DAILY REPORT FOR 31 OCTOBER, 2007

NIFTY: - Open 5917 High 5976 Low 5833 Close 5868 (-37 points)

P/E 26.01 P/B 6.15 Adv 17 Dec 33

Supp 5830/5740/5625 Res 5890/5930/5980

SENSEX: - Open 20103 High 20238 Low 19694 Close 19783 (-194 pts)

Supp 19700/19560/19200 Res 20030/20240/20450

CRR hike dampens sentiment:-

· It was a volatile day of trade but Banks and Auto stocks got sold off after RBI hiked CRR by 50 bps. Finally we closed 194 points down on the Sensex.

· Volumes were decent - Rs 24636 Cr in spot market and F&O Vol at Rs 89601 Cr.

· Breadth was a concern – BSE Adv 1218 Dec 1757 Unch 83 NSE Adv 360 Dec 728 Unch 33

· Foreign and Domestic investors both sold Indian Equity worth Rs 566 Cr. FIIs continue to hedge as they sold Rs 561 Cr worth Stock and Index Futures.

Top Gainers: - Sterlite Inds, ABB, RPL, Rel Energy, Siemens

Top Losers: - Maruti, M&M, SAIL, PNB, Tata Motors

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Wednesday:-

· US Fed meeting has started yesterday and today night its decision will come out on whether interest rates will be cut or not. Last time when Fed cut the rates, we saw a massive rally in our markets.

· Earnings season is coming to end and most of the growth has been discounted by the market already.

· N-Deal is still an uncertainty as Congress and Left are yet to decide on the issue.

· A correction until 19200-19300 is possible for the Sensex and it can come intraday also.

· 19560 should provide a good support and until that is broken, we will remain ranged between 20100 and 19600.

· Though Sensex has traded above 20000 for a lot of times intraday, it has not been able to close above it. A closing above 20000 can be positive as far as strength of the rally is concerned. We have to see if a Fed rate cut can make it happen. 6000 on the Nifty is also awaited eagerly.

· APIL, ACC, India Cem are some of the weaker stocks in the market and they can touch lower levels.

· ACE (412):- Buy this stock as it can achieve 450-460 levels in 3-4 days time.

(Keep SL in short-term trades)

Results today – 3M India, Aarti Inds, Aditya Birla Nuvo, Aftek, Agro Dutch Ind, Ahmednagar Forg, AIA Engg, Alok Inds, Amar Remedies, Amtek India, Ankur Drug, Ansal Hsg, Ansal Prop, Aptech, Archies, Ashtavinayak, Assam Co, Astra Micro, Atlas Cycle, Auro Pharma, Axis IT&T, BAG Films, Bank Of Baroda, Berger Paints, Bharti Airtel, Birla Corp, Birla VXL, Blue Star Info, Bombay Dyeing, BPCL, BSEL Infra, Cambridge Tech, Canara Bank, Celebrity Fashion, Central Bank, CESC, Cinemax, Cosmo Films, DCB, Deccan Aviation, Elgi Tread, Emami, ESS DEE, Essar Oil, Essar Steel, Eurotex, Eveready Ind, Financial Tech, Ganesh Hsg, GBN, Glenmark, GTN Tex, Guj Sidhee Cem, Hanil Era Tex, Harrisons Malay, HFCL, Hindalco, HMT, HTMT Global, HUL, Hyd Ind, Indoco Rem, IOL Broadband, Ispat Ind, IVP, IVR Prime, IVRCL Infra, Jayshree Tea, K Sera Sera, KEC Int, KEI Inds, Kinetic Motor, Liberty Shoes, Lloyds Steel, Lyka Lab, Mangalore Chem, Mcleod Russ, Mcnally Bh Engg, Media Video, MTNL, Nagarjuna Const, Neyveli Lig, Oswal Chem, Padmalaya Tele, Patni Comp, Petron Eng, Phillips Carbon, Power Grid Corp, Prithvi Info, Punj Lloyd, Rana Sug, Rajshree Sug, RCom, RS Soft, RSWM, Ruchi Soya, Sabero Org, SAL Steel, Shriram City, Shyam Tele, Siyaram Silk, STC India, Subhash Proj, Sunflag Iron, Sunil HiTech, Suryalakshmi Cott, Taj GVK Hotel, Talbros Auto, Tamil Tele, Tata Mot, Trigyn Tech, Tube Inv, TV18, Uniply, United Spir, Usha Martin, Vaibhav Gem, Venkeys, Videocon Inds, Visa Steel, Vivimed Lab, VSNL, Wanbury, WS Inds, XL Tele, Zenith Birla

RBI hikes CRR http://www.dnaindia.com/report.asp?newsid=1130711

Infosys pursuing $1,500 mn plus bills overseas http://www.dnaindia.com/report.asp?newsid=1130742

US mounts pressure, Pranab turns to Left http://www.ibnlive.com/news/us-mounts-pressure-pranab-turns-to-left/51423-3.html

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 30 OCTOBER, 2007

NIFTY: - Open 5708 High 5922 Low 5708 Close 5905 (+203 points)

P/E 26.35 P/B 6.18 Adv 41 Dec 9

Supp 5890/5840/5730 Res 5935/5980/6065

SENSEX: - Open 19621 High 20024 Low 19621 Close 19977 (+734 pts)

Supp 19850/19730/19600 Res 20050/20130/20300

20K conquered:-

· After a breathtaking opening, Sensex consolidated all the gains and touched 20K in late trade. It closed just below that magical figure and was up 734 points. Banks, Capital Goods and ONGC were major leaders.

· Volumes were good - Rs 21803 Cr in spot market and F&O Vol at Rs 69537 Cr.

· Breadth was positive– BSE Adv 1700 Dec 1288 Unch 70 NSE Adv 644 Dec 455 Unch 22

· Both FIIs and DIIs went on a buying spree as they collectively bought Rs 1323 Cr in Spot Market. In Derivatives segment, FIIs bought Rs 1380 Cr worth Nifty Fut and sold Rs 28 Cr of Stock Fut.

Top Gainers: - Siemens, L&T, RPL, HDFC, BHEL

Top Losers: - BPCL, M&M, Ranbaxy, TCS, Cipla

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Tuesday:-

· RBI Credit Policy will be out today and any hike in CRR or other rates may be a bit negative for the markets. Auto and Banks will see some selling in that case.

· Next psychological milestone is 6000 for the Nifty, 5840 should be considered as a good support intraday. Selling from higher levels is not ruled out.

· Sugar Stocks look attractive. Bajaj Hind, Renuka and Balrampur Chinni can outperform.

Results today – Aarti Drugs, Aarvee Denim, Ajanta Pharma, APIL, Asian Ele, Balaji Tele, Bharat Rasayan, BL Kashyap, Bong Ref, Cambridge Sol, CBoP, Chennai Petro, Crest Anim, Crompton Greaves, DLF, EIH, Emco, EIL, Esab, Everonn, GHCL, HDFC, HOCL, IMP Power, Indo Rama Synth, Indo Tech Trans, IGL, Indus Fila, IOC, Ispat Inds, JB Chem, Karnataka Bank, KEC Infra, Kesoram, Logix Micro, Mah Seamless, Mirc Ele, Nectar Life, Nestle, ONGC, Parsvanath, Raj TV, Ramkrishna Forg, ROHL, SAIL, Sesa Goa, Shreyas Ship, Sterlite Opt, Tata Chem, Tata Power, TTML, Timken, Torrent Pharma, Unitech, Varun Ship, Vesuvius, Vishal Exp, Zenith Info, Zylog

http://www.business-standard.com/bsonline/storypage.php?leftnm=11&bKeyFlag=IN&autono=29445

RBI hints at no changes in rates

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 29 OCTOBER, 2007

NIFTY: - Open 5564High 5716 Low 5513 Close 5702 (+134 points)

P/E 25.57 P/B 5.96 Adv 41 Dec 9

Supp 5640/5570/5500 Res 5740/5830/5880

SENSEX: - Open 18823 High 19276 Low 18629 Close 19243 (+472 pts)

Supp 19180/19000/18820 Res 19500/19970/20450

Capital Goods, Auto and Banks lead:-

· After initial hesitation bulls snatched the control and consistent buying was seen the whole day. L&T and SBI were the stars in the Nifty.

· Volumes were lower - Rs 19967 Cr in spot market and F&O Vol at Rs 73836 Cr.

· Breadth was very good – BSE Adv 1814 Dec 1159 Unch 84 NSE Adv 725 Dec 368 Unch 28

· FIIs sold Indian Equity despite a good rally. They sold Rs 1237 Cr in Cash market. But DIIs were buyers to the tune of Rs 965 Cr. Foreign Investors sold Index futures worth Rs 1600 Cr. They sold in Stock Futures too worth Rs 487 Cr. This means they must be hedging their delivery exposure.

Top Gainers: - Tata Steel, Nalco, VSNL, Ster Inds, BPCL

Top Losers: - Cipla, Dr Reddy, ACC, ABB, Zee Enter

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Monday:-

· After correcting heavily last week, we have recovered the whole distance as Sensex gave a new all time high closing on Friday. Nifty is yet to do that feat as its all time high sits at 5736.

· P Chidambaram, the Finance Minister of India has talked about controlling capital inflows into India on Friday and that statement has to be taken a bit cautiously.

· This week is characterized by 2 major events. One is the RBI Credit Policy on Tuesday and the other is the Fed meeting on Wednesday. 5450-5500 should be considered as a good weekly support in case of any decline. One is advised to be light on positions for some time.

· 5640 should be considered as intraday support for the Nifty and we can see 5830 and 5880 once we cross previous high around 5740.

· CAIRN (204):- The stock can target 240-250 levels in 15 days time. Buy with SL of 192.

Results today – ABG Shipyard, Adani Enter, Aegis Log, Akruti Nirman, Apollo Sindh, Asian Granito, BoI, BHEL, CBoP, CCCL, Core Proj, Dhanalax Bank, Easun Reyrl, EID Parry, Electrosteel, FirstSource Sol, Fortis Health, Genus Power, GMR Ind, GMDC, Hanung Toy, HDFC, Hi-tech Gear, Hinduja TMT, House of Pearl, HPCL, ICRA, Ind-swift Labs, Indiabulls Real Estate, Info Edge, IOB, Ipca Lab, ITI, Jagran, JP Hydro, Jet Air, Jindal Steel, JM Fin, Kalpataru Power, Karur Vysya, Kaveri Seed, Kernex Micro, Lakshmi Machine, Lumax Auto, Mah and Mah, Malu Paper, Manali Petro, Maruti Suzuki, Max, McDowell, Midday Multi, Monsanto, Mphasis, MRPL, Mukand, NCL Ind, Neocure Therap, Nirma, Omax Auto, OBC, Oudh Sugar, PNB, RPG Cab, Samtel Col, Simplex Infra, SMS Pharma, Sobha Dev, SREI Infra, Sterlite Ind, Surya Roshni, Sutlej Tex, Take Sol, Tata Tea, Time Techno, Torrent Power, Uniphos Enter, United Phos, VIP, Vishal Ret, Voltamp Trans, VST, Zodiac Cloth

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 26 OCTOBER, 2007

NIFTY: - Open 5499 High 5605 Low 5469 Close 5568 (+72 points)

P/E 25.01 P/B 5.82 Adv 36 Dec 14

Supp 5530/5465/5400 Res 5670/5735/5870

SENSEX: - Open 18519 High 18900 Low 18459 Close 18770 (+257 pts)

Supp 18700/18460/18240 Res 18950/19200/19420

Metals shine:-

· Markets started flat. But buying was seen in Metal stocks especially Nalco, SAIL and Tata Steel. Finally Sensex could close up by 257 points. Nifty too touched 5600 intraday.

· Volumes were expectedly better than Wednesday because of F&O expiry - Rs 23477 Cr in spot market and F&O Vol at Rs 103930 Cr.

· Breadth was better – BSE Adv 1729 Dec 1245 Unch 82 NSE Adv 606 Dec 478 Unch 37

· FIIs were overall cautious just before the SEBI announcements yesterday. They were sellers to the tune of Rs 625 Cr in spot market. Also they sold Rs 535 Cr in both Stock and Index Futures markets. DIIs bought Indian equity worth Rs 788 Cr yesterday.

Top Gainers: - Tata Steel, Nalco, VSNL, Ster Inds, BPCL

Top Losers: - Cipla, Dr Reddy, ACC, ABB, Zee Enter

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Friday:-

· There is nothing new in the SEBI announcements yesterday. Previous suggestions have just been confirmed as rules now. It is a clear positive in the long term. There has not been further tightening on any front. Also no liberty has been given in any matter. But we need to see how markets will react to this.

· Uncertainty is very dangerous for the markets and now it has been removed by SEBI’s clarifications yesterday. Market should be watched for some time before jumping on to buying / selling. Next trigger is RBI credit policy on Tuesday.

· Banks and Auto stocks are pretty buoyant for last 2-3 days as RBI credit policy is to be announced on 30th of this month. A neutral policy or a rate cut will be welcomed by the market. But a rate hike will be punished quite heavily. Also US Fed meets on 31st October. That event will also be watched out.

· Technically speaking, 5530 is a good support for the market in intraday trade. Some correction towards 5460 and 5400 can happen if that gets broken. On the upside we have resistance at 5670 and above that a new high is expected.

Results today – Ador Welding, Allsec, Andhra Bank, Apollo Tyres, Asahi India, Atlanta, Atul, Avaya Global, Bata, BEML, Bharat Bijlee, Bharat Elec, Bharat Forge, Cadilla, Carborundrum, City Union Bank, Clutch Auto, Colgate, CRISIL, D-Link, Dabur Pharma, Deccan Chronicle, Dredging Corp, Educomp, Emkay, Excel, Gabriel, GVK Power, HDIL, HCC, HT Media, I-Flex, ICI, ICSA, Indian Hotels, ITC, Jindal Stain, JK Cem, Jyoti Struct, Kale Cons, Kotak Mah Bank, Lanco Infra, L&T, Micro Tech, Moser Baer, Nagar Fert, Oil Country, OBC, Pantaloon, Phoenix Lamp, Piramyd Ret, Raymond, SPIC, Syndi Bank, Tata Steel, Texmaco, Thomas Cook, TV Today, Valecha, Vimta

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 25 OCTOBER, 2007

NIFTY: - Open 5477 High 5577 Low 5419 Close 5496 (+23 points)

P/E 24.66 P/B 5.75 Adv 25 Dec 25

Supp 5380/5320/5260 Res 5520/5580/5670

SENSEX: - Open 18727 High 18832 Low 18317 Close 18512 (+20 pts)

Supp 18320/18200/18000 Res 18560/18850/19200

Flat day:-

· Indices did see-saw whole day and closed with a small gains of 20 points on the Sensex. Suzlon was the star of the day with 10% gains.

· Volumes were higher - Rs 19787 Cr in spot market and F&O Vol at Rs 107495 Cr.

· Breadth was positive – BSE Adv 1693 Dec 1294 Unch 67 NSE Adv 586 Dec 492 Unch 43

· Both FIIs and Domestic Institutional Investors were buyers in spot market. FIIs bought Rs 1301 Cr and DII bought Rs 383 Cr Equity. FIIs were sellers in Index Fut Rs 1501 Cr and buyers in Index Opt Rs 249 Cr. They sold stock fut worth Rs 361 Cr.

Top Gainers: - Suzlon, Rel Energy, RPL, SBI, Tata Power

Top Losers: - GAIL, ONGC, Tata Motors, Hero Honda, Infosys

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Thursday:-

· We could not hold on to the gains yesterday and closed flat. So today can be a negative day also. 5380 should work as a good support for the Nifty and a correction around that is not ruled out. Resistance for today is 5580 and 5670. ONGC and Reliance can determine the trend of the market and they should be watched today.

· SEBI is to announce decision on P-Notes today. So the street will watch what the regulator has to say. Any negative surprise there can lead to a good correction in markets.

· One needs to be very stock-specific at this point of time and should avoid big leveraged positions.

· Sun Pharma (996):- Buy for target of 1075-1090. Keep SL at 1060.

(Keep SL in short-term trades)

Results today – ABB, ACE, Alfa Laval, Alps Inds, Autoline Ind, Ballarpur Ind, BHEL, Bank of Rajasthan, Cairn, Century, Century Enka, Chambal Fert, Cranes Soft, Cummins, Datamatics Tech, DS Kulkarni, Elecon Eng, Euro Cera, Everest Ind, FAG Bearings, Federal Bank, Gillette India, GSPL, Hitachi Home, HOV Serv, Hyderabad Ind, Idea Cell, ING Vysya Bank, JK Paper, Liberty Shoe, M&M Fin, Motherson Sumi, Munjal Showa, Natco Pharma, Nicholas Pira, NIIT, NIIT Tech, NOCIL, Peninsula, PFocus, RCF, Redington, Rel Cap, Sagar Cem, Shrenuj, STFC, SRF, Sun Pharma, Tata Coffee, Tata Inv Corp, UTV, Voltas, Zuari Inds

Market keeps date with SEBI for final word on P-notes issue http://economictimes.indiatimes.com/Investors_await_SEBIs_final_word_on_PNs/articleshow/2488195.cms

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 24 OCTOBER, 2007

NIFTY: - Open 5185 High 5488 Low 5176 Close 5473 (+289 points)

P/E 24.53 P/B 5.72 Adv 45 Dec 5

Supp 5380/5330/5275 Res 5500/5590/5670

SENSEX: - Open 17910 High 18542 Low 17910 Close 18492 (+878 pts)

Supp 18300/18150/18000 Res 18550/18860/19200

Big rally:-

· Consistent buying was seen whole day especially in banking and capital goods stocks to take the Sensex up more than 900 points intraday.

· Volumes were good - Rs 17657 Cr in spot market and F&O Vol at Rs 97393 Cr.

· Breadth was fantastic for a bullish day – BSE Adv 2223 Dec 762 Unch 88 NSE Adv 914 Dec 176 Unch 31

· FIIs bought Rs 390 Cr in Spot Market. Domestic Institutions bought Rs 37 Cr Equity. FIIs were buyers in Index F&O Rs 2329 Cr. They sold Stock Fut worth Rs 205 Cr.

Top Gainers: - BHEL, Rel Energy, SAIL, Unitech, NTPC

Top Losers: - HCL Tech, Ambuja Cem, TCS, Wipro, Infosys

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Wednesday:-

· US Markets are positive with all Indian ADRs gaining. Major gainers were Satyam 12%, VSNL and HDFC Bank 7% each.

· The upward momentum should continue. 5590 and 5670 are levels that need to be achieved as quickly as possible. A flat day in a day or two will mean some weakness in days to come.

· 5380 is nearest support for the day and that means intraday corrections, if they occur can be large.

· Indraprastha Gas (123):- Buy for target 142-146.

· Sobha Dev (922):- The stock can target 1020-1030. Buy with SL of 890.

(Keep SL in short-term trades)

Results today – 3I Infotech, Allied Dig, Bank of Mah, Blue Star, Castrol, Cipla, Dabur India, DCM Shriram Cons, DCW, Dishman Pharma, Dr Reddy, Eastern Silk, Geodesic, GIC Hsg Fin, Guj Amb Exp, Guj Gas, GIPCL, Hind Mot, Hotel Leela, JBF, JK Lakshmi Cem, Krebs Bio, Lupin, Mah Ugine, Marico, Merc Line, Mys Cem, Navneet, Nitco Tiles, NRC, Opto Circ, Page Inds, Sadbhav, Sakthi Sug, Sun TV, Teledata, Tourism Fin, TVS Mot, Uco Bank, Union Bank, Viceroy Hot, Vijaya Bank

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

Why Participatory Notes are dangerous

Participatory Notes (PN) — a general name used for the investment by Foreign Institutional Investors (FIIs) through Offshore Derivative Instruments (ODIs) such as Participatory Notes, Equity-Linked Notes, Capped Return Notes and Participating Return Notes — have created a storm in the stock market, with SEBI coming out with a draft for discussion to regulate them, the RBI suggesting that they be phased out, and the Finance Minister assuring that the Government is not going to phase them out.

First things first. Let us clearly understand the fundamental issues. The PNs are a slap on the face of every citizen who is an investor. For a person to invest even in one share, several KYC (know your customer) forms have to be filled up, and PAN numbers and proof of address, etc., provided. For the PN investor the system is totally silent on even elementary information. The FIIs issue PNs to funds/companies whose identity is not known to the Indian authorities.

Hence, the PN system is blatantly discriminatory and seems to favour ghost investors. Any self-respecting market, if it discriminates at all, does so against outsiders. But we have done the unthinkable.

We should recognise and internalise the fact that funds are in search of markets, and not the other way. Given the demographic shift in the developed markets (where pension funds have to locate markets to get returns for longer periods) and the lack of huge opportunities in long-term projects, it is natural that global funds are in search of markets.

The PN route, through which a section of investors is participating in our markets, is a mystery wrapped in a puzzle, crammed inside a conundrum and delivered through a riddle. These are address-less funds that could be from dubious sources and the clamour for it is intriguing, if not outright suspicious.

Current Scenario

According to the SEBI Web site, the current position of these instruments is as follows: “Currently, 34 FIIs / Sub-accounts issue ODIs. This number was 14 in March 2004. The notional value of PNs outstanding, which was at Rs 31, 875 crore (20 per cent of Assets Under Custody of all FIIs/Sub-Accounts) in March 2004, increased to Rs 3,53,484 crore (51.6 per cent of AUC) by August 2007.

The value of outstanding ODIs, with underlying as derivatives, currently stands at Rs 1,17,071 crores, which is approximately 30 per cent of total PNs outstanding. The notional value of outstanding PNs, excluding derivatives as underlying as a percentage of AUC is 34.5 per cent at the end of August 2007.” (SEBI – Paper for Discussion on ODIs).

This implies that more than 50 per cent of the funds are flowing through this anonymous route which needs a re-think on this entire issue. This brings us to the question about who are the investors interested in Indian Papers.

Who uses the PN route?

The first category is the regular funds whose twin objectives are returns and more returns on a 21*7*365 basis. They are interested in India since the India story is very good and returns are attractive compared to developed markets. The second category is prodigal money returning. It is not a secret that a large number of politicians/bureaucrats/business-persons have accumulated wealth abroad. This has been accumulated by under-invoicing/over-invoicing, by corruption in contracts and gifts from abroad; and by not bringing in legitimate receipts.

The third category is those foreign governments/entities who would like to acquire/control Indian entities by taking them over.

The fourth category is the terror financiers who could find this route attractive and simple. The first category does not have any reason to use the “anonymous” route since the aim is to earn returns /repatriate and benefit out of interest rate and currency value arbitrage. They enter and exit as per these calculations and are not shy about the greed for maximum returns. They pay the taxes applicable and laugh all the way to the bank with bonus incentives.

The only issue is that currently the stock market is the only route for investing while several other “unlisted” sectors, such as trade, transport, restaurants and other services are starved of funds. Maybe methods should be evolved to get these regular global funds to invest not just in the top ten shares of the stock market but in the needs of the large non-corporate or “ unlisted” segments of the economy, through NBFCs. That would ease the volatility in the market since currently large funds are chasing too few shares of the Sensex or Nifty.

No more ‘safe havens’

The second category will be enthusiastic in bringing the money back into India since the KYC (Know your Customer) norms in many so-called “safe” territories like Switzerland are becoming tougher — particularly after 9/11— and the India story is very interesting and the returns and growth prospects are very good. The Government can always think of an “Amnesty Scheme” for such “prodigal funds” in the form of “no questions asked” about the source. But, once the funds are brought in, then all the KYC norms must be followed, with minimum legal and tax hassles. After all, such amnesty schemes for the domestic black-money holders in the past have met with reasonable success. Otherwise, a Special Purpose Vehicle (SPV) can be created which can be dollar-denominated to hold these funds at attractive rates and which are converted over a period of time to minimise the flow impact.

Harmful for companies

The third category spells danger for domestic companies since the unknown entity may be targeting the local company without its knowledge. With reasonable control they can pressure the current owners to settle with them or even try taking over.

This becomes more ominous in the context of several sovereign funds, like that of China, using the private equity companies to manage their funds which are non-transparent.

These PEs could use other vehicles to acquire on behalf of these sovereign funds and it may be possible that Chinese or West Asian sovereign funds may hold indirectly shares in Indian companies, particularly in software or oil or telecom, which are critical sectors.

The fourth category is the one to be worried about. The terror financier will be happy on two counts, namely the anonymity provided by these instruments and the domestic regulations on gifting the shares.

Also important is the issue of the sale of these PNs to entities that could be inter-connected to the original buyers.

In other words, the original buyer and to whom he sells could belong to inter-connected terror entitities, in which case the global entity could have succeeded in transferring funds to India with ease and anonymity.

It is not without basis that the National Security Advisor (NSA) has cautioned against terror-financing through the banking and stock market channels.

That is a cause for concern. Why are we insisting on the anonymity of the investor and the sources? Why not have confidence in the India story and realise that we can get funds with addresses since we have arrived on the global arena?

We should distinguish between clean global flows and dubious flows as a responsible country with a remarkable growth story.

(Source: Business Line)

DAILY REPORT FOR 23 OCTOBER, 2007

NIFTY: - Open 5202 High 5247 Low 5070 Close 5184 (-31 points)

P/E 23.28 P/B 5.42 Adv 25 Dec 25

Supp 5160/5130/5050 Res 5270/5330/5400

SENSEX: - Open 17259 High 17704 Low 17171 Close 17613 (+54 pts)

Supp 17500/17370/17000 Res 17750/18000/18190

Banks provide support from lower levels:-

· Markets were sold off in initial trade but recovered as buying was seen in Banks especially ICICI Bank. HDFC was the top gainer.

· Volumes were lower - Rs 15736 Cr in spot market and F&O Vol at Rs 71454 Cr.

· Breadth was flattish– BSE Adv 1480 Dec 1486 Unch 87 NSE Adv 505 Dec 580 Unch 36

· FIIs sold Rs 1290 Cr in Spot Market. Domestic Institutions bought Rs 15 Cr Equity. Derivative Activity was pretty flat from FIIs.

Top Gainers: - HDFC, BPCL, Zee Enter, Ambuja Cem, ICICI Bank

Top Losers: - Bharti Airtel, TCS, SAIL, Nalco, ABB

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Tuesday:-

· Market players were watching 2 events yesterday: - One was SEBI meeting with FIIs and the other was the meeting between Left and the UPA.

· SEBI statements yesterday evening clear the air of confusion for FIIs. P-Note holders should register themselves and come from front door is what SEBI wants. The final decision will come on 25^th October as SEBI board is scheduled to meet on that day.

· UPA-Left meeting has been shelved till 15 November. So some uncertainty still remains about the N-Deal.

· As far as markets are concerned, some pullback is expected to happen today as we have tested good support below 5100 on the Nifty. Also 17000 is a good support for the Sensex. This pullback can take us towards 5330 and 5400.

· Sesa Goa, M&M, Ranbaxy, India Cements, Punj Lloyd look good on graph and can be bought for short term. One needs to buy with stop losses as correction may not be over yet.

· IVRCL (440):- Buy around 428-432 for target 475-485.

(Keep SL in short-term trades)

Results today – Agro Tech Foods, Amara Raja, Apollo Hosp, Ashok Ley, BASF, Britannia, Fin Cables, Firstsource Sol, Garden Silk, GlaxoSmithKline, Greenply, GSFC, Guj Alk, HOEC, India Infoline, Indiabulls, Jain Irri, Lumax Auto, Mangalam Cem, MIC Elec, Micro Ink, Mindtree, Mukta Arts, Nalco, Nelco, Pidilite, Provogue, PTC, Punj Tract, Satyam Comp, Seamec, Shree Cem, Shringar Cinema, Subex, Suzlon, WWIL, Wockhardt, Zee Enter

Sebi cleared 16 FII papers today: Damodaran http://www.business-standard.com/common/storypage_c_online.php?leftnm=11&bKeyFlag=IN&autono=29095

Pharmaceuticals: Demerger of R&D units — a new trend http://www.thehindubusinessline.com/iw/2007/10/22/stories/2007102251191500.htm

N-Deal Talks: UPA, Left to meet again on Nov 16 http://www.business-standard.com/common/storypage_c_online.php?leftnm=11&bKeyFlag=IN&autono=29093

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.

DAILY REPORT FOR 19 OCTOBER, 2007

NIFTY: - Open 5551 High 5736 Low 5269 Close 5351 (-208 points)

P/E 24.33 P/B 5.60 Adv 10 Dec 40

Supp 5240/5105/5040 Res 5450/5550/5640

SENSEX: - Open 18827 High 19198 Low 17771 Close 17998 (-717 pts)

Supp 17700/17480/17280 Res 18110/18330/18650

Nobody, but supply overpowering demand, to blame for the fall:-

· If we recovered almost 1500 points on Wednesday, yesterday was a bear-party as they took 1400 points off the Sensex intraday. The closing was down 717 points as Banks, Metals and Reliance group stocks crashed heavily. Tech stocks didn’t see much of selling.

· Volumes were at all time high - Rs 26030 Cr in spot market and F&O Vol at Rs 110563 Cr.

· Breadth was negative – BSE Adv 1247 Dec 1737 Unch 67 NSE Adv 367 Dec 734 Unch 19

· FIIs look like trimming their exposure as they sold Rs 1130 Cr in spot market whereas Domestic Institutions bought Rs 96 Cr. Foreign funds sold Rs 2356 Cr in Index Futures. They were net sellers in Stock Fut too Rs 569 Cr.

Top Gainers: - Sun Pharma, TCS, Cipla, Satyam Comp, MTNL

Top Losers: - ACC, Rel Energy, SBI, Bharti Airtel, Tata Power

Indian ADRs: - http://tinyurl.com/33m7dx

Outlook for Friday:-

· Yesterday’s sell-off indicates that we lack buying depth in the market. First blow came as there were rumours of NSE hiking F&O margins. But even if NSE denied the same, the fall accentuated after that.

· Most of the supply yesterday must have come from stuck intraday positions and today some bounce can happen. 5450 and 5550 are resistance for today. If we can not cross them, again correction will set in.

· If we close below 5240 on the Nifty, 4800-4900 levels may be tested. 5000-5050 may provide some support while cracking.

· Wipro and Tech Mahindra results will be out today. More buying can be seen in Tech stocks. Satyam and TCS look good.

(Keep SL in short-term trades)

Results today – Ambuja Cem, Asian Paints, Bajaj Auto, CMC, Emco, GE Ship, Geometric Soft, Grindwell Norton, GTL Infra, ICICI Bank, Tech Mah, Uttam Galva, Welspun India, Wipro

Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.