Market Outlook for 24th Sep 2009

INTRADAY calls for 24th Sep 2009
Short Infy-2366 for 2330- with sl 2379
Short JPHydro-82 for 78-76 with sl 84
Short AXIS-920 for 898- with sl 927
Short IDFC-144 for 138- with sl 147

Positional calls
BUY WWIL-21 for 35+ with sl 17
BUY FCSSoft-82 for 108+ with sl 75

 

NIFTY FUTURES LEVELS
SUPPORT
4958
4941
4911
4802
RESISTANCE
4973
4980
5010
5039
5086
5115
Buy STEEL STRIPS WHEELS;AAARTI DRUGS 

 

Strong & Weak  futures

This is list of 10 strong futures:

IOC, Orchid chem, Lic house, Jindal Saw, Ranbaxy, Allahabad Bank, HCC, Bajaj Auto, Bharat Forg & Sesa Goa.

And this is list of 10 Weak futures:

TV-18, Tulip, United Phosphoro, Triveni, Finance Tech, GVK Power, MTNL, Bajaj Hind, Nagarjuna Fertil & Cipla.

 Nifty is in Up trend

 

NIFTY FUTURES (F & O):
 
Below 4958-4960 zone, selling may continue up to 4941 level by non-stop.

Hurdles at 4973 & 4980 levels. Above these levels, expect short covering up to 5008-5010 zone and thereafter expect a jump up to 5037-5039 zone by non-stop.

Cross above 5084-5086 zone, can take it up to 5113-5115 zone by non-stop. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 4911-4913 zone. Stop Loss at 4882-4884 zone.
 
Short-Term Investors:
 
Bullish Trend. 3 closes above 4790.00 level, it can zoom up to 5155.00 level by non-stop. 
BSE SENSEX:
 
Lower opening expected. Recovery should happen. 
Short-Term Investors:
 
Short-Term trend is Bullish and target at around 17281.17 level on upper side.
Maintain a Stop Loss at 16119.95 level for your long positions too.

POSITIONAL  BUY:
Buy STEEL STRIPS WHEELS (NSE Cash) 
Technically uptrend should continue.

Risk is that, correction up to 97 level also possible. Buy with a Stop Loss of 93 level.

Expect a Target of 106 level on upper side. Above 110 level, uptrend may continue.
 
Buy AAARTI DRUGS (NSE Cash) 
Technically uptrend should continue.

Risk is that, correction up to 97 level also possible. Buy with a Stop Loss of 90 level.

Expect a Target of 106 level on upper side. Above 113 level, uptrend may continue.
 

Global Cues & Rupee
The Dow Jones Industrial Average closed at 9,748.55. Down by 81.32 points.
The Broader S&P 500 closed at 1,060.87. Down by 10.79 points.

The Nasdaq Composite Index closed at 2,131.42. Down by 14.88 points.

The partially convertible rupee INR=IN closed at 47.98/48.00 per dollar on yesterday, weaker than Tuesday's close of 47.9550/9650.

FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	23-Sep-2009	4331.49	2582.5	+1748.99

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	23-Sep-2009	1637.48	1137.01	+500.47

 

SPOT LEVELS TODAY

	4969.95	( -1.00 %)	-50.25
		1	2	3
Resistance		5014.78	5059.62	5088.48
Support		4941.08	4912.22	4867.38

	16719.50		( -0.99 %)	-166.93
			1	2	3
Resistance			16855.46	16991.42	17077.26
Support			16633.66	16547.82	16411.86

 

 Interesting findings on web:
Stocks ended lower Wednesday as the rally after the Federal Reserve's statement faded and investors began to worry that the central bank is inching closer to withdrawing stimulus measures that have propped up the economy.

The stock market is encouraged by the Fed's latest improved assessment of the economy, but not enough to propel the Dow Jones industrial average past 10,000.

Stocks have closed lower after the Fed's economic statement Wednesday. The market initially blipped higher, bringing the Dow within 82 points of crossing 10,000 for the first time since October, but the average ended the day with a loss of 81.

Late-day selling in energy and commodity stocks left the major averages up to 1% lower Wednesday as Wall Street brushed off the Federal Reserve's latest statement.

The Dow Jones industrial average fell 81.32, or 0.8 percent, to 9,748.55

The Standard & Poor's 500 index fell 10.79, or 1.0 percent, to 1,060.87

The Nasdaq composite index fell 14.88, or 0.7 percent, to 2,131.42.

RUSSELL613.37-7.32-1.18%.

For the week:

The Dow is down 71.65, or 0.7 percent.

The S&P is down 7.43, or 0.7 percent.

The Nasdaq is down 1.44, or 0.1 percent.

For the year:

The Dow is up 972.16, or 11.1 percent.

The S&P is up 157.62, or 17.5 percent.

The Nasdaq is up 554.39, or 35.2 percent.

The U.S. Federal Reserved on Wednesday decided to leave a key interest rate at a record low in an obvious effort to foster a nascent economy recovery.

Wrapping a two-day meeting, the Federal Open Market Committee (FOMC) said in a statement that it will maintain the target range for the federal funds rate at 0 to 0.25 percent, indicating that it will leave the benchmark interest rate at exceptional low levels "for an extended period" of time.

    "Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased," FOMC said.

    The committee expressed concerns that while household spending seems to be stabilizing, it remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.

    "Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales," it added.

    The committee said that it expects inflation will remain subdued for some time because substantial resource slack is likely continue to dampen cost pressures and longer-term inflation expectations remain stable.

    "In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability," FOMC said in the statement.

    The Fed on Wednesday also decided to slow down the pace of a program designed to aid housing purchases amid signs that the battered housing market is stabilizing.

    "To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of 1.25 trillion U.S. dollars of agency mortgage-backed securities and up to 200 billion dollars of agency debt," FOMC said.

    "The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010," it added.

    The Federal Reserve announced the program to buy mortgages and debts from Fannie Mae, Freddie Mac and Ginnie Mae last November, shortly after the financial crisis culminated with the collapses of the Lehman Brothers.

    The program, designed to prevent a complete breakdown of the housing market, was originally scheduled to end by the end of this year.

    Observers believe that the Fed decision to stretch out the goal of purchasing 1.45 trillion dollars in mortgage-backed securities and debt issued by companies like Fannie Mae and Freddie Mac shows that the U.S. central bank is confident the nascent recovery will take hold.

    The Federal Reserve has so far bought about 775 billion dollars worth of mortgage-backed securities and debt from the major loan providers for home buyers.

And according to CNN Money Treasury Secretary Timothy Geithner told a House Financial Services committee hearing on regulatory reform that economic growth in the U.S. appears to be improving but that reforms must be enacted to fix a broken system.

Bank stocks did an about-face amid the concerns about Fed stimulus.

Bank of America [BAC  17.50    -0.11  (-0.62%)   ] and Citigroup [C  4.52    -0.13  (-2.8%)   ] had been up for much of the day but ended lower, along with the rest of the sector. JPMorgan [JPM  45.00    -1.47  (-3.16%)   ] was the biggest decliner on the Dow, falling 3 percent.

Housing and energy stocks also took a hit: Beazer Homes [BZH  6.02    -0.62  (-9.34%)   ] ended down more than 9 percent.

Cisco [CSCO  22.80    -0.61  (-2.61%)   ] was among the biggest drags on the Nasdaq and the Dow after CEO John Chambers said the U.S. is coming out of recession but it wasn't a full-blown recovery.

"It looks like a gradual recovery," Chambers told the Wall Street Journal, adding that there's a risk the economy could still slip backward. He also declined to give a read on the networking-gear maker's current quarter.

Seagate Technology [STX  15.48    -0.20  (-1.28%)   ] lost 1.3 percent despite an upgrade to "buy" from Deutsche Bank, which expects the computer-disk maker to benefit from increased demand and higher margins.

Palm [PALM  16.96    -0.11  (-0.64%)   ] shares skidded 0.6 percent. The smartphone maker said it expects to raise $313.1 million from a sale of shares at $16.25 each, a 5 percent discount to Tuesday's closing price. Palm shares had been up about 15 percent over the past several days amid talks of a possible takeover bid as traders scurried to cover short positions.

Microsoft [MSFT  25.71    -0.06  (-0.23%)   ] shares also slipped. The software giant is reportedly developing a tablet-style PC, according to widely followed technology blog Gizmodo.

Life insurers finished mostly lower after a downgrade from Morgan Stanley to "in line" from "attractive." Prudential Financial [PRU  49.30    -2.72  (-5.23%)   ] was among the individual stocks also downgraded.

In the corporate sector, General Mills ( GIS - news - people ) added 5% after reporting its first-quarter profits were up 51%. Money manager BlackRock ( BLK - news - people ) lost 1% despite announcing it received European Union approval to acquire Barclays ( BCS - news - people ) asset management arm. The deal will give Barclays $6.6 billion in cash and take a nearly 20% stake in BlackRock.

Swiss bank UBS ( UBS - news - people ) closed down nearly 1% in New York after saying it would cut approximately 200 jobs at its U.S. wealth management business. A high-profile tax fraud probe led many clients to withdraw their assets from the firm.

Among stocks, Ford(F Quote) gained 5% as CEO Alan Mulally said the U.S. market was showing signs of recovery, and he expects the industry will see sales rise over the next two years.

Also, General Mills(GIS Quote) gained 4.6% on better-than-expected earnings.

Shares in U.S. Airways Group Inc (NYSE:LCC) dropped 13.58 per cent to $4.52. The company announced plans to raise cash, saying it plans to sell 26.3 million shares of its common stock to Citigroup.

Shares in specialty retailer and a distributor of automotive replacement parts AutoZone Inc (NYSE:AZO) declined 7.47 per cent to $141.50. The company reported a 3.1 per cent fall in profit for the fourth quarter which was a week shorter than last year.

And shares in biopharmaceutical company Opexa Therapeutics Inc (NASDAQ:OPXA) gained 12.43 per cent to $3.89. According to Reuter's Swiss drug maker Novartis has paid Opexa $500,000 under a stem cell technology transfer agreement.

Checking the NASDAQ Top 100: The best performer overnight was Electronic Arts, adding 7.07 per cent to $19.83, followed by Xilinx and Altera Corporation. On the downside, Cintas Corporation was the worst performer, shares fell 4.8 per cent to $28.35. Starbucks and Joy Global also closed lower.

Also on the positive side, mortgage applications jumped 12.8 percent last week to their highest level since late May. Interest in home-buying increased as mortgage rates fell below 5 percent.

VIX23.490.41+1.78.

Oil,Gold & Currencies:

Crude oil futures fell $2.79 to $68.97 after the Energy Information Administration reported a surprise, 2.8 million-barrel increase in crude stocks last week. Analysts were expecting a drop of 2.25 million barrels.

Gasoline stockpiles rose by 5.4 million barrels, vs. forecasts for a lesser increase of 800,000 barrels.

Gold prices fell.

The dollar rose against other major currencies.

The euro fell from a one-year high versus the U.S. dollar amid speculation that global policy makers will discuss the rapid appreciation of the 16-nation currency at the forthcoming meeting of Group of 20 leaders.

The euro weakened after Reuters cited a French government official as saying France is concerned about the increasing strength of the euro and intends to press fellow G-20 members to set a timeframe for a discussion on exchange rates. New Zealand's dollar traded near a 13-month high against the U.S. currency as Asian shares climbed, boosting demand for higher- yielding assets.

"The market is becoming sensitive to comments from monetary authorities as the G-20 meeting approaches," said Kosei Fujita, a foreign-currency dealer in Tokyo at SBI Liquidity Markets Co., a unit of financier SBI Holdings Inc. "As comments from French government officials added to concerns, people are inclined to close long positions on the euro." A long position is a bet that an asset will rise.

The European currency traded at $1.4743 at 9:45 a.m. in Tokyo from $1.4735 yesterday in New York where it touched $1.4844, the strongest level since September 2008. It traded at 134.58 yen from 134.52 yen in New York. The dollar was at 91.28 yen from 91.29 yen yesterday.

The French government is seeking a "framework" for discussions, Reuters quoted the official as saying. G-20 leaders will meet in Pittsburgh this week to discuss the latest developments of the global economy and financial markets.

ECB

"The European Central Bank didn't intervene to reduce the value of the single currency from these levels in the past," said Daisaku Ueno, chief analyst at Gaitame.Com Research Institute Ltd., a unit of Japan's largest currency margin company. "Still, we need to assess carefully if the recent appreciation of the euro will prompt monetary authorities to change their currency stance."

New Zealand's dollar, known as the kiwi, climbed as Asian stocks advanced, adding to signs investors' risk appetite is recovering. MSCI's Asian Pacific Index of regional shares added 0.4 percent, while Japan's Nikkei 225 Stock Average jumped 1.4 percent. 

Benchmark interest rates are 2.5 percent in New Zealand and 3 percent in Australia, compared with 0.1 percent in Japan, attracting investors to the South Pacific nations' assets. In carry trades, investors borrow in a nation with low interest rates and invest where returns are higher. The risk in such trades is that currency market moves will erase profits.

New Zealand's dollar was at 72.06 U.S. cents from 71.97 cents yesterday, when it reached a 13-month high of 73.12 cents. Australia's dollar traded at 87.12 U.S. cents from 86.97 U.S. cents yesterday.

New Zealand Finance Minister Bill English said today the strength of the nation's currency may prevent an export-led economic recovery.

Kiwi Strength

"We are concerned about the New Zealand dollar," English told Radio New Zealand. "Ideally we want an export-led recovery. The high dollar is making it more difficult for the export sector to get off the floor."

Losses of the euro were tempered before a report forecast to show that German business confidence rose for a sixth month. The Munich-based Ifo institute's business climate index, based on a poll of 7,000 executives, increased to 92.0 in September from 90.5 in the previous month, according to a Bloomberg News survey of economists. The institution releases the data today.

"The trend for improving risk appetite amid an economic rebound is unchanged," said Yuji Saito, head of the foreign- exchange group in Tokyo at Societe Generale SA, France's third- largest bank. "The bias is for the dollar to weaken."

Adding to signs that the global economy may be recovering, purchases of existing U.S. homes climbed to a 5.35 million annual rate in August, the most since August 2007, from a 5.24 million rate in July, according to a Bloomberg News survey of economists. The National Association of Realtors will release the report today.

Bonds:

Bond prices rebounded after the Fed alleviated worries about inflation and said it would keep its short-term interest rate near zero. Treasurys recouped their losses from earlier in the day, which came after somewhat disappointing demand for the latest auction of 5-year notes.

The 10-year note rose 6/32 to 101 20/32 and its yield fell to 3.43 percent from 3.45 percent.

What to expect:

The market will focus Thursday on any developments in financial regulation that come out of a meeting between President Obama and the Group of 20 leaders in Pittsburgh.

THURSDAY: G-20 summit begins; weekly jobless claims; existing-home sales; seven-year auction; Earnings from RIM

FRIDAY: Durable-goods orders; consumer sentiment; new-home sales; Earnings from KB Home

Asia:

Asian stocks rose as brokerage upgrades of Toshiba Corp. and Fast Retailing Co. fueled speculation that an equity rally since March can continue.

Toshiba, Japan's biggest chipmaker, climbed 3.8 percent after Credit Suisse Group AG more than doubled its price estimate. Fast Retailing, the operator of the nation's biggest casual clothing chain, jumped 3.8 percent after Goldman Sachs Group Inc. recommended buying the stock. Metallurgical Corporation of China Ltd. may gain on its first day of trading in Hong Kong.

The MSCI Asia Pacific Index gained 0.7 percent to 119.60 as of 10:24 a.m. in Tokyo, where markets resumed trading after a three-day holiday. The MSCI gauge has surged 42 percent in the past six months as government stimulus measures around the world dragged economies out of recession.

"The consensus view now is that the worst is over," said Tim Schroeders, who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. "The markets have priced in a fair degree of good news, but discerning how strong the recovery's going to be is still problematic."

Japan's Nikkei 225 Stock Average climbed 1.7 percent. Australia's S&P/ASX 200 Index dropped 0.3 percent, while New Zealand's NZX 50 Index lost 0.2 percent. BHP Billiton Ltd., the world's largest mining company, and Inpex Corp., Japan's largest oil and gas explorer, dropped more than 1 percent on lower commodity prices.

Futures on the Standard & Poor's 500 Index added 0.1 percent. The gauge lost 1 percent yesterday as the Federal Reserve signaled it will use fewer tools to bolster growth.

Policy Meeting

The Fed, following a two-day policy meeting, changed the wording in the final paragraph of its statement to say it will continue to employ a "wide range of tools" to bolster the economy. In its August statement, it said it would use "all available" tools.

The MSCI Asia Pacific Index has gained 68 percent from a five-year low on March 9 on speculation improved global growth will boost corporate earnings. The advance has driven the average price of the gauge's members to 1.6 times book value, up from 1 at the low in March.

Toshiba climbed 3.8 percent to 496 yen. Credit Suisse raised the stock to "outperform" from "neutral" and increased its price estimate more than twofold to 640 yen.

Fast Retailing rallied 3.8 percent to 10,980 yen after it was boosted to "buy" from "neutral" by Sho Kawano, a Tokyo-based analyst at Goldman Sachs Group Inc.

Strike Vote

BHP slid 1.2 percent to A$37.91 as a gauge of six metals fell 1.6 percent in London yesterday, the most this week. The stock also fell after Andres Ramirez, president of a union representing miners at one of BHP's copper mines in Chile, said workers will vote on a strike next week after rejecting the company's latest pay offer.

Inpex dropped 1.1 percent after crude oil lost 0.6 percent in after-hours trading, adding to yesterday's 3.9 percent slump in New York. Woodside Petroleum Ltd., Australia's No. 2 oil and gas producer, sank 1.2 percent to A$52.45. Mitsubishi Corp., a Japanese trading company that gets 39 percent of its sales from commodities, retreated 0.4 percent to 1,956 yen.

"With a lack of major news, resource-related shares will be inevitably affected by the drop in commodity prices," said Mitsushige Akino, who oversees the equivalent of $656 million at Ichiyoshi Investment Management Co. in Tokyo.

Metallurgical Corporation of China, which helped build the "Bird's Nest" Olympic stadium in Beijing, starts trading today in Hong Kong. The company's shares surged 28 percent when it debuted in Shanghai on Sept. 21. 

Nikkei 225 10,548.42     +177.88 ( +1.72%). (08.27 AM IST)

Japan's Nikkei stock average jumped 1.7 percent on Thursday, with exporters such as Honda Motor Co (7267.T) rising after Federal Reserve statements that U.S. economic activity was picking up outweighed fears about a stimulus withdrawal by the Fed.

Active short-covering after the benchmark lost 0.7 percent last week also boosted shares across the board, analysts said.

HSI 21140.73 -454.79 -2.11% .(08.29 AM IST)

Hong Kong shares fell sharply early Thursday, with property and banking stocks tracking down a retreat on Wall Street as well as extended losess in Shanghai. The weak market also hurt the performance of debutante Metallurgical Corp. of China /quotes/comstock/22h!1618 (HK:1618 0.00, 0.00, 0.00%) , whose shares were trading at 5.56 Hong Kong dollars (71 cents), falling below its initial public offering at 6.35 Hong Kong dollars. The Hang Seng Index fell 1.6% to 21,242.01, while the Hang Seng China Enterprises Index slild 2.1% to 12,171.36. Over on the mainland, the Shanghai Composite Index slipped 0.2% to 2,836.35, taking losses into a third straight session.

Hang Seng Index opens 209 points lower on Thu

Hong Kong stocks fell on Thursday morning, with the benchmark Hang Seng Index opening 209 points lower at 21,386.

The Hang Seng China Enterprise Index, which tracks the overall performance of 43 mainland Chinese state-owned enterprises on the Hong Kong Stock Exchange, opened 128 points lower at 21,303.

Cheung Kong (Holdings) Ltd<0001> decreased 1% from the previous closing to HK$99.2. Sun Hung Kai Properties Ltd<0016> fell 0.06% and opened at HK$114. 

SSE Composite 2842.72 2820.50 2855.51 2800.91 -0.78.(08.31 AM IST)

China's key stock index opened down 0.64 percent on Thursday, with energy and metal shares soft as commodity prices fell and after a break below a key chart support level encouraged investors to lock in profits.

The Shanghai Composite Index .SSEC opened at 2,824.583 points, after slipping through support at the 125-day moving average and closing down 1.9 percent on Wednesday.

Energy and metal shares were soft as U.S. crude oil futures extended losses to fall towards $68 a barrel on Thursday while copper prices closed down 2 percent on Wednesday.

PetroChina (601857.SS: Quote, Profile, Research), the index's most heavily weighted share, fell 0.94 percent to 12.65 yuan.

Analysts said the index could be poised for a mild technical rebound, however, after falls in recent days.

The official China Securities Journal cited Ba Shusong, a vice director at the Development Research Centre, a think tank under China's State Council, as saying that the chances of China's economy hitting bottom again were declining given the strong recovery in the country's real economy.

Share in Wuliangye Yibin (000858.SZ: Quote, Profile, Research), one of China's top liquor makers, were suspended from trade after the country's stock watchdog said it did not properly disclose a securities investment loss and was found to have discrepancies in its stated core business revenue. [ID:nLN608944] ($1=6.825 Yuan)

 

Chinese stocks open 0.64% lower on Thu

Chinese stocks opened lower on Thursday morning, tracking losses from the previous closing.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, opened at 2,824.58 points, down 0.64% or 18.14 points from the previous closing.

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange opened 0.66% or 75.89 points lower at 11,386.44 points.

Mirae Asset to set up fund management JV in China.

Ganzi Atlantic Silicon starts EUR 820-mln silicon project in Kangding.

Zhejiang Transfar to raise RMB 505 mln through private placement.

T. Rowe Price Associates cuts stake in Guangshen Railway.

China's coal imports fall to 11.77 mln tons in Aug.

State-owned shareholder to sell 170 mln shares of CMB.

ADB raises China's economic growth forecast for 2009.

Capital Group cuts stake in BYD to 5%.

Chairman sells 9.04 mln shares of Gome.

PetroChina's RMB 30-bln refinery starts operation in Xinjiang.       

China's top aircraft manufacturer in partnership with Safran, GE

Aviation Industry Corporation of China (AVIC), China's top aircraft manufacturer, has announced cooperation plans with Safran and GE, aimed chiefly at boosting the country's homemade jumbo jet program, China Daily reported Thursday.

    The C919, China's largest domestically manufactured jetliner that is expected to take off in 2016, will source parts and components globally, but foreign suppliers are encouraged to enter into partnerships with Chinese manufacturers, the newspaper said, citing Wu Guanghui, chief designer and deputy general manager of the Shanghai-based Commercial Aviation Corporation (COMAC), which is producing the jet.

    AVIC and France-based Safran Group signed Wednesday a framework agreement to extend their partnership. The agreement includes establishing new facilities in China based on both sides' existing assets, and cooperating on all aspects of a production line, from design, production, assembly, to support.

    The short-term targets focus on producing landing and braking systems and nacelles (engine compartment) for the C919. The subsidiaries of Safran and AVIC will together submit a joint proposal to COMAC for landing and braking systems on the C919, according to a news release by Safran.

    Meanwhile, AVIC, GE and Safran signed a memorandum of understanding Wednesday on setting up a joint venture that designs and manufactures engine nacelles and components for a full range of aircraft applications including the home-made jumbo jet C919. 

    The new joint venture is between AVIC Aircraft Corporation and Nexcelle - a nacelle joint venture company created by GE's Middle River Aircraft Systems and Aircelle, a Safran group company.

    AVIC Aircraft and Nexcelle will have equal stakes in the venture. Both the dollar value and the location of the undertaking have not been disclosed.

    The first target of the new joint venture would be the C919 project, the newspaper said, citing Lorraine Bolsinger, president and CEO of GE Aviation Systems.

    The engine nacelle technology is one of the fundamental elements in an aircraft's performance, efficiency and environmental footprint. 

Japan's trade surplus expands for 7th consecutive month

Japan's trade surplus expanded for the 7th straight month in August to 184.7 billion yen (2.03 billion U.S. dollars), compared with a deficit of 314.2 billion yen (3.45 billion dollars) a year earlier, said the finance ministry on Thursday.

    A sharp fall in imports was a key factor behind the trade surplus expansion, according to the ministry.

    The world second largest economy's exports shrank for the 11th straight month, down by 36.0 percent year-on-year to 4,511.1 billion yen (49.57 billion dollars), while imports contracted for the 10 months in a row, down by 41.3 percent to 4,325.4 billion yen (47.53 billion dollars), said the ministry in a preliminary report.

    In terms of regions, Japan's trade surplus with the United States fell for the 24th straight month, down by 26.7 percent year-on-year to 272.9 billion yen (3.0 billion dollars).

    With the rest of Asia, the figure dropped for the 12th straight month, down by 30.2 percent to 695.0 billion yen (7.64 billion dollars).

    And the nation's trade surplus with the EU posted the 12th monthly decline, plummeting by 86.5 percent to 44.8 billion yen (492.30 million dollars).

    The trade data, measured on a customs-cleared basis, have yet to be adjusted for seasonal factors. 

Eurozone industrial new orders rise in July

Industrial new orders recorded a higher-than-expected increase in July in the 16-nation euro zone, official figures revealed on Wednesday.

    On a month-on-month basis, industrial new orders rose by 2.6 percent in the euro area in July, compared with June, said the European Union (EU) statistics agency Eurostat.

    The agency also revised up June's figure from an increase of 3.1 percent to 4.0 percent, compared with May.

    In the 27-nation EU, new orders rose by 1.6 percent in July, after falling by 0.6 percent in June.

    Excluding ships, railway and aerospace equipment, for which changes tend to be more volatile, industrial new orders in July grew by 3.1 percent in the euro area and 3.4 percent in the EU month-on-month.

    However, the figures continue to be well down on a year ago.

    Compared with the same month in 2008, industrial new orders in July decreased by 24.3 percent in the euro area and 24.9 percent in the EU. Total industry, excluding ships, railway and aerospace equipment, dropped by 23.4 percent in the euro area and 22.5 percent in the EU.

    Among the various industries, new orders for durable consumer goods in July increased by 5.6 percent month-on-month in the euro zone and 6.9 percent in the EU, Eurostat said.

    Capital goods were up by 2.9 percent in the euro zone, but fell by 1.8 percent in the EU. Intermediate goods rose by 2.8 percent and 4.1 percent, respectively, in the two regions.

Outlook for global PC market improving: Gartner

Outlook for global personal computer (PC) market continues to improve and the worst may be over for the industry, research firm Gartner said on Wednesday while releasing the latest forecast for this year's worldwide PC shipments.

    According to Gartner, global PC shipments are expected to drop 2 percent in 2009 from the previous year, much more optimistic than the 6-percent decline the firm predicted in June.

    "PC demand appears be running much stronger than we expected back in June, especially in the United States and China," George Shiffler, research director at Gartner, said in a statement.

    "Mobile PC shipments have regained substantial momentum, especially in emerging markets, and the decline in desk-based PC shipments is slowing down," he added.

    Gartner said PC shipments are likely to be growing again in the fourth quarter, but may not be able to experience growth for the whole year.

    For PC shipments to post growth for the year, growth rate would have to be at least 4 percent in the second half as global PC shipments fell 4.4 percent in the first half of 2009.

    Gartner analysts said that scenario seems just a bit beyond the market's capability at this point.

    "2010 should be a considerably better year for the PC market," Shiffler said. "We now expect units to grow 12.6 percent next year as mobile PC growth continues to gain momentum and desk-based PC growth turns positive, thanks to revived replacement activity." 

Financial Watchdog Plan Advances; Frank Cites 'Death Panels'

An Obama administration proposal to create a government watchdog for financial consumers inched forward in Congress Wednesday, with House Financial Services Chairman Barney Frank calling for "death panels" to close down troubled financial firms.

Treasury Secretary Timothy Geithner, at a hearing chaired by Frank, urged lawmakers to approve the proposed Consumer Financial Protection Agency.

But he also signaled support for paring back the CFPA's scope and scale in ways that could help overcome fierce opposition to it and improve its chances of passage.

"A dedicated, consolidated consumer protection agency" is needed to fix a scattered system that failed consumers in the global financial crisis that started last year, Geithner said at a House Financial Services Committee hearing.

He expressed support for moderating changes to the administration's CFPA proposal put forward by Frank, the Democratic chairman of the committee.

"The broad thrust of those proposals look very encouraging and promising to us. And there's nothing in there, at first glance, that troubles me significantly," Geithner said.

The CFPA would be a central overseer of consumer protection laws that are now vested in several agencies, including the Federal Reserve, criticized for their past performance.

Frank said existing regulators' record was "abysmal."

Underlining popular opposition to further government-funded bailouts, Frank added: "There will be death panels enacted by this Congress, but they will be for non-bank financial institutions that will not be considered too big to die."

Frank, known for his acerbic wit, made the remark in connection with a proposed "resolution authority" that would give the government a new way to deal with troubled non-bank financial institutions whose failure could hurt the economy.

His comment revealed that Frank, for one, views "resolution" more like a firing squad than a rescue mission.

"We have this euphemism that we are going to be resolving these institutions ... We are talking about dissolution, not resolution," Frank said. "We are talking about making it unpleasant for the entities."

Puzzle Piece

The CFPA is the next piece of President Barack Obama's complex financial reform puzzle to gain headway in Congress.

Credit card reform has been accomplished. A restructuring of the troubled $92-billion student loan market is close to Senate consideration, having already won House approval.

More difficult pieces still await action, such as creating the resolution authority and a systemic risk regulator; cracking down on over-the-counter derivatives; and regulating other areas of high finance that last year ran off the rails.

The hearing marked the outset of an intense push in coming weeks by the committee on financial reform, starting with CFPA.

Frank said he expects a House vote on legislation in November.

Banks and Republicans opposing CFPA have said it would only entangle businesses in more government red tape.

Representative Spencer Bachus, the committee's top Republican, said it would be "a massive new government bureaucracy ... which consumers will ultimately pay for."

Existing bank regulators, who would lose authority under the CFPA proposal if it were adopted, also questioned it.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, said her agency should continue protecting customers.

"We don't want to lose that. If you want to call that turf, that's fine," she said at the hearing.

Seeking to improve the CFPA's chances for passage, Frank wants to kill a controversial part of the plan — a provision that would force banks to offer so-called "plain vanilla" versions of financial products, such as mortgages.

In draft legislative language obtained by Reuters, Frank also is calling for exempting a wide range of businesses from CFPA oversight, such as accountants, lawyers, securities, commodities and investment and general insurance products.

Rule Writing and Enforcement

Lawmakers have debated whether the CFPA should be able to both write and enforce consumer protection rules. Drawing a firm line, Geithner said separating those powers "would risk creating an agency that is weak and ill-informed."

Another issue raised in the CFPA debate is whether state governments could adopt and enforce even stricter rules. That issue still "has to be dealt with and debated," Frank said.

Obama said Wednesday that financial regulation needs strengthening to end the "greed, excess and abuse" that caused the financial crisis, the worst in generations.

Regulatory reform will headline this week's meeting of the Group of 20 economic powerhouse countries in Pittsburgh, to be attended by Obama and other world leaders.

Obama's reform agenda in recent months has bogged down in Congress, with lawmakers still far apart on central issues and distracted by other topics such as healthcare reform, even as markets bounce back and the economy show signs of recovery.

"We can't let the momentum for reform fade as the memory of the crisis recedes," Geithner told the committee.

Two REITs Complete IPOs After Halving Deals

Two mortgage real estate investment trusts completed their initial public offerings at half the size they had originally targeted due to limited demand, casting a shadow over similar upcoming IPOs.

Colony Financial [CLNY  0.0  ---  UNCH  (0)   ] said on Wednesday it sold 12.5 million shares and raised $250 million, while Apollo Commercial Real Estate Finance [ARI  0.0  ---  UNCH  (0)   ] sold 10 million shares and raised $200 million, one of its underwriters said.

Both companies were created to buy distressed mortgage assets.

The deals were originally scheduled to price on Tuesday, but were postponed by a day. Early on Wednesday, both slashed their deal estimates by half.

They may have faced weak demand because of the recent glut of similar mortgage REIT IPOs. Two more plan to come to market in the next week.

"People are assuming the market is unlimited, but institutions don't want to be overweighted in the sector," said Nicholas Schorsch, chief executive of American Realty Capital, a real estate advisory firm. "The market doesn't have the capacity to absorb this many deals."

The two other mortgage REITs set to price in the next few days are Foursquare Capital, due on Thursday, and Ladder Capital Realty Finance, due next week.

Schorsch said both could face the same investor reticence encountered by Colony Financial and Apollo Commercial.

A number of mortgage REIT IPOs have recently come to market, including Starwood Property Investment Trust [STWD  19.80    -0.07  (-0.35%)   ] and PennyMac Mortgage Investment Trust[PMT  19.74    -0.13  (-0.65%)   ].

Last week, a REIT by Crexus Investment [CXS  14.43    -0.07  (-0.48%)   ] shrank its IPO by 60 percent on the day of its pricing.

Because their shares are down slightly since the IPOs, there is little pressure on institutional investors to get in early on such deals, Schorsch said.

There is little fear of missing out on a "first-day pop," he added. 

Market Insider: Will Key Data Support The Fed's View?

The challenge for markets Thursday will be whether weekly jobless claims and existing homes sales confirm the Fed's view that the economy and housing are getting better.

The Fed Wednesday, as expected, signaled it saw improvement in the economy and added, for the first time a comment on "increased activity" in housing and that businesses are cutting back on staff at a "slower pace." It noted that ongoing job losses and sluggish income growth are still a concern.

Economists expect jobless claims to come in at around the same level as last week, 550,000. They hope to see improvement in existing home sales to 5.35 million, when the data is released at 10 a.m.

Economists debate when the unemployment rate will peak in anytime form one to three quarters, but they have been hoping to see the number of weekly claims begin to trail off.

Stocks could take direction from that 8:30 a.m. claims number, after Wednesday's late day sell off. "You'll know before the open from the jobless claim. If they stay stubbornly above 550,00, then you've got a problem," said Art Cashin, director of floor operations at UBS.

The dollar is also a focal point, though there is little chance it will be mentioned publicly by leaders gathered at G-20 in Pittsburgh Thursday. A quick turn higher in the dollar, in fact, sapped the stock market's post-Fed rally and helped drive it to a lower close.

The Dow finished 81 points lower at 9748. After the Fed statement, it had reached 9917, its highest level since October, 2008. The S&P 500 was down 1 percent, or 10 points, at 1060, and the Nasdaq was off 0.7 percent at 2131. The market leaders were the defensive sectors of telecom and consumer staples. The biggest loser was energy, down 1.9 percent.

The dollar immediately slumped on the Fed release, then turned positive against the euro and a basket of currencies. "This risk rally is having trouble sustaining itself at new highs," said Brian Dolan of Forex.com. "We're kind of seeing the same thing with the dollar. The dollar just tried to sustain the highs at $1.4850 over the euro and it couldn't do that. These things are trading in lock step, so as the euro came off, the stock market followed suit."

The dollar finished at $1.4743 against the euro. The dollar has been hitting new lows as the stock market edges higher and commodities rise in a global "risk" trade. On Wednesday, oil was trading sharply lower after a surprising build in inventories was reported in the morning. Oil lost 3.9 percent to $68.97 per barrel, in its biggest daily decline since August 14.

Stock traders said they saw the stock market turn lower, not long after the Dow crossed the psychological level of 9900. "We've got to get over 10,000 (Dow), and we've got to close over 1070 to 1075 (S&P) for this thing to sustain itself," he said.

Dolan said the G-20 is unlikely to make note of the dollar, and the first official mention of the greenback might come when the G-7 finance ministers gather in October.  "What's likely to come out of these guys is they are going to commit to maintain economic stimulus and accommodative monetary policies. They're not going to withdraw. They're not going to take the punch bowl away just yet," he said.

Treasuries turned higher after the Fed comment, in which it also said it extended its program to buy mortgage-backed securities until the end of March instead of ending in December. The Fed also intends to gradually reduce its purchases of a total $1.25 trillion in mortgage-backed securities. It said it would wind down its Treasury purchase program in October.  The 10-year yield slipped to 3.420 percent, and the 2-year saw its yield slide to 0.968 percent.

Brian Edmonds, head of Treasury trading at Cantor Fitzgerald,  said the Fed showed in its statement that it is preparing to step back from its "ultra-accommodative" stance. "I think the market was bracing for the worst," he said, adding there had been some concern the Fed would make some move toward tightening.

The Fed's 2:15 p.m. statement came not long after the auction of $40 billion in 5-year notes Wednesday. "Going into the 5-year (auction), the market traded very well. There were a lot of securities in dealers hands," said Edmonds. "I think you've got to take everything in perspective. We were just able to auction $40 billion in 5-year notes within 3 bps of the market. Our capital markets are still deep and well supplied."

"It wasn't the greatest auction you've ever seen but it shows you there is demand."

Lilly Says Judge Upholds Some Evista Patents

Eli Lilly [LLY  32.45    -0.32  (-0.98%)   ] said on Wednesday that a federal judge upheld its method-of-use patents on osteoporosis drug Evista through March of 2014, but found that Lilly's Evista particle-size patents are invalid.

Lilly said the ruling came in a U.S. District Court, Southern District of Indiana case involving Israeli drugmaker Teva Pharmaceutical Industries [TEVA  50.64    -0.30  (-0.59%)   ], which has been seeking to launch a cheaper generic form of Evista.

The branded drug has annual U.S. sales of about $650 million.

Lilly said it is reviewing the portion of the ruling that invalidated some patents to determine whether or not to appeal. 

G20—Why Pittsburgh? A Tale of Three Cities

Pittsburgh is known for its three rivers. To me, it's been three cities over the past 30 years.

It's the city that I grew up in when the Steel Era was strongest in the late 1970s.

It became a city whose universities and hospitals flourished over the next decades, while a growing number of global services businesses started calling Pittsburgh home.

And now the city that G-20 visitors will see can credit those institutions for helping it weather this financial crisis.

"It used to be we'd dive into a recession and leap out," says Doug Heuck, a former colleague from my days as a fledgling reporter at the now defunct Pittsburgh Press. "Now all of those curves are much flatter. It's kind of a brain power center now as compared to a brawn power center."

Heuck edits Pittsburgh Quarterly, the city's glossy commerce and culture magazine. Its stories — features on educational and medical breakthroughs, conservation and greening programs, and the city's lively cultural district — couldn't have been written in the 1980s.

"Pittsburgh is really much better off now, it's much more livable, much more vibrant," he says.

The City of Steel

It's been a slow process but Pittsburgh seems to have figured out how to deal with difficult economic times, like this current recession. After all, the city has seen much worse. Pittsburgh's unemployment rate hit 17 percent in 1983, after the collapse of the steel industry. Today unemployment here is under 8 percent, about 2 percent below the national average.

The steel mills that provided my grandfather with a living for three decades are mostly gone. Manufacturing lost 100,000 jobs when that industry largely shut down in early 1980s. Yet the manufacturing sector — now diversified into energy, technology, life sciences and robotics — still contributes about $14 billion to the local economy.

Financial Services, Education & Healthcare

Downtown Pittsburgh's skyline is dotted with Fortune 500 companies and global services corporations, including financial services companies (Federated Investors [FII  26.66    -0.53  (-1.95%)   ] and PNC [PNC  45.95    -0.91  (-1.94%)   ]) and top law firms (K&L Gates), which have also been critical to the city's survival. About 14 percent of the local jobs are here and financial activities, business and professional services account for $35 billion in gross regional product.

But to me, the most stunning change in Pittsburgh's economy over the past 30 years has been the explosive growth of its universities and hospitals.

"When I came here, Pittsburgh was known mainly for steel, ketchup and football and now while I love all of those things in many parts of the world it really is pioneering research and world-class medical care that people know about this city," says University of Pittsburgh Chancellor Mark Nordenberg, who joined the faculty in 1977 and worked for nearly 25 years with my father, now a retired university dean.

Today the University of Pittsburgh accounts for nearly $1.75 billion in local spending and supports 34,000 jobs. Fifteen years ago, the university's research expenditures were a little over $200 million dollars a year.

Today they're more than $650 million dollars a year. Collaborating with Carnegie Mellon University — a few blocks away — to create technological innovations, these schools have spawned hundreds of start-up companies.

"We're spinning off new companies from university-based research," Nordenberg says. "Those companies are rooting here and beginning to grow here and that of course is the generator of not only new jobs but good jobs."

The University of Pittsburgh's Medical Center — known now just as "U-P-M-C" — is the most shining example of the city's transformation. Its letters are emblazoned on top of the city's iconic U.S. Steel Building, the $8 billion corporation is the biggest tenant of this 42-story skyscraper and the region's largest employer with 50,000 employees.

Support From 'Mom and Pop'

But Pittsburgh's small businesses, the "Mom and Pop" shops, will be critical to Pittsburgh's continued growth. My mother's family owned a dry cleaning business in the city for nearly 70 years. One of the locations, under new ownership, still serves the Homewood neighborhood. Justin Strong's dad runs it now.

Justin, also an entrepreneur, owns the popular "Shadow Lounge" in Pittsburgh's East Liberty neighborhood and is scouring the forgotten areas of the city for new business opportunities. He's hoping to convince visitors from around the world who are in town for the G-20 to consider investing here.

Vacant lots and abandoned buildings in the city's East End are prime locations for urban farming and green manufacturing, he says.

"It's about using what is already here and using it in a new way that you may not be thinking about that actually gets us the best potential and the best bottom line."

That has been Pittsburgh's promise for the past 30 years and may be the key to its future progress. 

Microsoft says it has 'no plans to acquire EA'

A Microsoft Corp. spokesman said late Wednesday that the software giant doesn't plan to acquire video-game publisher Electronic Arts Inc., contrary to rumors circulating earlier that sent shares of Electronic Arts soaring during the regular session.

"We have no plans to acquire EA," a spokesman for Microsoft's /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 25.73, +0.02, +0.08%) Xbox video game business said.

Rumors swirled for the better part of Wednesday that Microsoft would make a bid for EA /quotes/comstock/15*!erts/quotes/nls/erts (ERTS 19.50, -0.33, -1.66%) , the publisher of popular games such as the "Madden NFL" franchise.

Shares of EA closed more than 7% higher, at $19.83.

However, analysts generally dismissed the idea of a Microsoft acquisition, noting that the company would seem to have little need for EA. Shares of EA have been under pressure in recent months, based on relatively weak August sales and concerns about the company's product lineup.

Shares of EA fell more than 1% to $19.50 in after-hours trading.

INVESTMENT VIEW
PTL Enterprises-Opening Up New Frontiers In Medicene

BSE 509220; CMP Rs 17.80
 
 
PTL Enterprises is a highly profitable, dividend paying but shell company owned by the Rs 4000 crore Apollo Tyres. It has a small truck tyre unit in Kalamassery, Ernakulam which is leased out to Apollo Tyres at an annual rental, but the piece de resistance is it's ownership of the 500 bed Super Speciality Hospital-Artemis located in the spanking new sub-city of Gurgaon. At Rs 235 crore of market cap, this is perhaps the cheapest combo of a tyre plant and a hospital that investors can get.
 

As facilities at Artemis are expanded and enlarged, a higher wealthy populace that inhabits Gurgaon will increasingly veer towards Artemis, and with the Super Speciality Hospital of Dr. Naresh Trehan (formerly of Escorts Heart Institute) and another property of Max coming in, Gurgaon will boast of 3 Super hospitals that could cater to what some crudely call, "Medical Tourism".

 

The following gives a brief of Artemis, and there seems no reason why PTL does not get a higher market capitalisation as both profitability and utilisation levels are ready to rise.

 

About Artemis:

 

Artemis Health Institute (AHI), at Gurgaon is a 500-bed super-specialty flagship hospital established by Artemis Health Sciences (AHS) - a healthcare venture launched by the promoters of the Apollo Tyres Group. Artemis aims at creating an integrated world-class healthcare system by leveraging the best medical practices backed by cutting-edge technology.

 

The super-specialities chosen by Artemis as its area of focus include Cardiovascular, Oncology,Orthopaedics, Artemis Institute of Neurosciences and Bariatric & minimally Invasive Surgery in addition to other specialties.

 

The services offered by Artemis encompass comprehensive medical solutions including consulting, diagnostics and therapy. For the benefit of its patients, the Institute also runs specialised programmes like Artemis Senior , Artemis Restore, Well Woman Programmes, and specialised clinics like Breast Clinic, Pain Clinic, Artemis Heart Club, Asthma Care Clinic amongst others.

 

The facility at Gurgaon is designed and constructed in strict accordance with International guidelines. Spread across a total area of 525,000 square feet (when completely built), the facility focuses on offering patients technology-backed world-class healthcare delivered by leading medical professionals certified by international medical bodies. Additionally,Artemis follows patient-centric processes conforming to International Patient Protocols, thereby establishing new standards of service and care.

 

The institution is equipped with the latest technology in predictive, diagnostic and therapeutic imaging, along with the highest levels of in-patient monitoring, and a paperless and film-less Hospital Information System.

 

Artemis already has many firsts to its credit, being the first installation in India to offer:

 

Intelligent critical patient monitoring system with clinical decision support application backed by portal imaging technology

Film-less and paperless environment (seamless integration with the Hospital Information System) 

An endovascular suite inside an operating room, which will allow endovascular surgery and catheter-based procedures along with hybrid surgery in the composite unit 

Functional MRI Scanning using Non-Contrast Imaging for Cancers (DWIBS) 

MRI-PET fusion technology 

3D dynamic road mapping for reconstructive imaging

The technological infrastructure at AHI also includes: 

Cath Labs with Stent Boost (software visualisation tools) 

64 Channel CT Machine with step-and-shoot technology, which reducesX-Ray radiation by 83 percent 

Intelligent Ultrasound/Echo Technology 

3 Tesla MRI Machine 

Whole Body Imaging with contrast and high-end spectroscopy

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
 

--
Arvind Parekh
+ 91 98432 32381