Market Commentary-11/03/2008

Sensex regains 16,100; realty, capital goods shares rally

Local markets managed to post decent gains in choppy trade boosted by steady buying demand for index pivotals and short covering at lower level after the recent fall. Firm global markets also lifted the sentiment. The total turnover on BSE crossed Rs 7000 core. It had opened lower tracking weak US markets. European markets extended early gains. Asian markets also reversed early losses to post gains.

17 shares from the 30-member Sensex pack advanced. The market breadth was strong after initial weakness. Shares from real estate, capital goods, sugar and oil & gas rallied on fresh buying.

The 30-share BSE Sensex gained 199.43 points or 1.25% at 16,123.15. It opened slightly lower at 15,778.27 and slipped further to touch a low of 15,739.05 in early trade. At the day’s low, the Sensex lost 184.67 points. It gained 244.41 points at day’s high of 16,168.13 hit in early afternoon trade.

China's trade surplus shrinks

China's trade surplus has shrunk to roughly a third of the level in the same month a year ago.

Customs authorities in China have put the figure at US$8.56 billion dollars in February.

Economists had been expecting a weakening of export performance, due to economic woes in the US, which have made consumers less likely to but Chinese-made goods.

They have also warned that China's exports are under threat from a variety of factors, including a strengthening of the yuan, the local currency.

Market News-11/03/2008

L&T takes a hit on bad hedge call disclosure
Engineering major Larsen & Toubro’s one of its subsidiaries in West Asia may incur a loss of Rs 200 crore on commodity-hedging bets gone wrong, erasing last year's profit at that unit. L&T International FZE, a Sharjah (United Arab Emirates)-based arm of L&T, may post a loss of Rs 200 crore because it bet against a decline in prices of zinc and other commodities.
L&T has a large exposure to commodities. It has an order book of $6 billion of which 30 to 40 per cent relates to the commodities. However the company has maintained that it has currently reduced exposure to a considerable extent. Further it has maintained its guidance on order booking, sales and operating margins for the year with an emphasis on improvement in the operating margins.

Rupee depreciates at an accelerated rate
After almost a year of sharp appreciation against major currencies, Indian rupee has actually depreciated in the last seven sessions between 27th February and 10th March 2008. During this period, Indian rupee depreciated by 6.9% against Japanese Yen, 4.7% against Euro, 3.7% against Great Britain Pounds and by 2.3% against US dollars. This has come as welcome breather for the exporters (particularly IT & textiles companies), provided they had not taken otherwise call and hedged their positions.

Government expects fall in spectrum charges
Indian telecom subscriber base grew by 28.5% in FY 2004-05, but the growth leaped to 44.4% in FY 2005-06, and to 44.9% in FY 2006-07. The growth continues, but at a decelerated pace on the higher base, at 36.8% in the ten months ended January 2008. The spectrum charges collected by the Government from the mobile operators were around Rs 1,957 crore in FY 2006-07, but have zoomed by over 74% on annualized basis to about Rs 2,845 crore in the ten months ended January 2008