Monday, May 07, 2012
The government has slapped a hefty penalty of about US$1.24bn on Reliance Industries for the steep fall in gas output from the KG-D6 block. (ET) Cipla cut prices of key cancer drugs by nearly 75%, an astounding, one-shot reduction that is certain to unsettle the industry and trigger a price war. (ET) Tata Motors owned Jaguar Land Rover is planning to expand its plant at Castle Bromwich to build new Jaguar models and overhaul the brand. JLR intends on expanding the facility by 50%. (ET) Tata Global Beverages increased its stake in Mount Everest Mineral Water to 50% through an off-market transaction worth Rs330mn. (ET)
After staunchly defending the 200-DMA level for the past several sessions, the Nifty finally gave up the fight on Friday. The 50-share benchmark index broke below the crucial technical barrier after the rupee tumbled on mounting concerns about India’s deteriorating fundamentals. FII inflows, which had promised so much earlier in the year, have evaporated amid concerns over controversial tax proposals. The main indices and the broader indices lost 2-3% this week. Today they were down by ~2% while the rupee dropped by nearly 1% after a junior minister said that the Government was considering a review of the Double Taxation Avoidance Treaty (DTAT) with Mauritius to boost revenues. It may be recalled that last week, Standard & Poor's cut the outlook on India's ratings, citing the downturn in the economy, deteriorating external account, high budget deficit and policy impasse. The rupee fell further to hit a new four-month low against the US dollar, as domestic oil refiners continued to buy the greenback amid high crude prices. Rising trade and current account deficits, besides dwindling FII inflows are also weighing on the partially-convertible Indian currency. FII flows have turned weak over the past few weeks, as overseas investors have been put off by the Government's proposed new regulations on capital gains and Vodafone-like tax disputes.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. -Winston Churchill. There appears to be misery on the Street. We are staring at yet another tumultuous session as local and overseas headwinds continue to dampen sentiment unless we have some exciting finish like the IPL matches towards the end. The start is expected to be lower. Asian markets are down after the US and European markets took it on the chin. US stocks slumped after the much-anticipated jobs data failed to ease worries over sluggish labour conditions. CBOE VIX jumped 9% on Friday. It is likely to be an action-packed week. Odds are in favour of further downside unless the FM chooses to change the game. The crucial level to watch will be 5000 on the Nifty.
The markets head towards a negative opening and likely to extend its losing momentum on account of weak global markets. Headlines for the day: Tatas among 10 best cos for leadership in Asia. Govt to take up 49 FDI requests on Wednesday. Idea added maximum subscribers due to MNP till March. Godrej Prop keen on redevelopment projects in Mumbai. Indian Indices: The sentiments across the globe look weak, which may lead the Indian markets to begin today’s session on a negative note. SGX Nifty is trading 31.50 points lower. Risk assets slipped broadly after elections in Greece and France fueling questions about commitments from struggling euro zone economies to pursue austerity measures, widely seen by markets as crucial to resolving the bloc's debt crisis.
Tight supplies of the metal outside China keep losses in check Copper prices ended lower at LME and Comex on Friday, 04 May 2012. Copper fell to its lowest level in more than a week on Friday after weaker-than-expected US jobs data increased uncertainty about economic growth, but tight supplies of the metal outside China kept losses in check. Copper for May delivery ended lower by 2 cents (0.4%) at $3.72 a pound at Comex on Friday. Copper ended the week 2.7% lower. Red metal prices for three-month-delivery at LME ended lower by $54 (0.7%) to $8,175 a metric ton on Friday.
Prices move up following disappointing job report Bullion metal prices ended higher on Friday, 04 May 2012 at Comex. Bullion futures prices ended the U.S. day session higher due to weak U.S. economic data, the much awaited job report and unemployment data. Gold also received a boost from uncertainties over the weekend, mainly in the euro zone. Gold had earlier fluctuated between small gains and losses, under pressure from a higher dollar. Gold for June delivery ended higher by $10.4 or 0.6%, to end at $1,645.2 an ounce on the Comex division of the New York Mercantile Exchange on Friday. Gold rose for the first time in five days. For the week, gold lost 1.2%. On Friday, silver prices for July delivery ended higher by 42 cents or 1.4% at $30.43. For the week, silver lost 3%.
Prices settle at its lowest levels in almost three months following disappointing job data Crude prices ended substantially lower on Friday, 04 May 2012 at Nymex. Prices dropped following a disappointing job report from the Labor Department. A strong dollar also pushed down prices and the same settled at its lowest levels in almost three months. Light and sweet crude for June delivery fell $4.05 (4%) to $98.49 a barrel on the New York Mercantile Exchange on Friday. For the week, crude lost 6.1%. In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.3%. The dollar was weaker earlier during the day.
The market may extend recent losses on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 68 points at the opening bell. Grasim Industries' consolidated net profit fell 7.97% to Rs 808.78 crore on 14.48% rise in total income to Rs 7562.59 crore in Q4 March 2012 over Q4 March 2011. The results were announced on Saturday, 5 May 2012. Housing finance major HDFC announces FY 2012 results today, 7 May 2012. Key benchmark indices tumbled on the last trading session of the week on Friday, 4 May 2012 to hit lowest closing level in more than 14 weeks weighed by news that the government is considering a review of the Double Taxation Avoidance Treaty with Mauritius to raise revenues. The BSE Sensex was down 320.11 points or 1.87% to 16,831.08, its lowest closing level since 23 January 2012.From a recent high of 17,318.81 on 30 April 2012, the Sensex has declined 487.73 points or 2.81% in three trading sessions.