Outlook for the day:

Nifty (3654) Support-3595/3545/3510 Resistance 3680/3720/3780-VIX-49.54

Markets to open flat to positive and after yesterday's Break-out & Gap-up on back of FIIs buying Rs.1715crs in cash segment, some profit-taking at higher levels can be possible and gap-up levels can be tested in days to come. ABN AMRO Bank purchasing managers' index (PMI) manufacturing touched a high of 53.3 in April from March's 49.5. The boost in manufacturing index came from a surge in new orders. Steel companies raising prices indicates strong demand and pricing power is coming back to the industry. Higher metal prices in LME has already boosted Metal stock SAIL, TATASTEEL & JSWSTEEL still looks attractive, Crude being strong would support CHENNAIPETRO, RELIANCE, CAIRN, GTOFFSHORE, PUNJLLYOD and WELGUJ. Nearly nine of every ten Indian diversified equity funds lagged the benchmark index's best monthly gains in 10 years as double digit cash levels diluted returns in April, data from Lipper showed. FIIs holding in Sensex Free-Float Market Cap dropped to 40.71% from 48.62% 2years ago, whereas MFs have increased holding from 19.86% to 25.4% indicating greater participation from retail hands. Normally FIIs are considered as smart money but in my view they have been wrong at major turning points, it is not the matter of chasing the smart people and trying to be right always, what matters most is having conviction in our view and correcting it as early as possible if we are wrong.

Cummins Ind: Cummins India is a 51% subsidiary of Cummins Inc. USA, the world's largest independent diesel engine designer and manufacturer above 200 HP. Big positive of the company is that it is debt free. With India having more gas at its disposal now, demand for gas-based generators and engines should improve, which can benefit Cummins.

Manufacturing activity in Indian factories picked up after a somewhat prolonged lull over five months in April with order bookings indicating a tentative recovery according to an industrial survey. An important indicator of industrial sectors performance the ABN AMRO Bank purchasing managers' index (PMI) based on a survey of 500 companies, rose to 53.3 in April from 49.5 for March rising above the threshold of 50 that separates expansion from contraction.

Nearly nine of every ten Indian diversified equity funds lagged the benchmark index's best monthly gains in 10 years as double digit cash levels diluted returns in April, data from global fund tracker Lipper show.

The manufacturing sectors in China and India grew for the first time in months in April, surveys showed on Monday, offering evidence the global economy may be through the worst of its sharpest slump in six decades. The latest signs of "green shoots" from the world's emerging giants followed US data on Friday that showed a rise in consumer confidence and suggested manufacturing conditions were gradually improving, helping push Asian stocks to seven-month highs on Monday.

http://www.ft.com/cms/s/0/89b8e156-3863-11de-9211-00144feabdc0.html?nclick_check=1

Tata Steel has shelved plans to re-bid for a $1.6 billion iron ore project in Liberia, "The company has decided not to participate in the re-bid for the property," the spokesperson said, adding that there was no specific reason for the decision, the PTI reported.

Ford India Pvt. Ltd. is planning to launch a small car on the India market by the first quarter of next year, the Business Standard reported, citing Nigel E. Wark, executive director of marketing, sales and service at the company. Wark said the company was looking at the broad Maruti 800 and Chevrolet Spark segment of the market, "but there are sub-segments in the category, and this is where we will differentiate ourselves. We will be basically competing in the largest volume segment," the Web site reported.

http://www.business-standard.com/india/news/ford-india-to-launch-small-car-inyear/357111/

MARUTI Suzuki India (MSI), which sells every second car in India, will increase its production capacity by an additional 2-lakh cars in the next two financial years to cater to the buoyant small car market, a top company executive said.

MSI managing director Shinzo Nakanishi said: "As demand has increased and will only grow further, we would require additional capacity beyond the current 9-lakh cars a year to cater to the small car market. We will increase volumes to meet rising domestic demand and higher export orders." He refused to disclose the investment envisaged for the expansion. The carmaker will invest Rs 1,800 crore to increase the capacity by a lakh units to 10-lakh cars in this fiscal alone.

Coal export volumes from Australia's Newcastle port, the world's largest coal export terminal, rose 17.94% last week, data from the port authority showed. The volume of coal shipped in the seven days ending May 4 rose to 2.01 million metric tons from 1.70 million tons the previous week, Newcastle Port Corp. said on its Web site. The average waiting time for coal vessels was 8.81 days, down 2.59 days the previous week, it said. During the week, there were an average 22 vessels off the port waiting to load 1,922,690 tons of coal versus 37 vessels waiting to load 3,225,328 tons the previous week.

Ratnagiri Gas & Power is close to signing a five-year agreement with Reliance Industries to buy 2.5 million metric standard cubic meters of gas a day. A senior official at Ratnagiri Gas & Power said the company's board would meet Friday to finalize the deal, which would include transportation from the Krishna Godavari basin. The agreement is likely to be signed at the government approved well-head price of $4.2 per million metric British thermal unit.

Essar Oil said it has restarted its Vadinar refinery in Jamnagar district of Gujarat after more than two-week long shutdown that has raised its capacity to turn crude oil into fuel by 12%.

Regards,

Anand RAthi Research Report 4 th May 2009