Market News on 21 Feb' 08

WORLD MARKET

Asian markets trading firm; Hang Seng up 333 points

Asian markets were trading firm. Hong Kong's HangSeng rose 1.41% or 333.02 points at 23,923.60.
Japan's Nikkei gained 2.12% or 282.14 points at 13,592.51.
Taiwan's Taiwan Weighted shot up 1.73% or 136.71 points at 8,031.18.
Singapore's Straits Times advanced 1.24% or 37.59 points at 3,064.42.
South Korea's Seoul Composite was up 0.92% or 15.47 points at 1,703.38.

Oil Jumps Past $101 a Barrel on View That the Fed, Seeing Weaker Growth, Will Slash Rates

Oil futures rallied again Wednesday, pushing briefly past $101 a barrel after the Federal Reserve lowered its forecast for economic growth this year, convincing energy investors that the central bank will slash interest rates further. At the pump, meanwhile, gas prices rose another 2 cents overnight.
The Fed said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 percent and 2 percent this year, down from a previous forecast for GDP growth of between 1.8 percent and 2.5 percent.
Oil prices are still within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
Two new economic reports Wednesday suggested the economy is cooling. The Labor Department said its Consumer Price Index, a measure of inflation, rose by 0.4 percent last month, more than economists expected. The Commerce Department, meanwhile, said construction of new homes and apartments rose by 0.8 percent in January, but that applications for building permits, an indicator of future activity, fell by 3 percent.
The reports come a week after the Energy Department, the Organization of Petroleum Exporting Countries and the International Energy Agency all lowered their oil demand growth forecasts for this year.

Japan's Export Growth Unexpectedly Quickens to 7.7%

Japan's export growth unexpectedly quickened in January, as rising demand for cars and steel from China and Russia made up for falling U.S. sales. Exports, the engine that drove almost half of the economy's expansion last quarter, rose 7.7 percent, from December's 6.9 percent gain, the Finance Ministry said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg was for a 6.6 percent increase. Shipments to Asia and Europe rose to records for the month, as growing consumer classes in China, India and Russia create new customers for exporters including Mitsubishi Motors Corp. and Matsushita Electric Industrial Co. Exports to the U.S. fell for a fifth month amid the worst housing slump in 26 years.

Dubai International to invest $5 bn in India, China, Japan

INDIAN MARKET

• It’s well known that Anil Ambani’s Reliance Power lost 17% to close on Rs 372.50 against the issue price of Rs 450 on its debut on the stock exchanges. But what’s not known is that a handful of Mauritius-based foreign institutional investors (FIIs) and a domestic bank offloaded their entire or almost entire shareholding in the company within minutes of the opening bell.
• Reliance Communications on Wednesday said it is consolidating its international businesses under Reliance Globalcom, the newly incorporated umbrella brand for all its overseas businesses.
• The battle for the Mumbai Trans Harbour Link climaxed on Wednesday with Anil Ambani pipping his sibling Mukesh to bag the project.
  A consortium led by Anil won the contract for the Rs4,000 crore project with a promise to build it in four years and recover the costs in five years, 11 months and one day, a ‘concession period’ of nine years, 11 months, one day.
• India's fifth-largest IT company by revenues, HCL Technologies, on Wednesday announced the acquisition of US-based software product company, Capital Stream, for $40 million, in an all-cash deal.
• Blackstone has acquired 10.4% stake in logistics major Allcargo Global Logistics (AGL) for Rs 242 crore.
• Franklin Resources Inc has acquired 49 per cent stake in Vietcombank Fund Management, an investment management firm currently focused on private equity investment in Vietnam.
• Sun Pharmaceutical Industries, India’s biggest drugmaker by market value, has acquired 9.4 per cent stake in Israel’s Taro Pharmaceutical Industries for $38 million, raising its total holding to 34.4 per cent.
• Commercial production of Tata Motors’ “Nano” automobile is expected to begin in October to be preceded by trial production of the car in June-July, Ravi Kant, Managing Director, Tata Motors, said after a visit to the project site at Singur in West Bengal’s Hooghly district on Wednesday.
• Tata Consultancy Services (TCS) has announced a $120 million contract from automotive major Chrysler for application, maintenance and support services.
  The IT services will be in the area of sales and marketing and shared services for Chrysler.
• Reliance Power today announced that the company will allot the proposed bonus shares only to investors who will make the balance payment before February 26.
  According to a release issued by the company to the BSE today, the bonus shares of investors who do not pay the call money by the due date will be kept in abeyance.

BUDGET

Chidambaram may announce cut in excise duty rates across the board from 16 per cent to 14 per cent or sector-specific duty cuts in the budget .
Sectors like pharmaceutical, textile machinery, food processing, paper and auto including two wheelers, tyres are expected to get relief in excise duty.