Morning Notes - March 10 2010
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Wednesday, March 10, 2010
US stocks manage to end day on a steady note
Major indices pare most of their intra day gains as dollar stays strong
US stocks shed most of their intra day gains and ended modestly higher on Tuesday, 09 March, 2010. Telecom sector had pushed US stocks considerably higher during the day on Tuesday. A stronger dollar weighed on stocks in the early going but financial and tech stocks lifted the broader market to a healthy gain. Lack of any particular catalyst coupled with strong dollar weighed on stocks once again later in the day. Tuesday marked the one-year anniversary of the stock market's rebound from its 12-year lows last year.
At the end of the day on Tuesday, the Dow Jones Industrial Average ended higher by 11.86 points at 10564.38. Nasdaq ended higher by 8.47 points at 2340.68. S&P 500 ended higher by 1.95 points at 1140.45. Dow opened 2.7 points lower earlier during the day. During intra day trading, Dow was higher by 53 points at one time.
Five of ten economic sectors ended higher for the day led by the telecom, industrials, and technology sectors. Materials, utilities, and consumer staples sectors were the main laggards.
AT&T, Verizon and Boeing were the main Dow winners. Pfizer, Alcoa and Merck were the main Dow laggards.
The technology sector was in focus today and the Nasdaq headed against its counterparts. This was after Texas Instruments announced an improved its earnings outlook, which remains in in-line with that of Wall Street. But the stock itself slipped. In another development, Cisco Systems unveiled plans for its new router, which is expected to improve the flow of content and, in turn, inspire further content development. This benefitted Cisco's potential customers.
AT&T shares were up after the company said it completed a test with Cisco System's new router, which allowed its long-distance Internet backbone to carry data traffic roughly 10,000 times faster than the average household cable or DSL connection.
Another Dow component, Boeing shares were up following reports that Northorp Grumann would drop out of a protracted quest to win a $40 billion contract to build the U.S. Air Force's next generation of aerial-refueling planes, leaving Boeing as the only competitor left standing.
The healthcare sector was down today after traders mulled over President Obama's new healthcare plans.
Like yesterday, Nasdaq continued to get its support from RIMM. The stock was up almost 7% in two days. Apple, Microsoft and Oracle remained the other supporters for the index.
In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by more than 0.3%. The U.S. dollar gained against most of its rivals on Tuesday, as worries about debt levels in the euro zone were rekindled after Fitch Ratings warned that Portugal remained vulnerable to a downgrade.
Crude prices ended little lower on Tuesday, 09 March 2010. Prices fell as dollar headed higher. However, crude managed to recover from its intra day lows. On Tuesday, crude-oil futures for light sweet crude for April delivery closed at $81.23/barrel (lower by $0.25 or 0.8%). Prices fell to a low of $80.12 during intra day trading. Prices gained 2% last week.
In the latest monthly report, the EIA reported today that it now expects oil consumption growth of 1.5 million barrels a day this year, up from 1.2 million barrels a day in last month's outlook. As per the report, with that demand, oil prices should stabilize above $80 a barrel. The report also detailed that with this, price of crude oil is to average above $80 a barrel this spring, then rise to about $82 a barrel by the end of the year. Crude should climb to $85 a barrel by the end of 2011.
Indian ADRs ended mixed on Tuesday. Tata Motors and Punjab Tractors were the main gainers soaring 2.5% each. WNS was the main loser shedding 1.44%.
For tomorrow, the economic data expected are the whole inventory report and monthly budget statement. Other than that, earning reports will continue to pour in tomorrow.
Daily News Roundup - March 10 2010
Minister of state for Petroleum and Natural Gas Jitin Prasada told Rajya Sabha that ONGC plans to invest Rs265bn in the next fiscal for exploration, production and related ventures. (FE)
Minister of State for Petroleum and Natural Gas, Mr Jitin Prasada, said that IOC has "regretted its participation" as equity partner in the proposed Barmer refinery due to financial constraints. (BL)
The European Investment Bank had agreed to a £340mn loan to the Jaguar and Land Rover brands of Tata Motors. (BS)
Daimler sold its 5.34% stake in Tata Motors for nearly €300mn (Rs18.6bn). (ET)
A group of British Members of Parliament launched a scathing attack on the mothballing of Corus's Teeside Cast Products plant in northern England. (BL)
NMDC is expected to increase its production to 50mt by 2013-2014 from the present 30mt and also plans to introduce a new pricing mechanism from April 1. (BS)
Wipro Technologies, the global IT services business of Wipro, announced that it has signed a Microsoft business productivity online suite "dedicated advisor" agreement with Microsoft Corp. (FE)
Wipro Infotech, the India and West Asian IT business of Wipro, won a turnkey project from the Financial Intelligence Unit - India (FIU-IND) of the Union Ministry of Finance to implement the FINnet project. (BS)
Hindustan Unilever has appealed against the Calcutta High Court's interim injunction, which restrained it from airing a particular commercial for its washing soap/powder, Rin. (BS)
FMCG major Marico plans to launch its beauty and wellness chain, Kaya in the Middle East by opening 4-5 clinics in the region in FY11. (ET)
The Steel Ministry said it will send the 20% share sale proposal of SAIL to the Cabinet this week. (ET)
IDBI Bank hoped to raise US$250-300mn through a medium-term note program, but would wait until market conditions were more favorable. (BS)
Indian Hotels is mulling the possibility of completely doing away with its Residency brand luxury hotels and gears up for a stronger push of its Vivanta brand. (BL)
The QIP issue of India Cements, launched late on Monday, is said to have a received good response from institutional investors to raise US$75mn. (ET)
Tata Teleservices has acquired 75,000 sq ft built up space for Rs280mn in the newly built IT building named ‘Prince Infocity II’ near Chennai. (ET)
Binani Cement plans to venture into commercial real estate development in order to cash in on its idle land bank and to reduce dependence on the cyclical nature of the cement business. (ET)
Patel Engineering has received coal linkage for its proposed 1,050MW thermal project at Nagapattinam, Tamil Nadu. (BL)
Aditya Birla Minacs part of the Aditya Birla Group, has acquired the UK-based firm Compass BPO for an undisclosed sum. (ET)
Bosch Ltd declared a lock-out at its Naganathpura production plant near Bangalore, after workers resorted to a flash strike and assaulted an officer over wage revision. (FE)
Even as reports of Bt cotton 1 developing resistance to pink bollworm create concern in the farming community, Monsanto has begun work on two new technologies Bollgard III, the third generation Bt cotton technology, and Roundup Ready Flex, a technology that gives herbicide tolerance to the plant. (BL)
Garware Offshore Services bagged a contract worth Rs225mn from ONGC. (FE)
CCCL Infrastructure Ltd, part of the Chennai-based Consolidated Construction Consortium Ltd, plans to raise Rs15-20bn through private equity. (BS)
Singareni Collieries Company Ltd, India’s second-largest coal producer, and also a state sector undertaking, plans to foray into power generation by setting up 1,200MW thermal power plant in Adilabad for an investment of Rs56bn. (BS)
The Railways carried over 800mt of freight, an increase of 6.95%, in the ongoing financial year to February. (ET)
The government plans to carry out bulk of its targeted borrowing for fiscal 2010-11 in the first six months, the country’s top policy adviser has said. (ET)
The RBI plans to amend its rules to pre-empt NBFCs from misusing the liberal rules governing limited liability partnership firms. (BS)
India and Russia are expected to sign four agreements in the fields of business and economy and one of the pacts includes fertilizers. (FE)
After de-controlling the prices of fertilizers containing phosphorous and potash from April 1 this year, the government is planning to encourage their free imports. (FE).
According to leading developers in the housing segment, home buyers are set to face higher prices due to the imposition of service tax as well as an increase in cost of various inputs like cement. (BS)
The Central Board of Excise and Customs has recommended to the Director General of Foreign Trade that the norms for issuing export/import licenses be more stringent. (BS)
The Jawaharlal Nehru Solar Mission’s plan for the deployment of 20,000MW of solar power by 2022 needs an investment of Rs3trn, based on a capex of Rs150mn/MW. (BS)
The government will provide Rs95bn for recapitalisation of public sector banks in the first quarter next year, while about Rs70bn will be infused during the rest of the financial year 2010-11. (BS)
Sugar production in Uttar Pradesh may cross 4.5mt during the ongoing 2010-11 season as cane yields surpass expectations. (BL)
Uninteresting...a year later!
Modern calendars mar the sweet simplicity of our lives by reminding us that each day that passes is the anniversary of some perfectly uninteresting event.
It's been a year since the market has bid farewell it its lows. Meanwhile, the Sensex has galloped by over 100% in a year; albeit with a couple of corrections. The story ahead doesn't appear as promising as yet. For the day, we don’t expect any broad movement as the sentiment has softened a bit. Global markets are also insipid to say the least. Given this backdrop, we expect a flat to slightly positive start and another anemic session. Select stock specific action may of course continue to hog limelight.
Technically, the NSE Nifty faces resistance at 5200 while support is likely to kick in at 5000. A break beyond this range is not expected anytime soon. Much will hinge on global cues and fund flows; also don’t forget local data points like IIP and inflation, which will be announced shortly.
Meanwhile, in Parliament, it has taken 14 long years for India to pass the Women’s Reservation Bill in Rajya Sabha. Even that was not easy as the Yadav troika put up stiff resistance. What’s more, the Bill is yet to be cleared by the Lok Sabha. The UPA seems to have lost the support of the SP and RJD. Hopefully, time will be the best healer by the time the Finance Bill comes for clearance later in Parliament.
FIIs were net buyers in the cash segment on Tuesday at Rs21.73bn on a provisional basis, including the big block deal involving the sale of Daimler AG's 5.3% stake in Tata Motors. Local funds were net sellers of Rs1.7bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers of Rs2.82bn. On Monday, FIIs were net buyers of Rs22.59bn in the cash segment. Mutual Funds were net sellers at Rs2bn on the same day.
Thermax may make a corporate announcement related to the Power and Energy sector today.
With fears over eurozone fiscal troubles easing a bit, global investors are scouting for fresh catalysts but have found little in the way of macroeconomic or corporate data to resume the shopping spree.
US stocks ended with slight gains, buoyed by strength in the financial space and a rally in telecom sector, which benefited from Cisco's unveiling of a new router. The US stock market has gained 68% since the 17-month bear market hit its bottom one year ago.
Crude oil held above the $80 a barrel level but base metals moved lower and sugar prices registered further declines as the stronger dollar put pressure on commodity markets.
Sterling pound suffered its sharpest decline for more than a week as fears resurface over the UK’s housing market, banking sector and fiscal health. Tuesday's UK trade balance disappointed investors as the weak sterling does not seem to be helping exporters as much as the Bank of England hopes, adding to fears that GDP may falter in the first quarter.
Separately, a report said that available positions with public and private employers in the US increased in January to an adjusted 2.7mn - the highest level in nearly a year. Investors in Asia are looking to upcoming cues, such Chinese data to be released on Wednesday and Thursday.
Chinese banks made loans for about 700 billion yuan ($102.6 billion) in February, around half the 1.39 trillion yuan worth of loans issued in January, according to a report. China is officially targeting to slow bank lending in 2010 to 7.5 trillion yuan, after record loan disbursals of 9.6 trillion yuan in 2009With no new catalysts to latch on to post Budget, the Indian market continued the lackluster trend of the past few days and ended near day’s low. Major selling was witnessed in the index heavyweights like Reliance Industries, Tata Motors and DLF. Sentiment was further hit as cues from the Asian markets were not that encouraging. US market closed nearly unchanged overnight and European markets began on a slightly negative note.
The breath on the BSE Sensex was negative, out of the total 2880 stocks, 1766 declined as against 1049 advances and 65 remained unchanged.
Among the 30-components of Sensex, 19 stocks ended in the negative and 11 ended in the green.
Finally, the BSE Sensex slipped 50 points to end at 17,052 after touching a high of 17,131 and a low of 17,031. The NSE Nifty slipped 22 points to end at 5,101.
In Asia, the Nikkei in Japan ended in the red, marginally slipping 0.2%, while Australia's S&P/ASX gained 0.2%. Shanghai SE Composite ended higher by 0.5% and Hang Seng index in Hong Kong ended flat%.
In Europe, stocks were in negative terrain. The DAX in Germany was down 0.8%; the CAC 40 index in France was down 0.5% and the FTSE in the UK was down 0.5%.
Coming back to India, among the BSE sectoral indices, the Metal index was the top loser, slipping 1.7%, followed by the PSU index that was down 1.5% and the BSE Oil & Gas index was down 1.3%. Even, the BSE Mid-Cap index was down 0.8% and BSE Small-Cap index was down 0.7%.
Among the gainers were BSE IT index up 0.8% and BSE Teck index up 0.4%.
Outside the frontline indices, the big losers in the broader market were NMDC, Hindustan Copper, Gujarat NRE Coke, India Cement and Syndicate Bank. On the other hand, gainers included Shriram Transport Fin, Sintex Ind, Jain Irrigation and Exide Ind.
Shares of Reliance Industries, the index heavyweight yet again slipped below the Rs1,000 level on Tuesday. This is the second time where the stock witnessed heavy supply at its 200 DMA.
The stock looked very promising last week. Infact it also managed to cross over its 200 day moving average. With traders using every opportunity to sell the stock at higher levels, the index heavyweight is again below its Rs1,000 mark.
The ongoing tussle for ownership of the bankrupt petrochemicals firm, LyondellBasell has also taken a toll on investor sentiment. Reliance’s offer to acquire Lyondell for US$14.5bn was rejected against the foreign company’s creditors. The rejection was seen as the offer was not sufficiently valuable to LyondellBasell to abandon its reorganisation plan.
On Tuesday, the stock ended 1.5% to Rs990. It opened at Rs1005 hitting an intra-day high of Rs1015 and an intra-day low of Rs988. Total traded quantity was 0.8mn shares on the BSE.
Reliance hit its 52-week high of Rs1245 on May 19, 2009 and 52-week low of Rs570 on March 9, 2009.
Daimler AG sold 5.34% stake or 25.5mn equity shares in Tata Motors through a block deal on Tuesday morning, the deal was done at an average price of Rs750 per share on the BSE.
Through this share sale, Daimler AG has managed to raise Rs19.12bn. Citigroup is the sole banker to the Tata Motors block deal.
Shares of Tata Motors declined by 3.5% to end at Rs770. The scrip opened at Rs765 it touched an intra-day high of Rs790 and a low of Rs750 and recorded volumes of over 43.8mn shares on BSE.
Shares of NMDC slipped by 6% to end at Rs375 after the government announced that it fixed a price band of Rs300-350 for the follow-on public offer of NMDC, and will raise between Rs99-11.5bn depending on the cut-off price.
The issue will open on Wednesday. The upper end of the price band translates into a 12.6% discount to Monday’s closing price of Rs400.60, while at the lower end, the discount works out to 25%.
The government has abandoned the French auction route for the NMDC offering and will use the conventional book-building process in the hope of getting a better subscription.
The government will be divesting 8.38% of its stake ~332.2mn equity shares in NMDC, with ~17.43 lakh shares reserved for eligible employees.
Bullion metals shed little glaze
Prices drop as dollar remains strong
Precious metal prices ended little lower on Tuesday, 09 March, 2010. Prices fell as dollar headed higher. The volatile dollar rose in reaction to Greece's plans to control its deficit and traders' outlook on US economy.
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 April delivery ended at $1,122.3 an ounce, lower by $1.7 (0.2%) an ounce on the New York Mercantile Exchange. Last week, gold gained 1.4%. In FY 2010, gold touched a high of $1,154 in January.
On Tuesday, May Comex silver futures ended lower by 7 cents (0.4%) at $17.34 an ounce. Last week, silver ended higher by almost 8%.
In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by more than 0.3%. The U.S. dollar gained against most of its rivals on Tuesday, as worries about debt levels in the euro zone were rekindled after Fitch Ratings warned that Portugal remained vulnerable to a downgrade.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
Last year, after hitting a low at $807.30 per ounce on 15 January 2009, gold futures rallied almost 51% to hit an all-time high at $1217.40 per ounce during early December of 2009 but fell from those levels at the end. Silver futures had hit a low at $10.42 on 15 January 2009 and hit a high at $19.30 per ounce on 2 December 2009. Like gold, silver also ended lower than its all time high level.
At the MCX, gold prices for April delivery closed lower by Rs 12 (0.07%) at Rs 16,727 per ten grams. Prices rose to a high of Rs 16,753 per 10 grams and fell to a low of Rs 16,581 per 10 grams during the day's trading.
At the MCX, silver prices for May delivery closed Rs 150 (0.55%) higher at Rs 27,033/Kg. Prices opened at Rs 26,816/kg and fell rose to a high of Rs 27,090/Kg during the day's trading.
India Income Tax Slabs and Savings
| Men | |||
| Income (Rs) | Tax Payable (Rs) | Saving | |
| Old Slab | New Slab | % | |
| 161,000 | 100 | 100 | 0.00% |
| 250,000 | 9,000 | 9,000 | 0.00% |
| 300,000 | 14,000 | 14,000 | 0.00% |
| 400,000 | 34,000 | 24,000 | 29.41% |
| 450,000 | 44,000 | 29,000 | 34.09% |
| 500,000 | 54,000 | 34,000 | 37.04% |
| 550,000 | 69,000 | 44,000 | 36.23% |
| 600,000 | 84,000 | 54,000 | 35.71% |
| 750,000 | 129,000 | 84,000 | 34.88% |
| 800,000 | 144,000 | 94,000 | 34.72% |
| 850,000 | 159,000 | 109,000 | 31.45% |
| 900,000 | 174,000 | 124,000 | 28.74% |
| 950,000 | 189,000 | 139,000 | 26.46% |
| 1,000,000 | 204,000 | 154,000 | 24.51% |
| 1,050,000 | 219,000 | 169,000 | 22.83% |
| 1,100,000 | 234,000 | 184,000 | 21.37% |
| 1,150,000 | 249,000 | 199,000 | 20.08% |
| 1,200,000 | 264,000 | 214,000 | 18.94% |
| 1,250,000 | 279,000 | 229,000 | 17.92% |
| 1,300,000 | 294,000 | 244,000 | 17.01% |
| 1,350,000 | 309,000 | 259,000 | 16.18% |
| 1,400,000 | 324,000 | 274,000 | 15.43% |
| 1,450,000 | 339,000 | 289,000 | 14.75% |
| 1,500,000 | 354,000 | 304,000 | 14.12% |
| Women | |||
| Income (Rs) | Tax Payable (Rs) | Saving % | |
| Old Slab | New Slab | ||
| 191,000 | 100 | 100 | 0.00% |
| 250,000 | 6,000 | 6,000 | 0.00% |
| 300,000 | 11,000 | 11,000 | 0.00% |
| 400,000 | 31,000 | 21,000 | 32.26% |
| 450,000 | 41,000 | 26,000 | 36.59% |
| 500,000 | 51,000 | 31,000 | 39.22% |
| 550,000 | 66,000 | 41,000 | 37.88% |
| 600,000 | 81,000 | 51,000 | 37.04% |
| 750,000 | 126,000 | 81,000 | 35.71% |
| 800,000 | 141,000 | 91,000 | 35.46% |
| 850,000 | 156,000 | 106,000 | 32.05% |
| 900,000 | 171,000 | 121,000 | 29.24% |
| 950,000 | 186,000 | 136,000 | 26.88% |
| 1,000,000 | 201,000 | 151,000 | 24.88% |
| 1,050,000 | 216,000 | 166,000 | 23.15% |
| 1,100,000 | 231,000 | 181,000 | 21.65% |
| 1,150,000 | 246,000 | 196,000 | 20.33% |
| 1,200,000 | 261,000 | 211,000 | 19.16% |
| 1,250,000 | 276,000 | 226,000 | 18.12% |
| 1,300,000 | 291,000 | 241,000 | 17.18% |
| 1,350,000 | 306,000 | 256,000 | 16.34% |
| 1,400,000 | 321,000 | 271,000 | 15.58% |
| 1,450,000 | 336,000 | 286,000 | 14.88% |
| 1,500,000 | 351,000 | 301,000 | 14.25% |
| Senior Citizens | ||||
| Income (Rs) | Tax Payable (Rs) | Saving | ||
| Old Slab | New Slab | % | ||
| 251,000 | 100 | 100 | 0.00% | |
| 275,000 | 2,500 | 2,500 | 0.00% | |
| 300,000 | 5,000 | 5,000 | 0.00% | |
| 400,000 | 25,000 | 15,000 | 40.00% | |
| 450,000 | 35,000 | 20,000 | 42.86% | |
| 500,000 | 45,000 | 25,000 | 44.44% | |
| 550,000 | 60,000 | 35,000 | 41.67% | |
| 600,000 | 75,000 | 45,000 | 40.00% | |
| 750,000 | 120,000 | 75,000 | 37.50% | |
| 800,000 | 135,000 | 85,000 | 37.04% | |
| 850,000 | 150,000 | 100,000 | 33.33% | |
| 900,000 | 165,000 | 115,000 | 30.30% | |
| 950,000 | 180,000 | 130,000 | 27.78% | |
| 1,000,000 | 195,000 | 145,000 | 25.64% | |
| 1,050,000 | 210,000 | 160,000 | 23.81% | |
| 1,100,000 | 225,000 | 175,000 | 22.22% | |
| 1,150,000 | 240,000 | 190,000 | 20.83% | |
| 1,200,000 | 255,000 | 205,000 | 19.61% | |
| 1,250,000 | 270,000 | 220,000 | 18.52% | |
| 1,300,000 | 285,000 | 235,000 | 17.54% | |
| 1,350,000 | 300,000 | 250,000 | 16.67% | |
| 1,400,000 | 315,000 | 265,000 | 15.87% | |
| 1,450,000 | 330,000 | 280,000 | 15.15% | |
| 1,500,000 | 345,000 | 295,000 | 14.49% | |
via Rediff
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