Strong earthquake jolts east Japan, tsunami warning

A massive 8.8 magnitude quake hit the northeast coast of Japan on Friday, shaking buildings in the capital Tokyo, causing many injuries, at least one fire and triggering a four-metre (13-ft) tsunami, NHK television and witnesses reported.

Nikkei average closed down 1.7% at 10,254.43 points after the earthquake struck. India Tsunami Centre says there are no local alerts yet in wake of Japanese quake.

There was also a warning of a 10-metre tsunami following the quake, Japan's biggest in 7 years.

The public broadcaster showed flames and black smoke billowing from a building in Odaiba, a Tokyo suburb, and bullet trains to the north of the country were halted.

Black smoke was also pouring out of an industrial area in Yokohama's Isogo area.

TV footage showed boats, cars and trucks floating in water after a small tsunami hit the town of Kamaichi in northern Japan.

"The building shook for what seemed a long time and many people in the newsroom grabbed their helmets and some got under their desks," Reuters correspondent Linda Sieg said.

"It was probably the worst I have felt since I came to Japan more than 20 years ago."

Passengers on a subway line in Tokyo screamed and grabbed other passengers' hands. The shaking was so bad it was hard to stand, said Reuters reporter Mariko Katsumura.

The US Geological Survey earlier verified a magnitude of 7.9 at a depth of 15.1 miles and located the quake 81 miles east of Sendai, Honshu. It later upgraded it to 8.8.

The Tokyo stock market extended its losses after the quake was announced. The central bank said it would do everything to ensure financial stability.

Japan's northeast Pacific coast, called Sanriku, has suffered from quakes and tsunamis in the past and a 7.2 quake struck on Wednesday. In 1933, a magnitude 8.1 quake in the area killed more than 3,000 people. Last year fishing facilities were damaged after by a tsunami caused by a strong tremor in Chile.

Earthquakes are common in Japan, one of the world's most seismically active areas. The country accounts for about 20 percent of the world's earthquakes of magnitude 6 or greater

Nifty slips weak global market

The Nifty slipped moderately in opening trade following fall in global markets on baggage of news. Indian benchmarks already saw a major fall yesterday, so they did not react too much to 2% crack in US markets on Thursday.

London Brent crude remained above USD 115 a barrel, which is headed for its first weekly decline in four weeks. There were reports that Saudi police was in the eastern city of Qatif - fired shots and stun grenades at several hundred protestors.

Reliance Communications, Reliance Power, Reliance Infrastructure, Jaiprakash Associates, Hindalco, SAIL, Sterlite, Tata Steel, IDFC, SBI, HDFC, HDFC Bank, BHEL, Tata Motors, M&M, Infosys, Ambuja Cements and Wipro were dragging the markets down.

Reliance Capital gained over 1% as Nippon Life is going to invest USD 720 million in Reliance Life, reports CNBC-TV18 quoting sources.

However, ITC, Bharti Airtel, Hero Honda and BPCL were on buyers' radar.

The 30-share BSE Sensex was trading at 18,251, down 77 points and the 50-share NSE Nifty fell 25 points to 5,469.

The CNX Midcap slipped 40 points to 7,620. About 248 shares advanced as against 589 shares declined on National Stock Exchange.

New listings

Sudar Garments was trading at Rs 84, up 17% over issue price of Rs 77 a share.

Fineotex Chemical was trading at Rs 88, up 26% over issue price of Rs 70 a share.

Listed yesterday - Acropetal Technologies was down by 7% at Rs 90.

Midcap & Smallcap space:

Unitech was down 1.5%. According to sources, TRAI recommendations suggested cancelation of 8 Uninor licenses in Assam, North-east, J&K, Haryana, MP, Punjab, HP and Rajasthan.

Tata Coffee fell 1% as Coffee futures tanked 5%.

3i Infotech was down 1.5% and Shree Renuka down 3%. Maxwell Industries lost 1.5%.

DB Realty rallied 5% as Maharashtra gave clean chit to former MD Shahid Balwa. Maharashtra Home Ministry filed affidavit in Delhi HC and affidavit said 'nothing adverse' was found against Balwa, reports CNBC-TV18 quoting sources.

Reliance Broadcast was up 3%. Gokaldas Exports gained 6%.

Nifty below 5500

Indian equity were witnessing selling pressure today at 10:54 hours on the back of continued worries in Libya. London Brent crude climbed above USD 116 a barrel yesterday, up 3% over previous day's close and NYMEX crude too gained upto USD 105 a barrel, which was worrying factor for global markets.

Libyan leader Gaddafi forces hit oil facilities in Central Libya; crushed rebels with artillery and gunfire in at least two major cities. Asian markets too were under pressure - Shanghai, Nikkei, Kospi and Taiwan fell over 1%. Straits Times and Hang Seng lost over 0.5%.

Ian Scott global head of equity strategy with Nomura says these geo-political (Middle East and North Africa) concerns have had an effect on equity markets particularly some of the big oil importers like India. "Investors are more concerned about the geo-politics than high oil prices. I think stock market can live with oil above USD 100 a barrel if we could get rid of some of the concerns on the geo political side," he adds.

Scott says he prefers developed markets to emerging ones. Nomura has, in fact, cut its exposure in emerging market since the first week of December, moving from an overweight view to an underweight one.

On the rationale behind his stand on emerging markets, he says, "The inflationary backdrop here is bad and is probably going to worsen before getting any better. Also, valuations have been a little stretched, especially in India. The gap in PE multiples between India and other emerging markets (particularly China) needs to narrow down."

The 30-share BSE Sensex was trading at 18,336, down 133 points and the 50-share NSE Nifty slipped 41 points to 5,490. However, the broader indices were flat in trade.

He feels it is too early to come back to Indian markets; "the relative valuations are still high here and there is still some adjustment to take place in terms of monetary policy. We may see some near-term pressure on margins as a result of higher cost as well," he says.

Technology, financial, FMCG, infrastructure and select metal companies' shares were dragging the markets down.

Among frontliners, ICICI Bank, SBI, Tata Power, TCS, Hindalco, Kotak Mahindra Bank and HCL Tech were the top losers with 1-2% fall.

However, Anil Dhirubhai Ambani Group companies' shares like Reliance Capital and Reliance Infrastructure gained 3.4% & 1.7%, respectively. Reliance Communications too gained 0.5%. SAIL, Maruti, ACC, Ambuja and Tata Motors were other gainers.

New listing - Acropetal Tech was trading at Rs 121.25, up 34.72% over issue price of Rs 90 a share.

In midcap space, Wockhardt, Bayer Cropscience, HCC, KS Oils and Uttam Galva gained 4-6% while Godfrey Phillip, KGN Industries, AstraZeneca, Kirloskar Oil and Atlas Copco lost 2.5-5%.

In smallcap space, Gokaldas Export, Symphony, TTK Healthcare, Gulf Oil Corp and Ester Inds rallied 7-12% whereas Urja Global, EIH Associated Hotel, Genesys Int, Poly Medicure and OCL Iron fell 5-10%.

RIL, ICICI Bank, DLF, TCS up

Equity benchmarks were extremely volatile in trade today at 12:33 hours. Heavyweight Reliance Industries was quite supportive; gained over 1.5% after DGH report. RIL gas output may touch 67 mmscmd by April and RIL will have 22 gas producing wells in April versus 18 now, says Directorate General of Hydrocarbons (DGH).

Auto, capital goods, realty and Anil Dhirubhai Ambani Group companies' shares too gained. TCS, ICICI Bank, Kotak Mahindra Bank and SAIL were trading higher as well.

However, healthcare, steel (barring SAIL) and FMCG companies' shares were witnessing selling pressure. Even Infosys, Bharti, HDFC, Cairn, ONGC, NTPC, SBI and Axis Bank were putting pressure on the markets.

The 30-share BSE Sensex was trading at 18,421, down 19 points and the 50-share NSE Nifty fell just 9 points to 5,511. However, the broader indices were marginally in green.

Currently global markets too were consolidating as they were closely watching the crude oil prices movement. Asian markets were flat to positive in trade.

London Brent crude cooled off to USD 112.3 a barrel from USD 115 a barrel in previous trade as Libya tensions eased for the time being and OPEC members reassured on ample spare capacity and discussions were on for a possible emergency meet. Saudi Oil Ministry said has enough spare capacity for oil markets.

In the midcap space, Bajaj Finserv, Shree Global, Mcleod Russel, Cox & Kings and S Kumars Nationwide 6-8% while Glenmark, Kalpataru Power, Monnet Ispat, Nava Bharat Ventures and India Infoline lost 2-4%.

In smallcap space, Entegra surged 20% as board approved equity raising upto Rs 1500 crore. Bhagwati Banquet, Tata Coffee, Midfield Inds and Talwalkars Fitness gained 9-13% whereas Urja Global, Shasun Pharma, R M Mohite, Lloyds Metals and Shree Nath Comm fell 4-10%.

Munish Varma, head of global markets at Deutsche Bank India said investors generally have been consciously optimistic on India. "There is very little debate and it is almost the consensus view that the structural growth story of India remains intact. However, people are concerned in the near-term on a couple of different trances, I know it is a well flat concern, oil prices leading to higher inflation, some concerns on the current account deficit and then some concerns regarding fiscal consolidation. But overall mood continues to be positive, optimistic but that is for the longer-term. In the short-term, there are these headwinds and there are these challenges that the market has to deal with."

L&T, BHEL, ITC, ONGC, TCS dip in the Market

The Nifty was sailing through choppy waters at 14:07 hours. Capital goods, FMCG, metal and select healthcare companies' shares were witnessing selling pressure. TCS, ONGC, Bharti, Tata Motors, ICICI Bank and PNB too were down.

London brent crude also touched USD 116 a barrel again, gained by USD 1.25 a barrel. Even the crude oil was trading near to USD 103 a barrel on the New York Mercantile Exchange.

Praveen Kumar, head-south Asia (Oil and Gas Team), FACTS Global Energy said the crude oil movement dependent on geopolitical tensions. “Brent is more reflective of physical crude market,” he said adding, “WTI prices more reflective of fundamentals at this point in time.”

Kumar expects crude to trade around USD 105 a barrel in 2011.

However, benchmarks were getting support from Infosys, Reliance Industries, HDFC, HDFC Bank, SBI, NTPC, Hero Honda and Maruti Suzuki. Reliance Power and Tata Power were the biggest gainers with 2.5-4% gains.

The 30-share BSE Sensex was trading at 18,522, up 32 points and the 50-share NSE Nifty gained 10 points at 5,546.

Bajaj Finserv, SBI, L&T, Tata Steel, Hero Honda, Infosys and Reliance Industries were the most active shares on exchanges.

In midcap space, Essar Shipping was locked at 10% upper circuit. Stride Arcolab, Bajaj Finserv, Aurobindo Pharma and Anant Raj Inds gained 4-5% while Money Matters, India Infoline, Ramky Infra, Gammon India and Dish TV India lost 3.5-4%.

In smallcap space, Vindhya Telelink, Nectar Life, Jindal Worldwid, Sequent Scient and Lloyds Metals rallied 9-12.5% whereas SML Isuzu, Atco Corp, Solar Inds, Ester Inds and Prabhav Industries fell 5%