending its previous analysis in November last year, when it had said the Sensex might continue advancing for 15 years before the end of another bull run, Elliott Wave said the market seemed to have completed its most recent downward spiral in October 2008.

The Indian stock market benchmark Sensex had scaled an all-time high of 21,206.77 points on January 10, 2008 before embarking on a downward journey, wherein it touched a low of 7,697.39 points on October 27.

According to the Elliot Wave's April forecast report, the Sensex has declined in three waves to the October low, where it retraced approximately 50 per cent of its 2003-08 rally on a percentage basis.

The index has just broken out of its downward trend channel and the patterns seen recently and during the 2003-04 period "are the best argument for a resumption of the bull market in Indian stocks," it added.

Naming India among the "potential baby bulls" of the region, alongside Taiwan and Korea, Elliott Wave had said the completion of three waves of fall from their respective highs had made them "strong candidates to rally back to at least near their all-time highs -- if not beyond".

Elliottt Wave has also classified Japan, Singapore, Hong Kong, China and Australia as long-term bear markets, while the "potential baby bulls" have been described as those which investors should consider for long-term investments.

The report further noted that India had experienced long- running bearish phase in the past, indicating that the next bull-run could continue beyond its most recent all-time high levels.

Until the early 2000s, the long bear market in India lasted for 11 years (1992-2003).

"The five-wave pattern from 2003-08 is a road map to the future. Elliott waves progress in five waves and correct in three waves," research group's Asia-Pacific Financial Forecast editor Mark Galasiewski said.

source:the economic times

FII ACTIVITY DURING APRIL 2010

Date	Equity (Rs. Crore)			Debt (Rs. Crore)
	Gross Purchase	Gross Sales	Net Purchase /Sales	Gross Purchase	Gross Sales	Net Purchase /Sales
29-Apr-2010	4,050.20	3,260.20	790.00	632.20	1,089.60	-457.40
28-Apr-2010	2,556.50	2,587.80	-31.30	316.60	1,013.30	-696.70
27-Apr-2010	2,683.50	2,523.50	160.00	111.00	14.10	96.90
26-Apr-2010	2,294.20	1,728.30	565.90	2,067.70	532.90	1,534.80
23-Apr-2010	3,241.50	2,361.60	879.90	1,737.40	472.40	1,265.00
22-Apr-2010	4,238.60	2,490.90	1,747.70	1,018.20	1,025.00	-6.80
21-Apr-2010	2,738.50	2,473.70	264.80	962.80	1,206.80	-244.00
20-Apr-2010	828.60	726.70	101.90	3,075.80	1,755.50	1,320.30
19-Apr-2010	1,747.60	2,223.30	-475.70	300.50	554.10	-253.60
16-Apr-2010	2,519.00	2,155.30	363.70	1,768.50	317.50	1,451.00
15-Apr-2010	3,978.00	3,634.90	343.10	620.80	298.90	321.90
13-Apr-2010	3,278.10	2,670.30	607.80	545.70	765.30	-219.60
12-Apr-2010	2,447.40	2,202.90	244.50	443.10	871.10	-428.00
09-Apr-2010	2,631.10	2,373.40	257.70	915.20	339.20	576.00
08-Apr-2010	2,109.40	1,961.40	148.00	871.50	1,092.40	-220.90
07-Apr-2010	3,427.30	3,009.60	417.70	1,701.70	571.80	1,129.90
06-Apr-2010	2,647.00	2,056.70	590.30	301.10	581.30	-280.20
05-Apr-2010	2,489.40	1,518.90	970.50	453.80	1,409.60	-955.80
01-Apr-2010	5,881.60	4,397.40	1,484.20	631.80	236.40	395.40
TOTAL	55,787.50	46,356.80	9,430.70	18,475.40	14,147.20	4,328.20

WEEKEND READING

EXCLUSIVELY FOR ENGINEERS:

Ques: We all know that 2/10 is 0.2, BUT prove that 2/10 is 2 ??
Answer by all normal students is,
‘Question is out of syllabus.’

BUT Engineering students would proceed to address the same as,
2 = Two,
10 = Ten
So 2/10;
is Two/Ten = wo/en.
Putting the numbers of the Alphabets as per their position, we get
W = 23,
O = 15,
E = 5,
N = 14.
W+O = 38, &
E + N = 19
Therefore 2/10 = wo/en
38/19 = 2
!! HENCE PROVED !!
For Engineers, “It doesn’t matter
‘Answer kya hai?’
They say,
“Answer Kya laana Hai??”

CHEERS