EQUITY UPDATE: 18 AUGUST 2012

INDIA

India’s PMEAC, an advisory body to the Government, revised growth to 6.7 percent from the projected 7.5 – 8 percent for FY2012-13. Inflation is to rise from forecasted 5 – 6 percent to 6.5 – 7.0 percent on higher food prices. Current account deficit could rise to USD 67.1 b, around 3.6 percent of GDP. Trade deficit could touch USD 181.1 b, i.e. around 9.7 percent of GDP. The PMEAC recommends that a price rise in diesel could mitigate higher expenditure on subsidies. The body also warned that India’s own credit rating could get downgraded if measures arent undertaken to prop up the economy. (Economic Times)

FII’s made gross purchases of INR 2,169.11cr and gross sales totalling INR 1,860.89cr. DII’s made gross purchases of INR 1,044.55cr and gross sales of INR 1004.36cr. (Business Standard)

According to India’s Coal Minister Sriprakash Jaiswal, the Comptroller and Auditor General (CAG) used an incorrect method of calculating the prices of the coal blocks under the scanner. He insisted that although the allocation was done on a transparent basis, private co.’s benefited from the auction as delays in the bidding process gave undue advantage to them. (Economic Times)

Ranbaxy Labs – The co. launched an authorized generic version of Takeda’s diabetes medicine in the U.S to be sold under the brand Actos. The co. would have a 180 marketing license with Mylan and Teva. (Economic Times)

Reliance Capital – Co. sold a 26 percent stake in its asset management and mutual fund divisions to Nippon Life for INR 1450 cr. (Economic Times)

Union Bank – PSU bank is expected to obtain a loan of around INR 950 – 1000 cr from the Indian Government. (Economic Times)

BHEL – Co. plans to construct a manufacturing facility in Maharashtra, India for about INR 159 cr. The plant is expected to manufacture tubular products to the western region of India. (Business Standard)

GMR Infra – Co.’s shares lost 4 per cent in intraday trade, as a CAG report highlighted that the Civil Aviation Ministry violated bid conditions, benefiting co. led DIAL by INR 3,415cr. (Economic Times/PTI)

Airlines Co.’s – According to the data released by the civil aviation ministry, domestic air passenger traffic fell to 45.37 lac in July from 51.08 lac in June. January – July domestic passenger at 354.52 lacs from 348.47 lacs in the January – July 2011. On a standalone basis IndiGo had the largest market share of 27 per cent, Jet Airways at 19.4 per cent, Air India at 18.2 per cent, SpiceJet at 17.8 per cent, JetLite at 7.2 per cent, Go Air at 7 per cent and Kingfisher Airlines at 3.4 per cent. (IANS/Yahoo)

Sail – Co. plans to raise at least INR 2.5b in funds through issuance of 5 to 10 year bonds, baring a coupon of 9.25 per cent. (Economic Times/Reuters)

INDIAN EARNINGS

Kamdhenu Ispat – Co. reported 1Q12-13 net profit at INR 95.24 lacs from INR 85 lacs in 1Q11-12. Turnover at INR 133.42cr from previous INR 113.29cr. (The Hindu Business Line)

EUROPE

According to the president of German BdB banking association, the ECB should supervise all banks across the euro zone. In related news German news paper Handelblatt reported that the ECB is to supervise all euro zones’ major banks, citing people familiar with the matter at the European Commission. (Fox Business)

According to a Spanish government spokeswoman, Spain to soon request for the first payment from the EUR 100b emergency eurozone line agreed in June. (Economic Times/AFP)

GSK – Co.’s clinical trial for its asthma drug ‘mepolizumab’ cut asthma attacks to nearly half, in people with severe asthma. (The Telegraph UK)

Qatar’s sovereign wealth fund is to purchase a 20 percent stake in BAA for GBP 900 m from Spanish infra co. Ferrovial. (Financial Times)

Aviva – Insurance co. has been approached by several US based PE firms as well as Guggenheim Partners, which have expressed interest in acquiring U.S unit of the firm. S&P also downgraded Aviva to its lowest level since 2001 on risks and costs to the co. The co. came down one notch to A -. (Financial Times)

NORTH AMERICA

The Thomson Reuters/University of Michigan Consumer confidence index rose to 73.6 in August vs 72.3 in July vs expectations of 72.2, suggesting that household spending could rise in the coming quarter. Rising payrolls, increasing retail sales show that consumers have gradually increased spending to set the tone for the third quarter. (Bloomberg)

The Conference Board’s measure of economic outlook for the next three to six months rose 0.4 percent in July vs a revised -0.4 percent in June. Factors such as an improving housing market and lower hirings contributed to the data. There is optimism that the consumer spending activity would increase along the coming few months. (Bloomberg)

 

 

 

 

 

EQUITY UPDATE – 10 AUGUST 2012

ASIA

China’s Industrial output for July rose slower than expected by 9.2 percent to near three year lows, adding to concerns that the country is slowing in its recovery process. Inflation in the county declined for the fourth consecutive month in July to 1.8 percent vs 2.2 percent a year ago. On a m/m basis, inflation rose 0.1 percent vs -0.6 percent previously. (Bloomberg)

The Bank of Japan kept benchmark interest rates unchanged at 0.10 percent, in line with expectations. The bank stopped short of lowering its monetary policies and kept its asset purchasing fund at JPY 45 t (USD 573 b) and the lending fund at JPY 25 t. Stimulus measures would only come into force if the yen appreciated significantly against the US dollar. (Bloomberg)

South Korean central bank The Bank of Korea (BoK) kept its benchmark seven day repo rates unchanged at 3.00 percent which was unanimously taken by the members. The central bank would give more focus to propping up domestic demand. (Reuters)

Sale of passenger vehicles in China for July rose slower than forecast on a m/m basis on slowing demand and buyers postponing purchases on expectations of stimulus measures from the government. Deliveries of vehicles incl. multipurpose and utility vehicles rose 11 percent to 1.12 m units vs expectations of 1.16 m units. Sale of mini-commercial vehicles saw the biggest decline which could impact logistic operations in the country. Sale of vehicles incl. trucks and buses rose to 1.38 m units, a 8 percent m/m rise. Customers who held back on purchase are due to expectations of various subsidies and other incentives to be offered by the government. (Bloomberg)

INDIA

The Reserve Bank of India has transferred surplus profit of INR 16,010cr in 1Q12-13 (vs. previous INR 15,009cr) to the government of India. (The Hindu Business Line)

Fitch has downgraded India’s 2H12 outlook on the retail sector to negative. The rating agency cited sustained deterioration in discretionary spending ability and its unlikely recovery in the short term. Fitch revised FY13 and FY14 real GDP forecast to 6.5 per cent and 7 per cent from the earlier 7.5 per cent and 8 per cent respectively. (The Hindu Business Line)

Reliance Industries – Co. has slashed its natural gas reserves in its KG-D6 gas field by 70 per cent to 3.10tr cubic feet due to unforeseen geological surprises. (Business Standard/PTI)

Infosys – IT firm secured a USD 700 cr deal with India’s Department of Post for provision of core banking and insurance services across various post offices in India. It will also assist in installing ATM’s in these post offices. (Economic Times)

JSW Steel – Co. and other steel co. that depend on iron ore from Karnataka could face closure due to severe shortage of iron ore, if mining did not resume in the state. The state’s steel industry, whose 21m ton output accounts for 25 per cent of the national production, is operating with just a 45-day supply of iron ore. According to JSW Steel’s management it would be difficult to operate its plants if mining operations didn’t resume. JSW Steel has purchased about 14m ton of iron ore sold at the e-auctions. (Business Standard)

Sail – Co. to outsource the development of its two virgin iron ore mines in Chatisgarh and Jharkand. The mines will have a capacity of 14m tons per annum and 15m tons per annum respectively. (Business Standard/PTI)

INDIAN EARNING

HPCL – Co. reported 1Q12-13 net loss at INR 9,248 cr.vs previous INR 3,080 cr. Net Sales of the co. rose to INR 44,076.5 cr. vs INR 40,795 cr on a YoY basis. (Moneycontrol)

Tech Mahindra – Co. reported 1Q12-13 consolidated Profit After Tax (PAT) at INR 338 cr vs estimated INR 310.73 cr. Sales for the firm increased by 8.7 percent  on a QoQ basis and 19 percent on a YoY basis to INR 1,543cr vs estimated INR 1,539 cr. EBITDA margins increased by 38.66 percent on a q/q basis to INR 330 cr vs estimated INR 295 cr. (Moneycontrol)

Jindal Stainless – Co. reported 1Q12-13 net loss at INR 231.41cr vs. previous 1Q11-12 net profit at INR 85.79cr. Net sales at INR 2,206.69cr vs. previous INR 1,976.93cr. (MoneyControl)

GE Shipping – Co. reported 1Q12-13 net profit at INR 181cr vs. previous INR 162.59cr. Income from operations at INR 802.42cr vs. previous INR 680.53cr. (MoneyControl)

Eicher Motors – Co. reported 2Q12 net profit at INR 75.96cr vs. previous INR 76.31cr. Income from operations at INR 1573.05cr vs. previous INR 1,268.75cr. (MoneyControl)

EUROPE

According to the ECB governing council member Christian Noyer, ECB was ready to intervene in secondary bond markets very soon, to bring down the excessive borrowing costs of Spain and Italy. (Reuters)

U.K Trade Deficit for 2Q12 ended June increased to GBP 28.3 b vs GBP 25 b in the previous quarter on lower exports. The ongoing euro crisis saw lower demand for Britain’s goods which declined 4.9 percent on a q/q basis while imports also lowered by 0.5 percent. The trade deficit for June came in higher than expected at GBP 10.119 b vs a deficit of GBP 8.364 b previously vs estimates of a deficit of GBP 8.73 b. Exports to Germany declined by GBP 525 m, while Netherlands trade declined the most to GBP 819 m. Exports for June declined 8.4 percent over May and imports fell 1.2 percent for the same period. (Bloomberg)

NORTH AMERICA

According to estimates, the trade deficit in the U.S for June narrowed to USD 47.5 b vs USD 48.7 b in May on lower oil prices reducing the country’s imports. The lower oil prices are attributed to low demand emanating from the global crisis. (Bloomberg)

U.S Non farm productivity rose 1.6 percent on an annualized basis for the 2Q12 period vs exp advance of 1.3 percent vs prv rise of 0.7 percent. Co.’s and businesses expanded their operations but still saw hourly work rate output rise by just 0.4 percent. (Bloomberg)

U.S Initial Jobless claims for unemployment benefits declined by 6000 applications to a seasonally adjusted number of 361,000 for week ended 3 August. Expectations came at 370,000 and prv period’s claims were revised to 367,000 applicants. The four-week moving average for fresh claims rose by 2250 applicants to 368,250. Nonfarm payrolls rose by 163,000 in July, but the unemployment rate rose to touch 8.3 percent. (Reuters)

Moody’s downgrades of US municipal bonds issuers hit a 10 year quarterly high in 2Q12. The rating agency cited stressed budgets and weaker liquidity. (Reuters)

Google Inc – Co. is to pay Apple Inc a total of USD 22.5 m in settlement charges for bypassing the privacy settings of customers who used Apple’s safari web browser. (Reuters)

Research in Motion – A US judge has overturned the USD 147.2m for patent infringement in favors of co. (Boston.com/AP)

COMMODITIES

OPEC forecasted FY 2012 oil demand at 88.72m barrels per day vs. previous estimate of 88.68 barrels per day in July. FY 12 demand forecasted at 89.52mbpd vs. previous estimate of 89.50mbpd in July. (MoneyControl)

EQUITY UPDATE – 7 AUGUST 2012

ASIA

China Vanke Co. – Property developer reported 1HY12 profit to RMB 3.73 b (USD 585 m) vs RMB 2.98 b a year ago. EPS came in at RMB 0.34 a share vs RMB 0.27 a share a year ago. Revenues rose 54 percent to RMB 30.72 b as co. cut its property prices by 10.6 percent on average to increase sales in a market under strict government regulations. (Bloomberg)

Taiwan Semiconductor Manufacturing Co. – Co. will infuse EUR 1.11 b (USD 1.4 b) in ASML Holding NV for a 5 percent stake to develop technology in lithography. TSMC would join Intel Inc which has already acquired a stake in the co through a USD 4.1 b investment. (Bloomberg)

According to a report by UBS AG, China’s stock index is expected to rise 20 percent by the end of FY12. The firm also expects another rate cut by the central bank to stimulate the economy. (Bloomberg)

HTC Corp – Taiwan based smartphone manufacturer saw its stock price decline almost 7 percent to NTD (New Taiwan Dollar) 258.50 as it forecasted lower than expected revenues for the 3Q12 period. Estimates came in at NTD 70 – 80 b vs expectations of NTD 87 b. The co.’s One Series is expected to face stiffer competition from Samsung’s Galaxy phone which could be one of the reasons for the lower estimate. (Reuters)

INDIA

According to Fitch, the outlook on the Indian real estate sector will continue to be negative in second half of 2012. The rating agency cited the persistence of sluggish demand, high construction costs and liquidity pressures. High property prices and elevated inflation to keep demand sluggish. Further to this Fitch said that, real estate companies will continue to face margin compression from high construction costs for building materials and labour. (Financial Express)

The rating agency Fitch, downgraded its outlook on the Indian retail sector to ‘negative’ from ‘stable’. Fitch cited sustained deterioration in discretionary spending, which was unlikely to improve over the short-term. In addition to this, the funding requirement of most retailers were likely to increase, due to store expansions and possibly higher inventory-holding periods. Also private final consumption expenditure was the weakest in last seven years. (Business Standard/PTI)

FII’s made gross purchases of INR 1,738.14cr and made gross sales of INR 1,182.41cr. DII’s made gross purchases of INR 876.85cr and gross sales totalling INR 881.08cr. (Business Standard)

According to Bank of America Merrill Lynch, the worst was not over for rupee, as it stuck to it September end forecast of USD /INR at 57. The bank believed global risk flows and uncertainty over reforms will keep confidence fragile. (Yahoo/Reuters)

ICICI – ICICI ventures to sell its property in central Mumbai, according to sources. The deal is expected to fetch around INR 180cr. (MoneyControl/CNBC-TV18)

SAIL – A consortium of firms led by SAIL plan to make an investment of USD 75 m in the Hajigak iron ore mines in Afghanistan. (Economic Times)

INDIAN EARNINGS

DLF – Co. reported 1Q12-13 net profit at INR 292.79cr vs. previous 1Q11-12 net profit at INR 358.36cr. Consolidated income from operations at INR 2,197.71cr vs. previous INR 2,445.82cr. (Financial Express)

Essar Shipping – Co. reported 1Q12-13 net profit at INR 53.90cr vs. previous 1Q11-12 net profit at INR 18.83cr. Revenue at INR 925.18cr vs. previous INR 670.31cr. (Financial Express)

EIH – Co. reported 1Q12-13 net profit at INR 9.45cr vs. previous INR 15.45cr. Total income from operations at INR 241.55cr vs. previous INR 231.37cr. (Business Standard/PTI)

Uttam Galva – Co. reported 1Q12-13 net profit at INR 10.24cr vs. previous net profit at INR 9.10cr. Net sales at INR 2,057.72cr vs. previous INR 1,533.21cr. (Business Standard/PTI)

Cadila Healthcare – Co. reported 1Q12-13 net profit at INR 194.79cr vs. previous 1Q11-12 net profit at INR 229.82cr. Net sales from operations at INR 1,516.10cr vs. previous INR 1,173.51cr. (Financial Express)

Wockhardt – Co. reported 1Q12-13 net profit at INR 377.97cr vs. previous INR 193.96cr. Consolidated net sales at INR 1,425.82cr vs. previous INR 1,053.21cr. (Economic Times/PTI)

Britannia Industries – Co. reported 1Q12-13 net profit at INR 43.45cr vs. previous INR 41.80cr. Net Sales at INR 1,221.62cr vs. previous INR 1,102.97cr. (Financial Express)

EUROPE

The standoff between the ECB and the European Union over the provision of a bailout package to Italy and Spain could see a breakup of the eurozone, said Italian PM Mario Monti. The leaders of Spain and Italy will await the ECB’s plan of action on government bond purchases as they fear that a request for a full fledged bailout package could mean imposition of ECB’s strict conditions and austerity measures. (Bloomberg)

Greece and the troika of the European Commission, ECB and IMF have reached an agreement on the need for stronger policies to stabilize the economy. The discussions follow two weeks of talks to determine whether the nation would continue to receive international funding worth EUR 240 b from the rescue funds designed for the crisis. The country would have to reduce its budget for 2013 and 2014 by EUR 11.5 b in order to receive international aid. (Bloomberg)

Siemens AG – Co. won a INR 1988 cr supply contract from India-based miner NMDC. The project, which involves the construction of a steel plant in Chattisgarh, India, is expected to be completed by HY2015. (Economic Times)

Standard Chartered plc – Co. could have its U.S unit suspended over allegations that it conducted over USD 250 b worth of transactions with Iranian entities which violated money laundering laws. The imposition of sanctions on Iran saw most banks curtail or stop its funding or lending activities to Iran. (Bloomberg)

NORTH AMERICA

According to Federal Reserve Chairman Ben Bernanke, broader economic data, which may point to a recovery in the U.S, the economy could still witness subdued consumer spending and business activity. He stated that the financial conditions in the country had still not improved as individuals and businesses continue to witness lower demand. (Reuters)

Lending by banks in the U.S rose to its highest since June 2009 to USD 7.1 t for week ended 25 July 2012. New auto loan issuance saw a 56 percent rise to USD 134 b for the Jan-Apr period on a y/y basis over 2009. Easier regulations to access credit for buyers of automobiles could have contributed to the higher lending data amongst other reasons. (Bloomberg)

Best Buy Co. – Co.’s founder Richard Schulze has offered to purchase the co. at USD 24 – 26 a share valuing the deal at around USD 8.5 b. Schulze could finance the deal with USD 1 b in equity contribution from the stake sale in which he owns 20 percent. The rest of the funding would be through PE firms. (Bloomberg)

Knight Capital Group – Electronic trading firm received funding worth USD 400 m in cash through sale of convertible securities. The sale of these instruments is due to make do for the huge losses it suffered due to software errors during a trading session on 1 August 2012. (Bloomberg)

DAILY MARKET REPORT – 03 AUGUST 2012

The Indian markets recovered from the session lows, as a slew of better than expected European data help lift market sentiments. Sensex 30 index closed 26.43 points down at 17197.93 (-0.15%), while the Nifty 50 closed down 12.05 points at 5215.70 (-0.23%). The markets dipped lower in the morning session, as the ECB dashed hopes of any immediate action with regards to easing the Spanish and Italian borrowing costs. The Sensex 30 index reached an intra-day high of 17,342.88 and low of 17,182.29. While Nifty 50 reached a high of 5219.55 and a low of 5166.90. On the currency front rupee hovered around INR 55.45 to the Dollar.

· Germany: Markit Service PMI for July at 50.3 vs. est. 49.7 vs. prev. 49.9.

· Eurozone: Markit Service PMI for July at 47.9 vs. est. 47.6 vs. prev. 47.1.

· Eurozone: Markit PMI Composite for July at 46.5 vs. est. 46.4 vs. prev. 46.4.

· Eurozone: Retail Sales on M/M basis for June at 0.1% vs. est. 0.0% vs. prev. 0.8%.

· Eurozone: Retail Sales on Y/Y basis for June at -1.2% vs. est. -1.4% vs. prev. -0.8%.

On the domestic front, an economic survey showed that, Indian economy is likely to grow by 6 to 6.2 percent in the current fiscal versus a previous of 6.5 per cent in 2011-12.

In the individual stock corner, today’s top gainers included Asian Paints, Wipro, Dr. Reddys Labs, ONGC and Gail At the bottom end stocks included Sterlite Industries, Jindal Steel, Tata Steel, Hindalco, IDFC and ICICI Bank.

Commodities traded higher during the session with WTI at USD 88.22 up 1.25% and Brent trading at USD 106.55 up 0.61%. Later in the day, US Department of Labor is expected to release Nonfarm Payrolls data for July. The current expectation stand at 100K versus a previous 80K; Unemployment rate for July expected at 8.2 per cent versus previous 8.2 per cent.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Bloomberg ,Business Standard,FX Street)

DAILY MARKET REPORT – 2 AUGUST 2012

The markets ended lower in a range bound trading session on lack of any significant global economic data. As we covered earlier, investors would await the decision taken by ECB President Mario Draghi on benchmark interest rates. Yesterday, the U.S Fed left rates unchanged and with the Bank of England also sticking to not changing rates, it looks very much likely that the ECB could also follow suit. Will Draghi cut rates or not? Markets and investors are also waiting cautiously and hence the flat trading sessions today.

Coming back to the Indian markets, the Sensex closed at 17224.36 points, down 33.02 points or 0.19 percent on highs of 17246.01 and lows of 17157.28 points.

The Nifty closed at 5,227.75, down 12.75 points or 0.24 percent on highs of 5236.90 and lows of 5209.95 points in intraday trade today.

On the BSE, the Midcap Index gained 0.21 percent and the Smallcap Index rose 0.45 percent. The Oil & Gas Index was declined 1 percent, the Bankex fell 0.29 percent and Metal Index fell 0.28 percent. The Power Index rose 0.77 percent and the Capital Goods Index gained 0.64 percent.

On stock specifics, power giant NTPC rose 4 percent in trade after Coal India’s agreement this week to supply 80 percent of the coal needed to fuel new power projects eased concerns about supply of the key commodity. Tata Power gained 1.5 percent. Tata Motors declined 2 percent on lower sales numbers. NIIT Tech fell 6 percent to INR 280 as its promoters sold a 7.4 percent stake in the co. The rupee still hovers at 55.5 levels.

Summing up the session, the much touted Fed and BoE  decisions were non-events. All eyes on the ECB meet now.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Bloomberg and Business Standard)

MARKETS TRADE FLAT ON INACTION BY THE FED; ALL EYES ON ECB NOW

Markets in Asia and India are trading flat ahead of the ECB meet today where the ECB President Mario Draghi is expected to announce his intentions for propping up the slowing Eurozone. With rates at 0.75 percent, a 25 bps cut could send the markets higher but if rates are steady and nothing notable is announced in the policy meet, then there could be high chances of the markets trading flat or lower.

All eyes were on the U.S Federal Reserve’s Chairman Ben Bernanke yesterday for if he would announce a cut in the benchmark interest rates. Although he stated that the Fed could continue asset and bond buying activity, a rate cut did not happen. He stated that the slowdown in the economy was noticeable with a raft of disappointing data. This made Bernanke’s statement a total non-event.

UK would also be announcing its decision on benchmark interest rates today. Rates are at 0.50 percent and there could be news on asset purchasing. But all eyes will be focused more  on Draghi than the Bank of England, but no doubt , we view both these events are very important.

(RsquaredAnalytics)

EQUITY UPDATE: 1 AUGUST 2012

ASIA

China’s steel factories saw a 96 percent decline in profits for the 1HY12 period on economic slowdown lowering demand. The China Iron and Steel Association revealed that profits came in at RMB 2.39 b (GBP 376 m) on rising costs and lower demand. (Financial Times)

INDIA

FIIs saw net buying of INR 879.97 cr in trade today on a provisional basis with gross purchases of INR 2940.75 cr and gross sales of INR 2060.79 cr. DIIs became net sellers of INR 493.48 cr on gross purchases of INR 827.81 cr and gross sales of INR 1,321.29 cr. (Business Standard)

The Reserve Bank of India relaxed foreign exchange retention rules, by allowing corporate and exporters to keep entire foreign exchange earnings in respective currencies for a limited period versus a existing provision of 50 per cent conversion to Indian rupee. In other news, RBI lowered India’s growth forecast for the current financial year to 6.5 per cent versus previous estimate of 7.5 per cent. (MoneyControl/BBC)

Reliance Power – Co. is set to utilize USD 800 m as four international banks sanctioned its loan for its power project in Sasan, India. (Business Standard)

Maruti Suzuki – Rating agency ICRA will scrutinize around 14 auto parts suppliers to Maruti Suzuki India on account of the ongoings at the co.’s Manesar plant. Violence at its factory in Manesar has severely affected the co.’s production, thus affecting its suppliers. (Economic Times)

Tata Steel – Co. is stated to have lowered its operating capacity on account of power outages in the northern region of India. (Economic Times)

Bharti Airtel – Co. is exploring options of issuing new shares to raise funds, citing two people aware of the situation. (Business Standard/Reuters)

Tata Motors – Jaguar Land Rover is recalling 2,229 Freelander 2 SUV’s in China due to a potential perforation in power steering hose. (The Hindu Business Line)

Power Co.’s – According to the rating agency Fitch, the outlook on domestic power sector was stable, due to some progress in availability in fuel and a possibility of debt restructuring of SEBs. In related news Coal India agreed to supply at least 80 per cent of coal requirements for new power projects.  (Financial Express/Money Control)

INDIAN EARNINGS

IDBI Bank – Co. reported 1Q12-13 net profit at INR 427.34cr vs. previous INR 335.10cr in 1Q11-12. Total income at INR 6,786.81cr vs. previous 6,059.83cr. (The Hindu Business Line)

Cipla – Co.reported 1Q12-13 net profit at INR 400.76cr vs. previous 1Q11-12 net profit at INR 253.34cr. Net sales at INR 1,917.34cr vs. previous INR 1,550.33cr. (Financial Exprees)

Petronet LNG – Co. reported 1Q12-13 net profit at INR 270.85cr vs. previous INR 256.71cr. Turnover up 52 per cent to INR 7,030.41cr. (The Hindu Business Line/PTI)

Bhushan Steel – Co. reported 1Q12-13 net profit at INR 205.97cr vs. previous INR 209.96cr. Net sales at INR 2747.34cr vs. previous INR 2165.85cr. (Business Standard/PTI)

Titan Group – Co. reported 1Q12-13 net profit at INR 156.09cr vs. previous INR 143.51cr. Net income at INR 2,205.81cr vs. previous INR 2020.60cr. (Business Standard/PTI)

Karur Vysya Bank – Co. reported 1Q12-13 net profit at INR 145.95cr vs. previous INR 116.70cr. Total income at INR 1,109.81cr vs. previous INR 768.72cr. (Business Standard)

Jaiprakash Associates – Co. reported 1Q12-13 net profit at INR 138.84cr vs. previous net profit at INR 184.06cr. Net sales at INR 2,963.57cr vs. previous INR 2,902.30cr. (Business Standard/PTI)

EID Parry – Co. reported 1Q12-13 net profit at INR 22.47cr vs. previous net loss of INR 7.18cr. Total income at INR 578cr vs. previous INR 398.49cr. (Financial Express)

GTL – Co. reported 1Q12-13 net loss of INR 203.95cr vs. previous 1Q11-12 net profit of INR 12.93cr. Revenue at INR 615.98cr vs. previous INR 820.62cr. (The Hindu Business Line)

Man Industries – Co. reported 1Q12-13 net profit at INR 26cr vs. previous INR 24cr in 1Q11-12. Net Sales at INR 326cr vs. previous INR 466cr. (The Hindu Business Line)

Shoopers Stop – Co. reported 1Q12-13 net profit at INR 50 lac vs. previous INR 11.7cr. Gross retail revenue at INR 516.9cr vs. previous INR 448.5cr. (Business Standard/PTI)

Muthoot Capital Services – Co. reported 1Q12-13 net profit at INR 4.93cr vs. previous INR 2.35cr. Revenue at INR 22.17cr vs. previous INR 12.23cr. (Business Standard/PTI)

EUROPE

Italian PM Mario Monti, stated that the timely assistance from the ECB and the bailout funds could slowly help the country return to stability, ahead of his tour to Helsinki, Madrid and Paris this week. Italy is faced by rising government bond yields and surveys indicate that around more than half of the public believe that Monti would not be able to achieve the target of lowering the country’s fiscal deficit. (Financial Times)

ECB’s plans of staging a bailout program for troubled European economies, hit a resistance. As according to a Bundesbank source, most troubled European economies faced a fiscal problems and which should be addressed using fiscal instruments. (CNBC)

EU unemployment rate for the 17 country block rose to 11.2 percent or 17.8 m unemployed people in July vs. 10.2 percent in June 2011. Youth unemployment, the under-25 age group, rose to 22.4 percent. The results were affected mostly by Spain and Greece where the rates were 24.8 percent and 22.5 percent respectively. Germany, was more stable as the rate declined to 5.4 percent vs 5.5 percent previously. The data would weigh on the ECB meet this Thursday when it decides on its monetary policy and interest rates. (Financial Times)

Euro zone inflation for June was stubbornly stuck at 2.4 percent in July, similar for the last three months. The data, combined with the rising unemployment rates, could weigh in on the ECB meet this Thursday. (Financial Times)

Italian unemployment rate at 10.8 per cent in June versus 10.6 per cent in May. (Economic Times)

Moody’s lowered U.K’s GDP forecast to 0.4 percent for FY12 and 1.8 percent growth in FY13. However, the agency did not alter its AAA rating and its outlook on it. The agency stated that policies such as asset purchases, the government’s ability to reduce debt without hampering growth all prompted for the forecast. (Financial Times)

According to Fathom consulting, a Eurozone break-up could force UK into a deep recession, force governments to nationalise banks and trigger a GBP 1tr of QE. (Telegraph UK)

Deutsche Bank – Co. admitted that some of their staff was involved in LIBOR rate-rigging scandal. However an internal inquiry has cleared senior management. In other news, co. to cut 1,900 staff, mostly outside Germany, due to the European economic downturn. (BBC)

Tesco – Standard and Poor’s cut co.’s outlook to ‘negative’, warned on weakening profits. The rating agency has suggested that co. should sell off businesses. (Telegraph UK)

EUROPEAN EARNINGS

BBVA – Spanish bank saw its 2Q12 profit decline to EUR 505 m vs expectations of EUR 700 m. Profits declined 58 percent y/y on its property loan delinquencies. Net interest income rose 16 percent to EUR 3.74 b. The co. set aside EUR 1.43 b of the reqd. EUR 4.6 b to comply with Spanish regulatory laws. The bank’s Latin American division saw revenues rise to EUR 1.02 b vs EUR 774 m on stronger demand for loans and rise in deposits. (Financial Times)

British Petroleum plc – Co. saw its 2Q12 profits decline to USD 3.7 b vs USD 5.7 b a year ago, a 35 percent decline on lower production, higher writedowns on its shale gas unit and a tax charge in Russia. The numbers came in below estimates as lower crude oil and nat gas prices weighed on its earnings. The charges on its Deepwater rig oil spill could still weigh on profitability as it appeased shareholders with its strategy of delivering a 50 percent increase in cash flows by 2014. The co. was also affected by the sale of its Russian JV with TNK where income was lower by USD 700 m on a y/y basis. Lower output also hampered its operations. (Financial Times)

NORTH AMERICA

US consumer confidence for July at 65.9 versus estimated 61.5 versus previous 62.7 ; revised from 62. (FXStreet)

NORTH AMERICAN EARNINGS

Pfizer – Pharma co. saw its profits rise to USD 3.25 b, a 25 percent y/y rise on cost cutting vs USD 2.61 b previously. EPS came in at 43 cents vs 33 cents a year ago. EPS excl costs came in at 62 cents vs expectations of 54 cents. Overheads declined 17 percent with R&D expenses lowered by 24 percent. Revenues declined 9 percent to USD 15.1 b, declining 9 percent y/y on a 53 percent fall in the sale of Lipitor, its anti cholesterol drug, whose patent expired. The co. plans to sell its nutrition and animal health units to raise USD 3.0 b through 20 percent divestment to offset declining revenues of Lipitor. It reaffirmed its FY2012 earnings at USD 2.14 – 2.24 a share. (Financial Times)

 

 

DAILY MARKET REPORT – 31 JULY 2012

RBI kept rates unchanged and the choppy markets rose to end the day on a positive note. The markets were taken aback not by the decision to hold rates, rather the reasons given by the RBI for the decision. The central bank stated that inflation would rise to 7 percent from its previous number of 6.5 percent and that the GDP for FY12-13 would be lowered to 6.5 percent from 7.3 percent. Eurozone market stability before the ECB meet saw Indian markets rise before today’s close.

The Sensex closed 92.5 points (0.54%) higher at 17236.18 points, with highs of 17253.67 and a lows of 17004.09 in intraday trade today. The Nifty closed 27.2 points (0.52%) higher at 5227 points on highs of 5234.55 and a lows of 5154.05 points.

Among the sectoral indices on the BSE,  the Midcaps closed 0.71 percent higher and the Small Caps inched higher by 0.11 percent.  The Oil & Gas Index rose 1.89 percent, the Realty Index upped 1.24 percent, Healthcare Index advanced 0.85 percent. However, Bankex was down 0.21 per cent on account of RBI’s stance and the Power Index declined 0.21 percent.

Globally, Asia closed higher on hopes of a stimulus provision from Europe’s banks. Europe, too, followed on the same news as it is trading marginally higher.

Power outage in North India dominated news again which is why the BSE Power Index declined.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Business Standard and CNBC)

DAILY MARKET REPORT – 30 JULY 2012

Friday’s events also contributed to Monday’s sentiments. Positive data emanating from the US markets, their in-line GDP numbers had a positive impact. Greek ministers also agreed most of the austerity measures demanded by the creditors gave investors a reason to believe that efforts are on to stem the crisis in Europe. The ECB president Mario Draghi is expected to meet with the head of Bundesbank, Jens Weidmann over next couple of days, to discuss plans of joint rescue by ECB and European rescue funds, to purchase Spanish and Italian government bonds, according to persons familiar.

All eyes await the interest rate decision tomorrow by the RBI. Meanwhile, global cues combined with ECB’s plan to stabilize the region through bond purchases, rallied the markets to close higher. For the RBI event, participants do expect a cut in rates while some state that rates would not be changed. Hence, it remains to be seen how the market would take to the news over the week. Although the cut would boost banking stocks, macro-issues would take center stage (Europe and Europe as of now.)

The Sensex closed 304 points higher at 17143 points or 1.81 percent higher. The Sensex touched a high of 17163.95 and a low of 16919.14 points in intraday trade today. The Nifty closed 99.95 points, falling short of 5200, closing at 5199.80 points. The Nifty touched a high of 5206.60 and a low of 5129.75 points in trade today. Globally, Asia closed higher on the backdrop of the FOMC meet and ECB’s proposed stimulus package. Europe meanwhile, opened higher on expectation that the ECB would undertake some sort of action to provide stimulus to the Eurozone.

On the sectoral indices on the BSE, the Midcap Index rose 1.56 percent and the Smallcap Index gained 1.34 percent. The Power Index gained 3.48 percent, the Realty Index rose 3.24 percent, the Capital Goods Index inched 2.92 percent higher and the Bankex advanced 2.52 percent. The rate cut could prompt a rise in the Bankex tomorrow as well.

On the individual stock front, we saw many PSU banks report their first quarter numbers. Airline stocks rose on SpiceJet’s better than expected numbers. On the earnings, Havells India Ltd, Syndicate Bank, Corporation Bank, Muthoot Finance Ltd, Allahabad Bank, Oriental Bank of Commerce, Bank of Baroda reported their numbers today.

Globally, Spain saw its 2Q12 GDP data come out lower, affirming a continuity in recession in the region. Italy saw its short-term bond yields decline while longer term debt fell just short of 6 percent. HSBC Holdings plc reported better than expected numbers but kept aside USD 2 b to counter contingent liabilities.

On the currency front, the rupee closed at 55.23 to the Dollar, down 29 paise.

Kindly check the Market Summary tab for further information on stock-related data.

(Economic Times, Business Standard and CNBC)