Pre Market: Stocks to open lower on weak global cues

Pre Market: Stocks to open lower on weak global cues


MUMBAI: Equities are likely to extend losses on Friday tracking overseas declines. However, stock-specific action is expected on the back of Budget expectations. Fertilizer stocks may gain strength following the government’s decision to go ahead with the nutrient based subsidy plan.

“Nifty witnessed profit booking after seeing a 2.7% rally in the last two days. Reliance Industries which gave a positive signal in Wednesday’s session was down 3% on Thursday due to which we saw huge pressure on the Sensex. The intermediate rally which started from the lows of 4,675 is still intact unless Nifty breaks below 4,825 on the closing basis.

The daily RSI and MACD are still in a positive territory indicating that this positive uptrend will continue. Strong support is seen at 4,860-4,825 and stiff resistance at 4,920 - 4,950 levels. Nifty is currently in the tight trading band of 4950-4800 and unless we see a break of this range, markets will remain volatile with a positive bias,” said Nirmal Bang Securities.

US stocks rose for a third straight day on Thursday as investors viewed company results and manufacturing data as evidence the economic rebound will continue. Meanwhile, index futures tumbled after the Federal Reserve announced it was raising the discount rate that it charges banks for emergency loans.

The Dow Jones Industrial Average rose 83.66 points, or 0.81 percent, to 10,392.90. The Standard & Poor's 500 Index added 7.24 points, or 0.66 percent, to 1,106.75. The Nasdaq Composite Index gained 15.42 points, or 0.69 percent, to 2,241.71.

As a result, Asian stocks declined sending the Nikkei down 0.12 per cent and Topix down 0.07 per cent. Kospi dropped 0.08 per cent and Straits Times fell 0.2 per cent.

Back home, markets ended a choppy session on a weak note Thursday, taking cues from subdued global peers. Profit booking in index heavy-weight Reliance Industries put pressure on indices. Traders also took some profit home near resistance levels after a two-day rally.

Bombay Stock Exchange’s Sensex ended at 16327.84, down 101.07 points or 0.62 per cent. The index touched an intra-day low of 16287.17 and high of 16452.51.

National Stock Exchange’s Nifty closed at 4887.75, down 26.25 points or 0.53 per cent. The broader index hit a low of 4873.70 and high of 4922.05


Top 5 picks | Mid term picks | Gainers, Losers & analysts' recommendations

4800 level seen crucial for Nifty

*********************************************
Heard on Street: Albula laps up Adani Power



Why are institutions so bullish on realty IPOs?

When an initial public offer (IPO) that is considered expensive gets oversubscribed, conspiracy theories usually follow the talk about the ‘real reasons’ behind the success. Such theories have been doing the rounds in the market, following the IPO success of one such developer recently. Grapevine has it that some of the leading investors in this issue were offered apartments at discounted rates to the market for subscribing to the IPO.

A robust subscription to an issue in the qualified institutional investors category is key to issuers and bankers for attracting the interest of retail investors, who usually look up to this category for cues to invest in an IPO. Such theories are not without reasons. When investors have been dumping shares of most leading developers, which has resulted in the realty index underperforming the benchmark since October, critics ask why these institutional investors are so bullish on realty public issues.

Albula laps up Adani Power as it reshuffles portfolio

The sluggish movement in Adani Power shares after the listing may have caused concern among its retail shareholders, but some investors still sense investment opportunity in the company, going by the trading pattern in the stock in the current market. On Wednesday, a

Sebi-registered FII sub-account Albula Investment Fund bought 43 lakh shares at Rs 108, around 8% higher than the price at which the company had come out with its public issue last year. According to brokers, purchases could be part of a portfolio reshuffling whereby a fund sells high-priced stock to buy a relatively cheaper one, a strategy mostly seen in volatile market conditions. Adani Power closed 1.1% down at Rs 107 on Thursday.

ICICIdirect gets go-ahead for digital KYC

Even as mutual fund distributors are grappling with the execution of the recent Sebi fiat on know your client (KYC) norms, one of the largest online distributors of mutual fund products, ICICIdirect, has been given the go-ahead for an electronically-scanned KYC. It may be recalled that mutual fund distributors had some time ago mooted a central bureau of registry for all KYC documentation.

The distributors have also been lobbying for an electronic
or digital KYC till such time a comprehensive system is in place. The rationale being that this would bring down the volume of paper in the system that would otherwise be generated if the distributors were to send a copy of all supporting documents to the AMCs with retrospective effect ie from 1999 as is the Sebi directive.

(Contributed by Nishanth Vasudevan, Vijay Gurav & Deeptha Rajkumar)


*******************************************

Daily News Roundup - Feb 19 2010

Surprise on the Street!

Rural Electrification Corporation FPO

Polaris Software Ltd

ICICI Bank

Tata Steel

HDIL

Hexaware Technologies

Reliance Industries Ltd

Src: ET, DP Blog etc

Pre-Market: Stocks to open flat on mixed global cues

Pre-Market: Stocks to open flat on mixed global cues



MUMBAI: Stocks are likely to open flat-to-positive on Thursday amid mixed cues from global shores.

“Nifty continued to hold its positive momentum as strong leadership was seen in metals, oil & gas and banking stocks. Market volumes also picked up and it seems that bulls have taken control of the market. If in the near term, Nifty manages to hold 4,825 then it’s quite possible that this rally could extend further 5,050 levels.

The daily RSI and MACD are also giving positive signs indicating that this intermediate uptrend will continue. Strong support seen at 4,860-4,825 and stiff resistance at 4,950, this positive trend could get reverse only if Nifty closes below 4,800,” said Nirmal Bang Securities.

US stocks rose on Wednesday as stronger-than-expected earnings from companies, and upbeat economic data fueled bets that the recovery will bolster corporate profits. The Dow Jones Industrial Average rose 40.36 points, or 0.39 per cent, to end at 10,309.17. The Standard & Poor's 500 Index climbed 4.64 points, or 0.42 per cent, to end at 1,099.51. The Nasdaq Composite Index rose 12.10 points, or 0.55 percent, to 2,226.29.

Stocks across Asia were trading with marginal losses. The Nikkei slipped 0.12 per cent, Topix lost 0.14 per cent, Kospi shed 0.21 per cent and Straits Times fell 0.61 per cent.

Back home, equities ended above psychological resistance levels on Wednesday, taking cues from positive global markets. All the sectoral indices ended in the green led by metals, banks and capital goods.

Bombay Stock Exchange’s Sensex closed at 16428.91, up 202.23 points or 1.25 per cent. The index touched a high of 16480.49 and low of 16228.91.

National Stock Exchange’s Nifty ended at 4914, up 58.25 points or 1.2 per cent. The broader index hit a high of 4929.70 and low of 4857.60



*******************************************

Stocks of MNCs sizzle on delisting hopes

18 Feb 2010, 0812 hrs IST, VIJAY GURAV,ET Bureau

MNCs gained between 2% and 26% compared to a 6% fall in Sensex since Jan 1. Top 5 picks | MNCs that outperformed Sensex |

********************************************
Heard on the street: Punters jack up spot prices of new F&O members



Punters jack up spot prices of new F&O members

It was a busy day for punters, as they bid up prices of stocks that will be added to NSE’s futures & options list from Friday. Godrej Industries, Videocon Industries and Mundra Port were among the prominent gainers of the day, rising in the 7-9% range accompanied by heavy volumes. Inclusion on the F&O list means that punters get more time to play around with these stocks. Interestingly, Godrej Industries, Mundra Port and BGR Energy witnessed a higher-than-usual-delivery ratio on Thursday.

Short-covering fires up Tata Steel stock

A frenetic bout of short-covering fired up Tata Steel shares over 6% to Rs 584.90 on Wednesday. Many traders and a quite a few hedge funds are said to have gone ‘short’ on the stock, anticipating weak quarterly numbers. But with its performance turning out to be better than expected, these players had to cover up their positions. Among those caught on the wrong foot included a market operator who shares his first name with the Union agriculture minister.

‘Friendly circles’ buy Ruchi Soya shares

Huge blocks of shares changed hands at the Ruchi Soya counter on Wednesday. However, FIs were not involved on either sides of the transaction. Given that “friendly circles” are regularly active in
the stock, the market is not taking much notice of the bulk deals.

Insurers mop up shares of Manappuram General Fin

A couple of insurers are said to be accumulating shares of Manappuram General Finance. The buzz is that the Kochi-based NBFC’s proposed QIP will be priced at Rs 700 per share. Manappuram aims to a raise about Rs 300 crore through the equity issue, to be completed over the next 10 days.

Ranbaxy trades flat as market awaits earnings

Ranbaxy shares closed flat in a buoyant market on Wednesday, after having shot up over 7% the previous session. The company is set to announce its fourth quarter numbers next week. The talk doing the rounds is that a prominent domestic broking firm, known for its strong base of high net worth investors, has bought a sizeable chunk of the stock on behalf of its ‘bulge bracket’ clients. Are they betting on the quarterly numbers?

(Contributed by Santosh Nair & Shailesh Menon)

******************************************

Tax Saving - Planning Options for Employees

Daily News Roundup - Feb 18 2010

Avoid the risk

India Infrastructure

United Bank of India sets IPO price band at Rs 60-66 a piece

PVR

Top Stocks for 2010

NHPC

Stock Picks

Bharti Airtel Limited

Sugar Sector

Src: ET, DP Blog and etc

Sensex may drop to 12K: Shankar Sharma

Sensex may drop to 12K: Shankar Sharma


ET Now caught up with Shankar Sharma, Vice Chairman & Joint MD, First Global to seek his views on where the markets were headed in 2010 and

Not a good time to start buying Mid term picks Top 5 picks of the day Correction offers opportunities

which stocks could be an attractive bet. Excerpts:

Where do you see the markets heading where in a surprising pullback, we have broken that resistance level that we were tracking. We are past 4900 on the Nifty. Do you actually see the markets witnessing a further correction in 2010 and what kind of returns do you expect from equities, especially in emerging markets?

The pullback was very much in order because we had sold off from 17,500 to 15,500. It can easily pull back another 200-500 points on the Sensex. This year is the down year for equities and within the context, emerging markets will do worse than the US markets. The markets that did really well in 2009, that is the BRIC pack, will actually underperform the markets. The markets that did not do that well, like Taiwan or South Korea, have relatively more stable markets than the volatile BRIC pack markets. Overall, this year is the down year for equities by and large.

When you say a down year, what kind of correction do you see both in the short-term and in the long-term?

In the short-term, we definitely do see the markets in the first half coming down 20-30% from the highs of the year, which was 17,500. The markets could easily go down to 12,000-12,500 in the first half and from there, I suspect there will be some measure of recovery. Markets could still ultimately end the year down 10-15% from the close of 2009 which may be around 16,000, but that is a long call or a long short to make just yet. For now, markets are headed lower. However, once they have reached a certain level, then we will see if things have changed enough for them to rally all the way back to close enough to the levels of 2009 December.

Do you think that's going to be a valuation call or is it going to be liquidity driven because we have also just had news that LIC would be pumping in another Rs 15,000 crores by the end of March and other insurance companies are waiting to put more money in. Also, FIIs are bringing in the money. Do you still see corrections coming in?

When the markets sold out 2000 points, the money was still there. These are facile arguments that liquidity ensures the markets will never fall. Throughout the history of the world, there has always been liquidity chasing markets and not markets chasing liquidity and that's the way it is. If the markets have to fall, they will fall. It does not matter whether LIC puts in $2 billion or everybody in the whole world puts in money. I do not waste my time looking at liquidity at all, it makes no difference to broad market trends at all. It might make a difference to thinly traded Z Group stock but other than that, I do not see that being a factor. The overall situation globally is probably headed to be a lot worse than what we saw in 2008. At that time, particularly the second half, we saw the collapse of one investment bank which was not a huge investment bank by any standards, compared to the top 3-4. It was a smallish bank but that itself was large enough to bring down markets substantially and shake the entire world financial system.


1|2|3|4|5|6|Next >

*****************************************

• 2010 is a down year for equities: Shankar Sharma
• ACC resistance seen at Rs 1000: Reliance Money
• On decline around 840-845, Jain Irrigation an attractive buy: Sandeep Wagle
• OnMobile interesting bet with longer term perspective: Paras Adenwala
• Buy Adani Enterprises for target of Rs 570:India Capital Markets
• Buy Fortis Healthcare for target of Rs 170:India Capital Markets

Valuation game hots up: Dozen cos trade at P/E of 100;
analysts chant caution


Tata Steel profit dips to Rs 473 cr




Src: ET

Heard on the street: Punters ramp up NMDC ahead of FPO

Heard on the street: Punters ramp up NMDC ahead of FPO


Punters ramp up NMDC ahead of FPO

The run-up in the share price of the NMDC counter over the past week has once again raised the bogey about valuations among investment bankers managing the company’s impending follow-on public offering. The stock hit a high of Rs 511.95 on February 10, with barely 50% of the trades resulting in delivery. This indicates that punters are ramping up the stock ahead of the FPO, and trying to get institutional investors to bid higher during the auction process.

Institutional investors are said to be showing interest in the stock only around Rs 200-220 levels. This has put the bankers to the issue in a spot, as the prevailing market price is closer to Rs 500. It seems unlikely if the government will be willing to divest stake at such a steep discount to market price.

The issue is said to have come up for discussion at a meeting between the company’s bankers and divestment ministry officials last Saturday. Government officials also debated the rationale for taking the French auction route for the NMDC issue, with some present at that meeting of the view that the methodology needs to be reviewed. NMDC shares closed flat at Rs 485 on Monday.

Traders lap up Titagarh on hopes of Budget boost

Day traders have apparently taken control of the Titagarh Wagons counter ahead of the Railway Budget on February 24. The trigger for the frenzied action in the stock, according to brokers, could be expectations of some measures that would have a positive impact on the company’s prospects.

Titagarh Wagons, one of the leading railway wagon manufacturers in the country, stands to benefit if the government announces introduction of new trains or any such proposal that would push up demand for the company’s products. The stock climbed 17% in just two trading sessions, before ending at Rs 466.6 on Monday.

The spurt in the share price took place amid a significant improvement in volumes as on a daily average basis, 25 lakh shares changed hands on Monday and last Thursday, compared to nearly one lakh shares in the previous two sessions. The interest in the counter, however, was mostly speculative as reflected in low delivery-based volumes. The delivery ratio — the percentage of shares actually delivered in the market — stood 10.7% on Monday and 6.3% on Thursday.

(Contributed by Deeptha Rajkumar & Vijay Gurav)


Src: ET

******************************************

Daily Newsletter - Feb 16 2010

Morning Note - Feb 16 2010

Bharti Airtel - Zain Deal

All India GSM Figures

India Budget Previews

Geodesic

Src: Deadpresident Blog

Bharti shares plunge 10% on Zain deal

Bharti to buy Zain's SA assets for $10.7 bn, street cautious

Bharti shares plunge 10% on Zain deal


MUMBAI - Shares of Bharti Airtel plunged nearly 10 per cent Monday as brokerages gave a thumbs down to the company’s deal with Kuwaiti telecom

Full Coverage: Bharti-Zain deal Stock quote: Bharti Airtel

Zain for its African cellular assets. Brokerages were concerned that the company’s $10.7 billion offer could strain its finances.

Bank of America-Merrill Lynch cut Bharti Airtel to ‘underperform’ from ‘buy’ after the mobile operator began its exclusive talks with Zain. The investment bank said the valuation seems rich, the growth outlook for Zain's African portfolio appears unexciting and a potential deal could materially stress Bharti's balance sheet.

Bharti announced Monday an offer to buy the African assets of Kuwait's Zain telecom for $10.7 billion. Bharti Airtel and Zain Africa "have agreed to enter into exclusive
discussions until 25 March, 2010 for the acquisition of Zain's African unit based on an enterprise value of $10.7 billion," Bharti said in a statement.

A consortium of Asian investors has for months been trying to buy Zain's stakes estimated to be worth $13.7 billion from Kuwaiti family conglomerate Kharafi Group, which is one of the main shareholders in Zain.

Meanwhile, Telecom Minister A Raja commented that the Bharti-Zain deal is good for the industry.

Also Read

→ Telecom sector under pressure; Bharti strongest of the lot: Deepak Mohoni

→ Bharti-Zain deal: Will Sunil Mittal be third time lucky?

→ Bharti to acquire 100% of Zain's African operations: Sources

→ Govt backs Bharti-Zain deal

Ambareesh Baliga, vice president at Karvy Stock Broking feels that the deal seems too expensive for Bharti and although the stock may stand to benefit in the long term, the short term is negative. “This looks a bit expensive for Bharti considering these are not extremely profitable operations. Those are future growth areas. But the growth will come only in 5-8 years time and in the short-term there is a risk of straining Bharti's balance sheet," said Baliga.

Giving a fundamental take on the deal, Romal Shetty, head- telecom, KPMG said, “Bharti’s bid is a step in the right direction to make its footprint in Africa. This is where the next round of growth is going to happen. India is becoming more and more saturated in the coming years. Africa is under-pentrated and has lesser competition thus making the Zean deal an attractive buy for Bharti.”

At 3 pm, shares of Bharti Airtel tumbled 9.11 per cent to Rs 285.85 in reaction to the deal.


Full Coverage: Bharti-Zain deal | Stock quote: Bharti Airtel

**************************************
Check out the Top 10 Fund Houses for the quarter

Market Watch: Nifty hovers around 4800; Bharti, Sterlite down

Inflation hits 14-month high at 8.56% in January

Tata Motors global sales grow by 93% in January

• Vascon Engineers slips below issue price
• Syncom H'thcare surges over 38% on listing

*******************************************

Src: ET, Moneycontrol

Morning Calls

Short covering triggers rally

The market saw a technical pullback via short-covering ahead of a long weekend. The Nifty, which slid to a 2010 low of 4,675 points on Monday, closed at 4,826.85 for a week-on-week gain of 2.4 per cent. The Sensex closed at 16,152 for an identical gain. The Defty rose by 2.7 per cent as the rupee rallied from lower levels. Breadth was good with advances outnumbering declines for the week. However, volumes were low. The FIIs were heavy net sellers, counter-balanced to some degree by moderate domestic institutional buying. The BSE500 was up 2.4 per cent while Midcaps underperformed the major indices, rising only 1.8 per cent.

Outlook: The rally appears to have come on short-covering. There is significant resistance at 4,850 and if the FII attitude doesn’t reverse, there is every chance next week will open weak. On the downside, support between 4,650 and 4,700 remains crucial. On the upside, if 4,850 is broken, a rally till 5,000 is possible.

Rationale: A sharp jump on low volumes ahead of a weekend is characteristic of a short-covering rally. The market would need significant volume expansion to cross 4,850. If it does so, a move past 4,950 would suggest an end to the intermediate downtrend, which has lasted five weeks so far.

Counter-view: Most likely, shorts will be renewed and push the market down to the strong support in the 4,650-4,700 range, followed by range-trading between 4,650 and 4,850. But a dip below 4,650, and especially a close below 4,650, would be a serious danger signal. That would be a Southwards breach of the 200 Day Moving Average, which is between 4,660 (exponential) and 4,684 (simple), and perhaps, the beginning of a new bear market.

Bulls & Bears: The CNXIT index continued to outperform the overall market, gaining 3.6 per cent. The move here was sector-wide. The banking (and financials) sector underperformed, with the Bank Nifty gaining only 1.9 per cent.

Real estate saw a late rally, which could fizzle out soon. Metals saw short-covering, which may continue for a couple more sessions. Sugar and cement scrips also saw a rally as did auto-stocks and in all three cases, there could be a little upside. Oil production and exploration scrips saw speculative investments. In most cases, the rise came on low volumes and clearly seemed to be short-covering or buybacks following sales against delivery. However, a lot of stocks have consolidated at lower levels before moving up.

MICRO TECHNICALS

HIND OIL EXPLORATION
Current Price: Rs 269.95
Target Price: Rs 290

The stock jumped from Rs 229 to current levels in one session on massive volume expansion. This is an unusual, difficult to read pattern. On volumes alone, there should be an upside till Rs 290. Keep a stop at Rs 263 and go long. Raise the stop by 5 units for every 5-unit rise. Book at least 50 per cent profit at Rs 290.

---

SESA GOA
Current Price: Rs 382.70
Target Price: Rs 405

The stock has rebounded from decent support between Rs 355 and Rs 365 to current levels. Volumes are average. If it can close above Rs 385, it has the potential to reach Rs 405. Keep a stop at Rs 375 and go long. Add to the position above Rs 385. Book profits at Rs 405.

---

ORIENTAL BANK
Current Price: Rs 274
Target Price: Rs 255

The stock has shown volume expansion and a lot of volatility, while ranging between Rs 250 and Rs 290 in the past few sessions. It is likely to see a downside in the next week, till at least Rs 265 level and maybe till Rs 255. Keep a stop at Rs 280 and go short. Cover 50 per cent of the position at Rs 265 and reset the stop till Rs 270.

---

JP ASSOCIATES
Current Price: Rs 132.65
Target Price: Rs 140

The stock has bottomed out close to the current levels and it may be set for another up move. A technical recovery to the Rs 140 level is possible. Keep a stop at Rs 130 and go long. Volumes are not great. So a move past resistance at Rs 140 is unlikely.

---

UNITECH
Current Price: Rs 74.80
Target Price: Rs 70

Short-covering has pulled the stock up but this looks like temporary relief. Another selloff next week could push the stock back till support at Rs 70. Keep a stop at Rs 77 and short. Cover 50 per cent of the position at Rs 72 and clear the rest at Rs 70.

Analysts' corner 15-FEB-10 Educomp reported robust performance recording 37.2 per cent year-on-year growth in top-line in the December 2009 quarter.

Attractive risk-reward ratios 15-FEB-10 It appears that the current month premiums are under-estimating the likely volatility ahead of the Budget.

Short covering triggers rally 15-FEB-10 The market saw a technical pullback via short-covering ahead of a long weekend.

Risk and innovation 15-FEB-10 Capital market vision is important as it tells us where we want our markets to head tomorrow.

Costly pipes 15-FEB-10 Lacklustre track record, competitive industry and stiff pricing render Texmo’s IPO unattractive.

Pitching for value 15-FEB-10 Tripling of its capacity and moving up the coal tar pitch value-chain should help Himadri Chemicals meet demand and maintain margins.

Firing on all cylinders 15-FEB-10 ITC’s cigarette business, its cash cow, has been doing well with volumes growing at a robust rate for three consecutive quarters.

Flying higher 15-FEB-10 If the sector is able to control costs and maintain higher load factors going ahead, then consistent profitability could become a reality.

"Be stock-specific, expect moderate returns in 2010" 15-FEB-10 In a new series of interviews, Ajay Parmar talks to Rex Cano about the outlook for 2010, review of corporate earnings, upcoming Union Budget and his approach to investments.

Markets at a glance 15-FEB-10 Volatility was order of the day, as investors were uncertain about global cues.

Value picks 15-FEB-10 Despite the run up in markets in the last one year, many good companies are still available at attractive valuations.

******************************************
'Frontline stocks can rise by up to 35 pc'

Top 5 stock picks | Mid-term picks | D-St's Budget expectations

Nifty resistance zone seen at 4900-5000

Idea Cellular

Bharti Airtel

Videocon Industries

Investor Conference - Feb 14 2010

Tulip Telecom

Transformers & Rectifiers

Consolidated Construction Consortium

Weekly Support and Resistance Levels - Feb 14 2010

SAIL

Cairn India

Src: ET, Business-Standard, DP Blog and etc

FIIs cut exposure to India, shift to safer markets

FIIs cut exposure to India, shift to safer markets

MUMBAI: The Indian stock market has witnessed net foreign fund outflows of Rs 3,550 crore since the start of 2010, making it one of most badly hit markets among emerging markets. A desire to shift a part of their money to safer dollar-denominated assets in the wake of the recent credit turmoil in Europe, concerns over further weakening of the rupee and stretched equity valuations have led foreign portfolio investors to cut their exposure to domestic equities. With a net withdrawal of $754 million in 29 trading sessions (since January), India trails just behind Taiwan ($2,488 million) in terms of foreign outflows, according to Bloomberg. Indonesia and Thailand, with net outflows of $238 million $294 million respectively, are among the other Asian market that have seen foreign capital outflows since the beginning of this year. Around $3 billion has been redeemed from the entire emerging market cluster during the first week of February, say market experts. While much preferred Asian equity hubs witnessed a sell-off, dormant markets like Japan, Philippines, Vietnam and Pakistan witnessed investments flowing in from foreign portfolio investors. South Korea logged inflows to the tune of $290 million since January while the surprise package was Japan, which witnessed inflows worth a whopping $18,868 million. Even if one takes a shorter time-frame from February, Japanese funds were winners as they witnessed seven consecutive weeks of net inflows. Key benchmarks in Japan, Vietnam and Philippines currently trade at 6-12 times price-to-earnings (P/E). In India’s case, despite a near-10% correction, the local market still commands a premium valuation of 20 times trailing P/E, making it a fairly-valued zone for any class of investor. “Japan currently offers investors a chance to gain on currency arbitrage. Moreover, asset prices (especially equities) in Japan are cheap. Astute cross-border investors will try to make most of this situation by moving their investments into Japanese shares,” said Gopal Agarwal, equities head, Mirae Asset Global Investment. In India’s case, according to market experts, the sell-off has been more because of global factors and stretched stock valuations. The sell-off in key emerging markets like India started after US President Barack Obama decided to limit financial risk-taking by banks. The sell-off aggravated after the credit crisis in Greece and Portugal. The hardening of the dollar also resulted in foreign investors shifting their rupee-based investments to dollar denominated assets. A rise in (dollar) value (against the rupee) increases the borrowing cost for foreign investors who had borrowed dollars to invest in Indian market. They exit their rupee investment at higher levels, pocketing currency value differential along with portfolio gains, if any. “Investors will start coming back once the rupee moves up to 48 - 49 levels,” said Mr Agarwal. Echoing his views, Ambareesh Baliga, vice-president, Karvy Stock Broking said: “FIIs are likely to stay away from Indian shares until there is clarity in world markets. It may be 2-3 months before they start reinvesting in Indian shares,” he said. According to Mr Baliga, while the market may not see a deep fall from current levels; it probably will be locked in a narrow range at lower levels. Investors should be cautious while investing in these markets, he added.

Other Stories:

The euro's final countdown?

China's 2nd CRR hike in four weeks

• Realty stocks ripe for the picking as IPO pipeline develops cracks: CLSA
• Tube Investments buys controlling stake in France’s Sedis Group

Subroto Bagchi: 'No substitute for hard work'

Jubilant Foodworks

India Strategy - Feb 13 2010

NTPC

Educomp Solutions Ltd

Dabur India

NHPC

Essar Oil

Capital Goods and Engineering

India Financials - Base Rate

Idea Cellular

Dabur, India Strategy,HDFC Bank,Banking, Automobiles

Mindtree

Biocon

Sector Report

Src: ET, DP Blog and etc

Record industrial growth strengthens case for stimulus exit

Record industrial growth strengthens case for stimulus exit


With the Index of Industrial Production (IIP) rising 16.8 per cent on the back of record manufacturing growth, the pressure has increased on the government and the Reserve Bank of India (RBI) to consider an early exit from the stimulus measures of the past 15 months.

Manufacturing, with an almost 80 per cent weight in the index, grew 18.46 per cent compared to a 0.6 per cent decline in the same month in 2008.

The electricity sector, however, grew far more slowly at 5.4 per cent (up from 1.59 per cent a year ago), prompting analysts to suggest that the industrial recovery was not broad-based enough to merit an immediate withdrawal of stimulus measures.

The mining sector’s 9.5 per cent growth was below double-digit levels, recorded three times in the previous six months, but much higher than the 2.17 per cent growth achieved in December 2008.

Manufacturing growth was propelled by the robust performance of capital goods (38 per cent), consumer durables (46 per cent) and intermediate goods (21.7 per cent). In sharp contrast, consumer non-durables grew only 3.7 per cent, once again pointing to the narrow base of the industrial recovery.

	Mining	Mfg	Elcty	General
2008-09	2.6	2.8	2.8	2.8
2009-10	8.5	9	5.8	8.6
(Apr-Dec)

The low base effect — industrial output in December 2008 fell a quarter per cent — also contributed to the record December numbers. On a month-ago basis (with no seasonal adjustments), however, the December 2009 performance showed an industrial growth rate of 10.81 per cent, the highest since the industrial slowdown began in the third quarter of 2008.

On a month-ago basis (with no seasonal adjustments), however, the December 2009 performance showed an industrial growth rate of 10.81 per cent, the highest since the industrial slowdown began in the third quarter of 2008.

Finance Minister Pranab Mukherjee expressed satisfaction at the numbers and said the third-quarter GDP growth numbers would be strengthened by the IIP figures. “It is quite encouraging and I do hope that the third-quarter GDP figures will also be encouraging…It will get reflected in the overall GDP,” Mukherjee told reporters.

Mukherjee’s statement comes after several positive economic indicators were released during the week, all of which augured well for private investment prospects. These indicators included the sharp rise in the business confidence index to a two-year high, a 14 per cent growth in exports and a healthy flow of foreign investments estimated at over $20 billion in the first nine months of the current financial year (compared to $21 billion last year).

Exuding similar optimism, D K Joshi, Crisil India’s principal economist, said: “It is definitely better than any forecast. The high growth in manufacturing and consumer durables have been sustained and that is a big positive surprise”.

Joshi added a caveat, however, observing that “The data is getting more and more broad-based but it still continues to be quite narrow”. He also pointed out that the base effect had a role to play in the December numbers and sustaining the high level would be difficult even though the month-on-month growth would continue.

Jyotinder Kaur, economist with HDFC Bank, differed. “The numbers are encouraging because they clearly point to a sequential spurt and it is across the board. Considering the strong performance in the past few months the numbers have reached a level where they are not purely driven by stimulus measures. So the growth, even though not this high, can be sustained with a gradual pull back of the stimulus,” said Kaur.

Some analysts also suggested that the number might lead to a rise in policy rates by the RBI before the fourth quarter policy rates.

“With industrial production growing at a record pace, capital goods production surging, business confidence high and foreign direct investment rapidly returning, there are now a number of signs that private investment is set for strong growth. This should facilitate the RBI putting a greater focus on inflation. The current situation no longer necessitates a repo rate of 4.75 per cent and a cash reserve ratio of 5.75 per cent, which are low by historical standards and more appropriate for a slow recovery scenario,” said Nikhilesh Bhattacharyya, economist with Moody’s economy.com.

The cumulative growth rate for April-December of the current financial year stands at 8.6 per cent against a low 3.6 per cent during the corresponding period in the previous fiscal. Industrial growth, on a cumulative basis, for the third quarter of the current fiscal stands at 13 per cent,compared to one per cent in the comparable period last year.

Consumer durables led the growth in manufacturing by expanding at a significant rate of 46 per cent in December 2009. The sector had contracted 4.2 per cent in the corresponding period in 2008. Consumer non-durables also showed a marginal acceleration in growth rate at 3.7 per cent compared to 3.2 per cent last year.

Intermediate goods, which were the worst hit due to the downturn and had contracted 8.9 per cent in December 2008, also posted a robust growth of 21.7 per cent in December 2009.

Src: Business-Standard

Europe prepares to help Greece out of crisis

Europe prepares to help Greece out of crisis



BRUSSELS: EU leaders are under increasing pressure to lend support to cash-strapped Greece when they meet in Brussels on Thursday, with attention increasingly on offering financial guarantees to soothe the markets.

On Wednesday, finance ministers from the European single currency area planned phone talks with European Central Bank president Jean-Claude Trichet, a European Commission spokesman said, in an attempt to firm up a deal.

So sensitive are the markets that the news Trichet was leaving a central bankers' meeting in Sydney early to attend the EU summit on Thursday was enough to bolster speculation that a deal was in the works.

That in turn eased worries over Europe's debt troubles and brought most markets higher following a rally on Wall Street.

It's the kind of boost that the EU leaders are hoping to encourage.

"At the moment it's a vicious circle," one EU insider said. "You have the Greek crisis, then massive media coverage that then leads to market movements which makes the crisis worse, which leads to more media speculation."

The 27 heads of state and government will begin meeting at 10:15 (0915 GMT) Thursday for their emergency summit focussed on the economic crisis in Europe.

The meeting was called by new EU president Herman Van Rompuy, who is emerging from the self-imposed shadows where he has dwelt since his appointment to the post in December.

So far "there is no agreement" on a plan to help Greece, which is suffering under a massive budget deficit which is heightening fears that Athens will find borrowing increasingly difficult, one informed source said.

However the signs were multiplying that a support mechanism for Greece will emerge.

An official from the conservative party of German Chancellor Angela Merkel indicated that preparations were underway in Berlin for a support plan.

Germany is looking to lead an EU "firewall" to contain the Greek debt crisis, possibly by guaranteeing loans to calm fears of a government default, press reports said on Wednesday.

The Financial Times Deutschland said Finance Minister Wolfgang Schaeuble was working on both a bilateral basis and at the European level on putting together a package to help Athens.

A "standing facility" to show that money is available, a kind of cheque guarantee, is being considered to provide market confidence for Greece.

"If this can be done by providing some extra standing facility that may or may not in due course have to be used that would in itself be very helpful," one EU official said.

Athens is pressing on with efforts to slash expenditure and raise revenue to narrow its 12.7 percent deficit -- more than four times the eurozone limit of three percent of gross domestic product that a host of European countries are also flouting.

The Greek crisis has driven up borrowing costs for governments across Europe, with pressure mounting on a number of other heavily-indebted eurozone members, and sent the euro sliding against the dollar.

Royal Bank of Scotland economist Jacques Cailloux said a facility of 50 or 100 billion euros available to Greece would act as a useful riot shield.

Other forms of aid could also be considered.

Google gives Gmail a 'Buzz' to challenge Facebook, Twitter 10 Feb 2010, 0233 hrs IST, AGENCIES

Save Print EMail Share Comment Text:

Topics: Internet Google Facebook social networking Orkut Twitter Buzz

SAN FRANCISCO: Google on Tuesday gave its free email service a "Buzz," adding Twitter and Facebook style social networking features. Significant China related cyber events Timeline: Google's China woes Google's new Wave Google Google Chrome Brain behind Google Chrome Google Buzz product manager Todd Jackson equated the enhanced offering to "an entirely new world in Gmail" during an unveiling presentation at the Internet giant's headquarters in Mountain View, California. Buzz began rolling out on Tuesday with Google Web-based email service getting updates about what friends are doing online and ways to share video, photos and other digitized snippets with others of one's choosing. As is the case with wildly popular microblogging service Twitter, Buzz lets users "follow" people that share updates with the world. Google also unveiled a handful of new products designed to make the new social networking features suited to mobile devices, like smartphones based on Google's Android operating system. Also Read → Google warns Chinese knock-off to stop using logo → Disney, Google eye deal with China bus media firm → Google warns Chinese copycat website: report → Google facing many risks in standoff with China → Google, NSA to team up in cyberattack probe Google's move comes as a direct challenge to social-networking stars Facebook and Twitter, which thrive on enabling people to share experiences, activities and thoughts as they go through their days. In addition to the Buzz features for Gmail, Google said it is launching a special mobile application for Buzz, as well as weaving Buzz technology into the mobile versions of its flagship Web site and its maps products. Google has tried to ride the social networking wave before, launching the Orkut social network in 2004. But while Orkut is big in certain overseas markets, like Brazil, it has failed to attract as many users as social giants like Facebook and MySpace in the United States. In building a social network on top of an email product, Google is following in the footsteps of Yahoo, which has taken a similar approach in efforts to keep up with Facebook. Yahoo! added a similar feature to its email program, Yahoo Mail, last year, allowing users to see whether friends have uploaded a photo to a photo-sharing site such as Flickr. In what could signal an escalating battle between Google and Facebook, the leading social-networking service celebrated its sixth birthday last week with changes that included a new message inbox that echoes the Gmail format. Gmail is the third most popular Web based email in the world, with 176.5 million unique visitors in December, according to comScore. Microsoft Corp's Windows Live Hotmail and Yahoo Inc's Mail were No 1 and No 2, with 369.2 million unique visitors and 303.7 million unique visitors respectively.

Src: ET