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Thursday, August 08, 2013

Flat start; fear remains

The strength of any weakness within us is the degree to which it is feared- Guy Finley

The nervousness continues on the bourses with no positive triggers emerging. Globally, US markets weakened on expectations that the Federal Reserve may soon begin to slow the pace of its asset purchases. Contrastingly, Asian markets are up as investors expect some positive signs from the Bank of Japan policy meet. Chinese trade data too is awaited.

The opening is expected to be flat. The Nifty seems to be searching for support these days. Some buying could come in but investors are keener on offloading stocks which have run up above valuations. Jet Airways results will be in focus for the day besides a host of other companies.

RBI governor D. Subbarao and all deputy governors will attend a Central Board meeting today.

The Centre’s net direct tax collections grew 10.37 per cent in April-July at Rs 1,16,645 crore (Rs 1,05,684 crore).

Union Consumer Affairs, Food and Public Distribution Minister, KVThomas introduced National Food Security Bill in Lok Sabha today to replace the National Food Security Ordinance, 2013 which was promulgated on 5th July, 2013.

Meanwhile, excessive rainfall has hit kharif agricultural commodities says a report as crops have been damaged in major growing regions, especially flood-prone areas.

In a bid to calm investors, NSEL released the complete list of buyers and stocks held by them. The 21 buyers in the list have an outstanding liability of Rs 5,580 crore, against which stocks tendered by them in exchange warehouses are worth Rs 6,063 crore, according to the National Spot Exchange.

The Bank of England said Wednesday it would not raise interest rates until U.K. unemployment falls to 7%, a level it doesn't expect to see for about three years. The Bank of England increased its forecasts for economic growth in 2013 to 1.5% from 1.2%, and for each of the next two years.

The stock of Shiv-Vani Oil and Gas Exploration Services fell to its 52-week low on fears of the company defaulting on its loan repayments.

Shares of Tata Motors, Lupin and Ranbaxy Laboratories will be in focus today.

While Tata Motors Q1 net profit was down 23% at Rs17.30bn.Lupin Ltd Q1 net profit for the quarter stood at Rs4.01bn, up 43%. Q1 sales stood at Rs24.21bn.

Ranbaxy Laboratories Ltd has posted a Net (Loss) after tax, minority interest and share in loss of associate of Rs (5242.44) mn for the quarter ended June 30, 2013 as compared to Net (Loss) of Rs. (5857.25) mn for the quarter ended June 30, 2012.

Gold was softer at $1,285 an ounce, while U.S. crude was pinned at one-week lows near $104 a barrel.

Japan's Nikkei 225 index was trading 1% higher while Hong Kong's Hang Seng index was up 0.7%. South Korea's Kospi index is marginally up while China's Shanghai index has slipped a bit.

Results watch: Fortis Healthcare, IRB Infra, Jet Air India, Allcargo Logistics, Apar Inds, Asian Hotels (West), Asian Hotels (East), Ashok Alcochem, BEML, BGR Energy, Black Rose Inds, Bhartiya Intl, Bombay Cycle, Bonanza Inds, Dhoot Inds, Deepak Fert, DQ Entert Intl, EIH Associated, Esab India, ITD Cem India, Indo Rama Syn, IL&FS TRANS, Haryana Cap, Great Eastern Sh, Frontier Leas, Jindal Drill, KCP Sugar, Kakatiya Cem, Kesar Terminals, Maars Software, Maharashtra Seam, Moser Baer, Muthoot Cap, NESCO, NTC Ind, Page Inds, Panacea Bio, Pradeep Metal, RDB Realty & Infra, Rasoya Proteins, Rainbow Papers, TALWALKAR, TBZ, Suryalakshmi, Spentex Inds, Shreyans Inds, Shree Raj Syntex, Sayaji Hotels, Universal Cred, Welspun Syn, Zicom Elect.

Trends in FII flows: The FIIs were net sellers of Rs3.50bn in the cash segment on Wednesday, while the domestic institutional investors (DIIs) were net buyers of Rs2.61bn, as per the provisional figures released by the NSE.

Global Data Watch: Idul Fitr INR, Employment Change s.a. (Jul) AUD, Fulltime employment (Jul) AUD, Part-time employment (Jul) AUD, Unemployment Rate s.a. (Jul) AUD, Trade Balance (Jul) CNY, Exports (YoY) (Jul) CNY, Imports (YoY) (Jul) CNY, M2 Money Supply (YoY) (Jul) CNY, New Loans (Jul) CNY, BoJ Interest Rate Decision JPY, BoJ Monetary Policy Statement JPY, Eco Watchers Survey: Current (Jul) JPY, Eco Watchers Survey: Outlook (Jul) JPY, Unemployment Rate s.a (MoM) (Jul) CHF, Current Account n.s.a. (Jun) EUR, Trade Balance s.a. (Jun) EUR, Exports (MoM) (Jun) EUR, Imports (MoM) (Jun) EUR, Industrial Output Cal Adjusted (YoY) (Jun) EUR, ECB Monthly Report EUR, Unemployment Rate (MoM) (May) EUR, New Housing Price Index (MoM) (Jun) CAD, New Housing Price Index (YoY) (Jun) CAD, Initial Jobless Claims (Aug 3) USD, Continuing Jobless Claims (Jul 27) USD, EIA Natural Gas Storage change (Aug 2) USD, 30-Year Bond Auction USD, Electronic Card Retail Sales (MoM) (Jun) NZD, Electronic Card Retail Sales (YoY) (Jun) NZD, Money Supply M2+CD (YoY) (Jun) JPY, Tertiary Industry Index (MoM) (Jun) JPY.

In other news in the media:

Havells India said it is targetting Rs 5bn revenue from Karnataka in the next two years. (ET)

BHEL said it has bagged a Rs2.65bn order from Bharat Petroleum Corporation Limited for supplying equipment for latter's refinery project in Kochi. (ET)

Emami is planning to invest nearly Rs10bn for setting up a cement grinding unit and a 450-bed hospital in West Bengal. (BL)

Cadbury India, part of Mondelçz International, plans to invest more than Rs10bn in the first phase of a manufacturing plant in Sri City, Andhra Pradesh. (BL)

Cognizant Technology Solutions hopes to earn around US$500 mn this year from offering SMAC (social, mobile, analytics and cloud) technologies to clients, according to its Chief Executive Officer Francisco D’Souza. (BL)

A consortium comprising Siemens Ltd, Siemens AG and Siemens China has won an order for a turnkey project worth approximately €70 mn from IL&FS Rail Ltd, said an official release. (BL)

Tilaknagar Industries (TI), is in talks with global giants like Suntory Holdings and Pernod Ricard to sell a 15-20 % stake in the company. (BS)

The first consignment of phosphoric acid from Tunisian Indian Fertilisers (Tifert), a Tunisia-based venture of Coromandel International Limited (CIL), has arrived at Kakinada, where CIL's complex fertilisers plant is located. (BS)

Larsen and Turbo Ltd (L&T) has been awarded Rs6.5bn contract for equipment supply and construction of 28 mega lift irrigation projects in Tel River basin by the water resources department of Odisha government. (BS)

While the National Spot Exchange Ltd (NSEL) claimed it has 0.5mn tonnes of basmati paddy stocks at its designated warehouses in Punjab and Haryana, the trade believes disposing this may not be easy with the new crop set to arrive in the markets from mid-September. (BL)

The State Trading Corporation (STC) of Mauritius has renewed an agreement to source petroleum products from Mangalore Refinery and Petrochemicals Ltd (MRPL), ending uncertainty. (BL)

The Central Bureau of Investigation (CBI) arrested the two owners of mobile handset maker Micromax, while they were allegedly giving a Rs3mn bribe to engineers of the North Delhi Municipal Corporation for clearance to a banquet hall construction. (BS)

The sub-committee of the Financial Stability and Development Council has expressed concern over the deteriorating asset quality of state-run banks.(ET)

A Parliamentary panel has recommended review of the Government’s decision to raise gas prices.(BL)

The Centre’s net direct tax collections grew 10.37 % in April-July at Rs 1160bn.(BL)

Housing finance companies (HFCs) can now lend more funds to real estate developers and individual home buyers. This is because the National Housing Bank (NHB), regulator for HFCs, has lowered the risk weights for loans extended by such companies. Lower risk weight means lesser capital that an HFC has to set aside for providing a home loan. (BL)