FOREX: January 2010

INDIAN STOCK MARKET WEEK AHEAD

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Derivatives: Huge resistance at 5000 level for the nifty
Outlook currently remains down ward bias, but market craves for positive cues in the domestic / global front, which can help it move northwards

The week started the week with extreme negative bias as the 3rd quarter result season closed besides negative macro trends in the global economy. During the week ended 29th January 2010, the S&P CNX Nifty corrected 153.95 points to close at 4882.05. In the future & option segment it was the expiry week and the rollover was smooth with short positions being created both at the nifty and the stock futures segment. The nifty February series added 2.26 crore shares in open interest (OI) during the week under review. Some of the stock futures also added OI, most of them short positions. For e.g. Reliance February futures added 83.38 lakh shares in OI while Tata Steel and Tata Motors added 1.18 crore shares and 80.15 lakh shares in OI during the week ended 29th January 2010.The nifty future continued to trade at a discount all throughout the week.

Overall the market wide OI on Friday stood at 169.070 crore shares, thus rising by 9.85 crore shares as compared to the previous day. Major activity was witnessed in the stock futures & options segment. (See table OI breakup).

Besides all throughout the week the trend in the nifty option front was not positive as significant call writing was witnessed at 4700 to 5300 strikes simultaneously puts witnessed addition of OI with buying of 4700 to 4900 strikes. Now these indicate strong resistance at 5000 levels for the underlying.

The most active options in the February series were the 4700 to 5000 strikes. The call option on the above mentioned strikes witnessed aggressive writing, while the puts witnessed addition of OI due to fresh buying. All throughout the week the 5000 strike call witnessed 29.96-lakh-share addition in OI while the same strike put witnessed 4.51 lakh additions in OI. Put OI addition was more profound at 4700, 4800 and 4900 strikes while for the calls it was at 4900 and 5000 strike.

The market may seem oversold at this level although any upward trigger will depend on the global market due to lack of domestic trigger. 5000 levels for the nifty will remain a key resistance. The outlook currently remains down ward bias, however any positive indicators for the market domestically or internationally may witness significant upward correction.

FOR THE PAST SIX MONTHS

ENERGY AND PRECIOUS METAL TECHNICAL ANALYSIS

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Gold and Forex Technical Update
EURUSD : EURUSD has broken the levels of 1.40 twice and aiming close to next important support at 1.3763 levels. Be cautious incase 1.4100 levels break confidently again. (EURUSD–1.3935) Bearish

Sterling : GBPUSD is currently trading at 1.6130 levels and and is having a strong resistance of 1.6250 level (trendline Resistance). Downside correction is expected near 1.60 levels. Since Euro is leading the show with further bearishness we could test 1.5800 levels.(GBPUSD – 1.6130) Bearish

Yen : The JPY is currently trading at 89.90 levels and is having a strong resistance of 91.20 levels. Yen is holding bullishness and targeting 88.40 levels and even lower due to increased risk aversion. (USDJPY- 89.90) Bullish

Aud : The Australian dollar is correcting due to increased risk aversion and gold selling . Good support is located close to 0.8900 levels. Buying close to 0.8900 levels is recommended.(AUDUSD-0.8900) Cautious Bullish

Gold : GOLD is currently trading around $1081 levels and is having immediate resistance near $1100 which if broken then could see strong resistance near $1118 where shorts can be initiated for the target of 30 dollars, stoploss above $1128 levels. Resist shorts at spot. (Gold- $1081) Bullish.

Dollar Index: Dollar Index is currently trading near 79.01 levels. We expected further bullish scenario towards 80 levels. Bias remains bullish only if sustained trading above 78.50 levels otherwise Rangebound.

GOLD AND CRUDE OIL REPORT

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Natural gas storage dropped -86 bcf to 2521 bcf in the week ended January 22. At current level gas inventory was +120 bcf higher than the same period year and +87 bcf (+3.6%) higher than 5-year average. The benchmark contract for natural gas slid for 4 consecutive days from Monday to Thursday, losing almost -12%.

Weather forecasters in the US indicate that temperature will rise above normal, in the coming 6-10 days to 11-15 days, from the Midwest to the East. In December as well as the past 2 weeks, we saw rather strong bids in gas futures as the market speculated cold weather in the Northern hemisphere would increase consumption. However, as weather gets warmer, demand will subsides. Together with the fact that gas storage remains ample and LNG imports are poised to surge this year, gas price should remain under pressure.

Decline in base metals accelerated in recent days amid worries about potential impacts of monetary policy tightening, stricter lending from banks and slowdown in global economic recovery. LME copper for 3-month delivery plummeted -7.4% to 6898 Thursday, following a -2% fall a day ago. Nickel outperformed the complex with +0.85% gain yesterday. On weekly basis, the metal will probably close flat. Near-term trading momentum should remain skewed to the downside as step-up in tightening in China and unwinding of stimulus measures in the US and the Eurozone should dampen expectation for demand growth.

Gold price trades narrowly around 1083 in European session, there's high risk for the yellow metal to weaken further as traders are dumping the euro, sending it below 1.4 against USD. Crude oil also gyrates around yesterday's close at 73.64. Investors prefer to standstill ahead of the US GDP report.

In Iran, 2 people were sentenced to death after leading demonstrations against Iran's elections. The executions triggered condemnation from the US. President Obama said that action would 'only serve to further isolate' Iran. However, elevated geopolitical tensions between the US and Iran failed to stimulate demand for gold and oil, whose prices normally surge during political unrests.

Gold :

Gold is still declining sharply under the negative pressure obtained from TEMA and DEMA indicators, seen on the provided four-hour chart. The bearish candlestick formation proves the strong bearish trend, which still has downside targets to be reached to complete the IM (impulsive) wave of our detected Elliott sequence.

The trading range for today is among the key support at 1052.00 and key resistance now at 1122.00.

The general trend is to the upside as far as 865.00 remains intact with targets at 1249.00.

Support: 1080.00, 1074.00, 1066.00, 1060.00, 1058.00
Resistance: 1088.00, 1092.00, 1097.00, 1102.00, 1107.00

Recommendation: Based on the charts and explanations above our opinion is, selling gold from 1083.00 targeting 1060.00 and stop loss above 1102.00 might be appropriate

appropriate.

FOREX REPORT

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Daily Report: Euro Weakens on Greece Concern. Dollar Firm ahead of GDP
Euro weakens further against dollar and yen today as concern on Greece intensified. Germany and France denied a report of an imminent EU bailout of Greece and sent Greece CDS up to 414 record 414 level which was the same as Dubai's CDS when it got a $10b bailout in December. The yield on 10-year Greek bonds rose to 7.15 percent yesterday, the highest level since October 1999 and up from 4.99 percent on Nov. 30. Euro is also additionally pressured as Portugal reported higher than expected budget deficit of 9.3% of GDP is 2009, even though it's still better than Greece's budget deficit of 13% of GDP. Sterling is also soft after S&P said they "no longer classify the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally," Asian stocks are also broadly down, following weakness in US equities, and saw Nikkei down more than -2% to 10198 level. Yen maintains overnight strength in Asian today while commodity currencies are soft. Dollar continues to remain firm in general after Bernanke was confirmed for a second term as Fed Chairman by the Senate on 70-30 vote.

Data released in Asia saw Japan Manufacturing PMI dropped to 52.5 in Jan, signaling lower pace of recovery. Unemployment rate unexpectedly improved to 5.1% in December. Household spending rose more than expected by 2.1% yoy in December. National CPI dropped -1.7% yoy in December with core CPI down -1.3% yoy. INdustrial production rose 2.2% mom, 5.3% yoy in December. Housing starts dropped -15.70% in December. Deflation should still be the main worry of BoJ. BoJ Governor Shirakawa said the bank is "prepared to act swiftly and decisively should concerns that financial market stability might be hampered reemerge."

Looking ahead, Eurozone CPI is expected to climbed to 1.2% yoy in January. Unemployment rate is also expected to rise to 10.1% in December, which should then be higher than US's 10.0%. M3 money is supply is expected to drop -0.5% yoy in December. Swiss KOF Leading indicator is expected to rise slightly to 1.71 in January. US Q4 GDP will be the main focus today and is expected to expand at 4.5% annualized rate. Canadian GDP is expected to rise 0.3% mom in November.

Dollar index continues to benefit from a weak Euro as well as risk aversion and rises further to as high as 79.14 today so far. We'd continue to expect further rise to 61.8% projection of 74.19 to 78.45 from 76.60 at 79.23. Break there will set the stage for next medium term target at 38.2% retracement of 89.62 to 74.19 at 80.08. Nevertheless, note that upside momentum is not too convincing so far. A break below 78.54 support will indicate that a short term top is in place and bring deeper pull back before staying another rally.

EUR/JPY Daily Outlook
Daily Pivots: (S1) 124.77; (P) 125.92; (R1) 126.76; More.

EUR/JPY fall resume by breaking 125.22 and reaches as low as 124.80 so far. At this point, intraday bias remains on the downside and further fall is still expected to be seen to 124.35 medium term support and then 100% projection of 138.47 to 126.88 from 134.36 at 122.77 next. However, considering mild bullish convergence condition in 4 hours MACD, a break above 127.08 minor resistance will indicate that a short term bottom is formed and bring stronger recovery before staging another fall.

In the bigger picture, the break of 126.88 support revives that case that medium term rebound from 112.10, which is treated as correction to long term down trend from 169.96, has completed last year at 139.21. Break of 124.35 support will further affirm this case. By then, we'll expect such long term down trend to resume for a new low below 112.10. On the upside, break of 134.36 resistance is needed to invalidate this bearish view and suggest that EUR/JPY is still in consolidation to rise from 112.10 only. Otherwise, outlook will remain bearish.

FOREX REPORT / 28TH JAN

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Daily Report: Yen Lower as Obama Boosted Risk Appetite, Dollar Mixed
Yen is broadly lower in Asian today as stocks are lifted by US President Obama's first State of the Union address. Obama pledged to put job creation as the "number one" focus in 2010 and called for a new job bill. Obama also called for an extension of tax incentives of USD 38b over this yearand proposed to use $30b of money paid back from TARP to assist community banks that give loans to small businesses. Nikkei rebounded by jumping 1.68% to close at 10424. Aussie and Kiwi are the better performers on risk appetite.

Dollar, on the other hand, is mixed. The greenback is lifted by slightly more hawkish than expected FOMC statement overnight. The January FOMC statement showed slightly more hawkish tone on economic growth though the overall stance remained unchanged - the Fed funds rate will be kept at 0-0.25% and 'economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period'. Kansas City Fed President Thomas Hoenig's dissent to keep the 'extended period' phrase was also surprising and signaled there might more hawks appearing later this year.

New Zealand dollar is also lifted mildly after RBNZ rate announcement. As expected, the RBNZ left the OCR unchanged at 2.5%. The accompanying statement was a short one as much uncertainty about recovery was removed. Also, the central bank reiterated December' stance that removal of policy stimulus will start around the middle of 2010 if the economy continues to recover.

On the data front, Japan retail sales unexpectedly dropped by -0.3% yoy in December. Germany unemployment rate is expected to climb to 8.2% in January. Eurozone confidence indicators are expected to show general improvements in January. From US, durable goods orders are expected to rise 2.0% in December with ex-transport orders up 0.3%. Focus will also be on US Senate's vote on Bernanke's second term as Fed chairman. The vote requires a 60-vote majority in the 100-member Senate to overcome procedural obstacles from Bernanke's Senate critics.

Dollar index rose to 79.06 today and the break of 78.81 resistance confirms that whole rise from 74.19 has resumed. Upside momentum is not to convincing for the moment. But we'd still expect further rise as long as 78.35 minor support holds. Dollar should target 61.8% projection of 74.19 to 78.45 from 76.60 at 79.23 next. However, break of 78.35 support will argue that a short term top is at least formed and deeper pull back should be seen to below 78.03 support.

USD/JPY Daily Outlook
Daily Pivots: (S1) 89.39; (P) 89.74; (R1) 90.34;

USD/JPY's strong rebound from 89.13 and break of 89.76 minor resistance indicates that an intraday low is in place and turns bias neutral. Some consolidations could be seen but we'd expect 90.55 resistance holds and bring fall resumption. Below 89.13 will target 87.36 support next and break there will confirm that whole rise from 84.10 has completed with waves up to 93.74 already. Also, it will indicate that medium term down trend is resuming for another low below 84.81. However, sustained trading above 90.55 resistance will dampen this bearish view and turn focus back to 91.86/92.03 resistance zone instead.

In the bigger picture, USD/JPY is still trading below medium term trend line resistance at 94.71 and 55 weeks EMA at 94.07. Whole down trend from 124.13 is likely still in progress and a break of 84.81 will target 1995 low of 79.75. However, note bullish convergence condition is seen in weekly MACD. Sustained trading above the medium trend line resistance will be the first signal of medium term reversal and in such case, focus will turn to 101.43 resistance for confirmation.

FORX REPORT / 28TH JAN

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GOLD AND OIL REPORT

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OUTLOOK FOR THE DAY

Apart from weekly oil inventory data, energy price movements will be directed by macroeconomic development as well as changes/anticipated changes in government policies this week. WTI crude oil price continues hovering around 74/75, lowest levels in a month, amid concerns about further tightening in China and USD recovery on weak data from Europe.

News said that some Chinese banks have begun limiting new lending as requested by the government to cool down the overheated economy. According to HSBC analysts, 5 major banks they contacted today confirmed that they received instruction form banking regulators last week to slow down new lending but not stop new lending as the market speculated. Moreover, officials refused to be identified from Bank of China and China Construction Bank admitted they have begun curbing new loans unless the borrowers have repaid previous borrowings.

The UK GDP grew +0.4% qoq in 4Q09, missing market expectation of a +0.4% expansion. The result was disappointing and raised the uncertainty whether the BOE will announce an end to QE at February's meeting. Even though it announces a pause in QE, it's still highly likely that the central bank will resume and extend stimulus measures if economic recovery fails to sustain.

The pound tumbles against USD amid the weak economic data and erases the gains made yesterday. Other major currencies also plunge against the dollar.

Recovery in USD weighs on precious metals in European session. Gold slips -0.4% to 1092 while silvers loses -0.7% to 16.85. For PGMs, platinum falls -1.2% while palladium amplifies the weakness by dropping almost -2% to 431.2. Palladium is a high-bets form of platinum and the relation between palladium and platinum is similar to that between silver and gold. Therefore, in and uptrend, palladium likely outperforms platinum while in a downtrend, palladium likely underperforms platinum.

Economic data to be released in NY session included S&P/Case-Shiller Composite-20 and consumer confidence. Decline in Case -Shiller home price index probably eased to -5% yoy in November from -7.3% and -9.3% in October and September respectively. The Conference Board is expected to report modest improvement of consumer confidence to 53.5 in January from 52.9 a month ago. FOMC members will meet today and is almost certain to announce that the policy rate will be kept at 0-0.25% for an extended period.

After market close, the industry-sponsored API will release its estimates on oil inventories. Last week, the agency said that crude stockpile dipped -1.8 mmb to 329.5 mmb in the week ended January 21. Distillate stockpile also drew -3.4 mmb to 163.4 mmb as cold weather over the past few weeks increased demand for heating oil. However, gasoline inventory continued to rise, although the magnitude was greatly reduced to +0.67 mmb.

GOLD

Intraday bias in gold remains neutral for the moment and some more sideway trading could be seen. Nevertheless, another fall is still expected as long as 1117.8 resistance holds. Current fall from 1163 is expected to continue to resume whole correction form 1227.5 and should target 100% projection of 1227.5 to 1075.2 from 1163 at 1010.7 next. On the upside, above 1117.8 will bring stronger rebound and put 1163 resistance back into focus.

In the bigger picture, gold has made a medium term top at 1227.5 and correction from there is likely still in progress to 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level. However, we'd expect such correction to be contained there at around 1000 psychological level and bring resumption of the whole up trend from 2008 low of 681. A break above 1163 will indicate that such correction has completed and will turn outlook bullish for another high above 1227.5.

SILVER

Silver's fall resumes after brief consolidation and further decline is still expected. As noted before, whole fall from 19.50 is likely resuming. Break of 16.765 support will confirm this case and target 100% projection of 19.50 to 16.756 from 18.925 at 16.19, which is close to 16.12 support. On the upside, above 17.27 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 18.925 resistance holds.

In the bigger picture, the sharp fall from 18.925 suggests that whole decline from 19.50 is still in progress and is resuming. The development revives that case that silver has already topped out in medium term at 19.50. Break of 16.19 projection target will suggest that fall fro 19.50 is developing into an impulsive move which further affirm the reversal scenario and bring deeper decline to lower medium term trend line at 14 level.

On the upside, above 18.925 will suggest that silver has not topped out yet. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall.

CRUDE

While downside moment is diminsihing a bit, intraday bias is still on the downside. Crude oil's fall from 83.95 is expected to continue and sustained d break of 61.8% retracement of 68.59 to 83.95 at 74.46 will target a rest on 68.59 support. . On the upside, above 76.68 resistance will turn intraday bias neutral and bring consolidations. But break of 79.16 resistance is needed to indicate that fall from 83.95 has completed. Otherwise, short term risk will remain on the downside.

In the bigger picture, upside momentum is clearly diminishing as seen in bearish divergence condition in daily MACD. However, there is no confirmation that medium term rise has topped out yet as long as 68.59 support holds. Such medium term rise could still continue and above 83.95 will target 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, even in such case, we'll continue to look for reversal signal and expect crude oil to top out finally as it approaches 90 level. ON the downside, break of 68.59 support will confirm that a medium term top is in place and will turn outlook bearish for a retest on 33.2 low as correction from 147.27 resumes.

DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.

FOREX REPORT

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Japanese yen had some jittery today but still managed to gain broadly on risk aversion. Sterling tumbled after release of worse than expected GDP data. Dollar continues to strengthen against major currencies except yen. The greenback is supported as crude oil fails to get hold of 75 level while gold is dropped back below 1090.

Sterling fell sharply today after disappointment from Q4 GDP data. GDP managed to turn positive to 0.1% qoq but fell short of expectation of 0.4% qoq, suggesting that recovery is still fragile and there are much risks of returning into recession. Euro, on the other hand was supported against sterling after release of better than expected Ifo business climate which rose to 18 month high of 95.8 in January.

Japan yen had a roller coaster ride today. Yen strengthen in Asia on talks that PBoC will ask several domestic banks to raise their reserve ratio. Then, yen was shot down by news that S&P placed a negative outlook on Japan's AA sovereign long-term credit rating and warned down a downgrade if "economic data remain weak and measures to boost medium-term growth are not forthcoming, given the country's high government debt burden and its weak demographic profile." Nevertheless, Yen regained strength after Finance Minster Kan assured markets of fiscal discipline.

BoJ left overnight lending rate unchanged at 0.1% as widely expected. Assessment of the economy is left unchanged and is "picking up" thanks to stimulus measures around the world. However, there central bank does not see "sufficient momentum to support a self-sustaining recovery in domestic private demand," yet. Stamping out deflation is still a "crucial challenge" of the bank. Forecasts are broadly unchanged from that made in October and deflation will be more moderate than predict because of "rise in crude oil prices." BoJ Governor Shirakawa said there is no change in the central bank's stance of keeping monetary policy very easy. Finance Minister Kan reiterated today that the BOJ has more options to combat deflation and it's believed that BoJ is considering to expand an emergency loan program or increase purchases of government bonds.

There are talks in the market that PBoC will ask several domestic banks to raise their reserve ratio. Industrial & Commercial Bank of China is believed to have ordered its branches to stop issuing new loans for the rest of January while China Citic Bank has suspended new lending in Shanghai. Bank of China has stopped extending new corporate loans in the Shanghai area. Also, Bank of China's earlier than expected announcement of its fund-raising plans is viewed as a confirmation to view of regulator's determination to slow loan growth.

GBP/JPY Mid-Day Outlook

Daily Pivots: (S1) 145.24; (P) 145.98; (R1) 147.33

GBP/JPY's break of 144.58 confirms that fall from 150.68 has resumed and the cross should now be targeting 141.99 support next. Break there will further affirm the case that consolidation from 139.69 has completed at 150.68 alrady and whole decline from 163.05 is resuming. In such case, deeper decline should be seen to retest 139.26 low next. On the upside, though, above 147.25 minor resistance will mix up the near term outlook and we'll turn neutral first in such case.

In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Fall from 163.05 is possibly resuming as consolidation pattern from 139.69 has likely finished at 150.68 already. Break of 139.26 will confirm this bearish case and target 61.8% retracement of 118.81 to 163.05 at 135.70 next. Break will further affirm the case that whole down trend from 2007 high of 251.90 is resuming for another low below 118.81. This will remain the preferred view as long as 150.68 resistance holds.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.9005; (P) 0.9048; (R1) 0.9084

AUD/USD's fall resumes after brief consolidation and is now pressing 61.8% retracement of 0.8734 to 0.9327 at 0.8961. At this point, intraday bias remains on the downside as long as 0.9094 minor resistance holds. Sustained trading below 0.8961 fibo support will shift favor to the case that fall from 0.9327 is resuming the whole decline from 0.9404 and AUD/USD should drop through 0.8734 support. On other hand, strong rebound from 0.8961, followed by break of 0.9094 minor resistance, will indicate that fall from 0.9327 is likely just a correction and will flip intraday bias back to the upside for 0.9327 and then 0.9404.

In the bigger picture, the failure below 0.9404 high and deep pull back from 0.9327 mixes up the outlook of AUD/USD and we'll stay neutral for the moment. Nevertheless, one thing to note is that AUD/USD is losing upside momentum as seen with bearish divergence in daily MACD. Hence, even in case of another rise, we'd expect strong resistance as AUD/USD approaches 2008 high of 0.9849 and bring reversal. On the downside, break of 0.8734 support will in turn revive the case that whole medium term rise from 0.6008 has completed and will turn outlook bearish for deeper correction towards 0.7702/0.8626 support zone.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.4121; (P) 1.4157; (R1) 1.4188

EUR/USD's sharp fall today suggests that recovery from 1.4028 might have completed at 1.4193 already. Intraday bias is cautiously on the downside for the moment. Break of 1.4028 will confirm fall resumption and should target next key cluster support at 1.3737. On the upside, above 1.4193 will bring more consolidations. But after all, upside is expected to be limited below 1.4334 resistance and bring fall resumption.

In the bigger picture, medium term rise from 1.2456 has completed at 1.5143 on bearish divergence conditions in daily MACD. Focus now turns to 1.3737 cluster support (50% retracement of 1.2329 to 1.5143 at 1.3736). Decisive break there will also confirm the case that three wave consolidation from 1.2329 has finished at 1.5134 too. In other words, whole medium term term fall from 1.6039 should be resuming for a new low below 1.2329. On the upside, however, break of 1.4578 resistance will leave the fall from 1.5143 in three wave corrective structure and mixes up the outlook.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.6134; (P) 1.6196; (R1) 1.6305;

Intraday bias in GBP/USD remains neutral for the moment and consolidation form 1.6077 might continue. But still, upside of the recovery should be limited below 1.6284 resistance and bring fall resumption. Recent development suggests that corrective rise from 1.5829 has completed with three waves up to 1.6456 already and whole decline from 1.6875 should be resuming. Below 1.6077 will flip intraday bias back to the downside for 1.5829 support and break there will confirm this bearish case and target 1.5706 key cluster support. On the upside, though, above 1.6284 minor resistance will delay the bearish view and turn focus back 1.6456 resistance

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503. However, note that break of 1.6456 resistance will in turn shift favor to the case that recent price actions from 1.7043 are merely developing into consolidations to the larger rise from 1.3503. That is, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.

REVIEW ON FOREIGN MARKETS

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FOREIGN MARKETS
With stocks witnessing a third consecutive sell-off on Friday, 22 January, 2010, it turned out to be a dismal week for stocks at Wall Street for the week that ended on that day. Earning reports dominated the week but the positive ones also failed to cheer investors. Concerns over financial sector regulation failed to induce buying interest among traders. Economic reports had limited impact on stocks. It was a holiday-shortened week with market being closed on Monday, 18 January, 2010.

For the week, that ended on Friday, 22 January 2010, Dow ended lower by 436.67 points (4.1%) at 10,172.98. Nasdaq ended lower by 82.7 points (3.6%) at 2205.29. S&P500 lost 44.27 points (3.9%) at 1091.76. All ten economic sectors ended in the red led by the materials sector. A large number of notable names reported earnings this week, including five Dow components.

During the week, President Obama proposed some reforms in the financial sector. Obama's plan lacked details, but it was announced that commercial banks will not be allowed to own, invest in or sponsor a hedge fund or a private equity fund. In addition, commercial banks will be prohibited from proprietary trading operations unrelated to serving customers for their own profit.

Several banks reported earnings during the week. The financial sector's losses were compounded by news of regulatory overhauls by the Obama administration. Among the companies in the financial sector that reported earnings were Citigroup, Goldman Sachs and American Express that beat earning estimates. Bank of America and Morgan Stanley missed estimates.

In the other earning space, industry bellwether General Electric reported upside results, as did McDonald's, Google and IBM.

At the end of the day on Friday, 22 January, 2010, stocks closed with steep losses for a third straight day paced by technology shares, which suffered from analyst downgrades and huge earnings expectations. The selling picked up in the afternoon as fears swirled regarding the possibility that Ben Bernanke might not get confirmed to a second term as Federal Reserve Chairman.

On that day, the Dow Jones Industrial Average ended lower by 216.9 points at 10,172.98. Nasdaq ended lower by 60.41 points at 2205.29. S&P 500 ended lower by 24.72 points at 1091.76. All ten sectors ended in the red led by financial, technology and materials sectors.

Losses cumulated at Wall Street despite better than expected earning reports from AMD and Google. Also, Mac Donalds and GE reported good earnings but the stocks ran out of gas by the end of the day.

Crude oil prices dropped significantly on Friday, 22 January 2010. Prices fell as traders mulled over China's tightening of the current monetary policies, which will lead to demand concerns for crude in coming months. Sell-off of US stocks at Wall Street also pressured to declining commodity prices.

On Friday, crude-oil futures for light sweet crude for March delivery closed at $74.54/barrel (lower by $1.54 or 2%). For the week, crude ended lower by 4.7%. On a year to date basis till date, crude is lower by 8%.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies stayed steady against most of its counterparts. The dollar strengthened during the week on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans. The dollar index dropped by a mere 0.2%. The dollar index lost 1.6% for the week.

Barring ICICI Bank, all the Indian ADRs ended in the red on Friday. Wipro Technologies and Punjab Tractors were the largest losers, each shedding almost 4.5%. HDFC Bank shed 3.5%. ICICI Bank added 0.25%.

COPPER OUTLOOK:

Base metal prices ended higher on Friday, 22 January 2010. Prices rose in tandem with the slipping dollar, which increased the appeal of base metals as an alternate investment.

At USA, copper futures for March delivery ended higher by 5.2 cents (1.6%) to 3.347 a pound. For the week, copper ended lower by 0.6%. This year, till date, copper is lower by 3.4%. Copper ended FY 2009 higher by 140%.

At LME, copper for delivery in three months ended higher by $115 (1.6%) at $7,390. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies stayed steady against most of its counterparts. The dollar strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans. The dollar index dropped by a mere 0.2%.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

Among other metals traded in the LME on Friday, lead ended 2% lower at $2,247 a ton and zinc dropped 5% to end at $2,343 a ton. Nickel dropped 2% to end at $18,510. Aluminium shed 1.6% to end at $2,220 a ton.

GOLD CRUDE OIL AND BASEMETALS REPORT

at 9:49 AM

Weekly Fundamental Outlook

The commodity sector got hammered last week as investors worried that overheating in China and US' bank proposal to curb risk-taking would reduce demand for higher-yield assets. The Reuters/Jefferies CRB Index dropped -2.1% to 275.56, the lowest level since December 22.

Crude Oil :
WTI crude oil slid -2% to close at 74.54 Friday in reaction to US' plan to limit trading banks. Energy demand in the US and China is also at risk of slowing down. The front-month contract plunged for more than -10% over the past 2 weeks.

The US President Barack Obama proposed restrictions on risk-taking at financial institutions. The plan includes limiting the size of financial institutions and to ban some 'risky' activities including proprietary trading and internal hedge funds. The news damped investments for risky assets such as commodities and equities.

Having waited for 5 months, investors received the CFTC's proposal on positions limits on energy contracts (physically settled and cash-settled futures in light, sweet crude oil, Henry Hub natural gas, and New York Harbor gasoline and No. 2 heating oil) on January 14. The purpose of limiting positions is to curb speculations of large banks and swaps dealers in oil, natural gas, heating oil and gasoline markets.

According to the Commission, the aggregate limits are set by formula based on open interest. The AMC speculative position limit would be 10% of the first 25,000 contracts of open interest and 2.5% of open interest beyond 25,000 contracts. The single-month position limit, in turn, is set at 2/3 of the AMC position limit. The position limits would be calculated off of the prior year's month-end open interest.

Only very bigger positions holders will be affected by the limits and the CFTC showed that 3 unique owners in crude oil market and 1 in the natural gas market were affected during the period from January 1, 2008 to December 31, 2009. However, more traders in heating oil and gasoline markets were restricted.

Apart from the policy side, fundamentals suggested crude oil price should remain within a range of 70-80 in the near-term. Released Thursday, the US Energy Department reported crude oil inventory drew -0.47 mmb to 330.6 mmb in the week ended January 21. Utilization fell to 78.4% for 81.3% but decline in demand was offset by higher reduction (-4%) in imports. Draw in distillate stockpile more than doubled consensus forecasts as extremely cold weather last week raised heating oil consumption. Demand rose +5.8% to 3.823M bpd while production plummeted -10%. Despite the draw, distillate inventory remained +17% above normal. However, gasoline stockpile rose +3.95 mmb to 227.4 mmb as driven by -1.5% drop in demand to 8.602M bpd.

Last year, rally in crude oil price hinged on robust demand growth in China. Indeed, demand in the country was strong as indicated by oil imports which gorse +1.6M bpd yoy in December. The Chinese government reported economy grew +10.7% yoy in 4Q09, the fastest pace since 2007 in 4Q09. For all of the year, the economy grew +8.7%, exceeding the official target of +8%.

However, the data did not send energy prices higher. Instead, the expansion raised worries about further tightening in the world's third largest economy. We believe Chinese demand in the near-term may slowdown due to policy tightening. However, in the longer-term, imports will pick up again as underlying fundamentals in Chinese economy stays strong.

Natural Gas :
After rising on Thursday and Friday, gas price added +2.2% last week. According to the US Energy Department, inventory drew -245 bcf to 2607 bcf in the week ended January 22, sending total gas storage -0.2% below 5-year average. Colder-than-expected weather in the US increased gas consumption. As weather returns to normal in coming weeks, we believe demand will reduce and so will supply. For most of the time In 2010, imports from Canada will weaken while production will be lower than last year as the impact of -60% decline (from peak to trough through September 2008 to July 2009) in rig counts feeds in. However, LNG imports will ramp up rapidly. Over the period of 2010 and 2011, LNG investments such as Yemen, Tangguh and Sakhalin projects will raise total capacity significantly

Precious Metals :
Gold price tumbled amid profit-taking and broad-based decline in commodities. The benchmark contract for gold plummeted -3.5% to close at 1090.8 last week. Although the yellow metal has fell -6.2% from recent high at 1163, we still see further downside risk, particularly as February and March are weak months seasonally.

PGMs slumped Friday. Platinum dived to 1521.1, the lowest level in more than 2 weeks, before recovery. The metal lost -3.2% over the week. Palladium ended the week with -1.7% decline. Price slipped to a 1-week low of 425 Friday before buying interest emerged. However, rebounds after the sharp fall indicates underlying demand for PGMS remain strong.

In China, imports for platinum and palladium grew +115.7% yoy and +215% yoy, respectively, in December. China overtook the US as the bigger auto market by sales in 2009. At the same time, it also surpassed Germany as the largest car exporter last year. With global auto market anticipated to recovery rapidly in 2010. We believe import s of PGMs for auto-catalysts will rise further.

ETF investments in PGMs remained firm last week. According to ETF Securities, platinum holdings in European and Australian Trusts pulled back to 433.2K oz (-17%) in the week ended January 2010. Holdings in the new US ETF surged to 149.9K oz during the period, from less than 10K oz in the first trading week. For palladium, holdings in European and Australian Trusts declined -4.7% to 648.2K oz while that in the new US ETF rallied to 209.9K oz. Holdings in the first trading week was also less than 10K oz. We improved fundamental outlook and strong ETF investment should boost PGMs prices this years.

The CFTC will hold further hearings in March to discuss about position limits on metal markets. We do not think this would dampen metal demands. As metals are non-perishable and easier to store, restrictions on financial markets will direct investors to physical market investment.

Base Metals :
Speculations on further monetary policy tightening in China weighed on base metals and the complex recorded broad-based decline last week. Copper proved to be the most resilient metal in the complex with only modest drop of -0.5%. China trade data showed that net refined copper import rose +26% mom in December. At the same time, the country's inventory slid -3.3% to 97308 metric tons from the previous week. These evidenced China's demand for the metal stays strong.

LME contract (3-month delivery) for lead plunged -8% to close at 2237. Last, we saw rapid rise in lead production in China. Producers stockpiled plenty of lead scrap in 2008 amid weak price and they released the scrap to the market in 2009 as price recovered markedly. This had led to significantly increase in secondary production of lead. We believe the phenomenon will continue in the first half of 2010 but should turn better in the second half. Therefore, we should be prepared for further weakness in lead prices in near- to medium-term.

DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.

FOREX WEEKLY REVIEW AND OUTLOOK

at 9:06 AM

Risk aversion was in the driving seat last week as investors rushed out from stocks and commodities on a couple of concerns. US stocks were shot down by President Obama's bank proposal to limit risk taking by banks and doubt on Bernanke's future as Fed chairman in the second term. European stocks were dragged down by US equities, deteriorating investor sentiments as well as continuous concern on Greece's fiscal health and deficit contagion spreading to other European nations. Asian stocks were pressured by worry of further tightening measures by China government to cool growth and inflation. Dollar benefited from safe haven flow and rose sharply against most major currencies. However, the Japanese yen was indeed the biggest winner last week and yen crosses were extremely heavy.
On Thursday, US President Barack Obama proposed restrictions on risk-taking at financial institutions. The plan includes limiting the size of financial institutions and to ban some 'risky' activities including proprietary trading and internal hedge funds. The news damped investments for risky assets such as commodities and equities. On Friday, two Senate democrats said they would oppose Bernanke's second term as Fed chairman and there are altogether five Senate Democrats in this position with eighteen others undecided. Bernanke needs 51 votes to be confirmed but hey may need 60 votes from Senate to overcome a procedural hurdle. However, it's doubtful whether Bernanke would get 60 votes when the current term expires on January 31. These two issues sent DOW -5.1% down from intraweek high of 10729.89 to close at 10172.98.

The ongoing concern on Greece's ability to cut down its fiscal deficit boosted interest in Portugal's 2010 budget plan this week. IMF warned Portugal last week of the "critical" importance of getting its public finances in order and said that "fiscal consolidation is critical to prevent further deterioration and preserve hard-won credibility." There were growing concern of contagion spreading from Greece to other nations in the Eurozone even though the prospect of Eurozone breakup is still very low. Investors are also deeply concerned as German and Eurozone ZEW economic sentiments dropped much more than expected in January and triggered doubt on the sustainability of recovery in the region. Euro continued to weaken against Swiss Franc and dived to as low as 0.8650 against Sterling before recovering.

Asian stocks were pressured as Chine hiked one-year bill yield again and on speculation that that China will raise interest rates last Friday. While rates was not raised at the end, investors will continue to be cautious on any more tightening measures from China.

The above developments will continue to be main drivers in the financial markets. The developments in the next few weeks will be important to development whether last week's sharp fall in stocks and commodities were overreactions or a real change in sentiments and trend.

Looking at the charts, DOW's sharp reversal last week has sent the index deeply below the medium term trend line support as well as 55 days EMA. The break of 10218 key near term support level also confirms that a medium term top is in place at 10729.80 with bearish divergence condition in daily MACD and RSI. While it's still a bit early to say that the up trend from 6469.9 has completed totally, more downside should now be in favor in near term to bring the index through 10000 psychological towards 38.2% retracement of 6469.9 to 10729.98 at 9102.

Another point to note is that VIX, the fear index, rocketed higher last week to close at 27.31, having its biggest three day rise since February 2007. This could be another sign of market reversal.

Crude oil's fall from 89.35 extended further to close at 74.54 last week. While it's still early to suggest that medium term rise from 33.2 has finished. Some near term weakness is in favor to trend line support at around 70 psychological level.

Gold's fall from 1163 has also extended last week and closed below 1100 level at 1190.8. THe development indicates that correction from 1227.5 is set to resume for another low below 1075, and probably to projection level at 1010.7, which is close to 1000 psychological support.

The above developments will continue to favor more upside in both dollar and yen. Considering bearish outlook in USD/JPY, we'd expect yen to outperform the greenback though. Nevertheless, this is inline with the outlook of dollar index. Dollar index rose to as high as 78.81 last week before treating mildly. The break of 78.45 resistance confirms that whole rise from 74.19 has resumed. Current retreat from 78.81 is expected to be contained above 77.41 support and bring rally resumption. We'd expect more upside to 61.8% projection of 74.19 to 78.45 from 76.60 at 79.23 and then 38.2% retracement of 89.62 to 74.19 at 80.08.

Also, recap the bigger picture outlook, whole fall from 89.62 has completed at 74.19 on bullish convergence condition already. Our preferred view is that price actions from 88.46 are a three wave consolidation to longer term rise from 70.70. That is rise from 74.19 is tentatively treated as resumption of the longer term up trend. The final structure of the rise from 74.19, be it impulsive or corrective, will provide more hints on whether this view is correct.

The Week Ahead

The above mentioned developments will continue to be main drivers in the financial markets, including development in Obama's bank proposal, Bernanke's re-appointment, Portugal's budget presentation on Tuesday and any new tightening measure from China. In particular markets could very volatile on Tuesday on Portugal's budget deficit and Bernanke's reappointment vote. In addition BoJ, Fed and RBNZ are scheduled to meet this week. On the economic data front, Germany Ifo will be closely watched to confirm deterioration in business confidence. UK Q4 GDP and US Q4 GDP will catch much attention from the markets.

■Monday: Australia PPI; German Gfk consumer sentiment; US existing home sales
■Tuesday: BoJ rate decision; German Ifo business climate; UK Q4 GDP; US consumer confidence, house price index, Bernanke confirmation vote
■Wednesday: Australia CPI; US new home sales, FOMC rate decision; RBNZ rate decision
■Thursday: Eurozone confidence indicators; US durable goods
■Friday: Japan CPI, unemployment rate; Eurozone M3, CPI; Swiss KOF; Canada GDP; US Q4 GDP
EUR/JPY Weekly Outlook
EUR/JPY's fall fall from 134.36 extended further last week and the break of 126.88 support confirms that whole decline from 138.47 has resumed. Initial bias remains on the downside this week and further fall should be seen to 124.35 support and then 100% projection of 138.47 to 126.88 from 134.36 at 122.77 next. On the upside, above 128.38 minor resistance will argue that a short term bottom might be in place on oversold condition and bring recovery. But upside should be limited below 131.49 support turned resistance and bring fall resumption.

In the bigger picture, the break of 126.88 support revives that case that medium term rebound from 112.10, which is treated as correction to long term down trend from 169.96, has completed last year at 139.21. Break of 124.35 support will further affirm this case. By then, we'll expect such long term down trend to resume for a new low below 112.10. On the upside, break of 134.36 resistance is needed to invalidate this bearish view and suggest that EUR/JPY is still in consolidation to rise from 112.10 only. Otherwise, outlook will remain bearish.

In the long term picture, up trend from 88.96 (00 low) has completed at 169.96 and made a long term top there. The corrective nature of the rise from 112.10 to 139.21 argues that whole fall from 169.96 is note completed yet. A break below 112.10 low will confirm that whole fall from 169.96 has resumed and should then target 61.8% projection of 169.96 to 112.21 from 139.21 at 103.45 or further to 100 psychological support next.

DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.

FOREX OUTLOOK FOR THE DAY

at 6:47 PM

EUR/USD Mid-Day Outlook
Daily Pivots: (S1) 1.4024; (P) 1.4160; (R1) 1.4239.

EUR/USD dives through mentioned 38.2% retracement of 1.2329 to 1.5143 at 1.4068 today and reaches as low as 1.4028 so far. At this point, intraday bias remains on the downside as long as 1.4137 minor resistance holds. Further decline should be seen to next medium cluster support level at 1.3737. On the upside, above 1.4137 will turn intraday bias neutral and bring recovery first. But upside should be limited below 1.4334 support turned resistance and bring fall resumption.

In the bigger picture, medium term rise from 1.2456 has completed at 1.5143 on bearish divergence conditions in daily MACD. Focus now turns to 1.3737 cluster support (50% retracement of 1.2329 to 1.5143 at 1.3736). Decisive break there will also confirm the case that three wave consolidation from 1.2329 has finished at 1.5134 too. In other words, whole medium term term fall from 1.6039 should be resuming for a new low below 1.2329. On the upside, above 1.5143 resistance is needed to invalidate this view. Otherwise, outlook will now remain bearish.

USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 90.87; (P) 91.16; (R1) 91.54.

No change in USD/JPY's outlook. Recovery from 90.30 might continue but after all, fall from 93.74 is still expected to resume as long as 92.03 resistance holds. Below 90.78 will flip intraday bias back to the downside and further break of 90.30 will bring fall resumption to 87.36 support next. Break there will confirm the bearish case that whole rebound from 84.81 has completed with three waves up to 93.74 already. This will also argue that medium term down trend is resuming for a new low below 84.81. On the upside, above 0.9203 will argue that fall from 93.74 is completed and will bring stronger recovery. But risk will remain on the downside as long as 93.74 resistance holds and another fall is still in favor after the consolidations.

In the bigger picture, USD/JPY is still trading below medium term trend line resistance at 94.71 and 55 weeks EMA at 94.07. Whole down trend from 124.13 is likely still in progress and a break of 84.81 will target 1995 low of 79.75. However, note bullish convergence condition is seen in weekly MACD. Sustained trading above the medium trend line resistance will be the first signal of medium term reversal and in such case, focus will turn to 101.43 resistance for confirmation

GBP/USD Mid-Day Outlook
Daily Pivots: (S1) 1.6232; (P) 1.6301; (R1) 1.6359.

GBP/USD's decisive break of 1.6209 support affirms that case that corrective rise from 1.5829 has completed with three waves up to 1.6456 already. Intraday bias is flipped back to the downside and further decline should be seen to retest 1.5829 support first. Break there will confirm that whole fall from 1.6875 is resuming for 1.5706 key cluster support. on the upside, above 1.6311 minor resistance will turn intraday bias neutral and mixes up the short term outlook.

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503.

However, note that sustain break of 61.8% retracement of 1.6875 to 1.5829 at 1.6475 will in turn indicate that whole fall from 1.6875 has completed and recent price actions from 1.7043 are merely consolidations to the larger rise from 1.3503 only. That is, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion

USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0351; (P) 1.0406; (R1) 1.0496

At this point, intraday bias in USD/CHF remains on the upside for 1.0506 resistance. Break there will confirm that whole rise from 0.9916 has resumed and should target medium term support turned resistance at 1.0590. On the downside, below 1.0418 minor support will turn intraday bias neutral and bring consolidations. But downside should be contained above 1.0291 resistance turned support and bring rally resumption.

In the bigger picture, medium term fall from 1.1963 has completed with five waves down to 0.9916 already, on bullish convergence condition in daily MACD. Also, the three wave consolidation from 1.2296 should be finished too. Current rise from 0.9916 is expected to extend further to medium term trend line resistance first (now at 1.1005). Sustained trading above the trend line will affirm the case that long term rise from 2008 low of 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 0.9916 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for 0.9634 low.

USD/CAD Daily Outlook
Daily Pivots: (S1) 1.0347; (P) 1.0417; (R1) 1.0534.

As discussed before, USD/CAD's fall from 1.0744 has completed at 1.0223 already, ahead of 1.0205 key support as expected. Intraday bias remains on the upside for the moment and further rise should be seen to 1.0744 resistance first. Break there will also confirm our bullish view that whole consolidation from 1.0851 has finished with three waves down to 1.0223 too. In such case, rise from 1.0205 should be resuming for 1.0851 and beyond. On the downside, below 1.0425 minor support will turn intraday bias neutral and bring retreat. But downside should be contained above 1.0313 resistance turn support and bring rally resumption.

In the bigger picture, we're still favoring the case that a medium term bottom is already in place at 1.0205 with bullish convergence conditions in daily MACD. As noted before, fall from 1.3063 is viewed as a correction to long term rise from 0.9056. Such correction might have already completed with three waves down to 1.0205 already (1.0784, 1.1732, 1.0205). Break of 1.0851 resistance will confirm this case and target 61.8% retracement of 1.3063 to 1.0205 at 1.1971 at least. On the downside, however, break of 1.0205 will invalidate this view and bring down trend resumption to parity instead.

AUD/USD Daily Outlook
Daily Pivots: (S1) 0.9033; (P) 0.9138; (R1) 0.9203.

AUD/USD dropped to as low as 0.9072 overnight but recovers after meeting 38.2% retracement of 0.8734 to 0.9327 at 0.9100. At this point, though, intraday bias remains on the downside as long as 0.9195 minor resistance holds and another fall could still be seen. Nevertheless, downside should be contained by 61.8% retracement at 0.8961. On the upside, above 0.9195 minor resistance will flip intraday bias back to the upside for retesting 0.9327 resistance first.

In the bigger picture, the corrective three wave structure of fall from 0.9404 to 0.8734 suggests that whole medium term rise from 0.6008 is still in progress. Break of 0.9404 will confirm medium term rise resumption and should target 2008 high of 0.9849. On the downside, though, break of 0.8734 support will revive the case that whole medium term rise from 0.6008 has completed and will turn outlook bearish for deeper correction towards 0.7702/0.8626 support zone.

EUR/JPY Daily Outlook
Daily Pivots: (S1) 127.94; (P) 129.12; (R1) 129.86.

Intraday bias in EUR/JPY remains on the downside with 129.634 minor resistance intact and further fall should be seen to 126.88/127.50 support zone. As discussed before, recent development suggests that price actions from 126.88 are merely consolidation to fall from 138.47 and should have completed at 134.36. Break of 126.88/127.50 will confirm the whole decline from 138.47 has resumed and should target 124.35 support next. On the upside, above 129.63 minor resistance will turn intraday bias neutral and bring consolidations. But recovery is expected to be limited by 131.50 resistance and bring fall resumption.

In the bigger picture, EUR/JPY is still bounded in medium term range between 126.88 and 139.21 and outlook remains neutral for the moment. On the downside, a break of 126.88 support will revive that case that medium term rebound from 112.10 has completed at 139.21 already and down trend from 169.96 is resuming. In such case, we'd expect deeper fall to 112.10 and beyond to resume the long term down trend. On the upside, however, break of 134.54 resistance will revive that case that recent price actions are merely consolidations to medium term rise from 112.10 already and another high above 139.21 should be seen before EUR/JPY tops.

EUR/GBP Daily Outlook
Daily Pivots: (S1) 0.8627; (P) 0.8680; (R1) 0.8710.

EUR/GBP's strong break of 0.8704 support suggests that whole decline from 0.9410 is still in progress and at this point, intraday bias remains on the downside for next target of 100% projection of 0.9410 to 0.8833 from 0.9153 at 0.8576 next. On the upside, above 0.8733 minor resistance will turn intraday bias neutral and bring recovery. But risk will remain on the downside as long as 0.8855 support turned resistance holds.

In the bigger picture, the break of 0.8704 support argues that whole rise from 0.8399 has completed at 0.9410 already. Also, this indicates that fall from 0.9410 is likely the third leg of the correction pattern that started at 0.9799 and could extend beyond 0.8399 support before the whole correction concludes. On the upside, a break of 0.8855 support turned resistance is needed to be the first sign that EUR/GBP has bottomed out. Otherwise, outlook will remain bearish.

EUR/CHF Daily Outlook
Daily Pivots: (S1) 1.4708; (P) 1.4739; (R1) 1.4755.

EUR/CHF breaches 1.4722 briefly today and at this point, intraday bias is cautiously on the downside. Another break of 1.4722 support will indicate that recent fall has resumed and should target 1.4577 key support next. On the upside, however, above 1.4781 resistance will indicate that a short term bottom is formed with bullish convergence condition in 4 hours MACD. In such case, stronger rebound should be seen to 1.4894/4988 resistance zone. But after all, that break of 1.4988 resistance is needed to indicate that EUR/CHF has bottomed. Otherwise, outlook will remain bearish and another fall should be seen after consolidations.

In the bigger picture, with EUR/CHF still staying well below 55 weeks EMA, fall from 1.5880 is likely still in progress. Current decline should have a test on 1.4577 support first and break will target 2008 low of 1.4315. On the upside, break of 1.5007 support turned resistance is needed be the first signal to indicate that fall from 1.5446 has finished and revive the case that 1.4577 is still in progress. Otherwise, medium term outlook will remain bearish.

GBP/JPY Daily Outlook
Daily Pivots: (S1) 147.69; (P) 148.47; (R1) 149.38.

No change in GBP/JPY's outlook as it's still bounded in converging range. Intraday bias remains neutral. Another rise cannot be ruled out and above 149.98 will target 150.68/153.21 resistance zone. But even in such case, upside should be limited there to conclude the whole consolidation from 139.96. On the downside, below 147.10 will flip intraday bias back to the downside. Further break of 145.96 will affirm the case that rise from 139.26, as well as consolidation from 139.96 have completed at 150.68 already. Deeper decline should then be seen to 141.99 support first and then a retest on 139.26 low.

In the bigger picture, medium term rebound from 118.18, which is a correction to the long term down trend from 07 high of 251.90, has completed at 163.05 already. Fall from 163.05 is expected to resume after sideway consolidation from 139.69 completes and should target a new low below 118.81. However, note that sustained break of 61.8% retracement of 163.05 to 139.26 at 153.96 will argue that fall from 163.05 has finished already and will in turn indicate that rise from 118.81 is still in progress to another high above 163.05 before conclusion.

FOREX REPORT / 22NDJAN

at 6:02 PM

Mid-Day Report: Sterling Tumbles on M4 and Fiscal Concern
Quick update: Stocks turned red after poorer than expected Philly Fed index which dropped to 15.2 in January. DOW dropped more than -1% and triggers sharp rally in Japanese yen.

Sterling dropped sharply in European session today after data showed that M4 broad money supply had its sharpest monthly fall on record. M4 fell by -1.1% in December and rose 6.4% yoy, much worse than expectation of 0.9%mom and 8.9% yoy rise. The undesirably low money growth showed the lack of response in the market in spite of BoE's GBP 200b quantitative easing program. In addition, data also showed a net GBP 15.7b of public sector net borrowing in December, which is the higher on record in that month since 1993.

Data from US saw jobless claims rose to 482k. Eurozone PMIs were mixed and provided little support to Euro. Manufacturing PMI improved to 52 in January but services PMI dropped to 52.3. ECB monthly bulletin said that economic recovery in Eurozone economic recovery is likely to be moderate and uneven. Regarding fiscal imbalances, ECB said "the very large government borrowing requirements carry the risk of triggering rapid changes in market sentiment, leading to less favorable medium and long-term market interest rates. Regarding inflation, ECB warned that "the expected increase in headline HICP inflation in 2010, from an estimated annual rate of 0.9% in December 2009, should not be interpreted as a resurgence of underlying inflationary pressures."

Earlier today, Yen weakens mildly after solid data from China. China's GDP posted an impressive 10.7% qoy rise in Q4, faster pace since 2007. CPI rose much faster than expected by 1.9% yoy in December, the second straight gain after none months of decline. PPI rose 1.7% yoy after dropping for 12 months. Economists believe that the inflation trend is a deep concern of the Chinese government, as well the risk of asset bubbles. The strong growth and inflation data intensifies speculation that more tightening is around the corner.

Looking at the dollar index again, intraday bias remains on the upside as long as 78.22 minor support holds and current rise is expected to continue to 61.8% projection of 74.19 to 78.45 from 76.60 at 79.23 and then 38.2% retracement of 89.62 to 74.19 at 80.08. On the downside, below 78.22 will turn intraday bias neutral and bring consolidations. But pullback should be contained above 77.41 resistance turned support and bring rally resumption.

2010 Currency Outlook: GBP
Since January 2007, the pound has dropped -23.5% against its major trading partners with the decline against the euro slightly more than that against the dollar. Although the pound managed to gained against most of these partners in 2009, much of the return was erased in the second half of the year as BOE committed to adopt extremely loose monetary policies and economic contraction was more serious than previously anticipated.

In 2010, we expect the pound will remain weak in the first quarter there are still uncertainties in how the nation's economy will develop and whether the central bank will expand or unwind stimulus policies. However, things may be clearer towards the second half of the year. More rapid economic growth (compared both with 2009 and with other OECDs) and improvement in fiscal conditions may help lift the pound. That said, 2010 will be a year full of variables in the UK. Election, exit of monetary policies, return of VAT to 17.5%... are all important issues for British economy this year and their impacts on economic development and currency are yet to tell.

Economic outlook: Economy should have grown slightly in 4Q09 after contracting almost -6% in the first 3 quarters. Forward-looking indicators have been improving and net trades have been boosted by weakness in the pound (against a basket of currencies, sterling has dropped more than -20% since 2007 and -4.4% since July 2009). In 2010, recovery is expected to continue although the path should be gradual and bumpy - a situation similar to most advanced economies. The OECD forecast UK's GDP will expand +1.2% in 2010 and +2.2% in 2010, after tumbling -4.7% in 2009. These are compared with corresponding growths of +0.9% and +0.9% in the Eurozone and +2.5% and +2.8% in the US.

The UK inflation jumped +2.9% yoy in December, +1% higher than the increase in November, as oil price rallied while reduction in sales tax in 2008 was not repeated. This is the first time since May that inflation has exceeded BOE's target of 2% and we forecast the rise may speed up in coming months as VAT has returned to 17.5%, from 15% last year, since January 2010. However, this is premature to predict an early tightening by the central bank. In fact, the MPC expected a spike in CPI. At November's inflation report, the BOE said that inflation will accelerate and then dip below the 2% target and the rate will not return to the target until 2012

Labor market in the UK has been resilient. The -15.2K decline in claimant count in December was the biggest drop since early 2007. Moreover, the decline in ILO unemployment rate to 7.8% in the September-November period from 7.9% in the August-October period also evidenced that the job market has performed better than expected since the beginning of the recession

Monetary Policy: Same as its counterparts in the advanced economy, the UK implemented a series of conventional and unconventional measures to stimulate growth. The BOE cut its policy rate to from 5% to 0.5% in the 5-month period from October 2008 to March 2009. The interest rates are expected to stay unprecedentedly low until at least late-2010. Moreover, policymakers also started buying assets in March 2009 and the size was increased from 75B pound in the beginning to 125B pound in May, 175B in August and then 200B pound in November.

It's a difficult task to forecast the BOE's policy as it surprises the market very often! In July, the market had expected the BOE would extend the asset buying program by 25B pound because it would be ending at the end of July, before the August meeting. Therefore, in order to avoid discontinuity, it's tactical for the central bank to extend the plan to 150B pound which was the total amount authorized by the Chancellor at that time. However, the outcome was that the MPC members decided to stick to 125B pound (May's decision).

After the meeting, the market widely anticipated the BOE would slow down the pace of purchases so that the whole program would extend beyond the meeting on August 6-until policymakers could acquired more information, from the Quarterly Inflation Report in August, on the impact of the existing monetary and quantitative easing policies.

While the market had expected the BOE would put everything on hold in August, it extended the asset purchase program by 50B pounds to 175B pound as 'the recession appears to have been deeper than previously thought. GDP fell further in the second quarter of 2009. But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand. Underlying broad money growth has picked up since the end of last year but remains weak. And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated'.

Another move was seen in November when the BOE raised the size of the program by another 25B pound to 200B pound, probably because the unexpected economic contraction in 3Q09 suggested dismal outlook in the country.

The next move will be in February when the Quarterly Inflation Report will be released. We and the market expect policymakers will announce a pause in QE at the meeting. A 'pause' in QE has good and bad implications. The good thing is that the BOE may think that there's evidence that economy in the UK has shown signs of improvement and previous easing programs are sufficient to drive growth. Moreover, putting an end to liquidity provision should be supportive for sterling which was being dumped in the second half of 2009 due to BOE's aggressive QE. On the other hand, if the BOE announces it a 'pause', it means there's possibility for further extension of the program should the economy deteriorate. While both the ECB and the FED have shown signs of unwinding their liquidity programs, potential expansions of QE by the BOE is really negative.

The BOE's monetary policy will even be harder to gauge this year as fiscal and political issues are playing important roles in the monetary outlook. In short, substantial fiscal tightening will prolong the accommodative monetary situation while how aggressively the government will work to cut the budget deficits greatly depends on which party wins the General Election which must occur by June 3, 2010.

Fiscal Policy and Election: The UK is running at huge deficits and the government said in the Pre-Budget Report public sector net borrowing (PSNB) will increase to 12.6% of GDP in 2009/10 while public sector net debt (PSND) will rise to 55.6% of GDP during the period. While the former should be more than halved by 2013/14, the latter will probably surge to 77.7% by 2014/15. IMF forecast in October that UK's net debt will rise to 75% of GDP in 2010 before 2010.

Credit agencies have warned that the nation's deficit problem is hurting its credit rating. While Moody's said on December 8 that the UK may test the 'Aaa boundaries', S&P lowered the outlook on the country's AAA rating 'negative' from 'stable' in May.

The 3 political parties in the UK have pledged to tighten fiscal policy as economic recovers but the Conservative party appears to be the most aggressive one regarding the issue. The opposition party said the current Labor government's plan to halve the deficit in 4 years is not enough and the cut needs to start immediately. Last week, the shadow Chancellor of Exchequer George Osborne said he will target programs that 'represent poor value for money' including spending on advertising and consultants. Tax credits for people earning more than 50 000 pounds and tax-free child trust funds for “better off families” will be cut' during the financial year. Currently, opinion polls show that the Conservatives are 10% ahead of the Labors in opinion polls.

The pound should be lifted with a hope of narrowing fiscal deficit. Therefore, it's possible for GBP to rebound after weakening in the first quarter, as election gets closer. However, the rise should not be too strong as fiscal tightening may hinder economic recovery and prolong the low-rate monetary policy.

If the election result replicates the polls, a lead of around 9-10% should produce a Conservative majority. However, if that's not the case, a hung parliament, with no party with an outright majority, could cause sterling to fall as well as increase the difficulty in coming up with an agreed approach to tighten fiscal policies.

DISCLAIMER: Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be used as investment advice. we assumes no responsibility or liability from gains or losses incurred by the information herein contained.

INDIAN STOCK MARKET END-SESSION-21STJAN

at 6:11 AM

Key benchmark indices extended losses for the third straight day on disappointing Q3 results from frontline companies. Markets across the globe were gripped with volatility as bullish economic data from China raised concerns Beijing may tighten policy. European markets were trading mixed after a firm start. Asian markets turned mixed after a weak start. The BSE 30-share Sensex declined 423.35 points or 2.42%.

The market breadth was extremely weak as small and mid-cap stocks underwent correction after a recent solid surge. Today's sell-off was wide-based with all the sectoral indices on BSE ending with losses. Shares from sectors related to infrastructure were the worst hit. L&T led decline in capital goods stocks after the engineering & construction major reported fall in third quarter sales revenue. Power equipment major Bharat Heavy Electricals also declined sharply as its third quarter revenue growth fell short of market expectations. ICICI Bank, too, was under selling pressure as third quarter net profit declined.

Power generation stocks dropped as investors shuffled their portfolios ahead of the upcoming mega follow-on-public (FPO) offer of NPTC. Banking shares were reeling under selling pressure ahead of the Reserve Bank of India's monetary policy review meet on 29 January 2010. Shares from metal, realty sectors and PSU stocks were not spared either.

The IPO of Jubilant Foodworks ended on Wednesday, 20 January 2010, with an oversubscription of 31.11 times. Foreign institutional investors (FIIs) made a beeline for the IPO. FIIs put in bids for 25.56 crore shares as compared to 71.41 lakh shares reserved for the qualified institutional investors segment as a whole. The strong response from FIIs indicates that global liquidity remains ample.

The food price index rose 16.81% in the 12 months to 9 January 2010, while the fuel index was up 6.34%, the government said on Thursday. The rise in food price index was lower than an annual rise of 17.28% in the previous week.

The annual wholesale inflation rose to 7.31% in December 2009, compared with 4.78% in November and 6.15% a year ago. Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said. He also promised more measures to check the rise in the prices of essential commodities.

Food prices will cool off in 1-2 months and inflation will turn around, finance ministry's chief economic advisor Kaushik Basu said in a newspaper interview published on Wednesday. The Reserve Bank of India will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank. Food prices rose near 20% in December from a year earlier, their highest in 11 years.

India's October-December 2009 quarter economic growth is expected to be lower than the previous quarter, chief statistician Pronab Sen said on Thursday, due to a contraction in farm output. Indian economy, which grew at 7.9% in the September quarter, is expected to grow 6-6.5% in the December quarter, Sen said.

He expects the Indian economy to grow at 6.5-7.5% for the fiscal year ending in March 2010. The annual farm output in the December 2009 quarter is expected to contract by 6-7%, he added. Monthly inflation may touch double digits by March 2010, Sen had said earlier this week

Union food and agriculture minister Sharad Pawar on Wednesday suggested that the prices of milk and related products were set to rise because of the demand-supply mismatch.

Aggregate results of 346 companies showed 58.20% advance in net profit on 9.5% rise in sales in quarter ended December 2009 over the quarter ended December 2008.

Excise, customs and service tax collections are continuing to show a negative growth. Excise duty collections between April to December 2009 are down by 13% at close to Rs 70,000 crore. Revenues by way of customs duty are also down by a whopping 28% at around Rs 59,000 crore while service tax collection is also down over 6% with the government collecting slightly over Rs 36,000 crore.

This takes the total collection of indirect taxes in the first nine months to about Rs 1,66,000 crore, down by 18% as compared to last fiscal. The government has set itself a target to collect around Rs 2,70,000 crore by the end of fiscal year ending March 2010.

Meanwhile, the government reportedly proposes to ease the norms for foreign direct investment (FDI) approval. Presently projects worth more than Rs 600 crore require the final approval of the Cabinet Committee on Economic Affairs (CCEA). The department of industrial policy and promotion (DIPP) has proposed that this ceiling be raised to anywhere between Rs 1,000 crore and Rs 1,500 crore. The new norms are likely to be notified after the introduction of a consolidated FDI policy framework on 1 April 2010.

FDI inflows increased to $27 billion in 2008-09 from $3.2 billion in 2004-05. During the period April-September 2009-10, FDI inflows reached $15 billion. The government has set a target of achieving $50 billion annual FDI by 2012 and $100 billion by 2017.

Economic growth will accelerate this year, Commerce and Industry Minister Anand Sharma said on Tuesday as he demanded better access to China's markets to help exports. Sharma's call for greater access for goods comes amid a widening trade gap between the two countries. Trade between the two grew rapidly to $50 billion in 2008, making China India's second-largest trading partner, but fell back to $43 billion in 2009 as global trade declined. Sharma called for more Chinese direct investment in India, especially in infrastructure, while noting that Indian firms are already present in China.

European shares were trading mixed on Thursday, continuing a choppy week for trading, with miners recouping some sharp losses made in the previous session. Key benchmark indices in Germany and France were up 0.06% and 0.32%. However, UK's FTSE 100 index fell 0.21%

Asian markets ended mixed. Key benchmark indices in Hong Kong, Singapore and Taiwan were down by between 1.13% and 1.99%. Japan's Nikkei 225 index rose 1.22% led by technology shares. South Korea's Seoul Composite index was up 0.45%. China's Shanghai Composite index added 0.22%.

Chinese data released Thursday were largely in line with expectations, showing economic growth powered higher in the fourth quarter, putting the full-year figure above forecasts. But inflation surprised to the upside, suggesting fiscal and monetary policy tightening could be ahead.

China's gross domestic product expanded at a rapid rate of 10.7% in the fourth-quarter of 2009 from the year-earlier period, pushing the full-year economic growth rate to a better-than-expected 8.7%, according to official data released Thursday.

Developing Asian economies face the risk of asset bubbles or overheating as the region's growth outpaces the rest of the world this year, the World Bank said in a report today. In South Asia, policy makers will be particularly responsive to signs of building inflationary pressures because of a strong aversion to food-price increases, the World Bank said.

US markets ended sharply lower on Wednesday, 20 January 2010, as earnings and the dollar's gains clipped the market's momentum. In earnings, Bank of America disappointed investors with a loss of $5.2 billion, which was worse than expected. Among others, Morgan Stanley's earnings fell short of analysts' expectations, but Wells Fargo posted an unexpected profit.

The Dow Jones industrial average lost 122.28 points, or 1.1%, to 10,603.15. The S&P 500 index fell 12.19 points, or 1.1%, to 1,138.04, and the Nasdaq Composite Index fell 29.15 points, or 1.3%, to 2,291.25.

Trading in US index futures indicated the Dow could fall 28 points at the opening bell on Thursday, 21 January 2010, reversing earlier gains. US stocks futures were firm earlier in the global day.

The World Bank raised its forecast for global growth in 2010 but warned that the recovery may lose momentum in the second half of the year as government stimulus programs wind down and unemployment persists. The world economy will expand 2.7% this year after the worst recession since the end of World War II, compared with an estimate in June of a 2% expansion, the Washington- based poverty-reduction agency said today in an annual report. Growth may reach 3.2% in 2011, the bank said.

The World Bank report also includes figures on last year's downturn, with an estimate that the global economy declined 2.2%, compared with the 2.9% decrease projected in June. Growth in emerging nations is expected to reach 5.2% this year, compared with a June estimate of 4.4%, the bank said. China will expand 9% this year and India 7.5%, it said.

The World Bank also raised its forecast for US growth in 2010 to 2.5% growth, after predicting 1.8% in June. Japan's gross domestic product will expand 1.3% this year, more than the 1% predicted in June. The euro area's economy is forecasted to grow 1%, compared with the earlier estimate of 0.5% expansion.

Speaking to a news agency on the anniversary of his first year in office US President Barack Obama urged lawmakers on Wednesday to agree quickly on core elements of healthcare reform, signaling he might support a scaled-back overhaul after his Democrats lost a key Senate seat.

Obama acknowledged that voter anger helped carry Republican Scott Brown to a stunning victory in Tuesday's Massachusetts election which has imperiled the president's healthcare effort and the rest of his legislative agenda.

The White House said it may retool its strategy for selling Obama's agenda while pressing ahead with his priorities of job creation, climate change and financial regulatory reform as well as healthcare.

Meanwhile British Prime Minister Gordon Brown in an article published in Asian Lite magazine marking the 60th anniversary of India becoming a republic said India is a 'modern global success story' that is marching toward prosperity.

Brown further said the relationship of one of the world's oldest democracies with one of the largest owes its foundations to our proud historic ties.

The BSE 30-share Sensex lost 423.35 points or 2.42% to 17,051.14. The Sensex opened unchanged from its previous close at 17,474.49, which was the day's high. Sensex fell 449.23 points at the day's low of 17,025.26 in late trade

The S&P CNX Nifty was down 127.55 points or 2.44% to 5094.15. Nifty January 2010 futures were at 5085, at a discount of 9.15 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment soared to Rs 1,11,117.17 crore from Rs 65,565.5 crore on Wednesday, 20 January 2010.

The market breadth, indicating the overall health of the market was extremely weak. On BSE, 2369 shares declined as compared with 579 that rose. A total of 51 shares remained unchanged.

The total turnover on BSE amounted to Rs 6185.96 crore as compared with Rs 6327 crore on Wednesday, 20 January 2010.

The BSE Mid-Cap index fell 2.39% to 6,858.73, outperforming the Sensex. The BSE Small-Cap index declined 2.47% to 8,760.99, underperforming the Sensex

BSE Auto index (down 1.42%), BSE IT index (down 1.42%) and BSE FMCG index (down 1.43%), outperformed the Sensex.

BSE Power index (down 3.47%), BSE Capital Goods index (down 5.15%), and BSE PSU index (down 2.98%), underperformed the Sensex

Bharti Airtel (down 2.93%), Tata Motors (down 2.84%), and HDFC (down 2.94%), edged lower from the Sensex pack.

Mahindra & Mahindra was the lone gainer from the 30-member Sensex pack. India's top tractor maker by sales gained 0.34% to Rs 1149.75. The stock staged a pullback from day's low of 1136.50. After market hours today, the company scheduled a board meet on 25 January 2010, to a stock-split proposal apart from considering its Q3 December 2009 results.

India's largest car maker by sales Maruti Suzuki India fell 1.25% on profit booking. The company announces its Q3 December 2009 results on 23 January 2010.

High beta infrastructure shares were the worst hit in today's sell-off. India's largest engineering & construction firm by sales Larsen & Toubro (L&T) slumped 6.63% to Rs 1527.95 and was the top loser from the Sensex pack. L&T said profit after tax from ordinary activities rose 15% to Rs 696 crore in Q3 December 2009 over Q3 December 2008. Gross sales revenue declined 6% to Rs 8139 crore. The result was announced during trading hours today, 21 January 2010.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) fell 4.26%. The company's the net profit rose 35.67% to Rs 1072.59 crore on a 17.28% rise in total income to Rs 7422.51 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours today, 21 January 2010.

Power generation stocks declined as investors shuffled their portfolios ahead of the upcoming mega follow-on-public (FPO) offer of NPTC.

Tata Power Company (down 4.69%), Reliance Infrastructure (down 2.66%), CESC (down 2.01%), Torrent Power (down 2.77%), Reliance Power (down 2.36%), and NHPC (down 2.30%), declined.

India's largest power generation firm by total capacity NTPC was down 1.55%. The company FPO remains open between 3 and 5 February 2010. The pricing has not yet been announced by the company.

Japirakash Associates (down 2.48%), Lanco Infratech (down 5.52%), GMR Infrastructure (down 1.84%), Punj Lloyd (down 4.91%), and GVK Power Infrastructure (down 2.29%), declined.

Realty shares were not spared either. DLF (down 2.69%), Unitech (down 2.29%), HDIL (down 3.98%), Indiabulls Real Estate (down 3.90%), and Omaxe (down 3.84%), declined.

India's largest private sector bank by net profit ICICI Bank lost 3.32%. The bank's net profit declined 13.44% to Rs 1101.06 crore on a 25% fall in total income to Rs 7762.71 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours today, 21 January 2010.

India's largest bank by net profit and branch network State Bank of India lost 1.76%.

India's second largest private sector bank by net profit HDFC Bank slipped 2.26% after its American depository receipt shed 1.56% on Wednesday.

Metal stocks declined after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 2.12% on Wednesday, 20 January 2010. Hindalco Industries (down 1.06%), Tata Steel (down 0.70%), Hindustan Zinc (down 3.09%), Sesa Goa (down 3.96%), and National Aluminum Company (down 4.42%), edged lower.

India's largest non-ferrous metal producer by sales Sterlite Industries India lost 3.70% after its American depository receipt or ADR dropped 5.23% to $18.11 on the New York Stock Exchange on Wednesday, 20 January 2010.

Index heavyweight Reliance Industries (RIL) shed 1.97% to Rs 1056.25. Reports indicated that RIL is unlikely to raise its offer price to take a controlling stake in LyondellBasell Industries. Lyondell's current restructuring plan values it as high as $15.5 billion. Recently, RIL had reportedly sweetened its initial $12.0 billion offer to about $13.5 billion for acquiring LyondellBasell. RIL will announce its Q3 result on Friday, 22 January 2010.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation was down 1.98% to Rs 1140, off day's high of Rs 1180. The company posted a 23% rise to Rs 3054 crore on 24% rise in net sales to Rs 15373 crore in Q3 December 2009 over Q3 December 2008. The results were announced after market hours today, 21 January 2010.

Cairn India fell 3.37% on reports the Comptroller and Auditor General of India, the country's statutory auditor, has sought government intervention to access financial records of the company's Rajasthan oil fields.

India's second largest mobile services provider by sales Reliance Communications (RCom) fell 0.99%. As per reports, the company has written to the Department of Telecom (DoT) asking it to reject the report submitted by the Government-appointed auditors. In a 28-page letter to the DoT, the company said that the report was based on uncorroborated facts and contrary to the all norms of audit and professional conduct.

Earlier the independent auditor - Parakh & Co - appointed by the DoT to examine the accounts of RCom had concluded that the company has under-reported revenues of Rs 2,799 crore to the Government, resulting in under-payment of Rs 315 crore as license fee and spectrum charges during 2006-08.

IT stocks succumbed to selling pressure in late trade after a firm start. The rupee fell to two-week lows against the dollar today, 21 January 2010.

India's largest IT exporter by sales Tata Consultancy Services fell 0.85% to Rs 772, off day's high of Rs 790.90. The third quarter earnings unveiled by the company after trading hours on 15 January 2010 surpassed market estimates as demand for outsourcing surged and prices stabilised, fuelling hopes of recovery in the showpiece sector.

India's second largest IT exporter by sales Infosys fell 1.39% to Rs 2616, after hitting a day's high of Rs 2663. On 12 January 2010 Infosys raised its full-year revenue and profit outlook after strong Q3 results and on improving trend for outsourcing orders.

India's third largest software services exporter Wipro lost 2.21% to Rs 709.40, easing from day's high of Rs 739. The company's consolidated net profit rose 21.26% to Rs 1217.40 crore on 4.17% rise in total income to Rs 7055.80 crore in Q3 December 2009 over Q3 December 2008. The company announced the results before trading hours on 20 January 2010.

Chief Financial Officer Suresh Senapaty said in a statement that the key financial services sector had bounced back on the back of strong outsourcing demand.

Financial Technologies (India) rose 0.76%. The company will declare Q3 December 2009 results on 29 January 2010.

The partially convertible rupee was at 46.01/02 after falling to 46.06 in early deals, which was its lowest since 6 January 2010. It had ended at 45.93/94 per dollar on Wednesday, 20 January 2010.

A weak rupee boosts operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.

Larsen & Toubro was the top traded counter on BSE with turnover of Rs 243.07 crore followed by Jai Corp (Rs 182.84 crore), Tata Steel (Rs 160.12 crore), Rashtriya Chemicals & Fertilisers (Rs 150.88 crore) and Bombay Dyeing & Manufacturing Company (Rs 103.32 crore).

Rashtriya Chemicals & Fertilisers reported a highest volume of 1.43 crore shares on the BSE. Unitech (73.77 lakh shares), Suzlon Energy (69.01 lakh shares), Lanco Infratech (67.25 lakh shares), and Ispat Industries (63.30 lakh shares), were the other volume toppers on the BSE.

Dr.Reddy's Laboratories slumped 6.55% after the company's American depository receipt, ADR tumbled 6.46% to $24.48 on the New York Stock Exchange on Wednesday, 20 January 2010 following poor Q3 December 2009 results announced during market hours on Wednesday, 20 January 2010.

Jindal Poly Films jumped 2.96% after the company's board approved buyback of up to 22 lakh equity shares at a ceiling price of Rs 450 per share. The announcement was made after market hours on Wednesday, 20 January 2010.

Raymond spurted 9.20% after the company reported a net profit of Rs 42.57 crore in Q3 December 2009 compared with a net loss of Rs 15.20 crore in Q3 December 2008. Net sales rose 5% to Rs 372.33 crore in Q3 December 2009 over Q3 December 2008. The result was announced after trading hours on Wednesday, 20 January 2010.

Private sector air carrier Jet Airways India jumped 3.21%. The company will declare Q3 December 2009 results on 25 January 2010.

Diversified agricultural products maker Jain Irrigation Systems moved up 1.40%. The company will declare Q3 December 2009 results on 28 January 2010.

Fertiliser maker Chambal Fertilisers & Chemicals climbed 2.06%. The company will declare Q3 December 2009 results on 23 January 2010. Fertiliser maker Rashtriya Chemicals and Fertilisers flared up 1.09%. The company will declare Q3 December 2009 results on 29 January 2010.

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