Sensex rebounds, up 194 points in early trade

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US stocks edged higher on Monday as technology shares bounced back. (Reuters) US stocks edged higher on Monday as technology shares bounced back. (Reuters)
SummaryThe 30-share barometer lost over 77 points in the past two trading days.

The BSE benchmark Sensex today recovered by over 194 points in early trade on fresh buying by funds and retailers on expectations of a rate cut by the Reserve Bank in its monetary policy review next week.

The 30-share barometer, which has lost over 77 points in the past two trading days, rose by 194.08 points, or 1 per cent, to 19,603.77, led by gains in stocks of healthcare, consumer durables, banking and realty sectors.

Similarly, the wide-based National Stock Exchange index Nifty moved up by 31.10 points, or 0.52 per cent, to 5,940.00.

Brokers said fresh round of buying by major players on hopes of an interest rate cut by RBI in its December 18 mid- quarter monetary policy review amid a mixed trend in Asian markets buoyed the trading sentiment.

Meanwhile in Asia, Hong Kong's Hang Seng index rose 0.37 per cent, while Japan's Nikkei shed 0.22 per cent.

The US Dow Jones Industrial Average ended 0.11 per cent higher in yesterday's trade on expectations that Federal Reserve will take fresh economic stimulus measures this week.

GLOBAL MARKETS ROUNDUP

* Nifty futures on the Singapore Exchange 0.45 percent higher. The MSCI-Asia Pacific index excluding Japan is also 0.14 percent up.

* US stocks edged higher on Monday as technology shares bounced back after recent weakness and McDonald's posted strong monthly sales.

* Asian shares and the euro steadied on Tuesday, drawing support from expectations that the U.S. Federal Reserve will take fresh economic stimulus measures this week.

FACTORS TO WATCH

* Bharti Infratel IPO opens for retail subscription.

* Banking reform bill likely to be voted in India's parliament.

INDIAN STOCKS TO WATCH

MACRO/POLICY

* The Indian government on Tuesday is expected to seek a vote in the lower house of parliament on easing voting rules of shareholders to attract foreign investment and separately allow the central bank more powers. (Reuters)

* The finance ministry is looking to shave off nearly 5 percent or around 700 billion rupees from its budgeted expenditure for the year by insisting that government departments release funds only after accounting for money

released earlier and ensuring that they do not bunch spending in the last quarter, according to government officials.

* The finance ministry has asked the Reserve Bank to consider giving infrastructure status to the housing sector, and relax provisioning norms for it so banks can extend attractive loans to buyers.

* Insurance regulator, IRDA has said that the government's move to increase the investment limit of country's largest insurer, LIC to 30 percent is "imprudent". * Foreign institutional investors have pitched for a reduction in the withholding tax rates on their investments in Indian debt and simplification of know your customer norms to attract foreign capital into the country.

AVIATION

* Etihad, which was also in talks with Jet, has agreed to pick up a 48 per cent stake in Kingfisher for a little over 30 billion rupees. The deal's official announcement is likely to come around December 18.

TELECOM

* Bharti Infratel Ltd, the telecommunications tower arm of top Indian mobile carrier Bharti Airtel, said it will allot shares worth $120 million to cornerstone investors as part of its up to $832 million initial public offering. (Reuters)

* The income tax department is seeking to reopen the case it lost against British telecom major Vodafone and wants the matter heard afresh by a larger bench.

* Russian conglomerate Sistema has warned India that a lack of progress in a dispute over telecoms licenses is putting bilateral relations at risk ahead of a visit by President Vladimir Putin later this month.

* State-run telecom operator Mahanagar Telephone Nigam Ltd(MTNL), which operates in Delhi and Mumbai, is set to raise between 50 billion rupees and 70 billion rupees this financial year by issuing sovereign bonds -those backed by the government to reduce its debt burden.

AUTO

* Great Wall Motor Co is in talks to open a plant in India, a move that would make it the first Chinese carmaker to operate in the country without a partner.

* India may consider diplomatic efforts to ask the Sri Lankan government to bring down import tariff on automobiles in the wake of the island nation hiking duties that has affected exports from the country.

* The new year is expected to give automobile industry some respite, as import tariffs for critical components imported from the Asean block, India's largest trading partner, are slated to halve from January, thus cushioning the impact of incessantly rising costs of auto components.

RETAIL

* A day after Parliament gave the go-ahead to foreign supermarkets to invest in India, Tesco Plc's top boss came calling on Tata officials to outline the UK-based company's plans for one of the world's most lucrative retail markets, according to reports.

RESOURCES/ENERGY

* India has set a share sale in state miner NMDC Ltd for Wednesday, the company said, in a deal which sources said could add up to $1.1 billion to government efforts to ease its yawning budget deficit. The government may on Tuesday announce a floor price for the NMDC issue in a range of 145 rupees to 150 rupees a share, said two sources with direct knowledge who asked not to be named as details are not yet public.

* After prolonged wrangling, power generator NTPC and coal producer Coal India appeared to have ironed out differences over the fuel supply agreement (FSA) and said the pact will be signed in a month's time.

* Hindustan Petroleum Corp Ltd has told the Oil Ministry that its proposed 240 billion rupees refinery at Barmer in Rajasthan will be unviable unless it is given all of the crude oil that Cairn India produces from oilfields in the state.

* The DGH has rejected Reliance Industries' proposal to do a single test to confirm three natural gas discoveries in the flagging KG-D6 block, saying separate tests

are required as the three finds are distant and unconnected.

* Even as domestic gas production has fallen 8 per cent, Oil India Ltd is planning to set up a liquefied natural gas (LNG) receiving terminal in India. The company plans to set up a 2.5-million tonne (mt) capacity terminal.

* The coal ministry is yet to make much progress in getting companies that have been allotted captive coal blocks to sign so-called power purchase agreements (PPAs) with state-owned power distribution companies, as it has been asked to do by the power ministry.

INFRA

* The government said it has so far awarded barely 11.5 percent of the targeted projects for construction of 8,800 km of highways during the fiscal.

* Chennai-based public sector undertaking, Neyveli Lignite Corporation Limited, is contemplating seeking additional compensation from Bharat Heavy Electricals Limited

for the loss it had incurred due to the latter's delay in the execution of its 500-Mw (2x250 Mw) power plant at Neyveli.

AGRI COMMODITIES

* Cargill said it has signed an agreement with Wipro to acquire the latter's flagship brand Sunflower Vanaspati.

OTHER FACTORS TO WATCH

* Indian debt/FX factors to watch

* Euro survives Italy worry, Fed in focus

* Brent oil gains after Chinese oil imports grow

* Foreign institutional investor flows

* For closing rates of Indian ADRs

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