The key benchmark indices surged to the fresh day's high in
mid-morning trade led by gains in IT, metal and banking stocks. The
BSE 30-share Sensex was up 143.21 points, or 0.98%, off close to 40
points from the day's high and up close to 285 points from the
day's low.

Volatility was high. The market extended Monday's (8 June 2009)
losses in early trade tracking weak Asia as investors continued to
book profit after a recent strong rally. Sensex swung between
positive and negative terrain in early trade as media reports that
the government may defer a proposal to decontrol pricing of
gasoline and diesel because of the increase in crude oil prices
weighed on the sentiment. An opposition to divestment by regional
party DMK which is a key ally of the Congress-led coalition
government at the centre also weighted on the sentiment. However
market surged in mid-morning trade.

As per media reports the government may defer a proposal to
decontrol pricing of gasoline and diesel because of the increase in
crude oil prices. Trinamool Congress (TC), a key ally in Prime
Minister Manmohan Singh's government, opposes lifting controls on
fuel pricing, a newspaper report said.

The petroleum minister had recently said he will submit a proposal
for deregulation of oil products to the Cabinet in six to eight
weeks. If government removes price controls on petrol and diesel,
it would benefit PSU OMCs and also the government, which has been
issuing oil bonds to share PSU OMC's burden. It would also persuade
private refiners, such as Reliance Industries and Essar Oil, to
reenter the oil-marketing business.

Meanwhile, DMK chief M Karunanidhi's daughter and Rajya Sabha MP,
Kanimozhi, on Monday signaled that the government could not count
on her party's support for its disinvestment plans and should avoid
the temptation of selling stakes in state-run firms for generating
revenue. The DMK accounts for 18 members of the Parliament and is
the third-biggest constituent of the Congress-led UPA government at
the Centre. TC, another key ally of the government may also a host
of reform oriented measures, reports suggest.

Any setback to reforms may weigh on the stock market sentiment at a
time when many equity analysts have been raising earnings forecasts
of India Inc on hopes that the new government will push economic
reforms to boost growth.

Unveiling the agenda of the government, President Pratibha Patil in
her speech addressed to a joint session of both houses had last
week indicated government's intension to divest stake in state-run
firms. The government, however, intends to retain control over
state-run firms and will continue to hold at least 51% stake in
state-run firms.

Finance Minister Pranab Mukherjee on 26 May 2009 said that a
sustained stimulus to economic growth is possible by next round of
reforms. He said reviving growth momentum is a top priority for the
government adding that fiscal prudence will also be kept in mind.
Investor expectations from the new government are high. Investors
expect financial sector reforms such as increase in the cap on
foreign direct investment in insurance sector to 49%, from 26% at
present

Asian stocks fell today as concern a three-month rally had
overvalued earnings prospects overshadowed comments from Nobel
Prize-winning economist Paul Krugman that the US recession may end
this year. Key benchmark indices in China, Hong Kong, Japan,
Singapore, Taiwan, South Korea fell by between 0.05% to 3.22%.

Trading in the US index futures indicated Dow could fall 23 points
at the opening bell today, 9 June 2009.

Most US stocks fell for a second day in a row on Monday as a drop
in health-care and materials shares overshadowed a late-day rally
spurred by Nobel Prize-winning economist Paul Krugman's prediction
the recession will end by September 2009. Financials bounced back
from an early decline. The Dow was up 1.36 points to 8,764.49. The
S&P 500 index slipped 0.95 points, or 0.1%, to 939.14, and the
Nasdaq Composite Index fell 7.02 points, or 0.4%, to 1,842.40.

Closer home, foreign funds turned marginal sellers on Monday, 8
June 2009. As per the provisional figures on NSE, foreign funds
sold shares worth Rs 14.47 crore. But there was heavy selling by
domestic funds who sold shares worth Rs 875.92 crore on Monday 8
June 2009. The BSE 30-share Sensex had ost 437.63 points, or 2.9%,
to 14,665.92 on Monday

Foreign funds made heavy purchases of Indian stocks in the past
three months. Their inflow totaled Rs 2,599 crore in June 2009
(till 5 June 2009) after buying hefty Rs 20,606.80 crore in May
2009. FII inflow in calendar year 2009 totaled Rs 23,918.40 crore
(till 5 June 2009).

On the back of heavy buying by foreign funds, the Sensex had jumped
5456.24 points or 56.55% in calendar year 2009 to 15,103.55 on
Friday, 5 June 2009. From a 3-year closing low of 8,160.40 on 9
March 2009, the Sensex was up 6,943.15 points or 85.08% on 5 June
2009.

Meanwhile, as a major boost to the capital markets, members of the
Securities and Exchange Board of India (Sebi) have reportedly
suggested a phased reduction of the securities transaction tax as
part of a package of measures to develop the capital markets.

Finance Minister Pranab Mukherjee is likely to present the Union
Budget in the first week of July 2009 with focus on the common man
while providing special attention to sectors hit hard by global
crisis. Railway Budget for the year 2009-10 would be presented on 1
July 2009 followed by Economic Survey on 2 July 2009.

Meanwhile, ample global liquidity will help India Inc help raise
funds for expansion which in turn will boost corporate profits.
India Inc has already raised almost Rs 5,000 crore from three
qualified institutional placements (QIPs) so far in 2009 and
announced plans to raise another Rs 20,000 crore.

Falling interest rates will also support a larger capital
expenditure programme of India Inc. Lower interest rates will also
help sustain strong domestic demand. Late last week, India's
biggest private sector bank by net profit ICICI Bank cut prime
lending rate by 50 basis points

At 11:25 IST, the BSE 30-share Sensex was up 143.21 points, or
0.98%, to 14,809.13. The Sensex rose 182.39 points at the day's
high of 14,848.31 hit in the mid-morning trade. At the day's low of
14,526.69, the Sensex fell 139.23 points in early trade.

The S&P CNX Nifty was up 20.40 points, or 0.46%, to 4,450.30.

The market breadth, indicating the overall health of the market,
was weak. On BSE, 595 shares rose as compared with 1,717 that
declined. A total of 29 shares remained unchanged.

The BSE Mid-Cap index was down 0.53% and the BSE Small-Cap index
was down 1.89%. Both the indices underperformed the Sensex.

From the 30 share Sensex pack: 20 rose while the rest fell.

India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries (RIL) was up 0.92% to Rs 2,209 off
the day's low of Rs 2,165.10. Analysts expect strong growth in
bottom line in coming quarters from sale of gas which it started
pumping last month from its deep-sea field off the east coast. Its
German unit Trevira, a specialty polyester manufacturer, became
bankrupt last week. Reliance Industries had acquired Trevira five
years ago for Rs 440 crore. This acquisition in 2004 had propelled
Reliance to the position of the world's largest polyester fibre and
yarn producer.

Meanwhile, the Bombay High Court is likely to deliver the final
judgement on the legal tussle over the supply of gas from Reliance
Industries (RIL) to Reliance Natural Resources (RNRL) this week
when the court re-opens after summer vacations.

The basic argument in the RIL-RNRL case pertains to the pricing and
quantum of gas RIL has to supply s from its Krishna Godavari basin
to RNRL for RNNL's upcoming 7400 megawatt (MW) power project at
Dadri in Uttar Pradesh.

PSU OMCs fell on reports rising crude oil prices, at around $70 per
barrel, may force the government to drop the plan to deregulate
fuel prices. Indian Oil Corporation, Bharat Petroleum Corporation
and Hindusthan Petroleum Corporation fell by between 4.63% to 5.73%

According to the earlier plan, state-run oil marketing companies
(PSU OMCs) were to be given freedom to fix rates of petrol and
diesel till the time crude oil stays below $75 a barrel. If it
breaches this mark, the government would step in to protect the
interests of consumers. However, according to proposal, the
government had planned to continue subsidising kerosene and
domestic LPG.

The petroleum ministry, which had earlier considered the proposal,
is reported to be backtracking now as allowing fuel to be sold at
market rates without government intervention will result in higher
retail oil prices, threatening the new government's popularity.

Bank stocks rose on reports the Reserve Bank of India may
standardise the way banks calculate their prime lending rates
(PLRs) and bar them from lending below their respective PLRs for
more transparency. India's largest private sector bank by net
profit ICICI Bank was up 0.59% even as its American depository
receipt (ADR) fell 4.02% on Monday, 8 June 2009.

ICICI Bank cut prime lending rate by 50 basis points with effect
from Friday, 5 June 2009. The benchmark advance rate, or the rate
that it charges its top customers, will drop to 15.75% from 16.25%.
It also cut floating reference rate (FRR) applicable to floating
rate retail loans (including floating rate home loans) by 50 basis
points. The revised FRR will be 12.75% from 13.25%. All the
existing floating rate customers to benefit from the cut.

India's second largest private sector bank by operating income HDFC
Bank was up 0.7% even as its ADR fell 3.1% on Monday.

India's biggest bank in terms of branch network State Bank of India
(SBI) was up 2.94%. As per recent reports, SBI may cut lending
rates by 25 basis points.

India's biggest dedicated housing finance firm by operating income
HDFC was up 1.52%.

Metal stocks rose as LME metal index rose 0.39% to 2,368.70 today.
Steel Authority of India, National Aluminum Company, Hindalco
Industries rose by between 1.66% to 3.05%.

India's largest steel maker by sales Tata Steel rose 1.4% even as
Moody's Investors Service downgraded the rating of both Tata Steel
and its UK subsidiary Tata Steel UK (Corus) by a notch.

The corporate family rating of Tata Steel was lowered to Ba3 from
Ba2, while Tata Steel UK to B2 from B1. The rating action reflects
the anticipated weakening of Tata Steel's consolidated financial
profile over the intermediate term, driven by the weakness in the
steel markets and the significant operating challenges faced by the
company's European operations.

Outsourcing focussed IT stocks extended early gain on talks worst
may be over for the US economy and the US banking system. US is the
biggest market for Indian IT firms. Weak rupee also aided the
gains. IT stocks had underperfromed the market in the past one
month due to a sharp surge in the rupee against the dollar.

India's second largest software firm by sales Infosys Technologies
rose 2.99%. Infosys Technologies reportedly plans to open a
software development and back office centre in Brazil later this
year to serve US customers better from a near-shore presence. Its
ADR rose 0.5% on Monday.

India's largest software services exporter by sales TCS rose 3.17%.
India's third largest software services exporter by sales Wipro
rose 3.57% even as its ADR fell 1.37% on Monday.

India's fraud-hit Satyam Computer Services hit 10% upper circuit
after it posted a standalone net profit of Rs 181 crore ($38
million) on revenue of Rs 229 crore in Q3 December 2008, it said in
a filing to the stock exchange.

It said it had total bank balances of Rs 373 crore as at 31 March
2009.Satyam was plunged into crisis after its founder quit in
saying profits and assets had been falsified. Outsourcer Tech
Mahindra won an auction in April 2009 for a controlling stake in
Satyam in a deal worth about $580 million. Tech Mahindra rose
11.6%.

The Indian rupee bounced back from two-week lows on Tuesday after
the domestic stock market rebounded more than 1 percent, but there
was pressure after the dollar climbed against major currencies. the
partially convertible rupee was at 47.62/63 per dollar below its
Monday's close of 47.555/565.

A firm rupee affects operating margins of IT firms negatively as IT
companies derive a lion's share of revenue from exports.

India's second largest telecom services provider by sales Reliance
Communications rose 2.76% on reports it is close to awarding a
$500-$600 million operations and maintainence contract to French
telecom infrastructure provider Alcatel-Lucent.

Areva T&D India gained around 1% after the company bagged four
orders aggregating Rs 350 crore.

Ashok Leyland tumbled 7.16% after total sales tumbled 64.54% to
1,977 units in May 2009 over May 2008.


Thanks and Regards

Aman Galhotra
Ludhiana
+91 9815627281