Less enthusiasm likely

The world belongs to the enthusiast who keeps cool - William McFee.
The bulls may lack their enthusiasm displayed in recent days as there may just be some cooling. Global markets are mixed amid persistent worries over the state of the economic recovery. Things are getting a bit choppy in the currency and commodity markets.



The yen has suddenly dipped versus the dollar this morning on suspected intervention by the Japanese government after consistently scaling 15-year peak against the greenback in the past few sessions.

Despite the recent rally in world equities risk aversion remains high. Gold hit a new record and Treasuries yields continue to fall. The dollar remains under pressure amid talk of the Fed announcing a new debt purchase plan. The FOMC is scheduled to meet next week.

Meanwhile, the RBI will hold its mid-quarter policy review on Thursday. It may continue to hike key rates, notwithstanding the dip in inflation.

We expect another flat to steady start amid murky global cues. The recent spike has left the market vulnerable to some sort of easing but on the whole the undertone remains upbeat. One needs to remain vigilant and avoid getting complacent. Emerging markets will continue to out-perform their industrialised rivals as money chases better growth prospects.

FIIs were net buyers of Rs16.51bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs11.24bn. In the F&O segment, the foreign funds were net sellers at Rs23.92bn. The foreign funds were net buyers of Rs26.36bn in the cash segment on Monday, according to SEBI data. Mutual Funds were net sellers of Rs4.35bn on the same day.

Important News Snippets For The Day:

Reliance Power, Adani Power and GMR are in the race for a coal mine asset in Australia worth US$1bn.

BHEL has bagged Rs26.7bn order for supply and installation of the main plant package for Dainik Bhaskar Power’s 2x600 mw coal based thermal power project.

Tata Steel has decided to exercise its option of acquiring an 80% interest in the direct shipping ore project of New Millennium Capital Corp, Canada.

SAIL has signed a 50:50 JV with Indian Railways arm RITES to build a wagonmaking unit at Kulti near Asansol in West Bengal.

International Coal Ventures Ltd., a JV between SAIL, Coal India, Rashtriya Ispat Nigam, NMDC and NTPC, is looking to acquire coal mines in Indonesia and has tied up with RITES for the purpose.

Punj Lloyd has initiated arbitration proceedings against ONGC to recover dues of over US$250mn more it had incurred to execute an offshore oil project in UK, allegedly due to a flawed design provided by ONGC.

The Delhi High Court refused L&T’s plea to stay the bidding process by NTPC, after the infrastructure major was disqualified from the 25,000crore power equipment tender.

Supreme Court has set aside a recommendation made by Karnataka government to allow mining of iron and manganese ores by JSW Steel and Kalyani steel at 380 hectares of land in Sandur.

Cairn India is scheduled to seek shareholders’ approval to Vedanta Resources’ bid to acquire a controlling stake in the company, at an AGM in Mumbai on Wednesday.

Lavasa Corporation, the real estate arm of HCC, has filed a draft prospectus with the SEBI for a Rs20bn IPO.

The Indian Hotels Company, which owns the Taj brand, plans to take its new brands - Vivanta by Taj and Gateway Hotels - to the overseas markets.

The RPG Group promoted Integrated Coal Mining Ltd., an affiliate company of power producer CESC, has acquired 10% stake in Resource Generation (RG), an Australian coal mining company, for US$10.5mn.

Simhapuri Energy, promoted by Madhucon Projects, has achieved financial closure for the 300 MW phase II thermal power plant coming up near Krishnapatnam off Andhra Pradesh coast.

Sanitaryware maker HSIL said it will raise Rs1.bn by issuing securities through QIP.

The rate of inflation for August under the new series eased to 8.51% from 9.78% in July.

Indirect tax collections for the first five months FY11 increased 45.9% over the corresponding period a year ago.

India’s imports of sensitive items, including foodgrains and milk products, have gone up by 13.6% to Rs161.9bn during the April-June period of the current fiscal.

Timely commissioning of over 50,000 Mw of power generation capacity has been jeopardised owing to the environment ministry’s latest move to classify India’s coal bearing regions as “go” and “no-go” areas.