China Cuts Tax on Share Trading to Bolster Markets

China will cut a tax on share trading from tomorrow to support the country's stock markets after the benchmark equity index plunged 35 percent this year.
The stamp duty will be lowered to 0.1 percent, from 0.3 percent, the government said on its official Web site today.
``The government doesn't want to see a falling market, which cannot serve the purpose of fund-raising for big state companies,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai, which manages the equivalent of about $850 million. ``We are going to see a rally.''
China's benchmark CSI 300 Index plunged this year on speculation the government will step up measures to cool inflation running at an 11-year high and on concern more stock sales will dilute the value of existing equities. The Shanghai Composite Index yesterday dropped by as much as 4 percent yesterday, taking the index 50 percent below its October record

MARKET UPDATES

• Direct or indirect compensation a government provides to private commercial firms in order to promote the export of domestic products. Examples include cash payments, tax exemptions, preferential exchange rates, and government subsidized financing for exports.
• More than half of the total number of IPOs listed on BSE and NSE in the last two years are trading below their offer price. During Apr. 1, 2006 - Mar. 31, 2008, the number of IPOs listed on the Bombay Stock Exchange stood at 150, of which 86 are trading below their offer price.on the National Stock Exchange, of the 162 IPOs listed during the same period, 88 were trading below the issue price and 38 were being traded at a discount of more than 40% of the issue price.
• Crude production in Nigeria, already running below capacity because of security problems, was buffeted again after rebels hit two oil pipelines there Monday. Royal Dutch Shell PLC has been unable to gain access to the pipelines, which feed into a key export terminal, a spokesman said.
• RPL plans setting up greenfield unit in Kuwait.
• Reliance Power to expedite hydropower projects; will invest Rs105bn in three years for 2100 MW.
• Reliance Retail forms 49:51 JV with US based stationary retailer Office Depot.
• Idea Cellular may sell its 16% stake in Indus Towers in December.
• Tata Teleservices Maharashtra (TTML) on Monday said it will seek shareholders' approval for hiving off its tower business into a subsidiary. Following the trend in the telecom industry, the company had announced its decision of hiving off its tower business on April 10. The move would help the company, which has around 3,500 towers now, lay greater focus on the passive infrastructure business that has huge potential.
• Shantanu Prakash, MD and CEO of Educomp Solutions said, “In our flagship product, Smart Class, we have gone from 331 schools in March 2007 to 933 schools in March 2008 - that’s an expansion of about three times. In ICT, again we have done over to 200% growth in number of schools. In MathGuru, the number of subscriptions has gone up by five times. So I think not just in one product, but across the spectrum of Educomp products, we are seeing the growth and penetration happening.”
• Kirloskar Oil Q4 net profit at Rs 36 cr
  Kirloskar Oil Engines has announced its fourth quarter results. The company's Q4 net profit was down at Rs 36 crore versus Rs 46 crore.
  Its net sales were at Rs Rs 617 crore.
• Bajaj Hindusthan has declared its second quarter results. The company's Q2 standalone net profit was up at Rs 43 crore versus Rs 3.70 crore, YoY.
  Its standalone net sales were down at Rs 490 versus Rs 514 crore
• China's sixth-largest bank announced that its first-quarter net profit rose 157 pct from a year earlier to 6.32 bln bln yuan due to strong growth in both interest and non-interest income and a lower tax rate.Among other China banks, Bank of Communications was up 0.12 hkd or 1.14 pct at 10.66, China Construction Bank was up 0.01 hkd or 0.15 pct at 6.54, Bank of China down 0.01 hkd or 0.26 pct at 3.77 and Citic Bank up 0.19 hkd or 3.91 pct at 5.04.
• Ganesh Natrajan, Chairman of Nasscom expects IT companies to grow at 20% for FY09, based on a strong H2. The next six months would be difficult for IT companies.He added that irrespective of the deepening recession, the outsourcing spend would rise.He also expects a favourable government stance on the STPI (Software Technology Parks of India) issue.
• Coming F&O expiery on tips, market is going under consolidation, Steel policy today to be declared today, which is leading heavy selling pressure. Steel sector is facing some depression today.
• The government is looking to revive the IFCI's (Industrial Finance Corporation of India) stake sale process, reports CNBC-TV18, quoting Newswire 18. IFCI may again look to sell 26% stake to strategic investors. The IFCI’s board may consider stake sale at April 29 meet. The IFCI had called off its 26% stake sale plan in December 2007.
• DLF eyeing controlling stake in Orient Express.
• Combining its success in acquiring overseas coal blocks with plans to enter the shipping business, Reliance Power Ltd (RPL), part of the Reliance-Anil Dhirubhai Ambani Group, is exploring getting into the business of selling coal to other big consumers in India. Indonesian coal blocks can support one more 4,000MW imported coal-based power project in India, apart from servicing the needs of our 4,000MW UMPP and the 1,200MW project at Shahpur.
• Indian Bank has announced its fourth quarter and fiscal year 2008 numbers. It has posted 2.98% growth in its Q4 standalone net profit of Rs 242 crore as against Rs 235 crore in same quarter of last year and de growth of 10.47% in net interest income of Rs 513 crore as against Rs 573 crore.

What are the uses of crude oil?

Burning crude oil itself is of limited use. To extract the maximum value from crude, it first needs to be refined into petroleum products. The best-known of these is gasoline, or petrol. However, there are many other products that can be obtained when a barrel of crude oil is refined. These include liquefied petroleum gas (LPG), naphtha, kerosene, gasoil and fuel oil. Other useful products which are not fuels can also be manufactured by refining crude oil, such as lubricants and asphalt (used in paving roads). A range of sub-items like perfumes and insecticides are also ultimately derived from crude oil.
Furthermore, several of the products listed above which are derived from crude oil, such as naphtha, gasoil, LPG and ethane, can themselves be used as inputs or feedstocks in the production of petrochemicals. There are more than 4,000 different petrochemical products, but those which are considered as basic products include ethylene, propylene, butadiene, benzene, ammonia and methanol. The main groups of petrochemical end-products are plastics, synthetic fibres, synthetic rubbers, detergents and chemical fertilisers.

Crude oil nears $120 on supply woes, dollar slide

Crude oil futures popped to a fresh record Tuesday as supply threats gathered and the dollar tumbled against the euro. Light, sweet crude for May delivery rose to a new trading record of $119.90 a barrel before retreating to trade up $1.70 at $119.18 on the New York Mercantile Exchange. The May contract expires on Tuesday. More active June Nymex crude was trading at $118.50 a barrel, up $1.87. June Brent crude on the ICE futures exchange was also up $1.62 to $116.05 a barrel, after climbing to a record high $116.75 a barrel. Crude production in Nigeria, already running below capacity because of security problems, was buffeted again after rebels hit two oil pipelines there Monday. Royal Dutch Shell PLC has been unable to gain access to the pipelines, which feed into a key export terminal, a spokesman said. As well, a joint venture that includes Shell said it had been forced to shut in around 169,000 barrels a day of crude exports from its Bonny terminal in southern Nigeria for the rest of April and May after a separate pipeline attack last week. A strike threatened by workers at Ineos PLC's 196,000 barrel-a-day Grangemouth refinery in the UK also stoked worries that a shutdown could disrupt production from North Sea oil fields, including the Forties pipeline system. Through Monday, oil futures have risen 22 percent year-to-date. A mix of production snags and macroeconomic factors have fueled its record run. "The biggest difficulty for oil producers will be if the speculative funds that have flooded into commodity markets moves on," said Mike Fitzpatrick, an analyst at brokerage MF Global, in a note. "While there is no indication that the tidal wave of these funds is anywhere near cresting, it is very easy for them to flow in to and out of markets with the stroke of a computer key, so the higher prices go, the more vulnerable the market is to violent, albeit short reversals." Fitzpatrick said he doubted such a pullback would take place before Wednesday, when the Energy Information Administration delivers its weekly U.S. oil inventory estimates. On average, analysts polled by Dow Jones Newswires expect the data will show crude stockpiles rose by 1.5 million barrels last week, while gasoline stockpiles fell by 2.3 million barrels and distillate stockpiles remained unchanged. The dollar also dropped to a record low against the euro, which was recently at $1.5994. The greenback's decline has generally supported dollar-denominated oil futures as exporters adjust their prices to compensate for its weakness. Dollar deterioration and inflation expectations are "the most important factors" behind oil's price rise, Societe Generale analysts said in a note. "At the same time, the supply and demand fundamentals have been supportive secondary factors, but important nonetheless." In other Nymex trading on Tuesday, May gasoline futures rose 2.59 cents to $3.005 a gallon after earlier rising to a trading record of $3.02, while May heating oil futures rose 0.88 cent to $3.3202 a gallon after earlier rising to their own trading record of $3.35. May natural gas futures fell 8.2 cents to $10.652 per 1,000 cubic feet.

Grain output seen at record 227 mn tonne in 2007-08

Foodgrain production in crop year 2007-08 is estimated to have touched a record 227.32 million tonnes (mt), with output of rice, wheat, coarse grains, pulses, oilseeds and cotton crossing previous highs. The Centre’s third advance estimates for the crop year (June-May) released on Tuesday showed an over 10 mt increase in grain production over the final estimates for 2006-07, which stood at 217.28 mt. This translates to a change of 4.6% over last year’s final estimates. Rice production is estimated at an all-time high of 95.68 mt in 2007-08 against an average 92 mt production annually. Wheat production has been estimated at a record 76.78 mt compared to last year’s 75.81 m tonne, a 1.3% hike. The previous high was 76.36 m tonnes. Coarse cereals production at 39.67 mt was 5.75 mt above last year’s level, a good 17% jump. Pulses production is pegged at 15.19 mt in 2007-08, including toor output of 3.03 mt, the highest ever. Oilseeds output has been pegged at a new high of 28.21 mt compared to 24.29 mt in 06-07, with groundnut production topping with 8.87 mt compared with only 4.86 mt. However, there has been a 13.6% drop in mustard production, primarily due to inclement weather, agriculture secretary P K Mishra said. Just a day prior to the farm ministry’s planned state conference to focus on strategies for increasing production of rice and coarse cereals — the latter may be included in the National Food Security Mission — the current estimates leave limited scope for optimism against the prevailing high in grain prices both at the domestic and the global level. Inflation is at a three-year high and given the lower production in the previous year, carry over stocks have been impacted. This has forced the government to import 1.8 mt of wheat. This beefed up the buffer stock to the prescribed level for April 1, 2008 but there are already indications that the government may have to import wheat again this year, even while imposing restrictions on rice export. The demand for foodgrains was officially estimated at 214.03 mt for 2007-08, while the estimate for demand by the end of the 11th Plan period is pegged at 234.26 mt. Significantly, analysts feel the government has underestimated rising demand and consumption levels and underpegged the levels. Rice shortfall, for instance, was pegged by the government at around 1-1.5 m tonnes but analysts peg the shortfall at around five million tonnes. The met department has forecast that Southwest monsoons this year will be near normal, spelling good news for crop output this year, too. However, analysts maintain the measures taken by the government, including scrapping duty on crude edible oil imports and a reduced 7.5% import duty for refined palm and soya oils, could have an impact on farmers’ decision to plant oilseeds this year. Also, the government has not announced the expected bonus of Rs 100-150/ quintal for wheat although its price is at a high of Rs 16 per kg in the global market. This again could impact the wheat crop while export restrictions on rice could push farmers to planting more remunerative commercial crops instead of grains.

MARKET PREDICTION

GLOBAL CUE ARE NEGATIVE DUE TO OIL&GAS PRICES .
ONE MORE DAY LEFT FOR NIFTY EXPIRY, TOTAL ROLLOVER SEEN 39% .
METAL AND ENERGY SPACE OBSERVED SIGNIFICANT ROLL OVER IN THE MARKET AFTER JANUARY MESSED UP.
TOTAL MARKET OI IS 72K CR NEXT MONTH OI IS 30K CR.
PUT CALL RATIO IS 1.35%.
LEVEL OF NIFTY IS 5000-5060-5100
MARKET IS HEADING TOWARDS PSYCHOLOGICAL LEVEL 5060 WHICH IS 200 DMA.
IF MARKET SUSTAIN ABOVE THIS IT WILL TOUCH 5200 OR 100 D M A 5400 LEVEL NEAR TERM.
HAVE A NICE TRADING DAY

-MR. SAM