Saturday, October 09, 2010
The Q2 September 2010 results season, which kick-starts next week, is a major near-term trigger for the market, which has risen sharply over the past few weeks on heavy buying by foreign funds. Possibility of a near-term weakness on the bourses cannot be ruled out as investors may sell some shares in the secondary market to make a room for investment in the initial public offer (IPO) of Coal India, billed as the country's largest issue ever.
The market corrected, last week, after selling activity intensified in the last two trading sessions of the week. The momentum of foreign fund buying maintained the strong pace. However, concerns of stretched valuations and caution ahead of the Q2 September 2010 result season triggered selling by domestic funds and retail investors. Investors also sold shares to make room for investment in the initial public offer (IPO) of Coal India, billed as the country's largest issue ever. The IPO of Coal India opens for bidding on 18 October 2010.
Gold futures in New York pulled back after reaching a record US$1,366 an ounce, its biggest drop in more than two months, as the dollar strengthened and some investors sold after the bullion’s sensational rally. Gold futures for December delivery lost US$4.60, or 0.3%, to US$1,330.40 an ounce at 8 a.m. on the Comex in New York. The metal is up 1% this week. Bullion for immediate delivery in London was 0.3% lower at US$1,329.57 after reaching a record US$1,364.77 yesterday.
The International Monetary Fund (IMF) said that economic recovery in the advanced nations is losing steam even as the emerging economies continue to race ahead. IMF chief economist said that some emerging nations need more market-oriented currency policies, while wealthy nations need to cut budget deficits. IMF officials said that the world economy will expand 4.8% this year and slow down slightly next year. Emerging economies will expand more than 7% this year, while developed nations can expect to grow just 2.7%. Industrialised nations are projected to grow by 2.2% in 2011, the IMF said. Although the global recovery is uneven and fragile, IMF chief economist Olivier Blanchard said that the world is not likely to slip back into a recession. Still, he urged policy-makers around the globe to take tough actions.
Overall, the US lost 95,000 non-farm jobs in September. This was much wider than the 5,000-10,000 decline expected by economists. The US employers laid off more people than anticipated in September as the government sector stepped up job cuts even as the private companies hired less than expected staff. Overall, the US lost 95,000 non-farm jobs in September, the Labor Department said in Washington today. This was much wider than the 5,000-10,000 decline expected by economists and the 57,000 jobs lost in August. The unemployment rate remained steady at 9.6% as fewer new workers joined the labor force than in the previous month. Economists had expected a slight increase in the jobless rate.
Private-sector payrolls rose by 64,000 in September, weaker than the 85,000 increase expected by economists. Private payrolls increased by a revised 93,000 in August, up from the 67,000 initially estimated. increase. The payrolls count in July and August was revised lower by a cumulative 15,000. Payrolls fell by a revised 57,000 in July and by 66,000 in August. The government sector lost 159,000 jobs, including 77,000 temporary Census workers. The decrease in overall payrolls reflected a 77,000 decline of temporary workers hired by the government to conduct the decennial population count and a 49,800 drop in teaching jobs at the local government level. Only about 6,000 census workers remain on the payrolls.
Fiat India Automobiles launched next generation Linea T-Jet in the C+ segment. It was first launched in January 2009. With an array of best in class features the new Italian beauty is reminiscent of higher segment cars. With a brand new T-Jet engine, the new Linea will be a powerhouse. The new imported power train delivers 114 PS power and an unbelievable torque of 207 Nm, enough to leave all its competitors behind. With this, the Fiat Linea will be the first and only car in the premium sedan segment to boast of a turbo charged petrol engine. The Fiat Linea T-Jet with 13 new features and 7 class leading equipments is sure to delight its owners. The car sets new benchmarks in the areas of performance, safety, comfort, ride , handling and in- car infotainment. Safety: All 4 disc brakes (a first in the segment), Dual airbags, ABS with EBD. Linea T-jet has been priced at Rs 8.84 lakhs (ex-showroom, Mumbai). Linea T-jet Plus will cost Rs 9.29 lakhs (ex-showroom Mumbai
Shares of SKS Microfinance fell after the Company's Board of Directors terminated the appointment of Suresh Gurumani as Managing Director and Chief Executive Officer. The board also withdrew all powers and authorities granted to him or otherwise enjoyed by him in the Company as Managing Director and CEO of the Company, with immediate effect. The Board also appointed M. R. Rao, Deputy CEO as the Managing Director & CEO for a period of three years w.e.f. October 04, 2010, subject to the completion of necessary statutory and other procedure.
Shares of Kingfisher Airlines jumped on reports that the billionaire investor Wilbur Ross was likely to invest up to US$150mn in the debt-strapped Indian carrier. Kingfisher Airlines reported net loss of Rs1.87bn in Q1 FY11, lower than a net loss of Rs2.42bn in Q1 FY10. Net sales rose 24.9% to Rs16.40bn. Kingfisher Airlines is expected to finalise the restructuring of its Rs60bn debt soon. The development comes ahead of the carrier’s plans to raise US$250mn through a global depository receipts (GDR) issue. "The Reserve Bank of India (RBI) has allowed banks to restructure the debt. We are working with a consortium of banks to restructure the entire debt. It should be finalised by next month," Vijay Mallya, CMD, Kingfisher Airlines, told the shareholders at the AGM late last month.
Tata Motors Ltd. said that its Board of Directors has approved the issue and allotment of 83,20,300 Ordinary Shares of Rs10 at a price of Rs1,074 per Ordinary Share and 3,21,65,000 'A' Ordinary Shares at a price of Rs764 per share, aggregating to Rs33.51bn. A duly authorized Committee of the Board of Directors of the Company has decided to close the bid for the Qualified Institutional Placement (QIP). Tata Motors raised the size of its QIP to US$750mn owing to higher demand from large institutional investors.
Passenger car sales in India grew by over 30% in September, as easy finance availability coupled with the introduction of a slew of new models and a booming economy continued to lure consumers. Total automobile vehicle sales grew by 21.63% to 13,29,086 units in September as against 10,92,687 units in the same month last year, the Society of Indian Automobile Manufacturers (SIAM) said. Total sales in August were 12,63,293 units. Companies sold 169,082 cars in September versus 129,684 units in the same month last year, the Society of Indian Automobile Manufacturers (SIAM) said on Friday. In August, domestic car sales were at 160,794 units. Total passenger vehicle sales in the domestic market stood at 215,632 units last month versus 167,515 units sold in the corresponding month of the last fiscal year. Sales of trucks and buses rose 29.6% to 59,455 units in September. Local two-wheeler sales were at 1,005,162 units in September 2010 as against 838,152 units in the corresponding month of last year. The previous best was in August this year at 9,57,304 units. Motorcycle sales in the country grew by 15.50% to 7,78,352 units from 6,73,893 units in the same month last year. The previous highest of 7,27,542 units was achieved in August this year.
Annual food inflation in India inched lower in the last week of September while fuel inflation stayed static in the same period, data released by the Government showed. But, the Reserve Bank of India (RBI) is still expected to continue its policy of gradually increasing the key interest rates as it tries to rein in spiraling prices in a rapidly growing economy. The central bank next meets on November 2. Inflation in the Food Articles space stood at 16.24% in the week ended Sept. 25 as against 16.44% in the preceding week, the Commerce & Industry Ministry said in a statement. It was at 12.85% in the year-ago period. The index for Food Articles group declined by 0.1% to 179.70. Inflation in the Primary Articles group rose to 18.53% in the week under review from 18.31% in the week ended Sept. 18. It was at 9.78% in the week ended Sept. 26, 2009. The index for Primary Articles group rose by 0.1% to 181.0. Annual inflation in the Fuel & Power group stood unchanged at 10.73% in the week ended Sept. 25. It was at (-)7.81% in the week ended Sept. 26, 2009. The index for this group remained unchanged at its previous week's level of 147.60.
The rupee surged to its highest level in more than two years against the dollar on Oct. 7, as the US currency weakened in the overseas markets amid growing talk of fresh Quantitative Easing by the Federal Reserve to revive economic growth. But a drop in local stocks and concern that the RBI may intervene in the market curtailed the weekly gains in the partially-convertible Indian currency, which fell the most in a month on Friday. The rupee ended on Friday at 44.4350 against the dollar after touching 44.1150 in the previous session, its strongest level since Sept. 1, 2008. The rupee has gained 5% in the past month, the best-performance among the 10-most traded Asian currencies. It had closed at 44.1950 on Thursday.
After five straight weeks of robust gains, the Indian market seems to be taking a breather. The sideways consolidation pattern may continue in the coming week too, as investors digest corporate earnings and a couple of key economic statistics in the form of IIP data and monthly WPI inflation report. August IIP data is due on Oct. 12 and monthly inflation data will be released on Oct. 14.
Monster India, the leading online career & recruitment solutions provider, today announced that The Monster Employment Index India rose five points (four percent) on the month in September, as online recruitment activity rebounded from eased levels of the prior summer months.
The Indian economy will grow by 9.7% in 2010 and 8.4% in next year, spurred by strong industrial output and overall robust macro-economic performance, the International Monetary Fund (IMF) said. "Growth is projected at 9.7% in 2010 and 8.4% in 2011, led increasingly by domestic demand. Robust corporate profits and favorable external financing will encourage investment," the IMF said in its latest World Economic Outlook report. "India's macroeconomic performance has been vigorous, with industrial production at a two-year high. Leading indicators - the production manufacturing index and measures of business and consumer confidence - continue to point up," the IMF said. "Recent activity (10% growth in real GDP at market prices in Q2) was driven largely by investment and the contribution from net exports is projected to turn negative in 2011 as the strength in investment further boosts imports," the IMF said. The RBI's projection for India is 8.5% for 2010-11, which is in line with other projections. The PM's Economic Advisory Council has also projected 8.5 in 2010-11, and 9% in 2011-12.
After a tremendous rally seen in September, which took markets 16% higher, now it seems correction have set in. Indian stocks dropped, snapping five weeks of rally. This week saw sustained profit booking and weak global cues, which dragged the markets down. However, the broader markets managed to close stronger for the week. FMCG index plunged 3.13% over the week in the BSE sectoral space followed by Capital goods index, declined 1.08%. However, Healthcare and Oil & gas indices gained over 3.25% and 1.91% week-on-week.
Major news for the week:
Food inflation eases to 16.24%
Securities & Exchange Board India sees no foreign institutional investor inflow reversal
India fertiliser demand seen at record high
Foreign banks set to play bigger role
August trade deficit widens to a 23-month high
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
8/10/2010 511706 Action Fin BP FINTRADE PRIVATE LIMITED S 50041 37.85
8/10/2010 532975 Aishwarya Tele VIPUL HIRALAL SHAH B 175000 34.94
8/10/2010 532975 Aishwarya Tele VIPUL HIRALAL SHAH S 174150 34.94
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
08-OCT-2010,AMAR,Amar Remedies Limited,MBL & COMPANY LTD.,BUY,132693,113.33,-
08-OCT-2010,BINANIIND,Binani Industries Limited,JMP SECURITIES PVT LTD,BUY,198133,168.34,-
08-OCT-2010,CPIL,Career Pt Infosystem Ltd,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,202771,595.06,-
08-OCT-2010,ESL,Electrosteel Steels Ltd,GEE BEE SECURITIES PVT. LTD.,BUY,10224619,10.66,-
08-OCT-2010,ESL,Electrosteel Steels Ltd,WELLCOME VYAPAAR PVT. LTD.,BUY,14625000,10.67,-
08-OCT-2010,GLORY,Glory Polyfilms Limited,ALFA FISCAL SERVICES PVT LTD,BUY,817897,18.54,-
08-OCT-2010,GLORY,Glory Polyfilms Limited,SAAKSHI SHARES PVT.LTD.,BUY,294500,19.88,-
08-OCT-2010,GLORY,Glory Polyfilms Limited,TRANS FINANCIAL RESOURCES LTD,BUY,521808,18.37,-
08-OCT-2010,GREENPOWER,Orient Green Power Co Ltd,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,2994150,42.85,-
08-OCT-2010,GREENPOWER,Orient Green Power Co Ltd,RELIANCE LIFE INSURANCE CO.LTD.,BUY,3305000,43.80,-
08-OCT-2010,HANUNG,Hanung Toys and Textiles,MMAVERICK INVESTMENT SOLUTIONS PVT LTD,BUY,153750,352.20,-
08-OCT-2010,JUPITER,Jupiter Bioscience Ltd,ALFA FISCAL SERVICES PVT LTD,BUY,531816,87.24,-
08-OCT-2010,JUPITER,Jupiter Bioscience Ltd,TRANS FINANCIAL RESOURCES LTD,BUY,223258,87.08,-
08-OCT-2010,KINETICMOT,Kinetic Motor Company Ltd,BP FINTRADE PRIVATE LIMITED,BUY,188904,43.45,-
08-OCT-2010,KINETICMOT,Kinetic Motor Company Ltd,JMP SECURITIES PVT LTD,BUY,1129117,43.82,-
08-OCT-2010,KOUTONS,Koutons Retail India Limi,AKASH SECURITIES PRIVATE LTD,BUY,275000,139.47,-
08-OCT-2010,KOUTONS,Koutons Retail India Limi,TRANS FINANCIAL RESOURCES LTD,BUY,460402,140.81,-
08-OCT-2010,LOKESHMACH,Lokesh Machines Limited,MANISH VRAJLAL SARVAIYA,BUY,112947,66.03,-
The key benchmark indices extended losses for the second straight day in a choppy trading session, as world stocks fell ahead of an influential non-farm payroll data in the US later in the global day. The BSE 30-share Sensex was down 65.06 points or 0.32% up close to 105 points from the day's low and off close to 160 points from the day's high. Strength in index heavyweights Reliance Industries (RIL) and Infosys, capped the decline.