Volatility to the fore

Volatility ruled the roost on the bourses in mid-morning trade. The
BSE Sensex was down 7.75 points or 0.08%. The barometer index swung
218.80 points between the day's high and low so far. The market
sentiment was edgy after the International Monetary Fund (IMF) cut
India's growth forecast for 2,009. But higher US index futures and
recovery in Asian stocks after from intraday steep fall supported
the domestic bourses.

Most of the IT stocks were down on fall in American depository
receipts overnight. FMCG stocks were higher on defensive buying.
PSU bank stocks edged higher on cut in lending rates.

The International Monetary Fund, or IMF, on Thursday, 6 November
2008, predicted lower growth in India and economic contractions in
the US, Japan and euro region next year, calling for further
interest rate cuts and fiscal stimulus. Its estimate for India's
growth in 2009 is now 6.3%, 0.6% lower than its earlier estimate of
6.9% made just a month ago. Its estimate for the country's growth
in 2008 is down 0.1% to 7.8%.

Bargain hunting following a 25 basis points rate cut by the central
bank in South Korea on Friday, 7 November 2008, a steep 1.5% cut in
rate by the Bank of England on Thursday, 6 November 2008 and a 50
basis points cut in rate by the European Central Bank (ECB) on that
day, triggered a recovery in Asian stocks from an intra-day fall.

South Korea's Kospi was up almost 4% boosted by the rate cut. Key
benchmark indices in China, Hong Kong,Taiwan, Singapore rose by
between 1.03% to 3.71%. Japan's Nikkei average was down 2.5% with
bargain hunting helping the benchmark pared losses that had taken
it down over 6% earlier in the day. The rate cut in Europe were
announced after Asian markets had closed on Thursday, 6 November
2008.

Trading in US index futures indicated the Dow will rise 88 points
at the opening bell.

At 11:23 IST, the 30-share BSE Sensex was down 7.75 points or 0.08%
at 9,726.47. The index fell 121 points at the day's low of 9,631.59
hit in early trade. The barometer index rose 116.17 points at the
day's high of 9,850.39 in early trade.

The 50-unit S&P Nifty was up 16 points or 0.55% to 2908.65.

The BSE Mid-cap index was down 0.58% to 3,299.30, while the BSE
Small-cap index was down 0.35% to 3,866.75.

The market breadth was weak. On BSE, 1108 stocks declined while 875
gained. 67 stocks remained unchanged.

India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries rose 0.47% to Rs 1,177.10 despite
reports it may delay commercial operations of its Jamnagar refinery
to early 2009 as it finishes the final testing of the facility.

Maruti Suzuki India (down 3.38% to Rs 579.70), Tata Power Company
(down 2.03% to Rs 704) and Tata Steel (down 2.15% to Rs 182.25)
were the major losers from the Sensex pack.

NTPC (up 1.87% to Rs 147), Bharti Airtel (up 1.7% to Rs 650.70) and
Hindalco Industries (up 1.06% to Rs 57.30) were the major gainers
from the Sensex pack.

FMCG stocks rose on defensive buying. Britannia Industries,
Hindustan Unilever, ITC, Marico, Tata Tea rose by between 0.53% to
2.28%.

Most of the IT stocks were down on weak American depository
receipts on worries the US outsourcing business will be curtailed
and the direct impact will be on IT sector after Barack Obama won
the US presidential election early this week. India's third largest
IT exporter by sales Satyam Computer Services fell 0.59% extending
previous trading session's loss of 3.36% as its American depository
receipt (ADR) fell 7.19% overnight.

India's second largest IT exporter by sales Infosys slipped 1.31%,
as ADR fell 10.47%. But India's fourth largest IT exporter by sales
Wipro rose 0.71% even as ADR slipped 8.56%. The stock had slipped
6.31% in previous trading session. India's largest IT exporter by
sales Tata Consultancy Services rose 0.16%. The stock had slipped
1.08% in previous trading session.

Obama has strong reservations on outsourcing from the US. He had
made many statements during his election speeches that he would
discourage outsourcing from the US when he comes into power.

Meanwhile, the Indian rupee fell more than half a percent in
opening deals on Friday, 7 November 2008, on expectations that
losses in overseas markets would lead the stock market to drop and
spur foreigners to continue withdrawing their investments. The
partially convertible rupee was at 47.95/96 per dollar, compared to
Thursday's close of 47.66/69 per dollar. A falling rupee augurs
well for the sector as IT companies earn most of their revenues in
dollar terms.

PSU banks rose after top state-owned banks on Thursday, 6 November
2008, cut their prime lending rates (PLR). India's largest
commercial bank State Bank of India (SBI) rose 0.46% on a decision
to cut the PLR by 75 basis points (bps) with effect from 10
November 2008 and deposit rates by 25 to 50 bps across all
maturities effective 1 December 2008.

Bank of Baroda, Allahabad Bank, Central Bank of India, Oriental
Bank of Commerce and Corporation Bank rose by between 0.04% to
0.73%. All of them reduced lending rates by 75 bps to 13.25% with
effect from 10 November 2008.

India's largest private sector bank by net profit ICICI Bank fell
4.18% as American depository receipt (ADR) lost 11.92% overnight.
ICICI Bank's chief executive K.V. Kamath said on 3 November 2008,
the bank will review interest rates in the next few days.

India's second largest private sector bank by net profit HDFC Bank
fell 1.26% as ADR slumped 10.78% on Thursday.

India's largest home loan lender by operating income HDFC jumped
1.25%. HDFC is yet to revise its rates, since the firm's borrowing
costs have not come down.

The Reserve Bank of India (RBI) on Saturday, 1 November 2008,
unexpectedly cut its main short-term lending rate viz. the repo
rate to ease a growing cash squeeze, spur faltering economic growth
and fend off damage from the global financial crisis.

Meanwhile, Inflation based on the wholesale price index rose 10.72%
in the year through 25 October 2008, higher than previous weekâ€(TM)s
10.68% rise.

India's largest commercial vehicle maker by sales Tata Motors
dipped 1.92% to Rs 156.10, off the day's low of Rs 148. Its ADR
lost 8.24% overnight. . The company on 6 November 2008 had
announced closing of the commercial vehicle plant at Jamshedpur
owing to a demand slump.

India's second largest telecom services provider by sales Reliance
Communication rose 3.79% on bargain hunting after a steep slide in
the past two trading sessions.