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Thursday’s Market Preview: Positive opening on the cards

The Indian market is likely to open on a positive note today buoyed by the US Federal Reserve’s stimulus package announced last night. Most Asian markets were also trading upbeat this morning following the US move. The SGX Nifty was up 32 points at 6,225 against its previous close of 6,193 on Wednesday.

The market brushed aside the minor hiccups associated with the Reserve Bank of India's (RBI) policy announcement on Tuesday and opened with smart gains yesterday, in line with markets across the globe. The realty sector, which ended lower in the previous session, saw some buying action in the morning session. However, after touching the day's high in mid-morning trade, the indices were range-bound. A small bout of selling towards the end of trade saw the indices paring some of their earlier gains.

Finally, the Sensex ended 120.05 points (0.59%) higher at 20,465. The index touched a high of 20,473 and a low of 20,426 during the session. The Nifty stood at 6160, up 41.50 points (0.68%). The index oscillated between a high-low of 6,182 and 6,147, respectively.

The local market will also be directed by the food inflation numbers and the listing of the shares of Coal India. The market will remain closed on Friday on account of Diwali.

The US indices closed higher on Wednesday after the Fed announced that it would purchase government bonds worth $600 billion over the next eight months in a bid to lower interest rates and perk up growth and borrowing. The Fed left options open for additional measures if growth and inflation don't stabilise in the months ahead. Besides, the Republicans’ strong gains in the mid-term polls is likely to encourage business activity.

The Dow surged 26.41 points (0.24%) at 11,215. The S&P 500 added 4.39 points (0.37%) at 1,198. The Nasdaq rose 6.75 points (0.27%) at 2,540.

Asian markets welcomed the US Fed move with key indices across the region trading in the green this morning. Fed’s move to boost spending is seen as a new hope for exporters in the region. Meanwhile, investors are hoping for a similar strategy from the Bank of Japan, which is meeting on Thursday-Friday.

The Shanghai Composite was up 0.96%, the Hang Seng surged 1.42%, the Jakarta Composite gained 0.37%, KLSE Composite rose 0.26%, Nikkei 225 jumped 2.24%, Straits Times was up 0.41%, Seoul Composite was up 0.30% and the Taiwan Weighted added 0.77% in early trade. The SGX Nifty was up 32 points at 6,225 against its previous close of 6,193 on Wednesday.

Indicating a sound industrial activity in the country, credit offtake from banks grew by 21.3% during the one-year period ended 22nd October, up from 9.3% from the year-ago period.

As of 22nd October, credit offtake from banks stood at Rs 35.81 lakh crore. As of October 23, 2009, bank credit for the 12 month period was Rs 29.51 lakh crore, the Reserve Bank of India (RBI) said on Wednesday.

Meanwhile, in its annual monetary policy the RBI has estimated that credit would grow by 20% this fiscal.


October M&A valued at $650 mn; lowest in 12 months: Report

New Delhi: India Inc's shopping spree suffered a setback in October in which merger and acquisition (M&A) deals worth only $650 million were announced - the lowest monthly M&A transaction value since October 2009, reports PTI.

According to data compiled by research firm VCCEdge, the M&A value in October stood at $650 million, a sharp decline from the $2 billion witnessed in the previous month.

However on a year-on-year basis, the deal volume as well as value saw an increase.

The highest number M&A deals were recorded in March this year with 72 transactions worth $14.35 billion. Previously, the maximum number of deals was in February, 2007 when it touched $19.29 billion in 39 deals, the report said.

The average deal amount in October this year was $36 million, a 9% increase from last month. In terms of deal size, transactions under $50 million accounted for 81% of the total volume, the report said.

The most targeted sector in October was the consumer discretionary sector, which attracted 18 deals valued at $158 million. However in terms of deal value, financials emerged at the top, recording acquisitions worth $369 million through six deals.

The largest deal was Fortis Healthcare acquisition of healthcare business of China-based Quality Healthcare Asia Ltd for $200 million.

The healthcare sector saw six deals worth $265 million.

ABG Shipyard's acquisition of 60.2% stake in Western India Shipyard for around $64 million was the second biggest deal in the month, the report added.

The other top deal of the month was Suzlon Energy's acquisition of 41.25 million equity shares representing 17.1% stake in Pune-based SE Forge Ltd from IDFC Private Equity for a price of $42 million.

The top five M&A deals accounted for 42% of total M&A deal value in October 2010, VCCEdge said.


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