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Feb 06, '10
 NIFTY TAKES A BLOOD BATH

Yesterday after a nasty fall Nifty recover some losses today. This week Nifty has closed near its significant support of 4700, which does not seems to be holding out in current scenario because this time magnitude of fall is different. The current correction cannot be considered as normal correction because the way global markets have crumbled in last few sessions it indicate something serious is going on. Traders are advised to avoid long position and sell Nifty on rallies.
As Nifty has taken hard knock in last few sessions and currently it is trading at its support level of 4700, possibility of pullback cannot be ruled out which could be good place to initiate short positions. Close above 4940 could be the initial sign that current correction is fizzling out and then only traders should consider long positions.

If Nifty close below 4700 next support for the Nifty is seen much lower around 4370. Traders are advised to just follow the momentum which is down.

Support And Resistance:
Support For The Nifty Is Seen Around 4570 And Then At 4370
Resistance For The Nifty Is Seen Around 4800




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Jan 27, '10
 Why Does An Investor Put His Money in The Stock Market......???

Why does an investor put his money in the stock market? The answer would be to earn higher returns. Ask him if he is sure that he is going to earn money that he intends, we don't think that there will be a confident answer from his side. This has been the story ever since the trading has started. There has been a continuous battle between the investors and the stock markets if you consider the history of stock market there have been some wins which have gone in favor of stock market and some in favor of investors. The investor, from the moment he invests tries to outperform the market, the billion dollar question is Is it possible…..???But it cannot be said that it's just impossible to outperform the market because there are some examples such as Warren Buffet.

The behavioral finance has proved that the tendency of investors is to Buy the Stocks at Lower Price and Sell them at Higher Price. How do they do that, it depends on the perception and analysis of various events that are happening around the world. It is mandatory to consider the events that are taking place around the world because Indian market is open to foreign investments and if anything (only concerned to financial system) happens in that country then it will have an effect on behavior of stock prices. One of the examples that can be given is the subprime crisis. The stock markets in America fell because there was a crisis and it had a huge impact on Indian stock market and we all know and experienced the worst period of our life.




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Jan 26, '10
 Market Commentary

Sensex provisionally down 0.5%; M&M tumbles.

Selling pressure in late trade following disappointing earnings from auto major Mahindra & Mahindra (M&M) derailed a sharp pullback on the bourses. As a result, key benchmark indices extended losses for the fifth straight session with weak global cues playing the spoilsport. High volatility was the hallmark of the day's trading session. Firm US index futures cushioned steep losses. The BSE 30-share Sensex was 86.51 points or 0.51%, up 67.61 points from the day's low and off 74.53 points from the day's high.

The undertone was cautious ahead of derivatives expiry, RBI's monetary policy and earnings from frontline companies. Weak global cues had played the spoilsport in early trade. US stocks tumbled in their worst three-day slide in 10 months on Friday, pulling Asian stocks lower today, 25 January 2010. European markets, too, opened lower. The S&P CNX Nifty, which crashed below the psychological 5,000 mark in opening trade, regained that level in late trade. The market breadth was negative after a positive start.

Aggregate results of 652 Indian companies showed 48.80% advance in net profit on 19.5% rise in sales in quarter ended December 2009 over the quarter ended December 2008.

Core sector, which comprises six key infrastructure industries, grew 6% in December 2009, compared with 5.3% growth in November 2009. The growth, signifying a recovery in industrial manufacturing, was primarily led by an increase in the production of finished steel, cement and electricity last month. The core sector growth stood at 0.7% in December 2008, due to the economic slowdown.

The sector, which accounts for 26.7% of the index of industrial production (IIP), grew 4.8% in April-December 2009 period, against 3.2% in the corresponding period of 2008-09, the commerce and industry ministry data showed on 23 January 2010.

Meanwhile India will get a $770 million loan from the World Bank for three projects in the southern state of Andhra Pradesh, the finance ministry said in a statement on Friday, 22 January 2010. With these new loan agreements, the multilateral agency's total ongoing commitment to India has increased to $19.38 billion, the statement added. In the current fiscal year to end-March 2010, the World Bank has committed fund assistance worth $5.5 billion to India.

As per reports, the government is considering an across-the-board increase in excise duty in Budget 2010-11, as it faces pressure to withdraw fiscal stimulus measures in the wake of a 16-year high fiscal deficit of 6.8% in the current financial year. One option being considered is an increase in Cenvat rate by 2% while leaving the service tax rate unchanged at 10%, reports citing an unnamed finance ministry official indicated. Cenvat refers to the median excise duty, tax on manufacture of goods, levied on nearly 90% of the goods made in the country.

Also more services could be brought under the tax net to allow the government to keep service tax rates unchanged. An alternative proposal is also under consideration which seeks an increase in excise rates in sectors that are doing well such as automobiles, instead of an across-the-board hike.

Equities are likely to remain volatile in a truncated week as traders roll positions in the derivative segment from January 2010 series to February 2010 series ahead of the expiry of the near-month January 2010 contracts on Thursday, 28 January 2010. The market remains closed on Tuesday, 26 January 2010, on account of Republic Day.

The Reserve Bank of India (RBI) 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.

A CRR increase would have little impact on market, as investors have mostly factored in at least a 25 basis points increase in banks' reserve requirement and steady interest rates. Increases in both the CRR and interest rates could however weigh on shares of banks as well as sectors such as auto and property on concerns loan demand may slow.

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.

European shares were trading lower today, 25 January 2010 weighed by banking stocks. Key benchmark indices in UK, Germany and France were down by between 0.21% to 0.63%.

Asian stocks fell for the sixth straight day as concern mounted that a US government plan to limit risk-taking at financial companies will reduce profits and derail a global economic recovery. Key benchmark indices in China, Taiwan, Hong Kong, South Korea, Japan, Singapore were down by between 0.28% and 1.09%.

US stocks tumbled in their worst three-day slide in 10 months on Friday, 22 January 2010, on fears the White House's plan to curb bank risk-taking would cut profits and a drop in tech shares after Google Inc's disappointing results.

The Dow Jones industrial average dropped 216.90 points, or 2.09%, to 10,172.98. The Standard & Poor's 500 Index slid 24.72 points, or 2.21%, to 1,091.76. The Nasdaq Composite Index fell 60.41 points, or 2.67%, to 2,205.29.

In the three day selloff, the Dow lost 5.1%, the S&P lost 5.1% and the Nasdaq lost 5%.

Uncertainty about the Senate's confirmation of Ben Bernanke for another term as the Federal Reserve's chairman also rattled investors in a week when political squabbles helped erase stocks' gains for 2010.

Aside from worrying about how the Obama administration's proposals might hurt bank profits, investors also fretted about the likely impact of China's efforts to prevent the world's third-largest economy from overheating. Since China has led the nascent global economic recovery, any curbs it puts on lending threatens to slow demand that other economies, including the United States, had relied upon to spur their own growth.

Fears that China will get more aggressive in reducing the risk of asset bubbles sent investors bailing from China-focused stock funds for an 18th consecutive week, research firm EPFR Global said on Friday. Investors pulled $348 million from China equity funds in the week ended 20 January 2010, the biggest outflow in 18 weeks.

Though global emerging market equity funds attracted $748 million in fresh money in the week of Jan. 20, Asia ex-Japan equity funds took in only $29 million because of the China-related outflows. Net inflows to emerging market bond funds hit the highest in eight weeks and US bond funds extended a streak of inflows to 55 weeks.

Back home the BSE 30-share Sensex was down 86.51 points or 0.51% to 16,773.17, as per provisional closing. The Sensex opened 11.98 points lower at 16,847.70. At the day's low of 16,705.56 the Sensex declined 154.12 points in mid-morning trade. Sensex rose 18.09 points at the day's high of 16,877.77 in mid-afternoon trade.

However the S&P CNX Nifty was down 34.45 points or 0.68% to 5001.55, as per provisional closing. The Nifty crashed below the psychological 5,000 mark to hit a low of 4983.05 in opening trade.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1782 shares declined as compared with 1106 that rose. A total of 63 shares remained unchanged. Breadth was positive in morning session.

The total turnover on BSE amounted to Rs 4812 crore.

Among the 30-member Sensex pack, 20 declined while the rest gained.

India's largest tractor maker by sales Mahindra and Mahindra (M&M) plunged 6.50% to Rs 1058 after it reported lower-than-expected earnings for the latest quarter ended December 2009. It was the top loser from the Sensex pack.

M&M's net profit surged 849% to Rs 413.70 crore on a 56.32% rise in sales to Rs 4478.70 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Monday, 25 January 2010. Meanwhile, the company on Monday approved a 2-for-1 stock split.

India's top small car maker by sales Maruti Suzuki India slipped 0.59% to Rs 1431.20 on profit booking. The stock had hit a day's high of Rs 1487.85 after the company reported higher than expected earnings in the third quarter. Its net profit surged 221.92% to Rs 687.53 crore on a 62.50% rise in sales to Rs 7372.65 crore in Q3 December 2009 over Q3 December 2008. The result was announced on Saturday, 23 January 2010.

Shares related to the infrastructure sector declined as investors continued to dump them on concerns of high valuation and poor financials. India's largest dam builder by sales Jaiprakash Associates slumped 3.37%.

However India's largest engineering & construction firm by sales Larsen & Toubro (L&T) rose 1.06% to Rs 1488, recovering from day's low of Rs 1456. The stock halted a two-day slide triggered after the company cut its revenue growth target to 10% from 15% at the time of announcing Q3 results on Thursday. 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.

Rate sensitive realty shares declined ahead of the RBI's quarterly monetary policy review meet on 29 January 2010. DLF (down 2.54%), Unitech (down 3.21%), HDIL (down 5.51%), Indiabulls Real Estate (down 4.22%), and Parsvnath Developers (down 2.76%), declined from the realty pack.

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 1.26%), CESC (down 2.55%), Reliance Power (down 0.66%), declined.

India's largest power generation firm by total capacity NTPC rose 0.67%. The company FPO remains open between 3 and 5 February 2010. The pricing has not yet been announced by the company. Speaking in an interview to a news agency, the company's chairman last week said he expects an upcoming sale of its shares by the government to raise up to Rs 12,000 crore.

Metal stocks declined, extending Friday's fall on profit booking. The fall came despite LMEX, a gauge of six metals traded on the London Metal Exchange, rising 0.25% on Friday, 22 January 2010.

Tata Steel (down 2.24%), Jindal Stainless (down 1.01%), Sail (down 0.93%), Sesa Goa (down 2.67%), and National Aluminum Company (down 1.29%), edged lower.

Sterlite Industries (down 2.09%), and Hindalco Industries (down 1.52%), declined ahead of their Q3 earnings today, 25 January 2010.

Private sector banking shares declined as investors turned cautious on rate sensitive sstocks ahead of the Reserve Bank of India's monetary policy review meet on 29 January 2010.

India's second largest private sector bank by net profit HDFC Bank fell 0.55% following a 3.49% slide in its ADR on Friday. India's largest private sector bank by net profit ICICI Bank lost 1.03%.

However India's largest bank by net profit and branch network State Bank of India was unchanged at Rs 2090 ahead of its Q3 December 2009 results later during the day.

Telecom shares saw divergent trend. India's largest cellular services provider by sales Bharti Airtel gained 2.55% to Rs 329.50 and was the top gainer from the Sensex pack. On consolidated basis, the company's net profit rose 13.2% to Rs 2236.90 crore on a 6.6% increase in total income to Rs 10327.57 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on 22 January 2010.

However India's second largest cellular services provider by sales Reliance Communications lost 2.17%. The company will declare its Q3 December 2009 earnings on 30 January 2010.

Select FMCG shares gained on defensive buying as investors shuffled portfolio to low beta stocks with the market fall extending to fifth-day today.

India's largest FMCG firm by sales Hindustan Unilever gained 2.52%. The company announces its Q3 December 2009 earnings on 26 January 2010.

India's largest cigarette maker by sales ITC rose 2.39% as net profit rose 26.67% to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on 22 January 2010.

Diversified major Grasim Industries rose 0.28% after the company posted 80.81% spurt in net profit to Rs 595.88 crore on a 14.79% rise in sales to Rs 3051.89 crore in Q3 December 2009 over Q3 December 2008. The result was announced after market hours on Friday, 22 January 2010.

Index heavyweight Reliance Industries (RIL) fell 1.18% to Rs 1040.70. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

IT stocks declined following Google Inc's disappointing results and on fears the Obama administration's bank plan will crimp outsourcing demand.

India's largest IT exporter by sales Tata Consultancy Services fell 0.15%. India's second largest IT exporter by sales Infosys fell 1.56%. India's third largest software services exporter Wipro lost 1.41%.

HCL Technologies lost 6.45% after net profit declined 15.07% to Rs 255.44 crore on 2.78% fall in total income 1259.22 crore in Q2 December 2009 over Q1 September 2009. The company declared results before trading hours today, 25 January 2010.




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Jan 25, '10
 No-where To Go?

The traders and speculators are confused.
They don't quite know what to make of the millions of pages of data and news flow that is generated every day.

One report says that India's GDP rose by 7.9% for the quarter ended September 30. This in a quarter where India witnessed one of its worst rainfall levels in decades implying that agricultural activity would not have been growing at its full potential.

Another report says that industrial production grew at 10.3% for the month of October.

Yet another piece of good news: the advance tax paid by companies is increasing.

But the stock markets seem unimpressed.

Since September 30, 2009 the BSE 30 Index has lost -0.05%. If you add back the benefits of dividends, then the BSE 30 Total Return Index has gained +0.11%.

The NSE 50 has hardly been "nifty". It's been boring and dull.
The NSE 50 gained +0.77% since September 30, 2009 on a "total return" basis.

Not that the world markets have done much better: the MSCI All Country World Index has gained +0.10%.

There is inaction in all this action
All this lack of action is particularly disturbing to 2 sets of people:

1. Those who watch stock market TV channels and trade on every sound-byte they hear, and
2. Those who have to fill up all that empty space with words that don't seem to have any impact on the stock markets.

On a typical day on the Indian stock exchanges about Rs 20,000 crore is traded.
There have been about 50 trading days between September 30th and December 11th. So, this translates into a total turnover of 1,000,000 crore...that sounds like a lot. About USD 220 billion. Brokers probably earned an average of 0.2% commission on these trades. Giving them a neat revenue stream of Rs 2,000 crore or Rs 40 crore per trading day.

With the markets flat - could people have made much money?

Maybe some did: they would have needed the skill let (and luck) to have bought each time the market fell and sold just as it hit the top end of this trading band of 16,000 to 17,000 that it seems to be stuck in.

In fact, when markets go nowhere, they may present an opportunity.

Between October 2008 and March 2009, the markets bounced in the 8,000 to 10,000 range. And they have surged since then.

Hang on: I am not suggesting that an 80% surge is around the corner.

But this is true: despite the 14.4 million words on business TV channels and the market going nowhere over the past 50 trading days, the Indian economy is growing.

And buying stocks is a long term investment in the long term growth of the economy.




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Jan 25, '10
 STOCK ALERT

Bulls may throng Maruti Suzuki counter on strong Q3 outcome.

Maruti Suzuki India reported higher than expected earnings in the third quarter. Its net profit surged 221.92% to Rs 687.53 crore on a 62.50% rise in sales to Rs 7372.65 crore in Q3 December 2009 over Q3 December 2008.

Net profit of Grasim Industries rose 80.81% to Rs 595.88 crore in on a 14.79% rise in sales to Rs 3051.89 crore in Q3 December 2009 over Q3 December 2008.

State Bank of India, Sterlite Industries, Mahindra and Mahindra, Hero Honda Motors, and Hindalco Industries among the key result announcement on Monday, 25 January 2010.

The Khorakiwala family, promoters of the troubled pharma company Wockhardt, has reportedly sold nearly 18 acres of land at Mulund for Rs 200 crore to a city-based developer, Runwal Group, and a real estate fund.

Real estate firm DLF has reportedly sold its 15-acre property in a Bangalore suburb for Rs 120 crore after plunging footfalls and poor margins nixed the company's plans for a large-scale mall in the locality.

The government is reportedly considering an across-the-board increase in excise duty in its annual budget as it faces pressure to withdraw fiscal stimulus measures in the wake of a high fiscal deficit. One option being considered is an increase in Cenvat rate by 2% while leaving the service tax rate unchanged at 10%.

India Cements, Voltas, Jet Airways, Pantaloon Retail, Power Grid Corporation, Andhra Bank, DB Corp, GSPL, LIC Housing Finance, Indiabulls Financial Services, Indiabulls Securities, Tata Teleservices (Maharashtra), Deepak Fertilizers, Wockhardt, GSK Consumer, GodrejIndustries, Cadila Healthcare, Shriram EPC, Himatsingka Seide, Lakshmi Machine Works, and Super Spinning Mills, among others will declare their December 2009 ended results on Monday.

Net profit of Punj Lloyd rose 31.52% to Rs 117.49 crore in the quarter ended December 2009 as against Rs 89.33 crore during the previous quarter ended December 2008. Sales rose 18.20% to Rs 2116.60 crore inthe quarter ended December 2009 as against Rs 1790.72 crore during the previous quarter ended December 2008.

Net profit of Asian Paints rose 256.60% to Rs 178.69 crore in the quarter ended December 2009 as against Rs 50.11 crore during the previous quarter ended December 2008. Sales rose 26.83% to Rs 1277.71 crore inthe quarter ended December 2009 as against Rs 1007.44 crore during the previous quarter ended December 2008.

Net profit of United Breweries Holdings rose 1112.99% to Rs 84.06 crore in the quarter ended December 2009 as against Rs 6.93 crore during the previous quarter ended December 2008. Sales rose 30.92% to Rs 92.31 crore inthe quarter ended December 2009 as against Rs 70.51 crore during the previous quarter ended December 2008.

Net profit of Chambal Fertilisers & Chemicals rose 5.91% to Rs 79.75 crore in the quarter ended December 2009 as against Rs 75.30 crore during the previous quarter ended December 2008. Sales declined 7.76% to Rs 1141.67 crore inthe quarter ended December 2009 as against Rs 1237.70 crore during the previous quarter ended December 2008.

Net profit of Bharat Forge rose 773.33% to Rs 37.99 crore in the quarter ended December 2009 as against Rs 4.35 crore during the previous quarter ended December 2008. Sales rose 13.61% to Rs 495.85 crore inthe quarter ended December 2009 as against Rs 436.44 crore during the previous quarter ended December 2008.

Net profit of Vijaya Bank declined 20.65% to Rs 124.57 crore in the quarter ended December 2009 as against Rs 156.99 crore during the previous quarter ended December 2008. Total operating income declined 2.35% to Rs 1344.31 crore inthe quarter ended December 2009 as against Rs 1376.73 crore during the previous quarter ended December 2008.

Essar Oil reported net loss of Rs 226.00 crore in the quarter ended December 2009 as against net loss of Rs 1230.00 crore during the previous quarter ended December 2008. Sales rose 19.45% to Rs 10146.00 crore inthe quarter ended December 2009 as against Rs 8494.00 crore during the previous quarter ended December 2008.

Ispat Industries reported net profit of Rs 18.87 crore in the quarter ended December 2009 as against net loss of Rs 651.71 crore during the previous quarter ended December 2008. Sales rose 91.07% to Rs 2104.70 crore inthe quarter ended December 2009 as against Rs 1101.51 crore during the previous quarter ended December 2008.

Net profit of Garware Offshore Services rose 3.21% to Rs 10.29 crore in the quarter ended December 2009 as against Rs 9.97 crore during the previous quarter ended December 2008. Sales declined 4.66% to Rs 43.40 crore inthe quarter ended December 2009 as against Rs 45.52 crore during the previous quarter ended December 2008.

Previous Stories:
* Maruti Suzuki gains on good Q3 show (Hot Pursuit 25-Jan 09:11)
* Maruti Suzuki (Results - Analysis 23-Jan 19:09)
* Maruti Suzuki India net profit rises 221.92% in the December 2009 quarter (Results - Announcements 23-Jan 14:42)
* Maruti Suzuki shifts gear on brokerage upgrade (Hot Pursuit 21-Jan 12:41)
* Maruti Suzuki shifts gear on hike in car prices (Hot Pursuit 18-Jan 12:15)
* Maruti Suzuki announces a marginal increase in the prices of its cars (Corporate News 18-Jan 10:38)
* Maruti Suzuki recovers on a likely hike in car prices (Hot Pursuit 15-Jan 12:48)
* Maruti Suzuki India to announce Q3 results (Corporate News 7-Jan 15:44)
* Rough terrain for Maruti Suzuki on increasing competition (Hot Pursuit 6-Jan 09:33)
* Maruti in reverse gear as competition to intensify in small car market (Hot Pursuit 5-Jan 14:54)




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Jan 24, '10
 THE WEEK THAT WAS

Sensex falls below 17,000 as world stocks undergo correction; L&T slumps.

A sell-off in global stocks and disappointment from key corporate earnings pulled the domestic bourses sharply lower in choppy trade. Stocks fell in four out of five trading sessions of the week. The BSE Sensex fell below the psychological 17,000 mark. Global stocks tumbled after US President Barack Obama on Thursday proposed new restrictions on banks, which would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.

The restrictions could limit leverage in the financial system and the role of risk-taking by hedge funds. The rules would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit. These bets have been enormously profitable for the banks but can hold huge risks for the financial system if they go wrong.

Global markets had already recoiled in recent weeks on fears that Chinese demand would slow as Beijing taps the brakes on its roaring growth to stave off inflation and keep the economy from overheating. China had curbed lending by banks after raising banks' reserve requirement ratios (RRR) by 50 basis points earlier.

The BSE Sensex fell 694.62 points or 3.96% to 16859.68 in the week ended Friday, 22 January 2010. The S&P CNX Nifty tumbled 216.20 points or 4.11% to 5,036.

The BSE Mid-Cap index slumped 266.75 points or 3.78% to 6,783.66 in the week. The BSE Small-Cap index dipped 309.29 points or 3.45% to 8,661.17. Both the indices outperformed Sensex.

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.

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.

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.

The timing and sequence of exit from an easy policy is still a challenge, Reserve Bank of India Governor D Subbarao said on Monday, 18 January 2010. Subbarao, who was speaking at a conference in Goa, also said the challenge was to support growth without compromising price stability. The Reserve Bank of India will review monetary policy on 29 January 2010.

The 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.

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.

India is on course to return to pre-crisis growth rates of about 9% from 2011, if key reforms continue, having emerged from the global economic crisis less scathed than most other nations. That's according to a guest opinion article recently published by Standard & Poor's Ratings Services, titled "Why India Will Continue To Gain Stature In The Global Economy." The guest opinion article says that India's large, young, and growing population, the rising income of the middle class, and the country's high savings rate continue to support strong domestic demand, tempering the impact of weak export markets and other external stimuli.

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.

Meanwhile, the World Bank has 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 in an annual report. Growth may reach 3.2% in 2011, the bank said.

The market edged higher on Monday, 18 January 2010 on reports banks are unlikely to raise lending rates in the near term even if the central bank signals a tightening of the monetary policy by hiking the cash reserve ratio (CRR). The BSE 30-share Sensex rose 86.78 points or 0.49% at 17,641.08 on that day.

The key benchmark indices lost ground in choppy trade on Tuesday, 19 January 2010 as weakness in world stocks weighed on investor sentiment. Global stocks fell as investors awaited key earnings reports from the US. The BSE 30-share Sensex fell 155.02 points or 0.88% to 17,486.06 on that day.

The key benchmark indices ended a choppy trading session lower on Wednesday, 20 January 2010, extending losses for the second straight day as weak global stocks weighed on investor sentiment. The BSE 30-share Sensex fell 11.57 points or 0.07% to 17,474.49 on that day.

The market extended losses for the third straight day on Thursday, 21 January 2010 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. The BSE 30-share Sensex lost 423.35 points or 2.42% to 17,051.14 on that day.

The key benchmark indices ended a volatile trading session lower on Friday, 22 January 2010 after US President Barack Obama proposed limiting risk-taking at US banks. The BSE 30-share Sensex fell 191.46 points or 1.12% lower at 16,859.68.

India's largest engineering & construction firm by sales Larsen & Toubro (L&T) slumped 10.83% in the week. The company cut its revenue growth target to 10% from 15% at the time of announcing Q3 results on Thursday. 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 on Thursday, 21 January 2010.

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) ended flat for the week at Rs 2372.20. 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 on 21 January 2010.

Index heavyweight Reliance Industries (RIL) fell 5.05%. RIL's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on Friday, 22 January 2010.

RIL's gross margin from refining a barrel of crude was $5.90 a barrel in the latest quarter, compared with $10 a barrel a year earlier. The company added said it has increased production at the D6 gas block in the Krishna-Godavari basin, off India's east coast, to 60 million metric standard cubic meters per day.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation dropped 8.1%. 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, which lagged street estimates, were announced after market hours on 21 January 2010.

India's largest cellular services provider by sales Bharti Airtel gained 1.26%. On consolidated basis, the company's net profit rose 13.2% to Rs 2236.90 crore on a 6.6% increase in total income to Rs 10327.57 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Friday, 22 January 2010.

India's largest cigarette maker by sales ITC fell 1.26% The company's net profit rose 26.67% to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on Friday, 22 January 2010.

India's largest private sector bank by net profit ICICI Bank ended flat for the week at Rs 840.65. 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 on Thursday, 21 January 2010.




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Jan 24, '10
 Market Commentary

Sensex provisionally sheds 200 points on weak global cues.

The key benchmark indices ended a volatile trading session lower after US President Barack Obama proposed limiting risk-taking at US banks. The BSE 30-share Sensex provisionally settled 198.55 points or 1.16% lower at 16,852.59, below the psychological 17,000 mark. The S&P CNX Nifty provisionally declined 64.50 points or 1.27% to 5029.65. Nifty regained the psychological 5,000 mark soon after falling below that level at the onset of the trading session. Index heavyweight Reliance Industries (RIL) was volatile after the company today reported higher third quarter net profit.

Intraday volatility on the bourses was high. The market tumbled in early trade on weak global stocks. The market staged a strong intraday rebound in afternoon trade after the chief economic adviser to the finance ministry Kaushik Basu said the economy will be back at a 9% growth rate by the next fiscal year. But the intraday rebound proved short-lived. The market weakened in afternoon trade. The market once again recovered from lower level. It lost ground again later.

The market breadth was weak, though it recovered from early trade. The breadth was dismal in early trade. Shares related to infrastructure sector were hammered for the second running day. IT stocks languished following the US bank plan. Bank stocks declined as investors turned cautious ahead of the Reserve Bank of India's quarterly monetary policy review meet on 29 January 2010. Auto stocks were mixed ahead of Q3 earnings. PSU shares regained fancy after taking a pause on Thursday on profit booking.

European markets extended losses for the third-straight session, with banks under pressure after Obama proposed tough new regulations on the sector. Key benchmark indices in UK, Germany and France were down by between 0.06% to 0.34%.

Asian stocks fell for a fifth day today amid concerns China's economic growth will lead to policy tightening there. Key benchmark indices in China, Hong Kong, South Korea, Japan, Singapore and Taiwan were down by between 0.65% and 2.56%.

Fears that China will get more aggressive in reducing the risk of asset bubbles sent investors bailing from China-focused stock funds for an 18th consecutive week, research firm EPFR Global said on Friday. Investors pulled $348 million from China equity funds in the week ended 20 January 2010, the biggest outflow in 18 weeks.

Though global emerging market equity funds attracted $748 million in fresh money in the week of Jan. 20, Asia ex-Japan equity funds took in only $29 million because of the China-related outflows. Net inflows to emerging market bond funds hit the highest in eight weeks and US bond funds extended a streak of inflows to 55 weeks.

China will stick to its moderately loose monetary policy, People's Bank of China Governor Zhou Xiaochuan said in comments broadcast on Friday. Zhou made the comments soon after China on Thursday reported stronger-than-expected 10.7% year-on-year gross domestic product growth for the last quarter of 2009.

US stocks tumbled on Thursday after Obama threatened to fight Wall Street banks with a new proposal to limit financial risk taking. The Dow registered its biggest two-day drop since June 2008 led by losses in financial shares

The Dow Jones Industrial Average slipped 213.27, or 2%, to 10,389.88. The broader Standard & Poor's 500 Index declined 21.56 points, or 1.9%, to 1,116.48. The Nasdaq Composite Index was down 25.55 points, or 1.1%, to 2,265.70.

Obama proposed new limits on the size and activities of the nation's largest banks, pushing a more muscular approach toward regulation that yanked down bank stocks and raised the stakes in his campaign to show he's tough on Wall Street.

Obama proposed that banks be prohibited from running proprietary trading operations or investing in hedge funds and private equity funds as a way to limit the risk of another financial crisis. The plan comes as banks around the world are recovering from $1.7 trillion in losses and writedowns since the start of 2007.

The concern over lending in China and banking reforms in the US overshadowed better-than-estimated earnings at companies from Starbucks Corp. to Xerox Corp. and EBay Inc. which sent US shares higher at the start of trading on Thursday.

The World Bank has 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.

Back home, aggregate results of 437 Indian companies showed 41.80% advance in net profit on 20.30% rise in sales in quarter ended December 2009 over the quarter ended December 2008.

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.

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.

As per provisional closing, the BSE 30-share Sensex was down 198.55 points or 1.16% to 16,852.59. The Sensex opened 72.78 points lower at 16,978.36. It fell 50.81 points at the day's low of 17,000.33 in early afternoon trade. Sensex lost 443.05 points at the day's low of 16,608.09 in morning trade.

The S&P CNX Nifty was down 64.50 points or 1.27% to 5029.65, as per provisional closing. The Nifty crashed below the psychological 5,000 mark to hit a low of 4954.85 in early trade.

The market breadth, indicating the overall health of the market was weak. On BSE, 2041 shares declined as compared with 873 that rose. A total of 56 shares remained unchanged. The breadth was extremely weak in opening session of trade.

The total turnover on BSE amounted to Rs 6537 crore as compared with Rs 5103 by 14:25 IST.

Among the 30-member Sensex pack, 25 declined while only 5 of them gained.

Metal stocks declined after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.14% on Thursday, 21 January 2010.

India's largest private sector steel maker by production capacity Tata Steel slumped 4.03% to Rs 622.20 and was the top loser from the Sensex pack.

Hindalco Industries (down 1.14%), Sterlite Industries (down 0.28%), Jindal Stainless (down 2.11%), Sail (down 3.23%), Sesa Goa (down 0.66%), and National Aluminum Company (down 3.77%), edged lower.

Capital goods pivotals saw divergent trend. India's largest engineering & construction firm by sales Larsen & Toubro (L&T) slumped 3.45% to Rs 1471.70. Nevertheless, the stock recovered from day's low of Rs 1438.80.

L&T extended Thursday's over 6% plunge after the company cut its revenue growth target to 10% from 15% at the time of announcing Q3 results on Thursday. 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 on Thursday, 21 January 2010.

However, India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) surged 3.36% to Rs 2374.70, staging a sharp recovery from day's low of Rs 2240. 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 on 21 January 2010. It was the top gainer from the Sensex pack.

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 1.64%), Torrent Power (down 4.91%), CESC (down 1.66%), Reliance Power (down 1.50%), declined.

India's largest power generation firm by total capacity NTPC was down 0.74%. The company FPO remains open between 3 and 5 February 2010. The pricing has not yet been announced by the company. Speaking in an interview to a news agency, the company's chairman said he expects an upcoming sale of its shares by the government to raise up to Rs 12,000 crore.

India's largest private sector utility firm by sales Reliance Infrastructure (R-Infra) declined 1.49%. The company has won Mumbai Metro Line II project from Maharashtra government. The estimated cost of project is around Rs 11,000 crore.

Index heavyweight Reliance Industries (RIL) advanced 0.29% to Rs 1050.70, staging a steep recovery from the day's low of Rs 1029.70 in volatile trade. RIL's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours today, 22 January 2010.

RIL's gross margin from refining a barrel of crude was $5.90 a barrel in the latest quarter, compared with $10 a barrel a year earlier. The company added said it has increased production at the D6 gas block in the Krishna-Godavari basin, off India's east coast, to 60 million metric standard cubic meters per day.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation dropped 1.93%. 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, which lagged street estimates, were announced after market hours on 21 January 2010.

India's largest cellular services provider by sales Bharti Airtel gained 0.11% to Rs 322.50, after oscillating in a band of Rs 315-Rs 329.80. On consolidated basis, the company's net profit rose 13.2% to Rs 2236.90 crore on a 6.6% increase in total income to Rs 10327.57 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours today, 22 January 2010.

India's largest cigarette maker by sales ITC rose 1.62% as net profit rose 26.67% to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours today.

Banking shares declined as investors turned cautious ahead of the Reserve Bank of India's monetary policy review meet on 29 January 2010.

India's largest private sector bank by net profit ICICI Bank lost 1.45%. 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 on 21 January 2010. The company's American depository receipt, or ADR lost 4.60% to $35.87 on the New York Stock Exchange on Thursday, 21 January 2010.

India's second largest private sector bank by net profit HDFC Bank fell 2.33%.

India's largest bank by net profit and branch network State Bank of India slipped 1.60%. The bank's chairman O P Bhatt on 21 January 2010 said it is not looking at acquisition of any other bank outside SBI-fold, even as speculations are rife that consolidation in the banking sector may gather pace.

IT stocks declined on fears the Obama administration's bank plan will crimp outsourcing demand. The fall came despite the rupee losing further ground against the dollar today, 22 January 2010.

India's largest IT exporter by sales Tata Consultancy Services fell 2.01%. India's second largest IT exporter by sales Infosys fell 1.95%. India's third largest software services exporter Wipro lost 1.40%.

The partially convertible rupee was at 46.10/11, weaker than its close of 46.04/05 per dollar on Thursday, 21 January 2010. A weak rupee boosts operating profit margin of IT firms as the sector derives a lion's share of revenue from exports.

India's top tractor maker by sales Mahindra & Mahindra slipped 0.68%. After market hours on Thursday, the company said the board will meet on 25 January 2010, to consider stock-split proposal.

Other auto shares were mixed as investors chose to stay on sidelines ahead of their earnings. India's largest car maker by sales Maruti Suzuki India fell 0.35% on profit booking. The company announces its Q3 December 2009 results on 23 January 2010.

India's top truck maker by sales Tata Motors rose 0.38% ahead of its Q3 December 2009 results on 29 January 2010.

India's top bike maker by sales Hero Honda Motors advanced 1.11% ahead of its Q3 December 2009 results on 25 January 2010.

Grasim Industries (down 2.14%), and Punj Lloyd (down 6.36%), were languishing ahead of their Q3 December 2009 results today, 22 January 2010.




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Jan 13, '10
 Market Commentary

Sensex provisionally up 0.5%.

The key benchmark indices extended gains to hit fresh day's high in late trade. Expectations of better Q3 December 2009 result by India Inc supported market. Market shrugged off weak global stocks. The BSE 30-share Sensex was provisionally up 87.34 points or 0.5%, up close to 230 points from the day's low. Index heavyweight Reliance Industries edged higher. IT stocks extended early gains. Metal stocks reversed early losses. But, auto stocks fell.The market breadth was strong.

The market was volatile. It cut losses after a weak opening triggered by subdued Asian stocks after China's move to cool lending. It turned positive in morning trade. It again fell into the red in early afternoon trade. Market weakened in afternoon trade. It turned positive, recovering sharply to hit the fresh day's high in mid-afternoon trade on positive European stocks.Market extended gains in late trade.

High food price inflation may start moderating in seven to 10 days, following the measures unveiled by the government, Farm Minister Sharad Pawar said on Wednesday.

The Indian economy is expected to grow by around 7.75 % in the fiscal year to March 2010, but food price inflation is a major concern, the finance minister said on Wednesday. Pranab Mukherjee also said the government could unload surplus wheat and rice stocks for open market sale.

The industrial output grew at its fastest pace in two years in November, strengthening the case for the Reserve Bank of India (RBI) to tighten policy later this month to temper inflation expectations. The RBI, which reviews its quarterly policy on 29 January 2010, is expected raise banks' cash reserve ratio, the level of deposits that banks must keep in cash. India's industrial output grew at faster-than-expected 11.7 % in November from a year earlier, data showed on Tuesday. The December inflation data, due on 14 January 2010, will be the last important data for the RBI to gauge price pressures

Inflationary pressures seem to be plateauing on the food front, Subir Gokarn, one of RBI's deputy governors, said at a banking conference. Inflationary pressures are relatively concentrated on food and very clearly as (the) economy starts to grow start to utilise whatever slack capacity there is, the risk of food inflation spilling over to wider surge increases, he added.

The finance secretary Ashok Chawla was quoted as saying on Monday the ministry backs administrative steps to tame inflation and wants hike in policy rates only if food inflation escalates into general inflation. Montek Singh Ahluwalia, the deputy chairman of Planning Commission, said the industrial growth for the full 2009/10 would be well above last year's level, but inflation could moderate in the coming months. While government officials said the industrial output growth highlighted recovery was on course, RBI's Gokarn said the recovery is somewhat uneven.

Meanwhile, the government will give financial incentives to exports of around 2,000 products including those in engineering, electronics and chemicals, Trade Minister Anand Sharma said on Tuesday. The boost, to support a nascent recovery in India's exports sector, would cost upto an additional Rs 500 crore ($110 million) in the current fiscal year ending March.

In global news, European shares flip flopped on Wednesday. The key benchmark indices in France and UK were down by between 0.07% to 0.24%. But Germany's DAX rose 0.26%.

Stock markets and commodities fell in Asia on Wednesday after Beijing's surprise decision to raise banks' reserve requirements sparked concerns that China's rapid economic rebound would slow, curbing demand for natural resources and other imported goods from around the region. China's Shanghai Composite fell 3.09%. China will raise the proportion of deposits banks must set aside as reserves by 50 basis points starting 18 January 2010, the central bank said on its Web site last night. The key benchmark indices in Hong Kong, Japan, Indonesia, South Korea, Singapore and Taiwan fell by between 0.95% to 2.59%.

Trading in US index futures indicated the Dow could gain 12 points at opening trade on Wednesday, 13 January 2010.

U.S. stocks fell in a broad selloff on Tuesday as investors pummeled financials on concerns about a potential government levy on banks, while Alcoa Inc's weaker-than-expected results tempered optimism. Dow Jones industrial average fell 37.86 points, or 0.36 % to end at 10,626.13. The Standard & Poor's 500 Index was down 10.82 points, or 0.94 % at 1,136.16. The Nasdaq Composite Index was down 30.10 points, or 1.30 % at 2,282.31.

The U.S. Federal Reserve will have to raise interest rates as the economy improves or risk losing the public's confidence in its commitment to keeping inflation low and stable, Charles Plosser, president of the Philadelphia Federal Reserve Banksaid on Tuesday.

Charles Plosser, said expectations for future inflation are currently well-anchored, but warned that there is considerable uncertainty clouding the outlook for price pressures over the next two to five years.

Closer home, as per provisional figures, the BSE 30-share Sensex was up 87.34 points or 0.5% at 17,509.85. The barometer index lost 146.05 points at the day's low of 17,276.46 in early trade. At the day's high of 17528.31, Sensex rose 105.80 points in late trade.

The S&P CNX Nifty was up 25.25 points or 0.48% at 5235.65 as per provisional figures.

The BSE Mid-Cap index rose 0.67% and the BSE Small-Cap index rose 0.97%.

The market breadth, indicating the overall health of the market was strong. On BSE, 1626 shares advanced as compared with 1250 that declined. A total of 77 shares remained unchanged. The breadth flipped between the positive and negative since early trade.

Among the 30-member Sensex pack, 15 fell while rest rose.

BSE clocked a turnover of Rs 6504 crore lower than Rs 6203.09 crore on Tuesday 12 January 2010.

Index heavyweight Reliance Industries (RIL) rose 0.47% to Rs 1088.80. The stock was volatile. It hit a high of Rs 1091.95 and a low of Rs 1070. The firm raised $763 million through a block sale of 3.3 crore shares. RIL raised $763 million through a block sale of 3.3 crore shares on Monday, the country head of UBS Manisha Girotra said on Monday. Girotra also said the share sale at Rs 1050 each would be the last of block trades by the company for a while. UBS was the sole arranger for the trade.

Reliance, which is bidding for bankrupt LyondellBasell Industries, had previously sold treasury shares to state-owned insurer Life Insurance Corp of India raising $577 million last week. As per reports last week, Reliance had sweetened its offer to buy a controlling stake that valued LyondellBasell at $13.5 billion.

Shares of software outsourcers rose for the second straight day after encouraging third quarter result from Infosys. India's largest software services exporter TCS rose 5.19% extending Tuesday's 4.88% gains. India's third largest software services exporter Wipro rose 3.19% extending Tuesday's 4.89% gains. Its ADR rose 5.64% on Tuesday.

IT bellwether Infosys rose 3.62% extending Tuesday's 3.97% gains after better than expected third quarter result announced by the company on Tuesday. Its ADR rose 5.14% on Tuesday. Infosys raised its full-year revenue and profit outlook after strong Q3 results and on improving trend for outsourcing orders. The company's consolidated net profit as per Indian accounting standards rose 2.72% to Rs 1582 crore on 2.8% rise in consolidated revenue to Rs 5741 crore in Q3 December 2009 over Q2 September 2009.

Infosys has raised earnings and revenue guidance for the year ending March 2010 (FY 2010) both in rupee and dollar terms. Infosys has forecast a 1.8% to 2% growth in consolidated dollar revenue for FY 2010 compared from a drop it had projected at the time of announcing Q2 September 2009 results. Infosys said FY 2010 consolidated revenue in dollar terms could rise to $4.75 billion to $4.76 billion, from $4.6 billion to $4.62 billion forecast earlier. The consolidated earnings per American depository share for the full year is seen rising 0.4% to $2.26, the company said in a statement.

Infosys CEO and managing director S. Gopalakrishnan said the global economic recovery seems to be led by the US and the financial services segment. Though IT budgets are expected to be flat in 2010, offshore outsourcing is expected to benefit from this recovery, he added. Chief Operating Officer S.D. Shibulal said the contribution to revenues from top ten clients grew by 12.2% during the quarter adding that Infosys' clients are taking decisions much faster.

Metal stocks reversed early losses. Hindalco Industries JSW Steel, Jindal Saw, Steel Authority of India, Bhushan Steel rose by between 1.74% to 5.92%.

Tata Steel, the world's eighth-largest steelmaker rose 2.32% on bargain hunting after falling for last two days. The company said on 5 January 2010 sales from its Indian operations rose 73% in December 2009 to 636,000 tonnes from a year earlier. The Indian operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker.

Most auto stocks fell on profit taking after the recent surge. India's largest tractor marker by sales Mahindra & Mahindra (M&M) fell 2.21%. M&M marked its entry into the heavy commercial vehicle (HCV) segment with its unveiling of 25 and 31 tonne trucks with its US-based joint venture partner Navistar Inc.

Mahindra & Mahindra, reported 122% rise in its domestic sales to 22,754 units in December 2009 over December 2008. The company sold a total of 24,001 vehicles (domestic plus exports) in December 2009 as against 11,172 vehicles sold in December 2008.

India's largest car maker by sales Maruti Suzuki fell 0.95%. The company is considering to raise prices of its vehicles in about two weeks time, Commercial Business Head S.N. Burman said on Wednesday. Maruti Suzuki's managing director and chief executive officer, Shinzo Nakanishi was quoted by the media as saying on 5 January 2010 that the company will see flat to lower exports next year because of the scrappage of incentives by Europe. He also said there would be lower offtake from Nissan for exports as a result of the removal of incentives.

Nakanishi said the company aims to keep operating margins at 10% in fiscal year 2009/10 but profitability will be impacted by a rise in raw material prices and a rise in the yen.

Maruti Suzuki India reported 50.6% increase in total vehicle sales to 84,804 units in December 2009 over December 2008. Domestic sales rose 36.5% to 71,000 units, while exports surged 223.7% to 13,804 units.

India's largest motorcycle maker by sales Hero Honda Motors fell 1.05%. Hero Honda will comfortably exceed its fiscal 2009/10 sales target of 40 lakh units, its managing director Pawan Munjal said to media on 7 January 2010. Sales jumped 74% to 375,838 units in December 2009 over December 2008.

India's top truck maker by sales Tata Motors was flat. Tata Motors has raised prices of some truck and bus models in January 2010 by about 1%. The company expects commercial vehicle sales to remain strong in the next 12 months. The company's chairman Ratan Tata said on 5 January 2010 that the company may consider launching its ultra-cheap Nano car in the United States in three years, following possible sales in Europe by the end of 2011.

Tata Motors registered 105% growth in sales to 51,627 units in December 2009 over December 2008.

Bajaj Auto was flat after net profit surged 189.20% to Rs 507.29 crore on 57.9% spurt in net sales to Rs 3165.84 crore in Q3 December 2009 over Q3 December 2008.

TVS Motors rose 1.04%. Sales rose 34% to 119,701 units in December 2009 over December 2008.

Banswara Syntex jumped 12.94%, after the company bagged an order for supply of 3-layer water proof breathable fabrics for an undislcosed sum.

Rural Electrification Corporation gained 1%, after net profit surged 48.78% to Rs 474.07 in Q3 December 2009 over Q3 December 2008.




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Jan 12, '10
 STOCK ALERT

Infosys may advance on better-than-expected Q3 earning.

IT bellwether Infosys today announced better-than-expected earnings for the latest quarter. The company reported 2.72% rise in consolidated net profit to Rs 1582 crore on 6.92% rise in consolidated total income to Rs 5972 crore in Q3 December 2009 over Q2 September 2009.

A total of seven brokerages had projected a between 0.79% to 8.65% fall in Infosys' Q3 consolidated net profit as per Indian accounting standards at between Rs 1406.80 crore to Rs 1527.70 crore in Q3 December 2009 over Q2 September 2009. They expectd a between 1.29% fall to a rise of 0.37% in revenue at between Rs 5512.90 crore to Rs 5606.10 crore in Q3 December 2009 over Q2 September 2009. It may be recalled that Infosys had raised salaries in October 2009.

Bajaj Auto will also announce its Q3 December 2009 result today, 12 January 2010. The company is seen reporting strong Q3 December 2009 results due to low base effect as sales in the year-ago period i.e. December 2008 were adversely affected by the global financial crisis. Increase in input costs will offset operating leverage arising from higher volumes, according to analysts.

A total of four brokerages expect a between 160.9% to 191% growth in Bajaj Auto's net profit at between Rs 428.60 crore to Rs 477.90 crore in Q3 December 2009 over Q3 December 2008.

Telecom major Bharti Airtel has reportedly clinched a deal to buy a controlling stake 70% in Bangladesh's fourth-biggest mobile phone operator Warid Telecom. The deal will be announced in New Delhi on Tuesday, reports said.

State-run power major NTPC has filed the draft red herring prospectus with the market regulator on Monday to sell some of its stake, reports said. The NTPC FPO is likely to open between 3 and 5 February 2010

Reliance Industries Ltd (RIL) is reportedly wooing the LyondellBasell management, especially Russian promoter Leonid Blavatnik, to become co-promoter in the bankrupt Dutch chemical company.

Trading in shares of Dunlop India will resume on the BSE today, 12 January 2010, after nearly eight years of suspension. However, around 2.69 crore equity shares of Rs 10 each issued on a rights basis are subjudice before the Delhi High Court and have not been listed by the BSE, a communique from the bourse said..

Exide Industries' net profit rose 132% to Rs 130.48 crore in the September-December quarter over the same period last year. Net sales rose 16% to Rs 912.57 crore.

Sterlite Technologies has scheduled a meeting of the board of directors on 18 January 2010 to consider issue of bonus shares and spilt of equity shares.

Telecom stocks may see action on reports the Department of Telecommunications (DoT) will auction three slots of third generation (3G) spectrum for all 22 telecom circles. The successful bidders would have to make an upfront payment within 15 days of winning the 3G licence.

The final date for submission of applications is 25 January 2010. The pre-qualification of bidders will be announced on 5 February 2010 and mock auction on 9-10 February 2010.

Previous Stories:
* Infosys spurts on forecast-beating Q3 earnings (Hot Pursuit 12-Jan 09:06)
* Infosys Technologies net profit declines 7.95% in the December 2009 quarter (Results - Announcements 12-Jan 08:55)
* Rupee's recent rally continues to haunt IT stocks (Hot Pursuit 8-Jan 10:09)
* Investors log out of IT stocks as rupee hits 15-month high (Hot Pursuit 7-Jan 09:53)
* Infosys Technologies to announce Q3 results (Corporate News 23-Dec 14:59)
* Infosys may witness buying on buzz it is in the fray for a large contract (Market Commentary - Stock Alert 18-Dec 09:27)
* Infosys strikes record high on recovery in global economy (Hot Pursuit 16-Dec 15:41)
* Infosys Technologies opens its first development center in Brazil (Corporate News 15-Dec 17:20)
* Infosys launches Finacle Advizor (Corporate News 15-Dec 15:09)
* Infosys launches Flypp Mobile Application Platform (Corporate News 14-Dec 15:10)




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Jan 11, '10
 Market Commentary

RIL drags Sensex lower.

Losses in index heavyweight Reliance Industries (RIL) pulled the barometer index BSE Sensex sharply off the day's high. RIL lost ground after the company sold a large quantum of its treasury shares. Banking pivotals fell. But, IT, auto, realty and metal stocks gained. The BSE 30-share Sensex was provisionally down 7.12 points or 0.04%, off close to 190 points from the day's high and up close to 30 points from the day's low.

The market pared gains soon after an early surge triggered by firm Asian stocks and strong trade data from China for December 2009. The market pared gains in mid-morning trade after moving in a narrow range in morning trade. The market further trimmed gains to hit fresh intrday low in early afternoon trade. The market lost further ground in afternoon trade. The market slipped into the red in mid-afternoon trade. The market cut losses in late trade.

The government will announce industrial output data for the month of November 2009 tomorrow, 12 January 2010. Industrial production recorded a robust 10.3% growth in October 2009.

India's December 2009 export figures will be positive, trade minister Anand Sharma said on Monday. Sharma told a banking summit that higher December 2009 exports are due to a low base. India's exports rose an annual 18.2 % in November 2009 to $13.2 billion, the first rise after 13 months of annual decline. Sharma also said that the government would spend $1.5 trillion on infrastructure over the next 10 years. Food prices are likely to come down due to good winter crop prospects and there was no need to import wheat and rice, Sharma said on Monday.

The finance ministry backs administrative steps to tame inflation and wants hike in policy rates only if food inflation escalates into general inflation, a media report said on Monday quoting Finance Secretary Ashok Chawla. The comments were in a proposal submitted to the Cabinet Committee on Prices, which is likely to meet this week, the report said. In order to augment supplies, all import duties may be suspended for the time being, may be till the end of the current financial year, the report quoted Chawla as saying. The finance secretary identified rice, wheat, pulses, potatoes, onion, fruits, milk, mineral oils, sugar and oil cakes as the "commodities of concern," the report added.

The government will present its annual budget in Parliament on 26 February 2010 and was aiming at enacting legislation in the second half of this year for introducing a new Goods and Services Tax (GST), finance minister Pranab Mukherjee said on Saturday 9 January 2010.

Mukherjee also said he is hopeful growth rate of Asia's third largest economy could touch 8% in the fiscal year to March 2010, faster than 6.7% in the previous year. With faster growth in output in recent months and rise in inflation, the government is widely expected to withdraw some of its fiscal stimulus in the forthcoming budget.

The economy is likely to return to an annual growth rate of 9% by the fiscal year ending in March 2012, Montek Singh Ahluwalia, deputy chairman of the Planning Commission said on Saturday. Prime Minister Manmohan Singh on Friday 8 January 2010 said he was optimistic that India, which along with China is leading the drive out of a global recession, could return to annual growth of 9-10% in a few years time.

Industry bodies have urged the government to extend fiscal stimulus by six months this year, but a 16-year high fiscal deficit of 6.8% of gross domestic product estimated for 2009/10, has left little room for extending tax concessions. Mukherjee said it would take 7-8 months for the government to bring in legislations for introducing GST, which was earlier scheduled on April 2010.

The government expects the proposed tax reform along with higher growth in the economy leading to more revenues and stake sales in state-run firms, could help lower the fiscal deficit in 2010/11 to an estimated at 5.5%. The government aims to sell shares of about 60 state-run firms in the coming years, with offers for power utility NTPC, miner NMDC, Rural Electrification Corp and Satluj Jal Vidyut expected by end-March 2010.

European shares rose on Monday, with energy companies and miners among the top performers, after strong trading data from China boosted sentiment. The key benchmark indices in France, Germany and UK rose by between 0.81% to 0.97%.

Asian stocks rose to a 17-month high on Monday as a strong rebound in China's exports raised optimism about the region's economic outlook as the dollar suffered following weak US jobs data. The key benchmark indices in Hong Kong, Indonesia, Singapore and Taiwan rose by between 0.37% to 0.68%. But, South Korea's KOSPI reversed early gains, falling 0.07%. Japanese markets were closed for Coming of Age Day.

In China, the Shanghai Composite index rose 0.52%, led by brokerages and banks, after the government approved index futures, fanning speculation the new derivatives will boost trading volumes. China's exports climbed 17.7% in December 2009 from a year earlier, the first increase in 14 months, and imports jumped 55.9 %, the customs bureau said over the weekend.

Trading in US index futures indicated Dow could gain 40 points at the opening bell on Monday, 11 January 2010.

US stocks closed higher on Friday as December's unemployment report, despite showing job losses, was seen supportive of a slow recovery. The Dow Jones Industrial Average was up 11.33 points, or 0.11%, to 10,618.19. The Nasdaq was up 17.12 points, or 0.74%, to 2317.17 and the S&P 500 was up 3.29 points, or 0.29% to 1144.98.

St. Louis Federal Reserve President James Bullard said at a conference in Shanghai on Monday that US interest rates may remain low for "quite some time," easing concerns that the central bank could hike interest rates sooner than expected.

US interest rate futures, after a one-day hiatus, continued their trek toward very low short-term rates Friday as data showed that an anemic jobs market stands in the way of a robust economic recovery. The data revealed 85,000 jobs were lost during December 2009, much larger than an expected decline of 10,000. The government, meanwhile, revised figures to show that 4,000 jobs were created in November 2009, having initially estimated a loss of 11,000 payrolls during that month. The unemployment rate remained persistently high, at 10.0% in December 2009 versus economists' estimate of a 10.1% rate.

At Friday's settlement, the July 2010 fed-funds futures contract priced in only a 20% chance for the Federal Open Market Committee (FOMC) to lift the Fed funds rate to 0.5% at its late June 2010 policy meeting. That's down from a 30% chance just before the jobs data came in. On 31 December 2009, the final trading day of 2009, July 2010 fed-funds had priced in a 78% chance for a 0.5% rate. At the time, there was more optimism about an economic recovery, and increased expectations that the FOMC would shift away from its easy money policies to curb inflation.

The Fed enacted a series of emergency measures to rescue the economy, including a move to reduce the funds rate to a lowest-ever range of 0% to 0.25%. The Fed has held the rate in that range since December 2008.

Closer home, as per provisional figures, the BSE 30-share Sensex was down 7.12 points or 0.04% at 17,533.17. The barometer index lost 39.50 points at the day's low of 17500.79 in mid-afternoon trade. It gained 236.28 points at the day's high of 17,776.57 in early trade. The barometer index opened with an upward gap of 184.30 points at 17,724.59.

The S&P CNX Nifty was up 7.70 points or 0.15% at 5252.45 as per provisional figures.

The BSE Mid-Cap index rose 0.9% and the BSE Small-Cap index rose 1.85%. Both the indices outperformed the Sensex.

The market breadth, indicating the overall health of the market was strong. On BSE, 2078 shares advanced as compared with 856 that declined. A total of 58 shares remained unchanged.

Among the 30-member Sensex pack, 13 rose while rest fell.

BSE clocked a turnover of Rs 5981 crore, lower than Rs 6322.38 crore on Friday 8 January 2010.

Index heavyweight Reliance Industries (RIL) fell 1.73% after the firm raised $763 million through a block sale of 3.3 crore shares on Monday. RIL raised $763 million through a block sale of 3.3 crore shares on Monday, the country head of UBS Manisha Girotra said on Monday. Girotra also said the share sale at Rs 1050 each would be the last of block trades by the company for a while. UBS was the sole arranger for the trade.

Reliance, which is bidding for bankrupt LyondellBasell Industries, had previously sold treasury shares to state-owned insurer Life Insurance Corp of India raising $577 million last week. As per reports last week, Reliance had sweetened its offer to buy a controlling stake that valued LyondellBasell at $13.5 billion.

Banking stocks fell on profit taking. India's largest private sector bank by net profit ICICI Bank fell 0.58% as its ADR fell 2.07% on Friday.

India's largest bank by net profit and branch network State Bank of India fell 0.73%. Non-performing loans (NPAs) in the small and medium enterprise sector (SME) are on the rise, chairman O.P Bhatt said on Monday. The state-run bank paid advance tax of Rs 1795 crore versus Rs 1700 crore.

India's second largest private sector bank by net profit HDFC Bank fell 0.56% even after its ADR rose 0.3% on Friday.

Software pivotals rose ahead of Infosys' Q3 December 2009 results on Tuesday, 12 January 2010. Infosys rose 1.28%. Its ADR rose 0.26% on Friday

Analysts expect weak performance from Infosys in Q3 December 2009 due to a firm rupee and hike in employee salaries. A firm rupee adversely affects operating profit margin of IT firms as the sector derives a lion's share of revenue from exports. Nevertheless, a favourable cross-currency movement will to some extent offset the impact of firm rupee and hike in salary bill. A number of analysts expect Infosys to revise upwards its guidance for the year ending March 2010 amid an improved global business environment. However, a section of the market feels that an adverse cross-currency movement will mean a muted guidance from Infosys for Q4 March 2010.

A total of seven brokerages expect a between 0.79% to 8.65% fall in Infosys' Q3 consolidated net profit as per Indian accounting standards at between Rs 1406.80 crore to Rs 1527.70 crore in Q3 December 2009 over Q2 September 2009. They expect a between 1.29% fall to a rise of 0.37% in revenue at between Rs 5512.90 crore to Rs 5606.10 crore in Q3 December 2009 over Q2 September 2009. It may be recalled that Infosys had raised salaries in October 2009.

India's largest software services exporter TCS rose 2.64%. But India's third largest software services exporter Wipro fell 0.98% to Rs 662.55 even as its ADR rose 0.86% on Friday. The stock came off the day's high of Rs 680.90.

The rupee rose to its highest level in more than 15 months on Monday boosted by the dollar's fall against major currencies and tracking gains in local shares which raised hopes for capital inflows. The partially convertible rupee was at 45.32/33 per dollar, off the day's high of 45.2850, its strongest since 22 September 2008 and above its Friday's close of 45.75/76.

Rate sensitive realty stocks rose for the second day in a row after a foreign brokerage house raised its outlook on the realty sector citing a potential recovery in the office property market and a steady growth in key residential markets. India's largest realty player by market capitalization DLF rose 2.18% after gaining 4.26% on Friday. On 16 December 2009, the company's board approved merger of its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL's debt.

Among other realty stocks, Omaxe, Unitech, Indiabulls Real Estate rose by between 1.37% to 4.85%.

Metal stocks rose as metals prices rose on stronger-than-expected Chinese imports data released on Sunday. National Aluminium Company, JSW Steel, Jindal Saw, Steel Authority of India, Hindustan Zinc, rose by between 1.1% to 7.72%.

Tata Steel, the world's eighth-largest steelmaker fell 0.28%. The company said on 5 January 2010 sales from its Indian operations rose 73% in December 2009 to 636,000 tonnes from a year earlier. The Indian operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker.

Auto stocks rose on expectations of strong Q3 December 2009 results. India's largest car maker by sales Maruti Suzuki rose 1.49%. Maruti Suzuki reportedly plans to bring out refreshed variants of its best-selling cars Alto, WagonR and Swift that may be cheaper than the existing models. The company said on Thursday, 7 January 2010 it had priced newly launched five-seater multipurpose car Eeco at Rs 2,59,000 as competition for low-cost vehicles heats up. Maruti Suzuki's managing director and chief executive officer, Shinzo Nakanishi was quoted by the media as saying on 5 January 2010 that the company will see flat to lower exports next year because of the scrappage of incentives by Europe. He also said there would be lower offtake from Nissan for exports as a result of the removal of incentives.

Nakanishi said the company aims to keep operating margins at 10% in fiscal year 2009/10 but profitability will be impacted by a rise in raw material prices and a rise in the yen.

Maruti Suzuki India reported 50.6% increase in total vehicle sales to 84,804 units in December 2009 over December 2008. Domestic sales rose 36.5% to 71,000 units, while exports surged 223.7% to 13,804 units.

India's largest motorcycle maker by sales Hero Honda Motors rose 1.69%. Hero Honda will comfortably exceed its fiscal 2009/10 sales target of 40 lakh units, its managing director Pawan Munjal said to media on 7 January 2010. Sales jumped 74% to 375,838 units in December 2009 over December 2008.

India's largest tractor marker by sales Mahindra & Mahindra (M&M) rose 0.6% on bargain hunting after last two days fall. M&M marked its entry into the heavy commercial vehicle (HCV) segment with its unveiling of 25 and 31 tonne trucks with its US-based joint venture partner Navistar Inc.

Mahindra & Mahindra, reported 122% rise in its domestic sales to 22,754 units in December 2009 over December 2008. The company sold a total of 24,001 vehicles (domestic plus exports) in December 2009 as against 11,172 vehicles sold in December 2008.

TVS Motors rose 11.31% extending Friday's gains. Sales rose 34% to 119,701 units in December 2009 over December 2008.

Bajaj Auto rose 0.88% in volatile trade ahead of its Q3 December 2009 result on Tuesday, 12 January 2010. Bajaj Auto sold 2,20,429 two-wheelers in December 2009, registering an 85% growth in sales over the same month last year, when it sold 1,19,215 units.

But, India's top truck maker by sales Tata Motors fell 0.1% reversing early gains. Tata Motors has raised prices of some truck and bus models in January 2010 by about 1%. The company expects commercial vehicle sales to remain strong in the next 12 months. The company's chairman Ratan Tata said on 5 January 2010 that the company may consider launching its ultra-cheap Nano car in the United States in three years, following possible sales in Europe by the end of 2011.

Tata Motors registered 105% growth in sales to 51,627 units in December 2009 over December 2008.

Bihar Tubes advanced 4.38%, after the company reported net profit of Rs 8.41 crore in Q3 December 2009 as compared to net loss of Rs 7.44 crore in Q3 December 2008 on consolidated basis.

JK Tyre & Industries advanced 3.68% on reports the company plans to invest Rs 1200 crore over the next three-four years for capacity expansion.

Novartis India surged 4.51% after its parent firm reportedly secured patent for cancer drug.

Punjab Chemicals & Crop Protection jumped 4.75%, after the company said its board will meet on 13 January 2010 to consider raising funds through various modes.




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