JULY INFLATION AT 6.87% vs exp 7.25%

Inflation for the month of July came in at 6.87 percent vs exp. number at 7.25 percent.

The other components of the data came in as follows:

  • Inflation for Manufactured Products came in at 5.58 percent vs prv 5 percent on a MoM basis.
  • Primary Articles Inflation came in at 10.39 percent vs prv month’s number of 10.46 percent.
  • Fuel Inflation almost halved at 5.98 percent vs 10.27 percent in June.
  • Fuel Group Index (GD)1.5% (MoM)
  • Food Articles Inflation At 10.06% Vs 10.81% (MoM))
  • Food Articles Index (RU)1.4% (MoM)
  • Non-food Articles Index (RU)2.9% (MoM)
  • May WPI Inflation Unchanged At 7.55% (Prov)

(Moneycontrol and CNBC TV 18)

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)

RBI KEEPS RATES UNCHANGED

India’s central bank The Reserve Bank of India (RBI)  interest rates at unchanged at 8 percent (Repo rate) citing rising inflation. SLR rate cut to 23 percent from 24 percent.

Bond yields on the 8.15% bond due 2022 is at 8.182 percent.

Bank Nifty down 111 points while Nifty down 15 points.  (CNBC TV 18)

RBI TO KEEP REPO RATE UNCHANGED: REUTERS

According to a poll conducted by Reuters, participants expect the Reserve Bank of India to keep its repo rate unchanged at 8 percent when it meets tomorrow. The RBI is of the premise that unless the government reduces its fiscal deficit, a rate cut in the benchmark rates will not be of much effect in the near period. Lack of supply side solutions to tackling food supply could result in higher inflation. Lack of adequate monsoons would also contribute to the rise in inflation.

(Reuters)

25 BPS RATE CUT EXPECTED BY RBI TOMORROW: BOA-ML

Bank of America Merrill Lynch India – Co. stated that it expects a 25 basis point or 0.25 percent cut in benchmark rates at the RBI policy meet tomorrow. Thereafter, the RBI would hang onto rates until December 2012 and cut rates by another 75 basis points in March 2013.

The investment bank expects GDP growth to be below RBI’s target of 7.3 percent on account of the effect of a suboptimal monsoon. Core Inflation, which is expected to hover around 5 percent, while main inflation could rise to 8 – 9 percent on account of higher food prices and diesel prices. (Moneycontrol)

DAILY MARKET REPORT – 16 JULY 2012

Well, inflation numbers came in today, and it came in lower than expected. Markets, which were volatile in trade, were affected by the news of a lower than expected monsoon season, which potentially could have an impact on the economy of India. The Meteorological Department announced that rains would miss its forecast in July and would be lower in September. IT stocks also disappointed in trade today.

On the global scenario, markets ended flat but China declined on earnings worries. Europe has also traded flat in trade today as not much in terms of events happened.

Markets ended near their day lows today. The Sensex closed 110.39 points or 0.64 percent lower at 17103.31 points today. Sensex touched a high of 5246.85 and a low of 5190.45 in trade today. The Nifty index closed lower by 30 points, below the 5200 mark at 5197.25 points which is near its 20-day moving average. Nifty touched a high of 17282.30 and a low of 17079.63 in intraday trade.

Amongst the sectoral indices on the BSE, the IT Index was continued to decline by2.56 percent, the Metal Index declined 2.09 percent, the Realty Index  and Power Index declined 1.86 percent  and 1 percent respectively.

On the individual stock front, Bank of America Merrill Lynch panned Reliance Industries by stating that the firm could see reduced output by 24 percent for its 2Q12 results as the GRM from its Singapore operations touched USD 5.5 a barrel, a 19 month low. Kingfisher Airlines declined 5 percent to INR 9.85 a share, below its face value of INR 10 on news of the co.’s employees going on a strike for nonpayment of dues. Lupin gained 4 percent to INR 574 a share. United Phosphorous acquired a Netherlands based firm Agrichem. Tata Motors saw a 6 percent rise in vehicle sales on a y/y basis.

Commodities traded mixed during the session with WTI at USD 86.69 down 0.47% and Brent trading at USD 102.42 down 0.02%. In Geopolitical news Saudi Arabia and United Arab Emirates have opened a new pipeline bypassing the Strait of Hormuz. The new pipeline bypassing the strait to carry 6.5m barrels of oil accounting for 40 per cent of the oil that passes through the Strait of Hormuz.  Brent trading at USD 102.42 up 0.02%

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

(Bloomberg, Business Standard, Economic Times and Moneycontrol)

EURO INFLATION UNCHANGED AT 2.4% IN JUNE

Eurozone Core Consumer Price Inflation data came in unchanged at 1.6 percent on a y/y basis.

On a m/m basis, inflation stayed at 2.4 percent for June, unchanged over May’s rate, which came in line with expectations.

Imports in the Euro region declined 0.9 percent on a seasonally adjusted basis over April and exports rose 0.3 percent in May. (Bloomberg)

WEEKEND EQUITY UPDATE – 14 JULY 2012 TO 15 JULY 2012

ASIA

According to Chinese Premier Wen Jiabao the current economic growth remained in the expected target range set earlier this year and saw the effectiveness of the stabilization policies. However he added that the economy had not formed a stable recovery and economic difficulties may continue for some time. He stated that the government will do its utmost to generate employment and support industries through tax breaks and capital provision which face a slowdown in exports. China currently faced slower GDP expansion and its woes were compounded with a slowdown in China’s traditional markets such as US and Europe.  (Economic Times/AP)

China plans to reduce taxes on the profits of overseas co.’s operating in China by upto 50 percent to encourage more investment into the country. The government would also include dividends paid by Chinese Co.’s to overseas shareholders. (Financial Times)

INDIA

The cumulative market capitalization of top five co.’s in the Sensex declined by INR 26,287 cr for week ended 13 July on earnings and other economic data. Infosys, which came out with dismal numbers, led the decline by INR 12,406 cr. Bharti Airtel, SBI, Reliance Industries and NTPC also saw their market values decline. TCS, ONGC, Coal Indian, HDFC Bank and ITC saw gains in their market share for the similar period. (Economic Times)

According to ICICI Securities June inflation is likely to be at 7.82 per cent versus 7.55 per cent in May, a unlikely scenario for a rate cut. (Economic Times/PTI)

Mining/Metals co.’s – Indian governments signs a bilateral security co-operation agreement with Mozambique as part of the effort to strengthen ties. (Economic Times/PTI)

According to the Indian Meteorological Department, the impact of a lower than expected monsoon could have a maximum impact of 0.25 percent on the country’s GDP.  (Business Standard)

ONGC – Co. is looking to invite bidders for sale of gas from its Gamij field in Gujarat, India through an e-bidding process. The oil field has an average output of 15,000 standard cubic meters per day (SCMD) on the basis of availability for a five year period. ONGC expects the field to generate revenues of INR 5.5 cr on an annual basis. (Economic Times)

Nalco – Co. is in talks to acquire an Indonesia-based firm Ashan Aluminum for around INR 8000 cr. Nalco primarily would gain from Ashan’s plant which has a capacity of 2.1 lakh tonnes. Ashan, which is owned by a Japanese consortium, would see its operating license expire at the end of 2013, which is portion Nalco would acquire. The rest of the stake in the co. is held by the Indonesian government. (Economic Times)

DLF – Co. plans to reduce its INR 23,000cr debt to INR 17,000cr at the end of the fiscal by the sale of non-core assets. (The Hindu Business Line)

SAIL/Coal India/RINL/NMDC/NTPC – ICVL is on a lookout to acquire coal mines in Australia and New Zealand as coking coal prices drop and valuation become favourable, according to management. (Business Standard/PTI)

Reliance Communications – Co. was downgraded by ICRA from ‘stable’ to ‘negative’, citing elevated levels of debt at INR 37,000cr at the end of last year. (The Hindu Business Line)

Essar Oil – Co. to invest INR 2000cr at its coal-bed methane facility in Ranigunj; West Bengal. (Business Standard)

Kingfisher Airlines – A sections of co.’s pilot are contemplating to drag the management to the labout court, according to sources. (Economic Times/PTI)

EUROPE

The German Chancellor Angela Merkel on Sunday said that she was confident that a majority of German lawmakers would back the Spanish banking aid pack of up to EUR 100b. In regards to Greece chancellor said that she would wait for the report from ‘troika’ before deciding on further steps. As Greece is seeking to renegotiate the terms of its EUR 130b rescue fund. (Reuters)

Italian Finance Minister Vittorio Grilli stated that Italy plans to reduce its public debt by 20 percent until FY2018. The nation would plan to sell public assets for about EUR 20 b (USD 24.5 b) on an annual basis for the next five years. The minister also stated that GDP would contract less than 2 percent in FY2012 vs the government’s forecast of a decline of 1.2 percent. (Bloomberg)

According to a official documents Spanish government will slash EUR 56.4b from the public deficit in the next two and a half years. The remaining EUR 8.6b shortfall will be filled by new tax measures. (FirstPost/Reuters)

GlaxoSmithKline – Co. in talks with Human Genome Sciences to acquire it for around USD 2.6b, according to sources. (Economic Times/Reuters)

BHP Billiton – Co. to put up its iron ore project in Guinea for sale, as the co. looks to dispose off non-core assets as global demand for commodities flattens. (Reuters)

Deutsche Bank – Co. has approached the ECB and Swiss authorities in order to co-operate in the Libor fixing investigation in return of leniency. (Fox Business – Dow Jones Newswires)

British Petroleum – Co. nears a USD 15b settlement deal over the Gulf oil spill. (Fox Business – Dow Jones Newswires)

NORTH AMERICA

US Retail Sales are projected to have increased by 0.2 percent in June vs -0.2 percent in May following a pickup in demand for automobiles offsetting expenditure on other goods. Median forecasts show optimism in spending by consumers increased with data to be released today. (Bloomberg)

Research in Motion – Co. has been ordered by Canadian jury to pay USD 147.2m in damages for patent infringement.  (The Financial Express)

Facebook – According to analysts co. is expected to post a net loss of USD 350.6m versus USD 137m profit in 1Q12. Co. reports its earnings on Thursday. (The Financial Express)

GLOBAL

According to a report by NPD Display Search, a research firm, shipments of LCD televisions over the globe would rise at a slower pace as compared to the previous year. Shipments are forecast to fall 1.4 percent for the 2012 period to 245 m units. Lower discretionary spending by consumers in Europe and Asia, including India, contributed to the lower shipments. Prices of LCD’s would also decline 4 percent in 2012 vs 6 percent in 2011. (Economic Times)

DAILY MARKET REPORT – 13 JULY 2012

The week ends with the markets closing flat in a listless session of trade on the back of flatter global cues. HDFC Bank‘s 1Q12 numbers rose 30 percent, but were in line with expectations, hence, it didn’t have much of an effect. LIC provided a small boost to the investors as the insurance giant on news that it would infuse a total of INR 60,000 cr in Indian equities. It should be noted that the firm previously bailed out ONGC as part of the government’s divestment programme.

The Sensex closed 18.85 points or 0.11 percent lower at 17213.70 points. Sensex touched an intraday high of 17342.88 and a low of 17182.29 in trade today. The Nifty closed 8 points lower at 5227.25 points after touching highs of 5267.15 and a low of 5216.85 points today.

On the news from the global cues, Asia closed marginally higher on China’s GDP data, which failed to give a direction to the markets. Europe, however, opened higher in trade.

Economy:

  • There also was some GDP action today with Singapore also giving out 2Q12 numbers.
  • Bond auctions in Italy saw yields decline over previous auction’s data as the investors ignored Moody’s rate cut on the country.
  • India’s trade deficit for June narrowed, on data released by the Commerce Secretary.

On the sectoral indices for the BSE index, the Midcap Index closed 0.23 percent lower; SmallCap Index declined 0.12 percent, Realty Index was down 1.58 percent, the Metal Index was lower by 1.24 percent, the Power Index slipped 0.7 percent and the IT Index was down 0.49 percent.

On the individual stock front, HDFC Bank came up with its 1Q12 numbers. R Software rose 16 percent to INR 98.15 a share on its consolidated profit rising almost twice to INR 9.58 cr for its 1Q12 results. IT Firm IGate also rose in trade as it reported a 217.5 percent rise in 1Q12 profit which came in at USD 12.7 m.

There was some news on the FII front as well. FII’s reduced their stake in ICICI Bank and Axis Bank while stake in HDFC Ltd and HDFC Bank. FII’s also divested some of their stake in Yes Bank, Indus Ind Bank and Union bank of India during the quarter.

On the currency front, the rupee closed near the 56 levels at 55.93, up 0.41 points. Commodities traded higher during the session with WTI at USD 87.18 up 1.28% and Brent trading at USD 102.06 up 0.98%.

Things to watch out for:

Inflation data (that scheduled for July 16), which will decide the Reserve Bank of India’s move on July 31 (a day of first quarter monetary policy review).

Analysts on average expect June inflation in the range of 7.5%-7.8% as against 7.55% in previous month and core inflation around 4.9%-5.5% versus 4.8% in May. Therefore they feel the RBI may not consider rate cut.

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

(Bloomberg, Business Standard, Economic Times and Moneycontrol)