Cloudy global cues

Prosperity is something the businessmen created for politicians to take credit for.

US President Barack Obama says that India’s prosperity is good for America. His remarks come a day after the PM made a case for reforming the UN Security Council and asked the developed world to address systemic failures. These statements hold particular significance in light of the three-day G8 meeting starting today. Chinese President Hu Jintao won’t be going to Italy for the G8 meet as he battles ethnic tension in Xinjiang.

In short, the global market will in focus. The bad news is western equity markets sank overnight amid growing doubts over the so-called ‘green shoots’ theory. Asian stocks are down 1-1.5%. So, it’s a no-brainer that we will open down. Results and global cues will control the sentiment. Infosys unveils its results on Friday. IIP will also be announced on the same day. Among the good news is that monsoon appears to be progressing well.

FIIs were net sellers for a second day running while local funds were bullish. Even though the market recovered from Monday Mayhem, the breadth was negative and traded volume was down.

In other global news, the US government is considering curbs on speculative trading of crude oil. Finance Minister Pranab Mukherjee also expressed concern on this issue with his post-budget interaction with India Inc. in New Delhi on Tuesday. Speculators have been blamed for causing extremely wild swings in the price of crude and consumers have been the big losers.

US consumer loan delinquencies have risen to record high. Across the Atlantic, manufacturing output in the UK saw an unexpected drop. The yen strengthened to a six-week high against the euro as Asian stocks fell and Japanese machinery orders unexpectedly declined, adding to signs the global recession is far from over.

Results Today: IndusInd Bank and Moser Baer.

FIIs were net sellers in the cash segment on Tuesday at Rs9.21bn while the local institutions poured in Rs7.9bn. In the F&O segment, the foreign funds were net buyers at Rs7.07bn. On Monday, the foreign funds were net sellers at Rs3.5bn in the cash segment. Mutual Funds also pulled out Rs5.88bn on the same day.

US stocks continued the recent downward trend on Tuesday, as traders dumped shares ahead of the start of the quarterly reporting period. A selloff in commodity prices took its toll on the underlying stocks, adding to the market weakness and worries about the health of the economy.

The Dow Jones Industrial Average lost 161 points, or 1.9%, to 8,163.60, closing at its lowest point since April 28. The S&P 500 index shed 18 points or 2%, to 881.03, closing at its lowest point since May 1. The Nasdaq fell 41 points, or 2.3%, to 1,746.17, closing at its lowest point since May 27. Declines were broad-based, with 25 of 30 Dow components sliding.

US stocks have been sliding since mid-June as a three-month rally has lost steam amid apprehensions that the economic recovery, when it does materialise, may not be as strong as has been anticipated. The S&P 500 had spiked 40% from early March.

Economic news due later this week includes readings on retail sales, the job market, import and export prices and consumer sentiment.

This recession is not going to be short and shallow like in 2001. We are more than 18 months into it and there does not seem to be any concrete signs of a turnaround. Until the global economy shows incremental signs of improvement, stocks will find it tough to move much higher.

A report from the Mortgage Bankers Association showed that delinquencies on credit cards and other loans jumped to a record 3.23% in the first quarter. That was a modest rise from the previous quarter.

Wall Street is also gearing up for the start of the second-quarter reporting period, which unofficially kicks off after the close on Wednesday with Dow component Alcoa. Next week brings reports from some of Wall Street's biggest financial firms, including Goldman Sachs, JPMorgan Chase and Citigroup. However, most quarterly financial reports are due out later in the month. Market participants will be looking to see not only that companies beat forecasts, but also for some soothing comments on the outlook for future quarters.

The summit of the world's leading industrialized nations begins on Wednesday in L'Aquila, Italy. US President Barack Obama is expected to speak about the economic outlook. The leaders of Japan, Britain, France, Italy, Germany, Canada and Russia will also speak.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.46% from 3.51% late on Thursday.

Energy prices slipped, with U.S. light crude oil for August delivery falling $1.12 to settle at $62.93 a barrel on the New York Mercantile Exchange.

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

COMEX gold for August delivery fell $4.80 to settle at $929.10 an ounce.

Shares in Europe ended lower for the fourth consecutive session, with losses for utilities offsetting gains for metal producers and banks. The pan-European Dow Jones Stoxx 600 index declined 0.7% to 200.20. Germany's DAX index shed 1.1% to 4,598.58 and the French CAC-40 index lost 1.1% to 3,048.57. The UK's FTSE 100 index inched 0.2% lower to 4,187.00.

After a big selloff on Monday, Indian markets seemed to have regained their composure as the key indices managed to end with smart gains. Stocks, which were badly battered, attracted buying at lower levels.

Market players still hoped that disinvestment, PSU IPOs and other reforms may be announced in the coming quarters. The Auto, FMCG, Capital Goods and Power stocks were among the major gainers, while, the PSU and the Oil & Gas stocks remained under pressure.

The Sensex advanced 126 points or 0.9% at 14,169 after touching a high of 14,252 and a low of 14,000. The index had opened at 14,103 against the previous close of 14,043.

The NSE Nifty surged 38 points or 0.9% to shut shop at 4,203.

Asian markets ended in the red; the Nikkei index in Japan slipped 0.4% at 9,647, Australia's S&P/ASX ended down 0.5% at 3,766. Hang Seng index fell 0.6% at 17,862.

Elsewhere in the Europe, stocks were trading in the green. The FTSE index was up 1% at 4,233. The DAX index was up 1% at 4,678. CAC 40 index was up 0.6% at 3,098.

Coming back to India, among the BSE Sectoral indices BSE Auto index was the top gainer gaining 3.8%, followed by the BSE FMCG index up 3.7%, BSE Capital Goods index gained 1.5% and BSE Power index gained 1%.

The BSE Mid-Cap index added 1% however on the other hand, BSE Small-Cap index fell 0.2%.

In the Sensex, the major losers were JP Associates, ITC, Hero Honda, M&M, Grasim, ACC, Maruti and Bharti Airtel.

On the other hand, ONGC, Tata Power, Reliance Industries, SBI, RCom, Tata Motors and Infosys.

Among the big gainers in the broader market were Marico, IRB Infra, Voltas, Exide Ind, Torrent Power, IVRCL Infra, Jubilant and India Cement.

Outside the frontline indices, the top losers included REI Agro, Chambal Fert, NMDC, RCF, Jai Corp and Bajaj Holdings.

Shares of RNRL advanced by over 2.5% to Rs81.6 after the Supreme Court refused to stay a verdict of the Bombay High Court in a gas dispute case between Reliance Industries Ltd. and RNRL

The SC asked both the companies to reply to the appeals filed by each other by July 20, when the matter will come up for hearing.

On the other hand, shares of Reliance Industries declined by over 2% to Rs1855.

Tata Steel June sales rose by 19% to 497,000 tons as compared to 419,000 tons in the same period last year. While, Q1 sales rose 22% to 1.42mn tons as compared to 1.16mn tons YoY.

The company’s hot-metal output for the month of June rose 16% to 578,000 tons as compared to 499,000 tons in the same period previous year. Crude steel output rose by 21% to 514,000 tons YoY. While, crude steel output rose 20% to 1.5mn tons as compared to 1.25mn tons.

The stock ended higher by 0.5% to Rs398 after hitting an intra-day high of Rs409 and a low of Rs385 and has recorded volumes of over 3.6mn shares on BSE.

Shares of Reliance Industries further lost ground on Tuesday after the Finance Minister in the Budget announced that it hiked the MAT rate from 10% to 15%. Further the credit period was also increased to 10 years from 7 years. The stock hit an intra-day high of Rs1910 and a low of Rs1825 and recorded volumes of over 1.4mn shares on BSE.

Shares of M&M advanced by over 5.5% to Rs750 after the Finance Minister in the Budget which was presented on Monday reduced the duties on large cars.

The FM reduced a "component" added to the 24% ad valorem duty on large cars and utility vehicles (SUV).

The government also reduced the excise duty on petrol driven trucks from 20% to 8% "to equate the duty with similar vehicles run on diesel".

Tea and coffee plantations stocks like Mcleod Russel and Tata Coffee ended with smart gains on Tuesday. The Finance Minister in the Budget announced concessional customs duty of 5% on specified machinery for tea and coffee plantations would be reintroduced for one year up to July 6, 2010.

Shares of McLeod Russel advanced by 4.6% to Rs115 after hitting an intra-day high of Rs116 and a low of Rs109 and recorded volumes of over 0.25mn shares on BSE.

While Tata Coffee ended flat at Rs201. The scrip touched an intra-day high of Rs203 and a low of Rs199 and recorded volumes of over 4,000 shares on BSE.

Shares of ITC surged to 52-week high, the stock surged by over 6.5% to end at Rs211. The Finance Minister in the Union Budget left excise duty on cigarettes unchanged, after five consecutive years of increases.

The scrip hit its new 52-week high of Rs214.85 and hit its intra-day low of Rs199 recording volumes of over 3.5mn shares on BSE. ITC had hit its 52-week low of Rs132 on October 27, 2008.

Shares of GSPL and GAIL are trading higher after the Finance Minister in the Budget proposed to develop a blueprint for long distance gas highway leading to a National Gas Grid. This would facilitate transportation of gas across the length and breadth of the country, he said.

Furthermore, he proposed in the Union Budget to fully allow all capital expenditure as deduction under the Income Tax Act in respect of businesses of setting up and operating cold chain, warehousing facilities for storing agricultural produce and operating cross-country natural gas or crude or petroleum pipeline network for distribution on common carrier principle.

Shares of GSPL surged by over 7.5% to Rs54.2 after hitting an intra-day high of Rs54.9 and a low of Rs49.5 and recorded volumes of over 4.7mn shares on BSE.

Meanwhile, GAIL gained by 3.5% to Rs323 after hitting an intra-day high of Rs344 and a low of Rs316 and recorded volumes of over 1.1mn shares on BSE.

Market may open lower tracking weak global cues

The key benchmark indices may open lower tracking weak global cues. Recent selling by foreign funds may also weigh on investor sentiment. The reports that government will have a disinvestment road map in place in about three months to bridge the fiscal deficit may however support the market.

Asian markets fell today on doubts over the speedier recovery of the global economy. The key benchmark indices in China, Japan, Hong Kong, South Korea, Singapore and Taiwan fell by between 0.73% to 1.86%.

The US markets closed deep in the red yesterday, 7 July 2009 as stocks fell to their lowest level in 10 weeks amid growing doubts about the economic recovery. The Dow slipped 161.27 points, or 1.9%, to 8,163.60. The S&P 500 index fell 17.69 points, or 2%, to 881.03. The Nasdaq Composite Index lost 41.23 points, or 2.3%, to 1,746.17.

A statement from one of Obama's economic advisors raised concerns about the recovery. Speaking at a seminar in Singapore, one of President Obama's economic advisors, Laura D'andrea Tyson, hinted that she felt the government should plan on a contingency basis for a second round of stimulus.

Back home, putting an end to speculation over the government's agenda on disinvestment, senior finance ministry officials reportedly said the government will have a disinvestment road map in place in about three months, and that it is exploring the option of tweaking the rules that govern the use of these funds.

The government is planning to sell about 10-20% stake in listed blue chip companies. Among those likely to be targeted are ONGC, IOC, NTPC, Bhel and SAIL. Considering that these companies are profitable, selling stakes at the opportune time could fetch the government a neat revenue that could help bridge the fiscal deficit. The cash-strapped government would also look at diluting stakes in already-listed state-run firms while bringing in public offers of others in the coming months, another finance ministry official said. According to the present rules, stake sale proceeds have to be put into the NIF (national investment fund) managed by professional fund managers—and are not treated like other tax and capital receipts of the government. The government can only use the interest from the fund for social schemes and restructuring of ailing PSUs.

The next major trigger for the market is earnings of India Inc. for the quarter ended June 2009. India's second largest IT major by sales Infosys kickstarts the result season on Friday, 10 July 2009.

The key benchmark indices rose 0.9% on Tuesday 7 July 2009 snapping Monday's (6 July 2009) near 6% post-budget losses on a view that a sharply higher government spending in the Union Budget 2009-2010 will aid a recovery in the economy.

Finance Minister Pranab Mukherjee said on Tuesday government spending has to fill a gap left by lower private investment, a day after he sharply raised government spending in the Union Budget 2009-2010 on Monday, 6 July 2009. Higher government spending on infrastructure sector and rural economy will help facilitate recovery in the economy.

Absence of any big bang economic reforms in the Union Budget 2009-2010 had triggered a nearly 6% slide on the bourses amid heavy volumes on Monday. The Union Budget 2009-2010 did not contain any major reforms such as a roadmap to increase foreign direct investment in insurance sector and decontrol fuel prices. Lack of financial sector reforms and a clear roadmap on divestment were other sources of disappointment. The government set an very small target of Rs 1120 crore from divestment for the financial year ending March 2010. A surge in fiscal deficit target added to the market's woes. Finance Minister (FM) Pranab Mukherjee set a sharply higher fiscal deficit target to 6.8% for the financial year ending March 2010 after he increased spending on roads, power and aid to the poor.

The market had expected some announcement on decontrol on fuel prices but the FM only said that a panel will be set up to look into the pricing of petrol and diesel. The market was also surprised by the FM keeping a mum on Foreign Direct Investment (FDI) policy at a time when expectations were running high that the government will announce a roadmap for hike in foreign direct investment in insurance sector to 49% from 24%.

As per the provisional figures on NSE, foreign funds sold shares worth Rs 921.39 crore on Tuesday, 7 July 2009. The foreign institutional investors (FIIs) sold shares worth a net Rs 351.40 crore on Monday, 6 July 2009 when the Union budget was announced by the finance minister.

SGX Nifty plunges

4,135.0 -58.0

Precious metals end mixed

Yellow metal registers gains snapping two day losing streak

Precious metal prices ended mixed at USA on Tuesday, 07 July, 2009. Gold ended higher while silver ended lower after a full day of volatile trading. The dollar remained strong trying to erase some shine from precious metals by decreasing their appeal as a hedge against inflation. But gold managed to end higher today.

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, gold for August delivery ended at $929.1, higher by $4.8 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 5.1%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Tuesday, Comex silver futures for September delivery lost 1.8 cents (0.1%) at $13.22 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 17.2% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, a six-currency measure of the greenback's value stayed steady. Dollar rose against the euro. The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback.

Crude prices traded lower once again today due to the strong dollar. Crude oil prices traded lower by 2% around $62/barrel.

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

At the MCX, gold prices for August delivery closed higher by Rs 85 (0.6%) at Rs 14,604 per 10 grams. Prices rose to a high of Rs 14,620 per 10 grams and fell to a low of Rs 14,495 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 3 (0.01%) lower at Rs 21,817/Kg. Prices opened at Rs 21,850/kg and fell to a low of Rs 21,700/Kg during the day's trading.

Crude continues to slip

Price drop by 12% in almost a week

Crude prices continued with their downward journey at Nymex on Tuesday, 07 July, 2009. Prices fell on worries about the certainty of global recovery from the current recession in the near future and strong dollar. Prices dropped below the $63 mark once again after a long time.

On Tuesday, crude-oil futures for light sweet crude for August delivery closed at $62.93/barrel (lower by $1.12 or 1.8%). Earlier, it fell to a low of $62.35. Last week, crude ended lower by 3.5%.

For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 63% since then. Year to date, in 2009, crude prices are higher by 41.2%.

EIA reported in its short-term energy outlook today that it expects a smaller decline in global oil consumption this year due to better-than-expected economic activity in Asia. The EIA now projects oil consumption to fall by 1.6 million barrels a day compared with a decline of 1.7 million barrels a day in its June outlook. The price of crude oil is expected to average near $70 per barrel through the second half of 2009.

In the currency market on Tuesday, the dollar index, a six-currency measure of the greenback's value stayed steady. Dollar rose against the euro. The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback.

Also at the Nymex on Tuesday, August reformulated gasoline fell 1 cent to $1.73 a gallon and August heating oil dropped 3 cents to $1.60 a gallon.

August natural-gas futures fell 6 cents to $3.43 per million British thermal units.

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

At the MCX, crude oil for July delivery closed at Rs 3,075/barrel, lower by Rs 42 (1.3%) against previous day's close. Natural gas for July delivery closed at Rs 169.4/mmbtu, lower by Rs 0.5/mmbtu (0.3%).

India Budget 2009

India Budget 2009

SGX Nifty Live Update - July 8 2009

4,145.5 -47.5

GSPL

We recommend a buy in Gujarat State Petronet from a short-term perspective. It is evident from the charts that the stock has been forming higher peaks and higher troughs since January low of Rs 26. However, after recording the peak of Rs 65 in early June, the stock witnessed a short-term pull-back. The significant support in the band of Rs 48 and Rs 50 arrested the stock’s decline. Moreover, presence of intermediate-term up-trendline around this support reinforced the bullish momentum in the stock. The stock appears to have resumed its intermediate-term uptrend. On July 7, the stock penetrated 21- and 50-day moving averages by gaining almost 8 per cent with heavy volume. The weekly relative strength index is on the brink of entering the bullish zone and the daily RSI is rising in the neutral region. Our short-term outlook is bullish for the stock. We expect it to move up until it hits our price target of Rs 60. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 51.

via BL

India Union Budget Analysis 2009

India Union Budget Analysis 2009

India Strategy, ITC, Reliance Industries, India Technology, Energy

India Strategy, ITC, Reliance Industries, India Technology, Energy

India Budget - Economic Analysis

India Budget - Economic Analysis

India Budget - Sectoral Impact

India Budget - Sectoral Impact

India Budget - Companies Impact

India Budget - Companies Impact

Asian markets ends mixed

Hang Seng, Shanghai retreat while Sensex gave up yesterday's losses

Stock market in Asian region showed mixed trend on Tuesday, 7 July 2009 amid choppy movements following a mixed close on Wall Street. With concerns over the state of global economy continuing to weigh in to a marked extent, participants are rather wary of holding positions at higher levels even as a section of them appear to be evincing keen interest in going in for some bargain hunting at declines.

On Wall Street, consumer staples stocks and an upgraded American Express helped to pull two of three major indices into the green Monday after a drop in oil and economic worries discouraged investors early on. The Dow Jones Industrial Average was higher by 44.13 points, or 0.5%, at 8324.87, while the S&P 500 gained 2.3 points, or 0.3%, to 898.72. The Nasdaq Composite declined 9.12 points, or 0.5%, to 1787.40.

In the commodity market, crude oil traded near a five-week low on a stronger dollar and concerns that slow fuel consumption will lead to an increase in stockpiles.

Crude oil for August delivery was at $64.23 a barrel, up 17 cents, or 0.3%, at 1:42 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, the contract fell $2.68, or 4%, to $64.05, the lowest settlement since 27 May 2009.

Brent crude oil for August settlement traded at $64.36 a barrel on London’s ICE Futures Europe exchange, up 31 cents, or 0.5%, at 1:37 p.m. in Singapore.

Gold, little changed in Asia, may gain from a two-week low as crude oil stemmed a decline and the dollar rally halted. Gold for immediate delivery traded at $925.98 an ounce at 8:43 a.m. in Singapore. Gold for August delivery on the Comex division of the New York Mercantile Exchange was at $925.90.

Bullion fell to $920.75 an ounce yesterday, the lowest since June 23, as oil led a drop in commodities on concern the global economic recovery will falter, damping demand for the precious metal as an inflation hedge.

In the currency market, major currencies recover against dollar and yen as markets stabilize following yesterday's late recovery in US stocks.

The Japanese yen strengthened against major currencies on Tuesday in Asia after European finance ministers said risks to the recovery remain, spurring demand for the relative safety of Japan’s currency. The Japanese currencies were quoted at 95.1 against the US dollar, 132.47 against euro, and 154.02 against British pound.

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 trade, the Australian dollar firmed on Tuesday after the Reserve Bank sounded slightly more upbeat in its latest policy statement, where it kept interest rates unchanged at a record low of 3 per cent as expected.

At the local close, the dollar was trading at $US0.7960, up from Monday's close of $US0.7912. During the domestic session, the unit moved between $US0.7944 and $US0.7993.

In Wellington trades, the New Zealand dollar fell to a three-week low against the greenback overnight, but then charged ahead. By 8am the kiwi was buying US63.67c, having fallen to around the US62.40c area from US62.80c at 5pm yesterday. The NZ dollar also fell to its lowest level in nearly six weeks against the Japanese currency, dropping as low as 59.30 yen early today before racing up to 60.70 yen at the local open from 59.95 at yesterday's local close.

The South Korean won finished at 1,273.1 won to the U.S. dollar, down 4.6 won from Monday's close, as an absence of major news led it to trade in a tight range

The Taiwan dollar weakened further against the greenback. The Taiwan dollar fell against the US dollar as it was trading lower at NT$ 32.9890, down by NT$ 0.0010 from Monday’s close of NT$32.9880.

Coming back in equities, Asian equity markets ended mostly lower as weaker metal and oil prices dragged on commodity and shipping related stocks.

In Japan, the stock market tumbled extending losses for fifth consecutive day, as investor’s remains on doubts over a potential rebound in the global economy. Marine transportation, automakers, and other export oriented shares plummeted as shipping rates slumped and the rising yen dimmed earnings prospects for the exporters. At the closing bell, the Nikkei 225 Stock Average index erased 33.08 points, or 0.3%, to 9,647.5, while the broader Topix index fell 3.29 points, or 0.4%, to 909.

On the economic front, Japan’s Ministry of Finance said the official reserve assets totaled $1.019 trillion at the end of June, representing a decline of $4.84 billion from May. In June, the foreign currency reserves amounted to $988.5 billion, while the reserves with the IMF totaled $ 4.3 billion. The gold reserves stood at $22.9 billion, while the SDRs amounted to $2.97 billion.

In Mainland China, stock index plummeted snapping five days of winning streak, on the back of losses from properties amid worries recent gains had outpaced profit expectations, while resource related shares plunged as pullback in commodities prices and on news copper imports into China might fall 64% in the second half. The Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, tumbled 1.13%, or 35.21 points, to 3,089.45, while the Shenzhen Component Index melted 1.02%, or 127.48 points, to 12,362.44.

On the economic front, China's central bank plan to drain 170 billion Yuan ($24.9 billion) from the money market on Tuesday through short-term bond repurchase agreements. The operation comprises 90 billion Yuan via 28-day repos and 80 billion Yuan via 91-day repos. A total of 260 billion Yuan in central bank bills and repos is due to mature this week. Last week, the central bank injected a net 31.5 billion yuan into the market.

In Hong Kong, the stock indices tumbled on tracking negative cues from Shanghai bourses. Shares of property developers dragged down the market amid worries recent gains had outpaced profit expectations and on concern regulators will crack down on mortgage lending to cool growth in home prices.

Banks stumbled after the nation’s banking regulator said rapid credit growth poses a risk to lenders. Falling commodities and oil prices weighed down resources related shares. The Hang Seng Index melted 117.14 points, or 0.65%, to 17,862.27, while the Hang Seng China Enterprise Index retracted 152.95 points, or 1.41%, to 10,674.67.

In Australia, the stock market drifted lower extending losses for third consecutive days on tracking negative lead from Wall Street and pullback in commodities prices. Materials and resources and energy shares hardest hit on a morning on the back of drop in base metal and crude oil prices. Shares of properties and other economically sensitive stocks were also below the line fell as investors turned cautious ahead of the upcoming company earnings reporting season.

At the closing bell, the benchmark S&P/ASX200 index stumbled 16.8 points, or 0.44%, to 3,766.9, meanwhile the broader All Ordinaries tumbled 16.4 points, or 0.43%, to 3,767.8.

On the economic front, the Australian Industry Group-Housing Industry Association performance of construction index dropped for the 16th consecutive month in June. The PCI shed 4.3 points to 42.6. The Reserve Bank of Australia retained its cash rate at 3% as expected for third straight month. The official cash rate now stands at its lowest level in 49 years.

In New Zealand, equities edged forward ending its four-day losing streak. The New Zealand share market edged slightly higher in early trading today, after Wall Street ended its session on a firm note. the NZX50 edged up 0.12% or 3.26 points to 2746.24. The NZX 15 added 0.28% or 14.07 points to close at 5068.63

On the economic front, New Zealand business activity is rebounding slightly according to NZIER. New Zealand businesses are less pessimistic than they have been in the past six months, said Jean-Pierre de Raad, chief executive of NZIER, as reported in the latest NZIER Quarterly Survey of Business Opinion (QSBO). According to the survey, fewer businesses expect a reduction in their own trading activity in the next three months. The recession is not over yet. These latest data do not alter the view of a continued contraction until the December quarter.

Meanwhile, the Reserve Bank of Australia board has kept interest rates unchanged at 3 percent. The decision was widely expected. It means that rates across the Tasman - unusually - remain higher than those in New Zealand. Here the Official Cash Rate is 2.5 percent. RBA Governor Glenn Stevens reiterated his view that the global economy is stabilising, after a sharp contraction in demand during the December and March quarters.

In South Korea, stocks finished higher as investors snapped up electronics shares amid rising expectations for second-quarter earnings. The benchmark Korea Composite Stocks Price Index (KOSPI) added 5.26 points to end at 1,434.20.

On the economic front, the International Monetary Fund (IMF) Tuesday revised up its 2009 growth outlook for South Korea, forecasting that its economy will contract 3 percent as the government's rapid and comprehensive" stimulus measures helped limit its downturn. In April, the IMF forecast that the economy would undergo a 4 percent contraction. The latest outlook is still worse than the government's projection of minus 1.5 percent growth for this year.

In Taiwan, stock market trespassed one month high, as technology shares on better-than-expected second-quarter earnings. The main Taiex share index gave up yesterday’s losses as the Taiex index stepped up 65.31 points or 0.98%, closing the day at 6715.22, strongest closing since last 6 June 2009 when market closed at 6856.74.

In Philippines, the stock market continued to take an uphill for a second consecutive day, closing almost 1% higher, as investors became optimistic following the benign inflation data on the local inflation front, which seemingly augured well from the point of view of the domestic markets. Philippines CPI rose at their slowest pace in more than 22 years in June, prompting the central bank to reiterate its monetary easing thrust. At the final bell, the benchmark index PSEi mounted 0.92% or 22.66 points to 2,471.76, while the All Shares index rose 0.89% or 13.98 points to 1,582.80.

In India, the key benchmark indices snapped yesterday’s nearly 6% post-budget losses on a view that the Union Budget 2009-2010 will aid a recovery in the economy The BSE 30-share Sensex was up 127.05 points or 0.90% to 14,170.45. The S&P CNX Nifty was up 36.45 points or 0.88% to 4,202.15.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.05% or 0.53 points to 1066.36 while Indonesia’s Jakarta composite index ended the day higher at 2083.25.

In other regional market, shares in Europe shook off some early uncertainty on Tuesday to trade higher for the first time in four sessions, helped by gains for metal stocks and banks. Of regional equity markets, the commodity-heavy U.K. FTSE 100 index advanced 0.8% to 4,227.25, the German DAX index rose 0.6% to 4,680.29 and the French CAC-40 index traded up 0.5% at 3,098.38.

India Union Budget Analysis - 2009

India Union Budget Analysis - 2009