Gold continues to make more headway

Gold prices continued its surge to reach another milestone of Rs 24,000 per 10 grams at the domestic bullion market on Thursday on strong stockists and investment buying triggered by climbing international prices.

Silver also galloped on heavy speculative offtake on the back of rising industrial demand.

"The yellow metal is witnessing a runaway rally for the past three days here, due to overseas bullishness for the metal as a risk aversion asset, impacted by worsening global economic situations," traders said.

BSE Bulk Deals to Watch - Aug 4 2011

Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
4/8/2011 532682 ABG Shipyard Aadi Financial Advisors LLP B 400000 388.00
4/8/2011 590006 Amrutanjan Health-$ CROSSEAS CAPITAL SERVICES PRIVATE LIMITED B 17491 919.45
4/8/2011 590006 Amrutanjan Health-$ CROSSEAS CAPITAL SERVICES PRIVATE LIMITED S 17491 919.75

NSE Bulk Deals to Watch - Aug 4 2011

Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
04-AUG-2011,AMRUTANJAN,Amrutajan Health Ltd,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,17491,919.80,-
04-AUG-2011,ATLASCYCLE,Atlas Cycles (Haryana) Lt,CROSSEAS CAPITAL SERVICES PVT. LTD.,BUY,17381,418.09,-
04-AUG-2011,BGLOBAL,Bharatiya Global Info Ltd,GKN SECURITIES,BUY,119699,21.99,-
04-AUG-2011,CREWBOS,Crew B.O.S. Products Limi,KARVY FINANCIAL SERVICES LIMITED,BUY,500,52.45,-
04-AUG-2011,CREWBOS,Crew B.O.S. Products Limi,VIVEK LAKSHMINATH MEHROTRA,BUY,70997,53.35,-
04-AUG-2011,ECEIND,ECE Industries Limited,BHUWANIA GOODS PRIVATE LIMITED,BUY,170370,105.24,-
04-AUG-2011,GPPL,Gujarat Pipavav Port Ltd,MERRILL LYNCH INDIA EQUITIES FUND MAURITIUS LIMITED,BUY,3864000,73.50,-

Now, pay more for Diesel soon

With passenger cars consuming about 15 per cent of the diesel, the government on Thursday indicated that it might do away with the subsidy enjoyed by such vehicle owners.

"...we can accept your (Opposition) suggestion and try to work out what mechanism could be found out so that this section (diesel car owners) are not subsidised," finance minister Pranab Mukherjee said replying to a debate on price rise in the Lok Sabha.

Read more

Sensex falls over 3% in July, biggest monthly fall since Jan

A slew of negatives weighed on markets in July, which include US & Europe debt crisis, poor results, weak IIP data, high inflation numbers and RBI’s hawkish stance.

Major news for the month

Infosys Q1 consolidated net profit up 16% to Rs1,722 crore

May IIP at 5.6%

Inflation in June at 9.44% versus 9.06%

HDFC Bank Q1 net profit up 34% to Rs1,085 crore

TCS Q1 net profit at Rs2,380 crore

RBI hikes repo, repo");'> reverse repo by 50 bps

Wipro Q1 consolidated net profit up 1% to Rs1,335 crore

RIL Q1 net profit up 17% to Rs5,661 crore

ICICI Bank Q1 consolidated net profit soars 53% to Rs1,667 crore

Nifty August 2011 futures below 5350

Turnover surges

Nifty August 2011 futures were at 5,339.80, at a premium of 8 points over spot closing of 5,331.80. Turnover in NSE's futures & options segment surged to Rs 123167.69 crore from Rs 104008.08 crore on Wednesday, 3 August 2011.

Reliance Industries August 2011 futures were at 813.20, at a premium spot closing of 811.

Tata Steel August 2011 futures were at 558.10, near spot closing of 558.50.

Inventure Growth & Securities surges on debut

Settles at Rs 207.95 on BSE

Shares of Inventure Growth & Securities settled at Rs 207.95 on BSE, a premium of 77.73% over the initial public offer price of Rs 117.

The stock debuted at Rs 119, a premium of 1.71% over the initial public offer (IPO) price. The stock hit a high of Rs 225 and low of Rs 91.55. On BSE, 4.70 crore shares were traded on the counter.

Sensex tumbles 6.24% in eight days; FIIs step up selling

Concerns about corporate earnings growth, high food inflation and data showing stepping up selling by foreign institutional investors spooked the market with the barometer index BSE Sensex and the 50-unit S&P CNX Nifty hitting 6-week lows. Reports of weak monsoon rains recently also weighed on the sentiment as Indian shares extended losses for the third straight day. The Sensex fell below the psychological 18,000 mark, after regaining that level earlier in the day. The BSE Sensex plunged 247.37 points or 1.38%, off close to 350 points from the day's high and up close to 30 points from the day's low. The market breadth turned negative from positive breadth earlier in the day.

The market has witnessed a steep slide recently on concerns that higher interest rates will crimp corporate profit growth. The Sensex has tumbled 1,178.11 points or 6.24% in eight trading sessions from a recent high of 18,871.29 on 25 July 2011, hit by the Reserve Bank of India's (RBI) aggressive rate hike at a policy review on 26 July 2011. A number of commercial banks have raised lending rates recently after the central bank raised its key lending rate by a steeper-than-expected 50 basis points on 26 July 2011.



Foreign institutional investors (FIIs) sold shares worth net Rs 801.10 crore on Wednesday, 3 August 2011, compared with an outflow of Rs 82.70 crore on Tuesday, 2 August 2011, latest data released by the Securities & Exchange Board of India (Sebi) showed.

Auto shares dropped after the finance minister said the government may look at charging higher diesel prices for luxury cars. Shares of state-run oil marketing companies (PSU OMCs) surged on expectations that their losses on diesel sales could fall if the fuel is sold at a higher price to car users. Index heavyweight Reliance Industries (RIL) dropped to a 52-week low. Three other index heavyweights, ICICI Bank, Infosys and Larsen & Tourbo, also slipped.

Reliance Infrastructure bucked weak market trend after the company on Wednesday, 3 August 2011, said a state-level electricity regulator has allowed it to recover accumulated costs from customers. Bank stocks reversed initial gains on worries that higher lending rates will crimp loan growth. Telecom pivotals saw divergent trend after sector bellwether Bharti Airtel reported a surprise fall in first quarter net profit on Wednesday, 3 August 2011.

The market nudged higher in early trade as bargain hunting emerged after a recent steep slide. Volatility ruled the roost as the key benchmark indices retreated from intraday highs in morning trade. Intraday volatility continued as the key benchmark indices hit fresh intraday lows in mid-morning trade as weak Asian shares weighed on the sentiment.

Intraday volatility continued with the Sensex alternatively swinging between gains and losses in early afternoon trade. The market held positive zone in afternoon trade as European shares edged higher in early trade. Fresh wave of selling jolted markets in mid-afternoon trade, with the Sensex hitting 6-week low. The market extended losses in late trade.

The BSE Sensex was down 247.37 points or 1.38% to 17,693.18, its lowest closing level since 22 June 2011. The Sensex lost 275.82 points at the day's low of 17,664.73 in late trade. The index rose 92 points at the day's high of 18,032.55 in morning trade, its highest level since Tuesday, 2 August 2011.

The S&P CNX Nifty was down 73 points or 1.35% to 5,331.80, its lowest closing level since 23 June 2011. The Nifty hit a high of 5,434.50 in intraday trade, its highest level since Tuesday, 2 August 2011. The Nifty hit a low of 5,323.15 in intraday trade.

The BSE Mid-Cap index fell 0.76% and the BSE Small-Cap index declined 0.57%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,708 shares declined and 1,136 shares rose. A total of 131 shares remained unchanged. The breadth was positive earlier in the day.

Among the 30-share Sensex pack, 28 declined while only two of them managed gains.

Index heavyweight Reliance Industries (RIL) lost 1.53% to Rs 812.50, off day's high of Rs 831.65. The stock slipped to a 52-week low of Rs 810.25 in intraday trade today, 4 August 2011. The prized KG-D6 fields of RIL produced 31% less than previously projected natural gas output in the April-June 2011 quarter, the Oil Ministry said recently. The average gas production during April-June 2011 from KG-DWN-98/3 (KG-D6) block was 48.60 million metric standard cubic meters per day (mmscmd), less than the approved Field Development Plan (FDP) rate of 70.39 mmscmd, the ministry said.

RIL's operating profit margin (OPM) declined sharply to 12.25% in Q1 June 2011 from 16.04% in Q1 June 2010 as weak performance from the oil & gas and petrochemicals businesses offset strong performance from the refining segment. RIL's net profit rose 16.69% to Rs 5661 crore on 39.1% increase in net sales to Rs 81018 crore in Q1 June 2011 over Q1 June 2010. The result was announced on 25 July 2011.

RIL's gross refining margin (GRM) surged to $10.3 a barrel from $7.3 a barrel in Q1 June 2010. Gas production from RIL's KG-D6 field off the east coast declined 18% to 156.2 BCF in Q1 June 2011 over Q1 June 2010. Production of gas condensate from the filed jumped 81.6% to 0.21 million barrels in Q1 June 2011 over Q1 June 2010. The company said gas sales have been prioritized as per government's directive with effect from 9 May 2011.

Capital goods stocks extended recent losses. Bhel, Larsen & Toubro, Praj Industries and ABB fell by between 0.59% to 3.64%.

Coal India rose 0.45% ahead of its entry into the NSE's futures & options segment from tomorrow, 5 August 2011. The National Stock Exchange has decided to add Coal India, Delta Corp, Dhanlaxmi Bank and Gujarat Flurochemicals for trading the futures & options (F&O) segment. Trading in these four additional stocks in the F&O segment will start from 5 August 2011.

Coal India replaces Reliance Infrastructure in the 30-share BSE Sensex with effect from Monday, 8 August 2011. In another change in the constituents of the barometer index, Sun Pharmaceutical replaces Reliance Communications in Sensex from that day.

Auto shares dropped after Finance Minister Pranab Mukherjee said the government may look at charging higher diesel prices for luxury cars and commercial users to ensure they don't benefit from a policy designed to help the needy. Automakers are investing heavily in rolling out diesel-run vehicles to meet growing demand from consumers, who are increasingly shifting to such vehicles as diesel price is kept sharply lower than that of petrol.

Mukherjee said 15% of the total diesel consumption in the country is by passenger cars. Oil Minister Jaipal Reddy said such a proposal is at an early stage and needs considerable discussion.

The BSE Auto index fell 2.06% and underperformed the Sensex. India's largest utility vehicles and tractors maker by sales Mahindra & Mahindra slumped 4.45% to Rs 679.25 and was the top loser from the Sensex pack. Tata Motors (down 1.55%) and Maruti Suzuki India (down 1.19%), were the other losers from the auto pack.

Bike makers, too, declined. India's largest bike maker by sales Hero MotoCorp shed 0.41% and India's second largest bike maker by sales Bajaj Auto fell 2.46%.

BSE FMCG index fell 1.82% and underperformed the Sensex. India's largest cigarette maker by sales ITC dropped 3.17% on reports the government is considering a hike in excise duty on tobacco products. The excise duty rates on cigarettes currently vary depending on the length of the cigarette.

Among other FMCG stocks, Hindustan Unilever, Dabur India and Marico shed by between 0.25% to 1.66%.

Banking stocks declined, reversing intraday gains, on worries that higher lending rates will crimp loan growth. A number of commercial banks have raised lending rates recently after the central bank raised its key lending rate by a steeper-than-expected 50 basis points at a policy review on 26 July 2011. BSE Banking index, Bankex fell 1.05% and outperformed the Sensex.

India's second largest private sector bank by net profit HDFC Bank slipped 1.14% and India's largest private sector bank by market capitalisation ICICI Bank fell 0.87%. India's largest commercial bank by branch network State Bank of India (SBI) declined 0.95%.

India's largest mortgage finance lender by total income Housing Development Finance Company (HDFC) fell 0.51% in volatile trade. HDFC has revised its retail prime lending rate (RPLR) by 50 basis points (bps) on its loans with effect from 1 August 2011. HDFC said the hike in lending rates is in line with interest rates in the economy, which have hardened due to increase in the policy rates by 75 bps since June 2011.

India's largest listed cellular services provider by sales Bharti Airtel shed 0.79%, extending Wednesday's over 1% decline triggered by a surprise fall in first quarter net profit on sequential basis reported by the firm during market hours on that day. Bharti's consolidated net profit as per International Financial Reporting Standards (IFRS) fell 13.2% to Rs 1215.20 crore on 4.18% growth in total revenue to Rs 16974.90 crore in Q1 June 2011 over Q4 March 2011.

Bharti Airtel said income before taxes fell 17.03% to Rs 1719 crore in Q1 June 2011 over Q1 June 2010, mainly on account of higher interest outgo of Rs 344 crore (due to the Africa acquisition and 3G investments in India), and 3G license fee amortization of Rs 159 crore. The effective tax rate for Q1 increased to 29.9%, mainly due to reduction in tax holiday benefits in India, Bharti said in a statement.

The consolidated operating free cash flow was at Rs 1357 crore in Q1 June 2011. Continued robust cash generation has resulted in improvement of the Net Debt Equity ratio to 1.20 in Q1 June 2011 compared with 1.38 on 30 June 2010.

In a post result statement Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel said, "Bharti Airtel has started this fiscal year on a stable note. Revenue growth has been steady across all geographies, with Africa recording a healthy sequential growth of approximately 6%, and annual growth of 21%. In India, the company's efforts in the area of cost efficiencies have helped arrest the margin decline. The new customer facing organization in India will see more agile and responsive teams in action. This will also give a fillip to growth in value added services, broadband, digital TV and airtel money. Overall, 2011-12 promises to be an exciting year of transformation".

India's second largest listed cellular services provider by sales Reliance Communications rose 0.66%, halting three-day fall, on bargain hunting. Idea Cellular rose 2%.

Reliance Infrastructure gained 0.95% after the company on Wednesday, 3 August 2011, said a state-level electricity regulator has allowed it to recover accumulated costs from customers.

Indian Hotels slipped 0.84% ahead of its Q1 results today, 4 August 2011. The owner of the Taj group of hotels, Indian Hotels, is seen reporting strong Q1 June 2011 results on the back of higher occupancy rates (OR) and higher average room rates (ARR). The re-opening of its Taj Heritage wing, Mumbai, will aid revenue growth. The bottom line will get a boost from lower interest costs post repayment of loans from warrants proceeds.

India's second largest software services exporter Infosys was fell 0.87%. During market hours today, Bank Chinatrust Indonesia and Infosys announced the successful implementation of Infosys' core banking solution Finacle.

Most metal stocks declined as LMEX, a gauge of six metals traded on the London Metal Exchange, dropped 2.07% on Wednesday, 3 August 2011. Hindalco Industries, Jindal Saw, Sterlite Industries, Jindal Steel & Power, Sail, Tata Steel, and Nalco shed by between 0.92% to 4.55%.

Hindustan Zinc fell 0.92%. The company has reportedly cut zinc prices by 2% to Rs 1,24,400 a metric tonne effective from today. It has lowered lead prices by 2.8% to Rs 1,30,400 a tonne.

JSW Steel slumped 3.45%. The company has denied the conclusions drawn in a report by the Lokayukta -- Karnataka's anti-graft watchdog -- against the company on procurement and transportation of iron ore in the state.

Shares of state-run oil marketing companies (PSU OMCs) surged on expectations that their losses on diesel sales could fall if the fuel is sold at a higher price to car users. Indian Oil Corporation (IOC) (up 3.47%), HPCL (up 3.99%) and BPCL (up 3.15%), edged higher. Lower crude oil prices also aided the rally. Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

Aviation stocks rose as a fall in crude oil prices eased concerns about the impact of high jet fuel prices on operating costs of these companies. SpiceJet (up 0.67%) and Jet Airways (India) (up 1.32%) rose. Kingfisher Airlines fell 1.35%. Easing of crude oil prices may bring down prices of jet fuel, which accounts for over 50% of airlines' operating cost. Jet fuel prices are linked to crude oil prices.

Crude oil extended its recent slide in Asian electronic trade on Thursday, 4 August 2011, as worries about economic growth sparked concern about future demand. US September 2011 crude futures were down 1.03 dollars or 1.13% to $90.90 a barrel.

India's largest power generation firm NTPC lost 2.46% to Rs 176. The stock declined after the company's chairman Arup Roy Choudhury on Wednesday, 3 August 2011, said that the company's plans to acquire coal mines abroad have been hit by high valuations and proposed rule changes in Indonesia and Australia that could make the fossil fuel there more expensive. High coal prices have driven up valuations of mines. Also, the cost of coal produced will go up as Australia plans to levy a tax of A$23 ($24.79) for each metric ton of carbon emitted from 2012 and Indonesia is set to link the price of coal exported to international coal indexes this year.

NTPC, India's largest power producer, requires 164 million tons of coal this fiscal year through March to run its plants. The company, which meets part of its fossil fuel requirement through imports, has been scouting for overseas assets to secure raw material.

Realty stocks fell on worries higher interest rates could dent demand for residential and commercial property. Purchases of both residential and commercial property are largely driven by finance. DLF, HDIL, Indiabulls Real Estate and Unitech shed by between 0.65% to 5.54%.

Cipla lost 2.2% to Rs 305.55 as the pharmaceutical firm is seen reporting a muted 1.61% growth in net profit to Rs 261.56 crore in Q1 June 2011 over Q1 June 2010 tomorrow, 5 August 2011. The company's top line is expected to register a decent growth on the back growth in formulations exports led by the ramping up of its Indore Special Economic Zone (SEZ) facility and on growth in domestic formulations.

Cals Refineries clocked highest volume of 6.66 crore shares on BSE. Inventure Growth & Securities (4.7 crore shares), Lanco Infratech (65.68 lakh shares), Birla Power Solutions (53.31 lakh shares) and Shree Ashtavinayak Cine Vision (50.94 lakh shares) were the other volume topper in that order.

Inventure Growth & Securities clocked highest turnover of Rs 978.72 crore on BSE. JSW Steel (Rs 80.17 crore), State Bank of India (Rs 66.28 crore), Rushil Decor (Rs 53.31 crore) and Asian Paints (Rs 47.83 crore) were the other turnover toppers in that order.

The Q1 June 2011 earnings season is drawing towards a close. Investors are focusing on the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when Indian firms are witnessing cost pressures amid rising interest rates and staff costs.

Cipla and IL&FS Transportation Networks are set to announce Q1 results on Friday, 5 August 2011. M&M announces Q1 results on Monday, 8 August 2011. ABB, Tata Communications, Mahindra Satyam, GMR Infrastructure and VIP Industries announce quarterly results on 9 August 2011. Tata Power and Rural Electrification Corporation unveil Q1 results on 10 August 2011. Tata Motors, Reliance Infrastructure, Reliance Power, Castrol India and Shipping Corporation of India unveil quarterly results on 11 August 2011.

Tata Steel, Hindalco, Coal India, National Aluminium Company, Jaiprakash Associates, Unitech and HPCL unveil Q1 results on 12 August 2011. State Bank of India, Aditya Birla Nuvo and Shipping Corporation of India unveil Q1 results on 13 August 2011.

Monsoon rains are likely to pick up over most parts of the country in the next four to five days, after sharply slowing for two consecutive weeks during the most important sowing period for summer crops. A news agency quoted an unnamed senior official with the state-run India Meteorological Department (IMD) as saying that the country's important rice-and oilseed-growing regions, the eastern and central parts, are likely to receive more rains in the near future after getting intermittent showers in the past few days.

Rains were 22% below normal in the week to 3 August 2011, recording marginal improvement from 23% below average showers in the previous week. Total rainfall since the beginning of the June-September monsoon season has been 6% below average. Rainfall has been normal or above in 73% of the country so far this season, while 27% of the country is facing a deficit. In some parts of eastern India such as Orissa, Bihar and Jharkhand, rainfall is below normal, but in the key rice-growing state of West Bengal rainfall is above normal. A rainfall deficit in the southern state of Andhra Pradesh, a top rice-producer, has largely been bridged.

In the northern grain bowl region of Punjab, the monsoon rain deficit is 26%. However, since most farmland in Punjab is irrigated, rice production may not be adversely affected in the state. In Gujarat, rainfall is 37% below average. Low rainfall in the western regions is likely to adversely affect the output of groundnut, the second biggest summer-sown oilseed crop after soybean.

Food price index rose 8.04% and the fuel price index climbed 12.12% in the year to 23 July 2011, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 7.33% and 12.12%, respectively. The primary articles price index was up 10.99%, compared with an annual rise of 10.49% a week earlier.

The Reserve Bank of India (RBI) on Tuesday, 2 August 2011, tightened its rules on sales of derivative products, in a move aimed at preventing the mis-selling of these complex products to local firms. RBI said in a notification that no bank can be a "market maker" in a product that it can't price independently, even if it covers the risk from the deal with another bank immediately. A market maker is a financial middle-man, typically a bank, that helps the price discovery process and adds liquidity to the market by quoting both bid and ask prices for financial products.

The new rules prevent foreign banks from being market makers in a product if they can't price it locally. Banks must also now make sure that officials to whom they sell derivative products are backed by the board to execute such transactions, the RBI said. RBI didn't specify what derivatives are covered by the new rules.

The services sector expanded at its fastest clip in three months in July 2011, driven by solid expansion of new business, but input prices also rose faster, a survey showed on Wednesday, 3 August 2011. The HSBC Markit Business Activity Index, based on a survey of around 400 companies, rose to 58.2 in July from 56.1 in June, staying above the 50 mark that separates growth from contraction for the 27th consecutive month. The new business sub-index recorded its strongest growth since February, rising to 59.3 from 57.1, as demand improved and firms found new customers.

The economy will grow at 8.2% in the year to March 2012, but it faces a challenge in achieving the fiscal targets set in the annual budget, a top economic advisory panel said in a report released early this week. Headline inflation would remain close to 9% till October, before beginning to ease, and would be at 6.5% in March, the prime minister's Economic Advisory Council said.

Exports grew by an impressive 46% to $29 billion in June 2011, despite uncertainty in the US and European markets, the latest data showed. Merchandise exports had aggregated to $20 billion in June 2010. During the April-June quarter, overseas shipments grew by 46% to $79 billion, according to Commerce Ministry data released on Monday, 1 August 2011. Though imports grew by 42% to $37 billion in June, the trade deficit of $7.6 billion was almost half the level of $15 billion seen in May, lessening concerns over the country's balance of payments situation.

Growth in manufacturing sector fell for the third month in a row in July as a long series of interest rate hikes and faltering global demand weighed on new orders and output growth, a survey showed on Monday, 1 August 2011. The HSBC Markit Business Activity Index, based on a survey of around 500 companies, fell to a 20-month low of 53.6 in July from 55.3 in June, though it remained above the 50 mark that separates growth from contraction for the 28th consecutive month.

The Reserve Bank of India (RBI) raised its key lending rates by 50 basis points at a policy review on 26 July 2011, to tame high inflation. The RBI has raised its end March 2012 inflation target to 7% as against the previous estimate of 6%, saying inflation has been higher than its expectations. It kept its economic growth forecast of 8% for this fiscal year. The RBI revised downwards non-food bank credit growth projection to 18% for the year ending March 2012 (FY 2012) from 19% earlier.

Although the impact of past monetary policy actions is still getting transmitted, considering the overall growth and inflation scenario, there is a need to persevere with the anti-inflationary stance, the RBI said. Going forward, the monetary policy stance will depend on the evolving inflation trajectory, which, in turn, will be determined by trends in domestic growth and global commodity prices, the RBI said. A change in stance will be motivated by signs of a sustainable downturn in inflation, it added.

The uncertain global macro-economic environment poses a challenge for the domestic economy from the perspective of financing the current account deficit, RBI said. In this context, the composition of capital flows remains a concern. In recent months, some shift in composition of capital flows towards foreign direct investment (FDI) has been observed. This trend needs to be reinforced through policy actions to improve the quality of financing of the current account deficit, RBI said.

Congress President Sonia Gandhi has gone to the US, to undergo surgery for a medical condition, which the party did not disclose. Gandhi has named a four-member team to run party affairs during her absence

European stock markets dipped in the red on Thursday, 4 August 2011, reversing initial gains, ahead of interest-rate decisions from the Bank of England's Monetary Policy Committee and the European Central Bank. The key benchmark indices in France, Germany and UK were down by between 0.44% to 1.18%.

The Bank of England (BOE) on Thursday kept its monetary policy unchanged as the central bank policymakers continued to be trapped between higher-than-normal inflation and a slowing British economy. The nine-member Monetary Policy Committee left the bank's key lending rate steady at a record low 0.5% and left the size of its asset-purchase program unchanged.

Most Asian stocks fell on Thursday, 4 August 2011, extending their recent losses triggered by worries about a slowdown in the global economy. Many of the regional markets reversed the gains they made earlier after a positive finish on Wall Street on Wednesday, 3 August 2011. The key benchmark indices in South Korea, Singapore, Indonesia Hong Kong and Taiwan fell by between 0.49% to 2.31%. Mainland Chinese shares rose. The Shanghai Composite index was up 0.21%

Japanese stocks rose with exporters getting a lift as Japan intervened in the foreign-exchange market to stem the yen's recent rise. The Nikkei 225 average was up 0.23%.

The Bank of Japan announced additional monetary easing Thursday, while keeping its policy interest-rate target range unchanged at 0 to 0.1%.

Trading in US index futures indicated that the Dow could fall 79 points at the opening bell on Thursday, 4 August 2011. Dow futures reversed steep initial gains.

US stocks rose on Wednesday on speculation that the Federal Reserve might consider a new stimulus programme to boost the sagging economy. The Dow Jones Industrial Average gained 29.82 points or 0.25% at 11,896.44. The S&P 500 rose 6.29 points or 0.50% at 1,260.34 and the Nasdaq advanced 23.83 points or 0.89% at 2,693.07.

The US government's key monthly jobs report for July 2011 is due on Friday, 5 August 2011, and will be closely watched by investors to gauge the health of the world's biggest economy.

Daily News Roundup - Aug 4 2011

Dabur has introduced its Burrst Fizz brand to tap the potential in this segment. Burrst Fizz is available in two flavours - apple and lemon. (ET)

Wockhardt's sale of its nutrition business to Danone will fetch the drug maker much-needed cash, allowing it to pay up foreign currency convertible bondholders and reduce debt. (ET)

Power Grid Corporation of India is expected to raise Rs 25bn by issuing corporate bonds before the end of this month. The company would issue bonds in tenors ranging between four and 15 years, with a coupon rate of 9.50 per cent, said bond dealers. (BS)

Sensex sags on overseas woes…Nifty holds 5400

The Indian markets have been a bit volatile in the week so far, but the overall bias has been negative owing to the weak global backdrop. The key Indian indices today fell for the second straight trading session with the BSE Sensex dropping below 18,000. But the NSE Nifty managed to end above 5400.

Finally, the BSE Sensex ended at 17,945 losing 169 points. It had earlier touched a day's high of 18,005 and a day's low of 17,859. It opened at 17,970. The NSE Nifty closed at 5,404 losing 52 points.

Better, though not perfect!

A good plan, violently executed now, is better than a perfect plan next week. - George S. Patton.

The start today could be a tad better after US stocks snapped an eight-session losing streak. Asian markets are not doing too badly. The big question is whether we can covert any relief pop into wider gains. Given the macro-economic backdrop (both local and global), that may be slightly tough.

Locally, elevated inflation and its impact on interest rates is the biggest headwind. GDP growth forecast has also been scaled down. Monsoon has been below par. There are fears of the Government overshooting its budget deficit. Disinvestment is in a limbo. The Centre is under attack for a number of issues – from corruption to economic management. The RBI is no mood to relent even as it seeks support from New Delhi.

Record runs continue for bullions

Investors continue flock to bullions on growing concerns over US economy

Precious metals ended at record highs on Wednesday, 03 August 2011 at Comex. Gold prices soared with silver following it as investors flocked to precious metals following fears of another recession. Though private sector job report showed that US added more jobs than expected in July, ISM's service sector index and factory order reports disappointed. A weak dollar also led investors flock around bullions.

Markets may begin on a flat note

The Indian markets are set for a flat start tracking unsupportive Asian cues.

Headlines for the day:

Wockhardt seeks legal go-ahead for Danone deal

Monsoon to weaken now, says Met dept

GMR hopes to land Spain airport projects

Market likely to see dull start in opening trade, food inflation data eyed

The market is likely to see a flat-to-negative start following mixed global cues. Trading of S&P CNX Nifty on the Singapore stock exchange indicates a fall of 12 points at the opening bell. However some bargain hunting may emerge after the recent market slide to a 6-week closing lows on Wednesday. The government will today, 4 August 2011, unveil data on some wholesale price indices viz. the food price index, the primary articles index and the fuel price index for the year through 23 July 2011.

FIIs sold shares worth a net Rs 869.69 crore on Wednesday, 3 August 2011, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) bought shares worth Rs 422.48 crore on that day.

SGX Nifty Live Update - Aug 4 2011

5,415.50 -14.00