Stock Market Report Guide

Markets remain well placed in the green on last day of the week

2011-03-04T04:48:00.003-08:00

Despite coming off the day's high level, the local equity markets remain well placed in the positive territory at this point of time. Both the Bombay Stock Exchange (BSE) benchmark Sensex and National Stock Exchange (NSE) Nifty indexes are trading above their psychological levels of 18,500 and 5,500. Other key Asian markets are all trading well in the green and US index futures too are showing an up-tick in screen trade. Back home, except capital goods segment which was down by 1.04%, all the sectoral indices were trading in the green. Among them, auto, banking, power, information technology and healthcare counters were leading the gains on the BSE sectoral space. Meanwhile, the banking segment is trading in the positive zone since morning following Cabinet giving its nod to the Banking Regulation (Amendment) Bill, which proposes to increase the voting rights of foreign investors in private sector banks. The Bill - which seeks to align the voting rights of foreign shareholders in banks in proportion to their equity holding - will make it easier for banks to raise capital. The broader markets were also moving higher with BSE mid-cap and small-cap indices gaining 0.37% and 0.38%, respectively. The market breadth on the BSE was positive; the gainers thrashed the losers in a ratio of 1572:1093 while 123 shares remained unchanged.

The BSE Sensex soared 103.66 points or 0.56% at 18,593.42. The index touched a high and a low of 18,736.97 and 18,526.22, respectively.

The BSE Mid-cap and Small-cap indices rose 0.37% and 0.38%, respectively.

All the sectoral indices on the BSE with an exception of Capital Goods (CG), which was down by 1.04% were trading higher. Auto up 1.23%, Bankex up 1.07%, Power up 0.71%, Information Technology (IT) up 0.70% and Healthcare (HC) up 0.64% were the major gainers on the index.

Meanwhile, drug maker Cipla has launched a breakthrough screening technology called the No Touch Breast Scan (NTBS) in India recently. NTBS is the first painless, non-invasive and radiation-free breast scanning technique for detecting breast cancer at an early stage.

Three centres across India have already installed the 40 lakh worth machine. The cost of each NTBS test would range between Rs 800 to 1000, depending on the pricing determined individually by the hospitals and centres. With introduction of this technology in India, Cipla has entered into the diagnostic market.

Developed by UE Life Sciences, the NTBS is the world's first fully computerized thermal imaging technology with dual IR cameras which can find thermal changes at less than 0.08 degree C. The NTBS using infrared imaging creates a sophisticated heat-map of the breast without using any radiation. Thermal imaging has been approved by the FDA several years ago for early diagnosis of breast cancer.

Breast cancer is associated with increased formation of new blood vessels and this show up as 'hot spots' which could indicate a cancerous growth. Today, one in every 22 women in India is expected to be diagnosed with breast cancer.There are NTBS machines available in the US, UK, Turkey, Sri Lanka and Kazakhstan, but women in India would have greater access to this landmark technology and have more control over their breast health.

The top gainers on the Sensex were Tata Power up 2.55%, Hero Honda up 2.45%, Jindal Steel up 2.14%, HDFC up 2.08% and Bajaj Auto up 1.98%.

On the flip side, L&T down 2.07%, JP Associates down 1.81%, Bharti Airtel down 0.70%, ONGC down 0.56% and Hindalco Inds down 0.43% were the major losers on the index.

Resuming their composite dialogue process, India and Pakistan will hold Secretary-level talks on anti-terrorism measures and steps to check drugs trade on March 27 and 28. The meeting will be held in New Delhi following last month's meeting between Pakistani Foreign Secretary Salman Bashir and his Indian counterpart Nirupama Rao in the Bhutanese capital Thimpu, and Pakistan and India announced the resumption of bilateral peace talks.

The talks will be mainly focused on progress made by Pakistan in the trial of Mumbai suspects. Seven suspects are being tried in Pakistan for allegedly masterminding and facilitating Mumbai attacks. India has also Pakistan to allow a team to question some persons in Pakistan suspected of involvement in the Mumbai attacks.

Meanwhile, India had pulled out of talks following the November 2008 bloodshed in India's commercial capital Mumbai which killed 166 people. India had blamed the attacks on terrorist outfits based in Pakistan.

The S&P CNX Nifty jumped 29.20 points or 0.53% to 5565.40. The index touched a high and a low of 5608.20 and 5544.60, respectively.

The top gainers on the Nifty were Sun Pharma up 3.35%, RPower up 3.13%, Tata Power up 2.89%, Jindal Steel up 2.38% and Bajaj Auto up 2.29%.

On the flip side, L&T down 2.39%, JP Associates down 2.21%, SAIL down 1.05%, Sesa Goa down 0.89% and Bharti Airtel down 0.76% were the major losers on the index.

Other key Asian markets are trading in the green. Shanghai Composite soared 1.28%, Hang Seng rose 1.44%, Jakarta Composite added 1.19%, KLSE Composite gained 1.10%, Nikkei 225 surged 1.02%, Straits Times soared 1.25%, Seoul Composite jumped 1.73% and Taiwan Weighted increased 0.53%.

Equity markets continue to trade higher; Auto, Banking counters lead

2011-03-04T04:48:00.001-08:00

The local equity markets continue to trade in green with notable gains in late morning session on the back of constructive global support and easing domestic economic stability as inflation has declined further. Global markets are supportive as US Index futures were trading higher and all other Asian markets too were trading higher. Back home, in the BSE sectoral space barring BSE CG down by 0.58% all other indices were trading in green , Auto was up by 1.24%, Bankex up by 1.10 %, IT up by 0.80%, Healthcare up 0.73% and Power up 0.69%. The broader markets are also trading higher the BSE Mid cap and Small cap indices were up by 0.45% and 0.51%, respectively. The markets breadth on BSE is in the favour of advances, outperforming declines in the ratio of 1511:997, while, 97 shares remained unchanged.

The BSE Sensex surged 118.21 or 0.64% at 18,607.97. The index has touched a high of 18,736.97 and a low of 18,582.30 respectively.

The BSE Mid cap and Small cap indices were up by 0.45% and 0.51%, respectively.

Bajaj Finserv continued its up move on the tie up with Warren Buffet's Berkshire Hathway. The stock was trading 4.28% higher on the BSE.

Power Finance Corporation shares are up nearly 3.17% on the buzz that the company may raise around Rs 4,500 crore in external debt in fiscal year 2011-12. The company is reportedly seeking permission from Reserve Bank of India to raise more funds from advanced economies, taking advantage of low interest rates.

AXIS Bank surged more than one percent as ICICI Prudential Asset Management's Deputy Managing Director Nilesh Shah is joining Axis Bank and will be overseeing the lender's initiatives in the investment banking space. Shah, who is well-known in the mutual fund industry, will be joining as President, Strategic Initiatives, Corporate Banking at Axis Bank,

All the sectoral indices on the BSE with an exception of CG were trading in green, Auto up by 1.24%, Bankex up by 1.10%, IT up by 0.80%, Healthcare up 0.73% and Power up 0.69% were the major gainers on the index.

Private sector bank like, ICICI bank, YES bank, Indusind Bank , Kotak Mahindra Bank, shares are trading higher as the Cabinet gave its nod to the Banking Regulation (Amendment) Bill, which proposes to increase the voting rights of foreign investors in private sector banks. This Bill will looks for to coordinate the voting rights of foreign shareholders in banks in proportion to their equity holding - will make it easier for banks to raise capital. It will be tabled in the current session of Parliament. At present, there is a 10% cap on voting rights of foreign entities in private banks, regardless of their shareholding, newspaper report suggests.

The top gainers on the Sensex were Hero Honda up by 2.79%, Tata Power up by 2.71%, HDFC up by 2.14%, M&M up by 2.05% and Bajaj Auto was up by 1.95%.

L&T down by 1.20%, JP Associates down 0.87%, Hindalco Industries down 0.83%, Bharti Airtel down by 0.67% and ONGC down by 0.41% were the only losers on the index.

The S&P CNX Nifty advanced 32.65 points or 0.59% at 5,568.85. The index has touched a high of 5,608.20 and a low of 5,561.60 respectively.

The top gainers of the Nifty were Sun Pharma up by 3.19%, Tata Power 2.90%, Reliance Power up by 2.77%, Hero Honda up by 2.50% and M&M up 2.25% .

The top losers of the index were L&T down by 1.51%, JP associates down 1.11%, Sesa Goa down by 0.93%, Ranbaxy down by 0.89% and Hindalco down by 0.76%.

All the Asian equity indices were trading in the green; Shanghai Composite surged 0.65%, Hang Seng climbed 1.19%, Jakarta Composite advanced 1.06%, KLSE Composite moved up by 0.92%, Nikkei 225 soared by 1.02%, Straits Times gained 1.39%, Seoul Composite added 1.73% and Taiwan Weighted rose 0.53%.

Markets cool off a bit after an enthusiastic start

2011-03-04T04:47:00.002-08:00

Indian equity markets have cooled off a bit in the mid morning session after making an enthusiastic start of the session. However, continued buying by funds, driven by a firm global market trend and easing food inflation are keeping the momentum on the positive side. In addition, corporate-friendly Budget proposals are also supporting the ongoing rally on the bourses. On the global front, trend on other Asian bourses remain firm following overnight gains in the US markets. The US future indices too are showing an uptick in the screen trade. Back home, on the BSE Sectoral front, stocks from Banking; Auto and Information Technology are enticing investor's attention, while the stocks from capital Goods counter are languishing at the bottom. The 30 share index--Sensex--on BSE is about to touch its key physiological level of 18500 marks. While 50 scrip index--Nifty--on NSE has sustained its important level of 5500 mark and is trading well above it. The broader indices though have trimmed their gains in line with the larger peers but they too still are trading well above 0.50% each. The overall markets breadth on BSE is in the favour of advances, outperforming declines in the ratio of 1533:776, while, 93 shares remained unchanged.

The BSE Sensex is currently trading at 18,620.30, up by 130.54 points or 0.71%. The index has touched a high of 18,736.97 and a low of 18,582.30 respectively. There were 26 stocks advancing against just 4 declines on the index.

The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices were up by 0.55% and 0.71%, respectively.

All the sectoral indices on the BSE remained higher, Bankex up by 1.24 %, Auto up by 1.18%, IT up by 0.94%, TECk up by 0.75%, and Healthcare up by 0.64% were the major gainers on the index.

The top gainers on the Sensex were Hero Honda up by 2.66%, Tata Power up by 2.59%,HDFC up by 1.97%, M&M up by 1.90% and Bajaj Auto was up by 1.85%.

L&T down by 1.10%, Bharti Airtel down by 0.57%, BHEL down by 0.26% and ONGC down by 0.04% were the only losers on the index.

State-owned miner National Mineral Development Corporation (NMDC) has finalized an agreement with a consortium comprising SVAI of Austria and Nagarjuna Construction Company for turnkey execution of a sinter plant complex, marking the first contract among the nine packages for the three million tonne steel plant that the company is setting up at Nagarnar.

The sinter plant will be catering to 80 per cent of the ferrous feed to the blast furnace. The schedule of the project is 33 months from the effective date of contract.

Recently state owned miner announced that it is planning to sign a 50:50 joint venture (JV) pact with Tata Steel for setting up a 2 million tonne per annum (mtpa) steel plant at Bastar in Chhattisgarh.

The S&P CNX Nifty is currently trading at 5,573.15, up by 36.95 points or 0.67%. The index has touched a high of 5,608.20 and a low of 5,561.60 respectively. There were36 stocks advancing against just 14 declines on the index.

The top gainers of the Nifty were Tata Power up by 2.89%, Reliance Power up by 2.55%, Sun Pharmaceuticals up by 2.39%, Hero Honda up by 2.37%, Hero Honda up by 2.10% and Bajaj Auto up by 2.10%.

The top losers of the index were L&T down by 1.42%, Ranbaxy down by 1.27%, Sesa Goa down by 1.19%, Cairn India down by 1.00% and SAIL was down by 0.63%.

Meanwhile, Drugmaker Cipla has launched a breakthrough screening technology called the No Touch Breast Scan (NTBS) in India recently. NTBS is the first painless, non-invasive and radiation-free breast scanning technique for detecting breast cancer at an early stage.

Three centres across India have already installed the 40 lakh worth machine. The cost of each NTBS test would range between Rs 800 to 1000, depending on the pricing determined individually by the hospitals and centres. With introduction of this technology in India, Cipla has entered into the diagnostic market.

Developed by UE Life Sciences, the NTBS is the world's first fully computerized thermal imaging technology with dual IR cameras which can find thermal changes at less than 0.08 degree C. The NTBS using infrared imaging creates a sophisticated heat-map of the breast without using any radiation. Thermal imaging has been approved by the FDA several years ago for early diagnosis of breast cancer.

All the Asian equity indices were trading in the green; Shanghai Composite was up by 0.22%, Hang Seng was up by 1.19%, Jakarta Composite was up by 1.06%, KLSE Composite was up by 0.92%, Nikkei 225 was up by 1.12%, Straits Times gained 1.20%, Seoul Composite added 1.69% and Taiwan Weighted increased 0.58%.

Benchmarks start tremendously on supporting global cues

2011-03-04T04:47:00.001-08:00

The Indian equity markets have made a firm start taking positive cues from across the globe. The US markets closed with a gain of over one percent overnight as unexpected drop in the unemployment benefit claim and good retail sales number boosted the morale of the investors. Moreover, all the Asian markets were trading in the positive terrain at this point of time indicating strong investors' sentiments. Back home, markets were trading tremendously well led by banking sector as private banks viz., ICICI Bank, HDFC Bank and Axis Bank all were trading with a gain of over one percent after Union Cabinet on Thursday approved the Banking Laws Amendment Bill, a part of the seven key financial sector legislative changes announced by finance minister Pranab Mukherjee in the Budget, which will allow shareholders of private banks to vote in line with their shareholdings. On the sectoral front, technology, fast moving consumer goods and software were the top gainers in the trade; while there were no losers on the BSE sectoral space. The broader indices too were going neck to neck with benchmarks. The market breadth on the BSE was negative; there were 1176 shares on the gaining side against 392 shares on the losing side while 42 shares remained unchanged.

The BSE Sensex opened at 18,622.70; about 133 points higher compared to its previous closing of 18,489.76, and has touched a high of 18,736.97 while low remain its opening.

The index is currently trading at 18,670.59, up by 180.83 points or 0.98%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth started in the positive terrain, with 73.04% stocks advancing against 24.35% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices were up by 0.86% and 0.80%, respectively.

All the sectoral indices on the BSE remained higher, Bankex up by 1.55%, Auto up by 1.53%, IT up by 1.26%, Metal up by 1.02% and TECk was up by 1.00%, were the major gainers on the index.

The top gainers on the Sensex were Tata Power up by 2.55%, M&M up by 2.49%, Hero Honda up by 2.45%, Bajaj Auto up by 2.00% and ICICI Bank was up by 1.87%.

Bharti Airtel down by 0.97% and ONGC down by 0.22% were the only losers on the index.

Meanwhile, for a nation that is 75% dependent on imported crude oil to meet its energy needs, further increase in crude prices may spell bad news for the Government as it will be forced to take the tough decision of deregulating the diesel prices. According to Kaushik Basu, Chief Economic Adviser in the Ministry of Finance, if global crude touches $150 to $160 a barrel, the government will have to take the tough decision of freeing up the diesel prices soon which may aggravate rising prices situation.

Meanwhile, crude oil prices in the international market are ruling above $100 a barrel at present and with the crisis worsening in Libya and other Middle East countries, they may go up further. Also, with rise in crude prices, petrol prices are also expected to be raised because in wake of rising prices it will be left with only two options either deregulation of diesel prices or shelling out more subsidies for already loss making oil marketing companies (OMCs).

The government is having a tough task at hand as diesel fuel is considered life blood of both the agriculture and the commercial transport sectors and higher diesel prices could lower profits for businesses. Also, the government has set itself a target of limiting the fiscal deficit to 4.6% of GDP in 2011-12, though it is perceived that it could be a tough call to keep it within the band against the backdrop of high global oil and commodity prices.

Though the government had in June last year allowed oil marketing firms to set petrol prices, it has shied away from deregulating diesel prices due to stiff opposition from political parties and on fears that such a move would stoke inflation. Hence, the deregulation of diesel has been kept in abeyance.

The S&P CNX Nifty opened at 5,586.20; about 50 points higher compared to its previous closing of 5,536.20, and has touched a high and a low of 5,608.20 and 5,581.75 respectively.

The index is currently trading at 5,595.85, up by 59.65 points or 1.08%. There were 44 stocks advancing against just 6 declines on the index.

The top gainers of the Nifty were M&M up by 2.78%, Tata Power up by 2.64%, Kotak Bank up by 2.56%, Hero Honda up by 2.46% and Bajaj Auto up by 2.22%.

The top losers of the index were Bharti Airtel down by 0.70%, ONGC down by 0.26%, Siemens down by 0.22%, GAIL down by 0.19% and Power Grid was down by 0.15%.

All the Asian equity indices were trading in the green; Shanghai Composite was up 6.13 points or 0.21% to 2,909.11, Hang Seng was up 291.77 points or 1.26% to 23,414.19, Jakarta Composite was up 35.42 points or 1.01% to 3,529.96, KLSE Composite was up 14.11 points or 0.94% to 1,520.99, Nikkei 225 was up 120.73 points or 1.14% to 10,706.75, Straits Times was up 35.85 points or 1.18% to 3,073.20, Seoul Composite was up 24.84 points or 1.26% to 1,995.50 and Taiwan Weighted was up 64.41 points or 0.74% to 8,802.78.

Late spurt help benchmarks make a scintillating intraday U-turn

2011-02-21T04:38:00.006-08:00

Indian share pulled through an unexpected finish to the initial day of F&O expiry week amid a slew of news continuously flowing from New Delhi, the national capital. The 5,400 level proved as a solid support for the S&P CNX Nifty index which registered a smart re-bound from those levels as investors turned sanguine and resorted to hefty bottom fishing in fundamentally strong and undervalued stocks. Government's consent to opposition's demand for Joint Parliamentary Committee Probe along with a robust GDP projection of nearly 9% for the coming fiscal by C Rangarajan, Chairman of the PM's Economic Advisory Council, underpinned investor sentiment in the dying hours of trade. Meanwhile Indian President Pratibha Patil affirmed that top priority of the government was to combat inflation, especially of food items, and sustaining growth momentum while striving to push economic reforms to encourage foreign and private sector investments in the country. The NSE's 50-share broadly followed index, Nifty surged over a percent to settle around the high point of the day above the crucial 5,500 level while the Bombay Stock Exchange's Sensitive Index, or Sensex soared over two hundred points to end above the psychological 18,400 mark. The broader markets though succumbed to selling pressure as the BSE's midcap index fell 0.04% and smallcap index shed 0.09% in Monday's session, underperforming their larger peers by quite a margin. The IT and TECk counters in the BSE sectoral space snapped the day with maximum gains of 2.76% and 2.11% respectively as bellwethers like Wipro and TCS zoomed 4.12% and 4.24% respectively. The consumer durables pack too remained amid the thick of the things after majors like Titan Industries and Bajaj Electricals amassed 4.64% and 1.86% respectively. Besides, index heavyweights like Reliance Industries and ONGC too made their participation felt after jumping 2.98% and 2.04% respectively. However the Auto pocket remained the only sectoral index that languished in the red zone with 1.18% losses since shares of Tata Motors and Hero Honda plunged 3.33% and 1.66%.

On the global front, Asian benchmarks closed mostly in the negative terrain amid growing concerns of turmoil in the Middle East which underpinned the crude oil prices to rise by more than $1 per barrel in Asian electronic trade. The European counterparts too traded with large cuts as investors resorted to hefty profit booking with the DAX plummeting around a percent, being the top laggard in the space. On the other hand, the screen trading for US index futures too indicated that the Dow could open on a pessimistic note.

Earlier on the Dalal Street, after Friday's over a percent jolt the benchmark showed signs of consolidation for most part of the day's trade as investors lacked conviction. The index gyrated around the neutral line in a narrow band through the first half in the absence of any optimistic market triggers. But Budget-related positive news flow and softening inflation eased investors' apprehensions as the Sensex saw a bounce back post-noon. Sanguine sentiments in the dying hours helped the local bourses pull through a scintillating intraday U-turn and settle around the high point of the day. The indices eventually went home with over a percent gain on the initial day of F&O expiry week and four working days ahead of the Budget 2011. Volumes for markets were lower than Friday at over Rs 1.77 lakh crore while the turnover for NSE F&O segment too remained higher at over Rs 1.63 lakh crore on Monday. The market breadth on the BSE was negative as there were 1397 shares on the gaining side against 1463 shares on the losing side while 112 shares remained unchanged.

On Charts: The S&P CNX Nifty today closed above 5,507 levels, which was crucial level. The next resistance for the nifty will be around 5,572 (38% retracement level) and 5688 (50% retracement level).While support will be around 5,457 (10EDMA) and 5,401 mark, while going forward its major resistance may see around 5,655 mark.

Finally, the BSE Sensex rose 226.79 points or 1.25% to settle at 18,438.31 while the S&P CNX Nifty advanced 59.65 points or 1.09% to end at 5518.60.

The BSE Sensex touched a high and a low of 18,457.49 and 18,082.66, respectively.

TCS up 4.24%, Wipro up 4.12%, Sterlite Inds up 3.31%, ONGC up 2.98% and Jaiprakash Associates up 2.93% were the major gainers on the Sensex.

On the flip side, Tata Motors down 3.33%, Hero Honda down 1.66%, Maruti Suzuki down 1.31%, NTPC down 1.04% and Tata Power down 1% were the main losers on the index.

The BSE Mid-cap and Small-cap indices lost 0.04% and 0.09%, respectively.

Meanwhile, the Indian textile industry has seen strong recovery from the impact of global downturn riding on improving demand from the rich countries and diversification of its export direction. There is however still a number of troubles facing the industry and textile players have lined up a series of expectations from the forthcoming Budget for FY12.

First, the industry has seen one of the severest cost inflation cycle in last one year. Cotton prices have been increasing rapidly on a tight demand-supply scenario in global markets putting pressure on textile companies' margins. Export market on the other hand has become extremely competitive and much more price sensitive compared to pre-crisis period. This has not only impacted margins but competitiveness of textile players as well. While the cap of 5 million bales of exports is nearly exhausted, the industry wants the government to hike export duty on cotton to lower exports immediately and continue with the same in next season as well.

The industry wants the government to hike duty drawback rates by 5% at least by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of various duties including excise duties, custom duties, service tax, education cess and various state level taxes. The demand is also based on argument that rivals like China and Bangladesh have increased these concessions and in a super-competitive export atmosphere which prevails currently, Indian government should also match the steps.

The industry wants the government to make the funding easier and at reasonable rate of interest. With the central bank hiking its policy rates seven times in the current fiscal so farm market interest rate has been going up, making the working capital costly for the textile players. The industry wants that at least for the small and medium units the government should ensure cheaper working capital by providing interest subvention. The industry is demanding that export loans to be treated at par with the farm loans and therefore made a part of the priority sector lending by the banks.

Another wish of textile players is that government should scrap the import duty on manmade fibres which will help it source cheaper manmade fabrics. The move will bring the cost of production down and improve the global competitiveness of Indian textile players. Such a move also becomes more important in wake of the surging prices of cotton. However, it has been strongly opposed by the manmade fibre industry and therefore may not make the cut in Budget.

Further, given the severe shortage of power being faced by the industry, the government has been urged to encourage development of captive power units by textile companies. Towards this end, the government should exempt the diesel used in captive power generation from excise duty and other local levies. Finally, the industry wants an early implementation of the goods and services tax (GST) which will help bring the tax incidence down. The industry wants the government to make sure that the state level levies of around 6% are also refunded to producers by the central government.

In BSE sectoral space Information Technology (IT) up 2.76%, TECk up 2.11%, Consumer Durables up by 1.97%, Oil & Gas up 1.81% and Metal up 1.31% were the major gainers in the BSE sectoral space; while Auto down 1.18% was the sole loser in the sectoral indices.

The S&P CNX Nifty touched a high and a low of 5526.25 and 5413.10, respectively.

The top gainers on the Nifty were Wipro up 4.83%, TCS up 4.32%, Jaiprakash Associates up 3.93%, Sterlite Inds up 3.59% and ONGC up 3.17%.

The top losers on the index were Tata Motors down 3.65%, Hero Honda down 2.18%, Maruti Suzuki down 1.56%, NTPC down 1.51% and DLF down 0.84%.

With the announcement of the Union Budget just days away, the tea industry like any other industry has its set of expectations. The industry has demanded complete exemption from the present level of import duty of 10% on import of filter paper for tea bags as tea bags and instant tea are gaining preference amongst consumers of India and abroad. Another demand of the industry is full exemption from payment of import duty from the present level of 10% on Nylon Cloth for tea bags.

The industry wants continuation of the special purpose tea fund and other additional subsidies which were being provided by the central government earlier, as it is reeling under cost pressures. This will help tea companies upgrade and improve overall tea quality. The industry further wants that the increased weighted deduction on payments made to national laboratories, research associations, universities and other institutions for scientific research from 125% to 175% must be continued as this will help organizations like the Tea Research Association to take up better research and development activities, resulting in production of better quality tea saplings.

The industry will also be benefitted by the extension of concessional import duty on imported plantation machinery as it will help the industry in value adding and hiking exports in the long run. Also, another crucial demand of the industry is that tea plantations should be made under the purview of the Transport Subsidy Scheme under NEIIPP, which would provide much needed cost relief and its enhance competitiveness.

India's tea industry has seen a strong revival over last 2-3 years. After facing years of slump, the industry has remained in bullish scenario over the last three years. Overall, the outlook of tea industry is quite strong at the moment, given the tight global demand supply scenario, and any supportive announcement in the Budget will act as a further catalyst for the industry.

European markets were trading in the red on Monday. France's CAC 40 lost 0.81%, Germany's DAX dipped 0.77% and Britain's FTSE 100 dropped 0.34%.

Asian equity indices finished the day's trade mostly in the negative terrain on Monday amid growing turmoil in the Middle East. The sentiments in the region also weighed as crude oil prices rose by more than $1 per barrel in Asian electronic trade on Monday. Seoul shares slipped by 0.40%, weighed by fall in steelmakers and financials such as POSCO and KB Financial Group, while Chinese main stock index closed with a gain of more than one percent, supported by oil firms after China raised fuel prices to fresh highs, offsetting the impact of a rise in bank reserve requirement ratios (RRR).

Markets remain lethargic in trade; Sensex down 52 points

2011-02-21T04:38:00.005-08:00

Although still into the negative, the markets managed to recoup some of the losses during the previous hour of trade as the Budget session of parliament kicked off with the President's joint address. The benchmark indices -- Sensex and Nifty -- were trading near their day's low levels. The global cues were also not very encouraging as most of the Asian markets were trading in the red amid prevailing tensions in the Middle East. The US index futures were also showing down-tick in screen trade at this point of time. Back home, among the sectoral indices, oil & gas, capital goods and fast moving consumer goods segments witnessed significant traction while auto, realty, banking, healthcare and consumer durables counters were the major laggards during trade. The broader markets were also mirroring their larger counterparts with BSE mid-cap and small-cap indices declining by 0.77% and 0.68%, respectively. The market breadth on the BSE was in favour of declines in the ratio of 1637:957 while 95 scrips remained unchanged.

The BSE Sensex dropped 52.33 points or 0.29% at 18,159.19. The index touched a high and a low of 18,306.75 and 18,128.36, respectively.

The BSE Mid-cap and Small-cap indices declined 0.77% and 0.68%, respectively.

In BSE sectoral space Auto down 1.84%, Realty down 1.29%, Bankex down 0.76%, Healthcare (HC) down 0.58% and Consumer Durables (CD) down 0.39% were the major losers.

On the flip side, Oil & Gas up 0.29%, Capital Goods (CG) up 0.20%, Fast Moving Consumer Goods (FMCG) up 0.14% and Information Technology (IT) up 0.10% were the only gainers on the BSE sectoral space.

Meanwhile, in order to give a boost to the affordable housing concept, Industry body Assocham has urged the government to re-introduce the tax based incentive scheme in the forthcoming Budget for 2011-12. It also wants a core sector tag for the real estate industry to help bring down prices of homes and hence boost demand.

The industry body has, in a letter addressed to the Union Finance Minister Pranab Mukherjee said the tax based incentives under the section 80IB (10) of the Income Tax Act should be extended by five years in the coming budget. The industry body feels that these incentives will not only help boost the demand for real estate sector but also help social inclusion by generating more affordable houses.

The government had in last year's budget extended a similar scheme by one year keeping in mind the state of the economy, but given the fiscal constraint is understood to be unwilling to extend the scheme again. The real estate industry however feels that continuation of the scheme is a must for increase in affordable housing construction, something that the government would also like to see as part of its social inclusion agenda.

'The realty firms must be encouraged through fiscal incentives to construct small dwelling units at affordable prices, which should go a long way in uplifting the social status of 'aam aadmi',' said the industry body adding that tax incentives will not impact revenue much as these will boost the volumes, compensating for lower rate of taxation. Another demand raised by Assocham is that the sector should be accorded the long pending status of an industry for purpose of availing long term and short term finances like other industries. It should be provided with a separate ministry for better policy making and should have an independent regulator to ensure such policies in letter and spirit by all the parties concerned.

The industry body is also seeking core sector status for real estate, particularly for integrated affordable housing project development from the regulators like the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI). This will help solve the funding problem for the realtors and help bring down the cost of projects and making the 'affordable houses' all the more affordable. Finally, the industry body also wants greater tax concession for first time house buyers to distinguish them for people who houses as an investment.

The top gainers on the Sensex were Wipro up 2.67%, Sterlite Inds up 1.87%, Jindal Steel up 1.13%, Rel Infra up 1.11% and RIL up 0.82%.

Tata Motors down 3.66%, DLF down 2.32%, Tata Power down 2.30%, Hero Honda down 2.28% and NTPC down 1.74% were the top losers on the index.

India Inc wants the government to ease the rules for overseas merger and acquisition (M&A) in order to let the growing industry expand its footing overseas rapidly. The Industry body CII has taken the demand to the government and urged the finance ministry to come up with requisite changes in forthcoming General Budget to be presented on Feb 26.

Global economic scenario has changed rapidly over last few years and a lot of assets are now available at much more attractive prices that they were like a decade ago. Also, with their rising size the strength of Indian companies has been rising and these are now looking to adopt best international practices for which overseas acquisition are very helpful.

The CII has submitted a memorandum to the Department of Industrial Policy and Promotion (DIPP), which is the apex body framing the foreign direct investment (FDI) norms for the country, saying that the current provisions in Companies Act, Competition Act and SEBI Takeover Code have a lot of confusion due to contradicting clauses and leaves the Indian companies in grey over this important emerging trend.

It has therefore requested the DIPP that it should frame new norms for allowing Indian companies to enter into M&A with foreign companies and also for the vice versa. Even as the DIPP will have to address the technical part, the finance ministry should go ahead and announce the agenda in the forthcoming Budget so that the companies can have clarity on the matter at the earliest.

The S&P CNX Nifty dipped 20.20 points or 0.37% to 5438.75. The index touched a high and a low of 5483.55 and 5432.20, respectively.

The top gainers of the Nifty were Wipro up 2.84%, Sterlite Inds up 1.84%, Rel Infra up 1.49%, ACC up 1.32% and Rel Capital up 1%.

The top losers of the index were Tata Motors down 4.02%, Hero Honda down 2.53%, DLF down 2.43%, Tata Power down 2.34% and Sesa Goa down 2.33%.

Rest of the Asian markets were trading mostly in the red. Hang Seng dipped 0.26%, Jakarta Composite tripped 0.01%, Straits Times declined 0.51%, Seoul Composite shed 0.39% and Taiwan Weighted slipped 0.05%.

On the flip side, Shanghai Composite jumped 0.94%, KLSE Composite rose 0.55% and Nikkei 225 gained 0.14%.

Nifty trades near day’s low level; auto and realty drags

2011-02-21T04:38:00.003-08:00

The local equity indices are trading near their day's low in late morning session as continuous selling pressure in Auto, Realty and Bankex counters are pulling the markets down while some defensive sectors like FMCG and IT are trying to give some support to the markets .Meanwhile the other regional markets too were not showing that much encouraging mood, majority of them were trading in red while US index futures were also showing down tick in screen trade. Back home, defensive counter Wipro up 3.02% was the top gainer on the BSE Sensex as the company's Lighting and Furniture Business arm has introduced its premium range of indoor and outdoor LED-based lighting range and designer modular furniture WE and Toronto based designer chair range Transit .While Realty major DLF once again is reeling in red, down by 2.47% .The broader indices too were trading in the red, the BSE Mid cap and Small cap indices were down by 0.83% and 0.56% respectively. The market breadth on the BSE was in favour of declines in the ratio of 1487:965 while 92 scrips remained unchanged.

The BSE Sensex declined 73.97 points or 0.41% at 18137.55.The index has touched a high of 18,306.75 and a low of 18,133.00 respectively.

The BSE Mid cap and Small cap indices were down by 0.83% and 0.56% respectively.

The top gaining sectoral indices on the BSE were, Consumer Durables (CD) up by 0.23% , FMCG up by 0.10% and IT up by 0.03% while, Auto down by 1.50%, Realty down by 1.44%, Bankex down by 0.87%, Power down 0.72 and Healthcare down 0.58% were the major losers on the index.

The top gainers on the Sensex were Wipro up by 3.02%, Sterlite Industries up by 1.75%, Jindal Steel up by 1.71%, RIL up by 0.86% and L&T was up by 0.56%.

DLF down by 2.47%, Hero Honda down by 2.30%, Tata Power down 2.08%, Tata Motors down by 2.04%, and NTPC down by 1.96% were the top losers on the index.

In order to give a boost to the affordable housing concept, Industry body Assocham has urged the government to re-introduce the tax based incentive scheme in the forthcoming Budget for 2011-12. It also wants a core sector tag for the real estate industry to help bring down prices of homes and hence boost demand.

The industry body has, in a letter addressed to the Union Finance Minister Pranab Mukherjee said the tax based incentives under the section 80IB (10) of the Income Tax Act should be extended by five years in the coming budget. The industry body feels that these incentives will not only help boost the demand for real estate sector but also help social inclusion by generating more affordable houses.

The government had in last year's budget extended a similar scheme by one year keeping in mind the state of the economy, but given the fiscal constraint is understood to be unwilling to extend the scheme again. The real estate industry however feels that continuation of the scheme is a must for increase in affordable housing construction, something that the government would also like to see as part of its social inclusion agenda.

'The realty firms must be encouraged through fiscal incentives to construct small dwelling units at affordable prices, which should go a long way in uplifting the social status of 'aam aadmi',' said the industry body adding that tax incentives will not impact revenue much as these will boost the volumes, compensating for lower rate of taxation. Another demand raised by Assocham is that the sector should be accorded the long pending status of an industry for purpose of availing long term and short term finances like other industries. It should be provided with a separate ministry for better policy making and should have an independent regulator to ensure such policies in letter and spirit by all the parties concerned.

The industry body is also seeking core sector status for real estate, particularly for integrated affordable housing project development from the regulators like the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI). This will help solve the funding problem for the realtors and help bring down the cost of projects and making the 'affordable houses' all the more affordable. Finally, the industry body also wants greater tax concession for first time house buyers to distinguish them for people who houses as an investment.

The S&P CNX Nifty trimmed 24.45 points or 0.455 at 5,434.50.The index has touched a high of 5,483.55 and a low of 5,433.85 respectively.

The top gainers of the Nifty were Wipro up by 2.85%, Sterlite Industries up by 1.68%, Jindal Steel up by 1.46%, , IDFC up by 1.36% and ACC up by 1.10%.

The top losers of the index were Sesa Goa down by 2.68%, Tata Motors down by 2.62%, DLF down 2.49%, Hero Honda down by 2.44% and NTPC down was down by 2.26%.

Majority of the other reginal peers are trading in red; Hang Seng trimmed 0.37%, Jakarta Composite slid 0.21%, Straits Times slipped 0.44%, Seoul Composite dropped 0.39% and Taiwan Weighted declined 0.05% while KLSE Composite surged 0.11%, Shanghai Composite gained 0.87% and Nikkei 225 increased by 0.14%.

Equity markets cut losses in mid morning trade

2011-02-21T04:38:00.001-08:00

Indian equity markets after continuing Friday's weak trend in early trade have now trimmed their losses in mid morning session on emergence of buying at select counters and covering-up of pending short positions by speculators ahead of monthly expiry in the derivatives segment on Thursday which mainly influenced the trading sentiment. However, the broad-based National Stock Exchange Nifty still was in the red zone as the ongoing probe into the 2G spectrum scam and a weak trend on other Asian bourses capped its gains. On the global front, despite positive closing of the Wall Street on Friday, the Asian shares were trading lower as a fresh round of policy tightening from China and spreading unrest in the Middle East encouraged some profit-taking after last week's solid gains. Back home, stocks from Capital Goods, Oil & Gas and Consumer Durables counters were trading confidently, while losses from stocks from Auto, Realty and Bankex space limited the upmove of the market. Meanwhile, the broader space also depicted some weak spells. However, the gains of frontliners like, Wipro which rose 2.13% after ratings upgrade by brokerage firm CLSA, followed by Sterlite, Reliance Infra and Jindal Steel also contributed to the recovery of the market. The market breadth on BSE though narrowed but still remain in the favour of declines which were outnumbering advances in the ratio of 1277:973, while, 102 shares remained unchanged.

The BSE Sensex is currently trading at 18,235.64, up by 24.12 points or 0.13%. The index has touched a high of 18,306.75 and a low of 18,133.00 respectively. There were 13 stocks advancing against 17 declines on the index.

The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.35% and 0.23% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods (CG) up by 1.04%, Oil & Gas up by 0.82%, Consumer Durables (CD) up by 0.67%, Metal up by 0.58% and FMCG up by 0.50 %, While, Auto down by 1.31%, Realty down by 0.88%, Bankex down by 0.36%, Healthcare down 0.33% and TECk down by 0.08% were the major losers on the index.

The top gainers on the Sensex were Wipro up by 2.90%, Sterlite Industries up by 2.28%, Jindal Steel up by 2.19%, BHEL up by 1.64% and L&T was up by 1.62%.

Tata Power down 2.17%, Hero Honda down by 2.16%, Tata Motors down by 2.12%, DLF down by 2.02% and M&M down by 1.27% were the top losers on the index were.

Meanwhile, the Indian government is likely to clear export of 5 lakh tone of sugar on Monday. An empowered group of ministers (EGOM) on food commodities, headed by Union Finance Minister Pranab Mukherjee, is likely to meet on Monday to decide on the matter. The EGoM has already taken a call on lifting the ban on onion exports.

The government is likely to consider the matter in light of predictions of good harvest in India, the world's second largest producer of the sweetener. Shipments were earlier allowed under the pending advance authorization scheme and the advance licence scheme and now half a million tonne will also be allowed to be exported under the open general license system.

Global sugar prices have continued to remain volatile and reached close to the record highs towards end of the last calendar year as the supply concerns from Brazil and policy uncertainty from India that has been keeping the overall supply-demand scenario in grey. Prices jumped to a 30 year high as the Brazilian harvest seemed set to be significantly lower compared with earlier expectations. Although prices came down in the following couple of fortnights, they have been rallying again now amidst concerns that global supplies will be down due to a storm in Australia and drought in Russia.

Earlier, the Indian sugar mills association (ISMA) had projected the sugar output at over 25 million tonne for this season. This will leave a surplus of around 2 million tonne after accounting for domestic consumption. The industry body has been demanding for permission to export at the earliest in order to benefit from the high global prices. The government while has already allowed export of sugar raws lying at ports, it has been more cautious to allow general exports due to high domestic inflation and political sensitivity of the matter.

The move has also been supported by Food and Agriculture minister Sharad Pawar. He had stated recently that with high sugar prices currently prevailing in global markets and strong uptic in domestic production likely this season, it was the right time for the ban on export of the commodity to be lifted. Exports at this time will help improve returns to the sugar mills which in turn will support higher crop prices back home in India and hence higher production next year as well. Sans this, domestic prices of cane might crash which will discourage sugar sowing next year, again bringing down production.

The S&P CNX Nifty is currently trading at 5,458.55 down by 0.40 points or 0.01%. The index has touched a high of 5,483.55 and a low of 5,433.85 respectively. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Wipro up by 2.96%, Jindal Steel up by 2.27%, Sterlite Industries up by 2.15 %, IDFC up by 1.75% and L&T up by 1.68%.

The top losers of the index were Tata Motors down by 2.41%, Hero Honda down by 2.38%, Tata Power down 2.19%, DLF down 2.04% and Suzlon was down by 1.68%.

Asian equity indices were trading mostly in the red; Hang Seng was down by 0.37%, Jakarta Composite slid 0.21%, Straits Times slipped 0.46%, Seoul Composite dropped 0.61% and Taiwan Weighted declined 0.26%.

On the flip side, KLSE Composite was trading flat, Shanghai Composite gained 0.14% and Nikkei 225 increased by 0.01%.

Benchmarks trade in red after a flat start

2011-02-21T04:37:00.000-08:00

The Indian equity markets are trading in the negative terrain after making a flat start taking weak cues from the Asian counterparts. Most of the Asian peers were trading in the negative terrain at this point of time slightly influenced by the rate hike in China. Though, the US markets continued their gaining streak on Friday and despite some profit booking the major indices were able to snap the week with gains of about a percent each. Back home, benchmarks turn negative after a positive start as selling pressure was witnessed in broader indices and rate sensitive sectors. On the sectoral front, capital goods, fast moving consumer goods and metal were the top gainers in the trade; on the other hand auto, realty and banking were the major losers on the BSE sectoral space. The broader indices too were bleeding badly. The market breadth on the BSE was negative; there were 617 shares on the gaining side against 1036 shares on the losing side while 61 shares remained unchanged. The investors remained on the safer side in early trade as crucial budget session of Parliament will begin today. Trade may remain volatile this week as it being the expiry week for the February F&O series.

The BSE Sensex opened at 18,238.54; about 27 points higher compared to its previous closing of 18,211.52, and has touched a high and a low of 18,306.75 and 18,147.07 respectively.

The index is currently trading at 18,181.48, down by 30.04 points or 0.16%. There were 10 stocks advancing against 19 declines while one scrip remained unchanged on the index.

The overall market breadth started in the negative terrain, with 36% stocks advancing against 60.44% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices were down by 0.82% and 0.41%, respectively.

The top gaining sectoral indices on the BSE were, CG up by 0.70%, FMCG up by 0.61%, Metal up by 0.42% and CD up by 0.01%. While, Auto down by 1.38%, Realty down by 0.80%, Bankex down by 0.66%, TECk down by 0.28% and IT down by 0.23% were the major losers on the index.

The top gainers on the Sensex were Bajaj Wipro up by 2.52%, Sterlite Industries up by 1.90%, Jindal Steel up by 1.63%, BHEL up by 1.29% and HUL was up by 1.02%.

Tata Motors down by 2.50%, TCS down by 1.87%, Hero Honda down by 1.72%, DLF down by 1.63% and M&M down by 1.46% were the top losers on the index were.

The Indian government cleared on Friday that it was not in favour of a global mechanism for regulating the flow of capital or for implementing capital controls, but would like to see a higher degree of transparency in framing of monetary policies and flow of volatile capital across borders.

"Our position is that we do not want any arbitrary mechanism to discourage capital inflows. We have stated that this decision should be left to the discretion of individual countries," said the Union Finance Minister of the country Pranab Mukherjee on Friday at the sidelined of the gathering of the G20 to deliberate on the global economic imbalances.

India is facing a difficult situation wherein its economy needs greater foreign capital to bridge its widening current account deficit (CAD), expected to reach 3.5% of the gross domestic product (GDP), but the foreign direct investment (FDI) has gone down in 2010. While institutional fund flow has increased broadly, economists have raised concerns saying financing of higher CAD should come through greater direct investment which has longer term commitment rather than volatile portfolio flows.

On the issue of fiscal consolidation, the finance minister stated that Indian government would return to fiscal discipline in the forthcoming Budget, after having followed policies of stimulus and expansion in the last two years. Mukherjee said that expansionary policies were the need of the hour when growth was going down. Now, however, as the growth has started to improve, it was pragmatic to bring down deficit, particularly in wake of high inflation prevailing presently.

Years of hard work in fiscal consolidation was washed away in 2008-09 when fiscal deficit ballooned to 6.8% of the GDP on account of higher subsidy outgo in first half amidst a global commodity rally and decline in tax receipts in second half due to tax sops and slowdown in economic growth. However, riding on windfall non-tax revenue from the auction of third generation (3G) telecom spectrum, the government is likely to end the fiscal with lower than budgeted deficit. The challenge will be to cut the fiscal gap further next year when there will be no windfall income.

The S&P CNX Nifty opened at 5,456.60; flat compared to its previous closing of 5,458.95, and has touched a high and a low of 5,483.55 and 5,436.80, respectively.

The index is currently trading at 5,444.35, down by 14.60 points or 0.27%. There were 19 stocks advancing against 31 declines on the index.

The top gainers of the Nifty were Wipro up by 2.42%, Sterlite Industries up by 2.28%, Jindal Steel up by 1.66%, Reliance Infra up by 1.45% and Sun Pharma up by 1.35%.

The top losers of the index were Tata Motors down by 2.70%, Hero Honda down by 1.91%, HCL Tech down by 1.88%, TCS down by 1.68% and Suzlon was down by 1.57%.

Asian equity indices were trading mostly in the red; Hang Seng was down 75.94 points or 0.32% to 23,519.30, Jakarta Composite was down 7.51 points or 0.21% to 3,493.99, KLSE Composite was down 0.31 points or 0.02% to 1,517.25, Straits Times was down 15.01 points or 0.49% to 3,071.91, Seoul Composite was down 3.93 points or 0.20% to 2,009.21 and Taiwan Weighted was down by 7.33 points or 0.08% to 8,836.51.

On the flip side, Shanghai Composite was up 3.59 points or 0.12% to 2,903.38 and Nikkei 225 was up by 5.19 points or 0.05% to 10,847.99.

Benchmarks continue to shrivel amid an increasingly vulnerable domestic setup

2011-02-08T05:05:00.005-08:00

Indian stock markets got pounded for yet another day of trade as local investors time and again squared off their positions after FIIs continued profit booking dragging the markets lower. It was the domestic investors who remained the primary sellers in today's session dragging the frontline indices to around seven month low levels. There was no stopping to the relentless selling pressure in the day's trade which has dragged down the benchmarks way below all key technical levels. The market leads from the European stock markets remained positive but of no avail as profit booking remained the order of the day. The NSE's 50-share broadly followed index, Nifty got pulverized to close near the low point of the day just above the 5,300 support level while the Bombay Stock Exchange's Sensitive Index Sensex plummeted way below the 18,000 level after collapsing over two hundred fifty points. The broader markets had to bear a brutal assault today as they went on to underperform their larger peers by quite a margin with BSE's midcap shaving off 2.42% and BSE's smallcap shelving 3.23%. All sectoral indices remained on sellers' radar with the Consumer Durables (CD) counter languishing at the bottom of the table with about 4% losses. Majors like VIP Industries and Titan industries sulked the most in the space as they took deep cuts of 7.15% and 6.02% respectively. The rate sensitive pockets like Real Estate, Auto and Bankex too lead the way down after drifting 3.08%, 2.70% and 2.28% respectively. Auto heavyweight M&M drenched close to 6%, being the top laggard on the Sensex while real estate major Unitech plunged 7.09% being the biggest loser in the realty space. ONGC too declined 5.58% on the BSE after the government said that legitimate concerns of state-owned ONGC will need to be addressed before it can approve Vedanta Resources' $9.6 billion acquisition of Cairn India.

On the global front, cues remained mixed, all Asian markets barring the Japanese and Malaysian benchmarks closed on a negative note as sentiments remained cautious since investors speculated that Chinese central bank might hike interest rates. While, the European counterparts are trading on a flat note, consolidating their position around the neutral line with DAX being the top gainer. On the other hand, the screen trading for US index futures indicates that the Dow could open on a flat note.

Earlier on the Dalal Street, the benchmarks started on a flat to positive note on the back of strong cues from the overnight US markets which got a lift from good earnings report and some merger announcements. However the indices plunged into the red after trading in the positive terrain for a brief period in the early trade as selling pressure gathered greater force. The frontline indices failed to show any kind of resilience thereafter and treaded on a southbound journey. The markets saw position squaring for most part of the day and eventually finished the day's trade around the low point of the day with massive losses of around one percentage point. The markets registered volumes of over Rs 1.25 lakh crore while the turnover for NSE F&O segment remained on the higher side at around Rs 1.25 lakh crore compared to Monday at over Rs 1.10 lakh crore in last session. The market breadth on the BSE was dreadfully negative as there were 551 shares on the gaining side against 2299 shares on the losing side while 136 shares remained unchanged.

Finally, the BSE Sensex flumped 261.49 points or 1.45% to settle at 17,775.70 while the S&P CNX Nifty crash-dived 83.45 points or 1.55% to end at 5312.55.

The BSE Sensex touched a high and a low of 18,141.51 and 17,742.18, respectively.

The top gainers on the Sensex were Bajaj Auto up 1.69%, Tata Power up 1.47%, Cipla up 0.83%, Hindalco Inds up 0.82% and Infosys up 0.24%.

M&M down 5.97%, ONGC down 5.58%, JP Associates down 5.21%, Reliance Communications down 4.20% and Hero Honda down 4.06% were the top losers on the index.

The BSE Mid-cap and Small-cap indices plunged 2.42% and 3.23%, respectively.

Meanwhile, in order to give some relief to inflation hit Indians, the government is likely to hike the tax exempt income ceiling from current Rs 1.6 lakh in the forthcoming General Budget to be presented by Union Finance Minister Pranab Mukherjee in the Parliament on February 28.

The government has already committed to raise the income tax exemption limit to Rs 2 lakh when it implements the Direct Taxes Code (DTC) in 2012-13. However, given the high inflation seen throughout the current fiscal, which has also been dubbed as main reason for slow growth in consumption of non-durables, the government may limit to Rs 2 lakh in FY12 itself.

Further, in order to give a boost to savings in the country, the government is also likely to enhance the limit of investment in accepted instruments to claim deduction from taxable income. At present the investment limit for which tax can be deducted stands at Rs 1.2 lakh including Rs20,000 in infrastructure bonds. The same might be hiked to Rs 1.4-1.5 lakh to encourage long-term savings.

The idea behind the potential move is that a higher saving rate gets translated into a higher investment rate, and higher investment as a percentage of gross domestic product (GDP), higher is the potential growth that an economy can achieve. For instance, the saving and investment rates in Indian economy were around 20 and 24% respectively in late 1990s when the economy was growing at around 6%. The same increased to 30/34% in early years of current decade that resulted in growth surpassing the 9% level in three years before the global financial crisis. China, which has seen growth in excess of 10%, has its saving/investment rates in mid-40s.

All the BSE sectoral spaces were trading in the red. Consumer Durables (CD) down 3.81%, Realty down 3.08%, Auto down 2.70%, Bankex down 2.28% and Oil & Gas down 2.06% were the major losers.

As the global economy continues to post a steady though gradual recovery, India's Information Technology (IT) industry is also seeing robust recovery and after nearly flat numbers in last fiscal, total exports of the industry are likely to expand by around 19% in this financial year. Overall revenue will also see a similar growth to touch $76 billion compared with $59 billion last year.

Further, the industry was reinventing itself in order to move further up the value chain and was putting more stress on innovation. This will help the total exports to grow three-folds over the current decade to touch $175 billion by the end of current decade, said the NASSCOM, the top industry body representing the Indian IT companies.

'IT will continue to play a significant role in the transformational agenda of India. Export revenue is expected to increase three times at $175 billion by 2020. However, among the various segments in the sector, the IT segment will continue to perform better than the BPO industry and software and engineering products,' Nasscom President Som Mittal said on Monday.

Mittal said that the strong growth is possible because the total size of the market that Indian IT industry can service will also grow nearly three-folds over the same time. 'The addressable market is set to triple in size to touch $1.5 to $1.6 trillion from the present $500 billion and a large part of these new opportunities will come from SMB (small and medium businesses) segment and increased government spending,' said Mittal.

Traditionally, the Indian software industry has relied upon the US and UK as the key regions to get business from. During the economic slowdown when companies cut their IT spending, doubts were raised over the sustainability of Indian IT companies' business model. However, the industry has been reinventing itself, particularly in wake of the emergence of newer technologies such as the cloud, which offers software services over the internet, with NASCOMM providing the direction to smaller and mid-sized companies.

The S&P CNX Nifty touched a high and a low of 5432.35 and 5303.40, respectively.

The top gainers of the Nifty were Bajaj Auto up 1.81%, Tata Power up 1.50%, Siemens up 0.91%, Cipla up 0.78% and Hindalco Industries up 0.75%

The top losers of the index were JP Associates down 6.49%, M&M down 6.16%, ONGC down 5.83%, Kotak Mahindra Bank down 5.23% and Hero Honda down 4.69%.

European markets were trading in the green on Tuesday. France's CAC 40 gained 0.01%, Germany's DAX jumped 0.19%, while Britain's FTSE 100 advanced 0.10%.

Asian equity indices finished the day's trade mostly in the negative terrain shrugging off the strong cues of US markets overnight. Seoul shares recoiled in the trade today on account of fall in shipyards and exporters including Daewoo Shipbuilding and Hyundai Motor. Investors hopes that Chinese central bank will raise interest rates or hike reserve requirements also weighed the sentiments in the region. However Japanese Nikkei rose about half a percent led by financial giants where, Mitsubishi UFJ Financial Group jumped 1.6, Mizuho Financial Group soared 1.8 percent and Sumitomo Mitsui Financial Group surged 2.2 percent, while Chinese stock market remained closed today on account of Chinese New Year holiday.

Markets trade choppy; Nifty struggling around 5350 mark

2011-02-08T05:05:00.003-08:00

Benchmark indices have tumbled on yet another day and are trading near to their 5-month lows in the early noon session. While, US index futures are showing an up-tick in screen trade at this point of time, trading was mixed on bourses in other parts of Asia. Back on the Dalal-street, the trade has turned choppy in the second half and the indices have further dipped into red. All the sectoral indices on BSE were currently trading in the red. Consumer durables, realty, auto, oil and gas, banking sector were taking the maximum beating. Index heavyweights such as RIL, Infosys, L&T, ICICI Bank, SBI etc are further dragging the markets lower. The BSE Mid-cap and Small-cap indices, declining by 1.56% and 2.02%, respectively, are completely underperforming their larger counterparts for yet another day. The market breadth on the BSE was dismal; the losers thrashed the gainers in the ratio of 2038:612 while 106 shares remained unchanged.

The BSE Sensex sank 146.56 points or 0.81% at 17,890.63. The index touched a high and a low of 18,141.51 and 17,848.25, respectively.

The BSE Mid-cap and Small-cap indices plunged 1.56% and 2.02%, respectively.

All the BSE sectoral spaces were trading in the red with deep cuts. Consumer Durables (CD) down 2.51%, Realty down 2.24%, Oil & Gas down 1.50%, Bankex down 1.46% and Auto down 1.36% were the major losers.

Meanwhile, in a move that will help the policy makers, particularly the Reserve Bank of India (RBI) to better gauge the underlying inflationary momentum in the Indian economy, the government will release new consumer prices indices (CPIs) on February 18, said an official release from the Planning Commission.

The government will release new series of CPIs for rural, urban and combined (rural + urban) with base 2010 (January-December =100) for January 2011 onwards, said the Central Statistical Organization (CSO). These indices will be available for five major groups, namely, food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous.

At present, India has four different CPIs and a wholesale prices index (WPI). There remains significant difference within the CPIs themselves and even higher difference when the CPIs are compared with the WPI. As such, the policy makers have to reconcile the differences between different indices, which sometimes are too large to be explained or to be factored in, for instance, by the RBI.

In this wake, the WPI has been getting much higher attention of the central bank when it comes to policy making. This is against the international best practice of assessing inflation by the CPI. The main reason for RBI following the WPI is the relatively broader coverage (447 items with a weight of 57% for manufactures), and its frequent and timely availability, as compared to the complicated mode of calculation of the CPIs and long delays in release.

Further, the current CPI numbers do not encompass all the segments of the population in the country and do not reflect the true picture of underlying price momentum. As such, the government has been looking to replace or augment the CPIs by some composite measure which will now be in form of the composite rural-urban CPI to be released on Feb 18.

Initially, the CSO proposes to release provisional indices for the period of one year. These provisional numbers will be subsequently revised and final numbers with complete data for all-India and also for all the States/Union Territories would be released with a time lag of two months. The CSO expects that the data reporting will be considerably improved and there may not be any need to bring out separate provisional numbers after December, 2011. As such, indices for January 2012 onwards along with annual inflation rates are likely to be released with a time lag of one month only.

The top gainers on the Sensex were Tata Power up 2.08%, Hindalco Inds up 1.68%, Bajaj Auto up 1.67%, Cipla up 1.46% and HDFC up 1.22%.

ONGC down 4.49%, M&M down 3.66%, JP Associates down 2.69%, Tata Steel down 2.43% and Hero Honda down 2.25% were the top losers on the index.

The liquidity deficit being faced by Indian commercial banks has eased significantly over the last one fortnight or so on account of the steps taken by the Reserve Bank of India (RBI) in December policy review and also due to rising deposit growth as banks hike deposit rates across the maturities.

Banks have been borrowing Rs 60,000-65,000 crore from the repo window of the central bank through its liquidity adjustment facility (LAF) off-late as compared with average borrowings of close Rs 1 lakh crore seen in last few months. However, the deficit is still somewhat higher compared with the comfort zone of the RBI at Rs 45000-50,000 crore.

Nonetheless, the easing liquidity crunch is now helping banks bring down the interest rate on bulk deposits and certificate of deposits, which had crossed 10% (for one year maturity) in January. Banks have probably realized that, as urged by the central bank too, it is beneficial to have more deposits, even as a somewhat higher cost, than relying on CDs or short term money market when the interest rate cycle is clearly on a significant uphill journey.

The RBI, while has been keeping the liquidity in the deficit mode in the system to improve the transmission of monetary policy decisions, has also stated a number of times that it would not like to see the liquidity get too tight. While tight liquidity is good for rapid transmission of central bank's signals, it can also cause frictions in the bond market and hit credit expansion, thus impacting growth. As such, the RBI has been willing to bring down the deficit to around 1% of net demand and time liabilities of the banks (NDTL) that work out to be around Rs 45,000 crore.

The S&P CNX Nifty fell 45.20 points or 0.84% to 5350.80. The index touched a high and a low of 5432.35 and 5335.85, respectively.

The top gainers of the Nifty were Tata Power up 1.99%, BPCL up 1.78%, Hindalco Inds up 1.70%, Bajaj Auto up 1.62% and Cipla up 1.41%.

The top losers of the index were ONGC down 5.07%, JP Associates down 4.43%, M&M down 3.91%, Axis Bank down 2.71% and Tata Steel down 2.53%.

Asian markets were trading mostly in the red; Hang Seng dipped 0.13%, Jakarta Composite shed 0.77%, Straits Times fell 0.06%, Seoul Composite dropped 0.58% and Taiwan Weighted slipped 0.37%.

On the flip side, KLSE Composite advanced 0.28% and Nikkei 225 rose 0.41%.

The Chinese markets were closed on account of the annual Lunar New Year holidays.

Local equity markets trade lower; Realty and metal drags

2011-02-08T05:05:00.001-08:00

Local equity markets are trading lower in late morning session as selling pressure persisted in selected realty, metal and bank counters. Meanwhile, majority of the other regional peers were trading in negative keeping the local sentiment weak. On the other hand US index future is showing mild gains in the screen trade. Back home the benchmark indices are continuing to trade below key psychological levels. The Sensex has broken and continue to trade below the 18,000 mark while the Nifty has drifted below the 5,350 mark which was the low of August 2010.In sectoral space, Realty stocks have declined sharply, dragging the BSE Realty index down by about 2.66%, Consumer Durables down 2.37% with key stocks from that space suffering sharp losses, metal and banking counters too are down by around 2% while the BSE IT and Teck counters were showing some resistance. Besides several large cap stocks, a number of stocks from midcap and small cap sections have posted sharp losses, the BSE Mid-cap and Small-cap indices slid 1.58% and 1.77%, respectively. The overall market breadth was in negative, the losers outpaced the gainers in the ratio of 1878:636, while, 106 shares remained unchanged on the index.

The BSE Sensex dropped 170 .31 points or 0.94% at 17,866.88. The index touched a high and a low of 18,141.51 and 17863.91, respectively.

The BSE Mid-cap and Small-cap indices slid 1.58% and 1.77%, respectively.

All the BSE sectoral spaces were trading in the red barring IT up by 0.18% and TECk up by 0.05%. Realty was down by 2.66%, Consumer Durables down 2.37%, Metal down 1.76%, Bankex down 1.75% and Capital Goods down by 1.52% were the major losers.

The top gainers on the Sensex were Tata Power up 1.75%, Bajaj Auto up 1.55%, Cipla up 1.38%, HDFC up 0.95% and TCS up 0.61%.

M&M down 3.82%,JP associates up 3.22%, ONGC down 3.09%, Tata Steel down 2.88% and Reliance communication down 2.55% were the top losers on the index.

In a move that will help the policy makers, particularly the Reserve Bank of India (RBI) to better gauge the underlying inflationary momentum in the Indian economy, the government will release new consumer prices indices (CPIs) on February 18, said an official release from the Planning Commission.

The government will release new series of CPIs for rural, urban and combined (rural + urban) with base 2010 (January-December =100) for January 2011 onwards, said the Central Statistical Organization (CSO). These indices will be available for five major groups, namely, food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous.

At present, India has four different CPIs and a wholesale prices index (WPI). There remains significant difference within the CPIs themselves and even higher difference when the CPIs are compared with the WPI. As such, the policy makers have to reconcile the differences between different indices, which sometimes are too large to be explained or to be factored in, for instance, by the RBI.

In this wake, the WPI has been getting much higher attention of the central bank when it comes to policy making. This is against the international best practice of assessing inflation by the CPI. The main reason for RBI following the WPI is the relatively broader coverage (447 items with a weight of 57% for manufactures), and its frequent and timely availability, as compared to the complicated mode of calculation of the CPIs and long delays in release.

Further, the current CPI numbers do not encompass all the segments of the population in the country and do not reflect the true picture of underlying price momentum. As such, the government has been looking to replace or augment the CPIs by some composite measure which will now be in form of the composite rural-urban CPI to be released on Feb 18.

Initially, the CSO proposes to release provisional indices for the period of one year. These provisional numbers will be subsequently revised and final numbers with complete data for all-India and also for all the States/Union Territories would be released with a time lag of two months. The CSO expects that the data reporting will be considerably improved and there may not be any need to bring out separate provisional numbers after December, 2011. As such, indices for January 2012 onwards along with annual inflation rates are likely to be released with a time lag of one month only.

The S&P CNX Nifty declined 56.85 points or 1.05% to 5,339.15. The index touched a high and a low of 5432.35 and 5,338.80, respectively.

The top gainers of the Nifty were BPCL up 1.75%, Tata power up 1.50%,Bajaj Auto up 1.33%, Cipla up 1.19% and HDFC up 0.94%.

The top losers of the index were JP Associates down 5.06%,M&M down 4.06%%, ONGC down 3.75%, Tata Steel down 3.15% and Axis Bank was down 3.11% .

Majority of the regional peers were trading in the red; Hang Seng declined 0.46%, Jakarta Composite dropped 0.60%, Straits Times declined 0.29%, Seoul Composite shed 0.58% and Taiwan Weighted slid 0.37% while, KLSE Composite was up by 0.28% and Nikkei 225 added 0.41%.

Weakness continues on Dalal Street; barometer indices below their crucial level

2011-02-08T05:04:00.002-08:00

Indian equity markets have lost more ground due to sour inventor's sentiment which is hit by scams and redemptions by FIIs are making matter worse amidst the micro economic concerns as rising inflation is hurting bottom lines. The local bourses tracking regional counterparts are on the declining path and the investor's sentiment remain cautious ahead of the Index of industrial production (IIP) data, due to be released on February 11, 2011. Both the barometer indices i.e. Bombay Sensitive 30 index--BSE Sensex-- and the 50 share index--Nifty--on NSE at the moment are trading below their physiological level of 18,000 and 5400 respectively. On the global front, despite Wall street gains, Asian shares were trading weak but Japan's Nikkei touched a 9-month high as hopes of a sustained economic recovery for the rich world encouraged investors to switch funds from emerging to developed markets. Returning to Dalal Street, the broader indices tailing their larger peers too clobbered out of shape with a cut of 1.00% each. On the BSE Sectoral front, only stocks from IT and TECk counters were sporting spirit, while stocks from Realty, Consumer Durable, Oil & Gas had surrendered the most to the selling pressure. The overall market breadth was in the favour of declines which whipped advances in the ratio of 1518:737, while, 92 shares remained unchanged on the index.

The BSE Sensex is currently trading at 17,958.15, down by 79.04 points or 0.44%. The index touched a high of 18,141.51 and low of 17,948.56 respectively. There were 11 stocks advancing against 19 declines while on the index.

The broader indices were trading in the red; the BSE Mid cap and Small cap indices were down by 1.00% and 0.95%, respectively.

The only two gaining sectoral indices on the BSE were, Information Technology up by 0.30% and TECk up by 0.29%, while, Realty down by 2.18%, Consumer Durables down by 1.41%, Oil and Gas down by 1.07%, Capital Goods down by 1.06%, and Auto down by 0.92% were the major losers on the index.

The top gainers on the Sensex were Tata Power up by 2.59%, Cipla up by 1.51%, Bharti Airtel up by 0.93%, Bajaj Auto up by 0.87%, and HDFC was up by 074%.

M&M down by 2.73%, ONGC down by 2.42%, JP Associates down by 2.34%, Hero Honda down by 1.80% and ICICI Bank down by 1.66% were the top losers on the index.

Meanwhile, tax revenue of the Union government continues to remain buoyant riding on a strong economy expanding at a robust pace. According to the latest data released by the government, direct tax collections between April-January period of current financial year have reached Rs 3,17,501 crore, against Rs 2,63,765 crore in the same period a year ago, registering a growth of 20.3%.

Looking at the sub-segments, the corporate income tax receipts in first 10 months of 2010-11 stood at Rs 2,16,872 crore, up 24.78% from Rs 1,73,799 crore in the corresponding period last year. Personal income tax collections, including securities transaction tax and residual fringe benefit tax/ banking cash transaction tax, grew by 11.87% to touch Rs 1,00,191 crore, as compared to Rs 89,561 crore in the year-ago period.

The government had budgeted the overall tax revenue for FY11 at Rs 7,46,000 crore. However, given the higher economic growth and strong buoyancy in tax revenue, the target was revised to Rs 7,82,000 crore last month. The Budget estimate for direct taxes was at Rs 4,30,000 crore and was increased by Rs 17,000 crore. The IT department will thereby have to collect about Rs 1,30,000 crore more in the next two months to meet the revised target of Rs 4,47,000 crore.

The tax refunds over the period under review stood at Rs 53,688 crore against Rs 38,721 crore last year, registering a growth of 39%. The Chairman Central Board of Direct Taxes has issued instructions to all chief commissioners to ensure that all refunds below Rs 10 lakh are transferred in the bank accounts of assesses by March 2011. The government has been upgrading its IT architecture to speed up the income tax assessment.

The S&P CNX Nifty is currently trading at 5,378.35, down by 17.65 points or 0.33%. The index touched a high of 5,432.35 and low of 5,368.35 respectively. There were 19 stocks advancing against 30 declines, while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Tata Power up by 2.82%, BPCL up by 2.09%, Cipla up by 1.72 %, Bajaj Auto up by 1.31% and Hindalco up by 1.20%.

The top losers of the index were JP Associates down by 4.14%, ONGC down by 2.90%, M&M down by 2.86%, Sunpharma down by 2.44%, and Hero Honda was down by 2.38%.

Asian markets were trading mostly in the red; Hang Seng down by 0.46%, Jakarta Composite dropped 0.17%, Straits Times declined 0.23%, Seoul Composite shed 0.70% and Taiwan Weighted slid 0.36%.

On the flip side, KLSE Composite was up by 0.34% and Nikkei 225 added 0.33%

Benchmarks trade flat after a firm start

2011-02-08T05:04:00.001-08:00

The Indian equity markets are trading on a flat note after making a firm start taking positive cues from the US markets. The US markets extended their gains on Monday, though there were no important economic reports but the earnings and some merger news kept the markets buzzing, though Asian markets were trading mostly in the negative terrain. Back home, markets made a strong start as CSO has projected a good growth for the nation in the fiscal, but the domestic markets paired most of their early gains as selling pressure was witnessed in broader indices. On the sectoral front, technology, fast moving consumer goods and software were the top gainers in trade; on the other hand capital goods, realty and consumer durables were the major losers on the BSE sectoral space. The broader indices were trading in the red. Index heavyweight Reliance Industries was trading with a cut of more than half a percent, while Punj Lloyd bleeding so hard and trading with a cut of more than 7% after reporting a weak Q3 numbers. The market breadth on the BSE was negative; there were 706 shares on the gaining side against 891 shares on the losing side while 75 shares remained unchanged.

The BSE Sensex opened at 18,141.51; about 103 points higher compared to its previous closing of 18,037.19, and has touched a low of 18,001.65 while high remain its opening.

The index is currently trading at 18,047.14, up by 9.95 points or 0.06%. There were 13 stocks advancing against 17 declines while on the index.

The overall market breadth started in the negative terrain, with 42.22% stocks advancing against 53.29% declines. The broader indices were trading in the red; the BSE Mid cap and Small cap indices were up by 0.24% and 0.21%, respectively.

The top gaining sectoral indices on the BSE were, TECk up by 0.51%, FMCG up by 0.42%, IT up by 0.34%, Power up by 0.32% and PSU was up by 0.29%. While, CG down by 0.59%, Realty down by 0.53%, CD down by 0.46%, Oil and Gas down by 0.30% and HC down by 0.30% were the major losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.56%, Bharti Airtel up by 1.41%, Cipla up by 1.35%, NTPC up by 0.92% and Wipro was up by 0.63%.

M&M down by 2.44%, JP Associates down by 1.17%, ONGC down by 1.06%, L&T down by 0.90% and ICICI Bank down by 0.86% were the top losers on the index were.

Meanwhile, the biggest macroeconomic challenge that the Indian economy was facing was rigid inflationary scenario, said the Chairman of Economic Advisory Council to the Prime Minister (PMEAC) on Saturday, adding that both government and central bank will need to take steps to counter the challenge posed by surging food prices.

Rangarajan said that inflation was mainly being driven by the high prices of food commodities and the government while was expecting it to moderate in 2011, more steps were required for a sustainable solution to the problem. He said the 8.43% year-on-year inflation seen in Dec 2010 was expected to come down to around 7% by March 2011. But the supply side needed a lot of work to get inflation sustainable below 5%.

While delivering the fifth G K Sundaram Endowment lecture organized by the South India Cotton Association here on Friday he said that long terms solutions like more investment in the farm sector in order to develop more irrigation facilities that will help facing a low rain year in a better way and improving the efficiency and capacity of the public food storage facilities should be implemented.

In its last policy review held on Jan 25, the RBI too had hiked its March-end 2011 inflation projection substantially to 7% compared with 5.5% given earlier. This clearly reflects that even the central bank has been under-estimating inflation pressures, or that the expected downside from factors like a strong Kharif harvest and six rounds of policy tightening by RBI has not materialized to the extent anticipated by policy makers.

On the growth front the Chairman said that with savings rate touching 34% and investments having exceeded 36% of the GDP, the country could achieve 9% GDP expansion in a sustained way. 'The broad economic parameters relating to savings and investment are conducive for growth. Despite the financial crisis, the economy grew at an average pace of 8.5% between 2005-06 and 2009-10. This clearly represented acceleration in the pace of growth and marks a distinct break from any previous five year period," he said.

The S&P CNX Nifty opened at 5,432.35; about 36 points higher compared to its previous closing of 5,396.00, and has touched a low of 5,388.75 while high remain its opening.

The index is currently trading at 5,399.15, down by 3.15 points or 0.06%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Suzlon up by 3.43%, BPCL up by 2.94%, Bharti Airtel up by 1.78%, Bajaj Auto up by 1.49% and Cipla up by 1.37%.

The top losers of the index were Sunpharma down by 3.49%, JP Associates down by 2.99%, M&M down by 2.18%, ONGC down by 1.48% and Hero Honda was down by 1.11%.

Asian markets were trading mostly in the red; Hang Seng was down 108.10 points or 0.46% to 23,445.49, Jakarta Composite was down 8.67 points or 0.25% to 3,479.04, Straits Times was down 7.81 points or 0.24% to 3,184.37, Seoul Composite was down 3.91 points or 0.19% to 2,077.83 and Taiwan Weighted was down by 10.95 points or 0.12% to 9,134.40.

On the flip side, KLSE Composite was up 5.16 points or 0.34% to 1,540.76 and Nikkei 225 was up 44.86 points or 0.42% to 10,636.90.

Benchmarks drift below crucial levels as rate sensitives do bulk of the damage

2011-01-25T05:03:00.006-08:00

The local benchmarks witnessed a turbulent trading session on Tuesday amid yet another rate hike implemented by the Reserve Bank of India (RBI). The rate-sensitive banking, realty and auto stocks remained highly unstable on the bourses and they did a bulk of the damage after the RBI hiked the repo rate to 6.5% from 6.25% and reverse repo rate to 5.5% from 5.25% earlier. However, the central bank left the cash reserve ratio (CRR) unchanged at 6% of net demand and time liabilities (NDTL) and the bank rate too was retained at 6%. Despite trading on a strong note in the first half, the NSE's 50-share broadly followed index, Nifty settled with cut of around a percent, below the psychological 5,700 level while the Bombay Stock Exchange's Sensitive Index Sensex plunged below the crucial 19,000 mark. The broader markets though, managed to close with relatively smaller cuts, performing better than their larger peers. The BSE's midcap and smallcap indices settled with losses of 0.41% and 0.35% respectively. The Banking index, which surged 2.40% yesterday, plummeted in today's trading by 2.34% on the BSE, being the biggest laggard. Banking heavyweights like ICICI Bank and HDFC Bank remained the top losers on the Sensex with 4.21% and 2.85% losses respectively. While the FMCG pack shrank 1.67% on the back of unabated selling pressure after FMCG major HUL tumbled 5.45% on reporting a decline in net profit to Rs 637.51 crore for the quarter ended December 31, 2010. Godrej Industries too plunged 2.31% despite reporting 47.66% surge in its Q3 net profit. Other stocks that remained on sellers' radar included index heavyweights like Reliance Industries and ONGC which slipped 1.29% and 0.56% respectively. On the other hand, some buying interests were evident in the Consumer Durables pocket which surged 1.73%, being the highest gainer in the space with stocks like Blue Star and VIP Industries skyrocketing 8.41% and 4.15% on the bourses.

On the global front, cues from the Asian markets remained mixed with Chinese stocks drifting over half a percent led by resource stocks, as investor sentiments got dragged on lingering worries over monetary tightening measures by the different nations of the region. While the European counterparts too traded with a negative bias and FTSE 100 shed around half a percent, being the biggest laggard in the space. The screen trading for US index futures indicates that the Dow could open on a pessimistic note.

Earlier on the Dalal Street, the benchmark started the day on an optimistic note tracking the Asian peers which traded mostly in the green following the upbeat overnight cues from the Wall Street where companies posted better than expected earnings reports along with some takeover and share buyback announcements. The frontline indices managed to build on to the early gains in the first half of trade as they touched the intraday high level. Though investors did not show any knee-jerk reaction to RBI's key interest rate hike by 25 basis points, but the indices came off the day's high as investors gradually squared some positions in the afternoon trade. Thereafter, the bourses drifted lower to the low point of the day in the dying minutes and shut shops with cuts of around a percent. Volumes for markets stayed substantially higher than Monday at around Rs 2.18 lakh crore while the turnover for NSE F&O segment too remained on the higher side at over Rs 2.01 lakh crore, on the second day of the F&O expiry week. The market breadth on the BSE was negative as there were 1207 shares on the gaining side against 1652 shares on the losing side while 148 shares remained unchanged.

Finally, the BSE Sensex doused 181.83 points or 0.95% to settle at 18,969.45 while the S&P CNX Nifty dived 55.85 points or 0.97% to end at 5687.40.

The BSE Sensex touched a high and a low of 19,340.99 and 18,949.44, respectively.

NTPC up 1.85%, Hero Honda up 1.62%, Hindalco Inds up 1.31%, Tata Steel up 0.96% and Bharti Airtel up 0.90% were the major gainers on the Sensex.

On the other hand, HUL down 5.45%, ICICI Bank down 4.21%, HDFC Bank down 2.85%, M&M down 2.25% and Tata Motors down 1.91% were the major losers on the index.

The BSE Mid-cap and Small-cap indices dropped 0.41% and 0.35%, respectively.

Meanwhile, revenue secretary Sunil Mitra said on Monday that the finance ministry had officially hiked the overall revenue target for the current financial year to Rs 7.82 lakh crore, in light of the robust growth in Indian economy. The revised estimate for revenue collections is about Rs 33,000 crore above the originally budgeted estimate.

'The Budget target of tax revenue has been revised upward to Rs 7.82 lakh crore from Rs 7.45 lakh crore for the current fiscal,' Mitra said while talking to media persons in New Delhi. The government now expects to collect Rs 4.30 lakh crore from direct taxes compared with Rs 4.46 lakh crore earlier while the indirect tax collections are now expected to total Rs 3.15 lakh crore to Rs 3.36 lakh crore, Mitra said.

Tax collections have been buoyant this year mainly due to higher-than-expected growth in Indian economy. The country recorded a GDP growth of 8.9% in the first half of the fiscal year compared with expectations of 8.5%. As a result, the government now expects the growth in current financial year to rise to around 8.7% compared with 8.5% earlier. Some upside to revenue collection has also come from the partial withdrawal of fiscal stimulus in February last year.

The secretary also stated that average annual inflation during the current fiscal may jump to around 9%, which is more than double the figure of 3.8% recorded a year ago. '...the economic advisors tell that we are likely to end the year with 9% inflation for the year 2010-11,' Mitra said adding that government was taking all necessary steps to check the surging pace of inflation'.

Bankex down 2.34%, Fast Moving Consumer Goods (FMCG) down 1.67%, Healthcare (HC) down 1.25%, Realty down 1.20% and Auto down 1.05% were the major losers in the BSE sectoral space.

On the other hand, Consumer Durables (CD) up 1.73%, Capital Goods (CG) up 0.28% and Power up 0.28% were the only gainers in the BSE sectoral space.

Global rating agency Fitch in its latest report on Indian pharmaceutical industry said that the outlook for Indian generic pharmaceuticals for 2011 was stable. Earnings and profitability of Indian generic-based pharmaceutical companies will also benefit from continued demand for generics, particularly that emerging from the US.

Indian pharmaceutical industry expect about $96 billion worth of drugs to go off patent in the US in 2011-2013 period which present a huge opportunity to them. 'Fitch expects the US market to be the main growth driver for the demand of generics,' the rating agency said. It however added that even though substantial demand was coming from European markets too, stiff pricing environment will limit exposure there.

The rating agency also expects the Indian drug companies to see good revenue visibility from the domestic markets as well and there were good prospects on the outsourcing front too. "The increasing interest towards generics among global innovator companies to either set shop in India or forge alliances and partnerships with Indian pharmaceutical companies will be additional revenue triggers for the sector," said the Fitch in a press release.

Further, the Indian pharma space has become increasingly attractive for foreign players which are also reflected in the acquisition of formulations business of Primal Healthcare by Abbott. 'Increasing interest towards generics among global innovator companies to either set shop in India or forge alliances and partnerships with Indian pharmaceutical companies will be additional revenue triggers for the sector,' Fitch observed.

Despite a number of positive that Fitch expects to guide margin expansions, competition and subsequent price erosions could limit the expected improvement. While the agency does not expect forex to have a major bearing on profitability, it does expect the liquidity to continue remaining tight for the sector, mainly due to high working capital requirements. Some downside to the outlook also could also emerge from regulatory and litigation risks. On the whole, though, the agency expects Indian pharma space to remain strong in the coming one year or so.

The S&P CNX Nifty touched a high and a low of 5907.25 and 5740.95, respectively.

The top gainers on the Nifty were BPCL up 4.79%, GAIL up 3.11%, Siemens up 2.86%, NTPC up 2.21% and Hero Honda up 2.05%.

On the other hand, HUL down 5.69%, ICICI Bank down 4.09%, HDFC Bank down 2.96%, Dr Reddy's down 2.88% and M&M down 2.73% were the top losers on the index.

European markets were trading in mixed range on Tuesday. France's CAC 40 gained 0.02%, Germany's DAX added 0.26%, while Britain's FTSE 100 shed 0.55%.

Asian equity indices finished the day's trade on the mixed note on Tuesday. Chinese Shanghai Composite declined more than half a percent led by resource stocks, as a money market squeeze reduced cash flow into the stock market, while the investors' confidence also weighed on lingering worries over monetary tightening steps by the different nations of the region. However, Japanese Nikkei rose more than a percent supported by anticipation of upbeat corporate earnings. Among Asian indices, Jakarta Composite and Nikkei led the gainers list while KLSE Composite and Shanghai Composite edged lower in trade.

Markets pare some gains post rate hike announcement

2011-01-25T05:03:00.005-08:00

Local equity markets, though have pared most of their gains, continue to trade in the green pursuant to the announcement of monetary policy by Reserve Bank of India (RBI). As expected, the hike has been made of 25 basis points (bps) each in its key short term rates -- repo and reverse repo. The rates now stand at 6.5% and 5.5%, respectively. The hike has been introduced to control rising inflation which was hampering the growth. The central bank, however, left the cash reserve ratio (CRR) unchanged despite contention by bankers that such a move would help ease liquidity in the banking system. As regards the global markets, the Asian indices are trading in a mixed range, while the US index futures are showing an up-tick in screen trade today. Back home, all BSE sectoral indices with an exception of banking segment were trading in the green. Capital Goods segment was leading the pack of gainers, followed by Consumer Durables, Metal, Oil & Gas and Public Sector Undertakings. Broader markets also pared some of their gains and are trading with gains of 0.18% and 0.27%, respectively. The market breadth on the BSE was positive; the gainers outpaced the losers in a ratio of 1431:1228 while 118 shares remained unchanged.

The BSE Sensex advanced 65.44 points or 0.34% at 19,216.72. The index touched a high and a low of 19,340.99 and 19,172.12, respectively.

The BSE Mid-cap and Small-cap indices rose 0.18% and 0.27%, respectively.

All BSE sectoral indices with an exception of Bankex, which was down by 0.92%, were trading in the green. Capital Goods (CG) up 1%, Consumer Durables (CD) up 0.91%, Metal up 0.86%, Oil & Gas up 0.85% and Public Sector Undertakings (PSU) up 0.62% were the major gainers in the BSE sectoral space.

Meanwhile, the Reserve Bank of India (RBI) implemented yet another rate hike on Tuesday when it issued the last quarterly review of monetary policy for the current financial year. The action however was much in line with the market expectations as most analysts expected at least a 25 bps hike in wake of recent surge in inflation seen in December. The repo and reverse repo rates now stand at 6.5% and 5.5% respectively.

On the liquidity front, the RBI has extended the additional liquidity support to scheduled commercial banks under the LAF to the extent of up to 1% of their net demand and time liabilities (NDTL), currently set to expire on January 28, 2011, till April 8, 2011. It however left the cash reserve ratio (CRR) unchanged despite contention by bankers that such a move would help ease liquidity in the banking system.

The central bank expects that the frictional liquidity shortage that is currently prevailing in the Indian banking system will begin to ease as government balances adjust to the expenditure schedule. As such, no new measures to ease liquidity were announced. However, the RBI did advice that banks needed to focus on the underlying structural cause of liquidity tightness arising out of the gap between the credit and deposit growth rates and therefore raise deposit growth.

On the inflation front, the RBI sounded rather worried. It has raised the indicative target for the wholesale prices based headline inflation to 7% from 5.5% given in last quarterly review. This is a major revision and clearly indicates that inflation has so far been behaving considerably different from what the central bank has been expecting. Also, it shows that RBI now expects the inflation to go down only at a very gradual pace.

On growth the central bank is still very confident. It noted that the 8.9% GDP growth in the first half of 2010-11 was a reflection of the fact that the economy was operating close to its trend growth rate, powered mainly by domestic factors. Even though the risks to growth in 2010-11 was mainly on the upside, it nonetheless retained the baseline projection of real GDP growth for FY11 retained at 8.5% as set out in the last review but with an upside bias.

Overall, the RBI concluded that growth inflation mix continued to remain complex and there was a need to continuing anti-inflationary stance. "Current growth and inflation trends warrant persistence with the anti-inflationary monetary stance... Inflation is likely to resume its moderating trend in the first quarter of 2011-12, but several upside risks are already visible in the global environment and more may surface domestically. The monetary stance will be determined by how these factors impact the overall inflationary scenario" concluded the RBI.

The top gainers on the Sensex were Sterlite Inds up 2.35%, Hindalco Inds up 2.26%, NTPC up 2.26%, L&T up 1.91% and Tata Steel up 1.56%.

ICICI Bank down 2.25%, HDFC Bank down 0.81%, Tata Motors down 0.55%, M&M down 0.53% and JP Associates down 0.27%, were the top losers on the index.

Union finance ministry is looking at ways to keep the subsidy outgo in reasonable limits and decide to limit its share in the excess fertilizer subsidy to just one-thirds of what the fertilizer ministry is asking. An official announcement however is unlikely immediately as lowering the subsidy would mean increase in prices of fertilizers.

Fertilizer prices have been on the rise this year and as a result the overall subsidy outgo is likely to exceed compared to what was budgeted by the government. In fact the fertilizer ministry is asking for Rs 82,245 crore, which is around Rs 30,000 crore more than the budgeted sum of Rs 52,837 crore for the current financial year. This has put the finance ministry, which is already facing surge in oil subsidy into a tight spot.

The finance ministry has now offered the fertilizer ministry a support of only Rs 10,000 crore over and above the budgeted level. This would leave a gap of Rs 20,000 crore for the fertilizer ministry to full, which would mean it may have to allow greater increase in prices to the industry in order to lower the subsidy outgo. Last fiscal too the subsidy outgo on fertilizers had increased to over Rs 65,000 crore from a budgeted figure of around Rs 45,000 crore.

The main reason behind surging subsidy is rising prices of fertilizers. There are two major factors which influence fertilizer prices. One is crude prices which have been rallying. Higher crude prices generally tend to push prices of fertilizer feedstock and hence jack up prices of the final product. This was the case during the commodity rally seen in 2008 as well which led to sharp rise in crude oil and other energy prices and also in prices of feedstock for fertilizers, resulting in a sharp jump in fertilizer subsidy spending of government of India.

Second, and even more important, factor is prices of grains and other food items. At present the prices of most agricultural commodities ranging from food grains to fruits and vegetables and even oil seeds and beverages are trading at very high levels. This is promoting farmers worldwide, and in India too, to plant more of these commodities, hence jacking up the demand of fertilizers. Analysts expect worldwide use of fertilizers will go up by around 5%, rather high given the historical trends, while the same in India may expand by 12-15% given the good conditions for Rabi planting.

The S&P CNX Nifty gained 19.30 points or 0.34% to 5762.55. The index touched a high and a low of 5801.55 and 5749.15, respectively.

The top gainers on the Nifty were BPCL up 4.62%, GAIL up 3.63%, Ambuja Cement up 2.79%, Hindalco Inds up 2.46% and Sterlite Inds up 2.41%.

The top losers on the index were ICICI Bank down 2.20%, HCL Tech down 1.26%, Suzlon Energy down 0.94%, HDFC Bank down 0.91% and Cairn India down 0.85%.

Other Asian markets are trading in the mixed range. Hang Seng advanced 0.26%, Jakarta Composite surged 2.02%, Nikkei 225 rose 1.15%, Straits Times gained 0.08% and Seoul Composite added 0.22%.

On the other hand, Shanghai Composite plummeted 0.85%, KLSE Composite declined 0.51%, and Taiwan Weighted dropped 0.23%.

Markets trade firm; RBI monetary policy in line with market expectation

2011-01-25T05:03:00.003-08:00

Indian equities markets continued to rally for the second day consecutive day as market got a positive trigger from the RBI's monetary policy. The Reserve Bank of India (RBI) hiked its key short term repo and reverse repo rates by 25 basis points each. This was in line with the market expectations. The new repo and reverse repo rates stand at 6.5% and 5.5% respectively. The central bank however left the cash reserve ratio unchanged despite contention by bankers that such a move would help ease liquidity in the banking system. Meanwhile other regional peers are trading mixed while US Dow future too was up by 11 points on the screen trade. Back home NSE Nifty and BSE Sensex were trading near their physiological levels 5800 and 19200 levels respectively. In BSE sectoral space there were no losers and Capital Goods (CG), Oil and Gas, Reality, Consumer Durables (CD) and Public Sector Undertakings (PSU) shares were the favorites for the investor on the street today. Among frontliners, NTPC up 2.42%, Sterlite Industries up 2.35 % have gained good traction ahead of their results today, L& T up 2.11% HDFC up 1.77% and DLF up 1.72%. However ICICI Bank was witnessing some profit booking and was marginally in red. Wipro has bounced back after two days of fall while SKS Micro Finance was down on disappointing Q3 results. However, the broader indices were also trading in green. The market breadth on the BSE was positive; the gainers outpaced the losers in a ratio of 1584:993, while 107 shares remained unchanged.

The BSE Sensex surged 172.63 points or 0.90% at 19,323.91. The index touched a high and a low of 19,340.99 and 19,203.49 respectively.

The BSE Mid-cap and Small-cap indices rose 0.59% and 0.57%, respectively.

Capital Goods (CG) up 01.33%, Oil and Gas up 1.30%, Realty up 1.21%, Consumer Durables (CD) up 1.10% and Public Sector Undertakings (PSU) up 1.05% were the major gainers in the BSE sectoral space; there were no losers in the BSE sectoral space.

The top gainers on the Sensex were NTPC up 2.42%, Sterlite Industries up 2.35%, L&T up 2.11%, HDFC up 1.77% and DLF up 1.72% .Whereas, ICICI Bank down 0.08% was the only loser on the index.

The Reserve Bank of India (RBI) implemented yet another rate hike on Tuesday when it issued the last quarterly review of monetary policy for the current financial year. The action however was much in line with the market expectations as most analysts expected at least a 25 bps hike in wake of recent surge in inflation seen in December. The repo and reverse repo rates now stand at 6.5% and 5.5% respectively.

On the liquidity front, the RBI has extended the additional liquidity support to scheduled commercial banks under the LAF to the extent of up to 1% of their net demand and time liabilities (NDTL), currently set to expire on January 28, 2011, till April 8, 2011. It however left the cash reserve ratio (CRR) unchanged despite contention by bankers that such a move would help ease liquidity in the banking system.

The central bank expects that the frictional liquidity shortage that is currently prevailing in the Indian banking system will begin to ease as government balances adjust to the expenditure schedule. As such, no new measures to ease liquidity were announced. However, the RBI did advice that banks needed to focus on the underlying structural cause of liquidity tightness arising out of the gap between the credit and deposit growth rates and therefore raise deposit growth.

On the inflation front, the RBI sounded rather worried. It has raised the indicative target for the wholesale prices based headline inflation to 7% from 5.5% given in last quarterly review. This is a major revision and clearly indicates that inflation has so far been behaving considerably different from what the central bank has been expecting. Also, it shows that RBI now expects the inflation to go down only at a very gradual pace.

On growth the central bank is still very confident. It noted that the 8.9% GDP growth in the first half of 2010-11 was a reflection of the fact that the economy was operating close to its trend growth rate, powered mainly by domestic factors. Even though the risks to growth in 2010-11 was mainly on the upside, it nonetheless retained the baseline projection of real GDP growth for FY11 retained at 8.5% as set out in the last review but with an upside bias.

Overall, the RBI concluded that growth inflation mix continued to remain complex and there was a need to continuing anti-inflationary stance. "Current growth and inflation trends warrant persistence with the anti-inflationary monetary stance... Inflation is likely to resume its moderating trend in the first quarter of 2011-12, but several upside risks are already visible in the global environment and more may surface domestically. The monetary stance will be determined by how these factors impact the overall inflationary scenario" concluded the RBI.

The S&P CNX Nifty advanced 52.85 points or 0.92% to 5796.10. The index touched a high and a low of 5801.55 and 5755.70, respectively.

The top gainers on the Nifty were GAIL up 4.07%, BPCL 3.59%, Ambuja Cements up 2.99%, Sterlite Industries up 2.44% and L&T up 2.39%.

On the other hand HCL Tech down 1.60%, Cairn India down 0.68% and M&M down 0.01% were the only losers on the index.

Majority of the other regional markets were trading in the green; Hang Seng increased 0.48%, Jakarta Composite rose 1.63%, Nikkei 225 added 1.15%, Straits Times gained 0.01% and Seoul Composite expanded 0.22% . While Shanghai Composite shed 0.56%, KLSE Composite declined 0.38% and Taiwan Weighted dropped 0.23%.

Markets remain sideways; RBI policy meet eyed

2011-01-25T05:03:00.001-08:00

Local share market though afloat in green tracking firm regional peers is treading water ahead of the RBI meet as all eyes are on the central bank's quarterly monetary policy review due to be announced around noon. The benchmarks equity indices are trading range bound, gyrating around their physiological level as investor's are preferring to stay on the sidelines keenly watching RBI's move on rate front today as this announcement is likely to decide the market course, at least in the short term. The street expectation is that RBI may hike repo and reverse repo rate by 25 basis points (bps), but considering the RBI's thrust on inflation, a 50 basis point hike has not been ruled out either. As the Reserve Bank of India said on Monday that "inflation may stay high for longer than anticipated earlier, due to a rise in global commodities prices and domestic supply side pressures that have recently pushed up food prices". On the global front, regional counterparts are trading firm as confidence in global growth prospects pushed equity and commodity markets higher, while US future indices too are showing an uptick on the screen trade. Back home on the BSE Sectoral front, stocks from Capital goods, Oil & Gas, Consumer Durables, Metal and Power space have gathered momentum, while, stocks from Bankex counter is the lone looser on the index. The broader indices too are performing in line with the larger peers. The market breadth one BSE is strongly in the favour of advances which have thrashed declines in the ratio of 1585:778, while, 92 shares remained unchanged.

The BSE Sensex is currently trading at 19,231.95, up by 80.67 points or 0.42%. There were 22 stocks advancing against 8 declines on the index.

The broader indices too were performing well; the BSE Mid cap and Small cap indices were up by 0.32% and 0.59%, respectively.

The top gaining sectoral indices on the BSE were, CG up by 1.12%, Oil and Gas up by 1.05%, CD up by 0.87%, Metal up by 0.85% and Power was up by 0.62%. While, Bankex down by 0.52% was the lone loser on the index.

The top gainers on the Sensex were NTPC up by 2.21%, Sterlite Industries up by 1.93%, L&T up by 1.89%, Hindalco Industries up by 1.49% and Hero Honda up by 1.36%. HDFC down by 0.74%, ICICI Bank down by 0.64%, Reliance Infra down by 0.37%, SBI down by 0.30% and Wipro down by 0.26% were the top losers on the index were.

Meanwhile, India's central bank is likely to hike its short term lending rate when it reviews its monetary policy later in the day. If there were any doubts on the outcome of the policy reviews, these seem to have given way to an outright possibility of 50 bps hike, although given the Reserve Bank of India's recent handling of things, hikes are more likely to continue in 25 bps tranches.

The central bank released its macroeconomic and monetary developments report, which serves as backdrop for policy review to be announced today. The most important take away from the report is that the RBI is worried over inflation which is proving to be much stickier than what was anticipated before and it further believes that if the inflation issue is not tackled at the earliest, it may going forward dent the otherwise very strong growth outlook.

The RBI noted that WPI inflation after moderating somewhat during August-November 2010 again surged in December, indicating renewed price pressures driven by factors that were largely unanticipated. It also feels that even the moderation in WPI inflation seen over a few months prior to December was weak due to persistent elevated levels of food and fuel inflation, which are largely insensitive to anti-inflationary monetary policy measures. The key reason is that expected downside to food prices from a good Kharif harvest has not materialized.

Even though the central bank recognizes that inflation in food commodities was largely driven by factors which may not be very sensitive to tightening, nonetheless it advocated further tightening to check inflation expectations. "While inflation upsurge has largely come from supply-side elements, monetary policy would need to factor in near-term risks to inflation from high input cost pressures transmitting to output prices. The risks to generalised inflation cannot be overlooked as inflation expectations are currently ruling high. Anchoring inflationary expectations would be necessary to mute the second-round impact of supply-side shocks," said the RBI.

It sounded very positive on growth though noting that the robust growth momentum seen so far and the lead indications that this performance would be sustained in the near future are reflected in the forward looking surveys conducted by various agencies, which generally show significant y-o-y gains. The Reserve Bank's Industrial Outlook Survey also mirrors the optimism, especially regarding improvement in demand and overall financial conditions. The Professional Forecasters' Survey shows an improvement in (median) GDP growth rate to 8.7% from 8.5% reported in the previous survey. The growth projections of various domestic and international agencies also reflect the buoyant optimism, it added.

Amidst this growth inflation trade-off however the attention of central bank is turning much more towards inflation as it feels that high pace of rising prices can derail even a very strong growth story in medium term. "The 300 basis points effective increase in the policy rate from March 2010 so far, was carefully calibrated by the Reserve Bank reflecting the need for sensitivity of monetary policy to both growth and inflation objectives. Since persistent high inflation could endanger the growth objective and also amplify risks to inclusive growth, containing inflation will have to remain as the predominant objective of monetary policy in the near-term," concludes the Indian monetary authority.

The S&P CNX Nifty is currently trading at 5,765.05, up by 21.80 points or 0.38%. There were 36 stocks advancing against 14 declines on the index.

The top gainers of the Nifty were GAIL up by 2.39%, NTPC up by 2.28%, BPCL up by 2.11%, L&T up by 2.07% and Ambuja Cement up by 2.01%.

The top losers of the index were HCL Technologies down by 1.68%, PNB down by 0.84%, HDFC Bank down by 0.76%, ICICI Bank down by 0.75% and M&M down by 0.71%.

Asian markets were trading mostly in the green; Hang Seng was up by 0.48%, Jakarta Composite rose 1.63%, Nikkei 225 added 1.16%, Straits Times gained 0.83% and Seoul Composite expanded 0.83% .

On the flip side, Shanghai Composite slid 0.56%, KLSE Composite declined 0.38% and Taiwan Weighted dropped 0.04%.

Markets trade range bound after a firm start

2011-01-25T05:02:00.000-08:00

The Indian equity markets are trading range-bound after making a firm start tracking positive cues from global markets. The US markets gained further overnight supported by tech and material stocks while the investors were also encouraged by economists' positive view about economic growth and the job market, while most of the Asian equity indices were trading in the positive terrain at this point of time, indicating strong investors' sentiments. Back Home, sustained buying in key heavyweights and broader indices were keeping the momentum on a positive side for the benchmark indices. Though, the BSE's -- Sensex -- and NSE's -- Nifty -- were trading comfortably higher from their crucial 19,200 and 5,750 level. On the sectoral front, capital goods, consumer durables and oil and gas were the top gainers in trade; on the other hand, software and banking were the only losers. The broader indices too were performing well in the trade. However, the Index heavyweight Reliance Industries was trading with a gain of about one percent. Moreover, the PSU oil marketing companies (OMC) like BPCL, HPCL and IOC all are trading with a gain of over 1.5-2% after getting some support with the continuous decline in international crude prices for the fifth straight day. The finance ministry is expected to announce a subsidy of Rs 10,000 crore for oil marketing firms, which are likely to suffer losses in the third quarter because of a spike in global crude prices. The market breadth on the BSE was positive; there were 1619 shares on the gaining side against 436 shares on the losing side while 76 shares remained unchanged. Trade may remain volatile this week as it being the expiry week for the January F&O series.

The BSE Sensex opened at 19,227.42; about 76 points higher compared to its previous closing of 19,151.28, and has touched a high and a low of 19,262.25, and 19,203.49 respectively. The index is currently trading at 19,229.46, up by 78.18 points or 0.41%. There were 24 stocks advancing against 6 declines on the index.

The overall market breadth started in the positive terrain, with 75.97% stocks advancing against 20.46% declines. The broader indices too were performing well; the BSE Mid cap and Small cap indices were up by 0.45% and 0.75%, respectively.

The top gaining sectoral indices on the BSE were, CG up by 1.40%, CD up by 0.93%, Oil and Gas up by 0.88%, Metal up by 0.83% and HC was up by 0.62%. While, IT down by 0.05% and Bankex down by 0.03% were the only losers on the index.

The top gainers on the Sensex were Sterlite Industries up by 2.13%, L&T up by 1.90%, Hindalco up by 1.44%, BHEL up by 1% and Reliance Industries was up by 0.92%.

Maruti Suzuki down by 0.48%, Infosys down by 0.38%, ICICI Bank down by 0.33%, M&M down by 0.26% and Tata Power down by 0.07% were the top losers on the index were.

Meanwhile, a day before it reviews the monetary policy, India's central bank has said that inflationary pressures due to supply constraints in food commodities and rising global commodity prices have increased and anti-inflation stance will have to be continued pragmatically to ensure that high food prices do not turn into a more wider or serious problem.

The Reserve Bank of India (RBI) noted that WPI inflation had moderated somewhat during August-November 2010 after remaining in double digits for five consecutive months. In December 2010, however, renewed price pressures surfaced, driven by factors that were largely unanticipated. Food inflation exhibited a strong rebound, led by vegetables, largely due to unseasonal rains and supply chain frictions. The central bank said it had already recognized the upside risks to inflation from higher global commodity prices, but that hardening happened sooner than anticipated.

Further, it said the pace of moderation in WPI inflation over a few months prior to December 2010 was also weak due to persistent elevated levels of food and fuel inflation, which are largely insensitive to anti-inflationary monetary policy measures. The expected significant softening of food inflation after a normal monsoon did not materialize, reflecting the impact of growing structural imbalances in certain sectors, particularly non-cereal food items. It blamed inflation on slower response on the supply side in items like vegetables, fruits, pulses, eggs and meat etc as demand has been growing rapidly with high growth in per capita income.

On the other hand, non-food manufactured inflation, which is a broad indicator of generalized and demand side price pressures, has remained stable in the range of 5.1-5.9% so far in the year. A number of factors like the expected better supply response in non-food manufactured items to price signals and the pressure of imports, normalization of the policy rate etc contributed in checking inflation in this space, according to the central bank.

On the growth front however the central bank sounded quite positive and maintained that broad-based reasonably faster pace of expansion will continue provided the global scenario remains stable. The two downsides to growth mainly stem from downside to recovery in developed economies and surge in global commodity prices that can push inflation in emerging economies. "GDP growth is reverting to its earlier high growth trajectory led by broad-based growth momentum. Services sector growth and enhanced agricultural output supported the strengthening of the growth process. Industrial growth was robust, albeit with greater volatility. With both services sector and agriculture performing well, sustainability of growth requires continued buoyancy in the industrial sector," noted the RBI.

The S&P CNX Nifty opened at 5,763.30; about 20 points higher compared to its previous closing of 5,743.25, and has touched a high and a low of 5,774.60 and 5,755.70 respectively. The index is currently trading at 5,767.60, up by 24.35 points or 0.42%. There were 40 stocks advancing against 9 declines while one scrip remained unchanged on the index.

The top gainers of the Nifty were Sterlite Industries up by 2.44%, L&T up by 2.11%, Siemens up by 1.90%, Dr Reddy up by 1.55% and Hindalco up by 1.53%.

The top losers of the index were HCL Tech down by 0.94%, Cairn down by 0.79%, Maruti down by 0.74%, PNB down by 0.60% and M&M was down by 0.57%.

Asian markets were trading mostly in the green; Hang Seng was up 114.81 points or 0.48% to 23,916.59, Jakarta Composite was up 44.90 points or 1.34% to 3,390.96, Nikkei 225 was up 120.28 points or 1.16% to 10,465.39, Straits Times was up 2.25 points or 0.07% to 3,188.01 and Seoul Composite was up by 19.51 points or 0.94% to 2,101.67.

On the flip side, Shanghai Composite was down 15.01 points or 0.56% to 2,680.71, KLSE Composite was down 5.79 points or 0.38% to 1,537.18 and Taiwan Weighted was down by 2.90 points or 0.03% to 9,008.80.

Local bourses end the week on a passive note

2011-01-21T05:01:00.007-08:00

The domestic markets ended the last trading day of the week on a subdued note amid intense sell-offs in technology and FMCG counters. Investors remained cautious ahead of a slew of events like the F&O expiry week for the month of January and the Reliance Industries Q3FY11 results expected today evening. The NSE's 50-share broadly followed index, Nifty went a tad blow the psychological 5,700 support level while the Bombay Stock Exchange's Sensitive Index Sensex managed to hold on to the crucial 19,000 mark. On the same time broader markets managed to outperform the larger peers today and the BSE's midcap and smallcap indices settled with moderate gains. The IT index down 1.29% on the BSE suffered the most this Friday as sentiments turned pessimistic after IT major Wipro plummeted 4.59% on reporting weaker than expected numbers. While another set of below expected numbers came from realty major HCC and it lost 1.35%. However, the down trend was capped due to buying in the Oil and Gas counter as it gained 0.78% on the BSE, being the leader in the space. State-run OMCs like HPCL and IOC zoomed 4.23% and 4.57% as international oil prices were lower for the third day in a row. While the interest rate sensitive, banking counter too gained 0.77% as Bank of India surged 6.50% on registering 61% growth in its Q3 net profits. While BHEL, a navratna company jumped 1.75% on reporting robust increase in net profits.

Global cues remained mixed this Friday. All stock markets in Asia barring the Taiwanese Benchmark drifted lower with the Indonesian benchmark being the biggest laggard with a large cut of 2.16%, lengthening the torrid run on Chinese monetary policy tightening concerns and also on fears of decline in commodities demand. However, bourses in Europe traded with a positive bias and German Stock Index DAX 30 advanced 0.25% after a latest business sentiment survey from Germany came out broadly in line with expectations. US index futures are also trading in the green as the screen trading for index futures indicates that the Dow could open on a flat to positive note at the start.

Earlier on the Dalal Street, the indices got a weak start tracking the Asian markets which shrank as worries over towering inflation intensified and investors booked profits on speculation that China may go for aggressive policy tightening measures which in turn can hurt global growth. The benchmarks continued to trade in the red for most part of the trade as weaker than expected earnings report by heavyweights weighed on sentiments. After staying in the red for almost the whole first half, the frontline indices bounced back into positive territory in early afternoon trades but failed to hold on to the gains. The second half saw the benchmarks touch lowest point of the day however, the bourses managed to pare some of the losses in the dying hours on the back of some fresh buying in oil and gas and banking stocks. Though the markets eventually shut shops with a moderate decline of around a quarter percent, it remained a choppy day of trade with the BSE Sensex swinging in a range of around 150 points between a low of 18,932.40 and a high of 19,065.34. Volumes for markets stayed marginally lower than Thursday at around Rs 1.61 lakh crore while the turnover for NSE F&O segment too remained on the weaker side at over Rs 1.45 lakh crore, ahead of the F&O expiry week. The market breadth on the BSE was positive as there were 1478 shares on the gaining side against a 1329 shares on the losing side while 176 shares remained unchanged.

On charts: The S&P CNX Nifty may face resistance around 5752 and 5860. Meanwhile, in near term, supports will be around 5660 (200EDMA) and 5630 level. However, it should not slip below 5660 (200EDMA) mark.

Finally, the BSE Sensex shed 39.01 points or 0.20% to settle at 19,007.53 while the S&P CNX Nifty slipped 15.10 points or 0.26% to end at 5696.50.

The BSE Sensex touched a high and a low of 19,065.34 and 18,932.40, respectively.

Reliance Infra up 2.81%, SBI up 2.49%, RCom up 2.14%, BHEL up 1.75% and RIL up 1.73% were the major gainers on the Sensex.

On the other hand, Wipro down 4.59%, ONGC down 2.57%, ITC down 1.63%, DLF down 1.56% and Sterlite Inds down 1.52% were the major laggards on the index.

The BSE Mid-cap and Small-cap indices rose 0.22% and 0.46%, respectively.

Meanwhile, fertilizer subsidy of the Indian government may increase substantially compared with the budget estimates as fertilizer prices in world markets are on the rise. India imports more than half of its fertilizer requirements and the surge in global prices of the commodity will certainly impact the costs of imports and hence the subsidy outgo.

Demand for fertilizers has been expanding rapidly over last several months with a significant rise in grain and commodity prices across the globe making producers more likely to purchase and apply fertilizer. The production on the other hand has been stagnant. This is mainly because demand was relatively lower in the last couple of years and producers were cutting back in fertilizer use as grain prices were not nearly as strong as currently they are.

India is the world's top importer of urea and DAP, and as such its demand is a major factor in overall demand-supply equation facing the international markets. Indian companies usually pool together and being the largest customer do manage to influence prices which are offered to them. However, greater the rise in average prices of fertilizers in global markets, more difficult becomes the battle of getting competitive offers for Indian importers.

There are two major factors which influence fertilizer prices. One is crude prices which have been rallying. Higher crude prices generally tend to push prices of fertilizer feedstock and hence jack up prices of the final product. This was the case during the commodity rally seen in 2008 as well which led to sharp rise in crude oil and other energy prices and also in prices of feedstock for fertilizers, resulting in a sharp jump in fertilizer subsidy spending of government of India.

Second, and even more important, factor is prices of grains and other food items. At present the prices of most agricultural commodities ranging from food grains to fruits and vegetables and even oil seeds and beverages are trading at very high levels. This will obviously promote farmers worldwide, and in India too, to plant more of these commodities, hence jacking up the demand of fertilizers. Analysts expect worldwide use of fertilizers will go up by around 5%, rather high given the historical trends, while the same in India may expand by 12-15% given the good conditions for Rabi planting.

The main gainers in the BSE sectoral space were Oil & Gas up 0.78%, Bankex up 0.77%, Power up 0.67%, Consumer Durables (CD) up 0.53% and Public Sector Undertakings (PSU) up 0.29%.

On the other hand, Information Technology (IT) down 1.29%, Fast Moving Consumer Goods (FMCG) down 1.28%, TECk down 1.02%, Metal down 0.73% and Realty down 0.50% were the major losers in the BSE sectoral space.

The signing of comprehensive economic partnership agreement (CEPA) between India and South Korea has resulted in a major boost to the bilateral trade between the two countries. The two-way trade between grew 44% to nearly $15 billion in 2010, just a year after the signing of CEPA August 2009.

Anand Sharma, minister of commerce and industry of India, said the five-fold growth in bilateral trade seen over the last eight years despite the recessionary backdrop points to the deepening trade and investment linkages between the two countries and the trend has been further boosted by the CEPA. The two countries were eying at doubling the bilateral trade by 2014 to $30 billion, said the minister while speaking at the India-Korea Business Forum along with Kim Jong-Hoon, minister for trade of the Republic of Korea, in New Delhi.

'I am confident that as exporters on both sides develop a better understanding of the advantages presented by this agreement through a liberal tariff regime, we should easily be in a position to achieve the trade target of $30 billion by 2014,' Sharma said adding that despite the strong growth seen over last several years, the untapped potential for expanding bilateral trade between the two very complementary economies was still huge.

The services sector of both the economies will particularly benefit from a liberalized regime on either side and will form an important building block for augmenting bilateral trade between our two countries, the minister opined. 'We view the agreement with the Republic of Korea to serve as an economic bridge between South Asia and the larger East Asian economy, paving the way for a larger regional economic integration across the continent of Asia,' he added.

With negotiations on the multilateral deal under the Doha round of world trade organization (WTO) looking to get extended into 2012, India too has been focusing on bilateral trade agreements and has already entered into trade agreement with the 10-member group Asean while negotiations are at advance stages with the European Union. Trade agreement with Japan is also ready to be signed soon.

The S&P CNX Nifty touched a high and a low of 5717.55 and 5674.50, respectively.

The top gainers on the Nifty were Reliance Infra up 3.18%, BPCL up 2.87%, SBI up 2.48%, Suzlon Energy up 2.22% and RCom up 2.17%.

On the other hand, Wipro down 4.40%, ONGC down 2.56%, PNB down 2.22%, ACC down 2.14% and ACC down by 2.11% were the top losers on the index.

European markets were trading in the green on Friday. France's CAC 40 gained 1.08%, Germany's DAX added 0.38% and Britain's FTSE 100 rose 0.54%.

Most of the Asian equity indices finished in the negative terrain on the last trading day of the week due to unsupportive global cues. The investors remained cautious on concern about inflation in the region which sparked a wave of selling in some countries. However, fall in Wall Street overnight also weighed on the sentiments in the region. While Chinese Shanghai Composite rebounded from a three and a half-month low after valuations neared their lowest in two years and the index snapped the session with a gain of more than one percent on the other hand most of the other indices ended the day's trade with a cut of over one percent.

Modest losses for Sensex amid choppy day

2011-01-21T05:01:00.005-08:00

The Indian equity indices continued to trade choppy with negative bias in last leg of the trade as mixed cues from the global front kept the local sentiments negative. The majority of the regional peers settled in the red and US index futures are still showing some downtick in the screen trade, though European markets were trading in green. Back home, on the sectoral front Oil & Gas, Bankex, Power, Consumer Durables and PSU all have tanked, while IT, technology, Metal, Fast Moving Consumer Goods and Realty stocks are providing some respite. On the other hand, the market breadth on the BSE is positive with the gainers thrashing the losers in a ratio of 1527:1233 while 120 shares remained unchanged. Also, broader markets continued to trade positive with modest gains.

The local markets are not getting any support from the domestic front either, though the earnings announcements so far have been mixed.

LIC Housing Finance is up for the fourth successive session. The stock is up nearly 10% to Rs 192.50 on strong results. Wipro was loosed further to 4.4%,it has reported a fall after its Q3FY11 numbers. Its Q3 net profit was up 3.4% to Rs 1,319 crore and dollar denominated Global IT revenues went up by 5.6% to $1.34 billion (QoQ), which were more or less in-line with estimates.

European shares rose in early trade on Friday as miners got support from key metals prices which bounced back after steep losses in the previous session on concerns about further monetary tightening in China.

The BSE Sensex shed 83.19 points or 0.44% at 18,963.35. The index touched a high and a low of 19,065.34 and 18,932.40, respectively.

The BSE Mid-cap and Small-cap indices rose 0.15% and 0.49%, respectively.

Oil & Gas up 0.82%, Bankex up 0.47%, Power up 0.45%, Consumer Durables (CD) up 0.42% and PSU up 0.25% were the only gainers in the BSE sectoral space.

On the other hand, Information Technology (IT) down 1.39%, TECk down 1.20%, Metal down 0.75%, Fast Moving Consumer Goods (FMCG) down 0.98% and Realty down 0.42% were the main losers in the BSE sectoral space.

Fertilizer subsidy of the Indian government may increase substantially compared with the budget estimates as fertilizer prices in world markets are on the rise. India imports more than half of its fertilizer requirements and the surge in global prices of the commodity will certainly impact the costs of imports and hence the subsidy outgo.

Demand for fertilizers has been expanding rapidly over last several months with a significant rise in grain and commodity prices across the globe making producers more likely to purchase and apply fertilizer. The production on the other hand has been stagnant. This is mainly because demand was relatively lower in the last couple of years and producers were cutting back in fertilizer use as grain prices were not nearly as strong as currently they are.

India is the world's top importer of urea and DAP, and as such its demand is a major factor in overall demand-supply equation facing the international markets. Indian companies usually pool together and being the largest customer do manage to influence prices which are offered to them. However, greater the rise in average prices of fertilizers in global markets, more difficult becomes the battle of getting competitive offers for Indian importers.

There are two major factors which influence fertilizer prices. One is crude prices which have been rallying. Higher crude prices generally tend to push prices of fertilizer feedstock and hence jack up prices of the final product. This was the case during the commodity rally seen in 2008 as well which led to sharp rise in crude oil and other energy prices and also in prices of feedstock for fertilizers, resulting in a sharp jump in fertilizer subsidy spending of government of India.

Second, and even more important, factor is prices of grains and other food items. At present the prices of most agricultural commodities ranging from food grains to fruits and vegetables and even oil seeds and beverages are trading at very high levels. This will obviously promote farmers worldwide, and in India too, to plant more of these commodities, hence jacking up the demand of fertilizers. Analysts expect worldwide use of fertilizers will go up by around 5%, rather high given the historical trends, while the same in India may expand by 12-15% given the good conditions for Rabi planting.

The S&P CNX Nifty trimmed 21.45 points or 0.38% to 5690.15. The index touched a high and a low of 5717.55 and 5674.50, respectively.

The top gainers on the Nifty were SBI up 2.34%, BPCL up 2.11%, Sesa Goa up 2.05% RIL up 1.82% and Reliance Infra up 1.59%.

The top losers on the index were Wipro down 4.43%, Sterlite Inds down 2.68%, ONGC down 2.44%, ACC down 2.20% and Cairn India down 1.87%.

Majority of the regional peers settled in the red. Hang Seng slipped 0.53%, Jakarta Composite plunged 2.16%, KLSE Composite declined 1.22%, Nikkei 225 plunged 1.56%, Straits Times shed 0.68% and Seoul Composite dropped 1.74%, while Shanghai Composite rose 1.43% and Taiwan Weighted advanced 0.29%.

The European markets were marginally trading in the green. CAC-40 increased 0.48%, FTSE 100 advanced 0.40% and DAX surged 0.24%.

Key indices hover around the neutral line

2011-01-21T05:01:00.003-08:00

Benchmark equity indices, which rebounded into positive territory for brief period of time and hit new intraday high has drifted lower again due to lack of support at higher levels in afternoon trade. Most of the regional counterparts were trading with deep cuts at this point of time, while the US index futures were also witnessing down-tick in screen trade today. Though 30-share BSE Sensex managed to hold its neck above the psychological 19,000 mark, 50-share NSE Nifty was trying hard to get back to the 5,700 level. On the BSE sectoral chart, gains in Oil & Gas, Consumer Durables and Power counter kept the bulls active on the street. Information technology stocks reeled under pressure on the back of weak third quarter results of Wipro. Technology, Metal and Fast Moving Consumer Goods stocks are also seen struggling for support. However, broader markets continue to show strength as the BSE Mid-cap and Small-cap indices are trading with gains of around 0.53% and 0.79%, respectively. Moreover, market men were also skeptical of the RIL's third-quarter results due to be announced today as it could have a significant impact on the overall market sentiment. The market breadth on the BSE was positive; the gainers outpaced the losers in a ratio of 1632:1030 while 89 shares remained unchanged.

The BSE Sensex slipped 33 points or 0.17% at 19,013.54. The index touched a high and a low of 19,065.34 and 18,946.86, respectively.

The BSE Mid-cap and Small-cap indices rose 0.53% and 0.79%, respectively.

The main gainers in the BSE sectoral space were Oil & Gas up 0.80%, Consumer Durables (CD) up 0.71%, Power up 0.69%, Bankex up 0.64% and Capital Goods (CG) up 0.54%.

On the other hand, Information Technology (IT) down 0.96%, TECk down 0.80%, Metal down 0.75%, Fast Moving Consumer Goods (FMCG) down 0.60% and Healthcare (HC) down 0.31% were the only losers in the BSE sectoral space.

Meanwhile, the report of Y.H. Malegam headed sub-committee of the Reserve Bank of India (RBI) to suggest regulations for the country's microfinance institutions (MFIs) has raised new controversies in the industry even as it tries to windup the troubles of micro-lenders that begun after Andhra Pradesh government's ordinance seeking to regulate the MFI business in the state.

The committee proposed to impose a 24% cap on the interest rate that MFIs can charge. It also imposed a host of other restrictions on the MFI business including a limits of an annual family income of Rs.50,000 and an individual ceiling on loans to a single borrower of Rs.25,000. Also, not less than 75% of the loans given by the MFI should be for income-generating purposes.

However, the Committee has also provided a door for the industry to escape from the Andhra government's ordinance. It has recommended creation of a separate category of NBFCs operating in the microfinance sector to be designated as NBFC-MFIs. The regulation of such NBFCs has been recommended to be left with the central bank only, thus saving them from the state governments' controls and hence form the Andhra ordinance as well.

Nonetheless, the real micros in the microfinance industry are crying foul over the recommendations. Smaller lenders are worried that the proposals of the Committee will pose additional operating and compliance-related challenges for them. The margin cap of 10% above cost of funds and interest rate ceiling of 24%, which can be handled by larger players, may compete the smaller players out of the business.

At this stage, it looks like if the report is implemented in totality, it would derive a lot of consolidation in the industry. According to the rating agency Crisil, smaller MFIs will find it difficult to raise capital, given the challenges of lower growth and profitability while the larger players with stronger internal processes, higher focus on transparency and governance, and efficient operations will reap the maximum benefits. In the medium term, such players would be able to take over the smaller players with less viable business models.

The top gainers on the Sensex were BHEL up 2.08%, RCom up 1.88%, SBI up 1.85%, RIL up 1.51% and M&M up 1.45%.

Wipro down 3.95%, Sterlite Inds down 1.77%, ONGC down 1.73%, Jindal Steel down 1.56% and HDFC down 1.40%, were the top losers on the index.

After the sharp rise seen in the wholesale price index (WPI) based inflation, the latest data released by the government has shown that consumer price index (CPI) based annual inflation rate too has registered significant increase in December, hinting that the prices, particularly in primary commodity space, were becoming a far more serious problem that what government seems to be appreciating.

The All-India CPI for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for December, 2010 increased by 11 points each to stand at 581 points for Agricultural Labourers (CPI-AL) and 580 points for Rural Labourers (CPI-RL). The increase was sharpest seen in the current fiscal so far and maps the sharp rise seen in food inflation in the wholesale price index as well.

The annual rate of inflation for both the indices increased too. In case of CPI-AL annual inflation stood at 7.99% in Dec compared 7.17% in the previous month while in case of CPI-RL the figure stood at 8.01% from 6.95% in November 2010. However, these values are still much lower compared with the last year figures when inflation according to CPI-AL and CPI-RL stood at 17.21% and 16.99%, respectively, in December 2009.

Earlier, the data release by commerce ministry had shown that headline inflation in India measured in terms of WPI rose significantly to 8.43% in December from 7.48% in the previous month. The latest decline in both the wholesale and consumer level inflation has come from the surge seen in food goods including staples, vegetables, fruits and milk etc and other primary commodities like cotton and yarn etc.

The S&P CNX Nifty dipped 12.65 points or 0.22% to 5698.95. The index touched a high and a low of 5717.55 and 5682.60, respectively.

The top gainers on the Nifty were BPCL up 2.39%, BHEL up 2.15%, SBI up 2.02%, Suzlon up 1.93% and RCom up 1.84%.

The top losers on the index were Wipro down 3.78%, Sterlite Inds down 2.05%, Jindal Steel down 1.80%, ONGC down 1.79% and Tata Power down 1.63%.

Other Asian markets are mostly trading in the red. Hang Seng slipped 0.55%, Jakarta Composite plunged 3.22%, KLSE Composite declined 1.19%, Nikkei 225 plummeted 1.56%, Straits Times shed 0.49% and Seoul Composite dropped 1.74%.

On the other hand, Shanghai Composite rose 1.43% and Taiwan Weighted advanced 0.29%.

Benchmark indices cut losses but trade in narrow range

2011-01-21T05:01:00.001-08:00

The benchmark equity indices are trading in a narrow range with negative bias in the late morning session on negative global cue. Majority of the regional peers are trading in red while US index futures too were showing down tick in the screen trade. Back home BSE Sensex and NSE Nifty were hovering around 19,000 and 5700 levels respectively. The trader sentiment remained cautious ahead of January month F&O expiry and upcoming RBI policy review next week. Selling in Wipro Jindal Steel, Sterlite Industries , HDFC and Bharti Airtel contributed largely to the fall. However, smart rise in Reliance Communication, RIL, Reliance Infra, BHEL and Bajaj Auto cushioned the dip to some extent. In BSE sectoral space IT, TECk ,Metal , FMCG and HC counters are witnessing some selling pressure at this point of time whereas Oil & Gas , Consumer Durables (CD) , Auto , PSU and Power companies were witnessing some buying interest from investors .On the other hand the broader markets were trading higher, the BSE Mid-cap and Small-cap indices surged 0.56% and 0.76%, respectively.

Wipro was the leading loser with 3.6% fall after its Q3FY11 numbers. Its Q3 net profit was up 3.4% to Rs 1,319 crore and dollar denominated Global IT revenues went up by 5.6% to $1.34 billion (QoQ), which were more or less in-line with estimates.

The market breadth on the BSE was in favour of advances in the ratio of 1568:981 while 94 scrips remained unchanged.

The BSE Sensex plunked 72.87 points or 0.38% at 18,973.67. The index touched a high and a low of 19,043.17 and 18,946.86, respectively.

The BSE Mid-cap and Small-cap indices surged 0.56% and 0.76%, respectively.

The main losers in the BSE sectoral space were IT down 1.04%, TECk down 0.92%,Metal down 0.80%, FMCG down 0.57% and HC down 0.20%.

On the other hand, Oil& Gas up 1.07%, Consumer Durables (CD) up 0.97%, Auto up 0.63%, PSU up 0.51% and Power up 0.49% were the main gainers in the BSE sectoral space.

The top gainers on the Sensex were Reliance Communication up 2.06%, RIL up 1.61%, Reliance Infra up 1.51%, BHEL up 1.36% and Bajaj Auto up 1.33%.

Wipro down 3.50%, Jindal Steel down 1.85%, Sterlite Industries down 1.72%, HDFC down 1.71% and Bharti Airtel down 1.70% were the top losers on the index.

After the sharp rise seen in the wholesale price index (WPI) based inflation, the latest data released by the government has shown that consumer price index (CPI) based annual inflation rate too has registered significant increase in December, hinting that the prices, particularly in primary commodity space, were becoming a far more serious problem that what government seems to be appreciating.

The All-India CPI for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for December, 2010 increased by 11 points each to stand at 581 points for Agricultural Labourers (CPI-AL) and 580 points for Rural Labourers (CPI-RL). The increase was sharpest seen in the current fiscal so far and maps the sharp rise seen in food inflation in the wholesale price index as well.

The annual rate of inflation for both the indices increased too. In case of CPI-AL annual inflation stood at 7.99% in Dec compared 7.17% in the previous month while in case of CPI-RL the figure stood at 8.01% from 6.95% in November 2010. However, these values are still much lower compared with the last year figures when inflation according to CPI-AL and CPI-RL stood at 17.21% and 16.99%, respectively, in December 2009.

Earlier, the data release by commerce ministry had shown that headline inflation in India measured in terms of WPI rose significantly to 8.43% in December from 7.48% in the previous month. The latest decline in both the wholesale and consumer level inflation has come from the surge seen in food goods including staples, vegetables, fruits and milk etc and other primary commodities like cotton and yarn etc.

The S&P CNX Nifty shed 15.60 points or 0.27% to 5,696. The index touched a high and a low of 5,712.80 and 5682.60, respectively.

The top gainers on the Nifty were BPCL up 2.80%, Reliance Communication up 2.40%, BHEL up 1.76%, Sesa Goa up 1.73% and Reliance Industries was up by 1.69%.

The top losers on the index were Wipro down 3.43%, Jindal Steel down 2.06%, Sterlite Industries down 1.91%, Tata Power down 1.75% and Bharti Airtel down 1.72% .

Majority of the regional peers are trading in the red. Hang Seng lost 0.19%, Jakarta Composite declined 3.25%, Nikkei 225 dipped 1.16%, Straits Times doused 1.74% and Seoul Composite plunked 1.74% while Taiwan Weighted increased 0.29% and Shanghai Composite advanced 0.94%.

Equity markets continue their downward journey

2011-01-21T05:00:00.003-08:00

Indian equity markets continue to trade in the red zone in the mid morning session on sustained selling by funds and retail investors in tandem with weak Asian markets. As on the global front , negative close of Wall Street on weaker commodity stocks casted its shadows on the regional peers, which have edged further lower in the trade, barring the Chinese index as China's 4th quarter GDP grew at 9.8 per cent, beating analysts' expectations, fuelling speculation of an impending rate hike because of high inflation. Back home, the 30-share benchmark index--Sensex--on BSE and the wide-based index -- Nifty --on National Stock Exchange (NSE) though are range-bound but have continued trading below their physiological level of 19k and 5.7k respectively due to somber investor's sentiment. As Wipro though met the estimates with a 10 percent rise in third-quarter profit, driven by improving demand for offshoring services, still underperformed the other biggies of the sector. Meanwhile, broader indices are showing signs of resilience. On the BSE sectoral front, stocks from Oil & Gas, Consumer Durables, Auto, Power and Realty space are nudging higher in the trade, while stocks from Information Technology, TECk, Metal, Fast Moving Consumer Goods, Bankex and Healthcare space are languishing at the bottom, dragging the markets lower. Meanwhile the stock that remains buzzing before they could announce their Q3 earnings include Cigarette major-ITC and Reliance Industries (RIL). The overall breadth on BSE however, remains to be in favour of advances which have outperformed declines in the ratio of 1494:892, while, 104 shares remained unchanged.

The BSE Sensex is currently trading at 18,965.13, down by 81.41 points or 0.43%. There were 11 stocks advancing against 19 declines while on the index.

The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.53% and 0.67%, respectively.

The top gaining sectoral indices on the BSE were, Oil and Gas up by 0.61%, CD up by 0.56%, Auto up by 0.50%, Power up by 0.46% and Realty up by 0.44%. While, IT down by 1.05%, TECk down by 0.91 %, Metal down by 0.61%,FMCG down by 0.59% and Bankex down by 0.25% were the major losers on the index.

The top gainers on the Sensex were Reliance Communication up by 1.54%, Mahindra & Mahindra up by 1.39%, RIL up by 1.25%, Reliance Infra up by 1.22% and Bajaj Auto up by 1.18%.

Wipro down by 3.73%, HDFC down by 1.62%, Bharti Airtel down by 3.77%, Sterlite Industries down by 1.52%, Bharti Airtel down by 1.41% and Jindal Steel down by 1.32% were the top losers on the index were.

Meanwhile, in a move that will significantly help the textile industry further improve its competitiveness; the government is likely to extend the Technology Upgradation Fund Scheme (TUFS) within the current quarter. The scheme has been a hit with domestic textile companies and has resulted in significant improvement in overall vintage of technology.

Rita Menon, Secretary in Ministry of Textiles said on Thursday that the government has accepted the demand of textile department and a cabinet approval is expected very soon. 'The Union Cabinet is expected to take up the matter and give its approval soon to revive the scheme that has been on the backburner for lack of funds.' Earlier, the government had asked the public sector banks through which the scheme was being routed to suspend new sanctions under the TUFS till fresh fund allocation was approved by the government. Till day various financial institutions have disbursed loans worth Rs 73,168 crore since the start of TUFS in 1999. The Cabinet Committee on Economic Affairs is now expected to allocate over Rs 1,000 crore for the scheme.

TUFS was originally planned to last till 2007, but was extended in 2008 to help the industry upgrade to advanced technology in order to improve competitiveness against other exporting countries amidst a commodity shock followed by slump in global economy. The scheme mainly provides for reimbursement of 5% interest charged by the financial institutions/banks for technology upgradation projects in conformity with the policy. In case of overseas loans, it gives the option of availing a cover for exchange rate erosion of up to 5% per annum instead of 5% interest support.

India's textile industry, particularly the export segment, witnessed tough times in wake of the global economic downturn. Due to contraction in demand from the developed world, export markets became extremely competitive and price sensitive. Competition from China and Bangladesh resulted in significant pressure on Indian shippers. Although reasonable recovery in this space has been seen over last couple of quarters, the average technology age is still poor and industry has been asking for extension of the TUFS to help smaller companies adopt latest technologies.

The S&P CNX Nifty is currently trading at 5,689.10, down by 22.50 points or 0.39%. There were 17 stocks advancing against 31 declines on the index, while 2 shares remained unchanged.

The top gainers of the Nifty were Reliance Communication and PNB both up by 1.54%, Sesa Goa up by 1.47%, M&M up by 1.38% and Reliance Infra up by 1.33%.

The top losers of the index were Wipro down by 3.64%, Bharti Airtel down by 1.82%, Sterlite Industries down by 1.77%, HDFC down 1.75% and Infosys was down by 1.45%.

Asian counterparts were also trading mostly in the negative terrain; Hang Seng was down by 0.19%, Jakarta Composite slid 3.25%, KLSE Composite declined 0.93%, Nikkei 225 drowned 1.62%, Straits Times dropped 0.23% and Seoul Composite plunged 1.38%.

On the flip side, Shanghai Composite was up by 1.54% and Taiwan Weighted rose 0.35%

Markets trade flat after a negative start

2011-01-21T05:00:00.001-08:00

The Indian equity markets are trading flat after making a negative start, tracking weak global cues. The US markets once again closed lower overnight on the worries that china may go for a rate hike to contain its inflation after the country's growth surpassed expectation, while Asian counterparts were also trading mostly in the red at this point of time, indicating somber investor's sentiments. Back Home, broader indices witnessed a great amount of traction in the trade which supported the benchmarks to pare their early losses. BSE's -- Sensex -- and NSE's -- Nifty -- were trading above their crucial 19,000 and 5,700 level, respectively. On the sectoral front, oil and gas, consumer durables and capital goods were the top gainers in trade; on the other hand software, technology and metal were the major losers . The broader indices were outperforming benchmarks today morning. The Index heavyweight Reliance Industries too was trading with a gain of over one percent ahead of its earnings announcement. The market breadth on the BSE was positive; there were 1491 shares on the gaining side against 470 shares on the losing side while 62 shares remained unchanged.

The BSE Sensex opened at 19,007.08; about 39 points lower compared to its previous closing of 19,046.54, and has touched a high and a low of 19,043.17 and 18,953.94 respectively. The index is currently trading at 19,025.84, down by 20.70 points or 0.11%. There were 13 stocks advancing against 17 declines while on the index.

The overall market breadth is started in the positive terrain, with 73.70% stocks advancing against 23.23% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices were up by 0.84% and 0.94%, respectively.

The top gaining sectoral indices on the BSE were, Oil and Gas up by 0.87%, CD up by 0.76%, CG up by 0.73%, Realty up by 0.68% and Auto was up by 0.68%. While, IT down by 0.98%, TECk down by 0.85%, Metal down by 0.13% and FMCG down by 0.07% were the major losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 2.25%, M&M up by 1.85%, BHEL up by 1.77%, Reliance Industries up by 1.46% and Reliance Infra was up by 1%.

Wipro down by 1.78%, Bharti Airtel down by 3.77%, HDFC down by 1.32%, Sterlite Industries down by 1.09% and Infosys down by 0.94% were the top losers on the index were.

Meanwhile, industry body CII on Wednesday recommended a 10-point agenda to the government to bring down the surging inflation in the country. The CII said in a release the brunt of high inflation was being felt across India and across all sections of society. It said while the food inflation increased last fiscal due to poor monsoon, the recurrence now even in a good Monsoon year shows the prevalence of a deeper structural problem.

In this wake it recommended a series of short and long term measures that government could take to bring down the pace of rising prices. In the short term, the government should lower import duty, especially on fruit and vegetables, and allow greater imports. The CII said that existing tariffs were hovering around 30% to 50% in many cases and should be brought down to zero or nominal levels for a while to ensure greater supply of fruit & vegetables which have been a major reason behind rising food inflation.

Further, all fruits and vegetables and other perishables including fisheries which have a very short shelf-life should be fully exempted from the provisions of the APMC Act. This will help improve the free movement of these commodities across the country. Simultaneously the government should incentivize processors and organized retailers to procure directly from the farmer groups like growers' companies or co-operatives and building infrastructure in rural areas for aggregating the fresh produce there. This will create not only employment in rural areas but also build the much needed infrastructure.

The CII also advocated that that India and its neighboring countries should enter into an agreement for import and export of perishables to tide over the demand-supply mismatch. While this will help all the south Asian countries to improve supply of food goods, it will also prove to be a significant a confidence building measure and hence improve relations among these states at all levels.

The S&P CNX Nifty opened at 5,692.05; about 19 points lower compared to its previous closing of 5,711.60, and has touched a high and a low of 5,712.80 and 5,687.30 respectively. The index is currently trading at 5,707.00, down by 4.60 points or 0.08%. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Bajaj Auto up by 2.01%, BHEL up by 1.96%, PNB up by 1.80%, M&M up by 1.80% and Sesa Goa up by 1.52%.

The top losers of the index were Wipro down by 3.73%, Sterlite Industries down by 1.25%, Bharti Airtel down by 1.22%, ACC down by 1.13% and Infosys was down by 1.06%.

Asian counterparts were also trading mostly in the negative terrain; Hang Seng was down 20.41 points or 0.09% to 23,983.29, Jakarta Composite was down 110.04 points or 3.19% to 3,344.07, KLSE Composite was down 14.58 points or 0.93% to 1,551.93, Nikkei 225 was down 101.86 points or 0.98% to 10,335.45, Straits Times was down 1.02 points or 0.03% to 3,204.46 and Seoul Composite was down by 24.20 points or 1.15% to 2,082.46.

On the flip side, Shanghai Composite was up 49.52 points or 1.85% to 2,727.17 and Taiwan Weighted was up by 42.16 points or 0.47% to 8,970.23.