Business Updates

See 20-30% sell-off in mkts in 3-4 months: Shankar Sharma

2008-12-03T23:04:00.000-08:00

Shankar Sharma, Vice-Chairman and Joint Managing Director, First Global, does not expect the current rally to continue for more than a week. “The market would see a huge sell-off by mid-December, which may continue till January end.”

He estimates a 20-30% sell-of in markets during the next 3-4 months and sees a durable rally only after the next fall.

Sharma foresees an earnings downtrend in FY10. “We see that fiscal year being worse than FY09 for the markets.”

Sharma feels the monetary easing would not boost the market significantly and said the markets may at best rally for 1-2 days. He added that the fiscal package under discussion was too little to make a difference.

He believes the elections could compound the current situation and would be a dampener.

Here is a verbatim transcript of the exclusive interview with Shankar Sharma on CNBC-TV18. Also watch the accompanying video.

Q: One of you recent reports was talking a pullback or a temporary pullback in equities. Has that come and gone with that five-six day rally that we saw just a few days back or do you think its still pending?

A: We issued this report a week before the last and globally markets did rally about 10-12% from the lows India however, didn’t participate and that’s in partly due to the terror attacks. There’s probably a week more for the rally to go at the highest is what our best estimate is. From the middle of December markets will begin to go back into the realization that this quarter will be an absolute washout quarter for any company anywhere in the world. So whether you take a company in technology or in retail or a company in metals or infrastructure or automobiles or anything almost across the board you will see completely washed out earnings.

Markets will not discount this substantial in advance so I reckon somewhere in the middle of the month i.e. this month the market will begin to get a sense of how bad their numbers are going to be and I wouldn’t be surprise if a few major companies across the world came out and issue earnings warnings that they are not going to be able to meet the numbers that they had forecasted for this quarter. Therefore we see market beginning to sell off probably in the middle of December and this could continue I reckon to the middle of January or end of January.

This month could be as ugly as October because I do not think the markets have factored in how bad the numbers in this quarter going to be globally. The October sell off was largely due to the Lehman bankruptcy and how it affected the credit market. But the credit market effect on the real economy will now be visible once these numbers begin to come out and we all know anecdotally how bad numbers in India will be for large industries and how bad they will be for many international companies. So I think the rally probably has a few days to go but beyond that it will be very brave to conjecture as the rally continues.

Q: What is your sense of how ugly it could get in December-January? Do you think it is a revisit of the October lows or could it get worse than that?

A: India is pretty close to that not on the intra-day basis but on a closing basis. We are about 7-8% away from the lows that we saw recently. So the October lows have gone on a closing basis. Looking at the way the world is shaping up, I wouldn’t be surprised if markets witnesses a 20-30% sell off in the next couple of months.

That leads me to believe the markets will probably see a more durable rally because one of the strange things about this bear market has been that the rallies have not been durable, they haven’t even lasted for 30-45 days, they are over in 5-10 or 15 days.

A durable rally will probably succeed a pretty severe fall which begins in the next few days time.

So that is the way we think the markets are set up. They have not fully discounted the bad numbers anywhere in the world. Analysts’ estimates are still way too high and I think this quarter will knock some sense into all those numbers.

Q: In the short-term, how high would you rate the chances that the market actually settles into a range is very boring for the next few weeks does nothing?

A: I don’t think any range has lasted more than a few days. The markets have been very strongly trending markets this year as they were in the last four-five years. The trading ranges have been in consolidation phases before markets breakout in whatever direction they have been trading in.

So when there was a bull market, the consolidations were very short. There were very sharp, short pullbacks and then markets would continue going up. This time the pullbacks while they may not have been that sharp, there have been few pullbacks of a few days duration and then they continue going down.

So I don’t think there is any trading range or any such situation developing at all. Merely because the markets don’t do much for three days, it starts to build theories that it is in a trading range but I don’t think that is a real possibility.

Q: There is the promise of course now of fiscal action and monetary action coming together. How much does that translate into for the market in real terms you think?

A: Maybe a day’s rally, maybe two days. One should remember this is like a Morphine shot you need greater and greater Morphine shots in order to kill the pain and that is the way this thing works.

The first one will lead to greater euphoria and each successive injection whether it is monetary or fiscal – in economics they call it the Law of Diminishing Marginal Utility and that is the way markets look at such stimuli packages.

So globally, the first ones (packages) did a lot of good in terms of market action and then successively markets say that nothing is working and it is just another stimulus package.

In India we haven’t seen anything on the fiscal side yet. So that may help for a couple of days maybe three days but it is just very little – USD 10 billion packages is nothing.

I don’t think it conveys a very good picture to the world that our neighbour is putting up a USD 550 billion package and here we are announcing a USD 10 billion package. It doesn’t seem right. They may as well not announce and on a subterranean basis — keep doing what you are doing on a slightly accelerated basis — why make a big song and dance about something which is like 2% of what China is doing? So it’s better not talk about it.

Q: How are you reading 2009 now if there is a big fall or big leg down coming around the January numbers after that how do you see the rest of 2009?

A: The numbers in FY10 will be substantially worse. The slowdown has accelerated post the middle of the calendar year 2009. So we have had more or less five-six months of reasonable earnings growth and reasonable GDP (Gross Domestic Product) growth coming and that’s not going to be replicable for the rest of the financial year and the calendar year of 2009. Our sense if FY10 will be definitely a down year in terms of earnings for India. I cannot see which sector will lead earnings growth. On an aggregate basis there might be a few sectors which will deliver positive earnings growth but you will not see the entire market deliver that largely because big companies like Reliance or the auto pack or the metal pack none of those companies are going to have earnings growth. You can only debate how much lower the earnings will go but growth is going to be very dim for a large part of the market. Some of the companies like telecom may grow but that’s not going to be enough to offset the decline in earnings we see from a lot of the cyclical companies a lot of infrastructure companies will not show you growth.

So I am pretty certain and its early days to start making definitive forecast in FY10 but our take is you will definitely see a down earnings in FY10. Globally, it will be pretty much the same case; corporate earnings that was strong for last five years will be decimated. Sector wise; semiconductors are hurting, retail is hurting, banks are obviously gone.

The world’s earnings composition also changes in every phase of a bull market. The last five years globally the market was driven largely by the commodity cyclical and they became large part of the indexes worldwide and they became even larger part of earnings growth worldwide. Now that sector is gone, oil is at USD 45/bbl and it can easily hit USD 20 print in the next six-eight months time. Exxon Mobil, iron ore or steel were all the big drivers of earnings growth but those are not going to come back for many years in terms of earnings growth.

You might well see a situation where they might make losses 12 months from now because it is our view that commodity prices will breach the lows of 2002. I am talking about the absolute commodity prices, which means that the stocks of those commodities so whether it is BHP Billiton, Rio Tinto or Exxon Mobil, Companhia Vale do Rio Doce (CVRD) or Indian metal companies should all trade lower than their prices of 2002-03, in terms of the absolute stock price. When the commodity price breaches the lows of 2002 the stocks of those companies will trade even lower because these companies have upped their risk in the last five years. They have gone and made acquisitions, they have leveraged their balance sheets up. Rio Tinto has got USD 46 billion of debt and that is a lot of debt built up in the last few years and about USD 8-10 billion is coming due in the next 12 months time.

These companies are far riskier than they were at the trough of the commodity cycle. So when you hit another trough, these stocks will go down even lower and therefore the earnings will obviously be linked to the trough. I don’t see how that earnings growth is going to be replicable out of the same pack. So may be some other pack has to emerge and it is too early in this bear market to start talking of the sector, which balances out the negatives of the commodity cyclical.

Q: At the very start of the conversation, you mentioned autos, what would you do with that whole pocket?

A: Autos are symptomatic of what the real problems are. So, as far as the real economy is concerned, these numbers are mind-bogglingly terrible numbers and I don’t see how this thing will revive or turnaround that quickly.

Companies like a Hero Honda or a Maruti don’t have much leverage. They are not going to be in a financial stress if the market continues to be as bad as it is. But you have other leveraged auto companies and I just fear that leverage with these kind of poor numbers, interest cost, interest burden none of those things are a good cocktail. They are a very lethal cocktail and the sector is in deep strife.

The Top Ten Global Energy Trends in 2009

2008-11-21T07:45:00.000-08:00

Global Markets Direct, Has Published the New Research Report, "The Top Ten Global Energy Trends in 2009", Which Analyzes the Various Issues and Trends Facing the Global Energy Industry Next Year.

Global Markets Direct , a leading global market intelligence company, has published the new research report, "The Top Ten Global Energy Trends in 2009", which identifies the key trends expected to influence the global energy market landscape in 2009.

Global Markets Direct has identified the following trends as being the key energy issues for 2009.

1. Capital expenditure on oil exploration and production will continue to stagnate in 2009

2. Oil price volatility to continue in the short term but likely to stabilize within a lower narrow band by the end of 2009

3. Clean energy projects will play a crucial role in the long term energy needs of the world although there will be reduced investment in 2009

4. New investments in unconventional oil and gas projects will decline in 2009

5. Coal will continue to be the highest consumed energy source in 2009 despite a shift towards nuclear and alternative sources

6. Nuclear energy will play an increasing role in meeting the global energy needs even though some new projects might be delayed in 2009

7. European countries' will continue to increase efforts to reduce their dependence on Russian natural gas in 2009

8. Demand for natural gas to continue to increase in 2009

9. Electricity generation capacity to grow in 2009 while distribution and transmission would require further investments

10. Rise in construction costs will delay projects in the refining sector

For additional information on the "Top Ten Global Energy Trends in 2009" report click here or contact Craig Pickering.

To view other research reports from Global Markets Direct, visit the Report Store

Global Markets Direct is a global market intelligence services company providing information research and analysis products and services.

SOURCE: Global Markets Direct

Today Sensex

2008-11-21T03:32:00.001-08:00

Friday, 21 November

4:32 PM - It was a disappointing week for the Indian market. Experts believe the Indian market is nearing the end of its bearish phase. But the picture in the US could worsen a lot more and the Citigroup meeting tonight on asset sale is expected to be crucial. The poor weekly figures are: Sensex was down 4.5%, Nifty down 3.5%. BSE Midcap index down 7.5%, BSE Smallcap index down 9.5% over the week. BSE Realty index was down 17.8%, BSE Bankex down 10%, BSE Metal index down 9.3%, BSE IT down 4.6%, BSE Auto index down 4% and BSE FMCG index was down 1.4%. » Send to friends

4:25 PM - The Asian markets bounced from 5-year lows and European markets traded firm today. It was a good day for the Indian market that closed at the high point of the day. Sensex shut shop at 8915, up 464 points and Nifty at 2693, up 140 points from the previous close. CNX Midcap index was up 0.77% and BSE Smallcap index was up 0.16%. Realty, oil and gas, power and FMCG stocks saw good buying. The market breadth was positive with advances at 646 against declines of 582 on the NSE. Top Nifty gainers included Reliance Infrastructure, Reliance Communications and NTPC while losers included Unitech, DLF and ACC. » Send to friends

4:21 PM - Buy Praj Industries with a target price of Rs 100 in 12 months, says Vikram Suryavanshi of Karvy Stock Broking, on CNBC Awaaz. The company has an order book of RS 950 crore, he adds. The stock is currently trading at Rs 54, up 0.56% on the BSE. » Send to friends

4:16 PM - Buy NTPC with a target price of Rs 160 where one can book profits, says Siddharth Bharme of Angel Broking on CNBC Awaaz. Maintain a stop loss of Rs 130, he adds. The stock is currently trading at Rs 150, up 8.8% on the BSE. » Send to friends

4:10 PM - Sell HUL with a target price of Rs 210, says Manoj Sachdeva of HEM Securities on CNBC Awaaz. Maintain a stop loss of Rs 239, he adds. The stock is currently trading at Rs 235, up 0.32% on the BSE. » Send to friends

4:05 PM - Sell Tata Chemicals with a target price of Rs 125, says Rajesh Jain of SMC Global on CNBC Awaaz. Maintain a stop loss of Rs 153, he adds. The stock is currently trading at Rs 137, down 4.65% on the BSE. » Send to friends

3:58 PM - Hold Financial Technologies as it has resistance at Rs 720, says Prakash Gaba, technical analyst, on CNBC Awaaz. Maintain a stop loss of Rs 605, he adds. The stock is currently trading at Rs 645, up 4.95% on the BSE. » Send to friends

3:51 PM - We are not bearish on the Indian market which is likely to make a higher bottom now, says Bharat Seth of Techno Shares, on NDTV Profit. The market is at a screaming value right now and investors who enter in the market within the next three months will certainly make excellent returns, he adds. » Send to friends

3:45 PM - Indian market is nearing the end of the bear phase, says Robin Griffiths, technical analyst, on NDTV Profit. The Indian market is currently in the process of finding lows, he says. European markets currently remain oversold, he says. One can expect minor rallies across European indices, he adds. » Send to friends

3:40 PM - The Indian market moved in tandem with the global rally and closed today at the high point of the day. Sensex closed at 8974, up 523 points (provisional) and Nifty at 2712, up 159 points (provisional) from the previous close. CNX Midcap index was up 1.12% and BSE Smallcap index was up 0.45%. Realty, oil and gas and power stocks saw good buying. The market breadth was positive with advances at 661 against declines of 568 on the NSE. » Send to friends

3:31 PM - Nifty longs can be carried over the weekend, says Rajat Bosse, technical analyst, on CNBC TV18, as closing market strategy. » Send to friends

3:29 PM - Sell Ranbaxy with a target price of Rs 190, says Manoj Sachdeva of HEM Securities on CNBC Awaaz. Maintain a stop loss of Rs 224, he adds. The stock is currently trading at Rs 220, up 1.22% on the BSE. » Send to friends

3:26 PM - Buy Lanco Infra with a target price of Rs 150, says Rajesh Jain of SMC Global on CNBC Awaaz. Maintain a stop loss of Rs 105, he adds. The stock is currently trading at Rs 118, up 4.56% on the BSE. » Send to friends

3:20 PM - Sell DLF with a target price of Rs 173, says Manoj Sachdeva of HEM Securities on CNBC Awaaz. Maintain a stop loss of Rs 203, he adds. The stock is currently trading at Rs 197, down 3.85% on the BSE. » Send to friends

3:15 PM - Buy Hindalco with a target price of Rs 63, says Rajesh Jain of SMC Global on CNBC Awaaz. Maintain a stop loss of Rs 46, he adds. The stock is currently trading at Rs 50, up 1% on the BSE. » Send to friends

3:10 PM - There is a pall of gloom and doom around the world markets, says Sandeep Shah of Sampriti Capital on NDTV Profit. The market tends to move in advance and is likely to bottom out 6-8 months before the economy, he feels. Nifty around 2400-2600 is a good time for long-term investors to accumulate good stocks, he adds. » Send to friends

3:06 PM - The European markets are trading firm. Positive global cues has led the Indian market to put on some gains. Sensex is trading at 8762, up 311 points and Nifty is at 2654, up 101 points from the previous close. CNX Midcap index is up 0.04% and BSE Smallcap index is down 0.59%. The market breadth is negative with advances at 563 against declines of 653 on the NSE. » Send to friends

2:59 PM - RBI steps adequate for the moment but the possibility of further rate cuts is not ruled out, says Ashok Chawla, economic advisor, on NDTV Profit. The government is looking seriously to provide rupee funds to infrastructure projects, he says. RBI and government not inclined to tinker with ECB norms at the moment, he says. Infrastructure and export incentives are likely to be announced this month, he adds. » Send to friends

2:54 PM - Sell United Spirits with a target price of Rs 680, says Manoj Sachdeva of HEM Securities on CNBC Awaaz. Maintain a stop loss of Rs 760, he adds. The stock is currently trading at Rs 688, down 8.20% on the BSE. » Send to friends

2:46 PM - Buy Bank of Baroda with a target price of Rs 290, says Rajesh Jain of SMC Global on CNBC Awaaz. Maintain a stop loss of Rs 249, he adds. The stock is currently trading at Rs 262, up 0.92% on the BSE. » Send to friends

2:38 PM - The situation is likely to go out of control in the US further, says Nirmal Jain of India Infoline, on CNBC TV18. The market is likely to continue to see uncertainty for the next six months and then see some recovery, he feels. The market is near the bottom and could see another 500-1000 points downside, he adds. » Send to friends

2:31 PM - Sell JSW Steel with a target price of Rs 196, says Manoj Sachdeva of HEM Securities on CNBC Awaaz. Maintain a stop loss of Rs 230, he adds. The stock is currently trading at Rs 198, down 10.55% on the BSE. » Send to friends

2:23 PM - Buy SBI with a target price of Rs 1220, says Rajesh Jain of SMC Global on CNBC Awaaz. Maintain a stop loss of Rs 1090, he adds. The stock is currently trading at Rs 1121, up 2.63% on the BSE. » Send to friends

2:17 PM - If Nifty breaches 2575 then it could go down to 2525-2550, says Devangshu Dutta, market analyst, on CNBC TV18. The market is looking weak and Nifty is likely to retest 2500 a couple of times, he says. Next week the market is likely to see volatility with one big short covering rally that could take Nifty upto 2800, he adds. » Send to friends

2:06 PM - The Asian markets recovered a little while European markets are trading mixed. The Indian market is seeing volatility and slipped into the negative briefly with realty sector taking a thrashing. Sensex is trading at 8486, up 35 points and Nifty is at 2556, up 3 points from the previous close. CNX Midcap index is down 1.42% and BSE Smallcap index is down 1.10%, BSE Realty index is down 7.5% and BSE IT index is up 3%. The market breadth is negative with advances at 466 against declines of 744 on the NSE. » Send to friends

1:56 PM - Rolta has cash holding of Rs 300-400 crore and is expected to maintain revenue growth of 30-40% going forward, reports NDTV Profit. Major revenues are from India and the company is looking at acquisition in the business intelligence space. The stock is currently trading at Rs 166, down 0.86% on the BSE. » Send to friends

1:48 PM - Kotak Securites maintains a buy call on Lanco Infra with a target of Rs 370, reports CNBC Awaaz. The stock is currently trading at Rs 111, down 1.02% on the BSE. » Send to friends

1:41 PM - Realty stocks are a sell on rallies, Unitech looks weak and could go down to Rs 30 while HDIL could go down to Rs 75, says Rajat Bose, technical analyst, on CNBC TV18. Unitech is currently trading at Rs 31, down 11.5% and HDIL is trading at Rs 81, down 6.9% on the BSE. » Send to friends

1:33 PM - Pinc Research maintains a buy call on HEG with a target of Rs 205, reports Zee Business. The stock is currently trading at Rs 124, down 0.95% on the BSE. » Send to friends

1:25 PM - Sell PNB with a target price of Rs 396, says Ashwani Gujral, technical analyst, on CNBC Awaaz. The stock is currently trading at Rs 443, up 3.03% on the BSE. » Send to friends

1:17 PM - Sharekhan maintains a buy call on L&T with a target of Rs 1802 in 12-18 months, reports Zee Business. The stock is currently trading at Rs 727, up 2.06% on the BSE. » Send to friends

1:07 PM - The Asian markets are trading mixed. The Indian market is trading firm after seven days of pain. But midcaps are muted. Sensex is trading at 8652, up 201 points and Nifty is at 2613, up 60 points from the previous close. CNX Midcap index is down 0.09% and BSE Smallcap index is down 0.21% and BSE Realty index is down 4%. The market breadth is negative with advances at 576 against declines of 607 on the NSE. » Send to friends

12:59 PM - Sharekhan maintains a buy call on Maruti Suzuki with a target of Rs 679, reports CNBC Awaaz. The stock is currently trading at Rs 498, up 3.22% on the BSE. » Send to friends

12:52 PM - Wipro seems to be trading in the range of Rs 180-280, says PK Agarwal of Bonanza Capital, on Zee Business. So hold with a stoploss at Rs 180, he suggests. It is currently trading at Rs 230.05, up 4.8% on the BSE. » Send to friends

12:44 PM - Reliance Communications needs to close above Rs 225 for it to give a 'buy' signal, says Sanjeev Agarwal, technical analyst, on CNBC-TV18. But it will face some resistance at Rs 290 and Rs 360, he adds. The stock is currently trading at Rs 191.95, up 5.3% on the BSE. » Send to friends

12:36 PM - Karvy Stock Broking maintains 'buy' rating on Unichem Laboratories, with a target price of Rs 270, reports CNBC-TV18. The stock is currently trading at Rs 162, up 0.4% on the BSE. » Send to friends

12:28 PM - Unitech has corrected substantially and it may not fall much further from here, says Rajen Shah of Angel Broking, on CNBC-TV18. On the upside, the stock can give 100-150% returns in the next 2 years, he adds. It is currently trading at Rs 31.60, down over 10% on the BSE. » Send to friends

12:20 PM - HDFC Bank will face resistance at Rs 1,000-1,100, says Sanjeev Agarwal, technical analyst, on CNBC-TV18. But once this is crossed, then it will see a sharp uptrend and may go up to Rs 1,300-1,400, he adds. The stock is currently trading at Rs 847, up over 3% on the BSE. » Send to friends

12:13 PM - GDP growth in India will be around 5-6% this year, says Peter Redward, Head of Rates Research for Emerging Asia at Barclays Capital, on CNBC-TV18. The base case scenario for Indian GDP in 2009 is 5.5-6.5% and in bearish case, 4%, he adds. He expects significant rate cuts by RBI and believes that capital flows are likely to remain negative. » Send to friends

12:05 PM - The market has gained further strength. Sensex is at 8,806, up 355 points from the previous close. Nifty is at 2657, up 104 points. IT, capital goods and power stocks continue to be the favourites, while realty stocks are still being dumped. Top Sensex ganers include TCS, Sterlite Industries and Reliance Communications, while DLF is a loser. » Send to friends

11:57 AM - Fortis Healthcare will face resistance at Rs 70, but once this is crossed, it can go up to Rs 90, says PK Agarwal of Bonanza Portfolio, on Zee Business. The stock is currently trading at Rs 60.85, up 1.7% on the BSE. » Send to friends

11:47 AM - One can continue to hold HDFC Bank for another 24 months for 40-50% returns from the current levels, says Rajen Shah of Angel Broking, on CNBC-TV18.The stock is currently trading at Rs 857.80, up 4.3% on the BSE. » Send to friends

11:38 AM - The upside in ONGC seems to be capped due to crude prices falling, says Ashwani Gujral, technical analyst, on CNBC-TV18. The stock will continue to trade in a range of Rs 600-800, he adds. The stock is currently trading at Rs 681, up 4.7% on the BSE. » Send to friends

11:31 AM - Look at buying L&T close to Rs 700, says PK Agarwal of Bonanza Portfolio, on Zee Business. It is trading in the range of Rs 680-810 for now, he adds. The stock is currently at Rs 740, up 3.9% on the BSE. » Send to friends

11:23 AM - SBI has support at around Rs 1,000 and on any pullback, can go up to Rs 1,250-1,300, says Ashwani Gujral, technical analyst, on CNBC-TV18. The stock is currently trading at Rs 1,123.60, up 2.8% on the BSE. » Send to friends

11:15 AM - If Educomp Solutions falls below Rs 1,500, then the outperformance will end, says Ashwani Gujral, technical analyst, on CNBC-TV18. On the upside, it will face resistance at Rs 2,100, he adds. The stock is currently trading at Rs 1,837, up 4.8% on the BSE. » Send to friends

11:08 AM - The market continues to have a good day. Sensex is at 8,723, up 272 points from the previous close. Nifty is at 2630, up 77 points. BSE Midcap index is up 1% and BSE Smallcap index, up 0.6%. IT, Capital goods and power are attracting significant buying interest, whereas realty stocks are being dumped. » Send to friends

11:01 AM - Look at buying SBI between Rs 1,100 and Rs 1,200 for 1-2 years, says PK Agarwal of Bonanza Portfolio, on Zee Business. The stock is currently trading at Rs 1,131.10, up 3.5% on the BSE. » Send to friends

10:54 AM - As compared to the private sector banks, PSU banks look better as of now, says Ambareesh Baliga of Karvy Stock Broking, on CNBC-TV18. If one needs to choose among the banks, then place your bets on State Bank of India as compared to possibly HDFC Bank now, he suggests. SBI is currently trading at Rs 1,125, up 3% on the BSE. » Send to friends

10:46 AM - Triveni Engineering can fall to Rs 29-30, says Ashwani Gujral, techical analyst, on CNBC-TV18. On the upside, it will face resistance at Rs 45-46, he adds. The stock is currently trading at Rs 35.05, up 4.2% on the BSE. » Send to friends

10:38 AM - Realty stocks like Unitech and DLF can fall to new lows, as they have been underperforming the already weak market, says Sudhanshu Pandey of LKP Shares, on CNBC Awaaz. » Send to friends

10:31 AM - JP Associates can re-test lows of Rs 50 now, says Ashwani Gujral, technical analyst, on CNBC-TV18. On the upside, it will face resistance at Rs 75-80, he adds. It is currently trading at Rs 61.05, up 2.5% on the BSE. » Send to friends

10:25 AM - Reliance Communications can re-test the levels of Rs 155-150, says Ashwani Gujral, technical analyst, on CNBC-TV18. On the upside, it will face resistance at Rs 210-215, he adds. The stock is currently trading at Rs 187.40, up 2.8% on the BSE. » Send to friends

10:18 AM - If Unitech breaks Rs 26, then it can see levels like Rs 20-18, says Ashwani Gujral, technical analyst, on CNBC-TV18. The stock is currently trading at Rs 32.90, down 6.4% on the BSE. » Send to friends

10:10 AM - Reliance Capital will see next level close to Rs 350, says Ashwani Gujral, technical analyst, on CNBC-TV18. It needs to get past Rs 515 to gain any strength, he adds. The stock is currently trading at Rs 434.30, up 2.9% on the BSE. » Send to friends

10:03 AM - The market opened slightly lower, but recovered within seconds, maybe due to short covering. Sensex is currently trading at 8,613, up 162 points from the previous close. Nifty is at 2607, up 54 points. » Send to friends

9:55 AM - The decline seen now is worst than October, says Ashwani Gujral, technical analyst, on CNBC-TV18. But selling exhaustion is being seen now, so the market may see a couple of days' rally if some announcement comes in, he adds. October low of 2250 on the Nifty will be broken, he says. » Send to friends

9:48 AM - ICICI Bank can fall further and probably make new lows now, says Sudhanshu Pandey of LKP Shares, on CNBC Awaaz. The stock is at Rs 320.35 on the BSE. » Send to friends

9:42 AM - If you have a week's view, then you can short Cairn India, keeping a stoploss above Rs 136, says Sudhanshu Pandey of LKP Shares, on CNBC Awaaz. The stock is at Rs 129.60 on the BSE. » Send to friends

9:36 AM - Reliance Industries will face strong resistance at Rs 1,085, where one can short it, says Sudhanshu Pandey of LKP Shares, on CNBC Awaaz. Keep a stoploss above Rs 1,135, he suggests. Below Rs 1,000, some short-covering may be seen in the counter, he adds. The stock is at Rs 1,058.60 on the BSE. » Send to friends

Global stocks at 5-1/2 year lows

2008-11-20T04:38:00.001-08:00

World stocks dropped to 5-1/2 year lows and oil hit 22-month troughs as investors reacted to dire Federal Reserve warnings on the economy and fears about the viability of major U.S. auto makers and bank giant Citigroup.

Federal Reserve officials slashed economic growth forecasts through 2009, with the lower range of the Fed's central tendencies forecasting the U.S. economy could shrink by 0.2 percent.

At least one among household names General Motors Corp, Ford Motor Co and Chrysler LLC is at risk of bankruptcy if a last-minute bail-out plan fails.

The plight of U.S. automakers highlighted the increasing damage which the world's financial crisis is inflicting on the real economy.

"We have contracting economic growth, falling corporate profits, and increasing unemployment which is filtering through to every part of the economy," said Henk Potts, investment manager at Barclays Stockbrokers.

The MSCI world equity index fell 2.3 percent to 197.90, its lowest since May 2003, driven lower in Asia after data showing Japan's exports to Asia fell for the first time in six years.

European shares also approached their lowest since June 2003, with the FTSEurofirst 300 index of leading European shares dropping 3 percent, following losses of 5 percent or more on Wall Street.

European banks remained under pressure after Citigroup Inc faced a crisis of confidence on Wednesday as investors questioned the survival prospects of the U.S. banking giant.

"Having seen Lehman and Merrill Lynch fall by the wayside this year, the sight of another major such as Citigroup struggling will prove a bitter pill to swallow," said Chris Hossain, senior sales manager at ODL Securities.

Oil fell by more than $1 a barrel to 22-month lows at $52.49, as the slumping global economy hit demand.

The two-year U.S. Treasury yield hit a record low of 1.06 percent on expectations of a 50 basis point U.S. rate cut to 0.50 percent next month.

Euro zone government bond futures rose more than half a point to their highest since March 2006 at 120.36.

The dollar dropped 0.77 percent to 95.20 against the safe-haven yen, but edged up against the euro to $1.2504.

Emerging markets suffered from falling commodity prices and global demand.

The MSCI emerging equities index dropped 4.55 percent to 467.32. Russian stocks on the MICEX exchange fell 7.5 percent before trading was suspended for an hour.

(Additional reporting by Simon Falush and Atul Prakash; Editing by Toby Chopra)

Best Real Estate sites 2008 (TOP 10)

2008-11-16T04:23:00.000-08:00

Hello www.webnsn.com presenting 2008's best Portal sites, Here the TOP TEN best Portal sites.

1. Makaan.com
2. 99acres.com
3. Magicbricks.com
4. Realestatetimes.in
5. Indiaproperties.com
6. Godirect.in
7. Indiahousing.com
8. Bharathrentals.com
9. Propertywala.com
10. Indiaproperty.com

11. Allcheckdeals.com
12. Nobrokerage.in

Do u agree with us if not send your own list to forum@webnsn.com

Best Finance site 2008 (TOP 10)

2008-11-16T04:02:00.000-08:00

Hello www.webnsn.com presenting 2008's best Finance sites, Here the TOP TEN best Finance sites.

1. Bseindia.com
2. Icicibank.com
3. Moneycontrol.com
4. Nseindia.com
5. Capitalmarket.com
6. Hdfcbank.com
7. Indiainfoline.com
8. Paypal.com
9. Reliancemoney.com
10. Myiris.com

11. Onlinesbi.com
12. Profitplus.in

Do u agree with us if not send your own list to forum@webnsn.com

8 stocks you must buy in small quantities today

2008-11-09T22:39:00.001-08:00

The two most respected names of corporate India, Tata and Birla, failed to raise money from the stockmarket through their respective rights issues (a rights issue is when a listed company offers shares to existing shareholders at a price, which is usually less than the market price of the listed stock).

Eventually, underwriters had to buy the majority of shares. Hindalco Industries, an Aditya Birla Group company, saw just half its Rs 5,000-crore rights issue subscribed to. Tata Motors of Tata Group, too, had the same fate.

The reason? Market prices of these stocks fell much below their offer price in the rights issue, removing the investor incentive of buying. Tata Motors and Hindalco are not the only companies to have seen such a battering.

As we go to press, about 380 out of 600 companies with a market cap of over Rs 250 crore (Rs 2.5 billion), have lost more than 50 per cent of their value since January. The Sensex and the Nifty have also lost close to 60 per cent. It is carnage on markets. But, in the rubble, you will find some gleaming diamonds, available at a quarter of what they were worth until a few months ago.

The Indian market has become a victim of a global meltdown. What started as credit crisis in the US has spilled over to the global financial market. Bears are out in full force, with their usual weapon of panic and fear, and have virtually captured every market--from Wall Street to Dalal Street.

If all you saw over the last four years was unbridled enthusiasm, now all you can hear is negativity. The Indian market started witnessing selling pressure from January this year. As the credit crisis started deepening in the West and liquidity became scarce, foreign institutional investors (FIIs) started selling stocks in all the markets, including India.

Anticipation of heavy selling from the FIIs prompted domestic investors to get out. FIIs continue to dump Indian stocks--they have sold stocks worth Rs 52,000 crore, or $12.90 billion, in our markets since January. Apart from the FII play, expectation of slower growth of the economy and corporate earnings, due to deteriorating global outlook and high domestic interest rates, contributed to the market's downfall. Read on. . .

What next? International Monetary Fund (IMF), in its October 2008 report, World Economic Outlook, said that the world economy is entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s. It has marked down global growth to 3 per cent for 2009, the slowest since 2002.

The Indian economy is also expected to slow down. The Reserve Bank of India (RBI), in its mid-term review of marcoeconomic and monetary developments, published a professional forecasters' survey, which suggests that the Indian economy will grow at 7.7 per cent in FY09, compared to 9 per cent in FY08. Earnings growth has also started to show a declining trend.

Earnings guidances are being revised downwards, liquidity has become scarce, markets have fallen above 60 per cent, and FIIs continue to sell. In short, the overall condition has turned against equities. So, should you be out of equities?

Outlook Money advised caution when the market was on a dizzying ride--the Sensex was up at around 21,000. Now, as the Sensex crashes to 9044.51, we are breaking out of the pessimistic babble to tell you that this is a good time to start buying stocks.

The current crisis is being termed as once-in-a-lifetime by the Western press. If the crisis is once in lifetime, so are the challenges and opportunities. And as an investor, you should grab the opportunities.

The question you may ask is whether the market will fall further? It surely can. But you need to remember that it's always difficult to catch the bottom. The market may fall further before stabilising, but start buying now. Investors entering at this stage need to hold on to their stocks for the long term.

If you are a short-term investor, stay out of the market at this stage. Buying long-term assets with short-term capital is never a good idea.

Valuations have come down significantly, even for fundamentally sound companies. We are giving you eight such options--take your pick and invest for at least three years. Invest systematically to take advantage of any further price fall.

Methodology: The companies that have been considered for selection are the ones with a market capitalisation of at least Rs 250 crore. Among them, companies with year-on-year (y-o-y) net sales and net profit growth of more than 10 per cent for the last three years and the last two quarters were retained. From this list, only companies that were able to maintain or increase their operating profit margin (OPM) and operating cash flow in the last three years were kept.

Bank of India (BOI)

BOI is perhaps the fastest growing public sector bank in India. Its operating profit and net profit in FY08 grew 53.81 per cent and 78.90 per cent y-o-y, respectively.

For the last nine quarters, including the quarter ended September 2008 (Q2 FY09), its net profit grew at 50 per cent plus y-o-y, which indicates its sustained growth. Because of its strong presence in the industrialised states of Maharashtra and Gujarat, BOI has given advances to more productive sectors than its public sector peers.

It has reduced its dependency on low-yielding treasury income and has focused on interest income and income from fees. Its gross non-performing assets have gone down from 3.72 per cent in FY06 to 1.68 per cent in FY08.

Overseas operations contribute around 20 per cent of its business. The overseas branches help BOI raise deposits at rates lower than the domestic rates. It has some exposure to derivatives instruments overseas, but all of them have highly-rated Indian companies as underlying.

Bharti Airtel

Bharti Airtel is riding high on the overall growth of the telecommunication sector in India. Mobile penetration in India is still around 26 per cent, which leaves an enormous opportunity for growth. In this growing and competitive market, Bharti has been on top, in terms of subscriber base since May 2006.

It has maintained both y-o-y net sales and net profit growth at around 40 per cent in the last nine quarters. The margins have declined due to stiff competition, but the volume growth from the untapped rural market compensates that.

It has outsourced its non-core operations to focus on brand building and increasing subscriber base. In January 2008, it hived off its infrastructure business into a new subsidiary, Bharti Infratel, which will share the capital expenditure burden with other telecom players

Emami

Emami has created a niche in the market by bringing products for its consumers that combine modern production techniques and ayurvedic principles.

Its brands such as Boro Plus, Navratna Oil and Fast Relief are leaders in their respective categories. Its recently launched brand, Fair & Handsome, created an altogether new market.

In the last eight years, its net sales and net profit registered 19 per cent and 23 per cent CAGR, respectively. Its OPM also improved over this period due to better pricing of products and cost management. The return on equity, which increased from 10.36 per cent in FY2000 to 35.78 per cent in FY08, also reflects its rising profitability. Emami is reaching deep inside rural India, which will lead to volume growth.

Modern lifestyle has increased the risk of chronic ailments and consumers will demand natural products backed by research.

HDFC Bank

HDFC Bank has seen a y-o-y net profit growth of over 30 per cent for the last 34 quarters and has maintained a high OPM of around 60 per cent during the same period.

Maintaining the same momentum, it has reported a net profit growth of 43.29 per cent and OPM of 62.61 per cent in Q2 FY09. The bank's merger with Centurion Bank of Punjab has not shown any significant impact till now, but it is expected to yield robust growth for the company in the future.

Banks will start showing mark-to-market gain on their bond portfolio with interest rates expected to go down in the coming quarters.

Also, funds have dried up in the global markets--this will increase demand for credit from domestic banks. This means stable business in the future.

Indraprastha Gas (IGL)

The government's thrust on environment is putting more compressed natural gas (CNG) buses on road and rising fuel prices are prompting people to fit CNG kits to their cars. This is boosting IGL's CNG distribution business.

Households and commercial establishments now prefer piped gas supply to conventional LPG cylinders as it is convenient and safe. This means a huge revenue jump for IGL's piped natural gas (PNG) distribution business.

IGL has been enjoying consistently high OPM--over 40 per cent--for the last 21 quarters. As a result, its return on equity has remained higher than 30 per cent in all the financial years, starting 2003.

Even if it is not able to sustain such high margins in the long term, the volume growth will more than compensate for any dip. It is unlikely to face any gas supply constraint as it gets it on a priority basis as directed by the government.

The IGL stock has limited its fall to 21 per cent as against Nifty's 54 per cent in the last 12 months. It is currently trading at seven times its earnings.

KS Oils

It leads the edible oil market in the north and north-eastern part of India through brands in mustard oil, refined oil and vanaspati. Its share in the Indian mustard oil market is 7 per cent, when 75 per cent of mustard oil is sold loose.

Among brands, it has captured 25 per cent of the market. The company has also entered north and central India with an aggressive branding effort and greater retail push.

Its net sales in FY08 was Rs 2,044 crore, implying 91.08 per cent growth over the previous year, backed by volume and high edible oil prices. Its y-o-y net sales growth in the first quarter of FY09 remained high--at 91 per cent over the previous quarter, though the margins were flat.

KS Oils has secured its raw material supply by acquiring 50,000 acres of palm plantations in Indonesia, which will protect it from any price fluctuation in oil seeds.

Also, this kind of backward integration will help improve the margins over sales.

MphasiS

MphasiS derives its revenues from application services, infrastructure technology outsourcing (ITO) and business process outsourcing that span industry verticals, such as banking and financial services, healthcare, transport and manufacturing.

In Q2 FY09, Mphasis reported an impressive y-o-y sales growth of 54.59 per cent. It significantly improved the OPM by 273 basis points over the last quarter and, therefore, registered higher PAT growth of 128.74 per cent during the same period.

All its three business segments are registering healthy growth with its ITO business growing at 113 per cent. MphasiS is trying to reduce its dependence on the US, which contributed 67 per cent to its revenue in FY08.

The current crisis in the financial sector may impact its revenue, but it will also throw up new opportunities as ailing banks will go for greater outsourcing in order to cut costs.

Titan Industries

Titan watches have built a strong brand and its diverse product range caters to masses as well as the premium segment, which is its success formula.

Titan Industries' jewellery business, under the brand Tanishq, too, commands leadership position in the organised retail segment. It is going to smaller towns and rural areas under the brand Gold Plus.

In Q2 FY09, Titan Industries' net sales and net profit rose 53 per cent and 88 per cent y-o-y, respectively. In the last six years, Titan and Tanishq recorded a compounded annual growth rate (CAGR) of around 13 per cent and 40 per cent, respectively.

Risks to business growth are low. Watch penetration in India is well below 30 per cent. Growth will continue and margins should improve as it sells more watches through its exclusive Titan showrooms, which is more profitable than the dealership model. Rise in gold prices could slow down jewellery sales.

But, at higher prices, consumers will become more quality and value conscious and should go to organised stores, such as Tanishq, that guarantee quality, diverse range and standard pricing.

Unitech offloads 60% in arm

2008-11-03T01:05:00.001-08:00

Realty major Unitech has announced a landmark deal in which it sold a majority 60 per cent stake in its telecom venture Unitech wireless 6, 120 crores to Norway based Tenenor.

Telenor ASA is the largest Nordic phone company with mobile operations in 12 countries and over 150 million wireless subscribers. Outside the Nordic region, Telenor owns units in Ukraine, Russia, Hungary, Serbia, Montenegro, Pakistan, Malaysia, Bangladesh and Thailand.

The Norwegian government is Telenor's biggest owner, with a 54 per cent stake in the company. Goldman Sachs advised Telenor on the transaction while Unitech was advised by UBS AG and Mumbai-based IDFCSSKI Group.

This is the second major deal to be closed by a club of new GSM licensees. Earlier, Swan Telecom, which has telecom licenses in 13 circles, sold 45 per cent stake to UAE-based Etisalat for $900 million.

Unitech was awarded pan-India mobile telecom licences for Rs 1,651 crore early this year and has been allocated GSM spectrum in 13 circles so far.

The company plans to launch services in the first half of 2009. According to Unitech, the alliance will benefit from Telenor's experience in both high growth and mature telecom markets and Unitech's reputation as one of India's most respected business groups.

Unitech Wireless says it will be investing over $3 billion over the next three years to become a successful pan-India operator. The company says it has recruited over 250 employees and established offices across several cities.

Incidentally, Telenor holds $2 bn equity in Pakistan's second largest mobile operator Telenor Pakistan. This is the largest FDI from Europe in any sector in Pakistan and represents a significant commitment by the company.

Telenor Pakistan, which launched services in March 2005, currently serves over 18 million subscribers through a country-wide network. Telenor Pakistan employs 2,500 people directly and 25,000 indirectly, 99.9 per cent of which are local Pakistani nationals.

It is expected that the Indian government will take a good hard look at this massive cross investment by Telenor in Pakistan given that telecom is a sensitve area and foreign investments usually invite scrutiny by security agencies in addition to FIPB clearances.

“India enjoys a forward looking telecom regulation and an investment-friendly climate. By combining Unitech's strong presence as a trusted corporation in the Indian market with Telenor's successful experience at building and managing best in class mobile operations in Asia, we will together contribute to growing the industry and developing the mobile market in India," said Jon Fredrik Baksaas, Telenor Group President & CEO.

“We believe Unitech Group's local position and strengths coupled with Telenor's technical, operational and marketing expertise will form a winning team. Telenor's experiences from growth markets in Asia are also a great benefit for the partnership,” said Sanjay Chandra, chairman, Unitech Wireless and MD, Unitech Ltd.

Chairman Chandra said approval for sale of 49 per cent stake has already been received and the company would be approaching the FIPB (Foreign Investment Promotion Board) for approval for the remaining 11 per cent equity sale.

Top ten firms lose Rs 3.17 tn in Oct

2008-11-02T00:33:00.000-07:00

Country's top 10 companies, including Reliance Industries and ONGC, witnessed an erosion of over Rs 3.17 trillion from their combined market capitalisations in October, as the bourses bore the brunt of the global financial crisis.

The combined market cap of the elite club saw an erosion of Rs 3,17,510 crore in the past month dropping to Rs 9,92,000 crore.

With the market witnessing a free-fall last month, country's most valued firm Reliance Industries lost Rs 61,539 crore in its market value and state-run oil producer ONGC lost Rs 79,801 crore in its market value dipping to Rs 1,43,261 crore.

RIL, which announced its second quarter results last week, had dipped below the crucial Rs 2,00,000-crore mark during the month.

Notwithstanding the fall in valuation, the Mukesh Ambani -led firm retained its numero-uno position with Rs 2,15,727 crore market cap on Friday, against Rs 2,77,266 crore on October 1.

The Bombay Stock Exchange benchmark Sensex lost over 3,200 points in the month of October to end at 9,788.06. The barometer Sensex was quoting at 13,055.67 points on October 1.

Besides, the elite club of top 10 firms, comprising four private sector and six public sector entities, witnessed a shuffle in the rankings, with PSU firm NMDC dipping to the 10th slot from 7th. Also state-run MMTC dipped from the 5th slot, while Bhel moved up to the 8th place from 9th.

According to the list,
RIL is followed by ONGC (Rs 1,43,261 crore),
Bharti Airtel (Rs 1,23,189 crore)
NTPC (Rs 1,15,889 crore),
Infosys (Rs 79,099 crore),
SBI (Rs 70,439 crore),
MMTC (Rs 66,479 crore),
BHEL (Rs 62,737 crore),
ITC (Rs 58,021 crore),
NMDC (Rs 57,032 crore).

Sensex down to 2-yr low, ends at 9772

2008-10-23T08:31:00.001-07:00

The benchmark Sensex on Thursday tumbled to below 10,000-point level for the second time in five days as sustained selling continued on fears of credit crisis deepening and grim outlook for the domestic corporates.

Cricket News

With foreign funds as the top net sellers, the Sensex, which has breached 10,000-point level twice in the past five days, tumbled by 398.20 points, or 3.92 per cent to 9,771.70, a level last seen on June 20, 2006. The key index hovered between the day's low of 9,681.28 and the high of 10,260.55.

Television News

The wide-based National Stock Exchange index Nifty also saw a drop of 122 points to close at 2,943.15 after touching an intra-day low of 2,917.15 as concerned over a slower growth for corporates, fence-sitters are on a fresh selling spree.

Also adding to the bearish sentiment due to global trouble was Prime Minister Manmohan Singh's statement yesterday that said the country could face a 'temporary slowdown' from 'the ripple effects' of the global financial crisis.

Today Top Most Film Breaking News

The market major and trend-setter Reliance Industries, tumbled by Rs 100.30, or 7.62 per cent at Rs 1,215.25, its lowest since December 2006.

The second largest heavy-weight on the Sensex, Infosys Technologies dropped by Rs 17.60, 1.35 per cent to Rs 1,282.75. The two carry nearly 23 per cent weightage on the index.

Breaking News

Metal Index suffered the most by losing 622.53 points, or 11.08 per cent at 4,996.92, followed by Auto Index by 215.37 points, or 7.21 per cent at 2769.79.

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Markets end in green on confidence boosting cues

2008-10-21T05:16:00.000-07:00

Despite the arrest of a state-level politician and the resultant violence here, Indian equities finished in the green on Tuesday, buoyed by the cut in a key lending rate by the central bank. Prime Minister Manmohan Singh's statement on Monday that the Indian economy continued to be resilient and strong global cues also added to the traders’ confidence.

Sensex falls below 10K, first time in 2 years

2008-10-17T05:40:00.000-07:00

LIVE Sensex - World Market

Melting stock prices on Friday pulled down the Bombay Stock Exchange benchmark Sensex below the 10,000 point mark for the first time in over two years.

The 30-share index, which opened higher by 205 points, tumbled by 582.76 points to 9,998.73 in pre-close trading, a level last seen in June 2006.

The wide-based National Stock Exchange index Nifty, which gained 66.65 points at the initial stage, plunged by 196.35 points, or 6 per cent at 3,072.95 points at the same time.

All the sectoral indices, led by realty sector were ruling in the red with steep falls, dragging the Sensex down.

Morning trade

Markets have turned volatile after bouncing back in early trade. Buying is seen in technology, capital goods and oil stocks, while selling in banking, few metal, pharma and FMCG stocks.

At 1022 hrs IST, the Sensex rose 5.90 points to 10,587 and the Nifty gained 16 points to 3,285. BSE Midcap and Small Cap indices rose 0.8 per cent each.

Top losers are ICICI Bank, HDFC Bank, Sterlite Industries, Tata Communication, SBI, DLF, Reliance Communication, HDFC, Tata Power and HUL. However, gainers are Wipro, ONGC, L&T, HCL Tech, Cairn India, TCS, Reliance Industries and ITC.

Breadth is negative; about 1363 shares have advanced while 1583 shares have declined. Nearly 242 shares are unchanged.

Markets @ 0956 hrs IST: Nifty stands above 3300; Cap Goods, IT, Realty stocks up

Markets have bounce back in early trade after sharp cut seen in previous trade, as US markets rebounded sharply in Thursday's trade. Buying is seen in capital goods, auto, technology, banking, technology and power stocks.

At 0956 hrs IST, the Sensex rose 111 points to 10,692 and the Nifty gained 35 points at 3,304. BSE Midcap and Small cap indices rose over 1 per cent.

Satyam, Tata Motors, Zee Entertainment, Reliance Infrastructure, L&T, BHEL, Siemens, Suzlon, HDFC Bank, TCS and Tata Steel have gained.

Satyam Computer is witnessing volatility after gaining nearly 5 per cent in opening trade, after its Q2 numbers. The company has reported growth of 6.05 per cent in net profit of Rs 580.85 crore as against Rs 547.70 crore, QoQ. Net sales stood at Rs 2819.29 crore versus Rs 2620.83 crore.

Asian markets are trading mixed. The Nikkei and Shanghai rose 2 per cent and 1 per cent, respectively. However, Kospi, Taiwan and Jakarta tumbled 1-3 per cent. Hang Seng and Straits Times fell marginally.

US markets closed firm after a hugely volatile session. A late-day rally gave the Dow a triple-digit boost after a 700 point intra-day swing. Unwinding of hedged options on the S&P 500 ahead of October options expiry was one of the factors for the volatility in the market.

The expiration triggered several big buys at the end of the day. Dow gained 401.35 points, or 4.68 per cent, to 8,979.26. The S&P 500 index advanced 38.59 points, or 4.25 per cent, to 946.43, and the Nasdaq composite index added 89.38 points, or 5.49 per cent, to 1,717.71.

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Sensex could dip below 10K levels: Shankar Sharma

2008-10-15T04:20:00.000-07:00

.
Shankar Sharma of First Global said poor IIP numbers and a sell-off in metals is the beginning of a sharp correction. "Newsflows are still poor. The markets have still not bottomed out. We don't see the Sensex rising beyond 12,500 in the current move and expect a further downside in October. The Sensex could head back to 10,000 levels, and may even dip below that."

According to Sharma, markets won't re-conquer fresh highs in the next three years. "The environment in equities is likely to be tough over the next few years. The situation in the US is getting worse. The S&P 500 could dip to 600 levels. We see a 40% downside in emerging market equities."

On the rupee, he said the rupee is also not secure at current levels, and may test new lows. "Even if emerging markets stabilize, currency problems will worsen the impact."

He feels RBI's last few CRR hikes may have been excessive. On liquidity, Sharma said India had a lot of liquidity but it was sucked out by RBI. "The central bank may be slightly behind the curve in freeing liquidity. Sentiment in market has soured, so fresh liquidity may not work. The Monetary Policy may not change the course of downward trend."

Here is a verbatim transcript of the exclusive interview with Shankar Sharma on CNBC-TV18. Also watch the accompanying video.

Q: Your targets for the year got hit last week. Do you still expect lower levels from here or do you think we have hit some kind of a bottom?

A: The real problem is that while we did have a target of 10,000 at the beginning of the year, it is a target that you would be happy to get wrong rather than get right. The Sensex at 10,000 means that everybody gets hit whether it is a bull or a bear. The fact of the matter is the aggregate community of financial services get hit, the whole economy gets hit.

So, there is no great pleasure in seeing the target get achieved. That said, our view remains that – the first part of any market’s move is almost always dictated by what is just presently visible. What was visible that India was just going into a small slowdown from 9% GDP to maybe 7.5-8%, and the world was hit but not that badly hit.

Back in May or June, whilst at least our view was that one or two banks would go belly-up, there was by no means our view that there would be a mass scale decimation on Wall Street and Main Street banks like Wachovia or Washington Mutual.

So, you see when the markets go into a certain bear market territory, a new fact emerges, which can only buttress the fact that the original move of the market was correct, and it started selling off before much of the bad news was visible. Once the bad news has continually gotten worse, the markets have continued selling off.

As we stand right now, I cannot understand how the US gets out of the kind of mess it is in, or how for that matter Europe gets out of the mess it is in. Asia is getting into one slowly but surely. You have Singapore in a technical recession, you have New Zealand in recession, you have Australia in big trouble. Australia has exactly the same characteristics as the UK or the US – big property bubble. So, pretty much the same kind of venom exists there.

The UK is in deep trouble, Eurozone banking system is all shot to hell. You have banks like Deutsche et cetera still between 45 and 50 times leverage on tangible networth. Banks like Barclays that have gone and bravely bought Lehman Brothers but then on the backside they go and seek financing from the Bank of England.

I don’t see the landscape changing at all for the better. You have a country like Iceland going completely bankrupt. In the US, based on whatever we have heard a lot of problems still exist on the Lehman Brothers CDS’. So, it is all those factors.

Coming home, you have had terrible IIP numbers coming in from our own companies. You saw the metal pack sell-off today. I think that is just the beginning of a big correction downwards in metals. It started a little while back, and that is something we need to be very clear about that how can the whole world be experiencing a slowdown and steel and iron ore companies record profits.

I don’t see how the new bad news has abated. In fact if anything the world looks a lot more bleak than it did back in January. Much as I would want to see that the market has bottomed out, I don’t think that case can be made just yet.

Q: How much would you give the current pullback, given the regulatory action that you have seen in the last 48-72 hours? Can you play for a couple of thousand points more on the Sensex, or do you think that is being optimistic?

A: That is being terribly optimistic. I wouldn’t say with any degree of conviction that the market can go beyond 12,500. I think that is the absolute top. I doubt if it will get there, in this move itself, looking at the way the price action happened today.

This was on the back of a pretty strong Asia rally, and even as we speak, Europe has been holding up quite well. Despite that, India kind of decoupled strangely enough for the first time in a couple of months because India has generally been one of the relative better performers. Even though it has been down, it has been down a lot less than others say a Brazil or a Russia, in the last leg of the bear market. This was a big disconnect move. The rest of the markets were quite okay. But India sold off, and that is not again a good sign.

So, I doubt if the market can make its way beyond 12,400 or 12,500, if at all it can make its way back to even that level.

Q: Do you think in the next few weeks, the market will try and hold a bit of a range between 10,000 and 12,500 or are you seeing substantially lower than 10,000 levels even in 2008?

A: This range is a pretty weird thing. I don’t understand why people keep talking about trading ranges. Everything is a trading range from 3,000 and 21,000 would have been a trading range. So, the fact is that the markets are headed lower in our view.

My sense is October is not over yet, and October is a cruel month. In our view in September was that October would really be a cruel month. So, far that has not changed.

Our take is you will probably again go back to levels closer to 10,000 or probably a tad lower than that, because if you think about it, and view it in context, our basic broad theme this year has been to be long US equities and short emerging markets. The trade has actually worked very well, and more so if you account for the currency, where the dollar has completely decimated all other currencies including the euro, the riyal or the rupee, and the Aussie dollar, except the yen. Other than that, all other currencies have weakened markedly. So, US equities have actually outperformed significantly this year.

They are still down about 30-35% for the year while the rest of the markets are down about 55-60%, and more if you look at their own currencies.

Therefore, if you think about it, the US situation keeps getting worse. Companies like GE are in deep trouble. Obviously mainstream banks are in no good shape. Investment banks whatever are remaining are very shaky. I doubt if Warren Buffett’s USD 115 call option will ever get exercised because I doubt if Goldman Sachs would go back to USD 115 any time soon.

So, my target on the S&P 500 is probably 650 or maybe 600, which is lower than where it was in 2001. So, if you think about it, it is a good 30% away or thereabouts.

If EMs underperform then that means you are looking at about a 40% downside to general EM equities. If you just go straight by that analysis, you are looking at substantial downsides overall for the entire emerging market pack, not just India, but if you take a Brazil or Russia or a China or India or Mexico. We think that there is still pretty substantial downside merely based on the fact that we think the US is still headed lower, and US would still outperform other markets, despite being headed lower. Therefore, other markets would go down more than what the US is going down.

So, it could be a combination of two things. In absolute price terms we go down lower, or we may go down by let’s say 20% and the currency does the rest because the rupee by no means is secure at 48-49 to a dollar. I think it will take out its lows quite comfortably. So, a combination of price action and currency will mean that we will go down 30% from here in dollar terms.

Q: Last time I spoke to you, you were saying that we will go to probably 10,000 but you didn’t see the Sensex at 8,000-9,000 and that was unlikely in your eyes. Do you think the way events have unfolded; those scenarios could also turn true?

A: You can make a forecast based on what is reasonably visible. You cannot jump too far ahead of the curve. But clearly the last one month’s events, although by no means were completely unforeseeable. The fact is the ferocity of the problems, and that especially happened after the Lehman bankruptcy, with the entire freeze in the credit market globally and the liquidity squeeze back in India, which has had no problems of the kind that the west is experiencing, but our liquidity - prices seem to be pretty significant.

And just looking at price action you see the market doesn’t even hold an intraday rally. That is telling you that 10,300 or wherever we reached last week is not absolutely set in stone that it doesn’t get violated. I wish it doesn’t get violated but evidence on the ground here and globally doesn’t suggest that any lows established in the last week are inviolable.

Q: We have seen quite a bit of regulatory action in India as well. The Reserve Bank is trying to throw liquidity. May be it will cut interest rates. To what extent can that come as a relief to the stock market?
A: For one, I have been personally very critical of Dr. YV Reddy’s last few CRR hikes. That was excessive and he was just trying to go by the textbook that if you have inflation – you have to tighten and inflation will therefore come-off. I don’t think you can play everything by the textbook. Some things have to be played outside of the textbook and the fact is that our inflation problem was an imported problem and that had nothing to do with domestic demand – whether it is a crude oil or agricultural commodities. I think he went too far overboard in his desire to quell inflation and the result of that has been that lot of money got sucked out of the system through the various CRR hikes and that when you look at in a global context, every single country across the world is reeling from a credit crunch.

India had a lot of slosh in liquidity. We sucked it back. Now we are again a little bit behind the curve. We are trying to give it back. But when markets have already turned sour then these actions while they have to be done and let us face it – there is no other way out but for the RBI to let go of the tight reins, I doubt if that will mean a lot for equity markets in India as they have not mattered even for global equity markets. The Fed has been doing what it can do and probably a lot more than it can do. It is already having a pretty bad looking balance sheet on its own. The ECB has for the first time turned dovish – cut rates after many months, if not years, of staying put and every other economy that has been tightening is actually loosening now.

But equity markets are still headed lower because monetary policy is a blunt instrument. It can have a day or two to rally but that’s about it and I doubt if it changes the basic course of a downward spiral just as raising interest rates in a bull market can pause the bull market for a day or two but it doesn’t necessarily finish a bull market off.

Q: The last leg of the fall has been hastened at least for the index by two largecap names – Reliance which we spoke about last time and ICICI Bank which got in the midst of all sorts of rumour mongering. Where do you see these two heavyweights going from here?

A: In the last episode, we spoke about Reliance as being the largest threat to the market and it has been a laggard in the last couple of months. Our view on that has not changed. We think because of lower oil prices and the fact that it is very large over owned stock we think it is headed lower and will underperform the markets.

On ICICI Bank – our view on banking generally has been that banks in India were trading way too expensively for us to like them and between 2.5 and 4 or 5 times book about a year back. A lot of that valuation has contracted and ICICI Bank has gone all the way down to book value. The rumours I have no idea about what value to attach the rumours but the fact is rumours or not, the stock has sold off big time and which is not the same case for any other bank in the entire peer group whether you take private sector or the public sector banks.

The fact is that ICICI Bank has an overseas subsidiary. ICICI Bank says that it has investment grade paper in those asset books. Investment grade paper in today’s context, I would attach very little value to because AIG was double AA rated on the morning that it was seeking USD 85 billion in financing and I am sure lot of the US banks are still rated A or AA. The US itself is rated AAA which I cannot understand which credit rating agency doing proper arithmetic can rate that country as AAA?

We are not big fans of credit rating agencies and I doubt if anybody sensible would be. So, holding investment grade paper in today context may or may not lend much comfort to investors. What would lend comfort is the fact that the investment grade paper is in reality truly investment grade and we would love to get more details breakdown of those assets because like I said, lot of the world is holding investment grade paper which is really not what the paper is printed upon. Iceland was investment grade till it went bust. That tells you. I would not attach too much importance to an S&P rating or a Moody’s rating because they have all shown themselves as to be completely compromised in every sense of the word. They have been the root cause of this entire problem.

ICICI Bank has suffered. I don’t know rightly or wrongly. I have no real call on that because in banks, it is very hard to make out asset quality and such things without getting full access to the books. All I can say is that the stock looks cheap if everything is absolutely fine and the book is in absolutely fine fettle irrespective of this investment grade logic – the book is generally in good shape. We think at book value it looks attractive. But then again, I must have the caveat in there that investment grade paper means nothing in today’s context – not one bit at all.

Q: For the first six or seven-month of this bear market, a lot of people were in denial that this is indeed a bear – that it was just a bull market correction or retracement. Now those scales have fallen from people eyes but now they are asking the question – how long could this bear market be? Is it going to be another six-months and then we are done with it or is it going to be one of those two-three-year bear markets? From what you have seen in the last one-month, what's your best guess of how long this drags on?

A: Our view has been that you will not see the highs being taken out in the next three or four year’s time – definitely not for the next three-years. Even the most optimistic estimates of what the companies comprising large parts of the index will earn and what multiple you want to attach to those earnings and thereby make a projection for the Sensex, it is very hard to come up with a number that exceeds even 18,000 let alone 21,500. So, our take is that you are not going to see the markets take out their highs for another three or four years and that goes for pretty much every global market.

So let’s at least have some consolation that the whole world will suffer alongside us and which brings me back to my original point which I have always said that there is nothing known as an Indian bull market. We take the bull markets too personally that it belongs only to us. It was a large global bull market based on very easy money. Easy money came to all parts of the world outside of the US because of the weak dollar that inflated prices of various kinds of assets because INR expectations of those dollar is very low considering what they were getting back home. So it came and it fueled your capex, infrastructure, a lot of the ground level growth that you had. So, India grew because of large influxes of foreign capital.

That capital is not coming back in the same kind of intensity that we have seen largely on account of the fact that the dollar will become a very strong currency even incrementally. We see the dollar going to 1.1-1.2 against the euro which means dollar will head back to the US. So, the fact is emerging markets benefited from the weak dollar. They will now get hurt by the strong dollar. Overall three-years definitely we doubt that we will go anywhere near the highs let alone take out the highs. So, it is going to be a tough environment – make no mistake. Anybody who believes that it is going get over soon or things would come back to normalcy is not doing real analysis. I do know still very many people who are still especially hedge funds, which were net longs in the market still hoping for the best. Then you are no longer a fund manager. Then you are just a pure hopeless optimist and may god be with you.

RIL starts oil production, gas next year

2008-09-22T05:07:00.000-07:00

The Rs 1,392.69-billion ($34.7-billion) Reliance Industries Limited (RIL) on Sunday announced the production of oil from one its largest hydrocarbon assets in the country and said it will also start tapping natural gas from the fields early next year. “This will have a huge significance for India's economic development,” RIL chairman Mukesh Ambani said at a press conference here, adding that some 5,000 barrels of oil a day will initially be pumped from the Krishna-Godavari basin's D6 block (KG-D6).

"This will be ramped to 550,000 barrels per day in the next six quarters," he said, terming it as a "major victory in the battle for energy security". The KG-D6 is located in the south-eastern coast of India in the Bay of Bengal at a water depth of 8,000 feet. It was awarded to the consortium led by RIL and Niko Resources Ltd in the first round of auction of hydrocarbon assets in 1999.
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Ambani said by starting production within two years of its discovery, KG-D6 has become one of the fastest greenfield deepwater oil development projects in the world. India, which currently imports some 70 per cent of its crude oil needs, is falling far short of its galloping demand for fuel, especially in the power and fertiliser sectors. Ambani said that with Reliance's contribution, domestic hydrocarbon production will increase by 40 per cent in the next 18 months.

Gas production from the Krishna-Godavri basin is expected to start in the first quarter of 2009. It will also bring down India's import bill by Rs 1,000 billion per year ($20 billion), Ambani said. He said the company has now not only joined the elite club of deepwater operators, but is also among the top 20 energy companies in the world. According to Ambani, RIL aims to become the largest deepwater developer in the world. RIL will also enter into the exploration and production of uranium, he added.

The gas from K-G basin will be sold at a base price of $4.2 per mmbtu (million British thermal unit), compared to the $2.02 quoted by the Oil and Natural Gas Corp (ONGC). "This is going to change the energy landscape in the country by meeting the requirement of 80 million households. The east coast of India is set emerge as a world class hub," said RIL's president of exploration and production business, PMS Prasad.

The FPSO (floating, production, storage and offloading system), which has been contracted for $733 million, has a production capacity of 60,000 barrels of oil per day and can store up to one million barrels. "It has been stationed at the oil production site and shuttle vessels will be used for offloading oil from the FPSO and carrying the produce to the coastal refineries," Prasad added, saying this will eliminate the need for piping the oil to the shore for onward transportation to refineries.

However, RIL indicated it may not refine the oil at its existing and soon-to-be commissioned Jamnagar refineries but instead, sell it to public sector refiners like Hindustan Petroleum's Visakhapatnam refinery. The utilisation of the gas is still embroiled in controversy, with RIL and younger brother Anil Ambani's Reliance Natural Resources Ltd locked in litigation in the Bombay High Court over sharing of natural gas from the K-G basin. The next hearing is slated for September 30.

Citi projects GDP growth to fall to 7.5%,Goldman to 7.8%

2008-08-31T08:56:00.000-07:00

Global financial services major Citigroup has projected that investment trends in India may weaken as the impact of monetary tightening sets in, with the entire year clocking a slower growth rate of 7.5 per cent.

The investment banking giant Goldman Sachs has, however, projected that the economy would register a growth rate of 7.8 per cent in the current fiscal year, a shade lower than GDP rate posted in the first quarter.

Rising interest rates pulled the economic growth rate down to 7.9 per cent in the first quarter of this fiscal, lowest in any quarter in three-and-a-half years.

Citigroup in its latest report Indian Eco Flash stated that it has revised FY09 estimates from 7.7 per cent to 7.5 per cent.

"Investments have faced a double whammy with rising input costs on the one hand and more stringent borrowing constraints on the other," Citigroup analyst Rohini Malkani said in the report.

Besides, Goldman Sachs in its latest report stated that, "in FY'09, slowing investment demand will likely be offset by a large fiscal stimulus through greater spending on a rural employment scheme, a debt waiver to farmers and wage hikes to civil servants."

Further, a near-normal monsoon is expected to support the food grain production this fiscal, it added. The Indian economy expanded by a slower 7.9 per cent in the first quarter of current fiscal as rising interest rates hit manufacturing and other key growth engines of the economy.

Dr K K Birla (1918-2008): A legend passes...

2008-08-31T08:46:00.000-07:00

Kolkata bid a tearful farewell to noted industrialist, former Rajya Sabha member and Chairman of HT Media Ltd Dr Krishna Kumar Birla on Saturday morning. The end came at 7.30 am after a brief illness. He was 89.

He is survived by his daughters Nandini Nopany, Jyotsna Poddar and Shobhana Bhartia. He lost his wife Manorama Devi barely a month ago.

As the news broke, a pall of gloom descended in all quarters of society. Anxious phone calls started pouring into newspaper offices and people started thronging the Birla Park residence where the industrialist spent his last days.

People from all walks of life including politicians and industrialists made a beeline there.Governor Gopal Krishna Gandhi reached Birla Park quite early, followed by Union Minister Priya Ranjan Dasmunsi and Congress leader Subrata Mukherjee.

Trinamool leader Mamata Banerjee couldn’t make it to Birla Park but she sent her party’s senior leader and MP Dinesh Trivedi with a wreath. Senior Congress leader and External Affairs Minister Pranab Mukherjee also sent flowers.

Industrialists across the city mourned the death of Dr Birla while some who were elsewhere in the country took early flights to have a last glimpse of the person who stood as an inspiration to many.

His brother, B.K. Birla, looked shattered, while C.K. Birla, Kumar Mangalam Birla and other members of the Birla family seemed distressed. It was just about a month back when the family lost Dr Birla’s wife, Manorama Devi, and it is yet to recover from that shock.

Before the last journey, the body was kept on a flower-bedecked courtyard where people paid their respects.

Sensex nosedives 368 pts; realty plunges 8%

2008-08-14T03:52:00.000-07:00

Markets closed weak on Thursday with the BSE benchmark Sensex shedding 368 points or 2.4 per cent to 14,724 levels. In the broader markets, Nifty shed 98 points or 2.2 per cent to reach 4430.

While buying was evident in IT counters, selling was visible in banking, realty, capital goods and oil & gas counters by over 2.3 per cent each.

"I expect markets to be range bound in the medium term. The pullback from 12,500 levels on the Sensex is due to cooling down of oil prices. Even if the oil prices come down further, markets will not rally, as earnings will be affected. Banks will remain sluggish over few months," said Jyotivardhan Jaipuria, Head of Research, DSP Merrill Lynch.

DLF, shedding 8.7 per cent was the biggest loser among the BSE-30 scrips. Other prominent losers in the pack were Reliance Infrastructure, State Bank of India and Jaiprakash Associates.
Other Asian markets closed mixed on Thursday. While South Korea’s Kospi and Hong Kong’s Hang Seng were in green, Japan’s Nikkei was in the red in by 0.5 per cent.

Realty plummets
The BSE realty index, slipped by 447 points or 8 per cent, was the biggest loser among the sectoral indices. DLF, Indiabulls Real Estate and Housing Development & Infra were the major losers in the group.

Banking counters also shed 5.1 per cent on Thursday. Canara Bank, Punjab National Bank and Kotak Mahindra were the prominent losers.

Tougher times ahead, inflation could touch 13 %

2008-08-13T05:55:00.001-07:00

.. India's annual inflation rate may rise to 13 per cent, warned outgoing chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan as he spoke to the media. The country's economy is expected to grow 7.7 per cent in the year to March-end, cooling from the year before and below a recent forecast from the central bank, a government report said on Wednesday.

Tight monetary policy triggered by high oil and commodity prices, and global market turmoil would combine to moderate growth, Prime Minister Manmohan Singh's Economic Advisory Council said in its economic outlook for the financial year 2008-09.But it added that to trim inflation to 8-9 percent this fiscal year from the current 13-year highs, a tightening bias would have to be maintained.

"The downside risk to our growth expectations in 2008-09 is primarily from a further deterioration in global conditions with its attendant impact on India -- be it in the sphere of oil prices or capital markets," the panel said in its report.

The current account deficit was likely to widen and the pressure on the fiscal system would grow through rising subsidy bills. A majority of forecasts expect expansion in Asia's third-largest economy to slow as policymakers struggle to fight rising prices by raising interest rates, tightening liquidity and cutting import duties.

The central bank in its monetary policy review last month cut the growth forecast to 8.0 percent from 8.0-8.5 per cent previously, but its prediction is still above many private banks' outlook for the Indian economy.
In its last report under the leadership of outgoing chief C. Rangarajan, a former Reserve bank governor, the panel said coordinated policy action at home, cooling commodity prices and action by other central banks could help bring India's inflation rate down to 8.90 per cent this fiscal.

"Maintaining a tight monetary policy stance and active fiscal and other methods are necessary to bring down inflation rates," the panel. It said India had been slow to raise the retail price of petroleum products in the face of surging crude rates and there remained a "large backlog" of adjustment still to be made. The Reserve Bank of India (RBI) has raised its benchmark-lending rate by 50 basis points to 9.0 per cent; it’s highest in seven years and the third increase in two months, as it battles annual inflation close to 12 per cent.

It is also increasing the proportion of funds banks must keep on deposit to 9.0 per cent to absorb surplus cash in the banking system as it seeks to quell demand and quash knock-on price hikes from higher fuel prices. The panel said fiscal deficit targets for 2008-09 would ‘overreach’ while revenue deficits would persist. It added that serious fiscal risks were arising from growing off-budget liabilities estimated at 5 per cent of GDP.

Hefty fuel subsidies, loan waivers for millions of poor farmers and proposed salary increases for government employees are constraining the country's finances. International ratings agencies have expressed concerns over India's deteriorating public finances. "Despite appreciable fiscal consolidation, large and growing off-budget liabilities are however a matter of concern. With these included, the fiscal situation no longer looks stable and sustainable," the panel said.

India's economy has grown by an average of 8.8 per cent over the past four years, grabbing the attention of global investors and raising its profile on the world stage.

Markets stay volatile, metals gain

2008-07-31T03:19:00.001-07:00

The markets lost more ground in the afternoon trade amid volatile trading, with the Sensex down by 80 points to 14206 levels.

Markets are likely to remain choppy throughout the day as the futures and options contracts for July 2008 series expires today.

The broader index Nifty is hovering around the 4300 levels, down by 13 points. Among the sectors, banking continues to be in the red, with the sectoral index on the BSE down 1.56 per cent.

FMCG is also another major loser, with the index down 1.87 per cent. Metals continue to have a good run today, up about 1.15 per cent. Among the Sensex stocks, Tata Motors and ITC continue to drag the Sensex down.

The stock of the largest automaker in the country is down by over 5 per cent to Rs 395, while ITC has lost 3.7 per cent to Rs 180. Both these companies reported a drop in their quarterly numbers.

Asian markets are trading mixed on Thursday, with Shanghai and Taiwan benchmark indices in the red, while South Korea’s Kopsi and Japan’s Nikkei are in the green.

Sensex rebounds 495 pts on banking, realty rally

2008-07-30T09:15:00.000-07:00

The markets closed firm on Wednesday ahead of the settlement of the July series of Nifty futures. The Sensex gained 3.6 per cent, or 495 points, to close at 14,287 levels, led by a strong comeback from banking and realty stocks.

The broader benchmark Nifty also surged 2.9 per cent, or 123 points, to end at 4,313.

Strong global cues also lifted the investor sentiment. Wall Street as well as Asian markets closed firm on a drop in oil prices. Light sweet crude for September 2008 delivery fell $2.54 to $122.19 a barrel on the New York Mercantile Exchange on Tuesday.

Heavy buying was visible on all counters, barring FMCG stocks.

Despite the recent rally in Indian markets, analyst expect more correction. “Though crude prices have eased, it is still at high levels. Companies are facing problems related to cost and their profitability has taken a hit. Global problems are also looming large. So Indian markets will correct further,” said Upendra Kulkarni, director & CEO, Fortress Financial Services.

Housing Development Finance was the biggest gainer among the BSE-30 pack, surging 8 per cent to Rs 2,273. Tata Steel, Tata Power and Reliance Infrastructure were the major prominent gainers in the group.

The banking and realty stocks made a remarkable comeback after losing heavily yesterday. The BSE banking index was up 5.2 per cent. Among the banking stocks, Axis Bank advanced 9.6 per cent to end at Rs 679. Bank of Baroda, Union Bank of India and HDFC Bank were the other major gainers in the sector.

The BSE realty index also gained 5 per cent, with IndiaBulls Real Estate surging 13.5 per cent to close at Rs 299.

The Asian markets also closed firm on Wednesday, with Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi ending in the green by over 0.7 per cent each.

Markets end marginally up ahead of RBI review

2008-07-28T05:51:00.000-07:00

The markets closed slightly higher on Monday, ahead of the RBI’s policy decision on Tuesday. The Sensex ended up 74 points to 14,349, led by gains in oil & gas and capital goods sectors. The broader Nifty closed higher by 20 points to 4,332 levels.

The indices opened lower on Monday, with the serial blasts in Bangalore and Ahmedabad casting a shadow over the markets. And during the day, the markets kept moving in and out of the green zone.

Analysts expect a 25 bps hike in key rates from RBI, but markets have already “factored in the increase”, said Sandeep Shenoy, head of equities at PINC Research. “I don’t expect markets to react to the RBI’s rate hike move tomorrow,” he added.The market breath was strong on Monday, with only three out of 12 sectoral indices on the BSE closing in the red.

Oil & gas and capital goods sectors were among the major sectoral gainers, up about 1.5 per cent each. Metals were the biggest loser, followed by IT and banking. The capital goods index was boosted by L&T, which reported strong quarterly numbers. The stock was also the biggest gainer among the Sensex stocks, up 3.75 per cent to Rs 2,723.

Tata Power, a new entrant to the Sensex list, had a good debut, up 3.61 per cent to Rs 1,051.The other major gainers were ACC, ONGC and Ranbaxy.With nearly three-fourth of the earnings numbers out, the markets are in a state of equilibrium, said Shenoy.

“The Q2 numbers are going to be important and 4600-4700 levels can be reached before correction sets in, unless some major setbacks happen, he added. Asian markets had a mixed day, with Jakarta, Shangai Composite closing in the green, while Hong Kong and Taiwan ending in the red.

SBI net rises 15% to Rs 1,641 cr in Q1

2008-07-27T01:00:00.000-07:00

The country’s largest bank, State Bank of India (SBI), has beaten analysts and market forecasts by reporting a 15% rise in net profit to Rs 1,640.7 crore for the first quarter of this fiscal on the back of a 100% rise in non-interest income, reports the media.

The impressive growth in non interest income, which includes fees and commissions from various financial activities , coupled with a higher net interest income has more than made up for the mark-to market losses of Rs 1656.6 crore incurred during this quarter.

SBI, like several other banks, has been hit hard after interest rates started moving up during the second half of last year. As interest rates rise, the value of the bonds in the portfolio of banks depreciate, forcing banks to take into account such losses.

ICICI Bank profit dips 6% to Rs 728 crore

2008-07-27T00:20:00.001-07:00

Treasury losses and slower growth in advances have taken a toll on ICICI Bank’s profits for the first quarter, reports Our Mumbai Bureau. ICICI Bank reported a 6% lower net profit for the first quarter ended June 30 at Rs 728 crore, down from Rs 775 crore in the corresponding period of the previous fiscal.

The bank is now targeting a lower growth of 5-10 % from retail loans against 10-12 % targeted earlier. However, corporate and international loans are expected to grow by over 25%. The fall in profits comes on the back of a loss of Rs 594 crore in treasury operations against a profit of Rs 195 crore in the corresponding period last year. With Reserve Bank of India increasing interest rates to control inflation, bond prices crashed leading to a widespread mark-to-market losses for banks. Equity markets too have crashed.

Terror strikes Bangalore; Sensex slumps 550 points

2008-07-25T04:26:00.000-07:00

The crack on Dalal Street widened after reports that serial blasts hit the IT city of Bangalore.

There was no immediate word of casualties reported yet.

Banking and oil & gas stocks were battered. Smallcaps and midcap stocks were relatively affected.

At 1:30 am, the Bombay Stock Exchange's Sensex tumbled 552 points or 3.73 per cent to 14,225.24. The index touched a high of 14,484.39 and low of 14,210.63 in trade so far. BSE Midcap and Smallcap indices were down 0.34 per cent and 0.38 per cent respectively.

Biggest index losers were ICICI Bank (-10.42%), HDFC (-7.16%), Reliance Industries (-7.13%), HDFC Bank (7.09%) and Reliance Infrastructure (5.68%). Ranbaxy Laboratories (2.81%), Hindustan Unilever (2.26%), ACC (1.49%), NTPC (1.13%) and Satyam Computer (0.99%) were the major gainers.

The National Stock Exchange's Nifty slumped 118 points or 2.67 per cent to 4315. The index touched a low of 4297.15 after opening at 4440.85.

The Sensex vaulted 838 points

2008-07-23T09:33:00.000-07:00

Markets rallied strongly on Wednesday on hopes that the government’s victory in the trust vote would spur the economic reform process.

For the first time in last four years, the government would be in office without the support of the Left parties.The Sensex vaulted 838 points, or 5.9 per cent, to close at 14,942 levels.

The Nifty also zoomed 236 points, or 5.6 per cent, to close at 4476. Finance Minister P Chidambaram said the government will now push ahead with its pending economic reforms agenda, particularly with financial sector reforms.

This helped to spur a big rally in the banking stocks, which were the biggest gainers on the BSE. The Bankex gained a whopping 10 per cent to close at 7,291 levels. The rally was driven mostly on heavy buying in frontline stocks, with six Sensex stocks surging by over 10-12 per cent each. These included Reliance Communication, Reliance Infrastructure, ICICI Bank, BHEL, Housing Development Finance and SBI.

The markets also benefitted from positive global cues, following a big drop in oil prices. The US markets had closed firm while European markets that open after the Indian markets also opened strong. The major Asian markets, with the exception of China, mostly ended in the green. Heavy buying was visible particularly in banking, realty and capital goods counters. “Nuclear deal is a big positive for market sentiment and it would improve further with the Left's withdrawal,” said Anand Rathi, Chairman of Anand Rathi Securities. He however added that other important factors like inflation, commodities prices, oil price and interest rate are still a concern for the markets.

Banking, realty lead rally Besides banking, the other major gainers on the BSE were capital goods and realty index, up 8.2 per cent and 8.1 per cent respectively. Yes Bank was the biggest gainer among the banking stocks, gaining 16.8 per cent. Other prominent gainers were Karnataka Bank, Federal Bank and Kotak Mahindra Bank.

Sensex above 13.5K, BANKS are shaning

2008-07-18T05:18:00.000-07:00

Indian markets continued their good run for the second day, as banking stocks rallied, spurred by better-than-expected inflation figures. The Sensex surged 523 points to 13,635 levels. The broader market index Nifty advanced by 3.7 per cent to 4092. The annual rate of inflation remained almost steady at 11.91 per cent for the week ended 5 July 2008, marginally higher than 11.89 per cent in the previous week. The inflation figures were announced on Thursday after the markets had closed.

The lower-than-expected inflation figures pulled up the banking stocks on the hope that the Reserve Bank of India might not increase the rates at its review meeting at the end of this month. The strong performances of the US markets also weighed on the market sentiment. Still many analysts feel that it will take a long time for the markets to get into a positive mode. “The uncertainties in market are likely to continue. If the government passes the trust vote, various other factors like oil and inflation would impact markets,” said Upendra Kulkarni, Director & CEO, Fortress Financial Services.

Buying was visible across all the sectors barring IT and metals. Banking lead the rally, with the index on the BSE advancing over 8 per cent. Other major sectoral gainers on the BSE were realty and oil & gas, up by 4 per cent.

The IT stocks were pulled down by the results of software major Wipro and Satyam, with the sectoral index on the BSE down by 2.57 per cent. Wipro and Satyam Wipro “reported disappointing results within their core businesses”, said CLSA. The Wipro stocked ended down by 3.75 per cent to Rs 365, while Satyam closed down by 7.5 per cent to Rs 382.

Among the BSE-30 stocks, banking stocks led the gainers. ICICI Bank surged 12 per cent to Rs 617 while Housing Development Financial advanced by 9.5 per cent to Rs 2,067 and HDFC Bank gained 7.9 per cent to Rs 1,033. “There will be a sharp movement upwards if political uncertainty is removed. I don’t expect nifty to breach 3800 on the downside,” added Ashu Madan, National Head, Religare Securities. However, the European markets, which open after the Indian markets, opened weak on worries over corporate earnings. The Asian markets presented a mixed picture, with Shanghai Composite and Hong Kong’s Hang Seng ending in the green. The other major markets closed lower.

Sensex above 13K; realty up 5.1%

2008-07-17T03:35:00.000-07:00

Markets continue to surge in the noon deals Thursday on strong global cues, with the Sensex gaining 479 points to 13,054 levels. The broader markets index Nifty advanced 118 points to 3,935.

The US markets surged on Wednesday, led by financial stocks, after better-than-expected results at Wells Fargo, one of the leading US bank and mortgage lender, easing worries about the on-going credit crisis. The Dow Jones industrial average soared 2.52 per cent, to 11,239.28.

Buying is visible across almost all the sectors, with the sectoral indices on the BSE in the green. However, the metal counters are in red turf by 1 per cent.

Banking and realty have seen the most buying, with both the sectoral indices on the BSE surging by over 4.8 per cent each.

Among the BSE-30 scrips, Housing Development Finance jumped 8.5 per cent to Rs 1866 levels. Other major gainers include Maruti Suzuki, which is up 7.7 per cent to Rs 589. Jaiprakash Associates also advanced 6.8 per cent to Rs 145.

Other Asian markets are also trading firm on Thursday. Hong Kong’s Hang Seng, Japan’s Nikkei and South Korea’s Kospi are in green turf by over 1 per cent each.

Kingfisher loses out, Wilbur Ross gets SpiceJet stake

2008-07-15T01:14:00.000-07:00

Kingfisher Airlines has lost the race to acquire low-cost carrier Spicejet.

The promoters of Spicejet -- the UK-based Kansagra family -- and Gulf-based investor Istithmar have accepted US-based investor Wilbur Ross' offer instead.

Ross will pay approximately Rs 350 crore to acquire roughly 25 per cent stake in Spicejet.

Kingfisher chairman Vijay Mallya admitted on Monday night he was no longer interested in buying Spicejet.

Mallya had reportedly been talking to the Istithmar and the Kansagra family who together hold roughly 25 per cent stake in SpiceJet.

The proposed deal was being estimated at around Rs 300 cr. Had it been operationalised, Kingfisher might have become the market leader in the domestic market.

The board of directors of SpiceJet has accepted an offer in-principle from the US-based PE firm that would make available about Rs 345 crore (around USD 80 million) to SpiceJet, a joint statement issued by SpiceJet and WL Ross & Co said.

"We are delighted to have WL Ross as an investor in SpiceJet. WL Ross is one of the largest and the most experienced investor in the world. With this investment, we have no doubt that SpiceJet will fulfill its promise of emerging as India's leading airline," SpiceJet board member Bhulo Kansagra said.

"We believe in the long term validity of the low cost airline model in India and that fuel prices eventually will stabilise," Chairman & CEO, WL Ross & Co LLC Wilbur L Ross said.

This would be WL Ross' second investment in India. Last year, WL Ross had acquired apparel maker OCM India for about USD 37 million.

"SpiceJet is one of the most efficient airlines in India. We are delighted to contribute to its growth and development," Ranjeet Nabha WL Ross India Managing Director & CEO said.

Shares of SpiceJet were trading at Rs 30.05, up 7.51 per cent in the morning trade on the Bombay Stock Exchange.

Markets close weak, Ranbaxy sheds 10.5%

2008-07-14T05:17:00.001-07:00

Markets ended weak on Monday with the BSE Sensex losing 139 points or 1 per cent to close at 13,330 levels. Broader market benchmark, Nifty, also dipped 0.2 per cent to 4039 points.“At this stage FIIs are booking profits and have turned net sellers.

That is a cause for concern. Though mutual funds are trying to support the market, macroeconomic factors combined together have led to an induced rally,” said WLN Sastry, Country Head, Firstcall India Equity Advisors. While buying was evident in metal, oil & gas and auto counters, selling was visible in IT, banking, realty and healthcare stocks.“Volatility is likely to continue due to a host of factors, including a bad global credit market scenario,” said S Ranganathan, head of research, LKP Shares.

Ranbaxy Laboratories lost a whopping 10.5 per cent on the allegations raised by the US government against the company. This has the potential to derail plans of the company's promoters to sell their 34.8 per cent stake to Daiichi Sankyo. The pharma major was the biggest loser among the BSE-30 scrips.

Other major losers in this group were Infosys, Satyam and TCS. Other Asian markets closed weak on Monday with the Hong Kong’s Hang Seng, Japan’s Nikkei and South Korea’s Kospi ending in the red turf by over 0.2 per cent each.IT slidesBSE IT index, dropping 228 points or 5.9 per cent, was the biggest loser among the sectoral indices. HCL Tech, Infosys and Satyam were the major losers of the pack. Satyam lost nearly 8 per cent to close at Rs 409.

Yahoo! rejects Microsoft-Icahn proposal

2008-07-13T10:00:00.001-07:00

Yahoo! has rejected a joint proposal from Microsoft Corporation and billionaire investor Carl Icahn for a restructuring of the global internet giant, saying the deal was not in the "best interest" of stockholders."After reviewing the proposal with its legal and financial advisers, Yahoo!'s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders," Yahoo! said in a statement.

Yahoo! had received the joint proposal from Microsoft and Icahn, an arrangement that would include the acquisition of the internet major's search business by Microsoft and the rest of the company by Icahn."The proposal was made on Friday evening and Yahoo! Was given less than 24 hours to accept the proposal, the fundamental terms of which Microsoft and Icahn had made clear they were unwilling to negotiate," Yahoo! said.The terms included the immediate replacement of Yahoo's board and removal of top management, the statement said, terming the proposal completely "absurd and irresponsible".

"This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!'s stockholders in mind," Yahoo! Chairman Roy Bostock said."Yahoo!'s board remains open to any transaction that delivers full value to our stockholders - we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor," the statement added.Yahoo! said a transaction to acquire the whole company would be much more straightforward and involve far less risk than the new proposal or any similar alternative.

Bostock said, "Microsoft and Icahn are trying to dismantle the company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders.""We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming vote," he added.Acknowledging that the Microsoft-Icahn proposal represented "a number of improvements" over the earlier one,Yahoo! said it not only repeated its offer to sell the entire company to Microsoft for at least $33 per share, but also offered to negotiate an improved search only transaction.

Microsoft rejected both offers.The revenue guarantees suggested are well below the search revenue that Yahoo! is expected to generate on its own and in association with its announced commercial agreement with Google, the statement added.

Tiger Woods to become first billionaire sportsman by 2010

2008-07-11T08:07:00.001-07:00

Tiger Woods is on pace to pass $1 billion in career earning by 2010, becoming the world’s first billionaire to accumulate his fortune by playing sports, says Forbes Magazine.

The 14-time major championship winner earned $115 million in 2007 alone, said the American magazine, which annually ranks the world’s richest people with its Forbes’ celebrity 100 list. English footballer David Beckham was the second sportsman on the list with earnings of $65 million.

“It will be an unprecedented occurrence,” the magazine said. “There are plenty of billionaires who have excelled at sports like Switzerland’s richest man and champion sailor Ernesto Bertarelli. But there are no billionaires who accumulated their fortune by playing sports.”

The magazine goes on to say in its Wednesday edition that while tycoons like Bill Gates accumulated his wealth by holding a stake in a company with soaring profits, Woods is unique because his massive fortune was earned through pay cheques.

Woods is a sports marketers’ dream, having earned more than $750 million in endorsement deals to date in his career. At 32, Woods has won 50 tournaments faster than any player and is closing in on Jack Nicklaus’ record of 18 major championship wins. The nine-time PGA player-of-the-year is extremely popular and likeable. When he is playing in a tournament, television ratings increase by at least one third and often more—like his recent stunning victory at the US Open in San Diego.

He has lucrative endorsement and sponsorship deals with companies like Nike, Buick and Gillette which help make up nine-tenths of his totals earnings and will land him $90 million in 2008, says Forbes.

Nike Golf registered over $600 million in sales in2007. The American shoe giant didn’t even have a golf line of shoes and clothing before it signed Woods to a contract in1996. Gatorade is also launching a new line of sports drinks,called Gatorade Tiger.

Woods is expected to miss the remainder of the golf season, while he recovers from knee surgery. He captured the 2008 US Open in a playoff despite playing with a torn ligament in his left knee.

Go Air to cut another 300 flights

2008-07-11T03:01:00.000-07:00

Go Air, the Wadia Group-promoted low cost carrier (LCC) is likely to cut another 300 flights from August in the wake of sky-rocketing oil prices.

Last month, the airline had halved its operations to 800 flights and served pink slips to over 150 employees, a Go Air executive said.

In spite of repeated attempts, Go Air vice president Neeraj Kapoor could not be contacted.

According to an analyst from a leading brokerage firm, LCCs are finding the going tough on account of high operational costs and high fuel prices.

'But it's not just LCC but even full service carriers are going through turbulent times, forcing them to cut flights and postponing fleet acquisition in order to preserve liquidity,' he said.

Full service carriers like Jet Airways and Kingfisher Airlines have also cut over 20 flights because of declining load factor, with Kingfisher postponing its international operations.

Even the state-owned Air India has grounded 32 flights on account of high aviation fuel charges.

The scenario is no different in the international airline industry. For instance, Continental Airlines and Northwest Airlines have sacked over 3,000 employees and cut several routes on account of rising aviation fuel costs.

No let-up in inflation, rate accelerates to 11.89 pc

2008-07-11T02:41:00.000-07:00

Inflation soared to 11.89 per cent for the week ended June 28, adding to the woes of the consumers who are paying higher prices for fruits and vegetable, pulses and edible oils.

On top of it, the Wholesale prices-based inflation reaching a new 13-year high, has added to the concerns of borrowers who fear that the Reserve Bank may go in for another hike in interest rates at its quarterly review on July 29.

The inflation was at 4.42 per cent in the corresponding week a year-ago.

Inflation rose on account of rising prices of coconut oil that soared by 11 per cent, mustard oil by five per cent, soya oil by four per cent, while fruits and vegetable, pulses, jowar and barley increased by one per cent each.

Despite attempts made by the government to tame price rise, items like cement increased by over one per cent and edible oils by two per cent.

However, the Finance Ministry said, "prices of essential commodities which include foodgrains, pulses, edible oils, vegetables, dairy products and some other commodities like kerosene, soap, safety matches more or less stabilised."

ICRIER, Director Rajiv Kumar said that inflation control is the prime focus of the government and monetary authority. "RBI may increase the rates in its forthcoming review to bring down inflation," he said.

According to the Crisil Principal Economist D K Joshi, to anchor inflation, the central bank is likely to increase repo rate by a further 25 basis points and CRR by another 50 basis points on July 29.

RBI had last month raised short term lending rate, Repo, twice, by 0.25 per cent and 0.50 per cent, and mandatory cash requirements for banks by 0.50 per cent, to squeeze money supply for taming inflation.

Markets close flat, metal up 2.5%

2008-07-10T05:09:00.000-07:00

Markets on Thursday closed flat on weak global cues, with Sensex ending lower by 38 points to 13,926. The broader market index Nifty edged up by 5 points to 4162.

Other Asian markets closed mixed on Thursday. While Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi were in green turf, Shanghai Composite was in the red.

While selling was visible in oil & gas, IT, realty and auto counters, buying was evident in metal counters. The metal index on the BSE surged 2.5 per cent, led by Nalco, Hindustan Zinc and Ispat Industries. These metal stocks moved up by more than 6 per cent.

“I believe macroeconomic indicators would have larger impact on the markets, compared to the earning guidance from Infosys. So the market’s sentiment will depend on inflation and IIP numbers. I don’t expect IIP numbers to be impressive in the coming days,” said Daljeet S Kohli,Head Research PCG, Emkay Shares.

Among the BSE-30 scrips, the Hindalco stock moved up by 5.5 per cent to Rs 153, while DLF, which announced a buyback offer, was up by 1.8 per cent to Rs 458. Other major gainers include ACC and Ambuja Cements.

Infosys Technologies shed 0.8 per cent ahead of its quarterly numbers, which will be announced tomorrow.

Domestic passenger car sales rose by 6.1 per cent in June 2008 to 99,738 units, against 94,002 units in the same month last year.

According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), motorcycle sales in the country last month went up by 8.2 per cent to 4,73,899 units as compared to 4,37,776 units a year ago.

Total two-wheeler sales in June also increased by 6.4 per cent to 6,01,941 units from 5,65,433 units in the same month last year.

Commercial vehicle sales during the month increased by 13.5 per cent to 40,324 units from 35,518 units during the year-ago period, SIAM said.

Markets cut losses despite the Left’s move

2008-07-08T05:41:00.000-07:00

Despite the Left’s announcement of withdrawal of support to the UPA, the markets recovered some losses of the early trade, but closed in the red on weak global cues. The Sensex ended lower by 176 points at 13,349 levels.

The Sensex ended lower by 176 points at 13,349 levels.

The markets had probably factored in the Left’s move of withdrawing support to the UPA, as it did not react negatively to the announcement. The Sensex pared some of its early losses, after the news came in.

The broader markets index Nifty also sheds 1.03 per cent to 3988.

While selling was evident in IT, FMCG, oil & gas and realty counters by over 0.9 per cent each, buying was visible in capital goods counters.

“Markets will be range bound in the coming days, with the Sensex reaching 14,000 levels on the upside. They will be largely affected by global cues and we might see more short covering,” said Jigar Lodaya, Senior Manager – Advisory, Sharekhan.

Among the BSE-30 scrips, Wipro sheds 4.6 per cent to Rs 419 levels. Other major losers include Tata Motors, which was down 4.1 per cent to Rs 376. Infosys also sheds 3.6 per cent to Rs 1736.

Other Asian markets closed weak on Tuesday. Hong Kong’s Hang Seng, Japan’s Nikkei and South Korea’s Kospi were in red turf by over 2.5 per cent each.

IT weak
BSE IT index, losing 129 points or 3.1 per cent, was the biggest loser among the sectoral indices. Moser Baer, Wipro and Infosys were the major losers of the pack

Over 100 companies defy bear hug

2008-07-06T06:12:00.001-07:00

All is not lost in the current bear run on Dalal Street, as close to Rs 1.5 trillion have been added to investors' wealth by over 100 companies, including blue-chips like Infosys, Cairn India, Satyam and Ranbaxy and also some little known smaller firms.

While a few of these companies have registered a growth of nearly two-fold or three-fold, a number of them have seen their values growing by more than 10 per cent with an average surge of nearly 15 per cent.

The stock market has been mostly on a downslide for close to six months now and its benchmark Sensex as well as total valuation has dipped by close to a third since January 10.

The barometer index, Sensex, had scaled a life-time high of 21,206.77 points on January 10 before embarking on a southward journey losing close to 8,000 points till now.

A number of large-cap companies have seen their valuations dip sharply – with a loss of close to Rs 5 trillion by companies headed by the country's five richest individuals – Mukesh and Anil Ambani, K P Singh, Azim Premji and Sunil Mittal. The net loss has been more than Rs 25 trillion for all the listed entities in the country.

However, an estimated 114 companies have actually seen their market value growing in this period, shows an analysis of change in M-cap figures since January 10.

In absolute terms, these companies have seen their market capitalisation growing by close to Rs 46,000 crore to more than Rs 3,54,000 crore.

However, just about 30 companies out of these have a market capitalisation of more than Rs 1,000 crore and the growth has been mostly in single or double-digit percentage points for these firms.

In absolute terms, the biggest gain of close to Rs 9,000 crore has been for Infosys, followed by over Rs 5,000 crore for Sun Pharma and Ranbaxy. Besides, companies like Cairn India, Satyam, Glenmark Pharma and Sterling Intl have also seen a surge of about Rs 2,000-4,000 crore.

Other major gainers in this period include Cipla, Nestel India, GlaxoSmithKline, REI Agro, Spice Communications and ICI India, BOC India and Temptation Foods.

In percentage terms, the growth has been relatively modest at about 10 per cent for companies like Infosys, Cairn, Satyam and relatively better at 25-35 per cent for Sun Pharma and Ranbaxy.

However, companies like Sterling Intl, Zandu Pharma, Khaitan Weaving, Sandur Manganese, Gujarat Foils, Champagne Vine, KLG Capital, Choksh Infotech and Rollatainers have seen a gravity-defying surge with their market values more than doubling in this period.

Inflation inches higher to 11.63%

2008-07-04T03:33:00.000-07:00

Driven by higher prices of fruits and vegetable, cereals and some manufactured items such as iron and steel and edible oil, inflation grew to a new 13-year high of 11.63 per cent. During the week ending June 21, inflation moved up by 0.21 per cent from 11.42 per cent in the previous week and 4.32 per cent in the corresponding week a year ago. The wholesale price index-based inflation inched up on account of higher prices of unrefined oil that soared by eight per cent, tea by four per cent, fruits and vegetable, sea fish, maize and bajra by two per cent each.

At the same time, pulses, including urad and moong and spices became expensive by one per cent each.

Despite attempts made by the government to tame price rise, items like iron and steel, edible oils and cement became costlier during the week.

RBI may take further anti-inflationary measures, Galloping inflation may force RBI to further hike short term lending rate to banks as well as statutory deposit requirements when it reviews the credit policy on July 29.

To anchor inflation, the central bank is likely to increase repo rate by a further 25 basis points and CRR by another 50 basis points during the month, Crisil Principal Economist D K Joshi said.
RBI has already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.
According to Goldman Sachs, the apex bank is expected to hike another 100 basis points through a combination of raising the repo rate, 50 basis points compared to the earlier expectation of 25 basis points and the CRR by 50 basis points over the next 3 months, with risks towards more tightening.

"With global crude prices going up further, inflation is also set to rise. However, the truckers strike which has been called off is unlikely to have any significant impact on the rising price," Joshi said.

On Thursday, New York's main oil contract, light sweet crude for August delivery, surged past 145 for the first time to reach an all-time pinnacle of $145.43 a barrel.

High oil price regime

Planning Commission Deputy Chairman Montek Singh Ahluwalia had said the country has to learn to live with high oil price regime, while the Petroleum Secretary had indicated that the government will review the retail prices in October.

The government last revised retail petroleum prices with effect from June 5, when petrol prices was increased by Rs 5 a litre, diesel by Rs 3 per litre and cooking gas by Rs 50 per cylinder.

This resulted in inflation touching double digit figure of 11.05 per cent for the week ended June 7.

As a part of anti-inflationary measure, the government on Thursday prevailed upon industry to cut prices of select iron and steel products by up to 10 per cent.

Inflation at 12 per cent mark

According to Saugata Bhattacharya, vice president Axis Bank, inflation would continue to rise and hit 12 per mark in the next month on account of rising crude and food items.

Among other food articles, prices of mustard seed, castor seed went up by one per cent. However, fuel index declined by 0.1 per cent on account of lower prices of furnace oil.

Manufactured items that have become expensive include medicine, phenol, dhoti, sari, bicycle, dry cells, switch gears in the range of 1-10 per cent.

The government, meanwhile, has revised inflation data for the week ended April 26 to 8.27 per cent from the provisional figure of 7.61 per cent.

Markets shrug off higher inflation numbers

2008-07-04T03:29:00.001-07:00

Markets have moved up sharply in the noon deals of Friday, shrugging off higher inflation numbers. The Sensex gained 271 points to 13,365 levels. The broader markets index Nifty also gained 1.7 per cent to 3992.

Buying is visible in capital goods, realty, banking and IT counters by over 1.3 per cent each.
“Markets will move in a sideways zone and I expect it to open flat. Inflation will be a key factor and market’s sentiment will largely depend on that,” said Sandeep Wagle, Chief Technical Analyst, Angel Broking.

Among the BSE-30 scrips, Jaiprakash Associates gained 7.8 per cent to Rs 149 levels. Other major gainers include BHEL, which is up 7.6 per cent to Rs 1502. Reliance Infrastructure also advanced 6.7 per cent to Rs 770.

Other Asian markets are trading mixed on Friday. While Hong Kong’s Hang Seng is in the green, Japan’s Nikkei and South Korea’s Kospi are in red turf by over 0.2 per cent each.

Realty surges: BSE realty index, advanced 229 points or 5.3 per cent, is the biggest gainer among the sectoral indices. Housing Development & Infra, Kolte-Patil and DLF are the major gainers of the pack.