BSEIndia: All Stock Market News: 05/23/08

Friday, May 23, 2008

DG - Citi : What If Oil Reaches $200

Citigroup

What If Oil Prices Reach $200?

Key points

-We analyze the hypothetical scenario of oil prices reaching $200/barrel by year end.

-This would push shares of oil expenditure in nominal GDP to above peak levels of 1980 for most Asian economies. And Asian growth could be cut by at least another 1.5ppts.

-Growth of economies with high energy-intensity, such as Indonesia, Malaysia, Thailand and Taiwan, would be affected more, while Chinese and Indian growth might be shielded by oil subsidy.

-Average inflation rate could rise by another 3.5ppts, defying the notion that supply-driven inflation could go away by itself. Rates would move up much more rapidly across the region.

-Current accounts would probably worsen in most Asian economies, posing particular challenges for India, Korea, the Philippines, Taiwan and Thailand, and their currencies.

-Indonesia and Malaysia already indicated imminent fuel price adjustments, while India would probably find high fuel subsidy hard to swallow given its already massive fiscal deficits.

Asian central banks’ dilemma

Policymakers continue to face the growth-and-inflatio n dilemma in Asia: while

economic activities showed more evidences of moderation, inflation rates climbed higher in recent months.

Most central banks are torn between the need to tighten to fight inflation and the urge to ease to limit growth slowdown.

According to latest monthly economic data, the pace of industrial production eased in China, India, Korea, Malaysia, Taiwan and Vietnam, while growth of exports moderated in China, Malaysia, the Philippines, Singapore, Taiwan and Vietnam .

So far the slowdown has been modest in magnitude in general, but the

trend may be worrisome for the authorities, especially as the US economy continues to weaken.

In China, for instance, export growth lowered to 21.8% in April from

30.6% in March, while production growth edged down to 15.7% from 17.8% during the same period.

Rising inflation was even more uniform in the region, evidenced recent data from China, India, Indonesia, Korea, Malaysia, the Philippines, Thailand and Vietnam. China’s CPI rebounded to 8.5% in April from 8.3% in March and Vietnam’s CPI further escalated to 21.4% from 19.4% during the same period. In all these economies except Thailand and Malaysia, the actual inflation rates are already way above the official targets.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

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DG - FW: Sharekhan Post-Market Report dated May 23, 2008

From: The Sharekhan Research Team [mailto:marketwatch@research.sharekhan.com]
Sent: 23 May 2008 16:29
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated May 23, 2008

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May 23, 2008

Index Performance

Index	Sensex	Nifty
Open	16,958.80	5,026.55
High	17,054.34	5,059.05
Low	16,626.11	4,940.70
Today's Cls	16,649.64	4,946.55
Prev Cls	16,907.11	5,025.45
Change	-257.47	-78.90
% Change	-1.52	-1.57

Market Indicators

Top Movers (Group A)
Company	Price (Rs)	% chg
Gainers
TV18	328.45	4.30
BPCL	359.20	3.76
HPCL	242.65	3.54
Indian Oil Corporation	420.05	3.18
Nicholas Piramal	356.65	3.02
Losers
Hindustan Zinc	676.95	-5.66
Deccan Aviation	127.70	-5.62
Lanco Infra	513.90	-5.36
GVK Power	51.70	-5.31
Sterlite Industries	903.20	-4.36

Market Statistics
-	BSE	NSE
Advances	795	266
Declines	1,924	929
Unchanged	71	15
Volume(Nos)	35.13cr	54.81cr

Market Commentary

Market takes a beating

Selling in heavyweights, realty, FMCG and oil & gas shares saw the Sensex decline sharply and end at 16,650.

The market witnessed a full-fledged correction, as weak Asian markets and flat US and European indices in yesterday's close dampened the sentiment.

After easing sharply in the last few sessions of the week, profit taking was round the corner, as the Sensex had rallied sharply last week. Although the Sensex resumed on a positive note at 16,959, the market soon lost ground and slipped below 16,800 in early trades. The market steadily kept losing momentum as trading progressed and lost significantly in afternoon trades as selling in heavyweights, realty, FMCG, oil & gas and metal stocks dragged the index to the day's low of 1,626. The Sensex finally ended the session with losses of 257 points at 16,650, while the Nifty shed 79 points to close at 4,947.

Movers & Shakers

Mercator Lines failed to rise inspite of acquiring a vessel.
Era Infra Engineering lost despite receiving two orders worth Rs83.50 crore.
Inspite of the increase in the net profit in Q4FY2008 and FY2008 results, Federal Bank inched lower.

The market breadth was extremely weak. Of the 2,790 stocks traded on the BSE 1,924 stocks declined, 795 stocks advanced and 71 stocks ended unchanged. All the sectoral indices ended in red except BSE HC index. BSE Realty index was the major loser and shed 2.38% at 7,510 followed by BSE FMCG index (down 2.15% at 2,387), BSE Oil & Gas index (down 2.15% at 10,975) and BSE Metal index (down 2.08% at 16,796).

Among the major losers ITC shed 4.24% at Rs213.60, Tata Motors declined 3.57% at Rs638, Jaiprakash Associates fell by 3.43% at Rs237.65, Larsen & Toubro slipped by 2.47% at Rs2,844.75, Reliance Energy dipped 2.42% at Rs1,291, ONGC lost 2.41% at Rs902.05 and Tata Consultancy Services slumped 2.40% at Rs933.70. While Hindalco, Reliance Communications, SBI, Ambuja Cement, ICICI Bank, ACC, Infosys, DLF, Maruti, Wipro, Satyam Computer and Tata Steel lost above 1-2% each. Bharti Airtel, however, gained 2.35% at Rs836.80 while HDFC, HUL, HDFC Bank and Cipla ended with steady gains.

Over 3.56 crore Ispat Industries shares changed hands on the BSE followed by IFCI (1.67 crore shares), Aishwarya Telecom (1.11 crore shares), Idea Cellular (0.92 crore shares) and Reliance Natural Resources (0.81 crore shares).

European Indices at 16:05 IST on 23-05-2008

Index	Level	Change (pts)	Change (%)
FTSE 100 Index	6156.20	-25.40	-0.41
CAC 40 Index	4986.70	-42.04	-0.84
DAX Index	7045.30	-25.03	-0.35

Asian Indices at close on 23-05-2008

Index	Level	Change (pts)	Change (%)
Nikkei 225	14012.20	33.74	0.24
Hang Seng Index	24714.07	-329.05	-1.31
Kospi Index	1827.94	-7.48	-0.41
Straits Times Index	3122.15	-38.71	-1.22
Jakarta Composite Index	2465.96	-38.00	-1.52

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