Post Market Commentary - Apr 15 2009

The market undid most of the day’s losses towards the close. Taking lead from weak global indices, the Sensex resumed lower from its previous close and the moodremained sombre with market slipping on profit booking in index pivotals and information technology (IT) stocks. The market once again witnessed selling pressure and the Sensex touched the day's low of 10719. Though the market erased most of its loss by noon trades, the pull-back from lower levels came toward the close, after a fresh bout of buying in several frontline stocks saw the Sensex touch an intra-day high of 11338. The Sensex ended the session 318 points up at 11285, while Nifty moved up by 102 points to 3484.

The market breadth was positive however. Of the 2,703 stocks traded on the BSE 2,173 stocks advanced, whereas 463 stocks declined. Sixty seven stocks ended unchanged. Of the 13 sectoral indices on the BSE, only one- -the BSE IT ended lower. Wiping its losses, BSE Realty moved up 8.79% topping the list, while BSE CG (capital goods’ index), occupying the second slot, was up by nearly 7.36%. Rest of the indices were up 1-5% each.

Several Sensex stocks registered decent gains. Tata Motors flared up 11.50% at Rs281.20, DLF jumped by 10% at Rs256.80 and Bharat Heavy Electricals Ltd gained 9.48% at Rs1669.85. ICICI Bank, Larsen & Toubro, State Bank of India, Ranbaxy Laboratories and Sun Pharmaceutical Industries were up by more than 5% each. Among laggards, Infosys shot down by 2.72% at Rs1370.80, Tata Consultancy Services lost 2.39% at Rs577.55 and HDFC Bank lost 1.17% at Rs1083.90. Tata Power, Sterlite Industries, ITC and ONGC were down by 0.25-1% each.

Realty stocks were in limelight and closed with strong gains. Ansal Properties and Infrastructure vaulted 17.07% at Rs39.10, Unitech soared 14.81% at Rs48.05, Peninsula Land surged 10.33% at Rs34.70 and DLF advanced 10% at Rs256.80.

Unitech attracted volumes of over 4.24 crore shares on the BSE followed by Cals Refineries (3.12 crore shares), Reliance Natural Resources (2.65 crore shares) and Suzlon Energy (1.84 crore shares).

Pantaloon, Tech Mahindra, India Telecom

Pantaloon, Tech Mahindra, India Telecom

Asian markets back in red

Nikkei gave up 1.1% while Hang Seng brought 0.6%

Stock market in Asian region closed mixed on Wednesday, 15 April 2009, following a weaker closing on Wall Street, where the major indices declined on disappointing retail sales data and a weak producer prices report.

The markets in Australia, South Korea, Taiwan and Japan ended lower, the markets in China, Hong Kong and Singapore recouped their early losses and ended in positive territory on expectations that China might announce another stimulus to help revive the economy that is already showing signs of recovery.

On Wall Street, financials led the stock market lower as investors brushed off Goldman Sachs upbeat earnings and focused on disappointing economic data. The Dow Jones Industrial Average dropped 137.63 points, or 1.7%, to 7920.18, and the S&P 500 lost 17.23 points, or 2%, to 841.50. The Nasdaq was off by 27.59 points, or 1.7%, at 1625.72.

Meanwhile, President Obama and Federal Reserve Chairman Ben Bernanke spoke separately on Tuesday. The president responded to criticism of government spending and defended the economic relief efforts. "Economists on both the left and the right agree that the last thing a government should do is to cut back on spending in the middle of a recession," Obama said. "The government has to step in to temporarily boost spending in order to stimulate demand."

For his part, Bernanke said that there have been "tentative signs" that the decline in economic activity is slowing; also saying "a leveling out of economic activity is the first step toward recovery."

In the commodity market, crude oil was little changed near $50 a barrel, after falling the past two days, as U.S. crude stockpiles climbed amid signs of further economic weakness in the world's biggest energy consumer.

Crude oil for May delivery was at $50.24 a barrel, up 83 cents, in electronic trading on the New York Mercantile Exchange at 10:54 a.m. London time. It earlier fell as much as 49 cents, or 1%, to $48.92 a barrel.

Brent crude oil for May settlement was at $52.41 a barrel, up 45 cents, on London's ICE Futures Europe exchange at 11:14 a.m. London time. It declined 18 cents, or 0.3%, to end the session at $51.96 a barrel yesterday.

Gold gained as a rally in global stocks halted and on investor expectations for inflationary pressures to rebound on government stimulus spending, boosting demand for the precious metal as a store of value. Gold for immediate delivery declined 0.04% to $891.60 an ounce at 10:54 a.m. London time.

In the currency market, fluctuation in yen crosses dominated the Asian session today as the yen extends recent rebound against other major currencies. Japanese Nikkei followed Wall Street losses by dropping nearly -100 points to 8742. The Japanese currency gained ground across the board against its major currencies on Wednesday. The Japanese currency edged up to 98.94 against the US dollar, compared to Tuesday's New York session closing values of 99.

The Hong Kong dollar was trading at HK$ 7.7502 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trades, the Australian dollar closed lower on Wednesday as world markets suffered a renewed bout of risk aversion. Towards its closing, the Australian dollar was trading at 71.75/78 US cents, down from Tuesday's close of 72.44/47 US cents. During the session, the unit traded between 72.37 and 71.46 US cents.

In Wellington trades, the NZ dollar ended the day at US57.80c, down from US59.10c yesterday. The New Zealand dollar was weaker today after worse-than-expected US retail sales data highlighted concerns about a global economic recovery.

The South Koran ended at 1,338 won to the dollar, down 14.5 won from Tuesday's close, as overseas investors cut holdings of local shares.

The Taiwan dollar weakened against the US dollar as it was trading at NT$ 33.790, down by NT$ 0.170 from Tuesday's close of NT$33.620.

Coming back in equities, Asian markets ended mixed amid concerns that stocks had risen too much too fast, with technology shares retreating on weak forecasts.

In Japan, the stock market finished the session lower, extending losing streak for second consecutive day, as financial sector gave back some of the recent gains and technology stocks dived as a lack of clarity in Intel Corporation's earnings outlook. Exporters dived as unexpected drop in U.S. retail sales and a stronger yen dimmed the profit outlook.

After opening in a negative note, following Wall Street's overnight losses after a disappointing retail sales report for March and a weaker-than-expected producer price index report punctured investors' optimism about the economy, and on concerns over a possible bankruptcy of US carmaker General Motors, and its effects on Japanese carmakers and auto-parts makers.

The Nikkei 225 Stock Average index dived 99.72 points, or 1.1%, to 8,742.96, while the broader Topix was 8.17 points, or 1%, lower to 835.

On the economic front, the Ministry of Economy, Trade and Industry said in a revised statement that Japanese industrial production declined for the fifth consecutive month in February to 9.4%. Output recorded an annual fall of 38.4%. On a seasonally adjusted basis, production fell 11.9% in February compared to a 12.9% decline in January.

In Mainland China, the stock index recouped morning losses to finish the session 0.3% higher, after swung between gains and losses, led by technology shares on speculation the government will aid the high-technology industry. Automakers were firmer on speculation the government will announce new measures that will aid car purchases. Metal stock was firmer on rise in copper prices.

Market consumers appear more optimistic as Beijing's massive government spending and easier fiscal policies will lead consumers and businesses to sink more money into the economy and help China stage a quicker recovery.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, rose 0.3%, or 8.87 points to 2,536.05. The Shenzhen Component Index was up 0.48%, or 46.40 points to close at 9724.58.

On the economic front, the Commerce Ministry said Wednesday China's foreign direct investment in March totaled $8.4 billion, down 9.5% from the same month last year.

In Hong Kong also the stock market recouped morning losses to finish the session higher, endured winning streak for third consecutive day, driven by strong rebound in the shares of commerce & industry issues on optimism as Beijing's massive government spending and easier fiscal policies will lead consumers and businesses to sink more money into the economy and help China stage a quicker recovery.

The Hang Seng Index rebounded 89.46 points, or 0.57%, to 15,669.62, while the Hang Seng China Enterprise Index, which tracks H shares of Chinese companies, rose 90.55 points, or 0.98% to 9,305.46.

In Australia, the stock market finished the session marginal lower, after swung between gains and losses, dragged down by losses in financials and property trusts, offset gains in materials and miners stocks. The benchmark S&P/ASX200 dropped 5.40 points, or 0.14%, to 3,747.5, while the broader All Ordinaries dived 4 points, or 0.11%, to 3,693.90.

On the economic front, a private sector leading index of Australia's economic activity published by Westpac Bank and the Melbourne Institute showed a contraction in February of 0.3% compared January and declined at a full-year rate of 5.1% in February. The coincident index, which measures current economic activity, was down 0.5% in February compared to January.

In New Zealand, equity market remained almost flat after stocks on the Wall Street ended lower overnight. Stocks on the benchmark index fell ended in the positive for the third time in a row. The share market began strong yesterday after the Easter break, however lost momentum early thus morning. The benchmark NZX50 closed in the green territory, up 0.02% or 0.471 points to close at 2600.288. The NZX 15 ended down 0.06% or 2.690 points to close at 4813.526.

In South Korea, stock markets fell as investor hopes for an economic recovery were dented by weak U.S. retail sales. The benchmark Korea Composite Stock Price Index (KOSPI) shed 9.54 points to close at 1,333.09, ending a four-session gaining streak.

On the economic front, South Korea's jobless rate inched up in March but job loss accelerated sharply as companies trimmed recruitment for fear of a worsening economic downturn. The unemployment rate stood at 4 percent last month, up from the previous month's 3.9 percent, according to the report by the National Statistical Office. Job losses accelerated; with employers eliminating 195,000 positions from their payrolls compared with a year earlier, the highest since March 1999 when the nation was in the midst of the Asian financial crisis.

In Taiwan, stock market receded from its near seven month high, as investors booked profit from recent rally by selling financials such as Cathay Financial that had risen on a potential agreement with China. Financial shares were hit after their U.S. peers slid on Tuesday on fears that more banks would follow Goldman Sachs' share offer to raise cash.

The main Taiex share index snapped its upward rally, receding from a new six and half months high stature, but sustaining the level of 5800 – points for a third straight session. Taiex cast off 17.49 points or 0.3%, closing the day at 5875.19.

On the economic front, the number of applicants for unemployment benefits continues to decrease in April as the economy shows signs of improvement, the Bureau of Labor Insurance said today.

During the first 14 days of April, an average of 866 people per working day applied for the benefits for the first time since becoming unemployed, down significantly from the average of 1,275 in the same period the previous month.

Meanwhile, the total number of applications has also been falling after reaching a peak of 6,000 per working day on average in February. The number dropped to 5,000 per working day in March and further to 4,200 per working day so far in April.

On the other hand, Standard & Poor's Ratings downgraded the outlook on Taiwan's sovereign rating to negative from steady, citing excessive debt burden of the Taiwanese government and poor performance of the local financial industry.

Standard & Poor's retained Taiwan's sovereign rating at AA-. It, though, noted that due to expanded fiscal outlays for economic stimulus measures and the issuance of spending vouchers, the total debt of the Taiwanese government would climb to 142% of its annual revenue by the end this year, the highest among economies under the AA- category. In addition, under the worst scenario, debts of the financial industry may top 48% of the gross domestic output (GDP), much higher than the average level of 28.4%.

In Philippines, the stock market, continued to take a downhill for the third consecutive day, as investors continued to book in profits as investor's became anxious by the overnight losses on Wall Street. At the concluding bell, the benchmark index dived 0.71% or 14.60 points to 2,022.49, while the All Share index fell 0.22% or 2.95 points to 1,320.57.

Socioeconomic Planning Secretary Ralph G. Recto yesterday said A P250-billion budget shortfall, at least 40% more than programmed, could be posted this year on the back of thinning revenues. Mr. Recto said a simulation by the National Economic and Development Authority (NEDA) showed the government would likely not meet its P177.2-billion deficit target as shrinking imports take their toll on Customs revenues. The agency also assumed a "worst case scenario" where the government fails to generate income from asset sales.

Imports plunged 34.5% in January from a year earlier as the electronic sector trimmed headcounts and output on slowing economic activity. Mr. Recto said on Monday that imports could fall by 12-14% this year, deeper than a previous estimate of an 8-10% decline. The wider deficit means the government will need to further shore up its funding requirement for this year, the NEDA chief said. The government has set its domestic borrowing program at P442 billion, while its foreign funding plan consists of $1.1 billion from foreign donors and $1.5 billion in commercial debts.

In India, bulls tightened their grip as stocks witnessed a spectacular rally for the eight consecutive trading session. Small-cap and mid-cap stocks spurted. Buying was broad based with 11 out of 12 sectoral indices on the BSE in positive terrain.

The BSE 30-share Sensex was up 317.51 points or 2.9% to 11,284.73. At the day's high of 11,337.75, the Sensex rose 370.53 points in late trade, its highest level since 14 October 2008. The S&P CNX Nifty was up 101.55 points or 3% at 3484.15.

In Singapore, the stock market reversing declines in the final minutes of trading to finish the session higher, on tracking positive cues from china market. The market witnessed the broad based gains, led by manufacturing and multi industries. Meanwhile buying pressure was evident in financials and properties issues. The blue chip Straits Times Index rose 8.97 points, or 0.47%, to 1,905.99.

On the economic front, Singapore's Minister of State for Manpower and Trade and Industry Lee Yi Shyan said that government-backed loans rose to a total value of more than 760 million Singapore dollars (about 507 million U.S. dollars) in March with small and medium-sized enterprises (SMEs) being the main beneficiaries.

The Department of Statistics said retail sales in Singapore declined 15.5% month-on-month in February, following a 8.3% fall in January. On a seasonally adjusted basis, retail sales grew 10.5% in February from the previous month, after falling 9.9% in the previous month. Excluding motor vehicles, retail sales dropped 3%. Year-on-year, retail sales slipped 5.7% in February, and excluding motor vehicles sales, it was down 10.2%.

In the Monetary Policy Statement released yesterday, the MAS stated that it will re-center the exchange rate policy band to the prevailing level of S$NEER. The central bank further noted that the current level of the S$NEER is appropriate for maintaining domestic price stability over the medium term, considering the prospects for growth in the economy.

The Ministry of Transport in Singapore said Singapore and Malaysia agreed to expand the bilateral air services agreement between both countries. Carriers from both countries can now fly to six new destinations in Malaysia and expand services in existing routes to Kuala Lumpur, Penang, Langkawi and Kota Kinabalu.

Elsewhere, Malaysia's Kula Lumpur Composite index was up 0.3% or 2.97 points to 956.68 while Indonesia's Jakarta composite index jumped by 1.5% or 23.40 points ending the day at 1593.66.

In other regional market, European shares traded modestly lower on Wednesday, dragged down by losses in the financial sector after UBS said that it will post another quarterly loss. On a regional level, the German DAX 30 index fell 0.5% at 4,532.89 and the French CAC-40 index declined 0.6% at 2,983.61. The U.K. FTSE 100 index traded flat at 3,987.19.

Research Notes

Research Notes

India in Great Recession

I. Conditions are reminiscent of the 1992 and 1999 downturns

While we are all aware that India is in a downturn, the exceptional circumstances that we are now placed in are not widely appreciated. Figure 1 shows the long time-series of year-on-year growth (smoothed) of industrial production. The recent period shows a marked slowdown. Negative values have come about. Industrial production growth seems to be at the worst levels since 1993. What we are facing is exceptional; the last time this happened was 16 years ago.

Other signs of stress are also building up. Capital inflows have dropped from a peak of over $30 billion a quarter to slightly negative values in the Oct-Nov-Dec 2008 quarter. This constitutes a `sudden stop' of capital flows. The fiscal situation has also worsened considerably, with a slowdown in tax collections. The collapse in industrial growth, coupled with the difficulties of public finance, add up to a gloomy environment. The only comparable experiences are found in the business cycle downturns of the early 1990s and the end of the 1990s.

II. The heart of the problem is investment

India is now in new territory on investment. The share of investment in GDP, which used to hover around 25%, has gone all the way up to 40% of GDP. Under normal circumstances, this bodes well, for high investment presages high GDP growth. But there is a problem. Investment, and particularly private corporate investment, is highly unstable in all market economies. Fluctuations of investment are a key source of business cycle fluctuations.

Figure 2 shows the dramatic changes that have taken place in India's investment. The three components of investment -- government, household and private corporate -- are expressed as percent of GDP. We see that for the first time in India's history, in recent years, private corporate investment has exceeded that by the government. Government investment is based on the budgetary process, and does not change much from year to year. Household investment is also relatively stable. Private corporate investment moves around substantially, based on the optimism of the private sector about India's future.

Private corporate investment was at around 5% when Narasimha Rao and Manmohan Singh unleashed the reforms of the early 1990s. This gave a rise in investment to 10%. Then the business cycle downturn came about, and it fell back to 5%. After this, the reforms of the Vajpayee government from 1999 to 2002 were able to reignite confidence, and private corporate investment went back up to 16% of GDP. The numerical values seen in the investment pipeline today are simply enormous. The extent to which it is translated into actual investment spending is of essence to the new logic of Indian business cycle fluctuations.

If the recent upsurge of private corporate investment reverses itself, we could see a drop from 16% of GDP to 6% of GDP. Each percentage point of GDP, today, is Rs.50,000 crore, so we are discussing massive numbers. A ten percentage point decline of private corporate investment is a decline in investment demand of Rs.500,000 crore.
III. We are only analysing possibilities for 2009-11

It must be emphasised that we are discussing a possible scenario for 2009-10 and 2010-11, and not a fact. Figure 2 above shows that private corporate investment has moved around dramatically in response to the changing optimism of the private sector. Optimism has clearly dropped dramatically in recent months. But we do not yet know the extent to which private corporate investment will drop in 2009-10 and 2010-11.

While these early indicators are worrisome, the jury is still out on whether investment in 2009-10 and 2010-11 will slowdown substantially when compared with the previous two years. However, even if this is only a scenario, this is the defining question for India's economic outlook, and the policy debate, when thinking about 2009-10. The critical questions are now: What can policy makers do to reduce the decline in private corporate investment? And, if a substantial drop arises, how can the damage be contained?
IV. Fiscal and monetary policy are mere spectators

Economists generally think in terms of counteracting business cycle fluctuations using fiscal policy and monetary policy. But in India, both fiscal policy and monetary policy institutions are quite feeble. They do not have the capability to make a substantial difference if the challenge that is posed to them is counteracting a decline in private corporate investment of Rs.500,000 crore a year.

In coming years, India must build up high quality fiscal, financial and monetary policy institutions. These institutions will give the institutional capability through which stabilisation can be done. This is a desirable goal, and should be undertaken. Indeed, the job of fiscal, financial and monetary policy reform should be the task number one on the agenda of the next government. But as far as the present downturn is concerned, the damage has been done. The time to fix the roof was when the sun was shining. But India did not make progress in the good years. Now, in the short term, we are faced with a storm, and the institutional capabilities required for stabilisation are absent. If the challenge is a potential decline of investment by Rs.500,000 crore a year, fiscal policy and monetary policy are mere spectators.
V. How can policy makers make a difference?

What shapes private corporate investment? In recent years, there was optimism that India was going to consistently grow at over 8% a year. Once this high growth environment was seemingly in place, the firms were not worried about India's shaky economic policy foundations. The perception of low risk and high expected returns gave an environment where the private sector plunged in to invest.

That scenario has now been disrupted. If the outlook for India is more gloomy, with a growth outlook of 4-6%, then much lower investment will take place. In boom times, all sins were forgiven, but in the present environment, the private sector is asking difficult questions about all aspects of State functioning. Now the private sector is worried about India's shaky institutional foundations on economic policy. The private sector needs to be persuaded that India is serious about economic policy reform, so as to get back to an optimistic environment where India is on the move, growth expectations are strong, and investment gets going again.

The will to invest of the private sector is thus shaped by `animal spirits' of private corporations. Today, the private sector has a low opinion of the interest or willingness of the Indian government to reform itself. The outlook today is one of a moribund India, trapped in ideology, lacking in execution capability, unable to make significant changes in any aspect of government, which will trundle along at 4-6% growth. Is India able to take on holy cows? Does economic policy making have common sense? Are we able to clear-headedly analyse problems, and translate sound analysis into action? Are we able to tread on toes? These are the critical questions.
VI. How to break the gloom?

In order to break with this gloom, the new government must unveil a reforms program in three areas:

1. Fiscal, financial and monetary institution building
2. Proper financing of the State
3. Expenditure reforms on both public goods and on subsidies.

In each of these three areas, a substantial laundry list can be made of what needs to be done. The next budget speech does not need to solve all the problems. It only needs to match Narasimha Rao over 1991 and 1992, and A. B. Vajpayee over 1999-2002, in terms of putting down enough of a down payment in economic reform so as to ignite optimism.

Fiscal, financial and monetary institution building
Under institution building are the long-standing problems of reforming law and institutions. This includes problems of RBI's transparency, the merger of all securities markets functions into SEBI (including the commodity futures work that is presently at FMC and the interest rates and currency work that is presently at RBI), the establishment of the Bond-Currency-Derivatives Nexus, and removing entry barriers in banking. With the Patil, Mistry, Rajan and Aziz reports which were done from 2005 to 2008, the technical work of planning out the reforms is in place. What is needed now is execution.
Proper financing of the State
What is now needed is new fiscal responsibility legislation, the establishment of a Debt Management Office, the implementation of the Goods and Services Tax, the removal of `bad taxes' including all cesses, all taxes on turnover such as stamp duty and the securities transaction tax, and barriers to globalisation such as customs duty. Given the immense escalation of public debt, government needs to obtain fiscal space through debt reduction by asset sales. Even if there is only a symbolic gesture of selling off 10 loss-making PSUs, it will have considerable signalling value, for it will show an India that is not trapped in ideology, that is able to pragmatically analyse problems and solve them.
Expenditure reforms on both public goods and on subsidies.
In terms of expenditure, the first challenge is that of refocusing the government to effectively deliver public goods. This involves setting up a proper police force and judiciary, a fundamental transformation of urban governance, a break with the holy cows on higher education, and genuine execution capabilities for critical infrastructure projects such as NHAI, the Bombay-Delhi industrial corridor, 3G telephony, broadband, and urban metro systems. In the areas of education and health, fundamental change is required to reorient government from spending money to obtaining outcomes.
The NREG is an important step forward in delivering cash to poor people. Once cash has been sent to every BPL family in India, the hundreds of distortions and subsidy programs that have been setup in the name of helping poor people can be disbanded. As an example, the LPG subsidy has nothing to do with helping poor people, and only serves to hold back GDP growth. Replacing the food, fertiliser and petroleum product subsidies by a cash transfer to BPL households will make a big difference in derisking the exchequer.

Movement on these three fronts -- institution building, financing of the State, and sensible expenditure -- will ignite animal spirits. The private sector will once again see that India has a chance of obtaining and sustaining above 8% growth. Once this is in hand, a series of bottlenecks which reduce the ability to invest will matter. These include restrictions on FDI, capital controls which prevent capital from coming into India, problems of the land market, and labour law. The new government needs to attack these bottlenecks also.

VII. What if a large decline in investment does come about?

While the new government must do all it can to reignite the `animal spirits' of private investors, we must not assume that this will work out successfully. We must simultaneously ask ourselves the question: If despite our best efforts, a large drop in investment does come about, how can we absorb the shock better? What can be done to minimise the damage, and bounce back effectively when the storm passes? There are four areas for work:

1. The first is about positive feedback loops. Faulty policy structures have positive feedback loops. In India, when times are good, interest rates tend to go down in real terms. When times are bad, interest rates tend to go up in real terms. Figure 4 shows the policy rate of RBI, expressed in real terms [methodology] The graph shows big values of the real rate in the dark days of 1999 and in recent months. It shows small values in the boom times of 2004 and 2008. Through this, monetary policy makes good times better and bad times worse. Such sources of pro-cyclicality need to be identified and blocked.
2. Institution building in fiscal, financial and monetary policy will enable stabilisation. But this can only yield results in the medium term. In the short term, the only tool for stabilisation that is easily accessed is a floating exchange rate. In good times, the rupee should appreciate and in bad times the rupee should depreciate. This will be a potent force in favour of stabilisation. Many people in India believe that RBI helps matters by reducing the volatility of the rupee-dollar exchange rate. However, such efforts exacerbate the boom and bust cycle of the market economy.
3. The third key area for work lies in finance. When bad times arrive, many companies find themselves making losses. Some of these companies are weak and must die. But the survival of better companies through the storm critically relies on a financial system that is able to deliver additional debt and equity capital, in a discriminating way, into the better firms. This requires progress on financial sector reforms. The implementation of the Patil, Mistry and Rajan reports will materially help.
4. The fourth dimension of coping with bad times is flexibility of resource allocation. Absorbing the downturn is critically about people being fired, people being hired, firms closing down, firms starting up, workers migrating from one place to another, and factories or companies being sold. Government must work to improve flexibility of resource allocation, so that a new configuration of firms, workers and capital is found, that is able to flourish. The more impediments there are to flexibility, the longer and more protracted the downturn will be.

VIII. Conclusion

In summary, the defining question today is about the extent to which private firms have the will to invest and the ability to invest. A significant decline in the investment to GDP ratio will trigger off a painful downturn. In order to stave off this scenario, the new government must undertake a broad program of economic reforms, comparable with what Narasimha Rao did in 1991-1992 and what A. B. Vajpayee did over 1999-2002, so as to ignite animal spirits, inspire confidence in India's future, and improve private corporate investment. At the same time, work is needed on four tracks in order to cope with a decline in investment (if it should arise): blocking feedback loops, exchange rate flexibility, improved flows of financing from outside the firm, and flexibility of resource allocation.


via Financial Express

Sensex settles above 11k mark; Realty zooms 8.79%

The Sensex rallied further on account of intense buying by funds and realty investors. Realty, capital goods, banking and power stocks gained further ground while IT dropped. It opened on a weak note with a loss of 162.08 points, at 10,805.14 on Wednesday as Infosys results came out with disappointing numbers. As the day progressed, the index recovered from day`s low of 10,719.18 and gained further ground breaking 11,000 levels on heavy buying seen in frontliners. Finally it wrapped on a cheerful note after touching a high of Rs 11,337.75.

Secondline stocks also performed well. BSE Midcap and Smallcap index surged 3.95% and 5.32% respectively.

Amongst the sectoral indices, BSE Realty zoomed 8.79%, Capital goods soared 7.36%, Power surged 5.19%, Bankex increased by 4.53%, while IT dipped 1.71%.

On global front, Asian stocks dropped after US retail sales unexpectedly declined and a stronger yen dimmed the earnings outlook for Japan`s electronics and auto companies. Nikkei fell 99.72 points, or 1.13%, to end at 8,742.96, Hang Seng index rose 89.46 points, or 0.57%, to close at 15,669.62 and Shanghai Composite advanced 8.88 points, or 0.35%, to settle at 2,536.06.

European stocks fell led by mining companies after Rio Tinto Group reported a drop in iron-ore output and base metal prices slid. FTSE 100 fell 4.32 points, or 0.11%, to trade at 3,984.67, CAC 40 declined 16.25 points, or 0.54%, to trade at 2,983.97 and DAX decreased 24.65 points, or 0.54%, to trade at 4,532.36. (4.03 p.m., IST).

The Sensex ended the day with a gain of 317.51 points, or 2.90% at 11,284.73 after touching a high of 11,337.75 and a low of 10,719.18. The broad-based NSE Nifty climbed 101.55 points, or 3.00% at 3,484.15 after hitting a high of 3,497.55 and a low of 3,311.80.

Major gainers in the 30-share index were Reliance Capital (13.84%), Tata Motors (11.50%), DLF (10.00%), Bharat Heavy Electricals (9.48%), Reliance Energy (7%), and ICICI Bank (6.77%).

On the other hand, Infosys Technologies (2.72%), Tata Consultancy Services (2.39%), HDFC Bank (1.17%), Tata Power Company (0.86%), Sterlite Industries (India) (0.75%), and ITC (0.72%) were the biggest losers in the Sensex.

Overall market breadth was extremely positive. Out of the total 2,703 stocks traded at BSE, 2,173 advanced, 463 declined while 67 remained unchanged.

Corporate result

India`s second biggest software exporter, Infosys Technologies announced on Wednesday a 29.14% year-on-year (y-o-y) growth in consolidated earnings for the quarter ended March, 2009. On sequential basis, the company registered a drop of 1.71% in consolidated profit.

BSE Bulk Deals to Watch - Apr 15 2009

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
15/4/2009 523395 3M INDIA LTD ACACIA INSTITUTIONAL PARTNERS LP B 76687 1120.00
15/4/2009 523395 3M INDIA LTD ACACIA PARTNERS LP S 76687 1120.00
15/4/2009 532840 ADVANTA ACACIA PARTNERS LP B 340000 515.00
15/4/2009 532840 ADVANTA ACACIA INSTITUTIONAL PARTNERS LP S 340000 515.00
15/4/2009 506074 ARSHIYA INTL HSBC BANK MAURITIUS LIMITED S 294921 65.02
15/4/2009 500027 ATUL LTD. FINFLOW INVESTMENT PVT LTD S 184000 50.58
15/4/2009 505506 AXON INFOTEC CHAK DE TRADING PRIVATE LTD B 5000 13.68
15/4/2009 505506 AXON INFOTEC BHARATKUMAR N PATEL S 3800 13.30
15/4/2009 512253 BIO GREEN I RAGHAVJI NARAN PATEL S 65000 8.92
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Post Session Commentary - Apr 15 2009

Domestic market rallied during final trading hours to close the day with handsome gains on sustained buying support. Firm US index futures along with little recovery in European market led sharp rebound from initial lows in the domestic bourses. The hopes of further ease in RBI’s monetary policy in annual review on 21st April 2009, also contributed to the positive attitude.

The Indian market belled the day on negative note tracking weak cues from the global markets. Tuesday, the US stock markets ended in red led by financial stocks that fell out of favor and disappointing retail sales data. In addition, disappointing quarterly results from the IT bellwether Infosys Technologies also weighed on the sentiments. Further, market managed to change its’ direction to northward on solid gains in benchmark indices and fresh buying by foreign funds. Stocks continued to extend their gains till end due to strong buying over the ground. BSE Sensex breached 11,300 level and NSE Nifty crossed 3,400 mark to close around 4,000. From the sectoral front, most of the indices ended in green barring IT stocks. Besides, most of the buying was seen in Reality, Capital Goods, Power, Bank, Pharma, Auto, Metal and PSU stocks. Broader indices outperformed today as Mid Cap and Small Cap stocks added more than 3% and 5% respectively.

Among the Sensex pack 22 stocks ended in green territory, 7 in red and 1 remained unchanged. The market breadth indicating the overall health of the market remained extremely positive as 2173 stocks closed in green while 463 stocks closed in red and 67 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 317.51 points at 11,284.73 and NSE Nifty ended up by 101.55 points at 3,484.15. BSE Mid Caps and Small Caps closed with gains of 136.97 and 208.29 points at 3,601.89 and 4,123.45 respectively. The BSE Sensex touched intraday high of 11,337.75 and intraday low of 10,719.18.

Gainers from the BSE Sensex pack are Tata Motors (11.50%), DLF Ltd (10%), BHEL (9.48%), Reliance Infra (7%), ICICI Bank (6.77%), L&T Ltd (6.65%), SBI (6.38%), Ranbaxy Lab (6.25%) and Sun Pharma (5.63%).

Losers from the BSE Sensex pack are Infosys Tech (2.72%), TCS Ltd (2.39%), HDFC Bank (1.17%), Tata Power (0.86%) and Sterlite Ind (0.75%).

On the global markets front the Asian markets which opened before the Indian market, ended mixed following a weaker closing on Wall Street. Shanghai Composite, Hang Seng and Straits Times index ended higher by 8.88, 89.46 and 8.97 points at 2,536.06, 15,669.62 and 1,905.99 respectively. However, Nikkei 225 and Seoul Composite lost 99.72 and 9.54 points at 8,742.96 and 1,333.09 respectively.

European markets which opened after the Indian market are trading mixed. In Frankfurt the DAX index is trading down by 22.74 points at 4,534.27 whereas in London FTSE 100 is trading up by 1.58 points at 3,990.57.

The BSE Realty index gained (8.79%) or 189.77 points to close at 2,312.53 on hopes that lower rates will spur housing demand. Gainers are Ansal Infra (17.07%), Unitech Ltd (14.81%), Penland Ltd (10.33%), DLF Ltd (10%) and Anant Raj (9.17%).

The BSE Capital Goods index also ended higher by (7.36%) or 551.15 points at 8,043.45. Lakshmi MA W (16.36%), Punj Lloyd (13.97%), Crompton Greaves (11.90%), Bharat Bijli (10%) and SKF India (9.77%) ended in positive territory.

The BSE Power stocks advanced by (5.19%) or 106.16 points to close at 2,166.24. Major gainers are Lanco Infra (21.59%), Crompton Greaves (11.90%), BHEL (9.48%), Siemens Ltd (7.35%) and Suzlon Energy (7.09%).

The BSE Bank index gained (4.53%) or 240.3 points at 5,541.45 on expectation of a further easing of the monetary policy by the regulatory body with headline inflation nearing to zero. Scrips that advanced are Axis Bank (9.09%), Indian Overseas Bank (8.84%), IDBI Bank (7.92%), Yes Bank (7.78%) and ICICI Bank (6.77%).

The BSE Pharma index went up by (4.05%) or 120.51 points to close at 3,098.56. Main gainers are Sunpha Adv (15.42%), Orchid Chem (12.94%), Dishman Pharma (10.75%), Wockhardt Ltd (10.55%) and Aurobindo Pharma (8.81%).

The BSE Auto ended up by (3.86%) or 130.57 points at 3,515.31. Gainers are Tata Motors (11.50%), Ashok Leyland (7.28%), Bharat Forge (6.96%), M&M Ltd (5.39%) and Escorts Ltd (4.83%).

The BSE IT index lost (1.71%) or 42.78 points to close at 2,444.55. Main losers are Infosys Tech (2.72%), TCS Ltd (2.39%) and Financ Tech (0.35%).

Tata Motors surged 11.50% on report that it repurchased and extinguished its US and Japan listed foreign currency convertible bonds. The buyback of FCCBs will help reduce liabilities

Larsen & Toubro ended up by 6.65%. The company and Atomstroyexport (ASE) of Russia have signed a Memorandum of Understanding (M0U) for co-operation between the two companies for Russian design reactors VVER 1000.

GHCL Ltd surged 5% on report that it had repurchased foreign currency convertible bonds worth $11 million at a discount and extinguished the same.

Pantaoon Retail India advanced by 3.17% after the board of directors approved raising funds of Rs1,500 crore through various routes and reorganizing the business.

Maruti Suzuki gained 2.96%. The company plans to roll out this year mits Bharat Stage (BS 4) compliant models in a phased manner. The company said it may not be able to make all its models acquiescent at the same time due to its vast product portfolio.

Infosys Technologies dropped by 2.72%. The company announced its fourth quarter results today. The company’s net profit in Q4 FY09 stood at Rs. 16.13bn as against Rs. 16.41bn in the previous quarter, marking a sequential drop of 1.7%. Revenue for the fourth quarter is down 2.6% QoQ at Rs56.35bn as against Rs57.86bn in Q3 FY09. Infosys has recommended a final dividend of Rs. 13.5 per share. Also Infosys expects a decline in revenue by 6.7% to 3.1% for FY10.

Sensex notches gains for 8th session in a row

Relentless buying helped the market maintain its upward march for the eighth straight session. The Sensex spurted 317.51 points or 2.90% to end at its highest level in more than six months. Barring the BSE IT index, all the other 11 sectoral indices on BSE ended higher. Software shares lagged behind after sector bellwether Infosys issued a weak guidance for the year ending March 2010 (FY 2010).

The market had tumbled in opening trade on weak cues from global markets and dismal guidance by IT bellwether Infosys Technologies. Expectations of a further easing of the monetary policy by the Reserve Bank of India (RBI) triggered a rebound later. Inflation based on the wholesale price index (WPI) rose 0.26% in the year through 28 March 2009, lower than previous week's 0.31% rise, data released by the government on 9 April 2009, showed. It was the lowest growth in WPI inflation in at least two decades.

Forecast of a good monsoon this year also supported rally on the domestic bourses. The International Research Institute (IRI) for Climate and Society at Columbia University has forecast normal-to-slightly-above-normal monsoon for India between June and September this year. Monsoon is key as sixty per cent of India's population lives in rural regions.

The market sentiment was firm due to buying by foreign funds after heavy outflows in the first two months of calendar 2009. Foreign institutional investors (FIIs) bought shares worth a net Rs 641.90 crore on Monday, 13 April 2009, much higher than Rs 90.60 crore on 9 April 2009. FII inflow in April 2009 totaled Rs 2,320 crore (till 13 April 2009). FII outflow in calendar year 2009 totaled Rs 4,351.70 crore.

The BSE 30-share Sensex rose 317.51 points or 2.90% to 11,284.73, its highest closing since 14 October 2008. At the day's high of 11,337.75, the Sensex rose 370.53 points in late trade. At the day's low of 10,719.18, the Sensex fell 248.04 points in early trade.

The S&P CNX Nifty rose 101.55 points or 3% at 3484.15, its highest closing since 14 October 2008. Nifty April 2009 futures were at 3496.20, a premium of 12.05 points compared to the spot closing. Turnover in NSE's futures & options (F&O) segment was Rs 72224.45 crore sharply higher than Rs 51688.1 crore on Monday, 13 April 2009.

The BSE Mid-Cap index rose 3.95% and the BSE Small-Cap index rose 5.32%. Both the indices outperformed the Sensex.

The market breadth was strong. On BSE, 2173 shares rose as compared to 463 that declined. A total of 67 shares were unchanged. The Sensex clocked a turnover of Rs 7678 crore, much higher than Rs 5,420.30 on 13 April 2009.

European shares declined after struggling Swiss bank UBS said it expects to post a loss of nearly 2 billion Swiss francs ($1.8 billion) for the first three months of 2009. Key indices in France and Germany were down 0.23% to 0.42%. UK's FTSE index, which swayed between gains and losses, was now up 0.05% after the hard-hit British housing market showed further signs of stabilization in March 2009

Swiss bank UBS said Wednesday that despite some positive signs at the start of the quarter, there was a further outflow of client money, with a net outflow of 23 billion francs from its wealth management and Swiss bank unit.

Trading in US index futures showed the Dow could rise 33 points at the opening bell on Wednesday. Earlier in the day, US index futures were in the red.

Chinese shares ended positive on reports the government is considering additional stimulus measures to boost consumption and bolster growth. The Shanghai Composite index rose 0.35%. In other Asian markets, Jakarta Composite index in Indonesia was up 1.49%, Singapore's Straits Times rose 0.47% and Hong Kong's Hang Seng rose 0.57%

Key benchmark indices in Japan, South Korea, and Taiwan were down by 0.30% to 1.13%.

US retail sales in March 2009 ended two months of increases and sparked selling across the board on Wall Street on Tuesday, 14 April 2009, with the stocks of retailers, big manufacturers and energy companies among the casualties.

Goldman Sachs shares slid 11.6% to $115.11, a day after the company said it would raise $5 billion by issuing common stock and posted a stronger-than-expected quarterly profit. Equity offerings are traditionally a drag due to their dilutive effect. Further, there were concerns about the quality of Goldman's earnings.

After the market closed Intel said its first-quarter net income dropped 55% on lower sales and margins; while the world's largest computer-chip maker said there were some signs of a bottoming, its fairly hazy second quarter guidance unnerved markets. Its shares fell 5.1% after-hours trading.

In a major speech, US President Barack Obama on Tuesday said there were signs of recovery, but by no means are we out of the woods just yet.

India's second largest software exporter by sales Infosys Technologies fell 2.70% to 1370.80 after its consolidated net profit as per Indian GAAP declined 1.7% to Rs 1613 crore in Q4 March 2009 over Q3 December 2008. Sales declined 2.6% to Rs 5635 crore in Q4 March 2009 over Q3 December 2008. The stock came off early lows of Rs 1300.05.

Infosys forecast a 3.1% to 6.7% decline in revenue to between $4.35 billion and $4.52 billion as per US GAAP for the year ending March 2010 (FY 2010). The company forecast a 9.5% to 13.6% decline in consolidated earnings per American Depositary Share in the range of $ 1.91 and $ 2.00 for FY 2010. The pricing for the quarter ended March 2009 declined by 3%, S.D.Shibulal, chief operating officer, Infosys said in a statement.

India's largest software outsourcer by sales TCS fell 2.39% and financial software servicer provider Financial Technologies fell 0.35%. India's third largest software outsourcer by sales Wipro ended unchanged at Rs 269.

Software developer CMC surged 51.22% at Rs 571.75 on reporting 42.42% rise in net profit to Rs 33.27 crore in Q4 March 2009 over Q3 December 2008. Net sales rose 17.49% to Rs 210.58 crore in Q4 March 2009 over Q3 December 2008. At the time of announcing Q4 results, the company declared dividend at the rate of Rs 15 per share (150%).

Tech Mahindra, who the bid to acquire fraud-hit Satyam Computer Services, rose 2.55%. The company reportedly plans to raise Rs 600 crore through bonds. Tech Mahindra will have to shell out Rs 2,900 crore for acquiring a 51% in Satyam. Satyam Computer, which is now owned by Tech Mahindra, fell 2.56%

India's largest engineering and construction company by revenue Larsen & Toubro (L&T) spurted 6.65%. The company recently announced that it bagged orders worth Rs 605-crore from the water and steel sectors in the January-March 2009 quarter. The stock has a sixth highest weightage of 5.53% on the Sensex.

L&T has lost the bid for buying a major stake in fraud-hit Satyam Computer. L&T's chief financial officer, however, said in a television interview on Monday that L&T will continue holding its stake in Satyam Computer. L&T had acquired 4% in Satyam at Rs 174 per share before Satyam's founder B Ramalinga Raju admitted on 7 January 2009 of a Rs 7,000-crore accounting fraud at the IT firm. L&T later had to hike its stake in Satyam to 12% as the initial cost of investment in Satyam was at risk after the Satyam stock tumbled hit by Raju's confession of the fraud on 7 January 2009.

India's largest power equipment maker by sales Bharat Heavy Electricals spurted 9.48% on expectations that lower steel prices will boost margins in the current year. Steel is a key raw material for power equipment.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries rose 3.18%. The scrip has the highest weightage of 17.73% on the Sensex. The company recently started pumping gas from the Krishna Godavari (KG) which is estimated to add close to $2 billion to the company's profit at peak production levels.

Bank stocks rose after government bond yields fell. India's second largest private sector bank by market capitlaisation ICICI Bank, which has fourth highest weightage of 5.89% on the Sensex, rose 6.77%. It recovered from the day's low of Rs 401.10 hit in early trade. ICICI Bank's advance tax payment remained unchanged at Rs 250 crore in Q4 March 2009 over Q4 March 2008.

Axis Bank (up 9.09%), Union Bank of India (up 2.47%), State Bank of India (up 6.38%), Kotak Mahindra Bank (up 6.43%), Punjab National Bank (up 5.21%), Karnataka Bank (up 1.87%), Yes Bank (up 7.78%), and Indian Overseas Bank (up 8.84%), soared.

Bond yields edged lower on Wednesday, 15 April 2009, supported by good liquidity conditions in the banking system, but upcoming bond auction kept gains in check. At 12:00 IST, the 10-year benchmark bond yield was at 6.66%, below Monday's close of 6.75%. The bond market was shut on Tuesday, 14 April 2009, on account of national holiday.

It may be recalled that many banks had reported robust Q3 December 2008 results on the back of treasury gains as bond prices soared. Bond yields and bond prices are inversely related.

Auto stocks extended recent gains on revival in demand on the back of lower interest rates. India's largest truck maker by sales Tata Motors topped the Sensex gainer, rising 11.50%. The company said after market hours on Monday, 13 April 2009, that it repurchased and extinguished its US and Japan listed foreign currency convertible bonds (FCCBs). The buyback of FCCBs will help reduce liabilities

Tata company repurchased 170 Zero Coupon Convertible Alternative Reference Securities (due 2012), of the face Value US $ 1,00,000 each aggregating $ 17,000,000 at the average price of 50.375%. Subsequent to this repurchase, the outstanding bonds would reduce from $490 million to $473 million.

The company also repurchased 30 Zero Coupon Convertible Notes (due 2011), of the face value of Japanese yen (JPY) 10,000,000 each aggregating JPY 300,000,000 at an average price of 54.27%. Subsequent to this repurchase, the outstanding Bonds would reduce from JPY 11760 million to JPY 11460 million.

Maruti Suzuki jumped 2.96% to Rs 847.70. The stock hit a high of Rs 853, its 52-week high. The company on Tuesday, 14 April 2009, unveiled its second K-series gasoline engine to be used in its upcoming passenger car Ritz.

Ashok Leyland (up 7.28%), Mahindra & Mahindra (up 5.39%), Escorts (up 4.83%), Bajaj Auto (up 3.50%), and Hero Honda (up 1.27%), rose.

Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. Penland (up 10.33%), Orbit Corporation (up 8.46%), Mahindra Lifespace Developers (up 6.45%), HDIL (up 5.96%), Sobha Developers (up 6.15%), Indiabulls Real Estate (up 5.59%), and Omaxe (up 5.21%), rose. Most of the realty deals including sale of commercial property and housing sales is driven by finance.

India's largest realtor by market capitalisation DLF soared 10%. DLF and its unlisted promoter group company DLF Assets (DAL) are together reported to have raised around Rs 1100 crore as debt from HDFC Bank through lease rental discounting (LRD) of their properties. The fresh round of debt raising will reportedly ease cash flow at DLF. LRD allows a property owner to raise funds against the expected rentals from the property in future. Privately held DAL has raised around Rs 800 crore, while DLF raised the rest.

Delhi-based realty firm Unitech rose 14.81%. According to recent reports, the company plans to raise as much as Rs 1,250 crore through private placement of shares to qualified institutions to repay part of its debt of over Rs 8,000 crore.

Telecom shares spurted on good monthly subscriber addition figures. India's largest listed telecom operator by market share Bharti Airtel rose 3.30%. Bharti added 28 lakh GSM users in March 2009 as against 27.3 lakh users in February 2009. Bharti Airtel continues to be the top GSM operator, with a market share of 32.57%. The stock has 5.61% weightage on the Sensex.

India's third largest listed cellular operator by sales Idea Celular rose 3.27%. The firm added added 15 lakh new customers, boosting its subscriber base to 4.30 crore. With this, Idea's market share is 14.92%.

India's second largest listed telecom operator by sales Reliance Comunication rose 4.95%. The company said on Wednesday, 15 April 2009, it will launch a tender offer to buyback FCCBs at a discount, subject to central bank approval. The company said in a statement $950 million of FCCB bonds were outstanding from $1 billion issue set to mature in 2012. It said it had already repurchased $40 million of the bonds.

The world's sixth largest steel producer Tata Steel extended recent gains, rising 3.69%. The company is reportedly in discussion with Tata Motors to supply flat steel products for the world's cheapest car, Nano.

India's largest copper maker by sales Sterlite Industries fell 0.75% after global mining giant Grupo Mexico outbid Vedanta Resources for acquiring bankrupt copper mining firm Asarco.

Tata Group firm Tata Communicatons rose 2.24% to Rs 582.85. It hit an intraday high of Rs 594.90, which is also its 52-week high.

Drug maker Pfizer jumped 2.12%. It hit an intraday high of Rs 712, which is also its 52-week high. US drug maker Pfizer Inc offered on Sunday, 12 April 2009, to pay about $136 million to boost its stake in its Indian arm Pfizer to 75%. Pfizer -- which announced plans to buy rival Wyeth for $68 billion earlier this year -- said it will launch a tender offer to buy a 33.77% stake in the Indian business at a price of Rs 675 per share. Pfizer already owns 41.23% of the Indian company. It expects the offer, which is subject to regulatory approvals, to open in June 2009.

Offshore service provider Garware Offshore Services was locked at an upper limit of 20% at Rs 92.40 on BSE, after the company said it has secured three-year contract from ONGC for its newly built platform supply vessel M V Makalu.

Signs of an improvement in the Indian economy and easing of the credit crisis triggered a solid rally on the Indian bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 3124.33 points or 36.92% to 11,284.73 on 15 April 2009, its highest closing since 14 October 2008.

There are signs that the credit crisis is easing. Indian corporate bonds sales posted their best quarter on record as government-backed infrastructure and finance companies raised funds to bolster their capital. Indian companies raised Rs 37800 crore from bonds in the quarter ended March 2009, 44% more than in the same period a year earlier. State-owned lender India Infrastructure Finance Company raised Rs 7370 crore in the biggest bond sale of the quarter, followed by a Rs 3950-crore issue by the National Bank for Agriculture & Rural Development, known as Nabard. The credit offtake from the banking sector is also improving.

The Q4 March 2009 results will dictate the near-term trend on the bourses and investors will closely watch the future outlook provided by the company managements.

India Votes 2009 - Please Vote for the BJP/NDA!

All the BJP/NDA supporters out there- Don't forget to vote tomorrow and on all the poll days!

Make your Vote count. Let's get NDA back!

Let's uproot those who symbolize appeasement, corruption, degradation and sycophancy

For those who aren't BJP supporters, please consider your vote and think on who can take our nation forward in terms of economic development and equal opportunity to everyone.

and finally, for the Bull Market - BJP/NDA !

Wall Street spends entire day in the red

Weak economic reports remind investors once again about recession

stocks at Wall Street ended with losses on Tuesday, 14 day, 10 April, 2009. Financial stocks were under pressure since the opening bell, and led losses in the broader market. The sector's downturn came amid a $5 billion common equity offering from Goldman Sachs. Other than this, came a weak batch of economic data which has also led to today's depressed market sentiment.

After opening 70 points lower earlier during the day, The Dow Jones Industrial Average ended lower by 137 points at 7,920. The Nasdaq Composite Index, ended lower by 27 points at 1,625. S&P 500 ended lower by 17 points at 841.

All ten sectors posted a loss today led by financial sector. Healthcare sector showed good strength today after better-than-expected earnings announcement and a reaffirmed outlook came from Johnson & Johnson.

Among major economic reports for the day, The Commerce Department reported today that U.S. retail sales dropped a seasonally adjusted 1.1% in March after two months of gains had boosted hopes of a rebound in consumer spending. Sales fell in March for almost every type of store except the necessities of food and drugs.

Retail sales in the first quarter were down 1.2% compared with the fourth quarter of last year, raising the possibility that real consumer spending may have fallen again in the first three months of 2009 after plunging at a 4% annual rate in the final six months of 2008.

In a separate report, the Labor Department said producer prices fell 1.2% in March, much more than the 0.5% decline expected. Core prices - which exclude food and energy were unchanged. Producer prices are down 3.5% in the past year, the largest decline in wholesale prices since 1950.

February business inventories decreased 1.3%, which is generally in-line with the 1.2% decline that was expected. Inventories also decreased 1.3% in the prior month.

Transportation stocks garnered positive interest after J.B. Hunt posted better-than-expected quarterly results. Increased confidence in the industry took the Dow Jones Transportation Index up.

Crude oil fell once again as traders anticipated that crude inventories rose more thane expected this week. Discouraging retail sales data also reminded traders once again regarding recession. Yesterday, the International Energy Agency had lowered its forecast for this year's global oil demand.

On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $49.41/barrel (lower by $0.64 or 0.6%) on the New York Mercantile Exchange. During intra day trading, it rose to a high of $51.12. Last week, crude ended lower by 0.5%.

Earning reports expected tomorrow are of Abbott Labs along with a host of other companies. Economic data will also be in focus, with March CPI, and April Empire Manufacturing due at 8:30ET, followed by March capacity utilization and industrial production at 9:15ET. In addition, the Fed will release its anecdotal collection of economic information, the Beige Book, at 14:00ET. The weekly crude inventories report is set for release at 10:30ET.

Market may resume weak

The market is monitoring the international markets for further direction and the weakness across the global markets may drag down the local indices. The market may open in negative territory following the slump in Asian markets in morning trades. However, after posting significant gains in last seven sessions, buying interest may continue on the back of firm trend. Among the key local indices, the Nifty has good support around 3340-3300 levels and upside till 3420-3460 levels. The Sensex has a likely support at 10800 and may face resistance at 11100.

US indices slipped on Tuesday with the Dow ended lower at 7920 down 138 points, while the tech-laden Nasdaq declined to close 28 points lower at 1626.

Indian floats had a weak outing on the US bourses. Except MTNL & VSNL all fell sharply. Satyam tumbled 11.11%, Tata Motors & ICICI Bank slipped above 4% and Wipro, Patni Computer, Infosys, Dr Reddy, HDFC Bank, Rediff dropped over 1-3% each.

Crude oil prices in the international market edged lower, with the Nymex light crude oil for May delivery lost by 64 cents to close at $49.41 per barrel. In the commodity space, the Comex gold for June series declined $3.80 to settle at $892 a troy ounce.

Pre Session Commentary - Apr 15 2009

Today domestic markets are likely to open positive despite majority of Asian markets have opened negative. The Infosys results have been phenomenal as they have recorded a phenomenal growth in topline and bottom line by 29.50% and 30.18%. The IT stocks may be in the limelight on the back of the better than expected results of Infosys.

On Monday, domestic markets recorded seventh consecutive gains. Nevertheless after a positive gap opening the domestic markets dipped the base line. The sentiments across Asian markets were positive however Japanese markets ended in red due to drastic deflation of 2.2% in wholesale prices which is considered to be the worst since May 2002. After a phenomenal post mid session rally the domestic markets pared off its early gains due to profit booking pressures. Sensex spurred incredibly to break the 11k mark. In the Sectoral indices Metal, Bankex, Realty, PSU and Auto witnessed huge buying as they gained 5.49%, 5.07%, 4.14%, 3.16% and 2.73% respectively. However on the other hand sectors like CD, IT and FMCG suffered selling pressures. Smallcap and Midcap stocks have once again stolen the charm of the day from the heavyweights. During the session we expect the markets to be trading positive with an essence of mild volatility.

The BSE Sensex closed with gain of 163.36 points at 10,967.22 and NSE Nifty ended with gain of 40.55 at 3,382.60. BSE Mid Caps and BSE Small Caps ended with gains of 106.57 points and 147.61 points at 3,464.92 and 3,915.16 respectively. The BSE Sensex touched intraday high of 11,069.54 and intraday low of 10,800.84.

Tuesday, the US stock markets ended in red led by financial stocks that fell out of favor and disappointing retail sales data. However the earnings results fell to provide any leadership today. The financial stocks ended the session with a 7.7% loss after Goldman Sachs announced a $5 billion common equity offering that was discounted from the prior session''s closing price. US light crude oil futures for May delivery traded in a range between $48.85 and $51.12 per barrel during the session and finally closed the session down by 1.3% at $49.41 per barrel on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) dropped by 137.63 points to close at 7,920.18. The NASDAQ Composite (RIXF) index decreased by 27.59 points to close at 1,625.72 and the S&P 500 (SPX) fell by 17.23 points to close at 841.50.

Today major stock markets in Asia are trading negative. Shanghai composite low by 13.12 points at 2,514.06. Hang Seng is trading low by 298.45 points at 15,281.71 followed by Japan''s Nikkei which is low by 107.25 points at 8,735.43, Strait Times is low by 39.46 points at 1,857.56. While Taiwan Weighted is also low by 35.15 points at 5,857.53 and Seoul Composite points is also low by 21.19 points at 1,321.44 respectively.

Indian ADRs ended mostly lower. In technology sector, Infosys ended down by 2.44% along with Wipro by 3.54%. Further, Patni Computers lost 3.01% and Satyam closed lower by 11.11%. In banking sector ICICI Bank and HDFC Bank lost 4.07% and 1.98% respectively. In telecommunication sector Tata Communication and MTNL advanced by 3.40% and 1.75% respectively. Sterlite Industries decreased by 3.50%.

The FIIs on Friday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,101.80 Crore and gross debt purchased stood at Rs 288.20 Crore, while the gross equity sold stood at Rs 2,011.20 Crore and gross debt sold stood at Rs. 585.10 Crore. Therefore, the net investment of equity and debt reported were Rs 90.60 Crore and Rs (296.60) Crore respectively.

On Thursday, the Rupee closed at Rs. 50.02/03, 0.38% stronger than its previous close of Rs. 50.19/20. The local currency closed stronger due to expectations of green back inflow as domestic stock markets are continuously rising.

On BSE, total number of shares traded were 57.58 Crore and total turnover stood at Rs 5,420.30 Crore. On NSE, total number of shares traded was 116.69 Crore and total turnover was Rs 15,397.98 Crore.

Top traded volumes on NSE Nifty – Unitech with 86624055 shares, Suzlon Energy with 52235926 shares, Tata Steel with 17672347 shares, DLF with 14394818 shares followed by SAIL with 13293216 shares.

On NSE Future and Options, total number of contracts traded in index futures was 751978 with a total turnover of Rs 12,097.16 Crore. Along with this total number of contracts traded in stock futures were 474913 with a total turnover of Rs 17,041.72 Crore. Total numbers of contracts for index options were 1238851 with a total turnover of Rs 20,862.92 Crore and total numbers of contracts for stock options were 44968 and notional turnover was Rs 1,686.30 Crore.

Today, Nifty would have a support at 3,343 and resistance at 3,421 and BSE Sensex has support at 10,870 and resistance at 11,098.

Market may drift lower on profit taking

The market may edge lower as investors may cash in on recent strong rally in share prices. Lower Asian markets may trigger price taking. Nevertheless, the market sentiment remains firm due to buying by foreign funds after heavy outflows in the first two months of calendar 2009. IT bellwether Infosys today announces Q4 March 2009 results and guidance for the year ending March 2010 (FY 2010).

Political uncertainty ahead of the parliamentary elections may cap near term upside. The month-long parliamentary elections begin on Thursday, 16 April 2009.

The market sentiment remains firm due to buying by foreign funds after heavy outflows in the first two months of calendar 2009. As per the provisional data released by the stock exchanges, foreign fund bought shares worth a net Rs 580.49 crore on Monday, 13 April 2009. The stock market was closed on Tuesday, 14 April 2009, for a public holiday. FII inflow totaled Rs 1678.10 crore in the first few days this month (till 9 April 2009).

Emerging-market equity funds carried into April 2009 their first-quarter momentum, taking in $2.2 billion in inflows on the week to 8 April 2009, fund tracker EPFR Global said on 10 April 2009. It was the fifth consecutive week of positive net inflows for emerging-market equity funds, EPFR said. "You have to think that all this liquidity being pumped in by central banks around the world is finally removing some of the shackles," EPFR Global's managing director Brad Durham said in a press release.

Emerging-market equity funds' $2.2 billion weekly inflow, or 0.9% of their total assets, brought year-to-date inflows to emerging-market stock funds to $5.4 billion, EPFR Global said.

Asia ex-Japan Equity Funds enjoyed another solid week, with an inflow of $794 million in the week ended 8 April 2009. It was the best week of inflows for Emerging Asia since April 2008. More than half of the $794 million of weekly inflows were received by China equity funds.

Signs of an improvement in the Indian economy and easing of the credit crisis triggered a solid rally on the Indian bourses in the past few days. The rally was also a part of a sharp surge in global equities triggered by hopes the worst of the global economic recession may be over. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex jumped 2,806.82 points or 34.39% to 10,967.22 on 13 April 2009, its highest closing since 14 October 2008.

There are signs that the credit crisis is easing. Indian corporate bonds sales posted their best quarter on record as government-backed infrastructure and finance companies raised funds to bolster their capital. Indian companies raised Rs 37800 crore from bonds in the quarter ended March 2009, 44% more than in the same period a year earlier. State-owned lender India Infrastructure Finance Company raised Rs 7370 crore in the biggest bond sale of the quarter, followed by a Rs 3950-crore issue by the National Bank for Agriculture & Rural Development, known as Nabard. The credit offtake from the banking sector is also improving.

Asian stocks edged lower on Wednesday, 15 April 2009, as financial stocks gave back some recent gains and as a lack of clarity in Intel Corp.'s earnings outlook sent the technology sector down. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan were down by 0.26% to 1.8%. But Jakarta Composite index in Indonesia was up 0.3%.

US retail sales in March 2009 ended two months of increases and sparked selling across the board on Wall Street on Tuesday, 14 April 2009, with the stocks of retailers, big manufacturers and energy companies among the casualties.

Goldman Sachs shares slid 11.6% to $115.11, a day after the company said it would raise $5 billion by issuing common stock and posted a stronger-than-expected quarterly profit. Equity offerings are traditionally a drag due to their dilutive effect. Further, there were concerns about the quality of Goldman's earnings.

After the market closed Intel said its first-quarter net income dropped 55% on lower sales and margins; while the world's largest computer-chip maker said there were some signs of a bottoming, its fairly hazy second quarter guidance unnerved markets. Its shares fell 5.1% after-hours trading.

In a major speech, US President Barack Obama said there were signs of recovery, but by no means are we out of the woods just yet.

Trading in US index futures showed the Dow could fall 49 points at the opening bell on Wednesday

Daily News Roundup - Apr 15 2009

Tech Mahindra became the highest bidder to acquire Satyam Computers with a bid of Rs58 per share, significantly higher than second largest bidder L&T’s bid of Rs48.85 per share. (ET)
Tech Mahindra will have to pay Rs28.89bn for 51% stake in Satyam Computers. (ET)
Grupo Mexico places higher bid for Asarco; Sterlite had bid US$1.1bn. (ET)
LN Mittal keen on selling half of his stake in Kazakh oil field to OVL. (BS)
Bhushan Steel hikes Orrisa plant capacity to 2.5mtpa. (ET)
Tech Mahindra has tied-up Rs8.75bn funding from mutual funds, insurance companies and is in talks with banks to mobilize Rs10bn bridge loans. (BS)
The Delhi High Court has dismissed a petition filed by Tata Power, challenging the Government’s decision to allow Reliance Power to divert excess coal from captive mines of Sasan power project to its other power projects. (ET)
NTPC plans to commence coal production from its mines in Jharkhand in H2 FY10. (ET)
JP Associates plans to spend Rs35bn during the current fiscal to increase its cement production to 25mtpa. (DNA)
ONGC is likely to see its natural gas output rising to an all-time high of 66mn cubic metres per day in 2012-13. (ET)
Pantaloon Retail has received the board approval for its restructuring plans by raising Rs14-15bn through a preferential share issue to promoters and private equity firms. (FE)
Pantaloon Retail plans to spin off its retail and fashion units. (BS)
Glenmark Pharmaceuticals announced that its prospective neuropathic pain, osteoarthritis and other inflammatory pain disorders molecule GRC 10693 has completed Phase I trials in Europe. (BL)
Pfizer Investments Netherlands BV, a 100% subsidiary of Pfizer will make a tender offer to acquire an additional 33.77% stake in Pfizer India from public shareholders at a price of Rs675 per share. (ET)
Tata Motors has bought back 170 FCCBs worth US$17mn. (ET)
Bank of Baroda has revised downwards its deposit rates across all maturities by 50bps w.e.f. April 15, 2009. (FE)
SBI has decided to extend the special offer for auto and home loans till September. (BS)
Vodafone Essar’s total GSM additions in March 2009 increased by 17.4% mom to 10.8mn. (ET)
Germany’s BASF SE will make an open offer to buy up to 20% of Ciba India Ltd at Rs237.13 per share. (FE)
Sun Pharmaceuticals has received USFDA approval to sell a generic version of Xanodyne Pharmaceuticals’ Roxicodone tablets. (FE)
LIC Housing Finance plans to raise fresh equity capital through the QIP route. (BS)
Zydus Pharma Inc, the US subsidiary of Zydus Cadila has been sued by US major Wyeth over anti-depressant drug, Effexor. (FE)
J Kumar Infraprojects’ board will meet on April 24 to discuss the allotment of 4mn warrants to the firms’ promoters on preferential basis. (FE)
Zuari Industries hikes stake in Texmaco to 21% to steer the company clear of crossholdings. (BL)
Naxalite attack brings NALCO’s bauxite mine in Koraput district of Orissa to a halt. (BS)
Syndicate Bank raised over Rs50bn through certificate of deposits. (BL)
Gitanjali Gems’ proposed Rs1.44bn buyback will open on April 17 and close on December 18, 2009. (FE)
Strides Arcolab plans to create two distinct wholly-owned subsidiaries covering the speciality pharmaceutical and research & development segments respectively. (ET)
Shriram City Union Finance Ltd, part of the diversified Shriram group plans to sell its windmills biomass assets. (FE)
DoT issues an advisory to Bharti Airtel to document properly all its telecom connection including broadband. (BS)
Lupin rejigs R&D plan, to foray into biotech.(BS)
RIL and Gail is gearing up to start the second phase of construction of the pipeline to transport gas from KG basin.(BS)
United Spirits post 20% growth in volumes in FY09. (BS)
IDFC, IFCI and UTI buys 16.62% stake in Sabarmati Gas promoted by BPCL and GSPC. (ET)
Sumitomo and Bhushan Steel in talks to build a steel plant in India with a total investment of US$3.5bn. (DNA)
GVK Bioscience has tied up with Excel Pharma Studies, a Chinese clinical research organization to conduct clinical trials in Asia. (ET)
Essar Oil has delayed a planned shutdown of its refinery in Gujarat by three days to April 16th. (DNA)
Pantaloon Retail sales were up 30% for the month ended March. (ET)
GHCL promoter’s buyback FCCB at 60% discount. (ET)
M&M Farm Equipment Division is planning to invest Rs1bn on product development this fiscal. (BL)
Polaris to focus on the insurance sector and intends to introduce new products and solution. (BL)
Future Group acquires ad agency Dhar & Hoon. (ET)

Steel companies not considering any price hike. (ET)
NHAI plans to invite fresh bids for 38 highway projects in the next quarter. (ET)
Sebi plans to seek an outside legal opinion on whether the Sebi board has the right to examine the special committee’s orders passed after quasi-judicial proceedings against NSDL. (ET)
According to Sebi, no mutual fund product can invest more than 30% of its net assets in money market instruments of a single issuer. (ET)
The Centre has told the Supreme Court that from May 30, 2009 it will enforce the rule making it mandatory for tobacco manufacturers to display statutory pictorial warning on cigarette and tobacco products sold in the country. (FE)
The National Pharmaceutical Pricing Authority (NPPA) collected Rs565mn in 2008-09 by way of penalties, up from Rs45mn in 2007-08. (ET)
India’s exports in March 2009 fell below US$12bn, showing a negative growth for the sixth month in a row. (ET)
The Election Commission has cleared the Government’s decision to abolish import duty on raw and refined sugar. (ET)
The ministry of shipping has written to the ministry of finance to come up with a policy regarding shipping companies’ long-term contracts with PSUs. (FE)

All ears for Infosys guidance!

Keep your fears to yourself, but share your courage with others.

Welcome back. The courageous bulls have been basking in the glory of recent gains having enjoyed a nice rally in the past 4-5 weeks, thanks largely to a global rebound. Today is a different day though with things not looking all that bright for the bulls. We will have to grapple with the Infy results today. The guidance from the IT bellwether will be critical. Meanwhile, the US market is leading world markets lower. A poor report on retail sales is the culprit. However, there are renewed signs of revival, with Goldman Sachs beating Wall Street estimates and Intel saying that the PC market has already seen a bottom.

The gains could have been better but for all the public holidays in April. The spurt has come on the back of tentative signs of recovery in the western financial system and advanced economies. Durability of the current rally remains a question mark. But nobody is seeking answers for now. Fundamentals remain fragile. Although a fresh correction cannot be ruled out previous multi-month lows struck in October are less likely to be tested soon.

India Infoline reckons that Infosys would guide for a 0-5% decline in dollar revenues and EPS of Rs100-103 for FY10. Given that the stock has significantly outperformed the market in past three months, any negative surprise with respect to guidance could be severely punished.

Blue Dart Express and Rallis India are among the other prominent companies announcing their results today.

One will also have to take into consideration the starting of first phase of elections from Thursday. The uncertainty surrounding the outcome of the Lok Sabha polls may have some bearing on the sentiment.

What could help extend the current ascent is the fact that trading volume and turnover have improved in the past one month despite a slew of public holidays. In the first 15 days of March, average daily delivery volumes on NSE were Rs 7,500-8,000 crores. By comparison, the first 14 days of April, which had just six trading sessions, have seen volumes doubling to about Rs 15,000 crores.

US stocks slumped on Tuesday after a weaker-than-expected retail sales report gave investors a reason to retreat following a five-week run. The Dow Jones Industrial Average lost 137 points, or 1.7%. The S&P 500 index lost 17 points, or 2%. The Nasdaq Composite index was down 27 points, or 1.7%.

US stocks have been on the rise for five straight weeks on bets that the worst for the economy and financial sector has already happened. The recent rally has lifted the Dow 22%. It was the blue-chip barometer's best five-week run since May 1933, when it gained 31%. The advance followed a downturn that left the Dow and S&P 500 at more than 12-year lows, as of March 9.

In corporate news, Goldman Sachs reported a better-than-expected quarterly earnings report late on Monday, making it the second financial firm to surprise to the upside. But investors sent shares lower nonetheless, with the stock having spiked 54% year-to-date prior to the Monday announcement.

Goldman Sachs released better-than-expected quarterly profits late Monday, earning $3.39 per share on revenue of $9.43 billion. The company also said it plans to raise $5 billion through a stock offering to be used toward paying back its $10 billion government loan. Shares fell 11.6% on Tuesday.

Other financial shares slipped too, sending the KBW Bank index down 8.1%. Last week, Wells Fargo forecast a nearly $3 billion quarterly profit.

After the close, Intel reported weaker quarterly sales and earnings that topped expectations. The company's chief executive also said that he thinks PC sales bottomed in the first quarter and that the industry is returning to "normal seasonal patterns."

Retail sales fell 1.1% in March after rising a revised 0.3% in February. Economists predicted that sales would rise 0.3%. Sales excluding volatile autos rose 0.9% after jumping a revised 1% in the previous month. Economists thought sales would be unchanged.

The Producer Price index (PPI) fell 1.2% in March after rising 0.1% in the previous month. Economists expected PPI to be unchanged. The so-called "core" PPI, which strips out volatile food and energy prices, was unchanged after rising 0.2% in the previous month. Economists thought it would increase 0.1%.

February business inventories fell 1.3% after falling 1.3% in the previous month. Economists had projected inventories would fall 1.2%.

In other news, Federal Reserve Chairman Ben Bernanke said that there are tentative signs that the US economy's slide is slowing, but that a full recovery won't come until the financial sector stabilizes.

US President Barack Obama spoke about his administration's efforts to stabilize and recharge the economy. He warned about unpopular choices when it comes to restructuring the auto industry and American International Group (AIG).

On Tuesday morning, Dow component Johnson & Johnson reported weaker quarterly earnings that nonetheless topped estimates. Shares were little changed.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 2.78% from 2.82% on Monday.

In currency trading, the dollar gained versus the euro and fell against the yen.

US light crude oil for May delivery fell 64 cents to settle at $49.41 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery fell $3.80 to settle at $892 an ounce.

Indian markets extended gains to fifth straight trading session on Wednesday despite starting the day with a huge negative gap. Bulls staged a strong come back with Sensex bouncing back nearly 600 points and the NSE Nifty index recovering nearly 200 points from their respective day’s low. The BSE Sensex surged 207 points to close at 10,742 and the NSE Nifty surged 86 points at 3,343.

Among the 30-components of Sensex, 22 stocks ended in positive terrain and 8 stocks ended in the red. JP Associates, NTPC, Tata Motors, Hindustan Unilever, L&T and ITC were among the major gainers. Among the top losers were Hindalco, M&M, RCom, HDFC Bank and Sterlite.

Shares of Aurobindo Pharma gained by 3.5% to Rs197 after the company announced that it received Swismedic approval for Finasteride tablets. The scrip has touched an intra-day high of Rs198 and a low of Rs183 and has recorded volumes of over 12,000 shares on BSE.

Shares of TCS gained by 4% to Rs604 after the company announced that it has entered into an agreement for a technology partnership with the Rajasthan Royals, champions of Indian Premier League 2008. The scrip touched an intra-day high of Rs612 and a low of Rs550 and recorded volumes of over 0.2mn shares on BSE.

Shares of Essar Oil further surged by 8.5% to Rs129 after hitting an intra-day high of Rs136 and a low of Rs112 and recorded volumes of over 10.4mn shares on BSE.

The stock surged for the fifth straight day its longest winning streak in almost two months. The stock has added 81% in the last five trading sessions. This is the longest stretch of gains since the period ended Feb. 10.

Shares of Tata Motors surged by over 6% to Rs222 after the company announced that it would set up a heavy truck manufacturing facility in Myanmar with a capacity of 1,500 units per annum, stated reports. The scrip touched an intra-day high of Rs225 and a low of Rs197 and recorded volumes of over 2.1mn shares on BSE.

NTPC Ltd. said on Wednesday that its provisional full year net profit rose 5.6% to Rs78.27bn on net sales of Rs421.82bn. Provisional net profit in the quarter ended March 31 was up 30% at Rs17.4bn, Chairman R.S. Sharma said today. That compares with Rs13.4bn in the same period a year earlier.

NTPC announced that it plans to add 3,300 MW of new electricity in fiscal year 2009-10 and plans to generate 1,000 MW of renewable energy by 2017. The state-run power utility company is also looking to acquire coal blocks in Indonesia and Mozambique.

The stock surged over 6% to end at Rs196 hitting an intra-day high of Rs199 and an intra-day low of Rs180 recording volumes of over 3mn shares on BSE.

Shares of Satyam Computer gained by 1% to Rs45 after the company announced its partnership with Pentaho Corporation, a leading open source business intelligence product company. The scrip touched an intra-day high

After witnessing a huge recovery on Wednesday, markets players would await for the IIP and inflation data to be released. Global cues would yet again play important role in dictating trend atleast in the opening trades.

Asian stocks open in red

Asian stocks dropped, after US retail sales unexpectedly declined and the stronger yen dimmed the earnings outlook for Japan`s electronics and auto companies.

Canon which generates more than half of sales from US and Europe declined more than 2.5% in Tokyo as the yen rose against the dollar and the euro.

Japanese benchmark index Nikkei fell 74.33 points, or 0.84%, to trade at 8,768.35.

Hong Kong`s Hang Seng index dropped 184.44 points, or 1.18%, to trade at 15,395.72.

China`s Shanghai Composite slid 10.37 points, or 0.41%, to trade at 2,516.81.

Taiwan`s Taiex index gained 4.40 points, or 0.07%, to trade at 5,897.08.

South Korea`s Kospi index slipped 4.41 points, or 0.33%, to trade at 1,338.22.

Singapore`s Straits Times dropped 31.79 points, or 1.68%, to trade at 1,865.23. (7.54 a.m., IST)

Bullion metals turn little pale

Weaker than expected economic reports take some glaze away from precious metals

Bullion metal ended lower on Tuesday, 14 April, 2009. Prices fell as retail sales and producer price data checked in weaker than expected reducing the appeal of the precious metals as a hedge against inflation.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, Comex Gold for June delivery fell $3.8 (0.4%) to close at $892 an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.5%. Year to date, gold prices are higher by 0.7%.

For the month of March, gold fell 2.1%, down for the first month in five. But the metal gained 4.3% in the first quarter. Before March, for the month of February, gold ended higher by 7.4%. For January, 2009, gold had gained 3.9%.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (15.5%) since then.

On Tuesday, Comex silver futures for May delivery fell by 5 cents at $12.765 an ounce. Year to date, silver has climbed 12. 3% this year. For 2008, silver had lost 24%.

The Commerce Department reported today that U.S. retail sales dropped a seasonally adjusted 1.1% in March after two months of gains had boosted hopes of a rebound in consumer spending. Sales fell in March for almost every type of store except the necessities of food and drugs.

In a separate report, the Labor Department said producer prices fell 1.2% in March, much more than the 0.5% decline expected. Core prices - which exclude food and energy were unchanged. Producer prices are down 3.5% in the past year, the largest decline in wholesale prices since 1950.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Crude continues to drop

Prices drop as traders anticipate more than anticipated buildup in inventories

Crude oil fell once again on Tuesday, 14 April, 2009 as traders anticipated that crude inventories rose more thane expected this week. Discouraging retail sales data also reminded traders once again regarding recession. Yesterday, the International Energy Agency had lowered its forecast for this year's global oil demand.

On Tuesday, crude-oil futures for light sweet crude for May delivery closed at $49.41/barrel (lower by $0.64 or 0.6%) on the New York Mercantile Exchange. During intra day trading, it rose to a high of $51.12. Last week, crude ended lower by 0.5%.

Crude ended March trading up 10.9%. It rallied 11.3% in the first quarter. For the month of February, crude prices had ended higher by 1.5%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 70% since then. Year to date, in 2009, crude prices are higher by 12%. On a yearly basis, crude prices are lower by 52%.

The Commerce Department reported today that U.S. retail sales dropped a seasonally adjusted 1.1% in March after two months of gains had boosted hopes of a rebound in consumer spending. Sales fell in March for almost every type of store except the necessities of food and drugs.

In a separate report, the Labor Department said producer prices fell 1.2% in March, much more than the 0.5% decline expected. Core prices - which exclude food and energy were unchanged. Producer prices are down 3.5% in the past year, the largest decline in wholesale prices since 1950.

Paris based IEA reported yesterday that it is cutting its demand projection by 1 million barrels a day. After the latest revision, global oil demand this year is now forecast at 83.4 million barrels a day, which is 2.4 million barrels a day below the 2008 level.

Also at the Nymex on Tuesday, May reformulated gasoline fell 0.4% to $1.4576 a gallon and May heating oil gained 0.3% to $1.4023 a gallon.

May natural-gas futures added 1.7% to $3.689 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.