The time has come for the BPO and ITeS industry to increase its presence in tier-II and tier-III locations as the industry is poised to reach a size of $225 billion in 2020. The industry expects 40% growth from tier-II and tier-III cities, said Som Mittal, president, Nasscom at a media briefing during the Nasscom HR summit.
"Last year we have conducted a granular study in association with AT Kearney in identifying the next 43 locations for IT-BPO penetration as the 60% of the BPO growth is happening only in the 7 major cities in the country. The growth of key infrastructure like airports and roads are welcome signs in such places," he said.
As the offshoring customers are now becoming location agnostic, the building of BPO and ITeS delivery centres in non-major cities would progress at a much higher pace, he added. Mittal released a study on the job potential of the BPO and ITeS industry and stated that by 2020 the industry would be employing about 10 million people directly that in turn would provide 20 million indirect jobs.
The contribution of IT-BPO industry to organised sector employment has jumped from 5% in 2000-01 to 15% in 2005-06 with 58% of the workforce hailing from tier II and tier III cities. Interestingly, 56% employees are chief bread winners. On gender inclusivity, 37% of the workforce are women with 26% of them found to be the chief wage earners.
Friday, July 30, 2010
Tuesday, July 27, 2010
The other India growth story: rising donations
It isn't only global manufacturers who are enthused about India's impressive growth story. The country's fast growing gross domestic product and the burgeoning middle class, with rising disposable incomes, has an unusual player excited - the global non-government, non-profit organisations, or NGOs, as they are popularly known.
"India's fast economic growth makes it an attractive market for fund-raising," says Samit Aich, Executive Director, Greenpeace India. "We are roping in more and more activists, fundraisers and donors to expand our presence here."
Like Greenpeace, many global NGOs, such as Oxfam, Save The Children, Care and ActionAid, have begun their fund-raising programme in India recently though many of these organisations have been present here for more than four to six decades. Most of these organisations did not even have an India office till recently and operated here as the offshoot of their global parent.
They have begun setting up offices in the past two years because Indian regulations do not allow entities not registered in India to raise funds locally. Save The Children, a leading global not-for-profit body working for underprivileged children, for instance, has had ties with India since 1920s. It was, however, in 2008 that it set up its India office and only in May this year that India was accorded the status of a "strong" member in its global alliance.
"A pre-requisite for being a strong member is to raise funds of a certain level and have a certain number of dedicated donors," says Thomas Chandy, CEO, Save The Children. Chandy, who has earlier worked with companies such as Coca-Cola, says he currently has 50,000 donors and "we are adding 6,000 more every month".
This, indeed, is getting reflected in the agency's income. While in 2009-10, the funds grew 46 per cent to Rs 60 crore against the previous year, this year, Chandy hopes the income to grow 50 per cent to Rs 90 crore. "Everybody wants to tap into the 'happy story' unfolding in India," says Chandy.
Greenpeace, the organisation fighting for the cause of environment and climate change, has more than 100,000 Indian donors, who contributed around Rs 12-13 crore to its funds last year, and Aich hopes the income to rise at least 25-30 per cent this year. "In the past three months or so, we have been generating around Rs 1 crore a month."
Citing another reason for the shift in approach towards India, Nisha Agarwal, CEO, Oxfam India, says: "After the global economic crisis, fund-raising in the developed world has slowed a bit. Organisations are looking for newer avenues. India, with its growing affluence and influence, makes a natural choice." Oxfam has been present in India since the 50s. The India office, however, was set up only in September 2008. It currently has 30,000 donors and had a budget of Rs 90 crore in 2009-10. According to Oxfam India, 10 per cent of this was raised in India and they hope that this kitty to grow further this year.
Humanitarian agency Care, on the other hand, has had a registered office in India since 1950. However, even Care, according to Communications Manager Amelia Andrews Daniels, began "resource mobilisation programme as recently as a week ago". "We will have figures on our India budget to share next year," she has said.
Some industry insiders, however, say Indians still like to donate for traditional causes and do not easily dish out money for efforts they cannot relate with. "Philanthropic giving in India is an old tradition. Indians have traditionally been donating to religious places and causes and to several social causes such as setting up hospitals or dispensaries or giving money to the poor. Even now, more than 95 per cent of philanthropic charities go to programmes focused on these issues. The only difference is raising such funds is becoming more organised now," says Ravi Singh, CEO, World Wildlife Fund India.
Indians, he adds, still do not easily give money for activities such as conservation of animals. "Of the Rs 18 crore budget we had last year, a very small amount was raised in India," Singh says.
"India's fast economic growth makes it an attractive market for fund-raising," says Samit Aich, Executive Director, Greenpeace India. "We are roping in more and more activists, fundraisers and donors to expand our presence here."
Like Greenpeace, many global NGOs, such as Oxfam, Save The Children, Care and ActionAid, have begun their fund-raising programme in India recently though many of these organisations have been present here for more than four to six decades. Most of these organisations did not even have an India office till recently and operated here as the offshoot of their global parent.
They have begun setting up offices in the past two years because Indian regulations do not allow entities not registered in India to raise funds locally. Save The Children, a leading global not-for-profit body working for underprivileged children, for instance, has had ties with India since 1920s. It was, however, in 2008 that it set up its India office and only in May this year that India was accorded the status of a "strong" member in its global alliance.
"A pre-requisite for being a strong member is to raise funds of a certain level and have a certain number of dedicated donors," says Thomas Chandy, CEO, Save The Children. Chandy, who has earlier worked with companies such as Coca-Cola, says he currently has 50,000 donors and "we are adding 6,000 more every month".
This, indeed, is getting reflected in the agency's income. While in 2009-10, the funds grew 46 per cent to Rs 60 crore against the previous year, this year, Chandy hopes the income to grow 50 per cent to Rs 90 crore. "Everybody wants to tap into the 'happy story' unfolding in India," says Chandy.
Greenpeace, the organisation fighting for the cause of environment and climate change, has more than 100,000 Indian donors, who contributed around Rs 12-13 crore to its funds last year, and Aich hopes the income to rise at least 25-30 per cent this year. "In the past three months or so, we have been generating around Rs 1 crore a month."
Citing another reason for the shift in approach towards India, Nisha Agarwal, CEO, Oxfam India, says: "After the global economic crisis, fund-raising in the developed world has slowed a bit. Organisations are looking for newer avenues. India, with its growing affluence and influence, makes a natural choice." Oxfam has been present in India since the 50s. The India office, however, was set up only in September 2008. It currently has 30,000 donors and had a budget of Rs 90 crore in 2009-10. According to Oxfam India, 10 per cent of this was raised in India and they hope that this kitty to grow further this year.
Humanitarian agency Care, on the other hand, has had a registered office in India since 1950. However, even Care, according to Communications Manager Amelia Andrews Daniels, began "resource mobilisation programme as recently as a week ago". "We will have figures on our India budget to share next year," she has said.
Some industry insiders, however, say Indians still like to donate for traditional causes and do not easily dish out money for efforts they cannot relate with. "Philanthropic giving in India is an old tradition. Indians have traditionally been donating to religious places and causes and to several social causes such as setting up hospitals or dispensaries or giving money to the poor. Even now, more than 95 per cent of philanthropic charities go to programmes focused on these issues. The only difference is raising such funds is becoming more organised now," says Ravi Singh, CEO, World Wildlife Fund India.
Indians, he adds, still do not easily give money for activities such as conservation of animals. "Of the Rs 18 crore budget we had last year, a very small amount was raised in India," Singh says.
Tuesday, July 13, 2010
Infosys Q1 net falls 2.6 pct, lags forecast
Infosys Technologies Ltd, India's No. 2 software services exporter, lagged market estimates with a surprise 2.6 percent drop in quarterly profit as the European debt crisis and salary increases took shine off improving U.S. demand.
The Nasdaq-listed firm announced today that net profit in its fiscal first quarter ended June 30 fell to 14.9 billion rupees ($318 million).
A Reuters poll of brokerages had forecast a profit of 15.56 billion rupees for Bangalore-headquartered Infosys, which counts Goldman Sachs, BT Group and BP among its main clients.
Infosys, larger rival Tata Consultancy Services and third-ranked Wipro have all stepped up hiring and raised salaries as demand for outsourcing grows in an improving global economy.
But a debt crisis in Europe, the second-largest market for Indian outsourcers after the United States, has clouded the demand outlook from the continent, while a weaker euro crimps margins for the export-driven companies.
Infosys shares, valued at about $35 billion, hit a record high yesterday and are up 11 percent this year, outpacing the 7 percent rise in the sector index
The Nasdaq-listed firm announced today that net profit in its fiscal first quarter ended June 30 fell to 14.9 billion rupees ($318 million).
A Reuters poll of brokerages had forecast a profit of 15.56 billion rupees for Bangalore-headquartered Infosys, which counts Goldman Sachs, BT Group and BP among its main clients.
Infosys, larger rival Tata Consultancy Services and third-ranked Wipro have all stepped up hiring and raised salaries as demand for outsourcing grows in an improving global economy.
But a debt crisis in Europe, the second-largest market for Indian outsourcers after the United States, has clouded the demand outlook from the continent, while a weaker euro crimps margins for the export-driven companies.
Infosys shares, valued at about $35 billion, hit a record high yesterday and are up 11 percent this year, outpacing the 7 percent rise in the sector index
Saturday, July 10, 2010
Economists see U.S. recovery weakening - survey
The U.S. economy will lose steam as the year progresses but will not slide back into recession, even though unemployment is unlikely to fall significantly, according to a survey released on today.
The Blue Chip Economic Indicators survey of private forecasters found analysts increasingly glum about the outlook. They now see the economy expanding just 3.1 percent in 2010, down from 3.3 percent in the June poll.
They do not, however, envisage a renewed period of contraction, which has been widely debated in financial markets in recent weeks.
"Our panellists think talk of a double-dip recession is overblown absent a new, major shock," the group said in its report.
Some analysts worry such a disruption might come from Europe, where concerns about high debt levels have made the banking sector jittery about lending.
The report's findings highlight the risks of a sputtering recovery amid lingering softness in housing, suggesting the unemployment rate will end the year at 9.4 percent, barely down from the current 9.5 percent rate.
"For a second straight month the number of panellists that lowered their forecasts of nominal GDP growth and inflation exceeded those that raised their forecasts by a significant margin," the report said.
"In the past, such a development has often suggested further erosion in consensus forecasts during subsequent survey."
Along with more moderate growth, inflation is expected to remain extremely tame. Forecasters are looking for a 0.9 percent increase in prices for 2010 as a whole, the smallest rise since 1950.
The Blue Chip Economic Indicators survey of private forecasters found analysts increasingly glum about the outlook. They now see the economy expanding just 3.1 percent in 2010, down from 3.3 percent in the June poll.
They do not, however, envisage a renewed period of contraction, which has been widely debated in financial markets in recent weeks.
"Our panellists think talk of a double-dip recession is overblown absent a new, major shock," the group said in its report.
Some analysts worry such a disruption might come from Europe, where concerns about high debt levels have made the banking sector jittery about lending.
The report's findings highlight the risks of a sputtering recovery amid lingering softness in housing, suggesting the unemployment rate will end the year at 9.4 percent, barely down from the current 9.5 percent rate.
"For a second straight month the number of panellists that lowered their forecasts of nominal GDP growth and inflation exceeded those that raised their forecasts by a significant margin," the report said.
"In the past, such a development has often suggested further erosion in consensus forecasts during subsequent survey."
Along with more moderate growth, inflation is expected to remain extremely tame. Forecasters are looking for a 0.9 percent increase in prices for 2010 as a whole, the smallest rise since 1950.
Monday, June 28, 2010
Gold hovers near record highs as economic fears persist
Courtesy Reuters
Gold was set for its third successive daily rise in international markets today, supported by uncertainty over the resilience of the global economic recovery and by resurfacing geopolitical tensions with Iran.
Gold prices flirted with sessions highs as the euro came under renewed pressure to fall to a 1-1/2 year low against sterling and eased against the dollar, while euro zone government bonds rose as investors were unsettled by a fall on Wall Street and persistent concern about Europe's debt crisis.
"Really the big driver is investor perception, investor risk appetite and do we see any nervousness over the European (debt) issue," said Societe Generale analyst David Wilson.
"Sentiment is still quite brittle, so we can get intraday moves in either direction, but the longer gold stays above $1,250 and consolidates, the more likely we are for a leg up rather than a leg down," he said.
Spot gold rose $7.80 to $1,261.35 an ounce by 1415 GMT, having hit an all-time high of $1,264.90 an ounce last Monday. U.S. gold futures for August delivery rose $5.50 cents to $1,261.30 an ounce.
Adding to the bullish backdrop for gold were comments from U.S. intelligence officials that Iran has enough fissile material for two atomic bombs.
Gold came under modest pressure earlier in the day from a rise in the dollar as its traditional inverse relation to the greenback briefly reestablished itself, while the broader markets were largely unperturbed by the weekend's meeting of G20 leaders in Toronto.
SAFE HAVEN SWEEP
But flagging equities and the broad decline in the euro reinvigorated the safe-haven sweep into both the U.S. currency and gold, prompting the two to move in tandem.
"The underlying safe-haven concerns that have supported prices -- the economic environment, Europe's fiscal outlook and the longer-term prospects for inflation, remain," said David Moore, commodities strategist at Commonwealth Bank of Australia.
"The G20 hasn't had a significant impact on markets, and while concerns about Iran's nuclear capacity are nothing new, there seems to be additional clarity."
With this in mind, gold could rise further to surpass the June 21 record at $1,264.90 per ounce to touch $1,270, as bullish momentum is strong, according to Reuters technical analyst Wang Tao.
He noted the bulls were taking control, with prices in an ascending channel from a $1,224.30 low struck last Wednesday and sharp rises and mild falls.
Gold was little moved by data that showed U.S. consumer spending rose more than expected in May, even as savings touched their highest in eight months, while a measure of inflation showed fairly muted core price pressures.
However, a continued contraction in physical demand from traditional end-users could undermine gold, at least in the short-term, analysts said.
The head of the Bombay Bullion Association said on today that gold imports into top consumer India are likely to have fallen by 75 percent in June from 29.9 tonnes a year ago. Suresh Hundia, president of BBA, told Reuters this bearish estimate could be overly optimistic and the final figures could be lower than this.
"The numbers are so bad, nobody wants to share it this time," he said referring to the importing banks and trading agencies, which contribute their data to the trade body.
While consumer demand has been dampened by gold prices near record highs, concern about the stability of the wider financial markets has fed demand for gold-related investment vehicles.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings remained unchanged at an all-time high at 1,316.177 tonnes.
Silver was up at $19.19 an ounce, from $19.04 late in New York on Friday, while in the platinum group metals complex, platinum rose 0.9 percent to $1,580.00 and palladium was up about 0.3 percent at $476.00.
Gold was set for its third successive daily rise in international markets today, supported by uncertainty over the resilience of the global economic recovery and by resurfacing geopolitical tensions with Iran.
Gold prices flirted with sessions highs as the euro came under renewed pressure to fall to a 1-1/2 year low against sterling and eased against the dollar, while euro zone government bonds rose as investors were unsettled by a fall on Wall Street and persistent concern about Europe's debt crisis.
"Really the big driver is investor perception, investor risk appetite and do we see any nervousness over the European (debt) issue," said Societe Generale analyst David Wilson.
"Sentiment is still quite brittle, so we can get intraday moves in either direction, but the longer gold stays above $1,250 and consolidates, the more likely we are for a leg up rather than a leg down," he said.
Spot gold rose $7.80 to $1,261.35 an ounce by 1415 GMT, having hit an all-time high of $1,264.90 an ounce last Monday. U.S. gold futures for August delivery rose $5.50 cents to $1,261.30 an ounce.
Adding to the bullish backdrop for gold were comments from U.S. intelligence officials that Iran has enough fissile material for two atomic bombs.
Gold came under modest pressure earlier in the day from a rise in the dollar as its traditional inverse relation to the greenback briefly reestablished itself, while the broader markets were largely unperturbed by the weekend's meeting of G20 leaders in Toronto.
SAFE HAVEN SWEEP
But flagging equities and the broad decline in the euro reinvigorated the safe-haven sweep into both the U.S. currency and gold, prompting the two to move in tandem.
"The underlying safe-haven concerns that have supported prices -- the economic environment, Europe's fiscal outlook and the longer-term prospects for inflation, remain," said David Moore, commodities strategist at Commonwealth Bank of Australia.
"The G20 hasn't had a significant impact on markets, and while concerns about Iran's nuclear capacity are nothing new, there seems to be additional clarity."
With this in mind, gold could rise further to surpass the June 21 record at $1,264.90 per ounce to touch $1,270, as bullish momentum is strong, according to Reuters technical analyst Wang Tao.
He noted the bulls were taking control, with prices in an ascending channel from a $1,224.30 low struck last Wednesday and sharp rises and mild falls.
Gold was little moved by data that showed U.S. consumer spending rose more than expected in May, even as savings touched their highest in eight months, while a measure of inflation showed fairly muted core price pressures.
However, a continued contraction in physical demand from traditional end-users could undermine gold, at least in the short-term, analysts said.
The head of the Bombay Bullion Association said on today that gold imports into top consumer India are likely to have fallen by 75 percent in June from 29.9 tonnes a year ago. Suresh Hundia, president of BBA, told Reuters this bearish estimate could be overly optimistic and the final figures could be lower than this.
"The numbers are so bad, nobody wants to share it this time," he said referring to the importing banks and trading agencies, which contribute their data to the trade body.
While consumer demand has been dampened by gold prices near record highs, concern about the stability of the wider financial markets has fed demand for gold-related investment vehicles.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings remained unchanged at an all-time high at 1,316.177 tonnes.
Silver was up at $19.19 an ounce, from $19.04 late in New York on Friday, while in the platinum group metals complex, platinum rose 0.9 percent to $1,580.00 and palladium was up about 0.3 percent at $476.00.
Friday, June 18, 2010
Risk back in vogue for investors abroad
Investors set aside sovereign debt fears (defaults by countries) and shifted their money to higher-returning assets in mid-June, with emerging market assets and U.S. equities among the recipients of fresh cash, EPFR Global said in a report on today.
Wednesday, June 16, 2010
Sensex to touch 19.5k by 2010 - 2011 fiscal end, says LIC investment chief
Indian equities may be gyrating on fears of Europe's spreading contagion, but N Mohan Raj, executive director in charge of investments at LIC, India's largest fund manager, remains unfazed. "We will not be swayed by short term volatility. The valuation has cooled down a bit. Every dip is an opportunity to buy," he has said, as per a report in the Indian Express Finance.
Raj expects the market to touch 19,500-levels by the end of this fiscal, which translates into returns of about 15% from current levels. His optimism stems from the fact that India's economy continues to be on a firm footing notwithstanding the turmoil in developed economies. "Locally, we don't see any trigger other than the monsoon. A good monsoon will do a lot of good for the economy, help spur rural demand and keep the food inflation in check," he says.
That said, India is not fully immune to global headwinds. "Global cues will determine how much money is brought into India by foreign institutional investors (FIIs). FII flows might feed into the sentiments of domestic institutional investors as well," says Raj. In fact, there is a strong possibility that FII flows might reverse if the dollar continues to strengthen. According to Raj, currency gain is one of the key reasons foreign investors (from the dollar region) put in their monies in riskier emerging markets like India. "If that arbitrage shrinks they might look for an exit," he cautions.
Going forward, Raj reckons sectors such as infrastructure, banking and FMCG are set to do well in India. "A lot of money is set to pour into infrastructure. The government also seems to be serious about investing in this space," says Raj, adding that the importance of infrastructure for the development of the country cannot be overemphasised.
According to him, the fourth quarter earnings season has been better than expected. However, he warns that the next quarter might not be as cheerful. "Input costs have risen across sectors. Higher inputs costs will moderate earnings," he says.
LIC has invested to the tune of Rs 1,93,000 crore in FY10 in various asset classes, of which a little over Rs 61,000 crore was put into equity. It invested nearly Rs 8,400 crore in equities in the first two months of the current financial year, about seven times the amount it had invested during the corresponding period of the previous fiscal.
Traditionally, the fourth quarter of the financial year sees the maximum sale of insurance policies. "This is available for deployment in the next financial year,"said Raj.
Raj expects the market to touch 19,500-levels by the end of this fiscal, which translates into returns of about 15% from current levels. His optimism stems from the fact that India's economy continues to be on a firm footing notwithstanding the turmoil in developed economies. "Locally, we don't see any trigger other than the monsoon. A good monsoon will do a lot of good for the economy, help spur rural demand and keep the food inflation in check," he says.
That said, India is not fully immune to global headwinds. "Global cues will determine how much money is brought into India by foreign institutional investors (FIIs). FII flows might feed into the sentiments of domestic institutional investors as well," says Raj. In fact, there is a strong possibility that FII flows might reverse if the dollar continues to strengthen. According to Raj, currency gain is one of the key reasons foreign investors (from the dollar region) put in their monies in riskier emerging markets like India. "If that arbitrage shrinks they might look for an exit," he cautions.
Going forward, Raj reckons sectors such as infrastructure, banking and FMCG are set to do well in India. "A lot of money is set to pour into infrastructure. The government also seems to be serious about investing in this space," says Raj, adding that the importance of infrastructure for the development of the country cannot be overemphasised.
According to him, the fourth quarter earnings season has been better than expected. However, he warns that the next quarter might not be as cheerful. "Input costs have risen across sectors. Higher inputs costs will moderate earnings," he says.
LIC has invested to the tune of Rs 1,93,000 crore in FY10 in various asset classes, of which a little over Rs 61,000 crore was put into equity. It invested nearly Rs 8,400 crore in equities in the first two months of the current financial year, about seven times the amount it had invested during the corresponding period of the previous fiscal.
Traditionally, the fourth quarter of the financial year sees the maximum sale of insurance policies. "This is available for deployment in the next financial year,"said Raj.
Monday, June 7, 2010
India Inc prunes Q4 losses by 28.5%
India Inc has not only witnessed a surge in profits during the January-March 2010 period, but the number of loss-making companies has also been steadily declining, a study carried out by Financial Express has revealed.
The study, on a sample of 2,430 quoted companies (excluding banks and NBFCs), shows that around 668 firms (27.5%) made losses during January-March 2010. This is a 46.3% fall from the 1,243 companies that reported losses during the same period last year. During April-June 2009, the number dwindled to 897, to 828 during July-September 2009 and 747 during October-December 2009.
Moreover, even the quantum of losses has seen a slide. In terms of value, the loss has steadily decreased 28.5% to Rs 7,010 crore in January-March 2010 from the level of Rs 9,798 crore in January-March 2009.
Cumulative sales (of 668 loss-making companies) was Rs 35,384 crore in January-March 2010 against Rs 49,987 crore (of 1,243 companies) in January-March 2009.
The fortunes of India Inc improved during Q4 FY10 compared with Q4 FY09. Commodity companies led the pack with improved volumes and realisations. Interestingly, the number of companies incurring losses declined sharply during the same period. On delving deeper, the industries that outperfomed belonged to sectors like auto ancillaries, gems & jewellery, engineering, food processing, hotels, textile companies, among others. With improved economy and higher spending, domestic consumption grew, leading to better financials of many companies in these sectors.
During January-March 2010, the top five loss-making companies are MTNL, Suzlon Energy, Kingfisher Airlines, HFCL and Wockhardt (WOCKPHARM.NS : 127.2 -4.55). The loss of Kingfisher Airlines increased 3.2% to Rs 572 crore during January-March 2010 from Rs 554 crore during January-March 2009. During January-March 2009, the top five loss-making companies were Ranbaxy Labs, Kingfisher, Northgate Tech, Raymond and Hind Photo Films.
Among the industries studied, more than Rs 100 crore loss was registered during January-March 2010 in sectors like cement, IT, electric equipment, entertainment, pharmaceuticals, steel, sugar, tea, telecommunications, textiles and airlines.
On the other hand, during January-March 2009, 17 industries registered more than Rs 100 crore loss. These include automobiles and ancillaries, IT, construction, jems & jewellery, entertainment, fertilisers, pharmaceuticals, steel, telecommunications, textiles and airlines. Significant surge in losses was seen in cement, electrical equipment, shipping, sugar and telecommunications sectors. The loss of telecommunication companies leaped from Rs 681 crore during January-March 2009 to Rs 2,167 crore during January-March 2010.
A downward trend in loss was seen in aluminium, automobiles and ancilleries, IT, construction, jems & jewellery, electronics, engineering, entertainments, fertilisers, food products, hotels, pharmaceuticals, retail, steel, tea and textiles, among others.
The study, on a sample of 2,430 quoted companies (excluding banks and NBFCs), shows that around 668 firms (27.5%) made losses during January-March 2010. This is a 46.3% fall from the 1,243 companies that reported losses during the same period last year. During April-June 2009, the number dwindled to 897, to 828 during July-September 2009 and 747 during October-December 2009.
Moreover, even the quantum of losses has seen a slide. In terms of value, the loss has steadily decreased 28.5% to Rs 7,010 crore in January-March 2010 from the level of Rs 9,798 crore in January-March 2009.
Cumulative sales (of 668 loss-making companies) was Rs 35,384 crore in January-March 2010 against Rs 49,987 crore (of 1,243 companies) in January-March 2009.
The fortunes of India Inc improved during Q4 FY10 compared with Q4 FY09. Commodity companies led the pack with improved volumes and realisations. Interestingly, the number of companies incurring losses declined sharply during the same period. On delving deeper, the industries that outperfomed belonged to sectors like auto ancillaries, gems & jewellery, engineering, food processing, hotels, textile companies, among others. With improved economy and higher spending, domestic consumption grew, leading to better financials of many companies in these sectors.
During January-March 2010, the top five loss-making companies are MTNL, Suzlon Energy, Kingfisher Airlines, HFCL and Wockhardt (WOCKPHARM.NS : 127.2 -4.55). The loss of Kingfisher Airlines increased 3.2% to Rs 572 crore during January-March 2010 from Rs 554 crore during January-March 2009. During January-March 2009, the top five loss-making companies were Ranbaxy Labs, Kingfisher, Northgate Tech, Raymond and Hind Photo Films.
Among the industries studied, more than Rs 100 crore loss was registered during January-March 2010 in sectors like cement, IT, electric equipment, entertainment, pharmaceuticals, steel, sugar, tea, telecommunications, textiles and airlines.
On the other hand, during January-March 2009, 17 industries registered more than Rs 100 crore loss. These include automobiles and ancillaries, IT, construction, jems & jewellery, entertainment, fertilisers, pharmaceuticals, steel, telecommunications, textiles and airlines. Significant surge in losses was seen in cement, electrical equipment, shipping, sugar and telecommunications sectors. The loss of telecommunication companies leaped from Rs 681 crore during January-March 2009 to Rs 2,167 crore during January-March 2010.
A downward trend in loss was seen in aluminium, automobiles and ancilleries, IT, construction, jems & jewellery, electronics, engineering, entertainments, fertilisers, food products, hotels, pharmaceuticals, retail, steel, tea and textiles, among others.
Saturday, May 29, 2010
Europe taking good steps - IMF chief
Measures announced by European countries to tackle their fiscal woes are helpful steps, IMF chief Dominique Strauss-Kahn said on Thursday, adding that Europe's economy will be back on track soon.
Strauss-Kahn, who spoke after meeting with Peruvian President Alan Garcia, said the International Monetary Fund believes that Greece and Spain are making the right moves to tackle their economic problems, which have rattled global financial markets for weeks.
"Those countries in Europe having a fiscal problem are addressing this problem these days, along the measures that have been announced, and I do believe that they are going in the right direction," the IMF's managing director told a media conference in Lima.
"I think that we've got good reason to believe that everything will come back on track rather rapidly," he added.
Strauss-Kahn also said the U.S. economy should grow about 3 percent this year. Europe may post growth of between 1 percent and 1.5 percent, he said.
He told students at a Peruvian university that Europe faces problems of high debt loads and slow economic growth and mending the global economy depends on continued policy coordination by governments.
He said much of Asia and Latin America were growing well and had largely moved past the crisis, but advanced economies were still lagging a bit.
The French economist also said Peru's economy should expand between 5 and 7 percent this year, a forecast that could make it the fastest growing in Latin America.
But he said hard-charging Latin American economies like those of Peru and Brazil face risks from enormous capital inflows that could cause asset bubbles or overheating.
Doubts remain about a fragile global economic recovery and investors are pouring money into emerging economies as they look for yield outside of traditional markets, he said.
Strauss-Kahn, who spoke after meeting with Peruvian President Alan Garcia, said the International Monetary Fund believes that Greece and Spain are making the right moves to tackle their economic problems, which have rattled global financial markets for weeks.
"Those countries in Europe having a fiscal problem are addressing this problem these days, along the measures that have been announced, and I do believe that they are going in the right direction," the IMF's managing director told a media conference in Lima.
"I think that we've got good reason to believe that everything will come back on track rather rapidly," he added.
Strauss-Kahn also said the U.S. economy should grow about 3 percent this year. Europe may post growth of between 1 percent and 1.5 percent, he said.
He told students at a Peruvian university that Europe faces problems of high debt loads and slow economic growth and mending the global economy depends on continued policy coordination by governments.
He said much of Asia and Latin America were growing well and had largely moved past the crisis, but advanced economies were still lagging a bit.
The French economist also said Peru's economy should expand between 5 and 7 percent this year, a forecast that could make it the fastest growing in Latin America.
But he said hard-charging Latin American economies like those of Peru and Brazil face risks from enormous capital inflows that could cause asset bubbles or overheating.
Doubts remain about a fragile global economic recovery and investors are pouring money into emerging economies as they look for yield outside of traditional markets, he said.
Monday, May 24, 2010
Investors still hope for India reform after mixed year
Courtesy: Reuters
To its admirers, the ruling coalition led by Congress has had a good year -- sound fiscal policy to stave off a ruinous global credit crisis, fast growth and some tentative steps toward reforms.
Those are likely to be stressed by Prime Minister Manmohan Singh when he gives a news conference on today to mark the coalition's first year in office.
But to its critics, his government has floundered on inflation, struggled ineffectively against a Maoist insurgency, and managed its political allies so badly its substantial parliamentary majority dwindled, hurting its ability to pass pro-market legislation needed to sustain robust growth.
A sense of bullish self-confidence marked the Congress party-led coalition's handsome re-election victory last May, spurring hopes of firm governance and quick policy changes.
A slew of crises then undercut that electoral momentum, emboldened the opposition and weakened Congress's hold on allies.
What may be more important though is that many investors remain optimistic government eventually will take steps to open the insurance, banking and retail sectors to overseas players, and India has too much potential for them to ignore in any case.
Incremental progress on structural reforms is the best they can hope for in a country of more than a billion people and 20 official languages still emerging from a socialist past.
"We do not expect any radical implementation," said Shubhada Rao, chief economist of Yes Bank (YESBANK.NS : 270.4 +5) in Mumbai.
"But we want the government to progressively start thinking about opening up the economy cautiously. The government's reforms agenda is clearly outlined; what is needed is clarity on the road to implementation."
Last May's election gave Prime Minister Singh a freer hand, no longer relying on the communist parties that propped up his first term government.
GOOD MARKS FOR THE ECONOMY
Many investors wanted cuts in subsidies for fuel, fertiliser and food. They expected the government to move fast on removing supply bottlenecks blamed on state-controlled prices as well as poor roads and rail.
Instead, the coalition spent much of the year fighting political fires, from public anger over high prices to criticism over a growing Maoist insurgency and a high-profile ministerial resignation over a cricket funding scandal.
"The government should have been stronger, instead it moved from one bungle to another," said Paranjoy Guha Thakurta, a leading newspaper columnist writing about the country's political economy.
In March, Singh lost some of his key allies as he tried to push through a bill reserving parliamentary seats for women. The thinning majority sent jitters through Congress before it cobbled the numbers to defeat a parliamentary vote on high prices.
While many say the government's response to inflation, now running at an annual rate of nearly 10 percent, was the single biggest failure, its overall handing of the economy has been praised.
Car sales are up 40 percent year-on-year, industrial output grew by 10.4 percent in 2009-10 and consumer durables production surged by 30 percent in the last five months.
Recovering quicker than expected from the global crunch, India's economy is forecast to grow at more than 7 percent this year and nearly 9 percent in 2011.
The government has also moved to sell stakes in some state-run firms, worked on a new tax code and is moving to repair public finances. It has sold spectrum to telecoms firms, which is expected to bring much needed funds for the budget.
SUSTAINING GROWTH?
To sustain grown, investors will be looking to the prime minister to introduce policies to improve the country's dilapidated roads, ports and airports and allow India's large savings to be channelled into productive returns.
Analysts expect Singh to continue to support, but make slow progress on, bills that would liberalise insurance and banking and open up retail, which could resolve supply bottlenecks contributing to high inflation.
Another likely slow mover, given problems with Congress's allies, will be a nuclear liability bill needed to allow entry of U.S. atomic energy firms into India.
"Gradualism punctuated by political compulsions will probably remain the key mantra," Macquarie Research said in a new report that rated the governing United Progressive Aliance performance at an uninspiring six on a scale peaking at 10.
With 42 percent of Indians living on less than the poverty line of $1.25 a day, reforms have always been a political hot potato. Many farmers who receive subsidies for rice and wheat helped Congress win last year's election.
"There is a lack of consensus within the Congress party and it is now increasingly clear the Left was only an excuse for postponing many important decisions needed to accelerate growth," N.K. Singh, former finance secretary wrote in the Mint newspaper.
Despite lack of big-ticket reforms, foreign firms and investors are getting on with business undeterred. India's long-term potential is too compelling to ignore.
"India is a delectable emerging economic story that suffers an unfortunate - but legitimate -- discount because of its government's poor management and implementation," the Macquarie report said.
To its admirers, the ruling coalition led by Congress has had a good year -- sound fiscal policy to stave off a ruinous global credit crisis, fast growth and some tentative steps toward reforms.
Those are likely to be stressed by Prime Minister Manmohan Singh when he gives a news conference on today to mark the coalition's first year in office.
But to its critics, his government has floundered on inflation, struggled ineffectively against a Maoist insurgency, and managed its political allies so badly its substantial parliamentary majority dwindled, hurting its ability to pass pro-market legislation needed to sustain robust growth.
A sense of bullish self-confidence marked the Congress party-led coalition's handsome re-election victory last May, spurring hopes of firm governance and quick policy changes.
A slew of crises then undercut that electoral momentum, emboldened the opposition and weakened Congress's hold on allies.
What may be more important though is that many investors remain optimistic government eventually will take steps to open the insurance, banking and retail sectors to overseas players, and India has too much potential for them to ignore in any case.
Incremental progress on structural reforms is the best they can hope for in a country of more than a billion people and 20 official languages still emerging from a socialist past.
"We do not expect any radical implementation," said Shubhada Rao, chief economist of Yes Bank (YESBANK.NS : 270.4 +5) in Mumbai.
"But we want the government to progressively start thinking about opening up the economy cautiously. The government's reforms agenda is clearly outlined; what is needed is clarity on the road to implementation."
Last May's election gave Prime Minister Singh a freer hand, no longer relying on the communist parties that propped up his first term government.
GOOD MARKS FOR THE ECONOMY
Many investors wanted cuts in subsidies for fuel, fertiliser and food. They expected the government to move fast on removing supply bottlenecks blamed on state-controlled prices as well as poor roads and rail.
Instead, the coalition spent much of the year fighting political fires, from public anger over high prices to criticism over a growing Maoist insurgency and a high-profile ministerial resignation over a cricket funding scandal.
"The government should have been stronger, instead it moved from one bungle to another," said Paranjoy Guha Thakurta, a leading newspaper columnist writing about the country's political economy.
In March, Singh lost some of his key allies as he tried to push through a bill reserving parliamentary seats for women. The thinning majority sent jitters through Congress before it cobbled the numbers to defeat a parliamentary vote on high prices.
While many say the government's response to inflation, now running at an annual rate of nearly 10 percent, was the single biggest failure, its overall handing of the economy has been praised.
Car sales are up 40 percent year-on-year, industrial output grew by 10.4 percent in 2009-10 and consumer durables production surged by 30 percent in the last five months.
Recovering quicker than expected from the global crunch, India's economy is forecast to grow at more than 7 percent this year and nearly 9 percent in 2011.
The government has also moved to sell stakes in some state-run firms, worked on a new tax code and is moving to repair public finances. It has sold spectrum to telecoms firms, which is expected to bring much needed funds for the budget.
SUSTAINING GROWTH?
To sustain grown, investors will be looking to the prime minister to introduce policies to improve the country's dilapidated roads, ports and airports and allow India's large savings to be channelled into productive returns.
Analysts expect Singh to continue to support, but make slow progress on, bills that would liberalise insurance and banking and open up retail, which could resolve supply bottlenecks contributing to high inflation.
Another likely slow mover, given problems with Congress's allies, will be a nuclear liability bill needed to allow entry of U.S. atomic energy firms into India.
"Gradualism punctuated by political compulsions will probably remain the key mantra," Macquarie Research said in a new report that rated the governing United Progressive Aliance performance at an uninspiring six on a scale peaking at 10.
With 42 percent of Indians living on less than the poverty line of $1.25 a day, reforms have always been a political hot potato. Many farmers who receive subsidies for rice and wheat helped Congress win last year's election.
"There is a lack of consensus within the Congress party and it is now increasingly clear the Left was only an excuse for postponing many important decisions needed to accelerate growth," N.K. Singh, former finance secretary wrote in the Mint newspaper.
Despite lack of big-ticket reforms, foreign firms and investors are getting on with business undeterred. India's long-term potential is too compelling to ignore.
"India is a delectable emerging economic story that suffers an unfortunate - but legitimate -- discount because of its government's poor management and implementation," the Macquarie report said.
Sunday, May 16, 2010
Indian economy to grow by 8.5%: CII
Industry chamber CII has projected the Indian economy to expand by up to 8.5 per cent in the current fiscal from estimated 7.2 per cent in 2009-10, but called for greater reforms, particularly in the financial sector, to push growth to double digits.
"CII estimates GDP growth at 8-8.5 per cent in 2010-11 ...A recovery in agriculture is likely in the coming years leading to upside in GDP growth; Industry and services to remain strong as capacity expansion takes place to take advantage of the rising demand," Confederation of Indian Industry President Hari S Bhartia said.
Bhartia further said that the industry is estimated to grow by 8.5 to 9 per cent, services by 9.3 to 9.5 per cent and agriculture by 2 to 3.5 per cent this fiscal.
"CII estimates GDP growth at 8-8.5 per cent in 2010-11 ...A recovery in agriculture is likely in the coming years leading to upside in GDP growth; Industry and services to remain strong as capacity expansion takes place to take advantage of the rising demand," Confederation of Indian Industry President Hari S Bhartia said.
Bhartia further said that the industry is estimated to grow by 8.5 to 9 per cent, services by 9.3 to 9.5 per cent and agriculture by 2 to 3.5 per cent this fiscal.
Thursday, May 13, 2010
Sara Lee selling stake in Godrej Sara Lee JV
The San Francisco based Sara Lee Corp announced yesterday that it would sell its 51 percent stake in Godrej Sara Lee Ltd joint venture, which markets insecticides in India, to Godrej Consumer Products Ltd for 185 million euros. Godrej is one of the largest marketers of consumer soap in India.
The transaction is expected to close by July 3, Sara Lee said in a statement.
The joint venture's revenue was around 7.5 billion Indian rupees ($158 million based on exchange rates in 2009) in fiscal 2009, Sara Lee said.
That business accounts for some 9 percent of the adjusted operating segment income for Sara Lee's International Household and Body Care business, Sara Lee said.
Sara Lee, whose businesses include Hillshire Farm lunchmeats and Sara Lee bread, has been focusing on its main food and beverage businesses as it remakes its portfolio.
It is slated to sell its European body-care business to Unilever and parts of its Ambi Pur air freshener business to Procter & Gamble Co.
The transaction is expected to close by July 3, Sara Lee said in a statement.
The joint venture's revenue was around 7.5 billion Indian rupees ($158 million based on exchange rates in 2009) in fiscal 2009, Sara Lee said.
That business accounts for some 9 percent of the adjusted operating segment income for Sara Lee's International Household and Body Care business, Sara Lee said.
Sara Lee, whose businesses include Hillshire Farm lunchmeats and Sara Lee bread, has been focusing on its main food and beverage businesses as it remakes its portfolio.
It is slated to sell its European body-care business to Unilever and parts of its Ambi Pur air freshener business to Procter & Gamble Co.
Tuesday, May 4, 2010
I have just returned from a week's stay in Alpbach
I have just returned from a week's stay in Alpbach - a lovely village in Tyrol, Austria. I had gone to attend a conference.
Wednesday, March 31, 2010
POLL - MFs see stocks rising; eye financials, energy
Indian shares, which touched a 25-month high on Monday, could rise further in the June quarter with financials and energy stocks finding favour among domestic fund managers, a Reuters poll has shown.
Five of the nine respondents to a Reuters Asset Allocation Poll conducted between March 23 and March 30 said India's benchmark stock index could rise further in the next three months. Two said the index could rise more than 5 percent.
Foreign funds have pumped around $3.9 billion in Indian shares this year, most of it in March, helping the BSE Sensex rise by about 7 percent in the current month.
"The (FII) flows are too strong, there is risk appetite and the concerns regarding sovereign debt are not so high," said David Pezarkar, head of equity at Shinsei's Indian mutual fund unit.
"There will be bouts - but I don't think that is going to change the underlying trend."
Five fund managers said the BSE Sensex, which currently trades at one-year forward price to earnings multiple of around 17 times, is fairly valued, while three said it was overvalued.
Four fund managers said they would decrease the cash levels in their portfolios, whereas three said they would sell equities.
Overall, nearly 7 percent of assets under India's equity diversified funds were held as cash at February end, data from fund tracker ICRA Online showed.
Though five managers are of the view that market would continue its northward journey, some believe it could fall in the next quarter.
A further rise in the equity markets could give way to profit booking opportunities, Tridib Pathak, director equity at IDFC Asset Management, said.
SECTORAL PICKS
Most fund managers are optimistic about the financial services space, which accounted for 18 percent of diversified equity fund assets in February, their biggest sectoral bet.
Six respondents said they would scale up exposure in the sector while two said they would maintain their current exposure.
The Reserve Bank of India (RBI) surprised markets by raising its key lending and borrowing rates by 25 bps on March 19. However, bankers said last week that Indian banks see stable lending rates and profits in the near term despite RBI's recent move.
The energy sector, which is the second most preferred space, would also be in focus with five fund managers looking at further increasing their allocation.
A recovering Indian economy might also prompt money managers to raise exposure to basic engineering sector, which controlled more than one tenth of diversified equity assets in February.
Five fund managers said they would increase investments in the sector while four would retain exposure, the poll showed.
Three of the poll respondents said they would increase their allocation to shares of construction companies, while four said they would maintain their holdings.
If targets have to be met, the country would require accelerated spending on infrastructure, which should benefit the construction space, said Sanjay Sinha, chief executive at L&T Mutual Fund.
"The outlook for the 12th five year plan to spend $1 trillion on infrastructure is an even bigger space," he added.
However, autos, consumer non-durables and healthcare stocks could face some selling pressure in the next three months, the poll showed.
Balanced fund managers, those who invest in both stocks and bonds, are also looking at reducing their allocation to cash.
Five of the nine respondents to a Reuters Asset Allocation Poll conducted between March 23 and March 30 said India's benchmark stock index could rise further in the next three months. Two said the index could rise more than 5 percent.
Foreign funds have pumped around $3.9 billion in Indian shares this year, most of it in March, helping the BSE Sensex rise by about 7 percent in the current month.
"The (FII) flows are too strong, there is risk appetite and the concerns regarding sovereign debt are not so high," said David Pezarkar, head of equity at Shinsei's Indian mutual fund unit.
"There will be bouts - but I don't think that is going to change the underlying trend."
Five fund managers said the BSE Sensex, which currently trades at one-year forward price to earnings multiple of around 17 times, is fairly valued, while three said it was overvalued.
Four fund managers said they would decrease the cash levels in their portfolios, whereas three said they would sell equities.
Overall, nearly 7 percent of assets under India's equity diversified funds were held as cash at February end, data from fund tracker ICRA Online showed.
Though five managers are of the view that market would continue its northward journey, some believe it could fall in the next quarter.
A further rise in the equity markets could give way to profit booking opportunities, Tridib Pathak, director equity at IDFC Asset Management, said.
SECTORAL PICKS
Most fund managers are optimistic about the financial services space, which accounted for 18 percent of diversified equity fund assets in February, their biggest sectoral bet.
Six respondents said they would scale up exposure in the sector while two said they would maintain their current exposure.
The Reserve Bank of India (RBI) surprised markets by raising its key lending and borrowing rates by 25 bps on March 19. However, bankers said last week that Indian banks see stable lending rates and profits in the near term despite RBI's recent move.
The energy sector, which is the second most preferred space, would also be in focus with five fund managers looking at further increasing their allocation.
A recovering Indian economy might also prompt money managers to raise exposure to basic engineering sector, which controlled more than one tenth of diversified equity assets in February.
Five fund managers said they would increase investments in the sector while four would retain exposure, the poll showed.
Three of the poll respondents said they would increase their allocation to shares of construction companies, while four said they would maintain their holdings.
If targets have to be met, the country would require accelerated spending on infrastructure, which should benefit the construction space, said Sanjay Sinha, chief executive at L&T Mutual Fund.
"The outlook for the 12th five year plan to spend $1 trillion on infrastructure is an even bigger space," he added.
However, autos, consumer non-durables and healthcare stocks could face some selling pressure in the next three months, the poll showed.
Balanced fund managers, those who invest in both stocks and bonds, are also looking at reducing their allocation to cash.
Monday, March 1, 2010
Feb manufacturing growth at 20-month high - PMI
India's manufacturing industry in February grew at its fastest pace in 20 months, expanding for the third month thanks to expanding output and new orders, a survey showed.
The HSBC Purchasing Managers' Index (PMI), based on a survey of 500 companies, rose to 58.5 in February, its strongest reading since June 2008, from 57.7 in January.
A reading above 50 means activity is expanding.
"At 58.5, the headline index is consistent with ongoing double-digit gains in industrial production which in turn is likely to mean that spare capacity is being eaten into rapidly," said Robert Prior-Wandesforde, Senior Asian Economist at HSBC.
"Although the output prices balance surprisingly dropped back in February, while remaining consistent with price gains, there is more and more evidence of emerging supply-side constraints in labour and product markets."
The new orders index rose to 64.0 from January's 62.9.
"While new export orders grew less strongly in February than January this didn't prevent the overall new orders series from hitting a high in the current upturn," said Prior-Wandesforde. "The same was also true of output growth, which has rarely shown such strength since the series began in April 2005."
In the 2010/11 federal budget released on Friday, the government said it expected Asia's third-biggest economy to grow faster than the 7.2 percent it forecast for this fiscal year ending on March 31. It sees growth accelerating to 8.5 percent in the 2010/11 fiscal year.
The HSBC Purchasing Managers' Index (PMI), based on a survey of 500 companies, rose to 58.5 in February, its strongest reading since June 2008, from 57.7 in January.
A reading above 50 means activity is expanding.
"At 58.5, the headline index is consistent with ongoing double-digit gains in industrial production which in turn is likely to mean that spare capacity is being eaten into rapidly," said Robert Prior-Wandesforde, Senior Asian Economist at HSBC.
"Although the output prices balance surprisingly dropped back in February, while remaining consistent with price gains, there is more and more evidence of emerging supply-side constraints in labour and product markets."
The new orders index rose to 64.0 from January's 62.9.
"While new export orders grew less strongly in February than January this didn't prevent the overall new orders series from hitting a high in the current upturn," said Prior-Wandesforde. "The same was also true of output growth, which has rarely shown such strength since the series began in April 2005."
In the 2010/11 federal budget released on Friday, the government said it expected Asia's third-biggest economy to grow faster than the 7.2 percent it forecast for this fiscal year ending on March 31. It sees growth accelerating to 8.5 percent in the 2010/11 fiscal year.
Friday, February 26, 2010
A positive and individual friendly budget!
The Union Budget 2010 presented by our Finance Minster Pranab Mukerjee has been received positively by the stock market investors. This is evident from the sharp jump in the indices - Sensex and Nifty.
The Biggest Positive
By far the most attractive thing in the Budget 2010 for individuals is the increase in the income tax slab limits. Though the entry level slab for income tax has not been changed from Rs.1.6 lakhs, there is a considerable jump in the other slabs.
The new proposed slabs for the personal income tax are:
10% - Between Rs.1.6 lakhs and 5 lakhs
20% - Between Rs.5 lakhs and 8 lakhs
30% - Above 8 lakhs
As per the words of the Finance Minister, this proposal will bring relief to about 40% of the current tax payers.
Infrastructure Bonds are Back
Rs.20,000/- has been introduced as the additional limit for investment in Infrastructure Bonds. Infrastructure Bonds are thus making a comeback after 5 years as a savings option for tax savers. This will also reduce the tax burden for a few who are interested in traditional savings tools. This Rs.20,000/- will be over and above the current limit of Rs.1,00,000/- in various tax saving schemes.
New Pension Scheme Push
A renewed push has been given to the New Pension Scheme in this Budget. Till now the New Pension Scheme has not found much favour from the common public due to typical teething problems related to its implementation.
Our Finance Minister has proposed to give Rs.1000/- as a starting incentive to all Accounts of NPS opening in the next 3 years. This is a welcome measure, as the NPS is as of now the key Contributory Social Security Scheme in India.
Housing Interest Rate
The Finance Minister has said that the Interest Support of 1% for low cost housing loans will be extended for the next year too. This is a boon for the builders of townships and also the aam aadmi of India who could not afford costly houses. This is a direct form of supporting the recovery of the economy itself.
Support for Rural People
Agriculturists and people livings in rural India can have a breath of relief. The farm loans have been given an extension of 6 months.
Not only that, new loans will be getting a Government support of 2% reduction in interest rates. Effectively this brings down the farm interest rate to 5%. The earlier support was limited to only 1%.
The rural communities in non-arable areas get support from the continuation of the Mahatma Gandhi National Rural Employment Guarantee Scheme. The budget has allotted Rs.40,000/- crores for this scheme, which is now being implemented across the country.
Micro-Finance Support
Recognizing the major change in development brought about by micro-finance companies in India, the Finance Minister has proposed a Micro-Finance Development Fund to support Micro Finance Companies. At Rs.400 crores, the fund size is small but being with right intention, the gesture is one in the right direction.
Banks Loans
Rs.16,500 crores has been budgeted for providing the Tier I capital required for some PSU banks. This will improve the lending capacity of these banks. The Budget 2010 has also made additional provisions of capital for lending to Rural Areas.
These measures will not only stabilize banks but also provide the much needed muscle to improve the loan portfolio of PSU banks.
Additional licenses are being planned for private banks. NBFCs will also get a chance to open banks. The modalities will be discussed in detail shortly.
Overall: An Individual Friendly Budget
Based on the above concessions and support for lending and investments, we can conclude that Budget 2010 is very much friendly for the individuals of India. The salaried class may rejoice in their tax out goes coming down in a big way. The Rural Population can cheer over their cash outflows coming down and/or postponed. Banks, housing developers and those buying low cost houses can be happy with the 1% interest support
The Biggest Positive
By far the most attractive thing in the Budget 2010 for individuals is the increase in the income tax slab limits. Though the entry level slab for income tax has not been changed from Rs.1.6 lakhs, there is a considerable jump in the other slabs.
The new proposed slabs for the personal income tax are:
10% - Between Rs.1.6 lakhs and 5 lakhs
20% - Between Rs.5 lakhs and 8 lakhs
30% - Above 8 lakhs
As per the words of the Finance Minister, this proposal will bring relief to about 40% of the current tax payers.
Infrastructure Bonds are Back
Rs.20,000/- has been introduced as the additional limit for investment in Infrastructure Bonds. Infrastructure Bonds are thus making a comeback after 5 years as a savings option for tax savers. This will also reduce the tax burden for a few who are interested in traditional savings tools. This Rs.20,000/- will be over and above the current limit of Rs.1,00,000/- in various tax saving schemes.
New Pension Scheme Push
A renewed push has been given to the New Pension Scheme in this Budget. Till now the New Pension Scheme has not found much favour from the common public due to typical teething problems related to its implementation.
Our Finance Minister has proposed to give Rs.1000/- as a starting incentive to all Accounts of NPS opening in the next 3 years. This is a welcome measure, as the NPS is as of now the key Contributory Social Security Scheme in India.
Housing Interest Rate
The Finance Minister has said that the Interest Support of 1% for low cost housing loans will be extended for the next year too. This is a boon for the builders of townships and also the aam aadmi of India who could not afford costly houses. This is a direct form of supporting the recovery of the economy itself.
Support for Rural People
Agriculturists and people livings in rural India can have a breath of relief. The farm loans have been given an extension of 6 months.
Not only that, new loans will be getting a Government support of 2% reduction in interest rates. Effectively this brings down the farm interest rate to 5%. The earlier support was limited to only 1%.
The rural communities in non-arable areas get support from the continuation of the Mahatma Gandhi National Rural Employment Guarantee Scheme. The budget has allotted Rs.40,000/- crores for this scheme, which is now being implemented across the country.
Micro-Finance Support
Recognizing the major change in development brought about by micro-finance companies in India, the Finance Minister has proposed a Micro-Finance Development Fund to support Micro Finance Companies. At Rs.400 crores, the fund size is small but being with right intention, the gesture is one in the right direction.
Banks Loans
Rs.16,500 crores has been budgeted for providing the Tier I capital required for some PSU banks. This will improve the lending capacity of these banks. The Budget 2010 has also made additional provisions of capital for lending to Rural Areas.
These measures will not only stabilize banks but also provide the much needed muscle to improve the loan portfolio of PSU banks.
Additional licenses are being planned for private banks. NBFCs will also get a chance to open banks. The modalities will be discussed in detail shortly.
Overall: An Individual Friendly Budget
Based on the above concessions and support for lending and investments, we can conclude that Budget 2010 is very much friendly for the individuals of India. The salaried class may rejoice in their tax out goes coming down in a big way. The Rural Population can cheer over their cash outflows coming down and/or postponed. Banks, housing developers and those buying low cost houses can be happy with the 1% interest support
Instant view: Budget proposals
India needs to review public spending and improve its fiscal position, Finance Minister Pranab Mukherjee said today, kicking-off the presentation of his budget for the fiscal year that starts on April 1.
Key Points:
# Need to review stimulus
# Challenge to return to 9 pct growth, then double-digit
# Economy now in far better position than a year ago
# Final FY10 GDP figure maybe higher than estimate of 7.2 pct
# Fiscal deficit seen at 6.9 pct of GDP in 2009/10
# Fiscal deficit seen at 5.5 pct of GDP in 2010/11 (Reuters poll 5.6 pct)
# Fiscal deficit seen at 4.8 pct of GDP in 2011/12; 4.1 pct in 2012/13
# Total expenditure in 2010/11 11.87 trillion rupees ($256.75 billion)
# 2009/10 revised estimate for tax collection 7.47 trillion rupees ($161.58 billion)
Key Points:
# Need to review stimulus
# Challenge to return to 9 pct growth, then double-digit
# Economy now in far better position than a year ago
# Final FY10 GDP figure maybe higher than estimate of 7.2 pct
# Fiscal deficit seen at 6.9 pct of GDP in 2009/10
# Fiscal deficit seen at 5.5 pct of GDP in 2010/11 (Reuters poll 5.6 pct)
# Fiscal deficit seen at 4.8 pct of GDP in 2011/12; 4.1 pct in 2012/13
# Total expenditure in 2010/11 11.87 trillion rupees ($256.75 billion)
# 2009/10 revised estimate for tax collection 7.47 trillion rupees ($161.58 billion)
Wednesday, February 24, 2010
No fare hikes, 52 new trains announced in India's rail budget
Passengers were spared a fare hike, freight rates were lowered for some essential items and 52 new trains announced in India's rail budget for 2010-11 that promises a new model to promote private investment in expanding the world's second largest railroad network under a single management.
'We have saved Rs.2,000 crore ($40 million) because of the hard work of our employees and austerity measures. There will be no increase in passenger fares,' Railway Minister Mamata Banerjee told the Lok Sabha, the lower house of Parliament.
'Our objective is inclusive growth,' she said in her marathon 110-minute speech, adding that her main consideration was social responsibility of Indian Railways rather than mere commercial viability of various projects.
Accordingly, she also announced a cut in freight tariff for kerosene and grain, upgrade of 94 stations, 522 diagnostic centres, target of 1,000 km new lines, 10 auto ancillary hubs, several high-speed passenger rail corridors, six new drinking water plants and housing for all railway staff in 10 years.
'We have set our goals in the Vision 2020 document and we will achieve it,' the minister said, referring to the document unveiled in December that has targeted making over 30,000 km of routes into double or multiple lines against 18,000 km today.
'It is a fact that administrative and procedural delays discourage potential investors. We will need to overcome this. I am setting up a special task force for this,' said the minister, dressed in a white and green sari and her trademark rubber slippers.
'Special structure will be created for the new business model,' she said, emphasising: 'But we will not privatise railways. Indian Railways will remain with the government.'
At the same time, she also asked the private sector to refrain from what she called the 'typical negative approach' while dealing with the Indian Railways. 'I am sorry to say this -- this mindset has to change.'
She, nevertheless, said a special task force will be set up to clear proposals for investments within 100 days and that policy guidelines in this regard will be made easy, simple and investment friendly to attract funds to the sector.
Prime Minister Manmohan Singh, United Progressive Alliance (UPA) chairperson Sonia Gandhi, Leader of Opposition Sushma Swaraj and Finance Minister Pranab Mukherjee were among those in the house, presided over by Speaker Meira Kumar.
This was Banerjee's fourth budget of her career as railway minister and the second for the United Progressive Alliance (UPA) government in its second straight term after being voted back to office in May last year.
According to Banerjee, 117 out of the 122 new trains promised in her last budget will be flagged off by March 31, within a matter of seven months, which was a commendable effort.
Seeking to give safety issues due consideration, the minister said there were a few cases of unfortunate accidents in the past and said these would be prevented by adopting the highest level of technology and manpower training.
'Within five years, we will have 13,000 out of unmanned level crossings manned - 3,000 this fiscal and 1,000 in the coming fiscal,' she said, referring to the high number of accidents at such crossroads.
The budget came against the backdrop of the share of Indian Railways in the movement of goods, vis a vis truckers, falling from 24.07 percent in 2001-02 to 20.89 percent in 2008-09 and further to 19.32 percent in the first 10 months of this fiscal.
Yet, the minister said this fiscal will end with a net profit of Rs.1,328 crore. She added that the freight target for the coming fiscal will be 944 million tonnes.
Indian Railways runs the world's second largest network under a single management with a network of 64,099 route km to ferry 18.9 million passengers on 7,000 trains daily from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonnes of cargo.
The main highlights of the 2010-11 railway budget include:
-- No increase in passenger fares
-- Rs.100 reduction in freight per wagon for fertilisers and kerosene
-- Free travel for cancer patients in 3rd AC classes
-- Cost-sharing in public-private-partnership (PPP) mode in some gauge-conversion projects
-- Further extension of Kolkata Metro on priority basis; stations to be named after Bahadur Shah Zafar, Tagore family
-- Karmabhoomi trains to be introduced for migrant labour
-- New Janmabhoomi train between Ahmedabad and Udhampur
-- Special 'Bharat Teertha' train to be run around India to commemorate Rabindranath Tagore's 150th birth anniversary
-- Railway line to be extended from Bilaspur in Himachal Pradesh to Leh in Jammu and Kashmir
-- Andaman and Nicobar Islands to get railway line from Port Blair to Diglipur
-- Sikkim capital Gangtok to be connected by rail from Rangpo
-- 2011 being 150th anniversary of Rabindranath Tagore, special train to be run from West Bengal to Bangladesh
-- Gross earnings in 2009-10 estimated at Rs.88,281 crore
-- Working expenditure in 2009-10 estimated at Rs.83,440 crore
-- Expenses during 2010-11 estimated at Rs.87,100 crore
-- Thrust on expansion in 2010-11 with allocation of Rs.4,411 crore
-- Kashmir rail link to be extended to Sopore in the north of the valley
-- Net profit of Rs.1,328 crore in 2009-10
-- 10 automobile ancillary hubs to be created
-- Twenty-two million energy saving CFLs for lighting distributed already
-- Policy decision to employ one member of family whose land is requisitioned for railway projects
-- North-south, east-west dedicated freight corridors to be created
-- Construction of high-speed passenger rail corridors envisaged
-- More multi-functional hospitals to be set up
-- Educational facilities to be set up for children of 80,000 women families
-- Special facilities to be established for gangmen
-- Insurance facilities for licensed porters as part of railway's corporate social responsibility
-- Centre for railway research to be established with Indian Institutes of Technology and Defence Research and Development Organisation
-- Will involve unions in policy making
-- Integral Coach Factory Chennai to be further modernised
-- New wagon repair shop in Mumbai
-- Design, development and testing centre for railway wheels at Bangalore
-- Within five years, all unmanned level crossings to be manned
-- Construction of more underpasses, besides road overbridges
-- Greater coordination with state governments to protect railway property
-- Security of women passengers to be improved
-- Ex-servicemen to be employed in Railway Protection Force
-- Five sports academies to be set up
-- Astroturf to be provided for development of hockey
-- Employment opportunities for sports persons
-- Railways to be lead partner for Commonwealth Games
-- Special drive to increase passenger amenities
-- Upgrade of 94 stations
-- Six new drinking water bottling plants in PPP mode
-- Modern toilets at railway stations
-- More ticketing centres to help the public
-- Acquisition of cutting edge safety technology
-- 1,000 route km to be created
-- Special task force for clearing investment proposals in 100 days
-- New business model to be created
-- No privatisation of railways
-- But greater participation of private sector
-- 117 of 120 new trains for current fiscal to be flagged off
'We have saved Rs.2,000 crore ($40 million) because of the hard work of our employees and austerity measures. There will be no increase in passenger fares,' Railway Minister Mamata Banerjee told the Lok Sabha, the lower house of Parliament.
'Our objective is inclusive growth,' she said in her marathon 110-minute speech, adding that her main consideration was social responsibility of Indian Railways rather than mere commercial viability of various projects.
Accordingly, she also announced a cut in freight tariff for kerosene and grain, upgrade of 94 stations, 522 diagnostic centres, target of 1,000 km new lines, 10 auto ancillary hubs, several high-speed passenger rail corridors, six new drinking water plants and housing for all railway staff in 10 years.
'We have set our goals in the Vision 2020 document and we will achieve it,' the minister said, referring to the document unveiled in December that has targeted making over 30,000 km of routes into double or multiple lines against 18,000 km today.
'It is a fact that administrative and procedural delays discourage potential investors. We will need to overcome this. I am setting up a special task force for this,' said the minister, dressed in a white and green sari and her trademark rubber slippers.
'Special structure will be created for the new business model,' she said, emphasising: 'But we will not privatise railways. Indian Railways will remain with the government.'
At the same time, she also asked the private sector to refrain from what she called the 'typical negative approach' while dealing with the Indian Railways. 'I am sorry to say this -- this mindset has to change.'
She, nevertheless, said a special task force will be set up to clear proposals for investments within 100 days and that policy guidelines in this regard will be made easy, simple and investment friendly to attract funds to the sector.
Prime Minister Manmohan Singh, United Progressive Alliance (UPA) chairperson Sonia Gandhi, Leader of Opposition Sushma Swaraj and Finance Minister Pranab Mukherjee were among those in the house, presided over by Speaker Meira Kumar.
This was Banerjee's fourth budget of her career as railway minister and the second for the United Progressive Alliance (UPA) government in its second straight term after being voted back to office in May last year.
According to Banerjee, 117 out of the 122 new trains promised in her last budget will be flagged off by March 31, within a matter of seven months, which was a commendable effort.
Seeking to give safety issues due consideration, the minister said there were a few cases of unfortunate accidents in the past and said these would be prevented by adopting the highest level of technology and manpower training.
'Within five years, we will have 13,000 out of unmanned level crossings manned - 3,000 this fiscal and 1,000 in the coming fiscal,' she said, referring to the high number of accidents at such crossroads.
The budget came against the backdrop of the share of Indian Railways in the movement of goods, vis a vis truckers, falling from 24.07 percent in 2001-02 to 20.89 percent in 2008-09 and further to 19.32 percent in the first 10 months of this fiscal.
Yet, the minister said this fiscal will end with a net profit of Rs.1,328 crore. She added that the freight target for the coming fiscal will be 944 million tonnes.
Indian Railways runs the world's second largest network under a single management with a network of 64,099 route km to ferry 18.9 million passengers on 7,000 trains daily from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonnes of cargo.
The main highlights of the 2010-11 railway budget include:
-- No increase in passenger fares
-- Rs.100 reduction in freight per wagon for fertilisers and kerosene
-- Free travel for cancer patients in 3rd AC classes
-- Cost-sharing in public-private-partnership (PPP) mode in some gauge-conversion projects
-- Further extension of Kolkata Metro on priority basis; stations to be named after Bahadur Shah Zafar, Tagore family
-- Karmabhoomi trains to be introduced for migrant labour
-- New Janmabhoomi train between Ahmedabad and Udhampur
-- Special 'Bharat Teertha' train to be run around India to commemorate Rabindranath Tagore's 150th birth anniversary
-- Railway line to be extended from Bilaspur in Himachal Pradesh to Leh in Jammu and Kashmir
-- Andaman and Nicobar Islands to get railway line from Port Blair to Diglipur
-- Sikkim capital Gangtok to be connected by rail from Rangpo
-- 2011 being 150th anniversary of Rabindranath Tagore, special train to be run from West Bengal to Bangladesh
-- Gross earnings in 2009-10 estimated at Rs.88,281 crore
-- Working expenditure in 2009-10 estimated at Rs.83,440 crore
-- Expenses during 2010-11 estimated at Rs.87,100 crore
-- Thrust on expansion in 2010-11 with allocation of Rs.4,411 crore
-- Kashmir rail link to be extended to Sopore in the north of the valley
-- Net profit of Rs.1,328 crore in 2009-10
-- 10 automobile ancillary hubs to be created
-- Twenty-two million energy saving CFLs for lighting distributed already
-- Policy decision to employ one member of family whose land is requisitioned for railway projects
-- North-south, east-west dedicated freight corridors to be created
-- Construction of high-speed passenger rail corridors envisaged
-- More multi-functional hospitals to be set up
-- Educational facilities to be set up for children of 80,000 women families
-- Special facilities to be established for gangmen
-- Insurance facilities for licensed porters as part of railway's corporate social responsibility
-- Centre for railway research to be established with Indian Institutes of Technology and Defence Research and Development Organisation
-- Will involve unions in policy making
-- Integral Coach Factory Chennai to be further modernised
-- New wagon repair shop in Mumbai
-- Design, development and testing centre for railway wheels at Bangalore
-- Within five years, all unmanned level crossings to be manned
-- Construction of more underpasses, besides road overbridges
-- Greater coordination with state governments to protect railway property
-- Security of women passengers to be improved
-- Ex-servicemen to be employed in Railway Protection Force
-- Five sports academies to be set up
-- Astroturf to be provided for development of hockey
-- Employment opportunities for sports persons
-- Railways to be lead partner for Commonwealth Games
-- Special drive to increase passenger amenities
-- Upgrade of 94 stations
-- Six new drinking water bottling plants in PPP mode
-- Modern toilets at railway stations
-- More ticketing centres to help the public
-- Acquisition of cutting edge safety technology
-- 1,000 route km to be created
-- Special task force for clearing investment proposals in 100 days
-- New business model to be created
-- No privatisation of railways
-- But greater participation of private sector
-- 117 of 120 new trains for current fiscal to be flagged off
Sunday, February 14, 2010
FIIs bullish on India, up stake in more companies...
Source: Indian Express
Foreign institutional investors' (FIIs) faith in the Indian stock markets is on the rise despite volatile market conditions and the economy witnessing an early stage on recovery. FIIs have not only increased their stake in companies but also added more firms under their belt, said CNI Research, a leading listed research body exclusively focusing on small and mid-cap companies in India.
CNI Research has found that FIIs have increased their stake in over 322 companies in Q3 (December quarter) as against 240 companies in Q2, showing the faith of foreign investors in India and the trend of rising investments in the country.
Among 322 companies, FIIs' holding increased by up to 2% in 259 cases over the previous period, from 2% to 5% in 51 firms, from 5% to 10% in 7 companies and more than 10% in 5 firms. Of the companies where FII increased stake, 74.2% have witnessed an increased price.
Based on the analyses it was found that in 205 companies FIIs increased their holding by less than or equal to 1%. According to a study on the rise in companies stake prices at the end of the quarter, the rise was up to 10% in cases of 107 companies, while 89 of them witnessed a rise of 10% to 50% and 9 firms had a rise of over 50%.
An opportunity exists for investors to invest in the 205 companies which witnessed price rise offers. But, they have to be careful as the rise sometimes is very erratic and in some cases it is even above 50%. It is generally believed that investors should identify companies where FIIs have just started consolidating their stake. It is in this category that CNI Research has identified those companies where FIIs' holding has just started rising as the rise is not even 1%.
A close look at these firms will find that there were cases where FIIs have just started raising the stake and the price rise is below 10%, which in other terms can be called under-performers and can still offer investors an opportunity to invest. In a similar study in Q2, CNI Research had identified 28 companies having potential to deliver higher returns.
Various filters were applied and the optimum mix where FIIs buying had just started and price rise was minimal was used to identify these firms
Foreign institutional investors' (FIIs) faith in the Indian stock markets is on the rise despite volatile market conditions and the economy witnessing an early stage on recovery. FIIs have not only increased their stake in companies but also added more firms under their belt, said CNI Research, a leading listed research body exclusively focusing on small and mid-cap companies in India.
CNI Research has found that FIIs have increased their stake in over 322 companies in Q3 (December quarter) as against 240 companies in Q2, showing the faith of foreign investors in India and the trend of rising investments in the country.
Among 322 companies, FIIs' holding increased by up to 2% in 259 cases over the previous period, from 2% to 5% in 51 firms, from 5% to 10% in 7 companies and more than 10% in 5 firms. Of the companies where FII increased stake, 74.2% have witnessed an increased price.
Based on the analyses it was found that in 205 companies FIIs increased their holding by less than or equal to 1%. According to a study on the rise in companies stake prices at the end of the quarter, the rise was up to 10% in cases of 107 companies, while 89 of them witnessed a rise of 10% to 50% and 9 firms had a rise of over 50%.
An opportunity exists for investors to invest in the 205 companies which witnessed price rise offers. But, they have to be careful as the rise sometimes is very erratic and in some cases it is even above 50%. It is generally believed that investors should identify companies where FIIs have just started consolidating their stake. It is in this category that CNI Research has identified those companies where FIIs' holding has just started rising as the rise is not even 1%.
A close look at these firms will find that there were cases where FIIs have just started raising the stake and the price rise is below 10%, which in other terms can be called under-performers and can still offer investors an opportunity to invest. In a similar study in Q2, CNI Research had identified 28 companies having potential to deliver higher returns.
Various filters were applied and the optimum mix where FIIs buying had just started and price rise was minimal was used to identify these firms
Wednesday, December 30, 2009
Tata leads wealth creation in 2009
(Courtesy Indian Express Finance)
As the market picked up the pieces from the global meltdown and inched back to its glorious milestones, the Tata group has leapt ahead of the bourses this year. Thirty-one companies from the salt-to software conglomerate saw their combined market capitalisation soar by more than Rs 2 lakh crore, or by over 150%, in 2009 (up to December 24, 2009). The jewel in the Tata crown, Tata Consultancy Services, had a rocking year, with its market capitilisation trebling, by 213%.
Investors in Mukesh Ambani's Reliance Industries group were also rewarded handsomely. The combined market capitalisation of the group swelled more than Rs 1.5 lakh crore, with flagship RIL recording an 80% jump in M-cap.
Together, the wealth of India's top 25 industrial houses-ranked according to turnover and measured by M-cap-rose by 113% to Rs 15.22 lakh crore, from Rs 7.15 lakh crore at the end of last year. In the same period, the benchmark 30-scrip Sensex (^BSESN : 17359.1 -42.46) gained nearly 80% to reach 17,360.61 points, while the broader 50-scrip Nifty (^NSEI : 5173.05 -5.35) moved up by 75%.
Among the larger business houses, Anil Dhirubhai Ambani Group saw its M-cap rising by just 15.6% this year.
The highest percentage increase, of over 350%, was recorded by the Om Prakash Jindal group; M-cap of group firm Jindal Steel & Power soared 366%. Power companies have been on steroids as such; the M-cap of Torrent Power moved up 326%.
Another sector that gave investors big returns was automobiles. After being battered towards the end of 2008, in the wake of the economic slowdown, companies such as Bajaj Auto, Tata Motors and Mahindra & Mahindra rebounded smartly, as consumer demand picked up.
The Indian stock market has been among the top five performers in Asia, ahead of China, this year. Foreign institutional investors have shown a good appetite for Indian stocks, buying equities worth over $16 billion, with the bulk of the money coming in after the Lok Sabha election results were announced on May 16, 2009.
With the outlook for the economy improving, India Inc is expected to turn in fairly good profit numbers in 2010-11. However, given the sharp run-up in stocks in 2009 and the fairly rich valuations, market watchers believe it would be unreasonable to expect similar returns in 2010.
As the market picked up the pieces from the global meltdown and inched back to its glorious milestones, the Tata group has leapt ahead of the bourses this year. Thirty-one companies from the salt-to software conglomerate saw their combined market capitalisation soar by more than Rs 2 lakh crore, or by over 150%, in 2009 (up to December 24, 2009). The jewel in the Tata crown, Tata Consultancy Services, had a rocking year, with its market capitilisation trebling, by 213%.
Investors in Mukesh Ambani's Reliance Industries group were also rewarded handsomely. The combined market capitalisation of the group swelled more than Rs 1.5 lakh crore, with flagship RIL recording an 80% jump in M-cap.
Together, the wealth of India's top 25 industrial houses-ranked according to turnover and measured by M-cap-rose by 113% to Rs 15.22 lakh crore, from Rs 7.15 lakh crore at the end of last year. In the same period, the benchmark 30-scrip Sensex (^BSESN : 17359.1 -42.46) gained nearly 80% to reach 17,360.61 points, while the broader 50-scrip Nifty (^NSEI : 5173.05 -5.35) moved up by 75%.
Among the larger business houses, Anil Dhirubhai Ambani Group saw its M-cap rising by just 15.6% this year.
The highest percentage increase, of over 350%, was recorded by the Om Prakash Jindal group; M-cap of group firm Jindal Steel & Power soared 366%. Power companies have been on steroids as such; the M-cap of Torrent Power moved up 326%.
Another sector that gave investors big returns was automobiles. After being battered towards the end of 2008, in the wake of the economic slowdown, companies such as Bajaj Auto, Tata Motors and Mahindra & Mahindra rebounded smartly, as consumer demand picked up.
The Indian stock market has been among the top five performers in Asia, ahead of China, this year. Foreign institutional investors have shown a good appetite for Indian stocks, buying equities worth over $16 billion, with the bulk of the money coming in after the Lok Sabha election results were announced on May 16, 2009.
With the outlook for the economy improving, India Inc is expected to turn in fairly good profit numbers in 2010-11. However, given the sharp run-up in stocks in 2009 and the fairly rich valuations, market watchers believe it would be unreasonable to expect similar returns in 2010.
Monday, December 28, 2009
GLOBAL ECONOMY 2010 - Crystal ball gazing
Courtesy Reuters
Thanks to roughly $5 trillion in special lending and spending programs, world finance leaders have managed to revive economic growth.
In 2010, the bills may start coming due.
The United States, the euro zone, Britain and Japan are all expected to report economic growth for the final three months of 2009, according to a recent Reuters poll of more than 150 economists. Official figures aren't due for several more weeks, but recent reports on factory activity and world trade point to a stronger fourth quarter.
While the pace of growth may slacken a bit in 2010, most forecasters think it will stay positive in advanced economies. But unemployment is likely to remain uncomfortably high, which suggests already strained government finances will worsen.
That will leave countries with limited resources to step in should the economy falter again. And the rising debt burden is beginning to raise alarms with some economists and investors.
The International Monetary Fund thinks debt as a percentage of gross domestic product will rise in all of the Group of Seven wealthiest countries in 2010, and probably remain elevated at least through 2014.
"The foundation of the global economy remains unstable even if the cracks have been smoothed over and we are all happy to forget what lies beneath the heavy layer of the public sector's liquidity insurance," said Lena Komileva, an economist with Tullett Prebon in London.
Komileva argues that the global economy is in the midst of a "mega cycle of multi-year economic trends" that won't quickly be resolved, even after growth is firmly established.
In addition to high government debt, many consumers are carrying large debt burdens, particularly in the United States and Britain. There is also the matter of elevated unemployment in most of the advanced economies, and credit is still not flowing normally between banks and borrowers.
Those factors, along with a tame inflation outlook, will probably give the major central banks ample reason to keep benchmark interest rates unusually low, at least through the first half of 2010 and perhaps well into 2011.
Longer-term interest rates, however, may rise anyway should investors grow more anxious about how countries will repay their debt when sluggish economic growth is curtailing tax revenues and aging populations are draining resources.
Higher long-term rates would make it costlier for businesses to fund investment or expansion, and for households to borrow money to buy cars and homes, putting a drag on the economic recovery.
Thanks to roughly $5 trillion in special lending and spending programs, world finance leaders have managed to revive economic growth.
In 2010, the bills may start coming due.
The United States, the euro zone, Britain and Japan are all expected to report economic growth for the final three months of 2009, according to a recent Reuters poll of more than 150 economists. Official figures aren't due for several more weeks, but recent reports on factory activity and world trade point to a stronger fourth quarter.
While the pace of growth may slacken a bit in 2010, most forecasters think it will stay positive in advanced economies. But unemployment is likely to remain uncomfortably high, which suggests already strained government finances will worsen.
That will leave countries with limited resources to step in should the economy falter again. And the rising debt burden is beginning to raise alarms with some economists and investors.
The International Monetary Fund thinks debt as a percentage of gross domestic product will rise in all of the Group of Seven wealthiest countries in 2010, and probably remain elevated at least through 2014.
"The foundation of the global economy remains unstable even if the cracks have been smoothed over and we are all happy to forget what lies beneath the heavy layer of the public sector's liquidity insurance," said Lena Komileva, an economist with Tullett Prebon in London.
Komileva argues that the global economy is in the midst of a "mega cycle of multi-year economic trends" that won't quickly be resolved, even after growth is firmly established.
In addition to high government debt, many consumers are carrying large debt burdens, particularly in the United States and Britain. There is also the matter of elevated unemployment in most of the advanced economies, and credit is still not flowing normally between banks and borrowers.
Those factors, along with a tame inflation outlook, will probably give the major central banks ample reason to keep benchmark interest rates unusually low, at least through the first half of 2010 and perhaps well into 2011.
Longer-term interest rates, however, may rise anyway should investors grow more anxious about how countries will repay their debt when sluggish economic growth is curtailing tax revenues and aging populations are draining resources.
Higher long-term rates would make it costlier for businesses to fund investment or expansion, and for households to borrow money to buy cars and homes, putting a drag on the economic recovery.
Thursday, December 17, 2009
POLL - Sensex set for slower rise in 2010
The BSE Sensex is likely to extend its recent rally into 2010, underpinned by strong economic growth and an improving earnings outlook, but it is unlikely to repeat 2009's spectacular rise, a Reuters poll has shown.
The benchmark Sensex is likely to rise nearly 9 percent by mid-2010 and by more than 12 percent by the end of next year from Wednesday's close of 16,912.77, the poll has found.
The median forecast of around 20 brokerages and investment houses, taken over the past week, has the benchmark rising to 18,375 points by the middle of 2010, and will likely end the year at 19,000.
"The Indian economy will do well. Corporate earnings will do well," said Jigar Shah, senior vice-president of Kim Eng Securities, who saw the Sensex rising to 21,000 by mid-2010.
The Sensex hit a record high of 21,206.77 in Jan. 2008.
Other analysts were worried that the withdrawal of stimulus measures and the impact of this year's weak monsoon could temper the stock market's strength.
"A lot depends on monsoon. We are on the edge as far as food reserves are concerned," said Arun Kejriwal, director of research firm KRIS, pointing to the galloping food inflation.
"If we have a bad monsoon, the market could really tumble," he added.
The benchmark is up by three-quarters so far in 2009 and on track to post its best yearly gains since 1991, with analysts polled expecting the Sensex to end the year at 17,000 points.
It had posted its worst yearly loss in 2008, when it slumped by more than half.
"Life is not going to be that easy for equity investors next year," said Rajesh Agarwal, director of CD Equisearch.
"You should see the gains this year in the context of the mayhem last year and, therefore, one shouldn't expect the market to rise sharply from this level in the year ahead."
The highest mid-year 2010 forecast had the BSE index scaling new highs and touching 23,000, while five forecasts expect a decline from current levels, with the most pessimistic view expecting the benchmark to decline 40 percent from Wednesday's close to 10,115.
The forecast for the Sensex at the end of 2010 ranged from 10,893 to 24,000.
The BSE index has outperformed Japan's Nikkei, which is up 14 percent so far this year, and a 50 percent rise in Hong Kong's Hang Seng Index, but is just behind an 80 percent rise in China's Shanghai Composite Index.
The BSE index trades at 21.8 times forward earnings, in line with the benchmark in South Korea, but higher than Indonesia which trades at a multiple of 15.8 .
China's Shanghai Composite Index traded at 24.1 times earnings while Brazil and Russia trade at about 17.6 and 13.3 respectively.
The benchmark Sensex is likely to rise nearly 9 percent by mid-2010 and by more than 12 percent by the end of next year from Wednesday's close of 16,912.77, the poll has found.
The median forecast of around 20 brokerages and investment houses, taken over the past week, has the benchmark rising to 18,375 points by the middle of 2010, and will likely end the year at 19,000.
"The Indian economy will do well. Corporate earnings will do well," said Jigar Shah, senior vice-president of Kim Eng Securities, who saw the Sensex rising to 21,000 by mid-2010.
The Sensex hit a record high of 21,206.77 in Jan. 2008.
Other analysts were worried that the withdrawal of stimulus measures and the impact of this year's weak monsoon could temper the stock market's strength.
"A lot depends on monsoon. We are on the edge as far as food reserves are concerned," said Arun Kejriwal, director of research firm KRIS, pointing to the galloping food inflation.
"If we have a bad monsoon, the market could really tumble," he added.
The benchmark is up by three-quarters so far in 2009 and on track to post its best yearly gains since 1991, with analysts polled expecting the Sensex to end the year at 17,000 points.
It had posted its worst yearly loss in 2008, when it slumped by more than half.
"Life is not going to be that easy for equity investors next year," said Rajesh Agarwal, director of CD Equisearch.
"You should see the gains this year in the context of the mayhem last year and, therefore, one shouldn't expect the market to rise sharply from this level in the year ahead."
The highest mid-year 2010 forecast had the BSE index scaling new highs and touching 23,000, while five forecasts expect a decline from current levels, with the most pessimistic view expecting the benchmark to decline 40 percent from Wednesday's close to 10,115.
The forecast for the Sensex at the end of 2010 ranged from 10,893 to 24,000.
The BSE index has outperformed Japan's Nikkei, which is up 14 percent so far this year, and a 50 percent rise in Hong Kong's Hang Seng Index, but is just behind an 80 percent rise in China's Shanghai Composite Index.
The BSE index trades at 21.8 times forward earnings, in line with the benchmark in South Korea, but higher than Indonesia which trades at a multiple of 15.8 .
China's Shanghai Composite Index traded at 24.1 times earnings while Brazil and Russia trade at about 17.6 and 13.3 respectively.
Saturday, December 12, 2009
Market update...
Indian markets ended Friday below the dotted line on profit booking witnessed in frontliners. Domestic bourses were unable to sustain the opening gains due to a hasty reaction to October IIP data. The US Dow, however closed Friday 65 points up, on positive news on the retail sales front.
Friday, November 20, 2009
Sensex makes remarkable recovery, regains 17K
The Sensex opened in the red at 16,772, mirroring negative global cues. Follow-up selling saw the index slip to a low of 16,636 - down 150 points from the previous close.
However, fresh buying in mid-noon trades saw the index jump into the positive zone. Cues from European markets helped the markets rebound. The buying momentum was so strong that the index rallied past the 17,000-mark to a high of 17,042 - up 406 points from the day's low.
The Sensex finally ended at 17,021, up 236 points. Reliance Industries contributed the maximum, (47 points) followed by HDFC (24 points) and SBI (21 points).
The NSE Nifty ended at 5,052, up 64 points.
Among the sectoral indices, barring consumer durables all the index ended in the positive. The Bankex index led the upmove, up 2% at 10,253. It was followed by oil & gas and maetal indices, up 1.5% each.
The consumer durables on the other hand was down 1% at 3,484.
INDEX MOVERS...
ACC soared 4.5% at Rs 766 and Hindalco advanced 3.5% to Rs 134. Jaiprakash Associates, Tata Steel, HDFC, Mahindra & Mahindra and SBI added over 2.5% each to Rs 233, Rs 551, Rs 2,819, Rs 1,040 and Rs 2,336, respectively.
DLF, HDFC Bank, Reliance, Grasim, TCS, Sun Pharma, Sterlite and ITC increased 1.5-2.5% each.
...AND THE SHAKERS
Bharti Airtel on the other hand was among the top loser down 1.5% at Rs 289. Reliance Infrastrcuture, Maruti, BHEL and Tata Power were some of the other marginal losers on the BSE.
The market breadth tunred positive at close - out of 2,787 shares traded, 1,462 advanced, 1,226 declined on the BSE.
VALUE & VOLUME TOPPERS
HDIL topped the value chart on the BSE with a turnover of Rs 210.48 crore. It was followed by Suzlon (Rs 207.14 crore), JSW Steel (Rs 196.98 crore), SBI (Rs 180.15 crore) and Reliance (Rs 158.13 crore).
Cals Refineries led the volume chart with trades of 50.87 million shares. It was followed by Suzlon (28.16 million), Unitech (13.04 million), Dena Bank (9.46 million) and Mahindra Satyam (8.85 million) shares on the BSE
However, fresh buying in mid-noon trades saw the index jump into the positive zone. Cues from European markets helped the markets rebound. The buying momentum was so strong that the index rallied past the 17,000-mark to a high of 17,042 - up 406 points from the day's low.
The Sensex finally ended at 17,021, up 236 points. Reliance Industries contributed the maximum, (47 points) followed by HDFC (24 points) and SBI (21 points).
The NSE Nifty ended at 5,052, up 64 points.
Among the sectoral indices, barring consumer durables all the index ended in the positive. The Bankex index led the upmove, up 2% at 10,253. It was followed by oil & gas and maetal indices, up 1.5% each.
The consumer durables on the other hand was down 1% at 3,484.
INDEX MOVERS...
ACC soared 4.5% at Rs 766 and Hindalco advanced 3.5% to Rs 134. Jaiprakash Associates, Tata Steel, HDFC, Mahindra & Mahindra and SBI added over 2.5% each to Rs 233, Rs 551, Rs 2,819, Rs 1,040 and Rs 2,336, respectively.
DLF, HDFC Bank, Reliance, Grasim, TCS, Sun Pharma, Sterlite and ITC increased 1.5-2.5% each.
...AND THE SHAKERS
Bharti Airtel on the other hand was among the top loser down 1.5% at Rs 289. Reliance Infrastrcuture, Maruti, BHEL and Tata Power were some of the other marginal losers on the BSE.
The market breadth tunred positive at close - out of 2,787 shares traded, 1,462 advanced, 1,226 declined on the BSE.
VALUE & VOLUME TOPPERS
HDIL topped the value chart on the BSE with a turnover of Rs 210.48 crore. It was followed by Suzlon (Rs 207.14 crore), JSW Steel (Rs 196.98 crore), SBI (Rs 180.15 crore) and Reliance (Rs 158.13 crore).
Cals Refineries led the volume chart with trades of 50.87 million shares. It was followed by Suzlon (28.16 million), Unitech (13.04 million), Dena Bank (9.46 million) and Mahindra Satyam (8.85 million) shares on the BSE
Wednesday, November 18, 2009
FIIs net buy Rs 412cr, DIIs net sell Rs 257cr
Foreign institutional investors (FIIs) were net buyers of Rs 412.13 crore (provisional) today, according to data released by BSE.
While FIIs made gross purchases of Rs 2,597.45 crore, gross sales totalled Rs 2,185.32 crore.
Domestic institutional investors (DIIs) were net sellers of Rs 256.73 crore today. While DIIs made gross purchases of Rs 1,091.23 crore, gross sales totalled Rs 1,347.96 crore.
FIIs were also net buyers of Rs 593.70 crore on Tuesday, November 17, according to data released by Sebi today. While FIIs made gross purchases of Rs 2,379.40 crore, gross sales totalled Rs 1,785.60 crore.
Mutual funds (MFs) were net sellers of Rs 308.40 crore on Tuesday. MFs made purchases of Rs 458.70 crore and sales of Rs 767.10 crore.
While FIIs made gross purchases of Rs 2,597.45 crore, gross sales totalled Rs 2,185.32 crore.
Domestic institutional investors (DIIs) were net sellers of Rs 256.73 crore today. While DIIs made gross purchases of Rs 1,091.23 crore, gross sales totalled Rs 1,347.96 crore.
FIIs were also net buyers of Rs 593.70 crore on Tuesday, November 17, according to data released by Sebi today. While FIIs made gross purchases of Rs 2,379.40 crore, gross sales totalled Rs 1,785.60 crore.
Mutual funds (MFs) were net sellers of Rs 308.40 crore on Tuesday. MFs made purchases of Rs 458.70 crore and sales of Rs 767.10 crore.
Friday, November 13, 2009
Sensex ignores global cues, gains 1%
After an initial slide, the Sensex turned volatile on the back of weak cues from Asian markets. The index then gained strength and touched a high of 16,910 - up 243 points from the day's low of 16,667.
The Sensex finally ended with a gain of 153 points (1%) at 16,849.
Asian markets ended flat with the Nikkei slipping 34 points. US markets had also edged lower on energy shares.
The Centre for Monitoring Indian Economies' (CMIE) upgraded view of India's GDP (from 6% to 6.2%) helped the NSE Nifty to cross the 5,000 mark again. However, the index slipped from the day's high to end at 4,999 - up 46 points.
The BSE market breadth turned neutral towards the end. Out of 2,827 stocks traded 1,378 advanced while 1,349 declined.
All indices ened in the green, barring realty and consumer durables. The BSE metal, IT and auto indices were up 1.5% each. The oil & gas index added 1% in trades today.
INDEX MOVERS...
Hero Honda was the best performer and surged 4% to Rs 1,579. Maruti Suzuki also pushed up 4% to Rs 1,480.
IT stocks were the biggest contributors with Infosys gaining 1.5% to Rs 2,359 and TCS moving up 2.5% at Rs 670. Wipro also edged up 1.2% to Rs 633.
ONGC added 3% to Rs 1,184 on hopes of a rise in gas prices by the government. Index heavy-weight, ICICI Bank advanced 1.6% to Rs 909.
Other gainers in the market today included Tata Steel, Hindustan Unilever, Hindalco, Reliance Infastructure and Grasim.
...AND THE SHAKERS
Jaiprakash Associates was the big loser in the benchmark today. The stock slid 2% to Rs 232.
VALUE & VOLUME TOPPERS...
Mahindra Satyam topped the value chart with a turnover of Rs 521.03 crore on the BSE. It was followed by Reliance (149.12 crore), DLF (Rs 144.20 crore), JSW Steel (Rs 122.24 crore) and SBI (Rs 119.86 crore).
Mahindra Satyam also leads the volume chart with trades of 46.50 million shares. It is followed by Cals Refineries (16.10 million), Wire & Wireless India (15.50 million), Suzlon Energy (12.76 million) and Unitech (9.19 million) shares on the BSE.
The Sensex finally ended with a gain of 153 points (1%) at 16,849.
Asian markets ended flat with the Nikkei slipping 34 points. US markets had also edged lower on energy shares.
The Centre for Monitoring Indian Economies' (CMIE) upgraded view of India's GDP (from 6% to 6.2%) helped the NSE Nifty to cross the 5,000 mark again. However, the index slipped from the day's high to end at 4,999 - up 46 points.
The BSE market breadth turned neutral towards the end. Out of 2,827 stocks traded 1,378 advanced while 1,349 declined.
All indices ened in the green, barring realty and consumer durables. The BSE metal, IT and auto indices were up 1.5% each. The oil & gas index added 1% in trades today.
INDEX MOVERS...
Hero Honda was the best performer and surged 4% to Rs 1,579. Maruti Suzuki also pushed up 4% to Rs 1,480.
IT stocks were the biggest contributors with Infosys gaining 1.5% to Rs 2,359 and TCS moving up 2.5% at Rs 670. Wipro also edged up 1.2% to Rs 633.
ONGC added 3% to Rs 1,184 on hopes of a rise in gas prices by the government. Index heavy-weight, ICICI Bank advanced 1.6% to Rs 909.
Other gainers in the market today included Tata Steel, Hindustan Unilever, Hindalco, Reliance Infastructure and Grasim.
...AND THE SHAKERS
Jaiprakash Associates was the big loser in the benchmark today. The stock slid 2% to Rs 232.
VALUE & VOLUME TOPPERS...
Mahindra Satyam topped the value chart with a turnover of Rs 521.03 crore on the BSE. It was followed by Reliance (149.12 crore), DLF (Rs 144.20 crore), JSW Steel (Rs 122.24 crore) and SBI (Rs 119.86 crore).
Mahindra Satyam also leads the volume chart with trades of 46.50 million shares. It is followed by Cals Refineries (16.10 million), Wire & Wireless India (15.50 million), Suzlon Energy (12.76 million) and Unitech (9.19 million) shares on the BSE.
Thursday, November 12, 2009
Markets ignore IIP data, end in red
The markets opened on a flat note today and slipped into red almost immediately. Strong IIP numbers helped the index rebound into the green to touch a high of 16,897. The market, thereafter, turned volatile on the back of global cues, ignoring the earlier gains.
Industrial growth continued its upward march with factory production rising 9.1 per cent in September against 6 per cent in the same period last year.
However, profit taking in the late-noon session saw the index slumping once again into the red and tumble to a low of 16,605 - down 292 points from the day's high.
The Sensex recovered marginally towards the close and ended off the day's low at 16,696 - down 154 points.
The Nifty ended down 51 points at 4,953 - slipping once again below the 5,000 mark which it had crossed yesterday.
The market breadth was marginally negative. Out of 2,806 stocks traded 1,516 declined while 1,201 advanced.
INDEX SHAKERS...
Banking and metal stocks were the major draggers, accounting for more than half the loss of the Sensex.
ICICI Bank and SBI together were responsible for a loss of over 70 points in the benchmark index. The stocks dropped 3.4% each to Rs 895 and Rs 2,296, respectively. HDFC Bank slipped 1% to Rs 1,715.
Metal stocks were the other big loser. Tata Steel and Sterlite dropped 2.5% each to Rs 512 and Rs 837, respectively. Hindalco was down 2% at Rs 129.
DLF declined 3.5% to Rs 371. HDFC, Jaiprakash Associates, Maruti Suzuki, reliance Infrastructure and ITC shed 1-2% each.
...AND THE MOVERS
IT stocks were the only major gainers in the market today following a string of acquisitions by the major companies. Wipro and TCS gained 1.5% at Rs 625 and Rs 654, respectively. Infosys was flat at Rs 2,323.
Reliance Communications advanced 2% to Rs 175.
VALUE & VOLUME TOPPERS...
Indiabulls Realestate topped the value chart on the BSE with a turnover of Rs 1,648.30 crore, followed by Educomp Solutions (Rs 225.78 crore), DLF (Rs 211.65 crore), Reliance (Rs 185.92 crore) and HDIL (Rs 163.62 crore).
The volume chart was led by Indiabulls Real Estate with trades of over 68 million shares, followed by Suzlon (20.15 million), Mahindra Satyam (13.28 million), First Source (11.74 million) and Unitech (10.72 million).
Industrial growth continued its upward march with factory production rising 9.1 per cent in September against 6 per cent in the same period last year.
However, profit taking in the late-noon session saw the index slumping once again into the red and tumble to a low of 16,605 - down 292 points from the day's high.
The Sensex recovered marginally towards the close and ended off the day's low at 16,696 - down 154 points.
The Nifty ended down 51 points at 4,953 - slipping once again below the 5,000 mark which it had crossed yesterday.
The market breadth was marginally negative. Out of 2,806 stocks traded 1,516 declined while 1,201 advanced.
INDEX SHAKERS...
Banking and metal stocks were the major draggers, accounting for more than half the loss of the Sensex.
ICICI Bank and SBI together were responsible for a loss of over 70 points in the benchmark index. The stocks dropped 3.4% each to Rs 895 and Rs 2,296, respectively. HDFC Bank slipped 1% to Rs 1,715.
Metal stocks were the other big loser. Tata Steel and Sterlite dropped 2.5% each to Rs 512 and Rs 837, respectively. Hindalco was down 2% at Rs 129.
DLF declined 3.5% to Rs 371. HDFC, Jaiprakash Associates, Maruti Suzuki, reliance Infrastructure and ITC shed 1-2% each.
...AND THE MOVERS
IT stocks were the only major gainers in the market today following a string of acquisitions by the major companies. Wipro and TCS gained 1.5% at Rs 625 and Rs 654, respectively. Infosys was flat at Rs 2,323.
Reliance Communications advanced 2% to Rs 175.
VALUE & VOLUME TOPPERS...
Indiabulls Realestate topped the value chart on the BSE with a turnover of Rs 1,648.30 crore, followed by Educomp Solutions (Rs 225.78 crore), DLF (Rs 211.65 crore), Reliance (Rs 185.92 crore) and HDIL (Rs 163.62 crore).
The volume chart was led by Indiabulls Real Estate with trades of over 68 million shares, followed by Suzlon (20.15 million), Mahindra Satyam (13.28 million), First Source (11.74 million) and Unitech (10.72 million).
Monday, November 9, 2009
World stock markets get G-20 boost...
World stock markets rose today after the Group of 20 leading rich and developing countries agreed to maintain their stimulus measures in the wake of weak U.S. employment figures.
Sunday, November 8, 2009
Wkly Tech Analysis: Nifty may move in 4,640-4,900 band
In a week marked by high volatility, markets corrected sharply only to bounce back with greater strength. Although, markets have bounced back sharply, chances of a full recovery look remote currently. Going forward, one needs to watch the 15,530-15,640 zone for the Sensex as crucial for the current upmove to remain intact. As and when it comes below this level, the index is likely to test its long-term support of 14,800.
The BSE benchmark index tumbled to a low of 15,331 at the start of the week. Thereafter, the index rallied to a high of 16,284 — a sharp recovery of 953 points. It finally ended the week with a gain of 262 points at 16,158.
Among the index stocks, Bharti Airtel zoomed 9.5 per cent to Rs 320, and Jaiprakash Associates soared 8.5 per cent to Rs 228. ICICI Bank, Tata Steel, Mahindra & Mahindra, Maruti and Sterlite were the other major gainers. On the other hand, Tata Power slipped over 5 per cent to Rs 1,343. ACC, Hindustan Unilever, ITC and Hero Honda were the other prominent losers.
The near-term support and resistance for the index is at 15,900 and 16,500, respectively. Positive news flow on the disinvestment and economic front is likely to act as boosters. However, the global cues will continue to have a dominant effect on markets in the short term. The NSE Nifty moved in a range of 298 points, from a low of 4,539, the index surged to a high of 4,836, before settling with a gain of 84 points at 4,796.
The Nifty is likely to find considerable support around 4,640 and resistance around 4,900. Technically, the short-term trend is still bearish as the index hovers below its short-term (20-day) and mid-term (50-day) moving averages which are currently at 4,885 and 4,928, respectively.
The Nifty’s low of 4,539 last week seems to be a perfect support on the monthly and yearly charts. Hence, the probability of the index breaking slipping this level may become slim once the index firms up above the 4,900 level. 4,525 is the crucial support for the Nifty on the monthly and yearly chart, after which the index may drop to the 3,900 level.
The BSE benchmark index tumbled to a low of 15,331 at the start of the week. Thereafter, the index rallied to a high of 16,284 — a sharp recovery of 953 points. It finally ended the week with a gain of 262 points at 16,158.
Among the index stocks, Bharti Airtel zoomed 9.5 per cent to Rs 320, and Jaiprakash Associates soared 8.5 per cent to Rs 228. ICICI Bank, Tata Steel, Mahindra & Mahindra, Maruti and Sterlite were the other major gainers. On the other hand, Tata Power slipped over 5 per cent to Rs 1,343. ACC, Hindustan Unilever, ITC and Hero Honda were the other prominent losers.
The near-term support and resistance for the index is at 15,900 and 16,500, respectively. Positive news flow on the disinvestment and economic front is likely to act as boosters. However, the global cues will continue to have a dominant effect on markets in the short term. The NSE Nifty moved in a range of 298 points, from a low of 4,539, the index surged to a high of 4,836, before settling with a gain of 84 points at 4,796.
The Nifty is likely to find considerable support around 4,640 and resistance around 4,900. Technically, the short-term trend is still bearish as the index hovers below its short-term (20-day) and mid-term (50-day) moving averages which are currently at 4,885 and 4,928, respectively.
The Nifty’s low of 4,539 last week seems to be a perfect support on the monthly and yearly charts. Hence, the probability of the index breaking slipping this level may become slim once the index firms up above the 4,900 level. 4,525 is the crucial support for the Nifty on the monthly and yearly chart, after which the index may drop to the 3,900 level.
Stock Market Rebound Boosts Warren Buffet's Berkshire
Berkshire Hathaway's third-quarter earnings tripled with help from rising stock markets. Profit jumped to $3.24 billion, and revenue rose 7.1% to $29.9 billion.
Wednesday, November 4, 2009
Markets recover with a vengeance...
After being halted in their tracks in the past two weeks, the bulls of the Indian stock markets came back with a vengeance.
The Nifty ended the day well above the 4,700 mark and the Sensex closed just shy of the 16,000 mark, with the realty, metal and IT stocks leading the way. In the process, the markets more than made up for the previous day's losses. The Sensex ended at 15,912, stronger by 507 points or 3% and the Nifty ended at 4711, up 147 points
Finance Minister Pranab Mukherjee had allayed fears of curbing capital inflows. The Asian bourses did well. Moreover, the European markets are trading firm and the Dow futures are also exhibiting strength, ahead of the Fed's policy statement scheduled later in the day.
Reliance alone catapulted the Sensex by more than 113 points. Infosys contributed 64 points and ICICI was responsible for a 60-points appreciation on the benchmark.
The stocks in the limelight were Jaiprakash Associates (stronger by 9% at Rs 212), Hindalco (higher by 9% at Rs 119) and DLF (up 8% at Rs 365). Sterlite gained 6% at Rs 770, Reliance added 5% at Rs 1840 and Tata Steel put on 5% at Rs 1,920.
Sun Pharma, Grasim and Tata Power were laggards, shedding up to 1% at Rs 1,375, Rs 2,167 and Rs 1,307 respectively.
The market breadth was strong. Out of 2778 stocks traded on the BSE there were 1770 advancing stocks as against 950 declines.
VALUE & VOLUME TOPPERS
State Bank of India topped the value charts with a turnover of Rs 202.38 crore, followed by Reliance (Rs 196.96 crore), Suzlon (Rs 183.03 crore), Tata Steel (Rs 174.20 crore) and Educomp (Rs 170.16 crore).
Suzlon led the volume charts with trades of 32.70 million shares, followed by Unitech (17.94 million), Reliance Natural Resources (10.59 million), Ispat (8.07 million) and Indiabulls Power (8.06 million).
The Nifty ended the day well above the 4,700 mark and the Sensex closed just shy of the 16,000 mark, with the realty, metal and IT stocks leading the way. In the process, the markets more than made up for the previous day's losses. The Sensex ended at 15,912, stronger by 507 points or 3% and the Nifty ended at 4711, up 147 points
Finance Minister Pranab Mukherjee had allayed fears of curbing capital inflows. The Asian bourses did well. Moreover, the European markets are trading firm and the Dow futures are also exhibiting strength, ahead of the Fed's policy statement scheduled later in the day.
Reliance alone catapulted the Sensex by more than 113 points. Infosys contributed 64 points and ICICI was responsible for a 60-points appreciation on the benchmark.
The stocks in the limelight were Jaiprakash Associates (stronger by 9% at Rs 212), Hindalco (higher by 9% at Rs 119) and DLF (up 8% at Rs 365). Sterlite gained 6% at Rs 770, Reliance added 5% at Rs 1840 and Tata Steel put on 5% at Rs 1,920.
Sun Pharma, Grasim and Tata Power were laggards, shedding up to 1% at Rs 1,375, Rs 2,167 and Rs 1,307 respectively.
The market breadth was strong. Out of 2778 stocks traded on the BSE there were 1770 advancing stocks as against 950 declines.
VALUE & VOLUME TOPPERS
State Bank of India topped the value charts with a turnover of Rs 202.38 crore, followed by Reliance (Rs 196.96 crore), Suzlon (Rs 183.03 crore), Tata Steel (Rs 174.20 crore) and Educomp (Rs 170.16 crore).
Suzlon led the volume charts with trades of 32.70 million shares, followed by Unitech (17.94 million), Reliance Natural Resources (10.59 million), Ispat (8.07 million) and Indiabulls Power (8.06 million).
Thursday, October 29, 2009
US economy grows in 3Q, signals end of recession
US economy grows again in 3rd quarter, best showing in 2 years signals end of recession
The U.S. economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.
Going forward, many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans.
"This welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered," said Christina Romer, President Barack Obama's chief economist. "It will take sustained, robust ... growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve."
The much-awaited turnaround reported Thursday by the Commerce Department ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947.
It also marked the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth.
On Wall Street, the news lifted stocks. The Dow Jones industrials gained nearly 110 points in midday trading and broader indices also rose.
The third-quarter's performance -- the strongest since right before the country fell into recession in December 2007 -- was slightly better than the 3.3 percent growth rate economists expected.
Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes.
Consumer spending on big-ticket manufactured goods soared at an annualized rate of 22.3 percent in the third quarter, the most since the end of 2001. The jump largely reflected car purchases spurred by the government's "Cash for Clunkers" program that offered a rebate of up to $4,500 to buy new cars and trade in old gas guzzlers.
The housing market also turned a corner in the summer. Spending on housing projects jumped at an annualized pace of 23.4 percent, the largest jump since 1986. It was the first time since the end of 2005 that spending on housing was positive. Purchases of home furnishings and appliances also added to economic growth.
The government's $8,000 tax credit for first-time home buyers supported the housing rebound. Congress is considering extending the credit, which expires on Nov. 30.
The U.S. economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.
Going forward, many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans.
"This welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered," said Christina Romer, President Barack Obama's chief economist. "It will take sustained, robust ... growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve."
The much-awaited turnaround reported Thursday by the Commerce Department ended the streak of four straight quarters of contracting economic activity, the first time that's happened on records dating to 1947.
It also marked the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth.
On Wall Street, the news lifted stocks. The Dow Jones industrials gained nearly 110 points in midday trading and broader indices also rose.
The third-quarter's performance -- the strongest since right before the country fell into recession in December 2007 -- was slightly better than the 3.3 percent growth rate economists expected.
Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes.
Consumer spending on big-ticket manufactured goods soared at an annualized rate of 22.3 percent in the third quarter, the most since the end of 2001. The jump largely reflected car purchases spurred by the government's "Cash for Clunkers" program that offered a rebate of up to $4,500 to buy new cars and trade in old gas guzzlers.
The housing market also turned a corner in the summer. Spending on housing projects jumped at an annualized pace of 23.4 percent, the largest jump since 1986. It was the first time since the end of 2005 that spending on housing was positive. Purchases of home furnishings and appliances also added to economic growth.
The government's $8,000 tax credit for first-time home buyers supported the housing rebound. Congress is considering extending the credit, which expires on Nov. 30.
Friday, October 23, 2009
Markets end flat as heavyweights disappoint...
After yesterday's over 200 points fall, the Sensex opened on an absolutely flat note at 16,796.
Strong global cues gave a fillip to the BSE index and the Sensex soared 217 points to a high of 17,007. However, significant selling pressure in India's most valuable company, Reliance, coupled with capital goods majors - BHEL and Larsen & Toubro - dragged the market down to a low of 16,765 - down 242 points. The Sensex finally ended with a marginal gain of 21 points at 16,811.
The Nifty ended flat at 4,997 - up eight points.
The market breadth was almost neutral. Out of 2,851 shares traded 1,414 advanced while 1,327 declined.
INDEX SHAKERS...
Sensex heavy-weight, Reliance dropped over 4% to Rs 2,047 - which resulted to a 95 points loss for the Sensex. The stock slipped after its partner's Hardy Oil announced plans to abandon one of its well from the KG basin field. According to reports, Hardy Oil stock tumbled around 36%, while the company held 10% stake in the said well, the balance stake is held by Reliance. On its part, however, Reliance clarified that work is on on the said field, and further clarifications will be done later.
Grasim shed 3% to Rs 2,150. Larsen & Toubro slipped for the second day after its Q2 results. The stock dipped 2.3% to Rs 1,571.
Tata Motors, Tata Steel, Bharti Airtel, BHEL, Reliance Infrastructure, Hero Honda and Reliance Communications were the other index losers.
...AND THE MOVERS
FMCG major, ITC, jumped 5% to Rs 260 on better-than-expected Q2 numbers. Mahindra & Mahindra and Maruti Suzuki added over 2% each to Rs 926 and Rs 1,517, respectively.
IT stocks held on to gains. Infosys, TCS and Wipro moved up 2% each to Rs 2,260, Rs 641 and Rs 589, respectively.
Banking stocks like ICICI Bank, HDFC Bank and SBI contributed to the index's upmove through the day. ICICI Bank and HDFC Bank advanced 1.5% each while SBI was up 1.2%
Strong global cues gave a fillip to the BSE index and the Sensex soared 217 points to a high of 17,007. However, significant selling pressure in India's most valuable company, Reliance, coupled with capital goods majors - BHEL and Larsen & Toubro - dragged the market down to a low of 16,765 - down 242 points. The Sensex finally ended with a marginal gain of 21 points at 16,811.
The Nifty ended flat at 4,997 - up eight points.
The market breadth was almost neutral. Out of 2,851 shares traded 1,414 advanced while 1,327 declined.
INDEX SHAKERS...
Sensex heavy-weight, Reliance dropped over 4% to Rs 2,047 - which resulted to a 95 points loss for the Sensex. The stock slipped after its partner's Hardy Oil announced plans to abandon one of its well from the KG basin field. According to reports, Hardy Oil stock tumbled around 36%, while the company held 10% stake in the said well, the balance stake is held by Reliance. On its part, however, Reliance clarified that work is on on the said field, and further clarifications will be done later.
Grasim shed 3% to Rs 2,150. Larsen & Toubro slipped for the second day after its Q2 results. The stock dipped 2.3% to Rs 1,571.
Tata Motors, Tata Steel, Bharti Airtel, BHEL, Reliance Infrastructure, Hero Honda and Reliance Communications were the other index losers.
...AND THE MOVERS
FMCG major, ITC, jumped 5% to Rs 260 on better-than-expected Q2 numbers. Mahindra & Mahindra and Maruti Suzuki added over 2% each to Rs 926 and Rs 1,517, respectively.
IT stocks held on to gains. Infosys, TCS and Wipro moved up 2% each to Rs 2,260, Rs 641 and Rs 589, respectively.
Banking stocks like ICICI Bank, HDFC Bank and SBI contributed to the index's upmove through the day. ICICI Bank and HDFC Bank advanced 1.5% each while SBI was up 1.2%
Thursday, October 22, 2009
Leading US economic indicators rise again in Sept.
Leading US economic indicators rise for 6th straight month in Sept., point to growth next year
A private forecast of US economic activity rose for the sixth straight month in September, a sign the economy will keep growing next year.
The Conference Board's index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August. Wall Street economists expected an increase of 0.8 percent last month, according to a survey by Thomson Reuters.
Economists expect the economy grew about 3 percent in the third quarter after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend.
The Conference Board index's six-month growth rate through September was the strongest since 1983, but joblessness was weighing on the recovery.
A private forecast of US economic activity rose for the sixth straight month in September, a sign the economy will keep growing next year.
The Conference Board's index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August. Wall Street economists expected an increase of 0.8 percent last month, according to a survey by Thomson Reuters.
Economists expect the economy grew about 3 percent in the third quarter after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend.
The Conference Board index's six-month growth rate through September was the strongest since 1983, but joblessness was weighing on the recovery.
Wednesday, October 21, 2009
US Corporate Results...
Morgan Stanley profit ends losing streak
Eli Lilly posts 3Q profit ahead of predictions
Boeing posts $1.6BM loss for 3Q on plane charges
Continental loses $18 million in third quarter
Wells Fargo 3Q profit rises to $3.2 billion
Eli Lilly posts 3Q profit ahead of predictions
Boeing posts $1.6BM loss for 3Q on plane charges
Continental loses $18 million in third quarter
Wells Fargo 3Q profit rises to $3.2 billion
Friday, October 9, 2009
Infosys profit falls 0.9 pct but outlook improves
Infosys Technologies Ltd. reported a slight decrease in quarterly profit today but raised its revenue forecast -- a sign the worst may be over for India's software services industry after being hard hit by the global downturn.
Infosys, India's second largest outsourcing firm, said net income fell 0.9 percent, to $317.0 million in the quarter ended Sept. 30 based on international accounting standards, beating its own forecast.
Revenues for the period were $1.15 billion, a 5.1 percent decline from the same period a year ago but a 2.9 percent improvement from the prior quarter.
"The business climate has improved," said Infosys chief executive S. Gopalakrishnan. "Clients are now looking to invest in a few strategic initiatives."
Infosys said it expects revenues for the fiscal year to be $4.6 billion to $4.62 billion, about 1 percent less than last year, but a more optimistic forecast than it made in July.
The company said it has boosted its cash holdings to $2.8 billion, added 35 new clients and 1,548 employees during the quarter.
Infosys, India's second largest outsourcing firm, said net income fell 0.9 percent, to $317.0 million in the quarter ended Sept. 30 based on international accounting standards, beating its own forecast.
Revenues for the period were $1.15 billion, a 5.1 percent decline from the same period a year ago but a 2.9 percent improvement from the prior quarter.
"The business climate has improved," said Infosys chief executive S. Gopalakrishnan. "Clients are now looking to invest in a few strategic initiatives."
Infosys said it expects revenues for the fiscal year to be $4.6 billion to $4.62 billion, about 1 percent less than last year, but a more optimistic forecast than it made in July.
The company said it has boosted its cash holdings to $2.8 billion, added 35 new clients and 1,548 employees during the quarter.
Wednesday, October 7, 2009
RIL consolidated FY09 net at Rs 15,296 cr
Mukesh Ambani group firm Reliance Industries (RIL) today reported a consolidated net profit of Rs 15,296 crore for the year ended March 31, 2009.
The company had registered a net profit of Rs 15,324 crore (from ordinary activities) in the FY08, the company stated in a filing to the Bombay Stock Exchange.
The announcement of audited financial results for 2008-09 came late as the merger of Reliance Petroleum with RIL was awaiting regulatory and court approvals.
The figures include those of Reliance Petroleum (RPL), which amalgamated with the company with effect from April 1, 2008 and are therefore, not comparable with those of previous year, the company said in the filing.
The net turnover of the company stood at Rs 1,51,224 crore for the year ended March 31, 2009, whereas it was Rs 1,37,147 crore a year-ago.
RIL has also proposed a dividend of Rs 13 per fully paid-up equity shares of Rs 10 each aggregating to Rs 2,219 crore, including the dividend distribution tax, the filing added.
The board has considered dividend on the shares issued to the shareholders erstwhile RPL as well.
The RIL board also approved a bonus issue of one share for each share held in the company, subject to the approval of the shareholders.
Further, the provision for current tax for the year ended March 31, 2009, includes provision for Fringe Benefit Tax of Rs 57 crore.
On standalone basis, RIL's audited net profit stood at Rs 15,309 crore for 2008-09, whereas it was Rs 19,458 crore in the previous year.
The company's standalone net turnover was Rs 1,41,847 crore in the last fiscal, while it was Rs 1,33,443 crore in 2007-08.
During the year, the company announced a voluntary separation scheme for the employees of Patalganga unit and about 430 employees had accepted the VSS.
The company said in the filing that it has recognised Rs 370 crore towards liabilities on account of corporate guarantees issues on behalf of a subsidiary, being an exceptional item.
In the previous year, exceptional item of Rs 4,733 crore represent gains primarily arising out of transactions concerning Reliance Petroleum shares.
Shares of RIL closed down 1.57 per cent at Rs 2,099 on the Bombay Stock Exchange.
The company had registered a net profit of Rs 15,324 crore (from ordinary activities) in the FY08, the company stated in a filing to the Bombay Stock Exchange.
The announcement of audited financial results for 2008-09 came late as the merger of Reliance Petroleum with RIL was awaiting regulatory and court approvals.
The figures include those of Reliance Petroleum (RPL), which amalgamated with the company with effect from April 1, 2008 and are therefore, not comparable with those of previous year, the company said in the filing.
The net turnover of the company stood at Rs 1,51,224 crore for the year ended March 31, 2009, whereas it was Rs 1,37,147 crore a year-ago.
RIL has also proposed a dividend of Rs 13 per fully paid-up equity shares of Rs 10 each aggregating to Rs 2,219 crore, including the dividend distribution tax, the filing added.
The board has considered dividend on the shares issued to the shareholders erstwhile RPL as well.
The RIL board also approved a bonus issue of one share for each share held in the company, subject to the approval of the shareholders.
Further, the provision for current tax for the year ended March 31, 2009, includes provision for Fringe Benefit Tax of Rs 57 crore.
On standalone basis, RIL's audited net profit stood at Rs 15,309 crore for 2008-09, whereas it was Rs 19,458 crore in the previous year.
The company's standalone net turnover was Rs 1,41,847 crore in the last fiscal, while it was Rs 1,33,443 crore in 2007-08.
During the year, the company announced a voluntary separation scheme for the employees of Patalganga unit and about 430 employees had accepted the VSS.
The company said in the filing that it has recognised Rs 370 crore towards liabilities on account of corporate guarantees issues on behalf of a subsidiary, being an exceptional item.
In the previous year, exceptional item of Rs 4,733 crore represent gains primarily arising out of transactions concerning Reliance Petroleum shares.
Shares of RIL closed down 1.57 per cent at Rs 2,099 on the Bombay Stock Exchange.
Friday, September 25, 2009
Industry recovers as excise up 22.7% in August...
In a clear sign of the strength of the industrial comeback, excise duty collection for August registered a 22.7 per cent increase over last month, raising the government's hope of meeting the indirect tax mop-up target for the year.
"Industry is clearly showing signs of revival. Excise collection in August is up 22.7 per cent compared to last month... We are hopeful of meeting the target," Chairman of Central Board of Excise and Customs V Sridhar told reporters here.
The growth in excise figures is led by improvement in sectors like sugar that showed an increase of about 16 per cent, petroleum products that grew by about 4 to 5 per cent and cigarettes, Sridhar added on the sidelines of a CII seminar.
The indirect tax collection target of the government is set at about Rs 2.7 lakh crore for 2009-10.
Further, customs duty also slightly improved from the negative of over 30 per cent in July to a minus 28 per cent in August, he said.
Among the three components of indirect tax — customs, excise and service tax — service tax has performed the best, he pointed out.
"Service tax has done the best among the three (central excise, customs and service tax). There is a negative 1.3 per cent growth in service tax in August," Sridhar added.
The tax cuts made by the government, to help industries tide over the slowdown, had hit the exchequer both in terms of direct and indirect taxes, while customs, excise and service tax witnessed negative growth in the past four months.
The government's indirect tax kitty during the first four months of this fiscal, April-July was down 28 per cent at about 63,623 crore compared to Rs 88,395 crore last year same period.
Customs, among the indirect tax components had witnessed the maximum decline of about 36 per cent at Rs 24,324 crore in the April-July period.
"Industry is clearly showing signs of revival. Excise collection in August is up 22.7 per cent compared to last month... We are hopeful of meeting the target," Chairman of Central Board of Excise and Customs V Sridhar told reporters here.
The growth in excise figures is led by improvement in sectors like sugar that showed an increase of about 16 per cent, petroleum products that grew by about 4 to 5 per cent and cigarettes, Sridhar added on the sidelines of a CII seminar.
The indirect tax collection target of the government is set at about Rs 2.7 lakh crore for 2009-10.
Further, customs duty also slightly improved from the negative of over 30 per cent in July to a minus 28 per cent in August, he said.
Among the three components of indirect tax — customs, excise and service tax — service tax has performed the best, he pointed out.
"Service tax has done the best among the three (central excise, customs and service tax). There is a negative 1.3 per cent growth in service tax in August," Sridhar added.
The tax cuts made by the government, to help industries tide over the slowdown, had hit the exchequer both in terms of direct and indirect taxes, while customs, excise and service tax witnessed negative growth in the past four months.
The government's indirect tax kitty during the first four months of this fiscal, April-July was down 28 per cent at about 63,623 crore compared to Rs 88,395 crore last year same period.
Customs, among the indirect tax components had witnessed the maximum decline of about 36 per cent at Rs 24,324 crore in the April-July period.
G-20 leaders reach historic pact on global recovery
Taking on board the concerns of India and other countries, leaders of the G-20 countries have decided to continue the stimulus package to quicken global economic recovery.
The leaders from US, UK, France, China and others reached a historic agreement, to put the group at the centre of their efforts to build a roadmap for durable recovery, avoiding the financial fragilities that led to the crisis.
"Today, leaders endorsed the G-20 as the premier forum for their international economic cooperation. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest," the White House said in a statement after US President Barack Obama hosted a dinner for the heads of government that included Prime Minister Manmohan Singh.
Amid demands by some European government heads that an exit policy should be made to end the stimulus package agreed in London, the draft declaration of the summit is believed to have stressed the need for continuance of the booster dose notwithstanding green shoots of recovery seen in some countries.
At the London Summit in April, the G-20 leaders agreed to pump in $1.1 billion, to lift the global economy hit by last year's financial crisis that had triggered the collapse of many leading financial institutions.
The draft declaration is understood to reflect India’s view that it was too early to adopt an exit strategy from the stimulus package, but left it to individual countries to adopt measures after some time, Indian officials involved in the hectic negotiations said.
Planning Commission Deputy Chairman, Montek Singh Ahluwalia, was India's pointsman in the negotiations as Singh met world leaders. At the dinner last night, the Prime Minister and his wife, Gursharan Kaur, were warmly received by Obama and the First Lady, Mitchelle.
After an affectionate handshake, the Prime Minister had some consultations with him for a couple of minutes before they got into deliberations in the environment-friendly Phipps Conservatory and Botanical Gardens, called the Green Heart of Pittsburgh.
The White House statement said dramatic changes in the world economy have not always been reflected in the global architecture for economic cooperation.
"This all started to change today. The G-20 leaders reached a historic agreement to put the G-20 at the centre of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis," it said.
Establishing the G-20 as the Premier Global Economic Forum, Obama called on the world's leaders to reform global economic institutions to meet the needs of an interconnected world economy.
"Today, leaders endorsed the G-20 as the premier forum for their international economic cooperation. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest," the White House said.
This builds on the decision made in April in London to expand the Financial Stability Board to include all G-20 countries and to add all the G-20 members to the Global Forum on Transparency and Exchange of Information.
"The Financial Stability Board is central to our efforts to develop and implement sweeping reforms to transform the system of global regulation.
The Global Forum is the primary vehicle in the G-20's effort to promote greater tax transparency," it said.
The draft communiqué is also believed to be strongly worded against any protectionism in trade, investment, services and capital flows and attempts to yield to such temptation in the face of crisis.
The WTO report on the issue has said that countries have broadly avoided the tendency to resort to protectionism but occasional violations have also been seen in the last six months. The US Government's decision to impose hefty duty on import of Chinese tyres is being cited by opponents of protectionism.
The Prime Minister has already said that the Summit should send a strong message against protectionism in all its forms and that it should not be business as usual for countries because the global economy is yet to come out of the woods.
The declaration also endorses India’s stand for reforms of international financial institutions like the World Bank and International Monetary Fund to reflect ground realities by giving greater say in their affairs for emerging economies.
The US Treasury Secretary, Timothy Geithner, said a substantial additional progress in Pittsburgh over what the summit did in London is to add in effect a fourth pillar to the architecture of cooperation established after the Second World War.
The US Treasury Secretary said that to the IMF, GATT and WTO, the fourth pillar Financial Stability Board has been added.
"And that forum again brings together central banks, finance ministers, supervisors of banks, market regulators, like the SEC and the CFTC, the accounting standard setters — brings them together and tries to forge consensus on standards, so we can have, again, common standards applied globally," Geithner said.
He underlined that the G-20 leaders want to have very strong standards to limit the risk that compensation practices in the world's largest institutions encourage.
"So we have laid out a really far-reaching set of pretty detailed standards to underscore that commitment. But we've also made it clear that we are going to move each country to put in place the mix of regulations, laws, supervisory measures, that are necessary to give those standards force," he said.
"We're going to measure progress against those standards, report on progress, and we're going to let an independent agency — in this case, the Financial Stability Board — assess progress against those standards," Geithner underlined.
The draft declaration also favours broad political consensus towards successful conclusion of the climate change summit.
The leaders from US, UK, France, China and others reached a historic agreement, to put the group at the centre of their efforts to build a roadmap for durable recovery, avoiding the financial fragilities that led to the crisis.
"Today, leaders endorsed the G-20 as the premier forum for their international economic cooperation. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest," the White House said in a statement after US President Barack Obama hosted a dinner for the heads of government that included Prime Minister Manmohan Singh.
Amid demands by some European government heads that an exit policy should be made to end the stimulus package agreed in London, the draft declaration of the summit is believed to have stressed the need for continuance of the booster dose notwithstanding green shoots of recovery seen in some countries.
At the London Summit in April, the G-20 leaders agreed to pump in $1.1 billion, to lift the global economy hit by last year's financial crisis that had triggered the collapse of many leading financial institutions.
The draft declaration is understood to reflect India’s view that it was too early to adopt an exit strategy from the stimulus package, but left it to individual countries to adopt measures after some time, Indian officials involved in the hectic negotiations said.
Planning Commission Deputy Chairman, Montek Singh Ahluwalia, was India's pointsman in the negotiations as Singh met world leaders. At the dinner last night, the Prime Minister and his wife, Gursharan Kaur, were warmly received by Obama and the First Lady, Mitchelle.
After an affectionate handshake, the Prime Minister had some consultations with him for a couple of minutes before they got into deliberations in the environment-friendly Phipps Conservatory and Botanical Gardens, called the Green Heart of Pittsburgh.
The White House statement said dramatic changes in the world economy have not always been reflected in the global architecture for economic cooperation.
"This all started to change today. The G-20 leaders reached a historic agreement to put the G-20 at the centre of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis," it said.
Establishing the G-20 as the Premier Global Economic Forum, Obama called on the world's leaders to reform global economic institutions to meet the needs of an interconnected world economy.
"Today, leaders endorsed the G-20 as the premier forum for their international economic cooperation. This decision brings to the table the countries needed to build a stronger, more balanced global economy, reform the financial system, and lift the lives of the poorest," the White House said.
This builds on the decision made in April in London to expand the Financial Stability Board to include all G-20 countries and to add all the G-20 members to the Global Forum on Transparency and Exchange of Information.
"The Financial Stability Board is central to our efforts to develop and implement sweeping reforms to transform the system of global regulation.
The Global Forum is the primary vehicle in the G-20's effort to promote greater tax transparency," it said.
The draft communiqué is also believed to be strongly worded against any protectionism in trade, investment, services and capital flows and attempts to yield to such temptation in the face of crisis.
The WTO report on the issue has said that countries have broadly avoided the tendency to resort to protectionism but occasional violations have also been seen in the last six months. The US Government's decision to impose hefty duty on import of Chinese tyres is being cited by opponents of protectionism.
The Prime Minister has already said that the Summit should send a strong message against protectionism in all its forms and that it should not be business as usual for countries because the global economy is yet to come out of the woods.
The declaration also endorses India’s stand for reforms of international financial institutions like the World Bank and International Monetary Fund to reflect ground realities by giving greater say in their affairs for emerging economies.
The US Treasury Secretary, Timothy Geithner, said a substantial additional progress in Pittsburgh over what the summit did in London is to add in effect a fourth pillar to the architecture of cooperation established after the Second World War.
The US Treasury Secretary said that to the IMF, GATT and WTO, the fourth pillar Financial Stability Board has been added.
"And that forum again brings together central banks, finance ministers, supervisors of banks, market regulators, like the SEC and the CFTC, the accounting standard setters — brings them together and tries to forge consensus on standards, so we can have, again, common standards applied globally," Geithner said.
He underlined that the G-20 leaders want to have very strong standards to limit the risk that compensation practices in the world's largest institutions encourage.
"So we have laid out a really far-reaching set of pretty detailed standards to underscore that commitment. But we've also made it clear that we are going to move each country to put in place the mix of regulations, laws, supervisory measures, that are necessary to give those standards force," he said.
"We're going to measure progress against those standards, report on progress, and we're going to let an independent agency — in this case, the Financial Stability Board — assess progress against those standards," Geithner underlined.
The draft declaration also favours broad political consensus towards successful conclusion of the climate change summit.
News snapshot
# Dr Reddy's hits new 52-wk high on ADR surge
# Kingfisher rallies on GDR, rights issue plans
# M&M gains on hopes of upping stake in Swaraj
# Cipla to raise Rs 676 cr via QIP issue
# Kingfisher rallies on GDR, rights issue plans
# M&M gains on hopes of upping stake in Swaraj
# Cipla to raise Rs 676 cr via QIP issue
Wednesday, September 23, 2009
Sensex closes in the red on profit-booking
The Sensex this morning opened with a positive gap of 19 points at 16,905. It soon slipped in the red and traded in a narrow range till late afternoon on either side of yesterday's closing line. The last one hour of trade, however, saw about of profit-booking. The Sensex finally ended at 16,717, down 170 points. What was more disappointing was the Nifty's close below the 5000 level within a day of having surpassed the psychological mark.
The BSE midcap index closed at 6,141, down 167 points and the BSE Small-cap index shut shop at 7,350, down 102 points.
The BSE IT index dipped 1.72% to 4,563. The TECk index shed 1.98% to 3,238 points and the realty index weakened by 2.31% to 4,415.
The markets breadth was negative. Out of 2,864 stocks traded, 1,001 advanced and 1,784 declined.
INDEX MOVERS...
HDFC Bank surged 1.45% to Rs 1,560, Sterlite gained 1.09% to Rs 769 and Sun Pharma rose 0.58% to Rs 1,212.
...AND LOSERS
Jaiprakash Associates sunk 6.34% to Rs 235, Bharti Airtel dropped 3.43% to Rs 414 and Reliance Communications declined 2.9% to Rs 308. Mahindra & Mahindra, Hindustan Unilever and Reliance Infrastructure were down between 1 and 2% each.
MOST ACTIVE COUNTERS
Jaiprakash Assoicates led the combined value chart on the BSE and the NSE with a total turnover of Rs 2,030 crore. It was followed by Suzlon (Rs 1,284 crore), Reliance (Rs 844 crore), DLF (Rs 675 crore) and Tata Steel (Rs 512 crore).
Suzlon topped the combined volume chart with trades of around 132.69 million shares followed by Jaiprakash Associates (85.33 million), Unitech (44.18 million), Ispat Industries (38.01 million), IFCI (37.50 million).
The BSE midcap index closed at 6,141, down 167 points and the BSE Small-cap index shut shop at 7,350, down 102 points.
The BSE IT index dipped 1.72% to 4,563. The TECk index shed 1.98% to 3,238 points and the realty index weakened by 2.31% to 4,415.
The markets breadth was negative. Out of 2,864 stocks traded, 1,001 advanced and 1,784 declined.
INDEX MOVERS...
HDFC Bank surged 1.45% to Rs 1,560, Sterlite gained 1.09% to Rs 769 and Sun Pharma rose 0.58% to Rs 1,212.
...AND LOSERS
Jaiprakash Associates sunk 6.34% to Rs 235, Bharti Airtel dropped 3.43% to Rs 414 and Reliance Communications declined 2.9% to Rs 308. Mahindra & Mahindra, Hindustan Unilever and Reliance Infrastructure were down between 1 and 2% each.
MOST ACTIVE COUNTERS
Jaiprakash Assoicates led the combined value chart on the BSE and the NSE with a total turnover of Rs 2,030 crore. It was followed by Suzlon (Rs 1,284 crore), Reliance (Rs 844 crore), DLF (Rs 675 crore) and Tata Steel (Rs 512 crore).
Suzlon topped the combined volume chart with trades of around 132.69 million shares followed by Jaiprakash Associates (85.33 million), Unitech (44.18 million), Ispat Industries (38.01 million), IFCI (37.50 million).
Sunday, September 20, 2009
FII inflows to cross $10 bn-mark this month: Analysts
Foreign investment in the Indian stock markets may cross $10 billion-mark by the end of this month as a hefty $9.8 billion (Rs 47,674 crore) have already been poured into the bourses by overseas entities so far this year, analysts feel.
"FII inflows in the Indian equity market would continue in the coming days and it may cross $10 billion level by September-end," Anand Rathi Financial Services Director & Head of Research Tarun Sisodia.
Foreign institutional investors (FIIs) are the net buyer of shares worth Rs 47,674 crore so far in this year, according to the data available with the market regulator or Securities and Exchange Board of India (Sebi).
The infusion of money by overseas investors in shares is a part of their portfolio management in various emerging markets and India is part of that strategy, Sisodia, who is based in Mumbai, said.
So for in this month, foreign investors have infused over Rs 7,400 crore ($1.5 billion), increasing their total net investment, since FIIs were allowed in India, to over Rs 2.78 lakh crore ($65 billion), as per Sebi data.
"FII investment in the local markets may cross $10 billion mark by end of this week. As everything is bullish and picture of Indian stock market is very rosy," Delhi-based SMC Global's Vice President Rajesh Jain said.
Significantly, so far in 2009, the Bombay Stock Exchange's benchmark index Sensex gained over 73 per cent. Nifty, the benchmark index of National Stock Exchange has also advanced fairly so far this year.
In long term, the rise in benchmark index would continue, Sisodia added.
"The Indian market has seen a huge inflow of funds from overseas investors and crossing $10 billion level is not tough in the current month," Ashika Stock Brokers Research Head Paras Bothra said.
After pulling out a hefty Rs 52,986 crore ($11.9 billion) from the local stock markets last year, FIIs remained net seller of shares for the first two month of current year.
However, with the sign of revival of economies, the trend turned positive during March and marketmen feel that the year will close with huge inflows.
"FII inflows in the Indian equity market would continue in the coming days and it may cross $10 billion level by September-end," Anand Rathi Financial Services Director & Head of Research Tarun Sisodia.
Foreign institutional investors (FIIs) are the net buyer of shares worth Rs 47,674 crore so far in this year, according to the data available with the market regulator or Securities and Exchange Board of India (Sebi).
The infusion of money by overseas investors in shares is a part of their portfolio management in various emerging markets and India is part of that strategy, Sisodia, who is based in Mumbai, said.
So for in this month, foreign investors have infused over Rs 7,400 crore ($1.5 billion), increasing their total net investment, since FIIs were allowed in India, to over Rs 2.78 lakh crore ($65 billion), as per Sebi data.
"FII investment in the local markets may cross $10 billion mark by end of this week. As everything is bullish and picture of Indian stock market is very rosy," Delhi-based SMC Global's Vice President Rajesh Jain said.
Significantly, so far in 2009, the Bombay Stock Exchange's benchmark index Sensex gained over 73 per cent. Nifty, the benchmark index of National Stock Exchange has also advanced fairly so far this year.
In long term, the rise in benchmark index would continue, Sisodia added.
"The Indian market has seen a huge inflow of funds from overseas investors and crossing $10 billion level is not tough in the current month," Ashika Stock Brokers Research Head Paras Bothra said.
After pulling out a hefty Rs 52,986 crore ($11.9 billion) from the local stock markets last year, FIIs remained net seller of shares for the first two month of current year.
However, with the sign of revival of economies, the trend turned positive during March and marketmen feel that the year will close with huge inflows.
Top 8 cos add Rs 23,000 cr last week
As many as eight out of the top 10 most valued companies added over Rs 23,000 crore to their market capitalisation in the last week.
However, oil major Oil & Natural Gas Corporation (ONGC) and telecom giant Bharti Airtel witnessed erosion in their market cap during the week.
The country's most valued firm, Reliance Industries (RIL), gained the most adding Rs 6,169.57 crore to its market cap at Rs 3,43,127.27 crore for the week ended September 19.
RIL had a market valuation at Rs 3,36,957.7 crore for the week ended September 12.
Meanwhile, both ONGC and Airtel together lost Rs 7,688.37 crore in their market valuation.
The market cap of ONGC stood at Rs 2,46,119.77 crore while that of Airtel was seen at Rs 1,57,967.53 crore at the end of the week.
The market cap of trading major MMTC rose by Rs 4,965.25 crore to Rs 1,74,705.25 crore and power major NTPC added Rs 3,339.42 crore taking its total market valuation to Rs 1,72,453.8 crore.
The country's largest iron ore producer, NMDC contributed Rs 693.83 crore to its market cap taking its total market valuation to Rs 1,43,561.79 crore.
IT bellwether Infosys Technologies and public sector lender State Bank of India (SBI) added Rs 232.09 crore and Rs 5,742.49 crore, respectively to their market cap.
The total market cap of Infosys Technologies stood at Rs 1,30,087.49 crore and that of SBI at Rs 1,27,563.26 crore.
Outsourcing firm, Tata Consultancy Services (TCS) climbed to the ninth slot from the tenth after adding Rs 2,201.85 crore to its market valuation, while power equipment-maker Bharat Heavy Electricals (BHEL) slipped to the tenth position even after adding Rs 2,201.85 crore to its market cap.
At the end of the week the total market cap of TCS stood at Rs 1,11,736.55 crore and BHEL at Rs 1,11,015.79 crore.
Apart from the top-10 coveted firms, two private sector lenders, ICICI Bank and HDFC Bank, together added Rs 1,689.07 crore to their market cap.
At the end of the week, the total market cap of ICICI Bank stood at Rs 93,783.37 crore and HDFC Bank at Rs 64,610.96 crore.
In the club of top-10 firms, RIL is followed by ONGC (Rs 2,46,119.77 crore), MMTC (Rs 1,74,705.25 crore), NTPC (Rs 1,72,453.8 crore), Bharti Airtel (Rs 1,57,967.53 crore), NMDC (Rs 1,43,561.79 crore), Infosys (Rs 1,30,087.49 crore), SBI (Rs 1,27,563.26 crore), TCS (Rs 111736.55 crore) and BHEL (Rs 1,11,015.79 crore), in that order.
However, oil major Oil & Natural Gas Corporation (ONGC) and telecom giant Bharti Airtel witnessed erosion in their market cap during the week.
The country's most valued firm, Reliance Industries (RIL), gained the most adding Rs 6,169.57 crore to its market cap at Rs 3,43,127.27 crore for the week ended September 19.
RIL had a market valuation at Rs 3,36,957.7 crore for the week ended September 12.
Meanwhile, both ONGC and Airtel together lost Rs 7,688.37 crore in their market valuation.
The market cap of ONGC stood at Rs 2,46,119.77 crore while that of Airtel was seen at Rs 1,57,967.53 crore at the end of the week.
The market cap of trading major MMTC rose by Rs 4,965.25 crore to Rs 1,74,705.25 crore and power major NTPC added Rs 3,339.42 crore taking its total market valuation to Rs 1,72,453.8 crore.
The country's largest iron ore producer, NMDC contributed Rs 693.83 crore to its market cap taking its total market valuation to Rs 1,43,561.79 crore.
IT bellwether Infosys Technologies and public sector lender State Bank of India (SBI) added Rs 232.09 crore and Rs 5,742.49 crore, respectively to their market cap.
The total market cap of Infosys Technologies stood at Rs 1,30,087.49 crore and that of SBI at Rs 1,27,563.26 crore.
Outsourcing firm, Tata Consultancy Services (TCS) climbed to the ninth slot from the tenth after adding Rs 2,201.85 crore to its market valuation, while power equipment-maker Bharat Heavy Electricals (BHEL) slipped to the tenth position even after adding Rs 2,201.85 crore to its market cap.
At the end of the week the total market cap of TCS stood at Rs 1,11,736.55 crore and BHEL at Rs 1,11,015.79 crore.
Apart from the top-10 coveted firms, two private sector lenders, ICICI Bank and HDFC Bank, together added Rs 1,689.07 crore to their market cap.
At the end of the week, the total market cap of ICICI Bank stood at Rs 93,783.37 crore and HDFC Bank at Rs 64,610.96 crore.
In the club of top-10 firms, RIL is followed by ONGC (Rs 2,46,119.77 crore), MMTC (Rs 1,74,705.25 crore), NTPC (Rs 1,72,453.8 crore), Bharti Airtel (Rs 1,57,967.53 crore), NMDC (Rs 1,43,561.79 crore), Infosys (Rs 1,30,087.49 crore), SBI (Rs 1,27,563.26 crore), TCS (Rs 111736.55 crore) and BHEL (Rs 1,11,015.79 crore), in that order.
Friday, September 11, 2009
Indian cos in Forbes 'Best Under A Billion' list
Twenty Indian companies have made the cut to enter the list of 200 best companies having sales less than $1 billion in the Asian Pacific region, compiled by business magazine Forbes.
Biotech major Biocon, industrial equipment firm AIA Engineering, IT outsourcing firm Allied Digital Services, software entity AurinoPro Solutions and construction materials company Birla feature in the league of 200 companies.
All have either increased sales and profits over the past 12 months or are forecast to do so in coming quarters. Apparel, media, technology and health care led the way.
"Nearly 40 per cent of the companies are from greater China," Forbes said.
Deepak Fertilisers, drug ingredients provider Divi's Laboratories, gas storage products entity Everest Kanto, pharma firm FDC, publishing entity Geodesic and IT consultancy ICSA have also made it to the list.
Others in the 200 league are IT firms GSS America and Micro Technologies, infrastructure firm IVRCL Infrastructure, security systems entity Nitin Fire Protection, medical devices company Opto Circuits, aluminium foil maker Parekh Aluminex, television broadcaster Raj Television and oil exploration firm Selan Exploration Technology.
The top 200 companies were picked from over 12,000 publicly-listed firms with sales of less than $1 billion in the Asia-Pacific region.
Biotech major Biocon, industrial equipment firm AIA Engineering, IT outsourcing firm Allied Digital Services, software entity AurinoPro Solutions and construction materials company Birla feature in the league of 200 companies.
All have either increased sales and profits over the past 12 months or are forecast to do so in coming quarters. Apparel, media, technology and health care led the way.
"Nearly 40 per cent of the companies are from greater China," Forbes said.
Deepak Fertilisers, drug ingredients provider Divi's Laboratories, gas storage products entity Everest Kanto, pharma firm FDC, publishing entity Geodesic and IT consultancy ICSA have also made it to the list.
Others in the 200 league are IT firms GSS America and Micro Technologies, infrastructure firm IVRCL Infrastructure, security systems entity Nitin Fire Protection, medical devices company Opto Circuits, aluminium foil maker Parekh Aluminex, television broadcaster Raj Television and oil exploration firm Selan Exploration Technology.
The top 200 companies were picked from over 12,000 publicly-listed firms with sales of less than $1 billion in the Asia-Pacific region.
IIP Industrial growth at 6.8% in July
Giving a clear indication of industrial revival, factory output grew by 6.8 per cent in July this year, more than 6.4 per cent in the same month a year ago.
The industrial recovery may offset for slackening of agricultural production being impacted by erratic monsoon and help the economy clock a reasonable growth in the second quarter.
For the first four months of this fiscal, industry grew by 4.6 per cent compared to 5.6 per cent a year ago.
The industrial recovery may offset for slackening of agricultural production being impacted by erratic monsoon and help the economy clock a reasonable growth in the second quarter.
For the first four months of this fiscal, industry grew by 4.6 per cent compared to 5.6 per cent a year ago.
Monday, September 7, 2009
Stocks rise after G-20 say stimulus will stay
European and Asian stocks rose Monday after finance officials from 20 rich and developing countries pledged to keep in place their massive stimulus programs to prop up the global economy.
News of corporate takeover activity, with Cadbury jumping 37.8 percent after rejecting a takeover offer from Kraft, also helped stocks start the week well on a day when Wall Street will be closed for the Labor Day holiday.
Germany's DAX closed up 1.5 percent, to 5,463.51, while Britain's FTSE 100 gained 1.7 percent, to 4,933.18. France's CAC-40 added 1.5 percent, to 3,652.83.
Benchmarks in Japan, Hong Kong and China added about 1 percent or more after Beijing said it would allow greater access to foreign investors.
Investors reacted positively to the weekend announcements from finance officials at the Group of 20 summit in London, which acknowledged some improvements in economic growth but warned recovery was not sustainable without continued help from governments in the form of deficit spending, low interest rates and efforts to expand the money supply.
"It will come as a relief to markets that G-20 central bankers and finance ministers agreed that it was too early to begin withdrawing massive fiscal, monetary and financial support," said Mitul Kotecha, analyst at Calyon.
Markets had been worried that nascent signs of economic recovery would lead countries to unwind their stimulus, but the G-20 dispelled those fears.
News of corporate takeover activity, with Cadbury jumping 37.8 percent after rejecting a takeover offer from Kraft, also helped stocks start the week well on a day when Wall Street will be closed for the Labor Day holiday.
Germany's DAX closed up 1.5 percent, to 5,463.51, while Britain's FTSE 100 gained 1.7 percent, to 4,933.18. France's CAC-40 added 1.5 percent, to 3,652.83.
Benchmarks in Japan, Hong Kong and China added about 1 percent or more after Beijing said it would allow greater access to foreign investors.
Investors reacted positively to the weekend announcements from finance officials at the Group of 20 summit in London, which acknowledged some improvements in economic growth but warned recovery was not sustainable without continued help from governments in the form of deficit spending, low interest rates and efforts to expand the money supply.
"It will come as a relief to markets that G-20 central bankers and finance ministers agreed that it was too early to begin withdrawing massive fiscal, monetary and financial support," said Mitul Kotecha, analyst at Calyon.
Markets had been worried that nascent signs of economic recovery would lead countries to unwind their stimulus, but the G-20 dispelled those fears.
Saturday, September 5, 2009
Friday US Market Overview
US buyers continued to push stocks higher in the face of some rather ugly unemployment headlines as strong momentum from the previous session and pent up buying fed a positive bias.
The latest jobs report showed that 216,000 nonfarm payrolls were slashed in August. That marked the lowest job loss tally in one year and wasn't as bad as the 230,000 job losses that economists had come to expect, but the difficulty of finding a job sent the unemployment rate to a 25-year high of 9.7% from 9.4%. The consensus estimate had been pegged at 9.5%.
Though US stocks struggled a bit to set forth on a clear trajectory in the minutes following the report, they benefited from some residual buying interest stemming from the previous session's late squeeze higher. Given that stocks had lost roughly 2.5% in the four sessions leading up to Friday's trade, participants also felt compelled to chase the gains registered in recent weeks.
This session's buying effort came on light trading volume, but that was generally expected going into Memorial Day weekend. Still, a lack of participation is often associated with a lack of conviction among broader-market participants, even though low-volume trade has been a hallmark of the stock market's summer rally. Hardly 1 billion shares traded hands on the NYSE this session, below the 50-day moving average of 1.2 billion shares.
Nonetheless, Friday's session's gains were broad-based as roughly 85% of the companies in the S&P 500 settled with a gain. Seven of the 10 major sectors in the S&P 500 posted gains between 1.3% and 2.0%. Financials (+0.8%), consumer staples (+0.7%), and utilities (+0.3%) were relative laggards.
The score at close of trade:
Dow 9,441.27 + 96.66 (1.03%)
Nasdaq 2,018.78 + 35.58 (1.79%)
S&P 500 1,016.40 + 13.16 (1.31%)
The latest jobs report showed that 216,000 nonfarm payrolls were slashed in August. That marked the lowest job loss tally in one year and wasn't as bad as the 230,000 job losses that economists had come to expect, but the difficulty of finding a job sent the unemployment rate to a 25-year high of 9.7% from 9.4%. The consensus estimate had been pegged at 9.5%.
Though US stocks struggled a bit to set forth on a clear trajectory in the minutes following the report, they benefited from some residual buying interest stemming from the previous session's late squeeze higher. Given that stocks had lost roughly 2.5% in the four sessions leading up to Friday's trade, participants also felt compelled to chase the gains registered in recent weeks.
This session's buying effort came on light trading volume, but that was generally expected going into Memorial Day weekend. Still, a lack of participation is often associated with a lack of conviction among broader-market participants, even though low-volume trade has been a hallmark of the stock market's summer rally. Hardly 1 billion shares traded hands on the NYSE this session, below the 50-day moving average of 1.2 billion shares.
Nonetheless, Friday's session's gains were broad-based as roughly 85% of the companies in the S&P 500 settled with a gain. Seven of the 10 major sectors in the S&P 500 posted gains between 1.3% and 2.0%. Financials (+0.8%), consumer staples (+0.7%), and utilities (+0.3%) were relative laggards.
The score at close of trade:
Dow 9,441.27 + 96.66 (1.03%)
Nasdaq 2,018.78 + 35.58 (1.79%)
S&P 500 1,016.40 + 13.16 (1.31%)
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