A better start for the week

We are confronted with insurmountable opportunities. - Walt Kelly

A string of macroeconomic data is due to be released in a holiday shortened week along with last leg of Q1 results. The Rupee movement will be in focus even as expectations are that a few more measures may be announced to strengthen the rupee. Investors will also keep an eye on the monsoon session of parliament as key bills such as the Food security bill, Land Acquisition and Rehabilitation, Right of Citizens to Time Bound Delivery of Goods and Services and the much awaited Pensions and Insurance bills are still in the pipeline. Besides the crucial pension and insurance bills, other economic agenda on parliament’s itinerary include the Direct Taxes Code Bill and changes in the SEBI law.

The outlook is a positive start to begin with. Global cues are mixed. Japan’s economy grew at an annualised 2.6% in the second quarter, a third straight quarter of expansion. The government also said growth in the first quarter was at a lower rate than previously reported with GDP at 3.8% instead of 4.1%. While the Nikkei is lower, the other Asian markets are gaining strength. Hong Kong's Hang Seng index and South Korea's Kospi index are marginally higher while China's Shanghai index was trading over a percent higher. On Friday, US indices fell. The Dow lost half a percent while the Standard & Poor's 500 Index and Nasdaq were down marginally.

Companies bill, 2012 was passed by the parliament on Thursday after a gripping speech by the Minister of Corporate Affairs –Sachin Pilot. The bill has made provisions for setting up one person companies and made mandatory for corporates to keep 2% of their profits for corporate social activities among many others. The bill replaces the relic of companies law, 1956 and was hailed by corporate India as a game changer.

Industrial production (IIP) and consumer price inflation (CPI) numbers will be released on Monday while Wholesale price index Inflation (WPI) data will be released on Wednesday. Industrial production had registered a contraction of 1.6% in May and the street expects it to contract by 1.5% in June. According to estimates, CPI is likely to improve to 9.7% in July from 9.9% in May.

Real estate behemoth DLF along with HPCL, Hindustan Motors, India Cements, India Hotels, Britannia Inds, Gammon India, Essar India will announce their June quarter earnings on Monday. Earnings of blue chips like SBI and Tata Steel will also hog the spotlight this week, other major earnings lined up in the week are ONGC, Mahindra & Mahindra and Hindalco Industries.

Volumes remain dull in both the cash and derivative segments indicating meagre investor interest. However, FIIs remained net buyers in equity in most sessions last week. Their net purchase stood at $189 mn in equity in August so far while their net sales in debt in $695 mn.

The rupee is likely to appreciate after RBI’s new measures (to sell Rs. 22,000cr worth of cash management bills every Monday) kick in from Monday. The measures are aimed at mopping the liquidity from the market and to decrease Rupee volatility versus the dollar. The government has taken a slew of liquidity tightening measures since mid-July to rescue INR which remains the worst performing Asian currency.

Indian generic makers will be watched on Monday after news came out that the US health regulator FDA is hiking the fees for generic drugmakers by up to 48% from October, making Indian generic drugs costlier in America.

Drug maker Sun Pharmaceutical Industries announced that it will pay its dues of Rs 2,517.41 cr soon as part of settlement agreement with Wyeth (now a division of Pfizer Inc.) and Altana Pharma AG (now known as Takeda GmbH).

After marking its entry in the nuclear submarine club last week India will launch its first indigenous aircraft carrier INS Vikrant on Monday. The development comes in the backdrop of tensions with Pakistan and increasing incursions from China.

Gujarat Chief Minister and Bharatiya Janata Party (BJP) leader Narendra Modi on Sunday backed the creation of Telangana State even as agitations against a separate State reached a high pitch in the city.

Subramanian Swamy on Sunday announced the merger of his Janata Party with BJP ahead of the 2014 general elections.

Results watch: ONGC, SBI, Britannia Inds, Indian Hotels, Marico, HPCL, DLF, Tech Mahindra, Gammon India, GVK Power, Ajmera Rlty, Hindustan Copp, Hindustan Motors, Aarti Inds, Bajaj Hind, Eros Intl Media, AIA Engineering, Anil, Aurionpro Sol, BAG Films, B2B Software., Bang Overseas, Balmer Lawr, Birla Shloka,BSEL Infra, Cantabil Retail, CMS Infotech, Cyber Media, DCM Shriram Inds, Dhanuka Agri, DHANLAK BANK, Dollex Inds, Dynacons Tech, Esaar India, Ferro Alloys, Global Offshore, HATHWAY CAB, Hind Rectifiers, Indraprastha Gas, India Cements, Inox Leisure, Intrasoft Tech, IOL Chemicals, Jayaswal Neco, JPPOWER, Jyothy Lab, Jyoti, Kamat Hotels, Lahoti Overseas, Manjushree Techno, Majestic Auto, Monnet Inds, Nicco Corp, Olympic Cards, Orient Green Power, NRB Ind, Precision Pipes, Polytex India, PG Electroplast, Peninsula Land, Rajshree Sug, Rane Holdings, Remi Metals, RPP Infra, Sambhaav Media, Shakti Pumps, Simbhaoli Sug, Satra Prop, Splash Media & Infra, Steel Exchange, Sundaram Clayton, Suryachakra Pow, Talbros Auto, Sunteck Realty, Themis Medicare, Tulip Telecom, Unisys Soft, United Bank, ZANDUREALTY, Wanbury, Visa Steel, Viceroy Hotels, Voltamp Trans, Winsome Diamonds.

Trends in FII flows: The FIIs were net sellers of Rs3.95bn in the cash segment on Thursday, while the domestic institutional investors (DIIs) were net buyers of Rs5.16bn, as per the provisional figures released by the NSE.

The foreign funds were net buyers of Rs19.23bn in the cash segment on Wednesday, according to the SEBI figures.

Global Data Watch: Industrial Production (YoY) (Jun) JPY, Capacity Utilization (Jun) JPY, Industrial Production (MoM) (Jun) JPY, Machine Tool Orders (YoY) (Jul)Preliminar JPY, Current Account (Jun) EUR, Real Retail Sales (YoY) (Jun) CHF, 10-y Bond Auction EUR, Consumer Price Index (MoM) (Jul) EUR, Consumer Price Index (YoY) (Jul) EUR, Cumulative Industrial Output (Jun) INR, Industrial Output (Jun) INR, Monthly Budget Statement (Jul) USD, RICS Housing Price Balance (Jul) GBP, BoJ Monetary Policy Meeting Minutes JPY, Machinery Orders (MoM) (Jun) JPY, Machinery Orders (YoY) (Jun) JPY .

In other news in the media:

Steel Authority of India Ltd (SAIL) has operationalised the nation’s largest blast furnace at its Rourkela Steel Plant. It will increase SAIL’s hot metal capacity by 2.5 mn tonnes per annum (mtpa) to 4.5 mtpa, the company said in a statement. (BL)

Syndicate Bank is expecting credit to grow at 15-16 % this fiscal, and a net interest margin of about 2.80 %. (BL)

Tata Motors-owned Jaguar Land Rover (JLR) is considering a major expansion plan at its UK factory which could create as many as 1,000 jobs. (ET)

The competition in the compact car segment is hotting up, with Maruti Suzuki India set to launch a brand new model early next year in response to rival Hyundai's soon-to-be-launched Grand i10. (ET)

Surya Roshni is aiming to achieve revenue of Rs2.5bn from LED segment by 2016. (ET)

Bombay Rayon Fashions, which owns brands such as Vero Moda and Jack & Jones, has asked its lenders to convert 10% of the total loan into equity to lessen its debt burden of Rs41bn. (ET)

Ending months of negotiation, Irish building materials giant CRH has agreed to buy Sree Jayajothi Cements (SJJC) from the Shriram Group for an enterprise valuation of around Rs14bn said multiple sources involved in the transaction. (ET)

Sun Pharmaceutical Industries has said it will pay its dues of Rs 25.17bn soon as part of settlement agreement with Wyeth (now a division of Pfizer Inc.) and Altana Pharma AG (now known as Takeda GmbH). (ET)

V-Guard Industries is eyeing a 25 % jump in sales revenue this fiscal to Rs17bn driven by new products, booming electrical cable and solar heater businesses and increasing focus on non-South markets. (ET)

The Aditya Birla group is planning to invest US$1 bn in setting up a chemical/fertiliser plant in the US to take advantage of the falling gas prices in that country. (BS)

Tata Group is preparing a blueprint to promote the Tata brand globally and has identified the US, Europe and Africa as areas of focus. (BS)

Having already strengthen its presence in Southern and Western region, now Kalyan Jewellers is planning to expand in the Northern region. (BS)

Lenders to Kingfisher Airlines have taken possession of Kingfisher House, the airline’s headquarters near Mumbai airport, after the guarantors — chairman Vijay Mallya and United Breweries (Holdings) Ltd — failed to pay the dues. (BS)

The Airports Authority of India is set to privatise the operation and maintenance of the Chennai airport. (BL)

With public sector banks showing a marked increase in bad loans, the Finance Ministry has asked these banks to diligently conduct quarterly inspection of units/enterprises jointly financed by them.(BL)

The Reserve Bank will soon set up a high-level panel of eminent experts from the banking and financial sector to screen applications of 26 aspirants for new banking licences.(ET)

Good monsoon has brought some respite to the power sector as the peak power deficit for the month of July dropped to 4.5 %from 5.8 % in June.(ET)

India imported over 2 mn tonnes (MT) of urea in the first four months of this fiscal worth US$ 614 mn to meet domestic demand, which is expected to further rise on good monsoon.(ET)