Tuesday, January 31, 2012

TECHNICAL BOUNCE

Local bourses trading in the fine contour have enticed some more gains, however broader indices barring the trend, have trimmed some of their gains.  Borrowing positive cues from global front, benchmark indices staged a technical bounce back post previous session's massacre. Regional counterparts trading higher have mainly buoyed the sentiment. Asian stocks soared after encouraging comments from the Greek prime minister on debt talks, the euro zone's move toward a closer fiscal union and positive economic data in Japan, but earnings concerns weighed on Tokyo exporters and China steelmakers. The US future indices are showing an uptick in the screen trade.
Back home, although buying was witnessed across the space, however, stocks from Bankex, oil & Gas and Information technology counters have mainly fuelled the rally. However, stocks from Capital Goods space are the only laggards among the space. The 30 share barometer index- Sensex- on BSE surging over 150 points is trading over 17000 mark, while widely followed 50 share index- Nifty-on NSE adding over 50 points is trading over 5100 level. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1318:723, while 84 shares remained unchanged.
The BSE Sensex is currently trading at 17,046.17, up by 182.87 points or 1.08%. The index has touched a high and a low of 17,081.54 and 16,965.58 respectively. There were 21 stocks advancing against just 9 declining one's on the index.
The broader indices had trimmed some gains; the BSE Mid cap and Small cap indices were up by 0.80% and 0.73% respectively. The top gaining sectoral indices on the BSE were, Bankex up by 2.06%, Oil and Gas up by 1.75%, IT up by 1.47%, Realty up by 1.40% and TECK up by 1.32% while, CG down by 1.06% was the sole loser on the index.
The top gainers on the Sensex were SBI up by 2.78%, ICICI Bank up by 2.59%, Bajaj Auto up by 2.42%, RIL up by 2.21% and  TCS up by 2.11%.
On the flip side, L&T down by 1.63%, Coal India down by 1.52%, Maruti Suzuki down by 1.35%, NTPC down by 1.02% and HUL down by 0.68% were the only losers on the Sensex.
Meanwhile, reflecting slowness in industrial activity, the overall growth of eight core industries has dipped to almost half in December as compared to the same period in the last fiscal. According to the data released by the Commerce and Industry Ministry, the combined index for the month of December 2011 grew at the rate of 3.1% as compared to 6.3% growth in December 2010. 
During April-December 2011-12, the cumulative growth rate of the core industries was 4.4% as against their growth at 5.7% during the corresponding period in 2010-11. The eight core industries namely coal, steel, cement, refinery products, electricity, natural gas, fertilizers and crude oil have a combined weight of 37.90% in the Index of Industrial Production (IIP), and are considered fair indicators of the growth of infrastructure and factory output in the economy. The lack of demand due to the global slowdown and the high interest rate regime seemed to have hit investments in the core industries, bringing down their growth rates.
The most drastic dips came in the growth of crude oil, petroleum refinery products and steel. These three products also happen to be the heaviest in the index. Crude Oil production (weight: 5.22%) registered a growth of (-) 5.6% in December 2011, a drastic fall as compared to its growth at 15.8% in December 2010. Cumulatively crude oil production registered a growth of a meager 1.9% during April-December 2011-12, compared to its growth at 12.0% during the same period of 2010-11.
Petroleum refinery production (weight: 5.94%) had a growth of 0.8% in December 2011, down substantially from its growth of 8.3% in December 2010. In cumulative terms petroleum refinery production registered a growth of 4.1% during April-December 2011-12, compared to its 1.7% growth during the same period of 2010-11. Steel production (weight: 6.68%) had a growth rate of 2.2% in December 2011 against its 9.4% growth in December 2010. Cumulatively steel production had a 7.5% growth during April-December 2011-12 compared to its 8.3% growth during the same period of 2010-11.
The sectors that saw a positive growth were cement, electricity and coal. Cement production registered a growth of 13.3% in December 2011 against its (-) 2.2% growth in December 2010. The cumulative growth of cement production was 5.3% during April-December 2011-12 compared to its 4.4% growth during the same period of 2010-11.
Electricity generation had an 8% growth in December 2011 compared to its 5% growth in December 2010. Electricity generation on the other hand had a cumulative growth of 9.2% during April-December 2011-12 as against its 4.7% growth during the same period of 2010-11. Moreover, coal production had a growth of 5.6% in December 2011 compared to its growth at 3.8% in December 2010. However, in cumulative terms coal production had a negative growth of (-) 2.7% during April-December 2011-12 compared to its growth at 0.8% during the same period of 2010-11. 
The industrial production can be expected to turn around, given that the RBI goes for a rate cut in the near term. If this happens, we could see some improvement in GDP numbers of the third quarter of FY12, as compared to its second quarter. Industrial output had contracted in October by 4.7%, but rebounded by a 5.9% growth in November. With the recent numbers showing sluggishness, industrial production in December is expected to slowsown due to the high base effect and also due to the recent lag of improvement in coal output.  
The S&P CNX Nifty is currently trading at 5,142.90, higher by 55.60 points or 1.09%. The index has touched a high and a low of 5,156.65 and 5,120.15 respectively.  There were 39 stocks advancing against just 8 declining one's on the index, while 3 shares remained unchanged.
The top gainers of the Nifty were SBI up by 3.02%, ICICI Bank up by 2.65%, PNB up by 2.36%, Reliance up by 2.30% and Axis Bank up by 2.12%.
On the flip side, Siemens down by 1.96%, Coal India down by 1.67%, L&T down by 1.51%, Maruti Suzuki down by 1.32% and JP Associate down by 1.28% were the major losers on the index.
All the Asian equity indices were trading in the green; Shanghai Composite gained 0.19%, Hang Seng surged 0.71%, Nikkei 225 added 0.17%, Seoul Composite inched up 0.02%, Taiwan Weighted gained 0.59% and Jakarta Composite inched up by 0.01%. 

Monday, January 30, 2012

PROFIT BOOKING

Weakness increased in the market with significant losses in the rate-sensitive sectors. Sensex and Nifty were down sharply in the red. Investors were trading cautiously tracking weak global cues and pressing sales in several blue chip stocks from across various sectors. Worries about the global economy rose followed by slower than expected US GDP growth in the October-December quarter. Profit taking after previous week's strong gains also contributed to the weak start. On sectoral front all were trading in red. Capital goods, power, metal and bank stocks were among the major losers in opening trades. On the global front, Asian markets were slipped deeper into the red in late morning trade. Back home, the market breadth favoring the negative trend; there were 1,037 shares on the gaining side against 1,346 shares on the losing side while 109 shares remained unchanged.
The BSE Sensex is currently trading at 17,013.95, down by 220.03 points or 1.28%. The index has touched a high and a low of 17,138.04 and 16,994.22 respectively. There were 8 stocks advancing against 22 declining ones on the index.
The broader indices also following the benchmarks; the BSE Mid cap and Small cap indices were trading down by 0.56% and 0.54% respectively.
There were no gaining sectoral index on the BSE. While, CG down by 2.70%, Power down by 1.72%, Bankex down by 1.67%, Auto down by 1.25% and CD down by 1.19% were the top losers on the index.
The top gainers on the Sensex were Sun Pharmaceuticals up by 1.91%, Jindal Steel up by 0.87%, Bajaj Auto up by 0.64%, GAIL up by 0.60% and Hero MotoCorp up by 0.60%.
On the flip side, BHEL down by 8.35%, Sterlite Industries down by 3.95%, Bharti Airtel down by 3.48%, M&M down by 2.72% and ICICI Bank down by 2.66% were the top losers on the Sensex.
Meanwhile, India's premier apex chamber, Associated Chambers of Commerce and Industry of India (ASSOCHAM), has sought exception from basic customs duty and countervailing duty on thermal or steam coal from the finance ministry. In a communication to the ministry, ASSOCHAM secretary general D S Rawat has stated that the demand for coal far exceeds its supply and hence it needs to be imported in large quantities. 
Thermal generation (coal, lignite and gas) of power still constitutes 65% of total generation capacity and domestic coal supply is just not sufficient to meet these requirements. Additionally, environment stipulations make it essential for coal companies to import high quality coal for blending with lower grades of indigenous coal.
Imposing customs duty not only raises the cost on imports but also has a cascading effect on the demand for all goods and services in the economy. Amid global recessionary trends, it is imperative that the Indian economy maintains a steady and accelerated rate of growth and for this the power sector has to play its legitimate and designated role. But this was hampered due to the high customs duties which lead to an increase in the power tariff by 25 paise per unit, and go against the basic tenets of ensuring long-term fuel sustainability and energy security.
Imported coal is subject to imposition of 7.55% customs duty for imports from Indonesia and 10.83% for imports from other countries. In addition, there is countervailing duty of 5%. This distorts the field in favour of domestic coal based projects and discourages investments in imported coal based projects, threatening shortages. Moreover, risk profiles of independent power producers are adversely affected due to volatility in prices of imported coal, unpredictable long-term pricing arrangements, instability in shipping and exchange rates, logistical and infrastructural constraints for moving imported coal from ports to power stations.
ASSCHOM suggested that to bridge the gap in demand and supply, emphasis should be on importing thermal coal or acquiring new mines abroad. It has further predicted that shortage of domestic coal is likely to continue to persist over the medium term as the additional coal generation programme is not likely to catch up with the growing demands of capacity addition to align with economic growth targets.
The S&P CNX Nifty is currently trading at 5,134.85, lower by 69.85 points or 1.34%. The index has touched a high and a low of 5,166.15 and 5,128.80 respectively. There were 13 stocks advancing against 36 declines and one remained unchanged on the index.
The top gainers of the Nifty were RPower up by 3.55%, Sun Pharma up by 2.12%, RCOM up by 0.88%, Jindal Steel up by 0.83% and GAIL up by 0.82%.
On the flip side, BHEL down by 8.24%, Sterlite Industries down by 4.35%, JP Associates down by 3.46%, Bharti Airtel down by 3.30% and M&M down by 2.98% were the major losers on the index.
Most of the Asian equity indices were indicating a somber sentiment; Shanghai Composite lost 0.87%, Hang Seng slid 0.77%, Jakarta Composite plunged 1.89%, Nikkei 225 surrendered 0.58%, Straits Times skid 0.73% and Seoul Composite plummeted 1.26%.
On the flip side, Taiwan Weighted up by 2.40% was the lone gainer amongst the Asian pack. 

GAP DOWN START

The Indian equity markets have made a gap down start as investors booked their profits recorded in the previous four sessions amid a weak trend in other Asian markets. Moreover, there was no debt deal yet, which is even unlikely before European Union Summit that would be started today. Fitch downgraded Italy and Spain among others last week. Back home, NSE's Nifty and BSE's Sensex declined below their crucial 5,200 and 17,100 level respectively in opening trade. Dismal third quarter performance of BHEL on margin front also weighed down the markets sentiment. Power equipment major slumped more than 8% as the company's operating profit margin (OPM) declined sharply in Q3 FY12. NTPC also declined on poor Q3 results. However, sugar stocks rose after Prime Minister Manmohan Singh constituted an Expert Committee under the Chairmanship of C Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector. On the sectoral front, fast moving consumer goods and software remained the only gainers while, capital goods, power and metal witnessed the most selling pressure, dragging down the Sensex. Moreover, the broader indices too were struggling to get some traction and the market breadth on the BSE was negative; there were 698 shares on the gaining side against 801 shares on the losing side while 61 shares remained unchanged. 
The BSE Sensex opened at 17,138.04; about 95 points lower compared to its previous closing of 17,233.98, and has touched a low of 17,056.18 while high remained its opening.
The index is currently trading at 17,080.71 down by 153.27 points or 0.89%. There were 7 stocks advancing against 23 declines on the index.
The overall market breadth has made a negative start with 44.74% stocks advancing against 51.35% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices declined by 0.41% and 0.24% respectively.
The only gaining sectoral indices on the BSE were, FMCG up by 1.34% and IT up by 0.02%. While, CG down by 2.63%, Power down by 2.15%, Metal down by 1.76%, Bankex down by 1.37% and Realty down by 1.16% were the top losers on the index.
The top gainers on the Sensex were Bajaj Auto up by 1.09%, Sun Pharma up by 0.96%, GAIL up by 0.74%, Hero MotoCorp up by 0.71% and Wipro up by 0.56%.
On the flip side, BHEL was down by 7.93%, Sterlite Industries was down by 3.20%, Bharti Airtel was down by 2.56%, Hindalco was down by 2.46% and Tata Steel was down by 2.46% were the top losers on the Sensex.
Meanwhile, India and 31 countries have joined hands to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. The convention sends a strong signal to individuals and companies that it will no longer be easy to evade taxes. It is of greater significance to India as it will give a further boost to the efforts of the Government in bringing the Indian money illegally stashed abroad.
The convention was signed by Sanjay Kumar Mishra, Joint Secretary, Foreign Tax & Tax Research Division, Department of Revenue. The instrument till now was available only for members of OECD and Council of Europe. It was amended in 2010 and is now open for all countries since June 2011. Many more countries are expected to sign the Convention in future.
This instrument is multilateral and a single legal basis for multi-country co-operation as against the DTAAs/TIEAs which are bilateral. It not only facilitates the exchange of information, but also provides for assistance in the recovery of taxes. It allows tax officials to enter into the territory of the other country to interview individuals and examine records. The Convention also allows exchange of past information in criminal tax matters. The information received under the convention can also be used for other purposes besides those related to tax co-operation, for example to counter money laundering with the approval of the supplying state.
Present signatories to the amended Convention are: Argentina, Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Georgia, Germany, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom, and the United States.
The S&P CNX Nifty opened at 5,163.55; about 41 points lower compared to its previous closing of 5,204.70, and has touched a high and a low of 5,166.15 and 5,147.60 respectively.
The index is currently trading at 5,157.45, lower by 47.25 points or 0.91%. There were 15 stocks advancing against 35 declines on the index.
The top gainers of the Nifty were RPower up by 2.78%, Sesa Goa up by 1.42%, Sun Pharma up by 1.16%, Bajaj Auto up by 1.06% and GAIL up by 0.93%.
On the flip side, BHEL down by 7.93%, IDFC down by 3.73%, Sterlite Industries down by 3.31%, JP Associates down by 3.18% and SAIL down by 2.47%, were the major losers on the index.
Most of the Asian equity indices were trading in the red; Shanghai Composite was down 7.42 points or 0.32% to 2,311.70, Hang Seng was down 100.35 points or 0.49% to 20,401.32, Jakarta Composite was down 65.60 points or 1.65% to 3,920.81, Nikkei 225 was down 41.62 points or 0.47% to 8,799.60, Straits Times was down 16.55 points or 0.57% to 2,899.71 and Seoul Composite was down by 19.35 points or 0.98% to 1,945.48.
On the flip side, Taiwan Weighted was up by 186.26 points or 2.57% to 7,419.95. 

Friday, January 27, 2012

MARKETS GAINING GROUND

After drifting to intraday lows in the late morning session, the benchmark equity indices have been steadily gaining ground and heading towards the psychological 5,200 (Nifty) and 17,200 (Sensex) resistances. The frontline indices traded with around half a percent gains as they extended the uptrend for third straight session after sentiments got support from encouraging weekly inflation data which showed that food inflation remained in the negative terrain for fourth straight week. The first day of a new Futures and Options series saw investors pile up hefty positions in the Consumer Durable and heavyweight Oil & Gas counter as the two sectors spurted over two percent each. Meanwhile all sugar stocks including Bajaj Hindustan, Shree Renuka and Balrampur Chini rallying sharply on reports that Prime Minister Manmohan Singh has formed expert committee to examine issues concerning the sugar industry and also the deregulation of the sector. However, the rate sensitive counters which have been in a stupendous uptrend of late witnessed some profit booking as the high beta Realty sector plummeted around two percent, being the top laggard in the BSE sectoral space followed by the Banking index which plunged about a percent. Meanwhile, earnings announcement from Canara Bank disappointed the street and got pounded by over two percent however Bank of India got commended for its third quarter performance as it rocketed over five percent post result announcement. In the global space, stock markets in Asia largely exhibited cautious trends while the European stock futures too are indicating a lower opening for the markets there as investors eye negotiations between private bondholders and the Greece's government over the nation's debt trouble.
Moreover, the broader markets traded on a strong note with over half a percent gains, outperforming their larger peers. The bourses rose on weak volumes of around Rs 0.50 lakh crore as it is the first day of a new F&O series. The market breadth on BSE was in favor of advances in the ratio of 1593:1014 while 100 scrips remained unchanged.
The BSE Sensex is currently trading at 17,160.24 up by 83.06 points or 0.49% after trading as high as 17,258.97 and as low as 17,106.57. There were 16 stocks advancing against 14 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap index rose 0.49% and Small cap soared 0.93%.
On the BSE sectoral space, Consumer Durables up 2.25%, Oil & Gas up 2.12%, Metal up 1.78%, TECk up 1.63% and IT up 1.41% were the major gainers while Realty down 1.74%, Bankex down 0.95%, FMCG down 0.54% and Capital Goods down 0.33% were the only losers in the space.
Tata Motors up 3.84%, Sterlite up 3.60%, Bharti Airtel up 2.92%, RIL up 2.78% and GAIL India up 2.38% were the major gainers on the Sensex, while Bajaj Auto down 3.52%, BHEL down 3.07%, DLF down 2.62%, Hero Moto down 2.31% and SBI down 1.25% were the major losers in the index.
Meanwhile, India's weekly food inflation, measured by the Wholesale Price Index (WPI), continued to remain in the negative terrain for the fourth consecutive week in the week ended January 14, 2012 as it moderated to -1.03 from its previous levels of -0.42% for the week ended January 7. The decline in inflation can largely be attributed to drop in the price of vegetables, especially onions and potatoes and wheat.
Owing to the sharp slump in the rate of price rise in the recent times, the Reserve Bank of India in a surprising move cut the cash reserve ratio for the first time since 2009 and hinted at future interest-rate cuts in its policy review meet earlier in the week. The RBI, even while maintaining its anti-inflationary stance attempted to ease the tight liquidity pressure on the economy by cutting the CRR and infusing Rs 32,000 crore into the Indian banking system. The central bank lowered its economic growth forecast for the current fiscal to 7% from 7.6% earlier, in addition credit growth estimates too were lowered to 16% from 18% while the central bank kept inflation forecast unchanged.
According to the data released by the Ministry of Commerce and Industry, the index for 'Food Articles' group rose by 0.3% to 191.4 from 190.9 for the previous week due to higher prices of bajra (4%), fish-marine and jowar (3% each), ragi and barley (2% each) and wheat, maize and milk (1% each).  However, the prices of fruits & vegetables, egg, gram, moong and condiments & spices (1% each) declined.
The index for 'Non-Food Articles' group declined by 1.5 percent to 179.9 from 182.6 for the previous week due to lower prices of flowers (18%), raw cotton (7%), sunflower (3%) and raw rubber, castor seed and copra (1% each). However, the prices of gaur seed (17 %), groundnut seed (3%) and raw jute, coir fibre, linseed, soyabean, rape & mustard seed and mesta (1 % each) moved up.
As a result, the index for 'Primary Articles', which accounts for 20.12% of the WPI, remained unchanged at its previous week's level of 199.1 for the week ended January 14. The annual rate of inflation, calculated on point to point basis, stood at 1.89% for the period under consideration as compared to 2.47% for the previous week.
Meanwhile, the index for Fuel & Power group which carries a weightage of 14.91% in WPI remained unchanged at its previous closing levels of 172.7 in the week while annual rate of inflation calculated on point to point basis too stood unchanged at 14.45% in the first week of the year 2012.
The S&P CNX Nifty is currently trading at 5,187.15, higher by 28.85 points or 0.56% after trading as high as 5,217.00 and as low as 5,162.40. There were 28 stocks advancing against 22 declines on the index.
The top gainers on the Nifty were Sesa Goa up 6.13%, Power Grid up 4.07%, Sterlite up 4.04%, SAIL up 3.91% and Tata Motors up 3.90%.
Ranbaxy down 5.81%, BHEL down 3.35%, Bajaj Auto down 3.20%, Hero Moto down 2.09% and DLF down 2.03% were the major losers on the index.
In the Asian space, Hang Seng rose 0.17% and Seoul Composite advanced 0.39%.
On the flipside only Jakarta Composite eased 0.06%, Nikkei 225 slipped 0.09% and Strait Times inched down 0.05%.
Stock markets in China and Taiwan remained closed in observance of Lunar New Year holiday. 

GAINS EXTENDED

Sentiments remained bullish in the morning trade with markets hitting 10-1/2-week highs, extending gains for the fourth straight session on continued buying by funds and retailers amid a firming trend in Asian markets. Moreover, hopes of easing liquidity in the market after the RBI cut cash reserve ratio by 0.50 percentage point in its policy review on Tuesday too buoyed the sentiment. Though, the US markets closed lower on Thursday, after new home sales fell unexpectedly in December and dropped 6.2% to a record low in 2011. Back home, BSE's -- Sensex -- and NSE's -- Nifty - inching towards their crucial, 17,200 and 5,200 mark respectively, supported by index heavyweights Reliance Industries, Infosys and L&T. However, the index came off early day's high on profit booking, led by SBI and ONGC. ON sectoral front, metal witnessed the maximum gain in trade followed by consumer durables and technology while, banking and healthcare remained the only losers on the BSE sectoral space. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,184 shares on the gaining side against 445 shares on the losing side while 52 shares remained unchanged.
The BSE Sensex opened at 17,201.33; about 124 points higher compared to its previous closing of 17,077.18, and has touched a high and a low of 17,258.97 and 17,166.20 respectively.
The index is currently trading at 17,198.95, up by 121.77 points or 0.71%. There were 22 stocks advancing against 8 declines on the index.
The overall market breadth has made a strong start with 70.43% stocks advancing against 26.47% declines. The broader indices were trading inline with benchmarks; the BSE Mid cap and Small cap indices surged 0.65% and 0.90% respectively.
The top gaining sectoral indices on the BSE were, Metal up by 2.27%, CD up by 1.58%, TECk up by 1.26%, IT up by 1.26% and Oil and Gas was up by 1.06%. While, Bankex down by 0.35% and HC was down by 0.27% remained the only loser on the index.
The top gainers on the Sensex were Sterlite Industries up by 3.29%, Hindalco up by 3.10%, Sun Pharma up by 2.69%, Tata Steel up by 2.28% and Tata Motors was up by 1.89%.
On the flip side, HDFC was down by 1.35%, SBI was down by 0.48%, Wipro was down by 0.39%, Maruti Suzuki was down by 0.37% and HDFC Bank was down by 0.20% were the top losers on the Sensex.
Meanwhile, the International Monetary Fund (IMF) in its World Economic Outlook (WEO) has said that the euro area would fall into a mild recession in 2012 after the euro area crisis entered a "perilous new phase" toward the end of last year. This is likely to affect other parts of the world including the emerging and developing economies (EDEs). The report said in 2012-13, growth in EDEs is expected to average 5¾ %, and about ½ percentage point lower than projected in the September 2011 WEO.
The slowdown is expected to be due to the deterioration in the global environment, as well as the slowdown in domestic demand in key emerging economies. However, Asia is still projected to grow most rapidly at 7½ percent on average in 2012-13. Growth projections for India have also been lowered. Indian economy is expected to grow at 7 % this year and 7.3 % in 2013. Both figures are lesser than its September estimates of 7.5% and 8.1% respectively.
The report suggests that in emerging and developing economies, the near-term focus should be on responding to moderating domestic demand and slowing external demand from advanced economies, while dealing with volatile capital flows. Those economies that suffer from both relatively high inflation and public debt, including India and various economies in the Middle East, may need to take a more cautious stance on any policy easing.
On the whole, global output is projected to expand by 3.3% in 2012, substantially lower (-0.7%) than its estimates in the September WEO.
The S&P CNX Nifty opened at 5,216.75; about 58 points higher compared to its previous closing of 5,158.30, and has touched a high and a low of 5,217.00 and 5,177.45 respectively.
The index is currently trading at 5,184.50, higher by 26.20 points or 0.51%. There were 34 stocks advancing against 16 declines on the index.
The top gainers of the Nifty were Sesa Goa up by 6.48%, Hindalco up by 3.31%, Sterlite Industries up by 3.21%, SAIL up by 3.10% and Sun Pharma up by 2.65%.
On the flip side, Dr Reddy down by 5.41%, Ranbaxy down by 4.09%, PNB down by 1.47%, IDFC down by 1.43% and HDFC down by 1.30%, were the major losers on the index.
Asian markets were trading mixed; Jakarta Composite was up 5.56 points or 0.14% to 3,988.99, Straits Times was up 0.34 points or 0.01% to 2,894.77 and Seoul Composite was down 0.57 points or 0.03% to 1,957.75.
On the flip side, Nikkei 225 was down by 17.22 points or 0.19% to 8,832.25 and Hang Seng was down by 7.18 points or 0.04% to 20,431.96. 

Wednesday, January 25, 2012

SHORT COVERING

Indian equity markets are gradually gaining momentum as the January series Futures and Options contract expiry nears in the session. The January series has already been one of the best performing series in around a year's time and with the benchmarks continuing to capitalize on the momentum the gains at the end of series are only going to be higher. The psychological 5,150 (Nifty) and 17,050 (Sensex) levels proved as strong supports as the frontline gauges got a technical bounce from those levels and are steadily heading towards the 5,200 (Nifty) and 17,150 (Sensex) resistances. Sentiments remain sanguine as investors are covering hefty short positions not only in heavyweight stocks but largely across the board a day after the RBI kept key policy rates unchanged but by cutting the CRR to 5.5% from 6% the central bank infused Rs 32,000 core into the Indian banking system. The PSU counter on BSE remained the top gainer in the sectoral space with over a percent gains followed by the TECk sector which too soared with similar gains. Though there appeared no sectoral laggard, however some profit booking was evident in Banking and Capital Goods counters which were top sectoral performers in the previous session as majors like ICICI Bank, HDFC Bank and L&T have shed some part of the gains they amassed yesterday. Meanwhile, investors commended Bank of Baroda for announcing encouraging quarterly earnings while Union Bank of India got punished for reporting a decline in profits and sharp increase in provisioning. In the global space, stock markets in Asia largely exhibited sanguine trends on getting support from the rally in technology shares after Apple Inc reported record-smashing quarterly earnings that saw the company double its profits and sell more products than ever before. The European stock futures too are indicating a higher opening for the markets there as investors await US Federal Reserve's monetary policy and interest rate forecasts announcement scheduled later in the global day.
Moreover, the broader markets capitalized on the momentum and traded on a strong note with over a percent gains, outperforming their larger peers by a fat margin. The bourses rose on extremely strong volumes of over Rs 1 lakh crore ahead of January series futures and options contract expiry later in the day owing to a national holiday on the last Thursday of the month. The market breadth on BSE was in favor of advances in the ratio of 1642:873 while 116 scrips remained unchanged.
The BSE Sensex is currently trading at 17,093.82 up by 98.05 points or 0.58% after trading as high as 17,110.02 and as low as 17,016.69. There were 20 stocks advancing against 10 declines on the index.
The broader indices were trading on a positive note; the BSE Mid cap index surged 1.13% and Small cap soared 1.32%.
On the BSE sectoral space, PSU up 1.26%, TECk up 1.19%, Metal up 1.15%, IT up 1.15% and Auto up 0.99% were the major gainers while there were no losers in the space.
Tata Motors up 2.48%, Coal India up 2.38%, Maruti Suzuki up 2.32%, Tata Steel up 2.28% and Sterlite up 2.11% were the major gainers on the Sensex, while Jindal Steel down 1.99%, Tata Power down 0.88%, Cipla down 0.80%, ICICI Bank down 0.69% and L&T down 0.57% were the major losers in the index.
Meanwhile, in its annual report, Global Employment Trends 2012, the International Labour Organisation (ILO) has said that in the backdrop of a global slowdown, South Asia region has witnessed the most robust growth. Growth in India, Sri Lanka and Bangladesh has been by 7.8, 7.0 and 6.1% in 2011, respectively as compared to the world average of 4%. With its large domestic economy, India is likely to weather the latest global slowdown better than most, but it is struggling with stubborn levels of inflation despite monetary tightening. The growth in the region has been attributed to the rapid rise in labour productivity rather than an expansion in employment. Until the 2000s, employment and labour productivity grew at similar rates. However, in the past decade, increased labour productivity has taken over as the driver of growth in the South Asia.
 This situation is prominent in India, where total employment grew by only 0.1 % from 2005-2010 (from 457.9 million in to 458.4 million),while labour productivity grew by more than 34% in total over this period. A major reason for the slow growth in employment in recent years is the fall in female labour force participation. This has been the most pronounced in India, where the participation rate for women fell from 49.4 % in 2004-05 to 37.8 % in 2009-10 for rural females and from 24.4 % to 19.4 % for urban females. This drop in participation can only partly be explained by the strong increase in enrolment in education, because it has been evident across all age groups.The report further says that far more important in the South Asian context, is the persistence of low-productivity, low-pay jobs, which are mostly located in the agricultural and urban informal sectors.
ILO has said that some countries like India, are however showing a structural shift where the share of employment in agriculture has decreased from 59.8% in 2000 to 51.1 % in 2010.India has also witnessed a rise in real wages between 2004-05 and 2009-10 for males and females in both rural and urban areas in India. Moreover, wages have improved not only for regular wage and salaried workers but also for casual ones. Working poverty, however, based on the $2 a day international poverty line, persists at the highest  levels in South Asia. South Asia still accounts for almost half of the world's working poor (46.2 % in 2011).Overall, the worsening economic conditions will make it more challenging for the South Asia region to promote the creation of productive jobs in the non-farm sector and continue the battle against the persistence of informality, vulnerable employment and specific barriers for women and youth in the labour market, the report said.
On its overall global view, ILO has said that global economy will need to create 600 million jobs over the next decade to meet the ''urgent challenge'' of tackling the legacy of unemployment left by recession and to find work for those entering the labour force. ILO said that three years of ''continuous crisis conditions'' had left 200 million jobless. It estimated that a further 400 million jobs - 40 million a year - would be needed over the next decade to absorb growth in the international labour force.
The S&P CNX Nifty is currently trading at 5,156.45, higher by 29.10 points or 0.57% after trading as high as 5,160.30 and as low as 5,130.25. There were 31 stocks advancing against 19 declines on the index.
The top gainers on the Nifty were BPCL up 3.49%, JP Associates up 3.48%, Tata Motors up 2.70%, SAIL up 2.63% and Coal India up 2.52%.
Jindal Steel down 2.25%, Kotak Bank down 1.98%, Siemens down 1.41%, Tata Power down 1.11% and ICICI Bank down 1.03% were the major losers on the index.
In the Asian space, Nikkei 225 surged 1.12%, Strait Times soared 1.24% and Seoul Composite rose 0.12%
On the flipside only Jakarta Composite sank 0.72%.
Stock markets in China, Hong Kong and Taiwan remained closed in observance of Lunar New Year holiday. 

DECENT START

The Indian equity markets have made a decent start hitting their highest level in more than ten weeks with Sensex recapturing its crucial 17,000 mark amid volatility on positive Asian cues. Japan's Nikkei average opened at a fresh three-month high on Wednesday after earnings from US-based technology giant Apple came in above expectations. Back home markets extended their recent rally on sustained buying by funds and retail investors following RBI's decision to cut cash reserve ratio (CRR). All the sectoral indices are in the green - led by metal, consumer durables and oil and gas space. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,106 shares on the gaining side against 473 shares on the losing side while 66 shares remained unchanged. Moreover, high volatility is expected on the bourses today as traders roll over positions in futures & options (F&O) segment from the near-month January 2012 series to February 2012 series. The near-month January 2012 F&O contracts expire today as stock market will remain closed on January 26, 2012, on account of Republic Day.
The BSE Sensex opened at 17,068.85; about 73 points higher compared to its previous closing of 16,995.77, and has touched a high and a low of 17,110.02 and 17,035.03 respectively.
The index is currently trading at 17,066.78, up by 71.01 points or 0.42%. There were 22 stocks advancing against 8 declines on the index.
The overall market breadth has made a strong start with 67.23% stocks advancing against 28.75% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.60% and 0.71% respectively.
The top gaining sectoral indices on the BSE were, Metal up by 1.05%, CD up by 0.88%, Oil and Gas up by 0.72%, Power up by 0.64% and PSU was up by 0.63%. While, there were no losers on the index.
The top gainers on the Sensex were Tata Steel up by 2.52%, Tata Motors up by 1.62%, Sterlite Industries up by 1.48%, SBI up by 1.16% and Coal India up by 1.00%.
On the flip side, Maruti Suzuki was down by 1.01%, Hero MotoCorp was down by 0.74%, ICICI Bank was down by 0.65%, Cipla was down by 0.48%  and Jindal Steel down by 0.40% were the only losers on the Sensex.
Meanwhile, India's trade with the ASEAN countries is expected to grow to $70 Billion by 2012. These expectations are based on the fact that trade between India and ASEAN countries has been growing at a rate of 18-20% every year. In 2011, trade crossed the $50 billion mark and hence targets for the year 2012 have been pegged at $70 billion, a growth of 20%. Since its start about a decade ago, the partnership between India and the Association of South East Asian Nations (ASEAN) comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam has been developing at quite a fast pace. Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from $ 2.9 billion in 1993 to $ 12.1 billion in 2003. In 2008, the total volume of ASEAN-India trade was $ 47.5 billion and it crossed the $ 50 billion mark in 2011.
The India-ASEAN Free Trade Agreement (FTA) is expected to further increase goods trade between India and ASEAN countries. India has a Comprehensive Economic Cooperation Agreement (CECA) signed with Singapore and FTAs with Malaysia, Indonesia and Thailand. India and ASEAN are currently negotiating agreements on trade in services and investment. The services negotiations are taking place on a request-offer basis, wherein both sides make requests for the openings they seek and offers are made by the receiving country based on the requests.
India has made requests in a number of areas including teaching, nursing, architecture, chartered accountancy and medicine as it has a large number of English speaking professionals in these areas who can gain from job opportunities in the ASEAN region. India is also keen on expanding its telecom, IT, tourism and banking network in ASEAN countries.
The S&P CNX Nifty opened at 5,151.50; about 24 points higher compared to its previous closing of 5,127.35, and has touched a high and a low of 5,160.30 and 5,134.90 respectively.
The index is currently trading at 5,144.65, higher by 17.30 points or 0.34%. There were 32 stocks advancing against 18 declines on the index.
The top gainers of the Nifty were Tata Steel up by 2.35%, BPCL up by 2.14%, IDFC up by 1.87%, Tata Motors up by 1.67% and JP Associates up by 1.35%.
On the flip side, Kotak Bank down by 1.98%, ICICI Bank down by 1.04%, Maruti Suzuki down by 1.02%, Hero MotoCorp down by 0.73% and Jindal Steel down by 0.62%, were the major losers on the index.
In Asia, majority of bourses remained closed for Lunar New Year holiday, however, Nikkei 225 was up 105.43 points or 1.20% to 8,890.76, Straits Times was up 24.30 points or 0.85% to 2,873.68 and Seoul Composite was up by 8.96 points or 0.46% to 1,958.85.
On the flip side, Jakarta Composite was down by 14.54 points or 0.36% to 3,980.05.

Tuesday, January 24, 2012

LIQUIDITY FORTIFIES THE MARKETS

Indian equity markets gave a big thumbs-up to the Indian central banks' unexpected decision to cut the cash reserve ratio to 5.5% from 6% which underscores a cut of 50 basis points. Sentiments got filliped as the Reserve Bank of India, even while maintaining its anti-inflationary stance attempted to ease the tight liquidity pressure on the economy by cutting the CRR and infusing Rs 32,000 crore into the Indian banking system. Marketmen even went ahead to overlook the RBI's economic growth forecast for the current fiscal which it lowered to 7% from 7.6% earlier in addition credit growth estimates too were lowered to 16% from 18% while the central bank kept inflation forecast unchanged. Nevertheless, sentiments remained extremely bullish as investors piled up hefty positions not only in heavyweight stocks but largely across the board amid hopes that the RBI will not only focus on containing inflation but also on easing liquidity pressure to spur economic growth which has been adversely impacted due the RBI's aggressive monetary tightening measures since March 2010. The frontline indices capitalized on the momentum and remained in euphoric mood for most part of the session and even sailed beyond various crucial levels. However, the key gauges faced some resistance around the psychological 5,150 (Nifty) and 17,000 (Sensex) levels on the back of pessimistic leads from European markets which pulled the key gauges off the day's highs. Investors also turned cautious by the end as they shifted their focus to January series F&O contract expiry scheduled on Wednesday. In the global space, on a day when major Asian equity markets were off for trading, the Japanese and Indonesian benchmarks were the only indices which remained open and settled on a positive note. However, the European markets traded on a negative note as there was no headway in negotiations between European ministers and Greek bondholders over how to resolve the nation's debt crisis.
Earlier on Dalal Street, the benchmark got off to a cautiously positive start tracking the supportive moves in Japanese and Indonesian markets. The indices kept hovering above the previous closing levels in a narrow range waiting for the announcement of RBI's all important policy announcements. Thereafter, the RBI's CRR cut triggered sharp rally in local equities thanks to across the board buying but some profit booking in the dying moments took some sheen off the rally. Eventually, the NSE's 50-share broadly followed index Nifty, garnered over one and half a percent to settle well above the crucial 5,100 support level while Bombay Stock Exchange's Sensitive Index Sensex accumulated around two hundred fifty points and ended just below the psychological 17,000 mark. Moreover, the broader markets settled on an optimistic note but failed to match the fervor with which their larger peers rallied. On the BSE sectoral space, the Capital Goods counter garnered a lot of traction to settle as the top gainer with over three percent gains, thanks to the close to six percent rally in heavyweight L&T which announced strong third quarter earnings on Monday. The banking index too surged with similar gains post the RBI's policy action while, encouraging earnings announcement by Yes Bank too supported to sentiments. While there were no laggards in the space, however some individual stocks like Coal India and Sun Pharma plunged over a percent. The markets spurted on extremely large volumes of over Rs 2.27 lakh core while the turnover for NSE F&O segment also remained on the higher side as compared to that on Monday at over Rs 2.05 lakh crore as January series futures and options contract are scheduled to expire a day earlier from its usual closing owing to a national holiday on the last Thursday of the month. The market breadth remained positive as there were 1592 shares on the gaining side against 1206 shares on the losing side while 142 shares remained unchanged.
Finally, the BSE Sensex surged 244.04 points or 1.46% to settle at 16,995.77, while the S&P CNX Nifty soared by 81.10 points or 1.61% to close at 5,127.35.
The BSE Sensex touched a high and a low of 17,050.32 and 16,770.01 respectively. The BSE Mid cap and Small cap indices were up by 1.38% and 0.70% respectively.
The major gainers on the Sensex were L&T up 5.64%, SBI up 5.19%, Hindalco up 4.55%, M&M up 3.56% and ICICI Bank up 3.30%. While, Coal India down 1.35%, Sun Pharma down 1.29%, NTPC down 0.94%, GAIL India down 0.72% and Hindustan Unilever down 0.52%, were the major losers on the index.
On the BSE sectoral space, Capital Goods (CG) up 3.30%, Bankex up 3.21%, Metal up 1.78%, Auto up 1.53% and Realty up 1.14% were the top gainers, while there was no loser on the sectoral space.
Meanwhile, India's trade with the ASEAN countries is expected to grow to $70 Billion by 2012. These expectations are based on the fact that trade between India and ASEAN countries has been growing at a rate of 18-20% every year. In 2011, trade crossed the $50 billion mark and hence targets for the year 2012 have been pegged at $70 billion, a growth of 20%. Since its start about a decade ago, the partnership between India and the Association of South East Asian Nations (ASEAN) comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam has been developing at quite a fast pace. Between 1993 and 2003, ASEAN-India bilateral trade grew at an annual rate of 11.2%, from $ 2.9 billion in 1993 to $ 12.1 billion in 2003. In 2008, the total volume of ASEAN-India trade was $ 47.5 billion and it crossed the $ 50 billion mark in 2011.
The India-ASEAN Free Trade Agreement (FTA) is expected to further increase goods trade between India and ASEAN countries. India has a Comprehensive Economic Cooperation Agreement (CECA) signed with Singapore and FTAs with Malaysia, Indonesia and Thailand. India and ASEAN are currently negotiating agreements on trade in services and investment. The services negotiations are taking place on a request-offer basis, wherein both sides make requests for the openings they seek and offers are made by the receiving country based on the requests.
India has made requests in a number of areas including teaching, nursing, architecture, chartered accountancy and medicine as it has a large number of English speaking professionals in these areas who can gain from job opportunities in the ASEAN region. India is also keen on expanding its telecom, IT, tourism and banking network in ASEAN countries.
The S&P CNX Nifty touched a high and low of 5,141.05 and 5,049.80 respectively.
The top gainers on the Nifty were L&T up 5.93%, IDFC up 5.53%, SBI up 5.33%, JP Associates up 4.68% and Hindalco up 4.48%.
On the flip side, Grasim down 2.32%, Coal India down 1.57%, DLF down 1.05%, Sun Pharma down 0.95% and HUL down 0.77% were the top losers on the index.
The European markets were trading in red. France's CAC 40 down 0.84%, Britain's FTSE 100 down 0.74% and Germany's DAX down by 1.03%.
Only a handful of markets remained open for trade in Asia, where Japanese Nikkei average rose to its highest closing level in nearly three months on Tuesday on expectations that a Greek debt swap deal will still be reached even after European finance ministers rejected an offer by Greece's private creditors. Moreover, the Bank of Japan kept interest rates on hold at near-zero on Tuesday, noting that activity in the Japanese economy has been more or less flat due to a slowdown in overseas economies and appreciation of the yen.
Activity was thin, however, with many Asian markets still closed for the Lunar New Year holiday. Despite the thin trading, some notable movers emerged, with chip maker Elpida Memory Inc. jumping 4.6% after a Yomiuri Shimbun report that the firm is set to agree on an alliance with US company -- Micron Technology and Taiwan's -- Nanya Technology Corp. Shares of Toyota Motor gained 2.7%. The auto maker announced late Monday that it would cut 350 jobs at a plant in Australia, in part due to the high Australian dollar.
Nikkei 225 was up by 19.43 points or 0.22% to 8,785.33 and Jakarta Composite was up 8.07 points or 0.20% to 3,994.58.
Stock markets in China, Hong Kong, Malaysia, South Korea, Singapore and Taiwan remained closed on Tuesday in observance of Lunar New Year holiday.