Key benchmark indices surged, snapping a four-day losing streak, as Indian shares played a catch up with a rally in world stocks on Thursday, 6 October 2011, when Indian market was closed on account of Dassera. World stocks had surged on Thursday, 6 October 2011,Czech soccer jerseys, driven by hopes Europe will recapitalize its banks to tame euro-zone debt crisis. The barometer index BSE Sensex regained the psychological 16,000 mark. The BSE Sensex was provisionally up 434.96 points or 2.75%, up close to 80 points from the day's low and off close to 120 points from the day's high. The market breadth was strong. All the 13 sectoral indices on BSE were in the green.
Telecom shares fell after a news agency on Wednesday, 5 October 2011, quoted telecom secretary R. Chandrashekhar as saying that the Department of Telecommunications (DoT) will issue notices to five mobile phone operators including Bharti Airtel, Reliance Communications and Idea Cellular after the country's top auditor the Comptroller and Auditor General of India, or CAG found that the carriers misreported revenue and paid lower license fees to the government. Metal stocks surged as LMEX, a gauge of six metals traded on the London Metal Exchange, jumped 4.4% on Thursday, 6 October 2011. Index heavyweights Reliance Industries (RIL) jumped close to 5%. Interest rate sensitive banking stocks surged on hopes a slowing economy could prompt the Reserve Bank of India to pause on rate increases this month. The market jumped in early trade on firm Asian stocks and as Indian shares played a catch up with a rally in world stocks on Thursday, 6 October 2011. The market extended gains in morning trade. The market trimmed gains in mid-morning trade. A bout of volatility was witnessed in early afternoon trade as key benchmark indices regained strength after paring intraday gains. Key benchmark indices recovered after hitting fresh intraday lows in afternoon trade. Intraday volatility continued as the market trimmed intraday gains to hit fresh intraday low in mid-afternoon trade as European shares reversed initial gains. The market regained strength in late trade. As per provisional figures, the BSE Sensex was up 434.96 points or 2.75% to 16,227.37. The index rose 356.56 points at the day's low of 16,148.97 in mid-afternoon trade. The index jumped 555.07 points at the day's high of 16,347.48 in morning trade, its highest level since 30 September 2011. The S&P CNX Nifty was up 134.40 points or 2.83% to 4,885.70, as per provisional figures. The Nifty hit a high of 4,922.60 in intraday trade, its highest level since 30 September 2011. The Nifty hit a low of 4,soccer shoes,861.20 in intraday trade. BSE clocked turnover of Rs 1825 crore lower than Rs 2373.27 crore on Wednesday, 5 October 2011. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,801 shares rose and 976 fell. A total of 126 shares were unchanged. From 30-share Sensex pack, 28 stocks rose and only two declined. Index heavyweight Reliance Industries (RIL) jumped 4.66%. BP PLC last week said it expects its partnership with RIL to boost natural gas output at the D6 block in the Krishna Godavari basin, off India's east coast. BP Chief Executive Robert Dudley and RIL Chairman Mukesh Ambani met trade minister Anand Sharma in New Delhi on 28 September 2011. RIL is fighting a decline in gas output at the D6 block. BP and RIL on Wednesday, 28 September 2011, pitched for permission from the government to develop satellite fields adjacent to the D6 block. RIL, last month, closed a deal with UK-based BP to sell a 30% stake in its 21 oil and gas exploration blocks in India. RIL recently denied inflating costs on its D6 gas field in the Krishna-Godavari (KG) basin. RIL made the clarification after CAG said in its final report submitted to the parliament on 8 September 2011 that RIL initially estimated capital expenditure of D-1 and D-3 gas discovery at $2.4 billion, which it later revised to $8.8 billion. RIL's advance tax payment rose 37.6% to Rs 1800 crore in Q2 September 2011 over Q2 September 2010, hinting at good Q2 results from the diversified firm. Telecom shares fell after a news agency on Wednesday, 5 October 2011, quoted telecom secretary R. Chandrashekhar as saying that the Department of Telecommunications (DoT) will issue notices to five mobile phone operators including Bharti Airtel, Reliance Communications and Idea Cellular after the country's top auditor the Comptroller and Auditor General of India, or CAG found that the carriers misreported revenue and paid lower license fees to the government. All the operators have previously denied any underreporting of revenue. The notices seek to have telecom service providers pay the license fees on actual revenue as calculated by the auditor, Chandrashekhar said. India's largest listed telecom operator by sales Bharti Airtel tumbled 3.83%. Idea Cellular tumbled 3.49%. Reliance Communications fell 0.14%. Meanwhile, the government will unveil a much-awaited new telecoms policy on Monday, 10 October 2011, which is expected to include rules on pricing of second-generation radio airwaves and mergers and acquisitions in the sector. Interest rate sensitive banking stocks surged on hopes a slowing economy could prompt the Reserve Bank of India to pause on rate increases this month. India's largest private sector bank by net profit ICICI Bank jumped 5.59% to Rs 822.50. The stock had hit a 52-week low of Rs 762.05 in intraday trade on Wednesday, 5 October 2011. India's second largest private sector bank by net profit HDFC Bank rose 2.66%. Axis Bank surged 8.9% to Rs 1036.70. The stock had hit a 52-week low of Rs 946.35 in intraday trade on Wednesday, 5 October 2011. India's largest bank by branch network and net profit State Bank of India (SBI) rose 1.76% to Rs 1745.45. The stock had tumbled recently after a downgrade from rating agency Moody's Investors Service on Tuesday, 4 October 2011. Moody's cut bank financial strength rating (BFSR), or stand-alone rating of SBI, to D+ from C- because of concerns over its capital situation and deteriorating asset quality. The SBI stock hit 52-week low of Rs 1,708.55 in intraday trade on Wednesday, 5 October 2011. SBI's non-performing assets were at a three-year high as of 30 June 2011, at 3.5% of loans, according to Moody's said on Tuesday, 4 October 2011. This will likely increase the bank's potential credit costs in the near-term, it said. 'Our expectations that non-performing assets are likely to continue rising in the near term--due to higher interest rates and a slower economy--have caused us to adopt a negative view of SBI's creditworthiness,' Beatrice Woo, vice president and senior credit officer, Moody's Investors Service said, in a statement. Moody's also lowered its hybrid debt rating on the bank to Ba3 (hyb) from Ba2 (hyb), following the reduction in financial strength rating. The revised standalone rating carries a stable outlook and the hybrid rating a negative outlook, Moody's said. SBI Chairman Pratip Chaudhuri on Wednesday, 5 October 2011, said that the bank has no immediate plan to tap overseas debt markets but hopes to receive as much as Rs 10000 crore in equity capital infusion from the government by the end of the fiscal year through March 2012. SBI expects to get between Rs 3000 crore and Rs 10000 crore from the government to help shore up its capital base, Chaudhuri added. He also said that the bank does not see any need to pass on interest rate increases to customers as the bank's margins are strong. The Reserve Bank of India (RBI) last month raised key lending rate for the 12th time in the last 18 months to fight near double-digit inflation. Metal stocks surged as LMEX, a gauge of six metals traded on the London Metal Exchange, jumped 4.4% on Thursday,Red bulls jerseys, 6 October 2011. JSW Steel, Tata Steel, Sail, Hindalco Industries, Jindal Steel & Power and Nalco rose by between 0.82% to 7.67%. Sterlite Industries jumped 8.18% after company said during market hours today, 7 October 2011, reported production and sales data. Mined domestic zinc metal production was 210,000 tonnes in Q2 and 398,000 tonnes in half year ended September 2011 (H1), up 2% and 3%, respectively, as compared with the corresponding prior periods, reflecting near normal production at Rampura Agucha following the maintenance shutdown in Q1. During Q2,Arsenal Jerseys, the Tuticorin copper smelter produced 87,000 tonnes of copper cathode, 28% higher than the corresponding prior quarter. Production in the prior year period was lower on account of a planned bi-annual maintenance shut-down. During H1, production of copper cathode was up 11% at 161,000 tonnes. Aluminium production at Balco was 60,000 tonnes in Q2 and 121,000 tonnes in H1, lower by 8% and 5% respectively, as compared with the corresponding prior periods. The company sold 1,748 million units of power in Q2 as compared with 463 million units in the corresponding prior quarter. The company sold 3,415 million units of power in H1, compared to 943 million units in the corresponding prior period. Consumer durables stocks also participated in a rally. Videocon Industries, Gitanjali Gems and Titan Industries gained by between 1.57% to 5.24%. Interest rate sensitive realty stocks rose on hopes a slowing economy could prompt the Reserve Bank of India to pause on rate increases this month. Purchases of both residential and commercial property are largely driven by finance. Indiabulls Real Estate, Orbit Corporation, Unitech, HDIL and DLF gained by between 1.15% to 5.61%. Firstsource Solutions rose 2.06% after the company said it has repurchased zero coupon convertible bonds of an aggregate face value of $21 million and due in December 2012. Cinemax India rose 0.56% after the company announced the launch of its three screens multiplex at 'Cinemax-Central Iris Mall' in Surat. NDTV rose 0.4% after the company entered into an agreement to sell its stake in Metronation Chennai Television to Educational Trustee Company, promoters of the leading Tamil daily Dina Thanthi. The near-term major trigger for the market is Q2 September 2011 results. The results are expected to be muted-to-weak due slower volume growth due to slowdown in domestic demand, higher input costs, rising wages, higher interest rates and slowdown in investment growth. Advance tax data from top 100 companies corroborates this view. The advance tax payment by top 100 companies rose a modest 9.9% in Q2 September 2011 from a year ago against 19% growth in Q1 June 2011, suggesting corporate profit growth is likely to be muted in the second quarter. Among the big companies that have paid lower advance tax, indicating a drop in profits, include State Bank of India (SBI), Maruti Suzuki India and state-run Neyveli Lignite Corporation. SBI's advance tax payment declined 14.2% to Rs 1650 crore in Q2 September 2011. Maruti's tax payment fell 55.8% to Rs 120 crore. Neyveli Lignite tax payment plunged 50.1% to Rs 66 crore. But, Reliance Industries' (RIL) advance tax payment jumped 37.6% to Rs 1800 crore, hinting at good Q2 results from the diversified firm. Investors will closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook. IT bellwether Infosys kickstarts the Q2 September 2011 earnings season on 12 October 2011. IT major TCS, housing finance major HDFC and media major Zee Entertainment Enterprises unveil Q2 results on 17 October 2011. Jet Airways (India) unveils Q2 results on 18 October 2011. HDFC Bank unveils Q2 results on 19 October 2011. Bajaj Auto, Cairn India and Thermax unveil quarterly results on 20 October 2011. Engineering & construction major L&T, paints major Asian Paints and Godrej Consumer Products reveal Q2 results on 21 October 2011. Axis Bank unveils Q2 results on 22 October 2011. Titan Industries unveils Q2 results on 24 October 2011. Dr. Reddy's Lab unveils Q2 results on 25 October 2011. Maruti Suzuki reports Q2 results on 29 October 2011. Dabur India, Colgate Palmolive (India) and BPCL unveil Q2 results on 31 October 2011. Cement major ACC and Aditya Birla Nuvo unveil quarterly results on 1 November 2011. Lower global commodity prices may ease pressure on corporate profit margins arising from higher raw material prices and at the macro level it could help ease inflation pressure. However, a weak rupee will offset the benefit of the recent steep fall in global commodity prices triggered by global growth worries. Most commodities imported by India, particularly oil, are denominated in dollars making these expensive for India. The rupee slumped 8.8% percent in July to September 2011 to 48.97/98, its largest quarterly fall since the same period in 2008. The Standard & Poor's GSCI Index of 24 commodities, has lost 5.3% in 2011, with the index hitting a 10-month low this week. Prices have recovered from 10-month lows over the past two days. The market regulator Securities and Exchange Board of India recently set a minimum net worth of Rs 100 crore for companies that wish to issue structured products or market-linked debentures to raise funds. Sebi also set the minimum size for such issues at Rs 10 lakh. Market-linked debentures are hybrid products which have the features of usual debt securities, but offer market-linked returns like an exchange-traded derivative. The issuer company will have to appoint a third party, a credit-rating company registered with the regulator, which will provide the value of the security at least once a week, Sebi said in a circular. A news agency recently quoted principal economic adviser to the ministry of finance Dipak Dasgupta as saying that the government has no plans to tax or impose restrictions on capital outflows. He said the government will instead focus on liberalising fund inflows into the economy, particularly via overseas borrowing. Finance Minister Pranab Mukherjee said last month that central banks in emerging economies have been forced to raise interest rates repeatedly as they battle high inflation, exposing them to volatile capital flows. 'An issue of immediate concern for emerging economies is managing large capital flows,' he said. 'Large and volatile capital flows to emerging markets can be destabilizing as they lead to high exchange rate volatility and in some cases make it incumbent to maintain high levels of foreign exchange reserves as an insurance against sudden and large-scale flight of international capital.' The government last month raised the limit of overseas borrowing for companies to $750 million from $500 million. Indian companies can also now raise loans up to $1 billion in Chinese yuan. Given the lackluster initial FII response to the government's sharply raising the ceiling of FII investment in long-term corporate bonds issued by the companies in the infrastructure sector in March 2011, the government on 12 September 2011, further relaxed the norms on FII investment in such bonds. Sebi had in early August 2011 allowed Qualified Foreign Investors (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of $3 billion within the total ceiling of $25 billion. The government, last week, raised its borrowing target for the current fiscal year by Rs 52800 crore, surprising the market and fueling worries that it may even overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. The government will borrow Rs 2.2 lakh crore during October 2011-March 2012 period, or the second half of the fiscal year, compared with the target of Rs 1.67 lakh crore announced in budget in February 2011. C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, on 29 September 2011 said it is going to be difficult to achieve fiscal deficit target of 4.6% of GDP for the year ending March 2012. The government's new borrowing programme may crowd out private borrowers who come into the market in the second half of the year. Credit growth normally picks up after October every year when the busy season starts. Atsi Sheth, a New York-based vice president and senior analyst at Moody's Investors Service said in a media interview last week that Moody's is unlikely to change its rating outlook on India for now, though the extent of the increase in the government's borrowing target is a surprise. The possibility of fiscal slippage is, however, already factored into the sovereign rating, Sheth said. Standard & Poor's Ratings Services on Monday, 3 October 2011, said it is maintaining its view that India will struggle to meet its fiscal deficit target. Takahira Ogawa, director of Sovereign and International Public Finance Ratings at S&P said India must prove its intent to continue with the process of fiscal consolidation in the medium term. Monsoon rains at the end of the June-September season were 1% above the 50-year average, raising hopes of improved crop supplies at a time when the country is battling high food prices. The rains normally start subsiding in the first week of September, but they continued two weeks longer this year. This has boosted the prospects of not only summer-sown crops such as rice, but also winter-sown staples like wheat, because of good soil moisture. Sowing of winter crops usually starts in October and picks up between the end of November and the first half of December. Apart from wheat, rapeseed and pulses are among other important crops grown during the winter season. India is aiming for a record foodgrain output of 245 million tons in the crop year that started on 1 July. Rangarajan on 29 September 2011 said there has to be definite signs of inflation falling before the Reserve Bank of India can reverse its current policy. Reserve Bank of India (RBI) deputy governor Subir Gokarn on 28 September 2011 said poor supply responses to rising demand for protein-rich food aren't helping to lower the inflation rate. His comment underscores the central bank's growing dismay over the government's loose fiscal stance that is diluting monetary policy moves and weakening its battle against inflation. 'Energy prices have remained very steady. I think (it) is a huge problem to deal with because it certainly reduces the space that monetary policy has,' Mr. Gokarn said at a conference. Food inflation accelerated in the week ended 24 September 2011, reflecting prolonged inflationary pressures and mounting pressure on the central bank to continue its rate increase cycle. Wholesale price index-based inflation quickened to 9.41% from a year earlier, compared with 9.13% the previous week, according to data issued on Friday, 7 October 2011, by the Ministry of Commerce and Industry. On a week-on-week basis, the food articles index rose a marginal 0.2% to 197.7, recording the eighth successive week of rising prices. RBI said at a monetary policy review on 16 September 2011 that it is imperative to persist with the current anti-inflationary stance because a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. The RBI raised repo rate by 25 basis points on 16 September 2011. Going forward, the stance of the monetary will be influenced by signs of downward movement in the inflation trajectory, to which the moderation in demand is expected to contribute, and the implications of global developments, RBI said in its 16 September 2011 policy statement. The overall tone of the RBI's latest policy was softer than the previous policy announcement which was extremely hawkish. Inflation in India remains high and will probably remain in a range of 9% to 10% until November 2011,Fulham jerseys, Gokarn said last month. RBI said on 16 September 2011 that corporate margins moderated across several sectors in Q1 June 2011 compared to levels in Q4 March 2011. However, barring a few sectors, significant pass-through of rising input costs is still visible, RBI said. RBI governor D Subbarao, last week, said inflation rate remains above the level the central bank deems acceptable. Inflation has been fairly stubborn, Subbarao said in New York. 'Above a threshold, you can't accept high inflation to have higher growth,' he said, adding that the price-rise limit is as much as 6% for the nation. A rate of 4% to 6% is the short-term comfort range for inflation, Subbarao said. He said the central expects inflation to slow by March 2012, but more slowly than initially expected. Intervention in forex markets brings unexpected consequences, Subbarao said. RBI is scheduled to announce the half-yearly review of the monetary policy on 25 October 2011. India's services sector contracted for the first time in more than two years as new business dried up and expectations weakened amid concern over a flagging world economy, a survey showed on Wednesday, 5 October 2011. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, plunged in September to 49.8 -- its lowest reading since April 2009 -- and below the 50 mark which separates growth from contraction. The slowdown in growth has continued to broaden with the service sector seeing a further slowdown in economic momentum, HSBC economist Leif Eskesen said. The new business sub-index sank to a 28-month low of 51.6 in September, down from 54.9 in August. The weak expansion in new business -- the main cause of the stagnation in activity -- meant employment levels fell for a third consecutive month. Despite harsh conditions firms were able to pass on rising input costs to customers, albeit at a slightly lower pace than in August. The growth in manufacturing sector nearly stalled in September 2011, hitting its weakest spot since March 2009 on slowing output and orders growth following a series of interest rate hikes, data showed on Monday, 3 October 2011. The HSBC Markit India Manufacturing PMI fell more than two points to 50.4 in September 2011 from 52.6 in August 2011, very close to the 50 mark which divides growth and contraction. The output index plunged by its biggest amount in one month since November 2008, to 51.1 from 56. Exports jumped 44.25% to $24.3 billion in August 2011 from a year earlier, while imports for the month rose 41.82% to $38.4 billion, leaving a trade deficit of $14 billion, the latest government data showed. European stocks gave up initial gains on Friday, 7 October 2011, after Moody's Investors Service downgraded 12 UK financial institutions. Key benchmark indices in UK and France were down by 0.22% to 0.6%. Germany's DAX rose 0.09%. Moody's today, 7 October 2011, cut the senior debt rating of units of Lloyds and RBS and the UK arm of Banco Santander, saying the moves reflect a lower probability that the UK government will support financial institutions if they need it. Moody's also took action on several Portugal banks, with a negative outlook, citing increased risk from their exposure to Portugal sovereign debt, deterioration of domestic asset quality and liquidity strains owed to a lack of access to wholesale funding. European shares had surged on Thursday, 6 October 2011, driven by continued hopes for coordinated bank recapitalization and action by the European Central Bank (ECB) and Bank of England to help fight the effects of the sovereign debt crisis. The ECB said after a policy meeting on Thursday that it will buy an extra 40 billion euros ($53.7 billion) of covered bonds from banks and would continue to provide unlimited three-month liquidity to the region's banks at least until July next year. The Bank of England said after a policy meeting on Thursday that it will inject a further ?75 billion into the economy through quantitative easing (QE). The bank has already pumped ?200 billion into the economy by buying assets such as government bonds, in an attempt to boost lending by commercial banks Asia stocks gained strongly on Friday, 7 October 2011, making a broad-based advance on fresh indications that Europe is ramping up efforts to shore up its financial system and prevent another global banking crisis. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were up by between 0.98% to 3.11%. Indonesia's Jakarta Composite fell 0.51. Mainland Chinese markets were closed this week for a holiday. The rally in Asian stocks on Friday followed a strong performance Thursday in the US, with gains on Wall Street prompted by the release of better-than-forecast unemployment-claims data and by the Bank of England and the European Central Bank (ECB) announcing easing measures. The Bank of Japan's policy board voted unanimously on Friday, 7 October 2011, to hold its overnight benchmark lending rate unchanged at a range of 0% to 0.1%, as expected, but also extended a special post-earthquake lending program by six months. The board said in its monthly statement that Japan's economic recovering remains intact, noting that production and exports continue to increase, although the pace of recovery has moderated from the sharp rebound that followed the slump in the wake of the March earthquake and tsunami. Trading in US index futures indicated the Dow could fall 16 points at the opening bell on Friday, 7 October 2011. The influential monthly US non-farm payroll data is due later in the day global day today, 7 October 2011. Posted By Miserji Research Team On 07/10/2011 Miserji Research Team, mail@miserji.com, , +91-8489919999/8489929999
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